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09/12/2011 - 30008CITY COUNCIL MEETING CITY OF FRIDLEY SEPTEMBER 12, 2011 The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:32 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 James Kosluchar, Public Works Director Darin Nelson, Finance Director/Treasurer Julie Jones, Planning Manager John Anderson, 5909 Second Street Pam Reynolds, 1241 Norton Avenue NE Joan Zmuda, 6051 Fourth Street NE Scott Tesmer, Home Depot John Haussner, Home Depot Ben Conwell, Home Depot Terry Overacker, 502 East Main Street, Anoka Michael Johnson, Talecris Gail Moore, Talecris PROCLAMATION: Honor the Heroes — Patriot Day: September 16, 2011 Constitution Week: September 17-23, 2011 PRESENTATION: Michael Johnson from Talecris Plasma Resources Mr. Johnson stated Talecris has been at the Holly Center for roughly three years. He is proud to outline what they do and would like to discuss some of the problems they have been having as FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 2 well. One of the problems they have been having is with litter at the bus stop at the corner of University and Mississippi. They know there is some litter coming from their facility. They want to make sure they clean up after themselves. Mr. Johnson stated they have implemented an action plan to address that issue. They are implementing donor education campaigns and handing out flyers throughout the donor panel asking people to make sure they are disposing of their trash appropriately. They are also monitoring and cleaning the parking lot on a daily basis during and after center hours. They are monitoring donor behavior at the nearby bus stop and would like to further work with Metro Transit to adopt the shelter along with the Cystic Fibrosis Foundation. Mr. Johnson stated they are also exploring ideas about waste removal from that particular site by either Waste Management or some type of refuse company to keep it clean. He introduced Gail Moore, whose daughter benefits from their service. Mr. Johnson stated there are a number of rare chronic disorders that are treated with plasma. They are a large national organization that produces 5 million collections a year, and those particular collections are what make life possible for a lot of people. Mayor Lund thanked Mr. Johnson for taking the time to come to the meeting and publicly state his willingness and volunteering to clean up the bus stop that the City was getting frequent complaints about. It goes without saying the whole problem is not solely from Talecris. Councilmember Bolkcom stated the complaints they have received were regarding bloody bandages which she knows are hazardous waste. It is her understanding the donors have to leave the bandage on for one-half hour. Mr. Johnson replied it depends on the person; but, yes, one-half hour is suggested. Longer if necessary. Councilmember Bolkcom asked if the donors could wait a half hour before they left. Mr. Johnson replied they could. Councilmember Bolkcom asked if this is a possibility they could look into. Mr. Johnson replied it is a possibility they have researched already and are still discussing. Councilmember Barnette asked how often a person could donate plasma. Mr. Johnson replied a donor is able to safely donate plasma twice in a seven-day period. William Burns, City Manager, asked how many donors they averaged per day. Mr. Johnson replied, depending on the week, roughly 250 a day. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 3 Dr. Burns said they discussed putting number identification on the bandages. He asked if that was still a possibility. Mr. Johnson replied, yes, and they have implemented such things. The Center has made it well known that if bandages are found with a number on them, the donor will be permanently removed from the facility. Councilmember Bolkcom stated the City has a staff inember who is monitoring and inspecting that area. Dr. Burns stated the City has a CSO who does an inspection twice a week. APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council Meeting of August 22, 2011: Councilmember Saefke pointed out two corrections on page 15: (1) second paragraph, second line, ". .. will not perform. ..."; (2) si�th paragraph, second line, ". .. units are in propert� order...." APPROVED AS CORRECTED. NEW BUSINESS: 1. Resolution Consenting to the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, Adopting a 2011 Tax Levy Payable in 2012. William Burns, City Manager, stated the HRA has used a.0185 percent tax levy since 1996 to support its housing rehabilitation programs. The levy will cost the owner of a$150,000 home $27.75 in 2012. The owner of a commerciaUindustrial property valued at $1 million would pay $185 in 2012. The HRA approved this levy at their September meeting. Staff recommends Council's approval. The size of the return has gone down. There is a significant reduction in the levy proceeds projected for 2012 because of a reduction in the value of Fridley properties. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON THE REGULAR AGENDA. 2. Claims (152042 - 152282). APPROVED. 3. Licenses. APPROVED THE LICENSES AS SUBMITTED AND AS ON FILE. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 4 4. Estimates : Ron Kassa Construction 6005 East 250th Street Elko, MN 55020-9447 20ll Miscellaneous Concrete Repair Project No. 401 Estimate No. 4 ............................................. $ 13,281.41 Northwest Asphalt, Inc. 1451 Stagecoach Road Shakopee, MN 55379 Street Improvement Project No. ST2011-01 Estimate No. 3 ............................................. $ 73,122. 84 APPROVED. APPROVAL OF PROPOSED CONSENT AGENDA: Councilmember Bolkcom asked that Item No. 1 be removed. MOTION by Councilmember Barnette to approve the consent agenda with the removal of Item No. 1. 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 No. 1. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. OPEN FORUM: No one from the audience spoke. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 5 PUBLIC HEARINGS: 5. Consideration of Revocation of Special Use Permits, SP #95-05 and #04-05, which Permit a Garden Center at Home Depot, Generally Located at 5650 Main Street (Ward 3). MOTION by Councilmember Bolkcom to open the public hearing. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING WAS OPENED AT 7:53. (All anticipated speakers and witnesses were sworn in by Mayor Lund.) Julie Jones, Planning Manager, stated the purpose of this public hearing is to consider revocation of two special use permits for Home Depot, SP #95-OS and also SP #04-05, which amended the previous 1995 special use permit. On July 24, 1995, the Fridley City Council granted Special Use Permit, SP #95-05, to Home Depot generally located at 5650 Main Street, to allow a garden center or nursery which requires the outdoor display of storage of inerchandise with six stipulations. Ms. Jones stated Stipulation No. 6 read as follows, "There shall be no outdoor plant sales (outside the confines of the garden center walls)." In the spring of 1996, City planning staff initiated a code enforcement case for outside storage resulting in a citation. The Home Depot storage manager plead guilty in Anoka County Court to charges of outside storage at 5650 Main Street. A few months later, on August 26, 1996, the Fridley City Council held a public hearing similar to tonight's hearing to consider revocation of SP #95-OS for the Home Depot garden center because of continued outside storage violations. The City Council decided at that hearing to review compliance with the special use permit again in six months. Ms. Jones stated SP #95-OS ended up not being revoked because later, in 1997, Home Depot applied for a temporary outdoor garden center special use permit to have a temporary garden center placed in the parking lot of the store during peak garden season, from April to July. However, on August 11, 1997, the City Council denied such special use permit request, #97-02. Non-compliance continued; however, Ms. Jones does not have records in the City's complaint- tracking system further back than ten years. Therefore, the City does not have details of what happened between 1996 and 2002. Mr. Hickok informed her that every code enforcement officer the City had on staff during his tenure had issues with Home Depot and had personally met with staff at the Home Depot store to try and rectify this continued problem. Ms. Jones stated in February 2002, City Planning staff initiated a code enforcement case regarding unscreened storage in the garden center area because of retail stock being stored above the height of the fence. The violation was resolved in April, 2002. In May, 2003, City planning staff initiated a code enforcement case regarding lawn tractors, fertilizers, and other retail stock being stored in front of the Home Depot store. That case was closed on May 30, 2003. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 6 Ms. Jones stated in 2004 Home Depot applied for a special use permit, SP #04-OS to amend the existing special use permit issued in 1995 to allow an expansion of the garden center walls. The Fridley City Council granted that special use permit, #04-05, on December 6, 2004, with seven stipulations. Stipulation No. 7, which was a rewording of Stipulation No. 6 from the original 1995 permit stated, "There shall be no sales, storage or display of plant material or any other merchandise outside of the confines of the garden center walls." Subsequent to approval of SP #04-05, Home Depot completed a 20-foot expansion to the south side of the garden center. Ms. Jones stated on April 20, 2007, City planning staff initiated a code enforcement case regarding nursery stock displayed for sale outside the garden center walls in the front area of the Home Depot store. That case was closed on May 16, 2007. Ms. Jones stated on July 2, 2008, City planning staff initiated a code enforcement case regarding nursery stock displayed for sale outside the garden center walls in front of the Home Depot store. That case was closed on August 15, 2008. On Apri17, 2010, City planning staff initiated a code enforcement case regarding storing and displaying garden center products outside the garden center walls. Following a subsequent meeting with the store and regional managers, the case was closed on April 14, 2010. Ms. Jones stated as a result of the meeting with store management, City staff allowed improvements to the front area of the garden center to the pedestrian walkway for permanent planting areas to install planted nursery stock for display. Home Depot had gone ahead and built some display areas which were basically racks set up with retaining walls to store the material that was for sale. The plant material there is potted material for the customer to take and purchase. Also, there was signage for which there were no sign permits along with stacked bagged material out on the front for display and sale. Ms. Jones stated in the resolution with staff, it was suggested that instead of displaying material for sale out front which their special use permit did not allow, Home Depot create a landscape feature in front of the store where they could display the material they had for sale but have it in a planted permanent landscaped area. The area would serve as a display and staff suggested they could even put little markers in the area to identify the plants. Staff felt it was a good solution. Ms. Jones stated on July 6, 2011, staff initiated a code enforcement case regarding the display of large volumes of garden center and landscape materials outside the garden center walls. Upon reinspection following the July 21 deadline, some materials were moved inside, and some were still being displayed in front of the building. Because of the history, staff chose to initiate the revocation of SP #95-OS and SP #04-05. Ms. Jones stated in early August, staff inet with Scott Tesmer, the regional manager of the store. Mr. Tesmer was quick to correct the outside storage violations at the Home Depot store. Staff held to its position that a public hearing regarding this site's special use permits needed to proceed. Staff scheduled a public hearing for consideration of revocation of SP #95-OS and SP #04-OS because the Zoning Code states that failure to comply with any and all conditions and stipulations issued with the special use permit shall result in revocation of the special use permit. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 7 Staff has had four documented incidences of violations of Stipulation No. 7 since the 2004 garden center expansion, each of which warranted a public hearing. Ms. Jones stated staff strives to work out the problems with businesses before bringing matters to Council, as they have done many times with this business. However, staff has been unable to reach long-term compliance with Home Depot because of staff turnover on the local level. Staff believes it should be the responsibility of Home Depot's corporate office to educate their staff regarding the stipulations of their special use permits. Councilmember Bolkcom asked regarding the stipulations, Ms. Jones mentioned the one stipulation. She asked if the other five stipulations had anything to do with outdoor storage or plant sales. Ms. Jones replied, no, they were for other requirements of the garden center. That was the only stipulation that related to outdoor storage. Councilmember Bolkcom stated Ms. Jones mentioned that in August 1996, there was a public hearing. She is reading the minutes in the packet and it says on the bottom of page 31 the recommendation was, "Mr. Hickok stated that a special use permit could be reviewed in six months if the Council so desired. It was the consensus of Council that there be a review." She asked if there was a review after six months. Ms. Jones replied, she researched the minutes and could not find any record of it in that time frame. Councilmember Bolkcom asked what kind of review was done by the Planning Department/Code Enforcement? Ms. Jones replied, it is her understanding that what happened is Home Depot came back approximately six months later and their proposed solution was to have a temporary garden center, in addition to the garden center attached to the building, in the parking lot during their peak times between April and July and that would handle their overstock problem. Councilmember Bolkcom asked about the stipulations. Ms. Jones replied there was an additional stipulation added that was not in the 1995 permit. The reason that was added was because this had been a problem for staff, and that is the one that said materials within that garden center shall not exceed the height of the fence or walls of the garden center. Councilmember Bolkcom said the only stipulation that Home Depot had not been adhering to as of now is No. 7. Ms. Jones replied, correct. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 8 Councilmember Bolkcom stated in June 2007, there were pallets on the south side of the building and there was trash and litter on the property. In 2002, there was another issue related to storage exceeding the height. She asked how far back the records went. Ms. Jones replied back to 2000. Councilmember Bolkcom asked but there was a gap after 1996, 1997. Ms. Jones replied, the City does not have code enforcement reports like this prior to 2000. Councilmember Bolkcom asked if the City had them from 2009. Scott Hickok, Community Development Director, stated because of the State records retention schedule, there were three years of code enforcement data dumped because they exceeded the time the State required record retention. That system changed in 2000. Everything is stored electronically so the City has those records. However, for those three years, the City had correspondence but records had been dumped. Councilmember Bolkcom stated there is a gap from 2003 to 2007. Were there any issues during that time period? Ms. Jones replied not to her knowledge. Councilmember Bolkcom stated Ms. Jones mentioned the outside storage but there also were issues related to trucks and there was long grass and weeds on the vacant strip north of the PetSmart store. Therefore, there were issues not exactly related to the stipulation, but related to the maintenance, upkeep of the property, parking, etc.? Ms. Jones replied correct. Councilmember Bolkcom said there is a possible development at the Cub Foods site and there was some proposal of some outdoor nursery sales. She asked how that was different. Mr. Hickok replied, in all cases, outdoor sales need a special use permit in a commercial district. That can come in any number of different shapes and forms, but it needs to be architecturally integrated into the site. Although historically, in the request for a parking lot sales area, for example, for something that was much more portable (put it together in a short time and take it quickly apart but allowed a lot of storage material for out in the parking lot) the City has taken the position over many years that those garden sales in the parking lot harm the businesses like Home Depot, Menards, and Bachman's who sell products, and pay their taxes throughout the year. For a vendor to come in and set up in the parking lot and have a temporary display is contrary to what the City's interests are. Mr. Hickok stated any garden center in the proposed Triland development would need to have architectural significance to the site. That one has a pergola that will be placed on the development for the garden sales portion of the year. It has special paving, electronic wiring for FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 9 their electronic pay systems, etc. It is really designed architecturally to integrate into the design of the site as well. It is not identical to this nor is it identical to the way the plants are sold at Menards, Wal-Mart, or Bachman's. It is important to note that it is not just set up in the parking lot but integrated architecturally into the design of the site. Councilmember Bolkcom said Home Depot is very similar to sales done at Bachman's, Menards, and Wal-Mart. Again they will all be enclosed and all their plants and plant materials are within those enclosed areas, whether it be fencing or screening of some type. Scott Tesmer, Regional Manager for Home Depot, stated he has been with Home Depot for 14 years. He has lived, resided, and worked in the metro area that whole time and is somewhat familiar with their operations in various cities around. Their intention is to be Fridley's most admired business. Mr. Tesmer stated he is not big on excuses. What is up there happened. The City had good district managers and store managers in front of them before who had the same heart as he has today and his folks have with him. And they failed. He tried to dig in after meeting with Ms. Jones as to what the root cause was for this. They have some communication gaps in their company that he believes he was able to rectify, which he thinks will be a big piece in this not being a problem going forward. Mr. Tesmer stated various stores deal with their operational realm in different ways. Bringing in people who have worked in other stores do not necessarily have the understanding of what the City is looking for with this. That is a training piece that also needs to be addressed. Regarding the north strip of grass that was not mowed, for the ten years PetSmart resided ne�t to them, they mowed the spot. They believed it was their land and Home Depot believed it also. Not until near the end of July did they find out that strip of land was owned by Home Depot. They have sent their store teams out to clean it and have their landscaping company maintain that on a permanent basis. Mr. Tesmer stated that live goods product does not need to be there. They want it to be there to help sale and grow revenues for themselves and provide beautification for homes around the community. In their training program they can include the operational guidelines set forth by the City. They generally do not all change at the same time. This year, the District Manager and Store Manager changed at the same time. Mr. Tesmer stated there is also the garden business itsel£ There is a short window. It is a difficult management process. They do $20 million at the store in Fridley. At any given week during a specific time period, for example in May, 38 percent of all business may go through the garden center. That allows them to hire people, this year 23, for the garden center. They are currently looking for 4 people as that continues to be a fall business. Part of that is just that growth, and they look to continue that piece and be able to continue to hire people going forward. Mr. Tesmer stated they strive as a company to be a good corporate citizen. They try to be in parades. They interact with the Fire Department and the Police Department as much as they can. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 10 They are proud to be in the cities they are in, and they are proud to be involved with the cities. Mayor Lund confirmed with Mr. Tesmer that he is not denying the previous infractions staff has discussed. Mr. Tesmer replied, he has no personal ability to speak to anything before February of this year when he overtook this district. There were pictures of some, so he is not going to deny that. The pictures and the mowing issue they had on the north side, he became aware of after the letters were received. Unfortunately, if he could have fixed those issues before, they would not be here today. He will not deny that. Mayor Lund stated he understands Mr. Tesmer's point. He can only speak to the issues now. The testimony he has heard so far tonight, leads him to believe clearly there is an ongoing issue, and from what he has heard from Ms. Jones and Mr. Tesmer, there seems to be a disconnect in communication. He asked what assurances they can give the City that this will not continue to happen. Mr. Tesmer replied, verbally the assurances are that he has gone to their legal department as the connected with them on any issues of maintenance through the district manager to the store manager which did not take place before. He believed in visiting with Ms. Jones, there was some communication to their tax department which is not connected the way it should be. They will lay it out in their training program. Councilmember Bolkcom stated she has been a councilmember for quite a while. She has the minutes and this is similar to back in August 1996 and they had the same kind of reassurance. She does not know if the managers change every year, but it seems like once a year someone has to be reminded. Granted Mr. Tesmer does not have that history, but her history is that very honorable people just like him have stood up and said the same thing to at least some of this Council since 1995. She asked what is that reassurance. Mr. Tesmer replied, he thinks the communication failed. Legal did not communicate to the district manager when they received staff's letter, and that has been fixed. Mr. Tesmer stated he is not here to tell them he is better than any of his predecessors. It is communication links within their corporate office that should never allow this to happen again. Many of their stores operate with apron presentations and product so that is why it does not click as well as it should in cities that have a different outlook. Councilmember Bolkcom stated the reason she brought up Bachman's, Menards, and Wal-Mart is they are very similar operations. The City has a limited amount of staff. She cannot ask City staff to go out and inspect Home Depot's property and make sure they are maintaining the stipulations they have. The City does not have the same problems at Bachman's, Menards, or Wal-Mart. She happens to be a gardener herself and goes to all these places. The Home Depot nursery area could be arranged so those plants could be inside. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 11 Mr. Tesmer stated it is very simple. The picture is three garden carts on wheels that did not need to get rolled out. The understanding of his team not to roll that out is easy to fix. The pallet of mulch there. During a busy week they will sell 3,000 bags of Cyprus mulch. That is more than five semi-trucks in one week's time. A lot of it is about customer safety. It could be about loader safety. Some of it are for good reasons but they violated Fridley's expectations. They can stop that from happening. Councilmember Bolkcom stated they are here mainly because of the garden center, but they say they want to be a good corporate citizen. The City wants them to be a business in its community. If PetSmart is closed and the grass is not being mowed, why wasn't somebody just mowing it while they were mowing Home Depot's? It makes Home Depot's property not look good. She asked Mr. Tesmer if that part is now straightened out. Mr. Tesmer replied absolutely. They still have the islands within the PetSmart area they own that have leaves and have had them ever since they left. At times Home Depot has gone and taken care of those. Home Depot does assume the City would enjoy some accountability for that company to do that as well. If the City would like Home Depot to take care of that, he will absolutely take on that task. Councilmember Bolkcom stated the City does have a weed and grass ordinance where it cannot be above the 10 inches. Mr. Tesmer stated, yes, it has been well beyond that for the entire year. Councilmember Bolkcom stated and the City needs to look at that, too. It is great if Home Depot would take that on. Mr. Tesmer asked Mayor Lund if he would like him to do that? Mayor Lund replied, no, he is not going to ask Mr. Tesmer to take care of somebody else's property. Mr. Tesmer asked if he would allow them to do that. Mayor Lund replied, certainly the City does have people who are volunteers to do certain things that they do because they want the image of their business to look presentable. He cannot authorize or endorse that one way or another. If he was in charge he would probably want his business to look presentable when customers are driving through the PetSmart parking lot to get to Home Depot. He knows in the past staff has had contact with PetSmart because it is their responsibility to maintain at least minimally their property under the ordinances. Mr. Tesmer stated, considered it handled. Mr. Hickok stated to Mr. Tesmer he does appreciate his sincerity and believes his willingness to change. A concern from this, probably coming from his 15 years of personal experience of working on this particular property, is that he has spoken with other managers who have said it is FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 12 corporate. Corporate pushes them because May is huge. He has seen from the testimony tonight, it is a$20 million store and 38 percent of the sales in May come from the garden center. He wants to believe there is not a willingness to just bend because 38 percent of the sales come from the garden center. The City's data would show that happens every year almost as though to them they are saying, this is what they do because May is so huge they cannot help it, they are busting at the seams. Mr. Tesmer replied that is a good question and if he had the same situation as he has in other stores where he had an outside group structure, foot rail fence with hundreds of pallets of shrubs, beautiful annuals and perennials, it would be quite the challenge to eliminate that. He would be looking at a massive negative comparable year here in sales, and it would be a whole other conversation. They are talking about a few garden carts they want to use to make it look more inviting. The garden carts do not need to be out there. It is a simple enough process, and he is embarrassed they are dealing with it. This store has never put hundreds of pallets out. Their business can do the business that it does and grow within the walls they have there. Mayor Lund stated he recognizes that not everybody in the corporate world or anywhere might agree with all the ordinances. But they are there and have to be maintained and upheld unless they want to come forward and try and change the law. Mr. Tesmer replied he agrees with him. He has the authority to make those statements. His legal department is a support function for the stores. They would not be pushing him beyond the ability to live within the City's guidelines. Mayor Lund stated if this revocation takes place, it has to be a huge detriment for this Home Depot store. Mr. Tesmer replied, if that took place, they probably would not have a Home Depot store there. Mayor Lund stated and that is huge just to shut that down, and they would not be the most liked council either. That being said, he would think Home Depot would want to stand up and take notice before it even got to the eleventh hour. Councilmember Varichak said according to all of the City's records, it looks like the biggest volume is in May; however, it looks like some of the issues did not happen in May. She sees issues in April, June and July. She sees some other dates that this particular stipulation was not met. The City has checked it throughout the summer and noticed it is not in compliance. Mr. Tesmer replied, the recent ones for this year are within that somewhat, but he thinks it lends itself to prove that they can work within those walls, that it is not the 38 percent garden piece that is forcing them to go out there. It is poor communication between corporate and themselves. It is not having the standard set for all new managers that come in to understand Fridley's expectations for what their building should look like. He thinks that is a plus in saying they can make this happen by the fact that it was not just that which caused it. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 13 Councilmember Varichak stated and it is not that they do not correct it when it is brought to their attention because Ms. Jones indicated several times she files the code enforcement violation and then very shortly after it has been closed because it has been corrected. It is someone knocking on their doors saying they have to clean this up, and then it is good to go. Just as long as they are policing. They would hate to lose Home Depot as a business, and they want them to just keep under the rules so they do not have to police all the time. Mr. Tesmer replied, them, too. He will be the cop. John Haussner, District Operations Manager with Home Depot, stated his role as the district operations manager is in essence to be the cop. He ensures their stores are following Home Depot's policies and procedures and any other regulations they would be subject to. He, too, will be considerably involved with the source to ensure that all ordinances and regulations are being followed. Mayor Lund asked how long has he been the district operations manager for this store? Mr. Haussner replied, he took the role in February of this year. Mayor Lund asked whether the former managers have enlightened him with the past history of this store? Mr. Haussner replied, unfortunately, no. Mayor Lund asked what is his assurance that if he leaves, this will get passed on to the ne�t district manager. How do they break the cycle of disconnect in communication that seemingly has occurred? Mr. Haussner replied he is planning to be in the role for a while. He has been with the Home Depot for 14 years in the Twin Cities. He has discussed with Mr. Tesmer the method they are going to use to make the store aware of the current ordinances and regulations so they can continue following them. They are going to post the expectations and regulations in the store so they are visible. They are going to use it as a tool to train people who are in the store currently. Councilmember Bolkcom asked if they would also have them sign something indicating they are aware of this policy. Mr. Haussner replied that is something that he would not be able to comment on tonight. That would need to be addressed by Home Depot's legal department. Councilmember Bolkcom asked what they meant by "posting." Mr. Haussner replied posting what the special use permit spells out for them to comply with. Councilmember Bolkcom asked where it would be posted. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 14 Mr. Haussner said in the store manager's office. Mr. Tesmer stated they could go forward with a signature program. In fact he thinks that is a good idea for anyone new coming on. Dr. Burns asked Mr. Hickok how far up the chain of command did the City go with its communication? Mr. Hickok replied in 1996, one of the key executives from Home Depot, Atlanta, left the Olympics to come because of concern they were not in compliance at that time. Councilmember Bolkcom stated it says the President of the Midwest Division and the Real Estate Manager of the Midwest Store Support, and the Director of Real Estate Midwest was here. Mr. Hickok stated, yes, they were here along with somebody much higher up. The Vice President of Home Depot. Dr. Burns asked what if they shared their concern with the corporate CEO for Home Depot and the members of the board of directors? Mr. Hickok replied, certainly communication sounds like it is one of the issues here. However, the communication needs to happen. Councilmember Bolkcom asked, as far as following the stipulations, is the ownership on the City or on Home Depot? Fritz Knaak, City Attorney, replied if by ownership she means who is responsible for storing it, it is the responsibility of Home Depot. Councilmember Bolkcom and it is the City staff's job to enforce it, along with the City Council. Is that fair to say? Attorney Knaak replied, ultimately it is the Council's responsibility to determine whether it is complied with or not. Staff brings it to their attention, and they are permitted to review, based on a record like this, to see whether the conditions are being complied with. Councilmember Bolkcom stated it is not City staff's or City Council's job to follow the stipulations. They know what the stipulations are, and it is Home Depot's responsibility to follow the stipulations they have in their special use permit. Attorney Knaak replied that is correct. Mr. Hickok replied, the special use permit has been posted in the store before. That is something that previous managers have done as a practice, and he has observed it in their manager's area. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 15 Mayor Lund asked the Home Depot representatives if any of them have seen it before. Mr. Haussner replied he has not seen it. He has not looked for it. Mr. Tesmer stated it is not posted. Ben Conwell, Store Manager of the Fridley Home Depot, stated he did not have anything to add to the statements that have been previously made but is open to questions. Councilmember Bolkcom asked Mr. Conwell if he has seen the sign Mr. Hickok mentioned posted in the office related to no outdoor storage? Mr. Conwell replied, he has not. It will be posted now though. Councilmember Bolkcom asked if he was informed of it when he became manager. Mr. Conwell replied he was not informed specifically, but he was informed as to what he thought were the stipulations, the guidelines. Councilmember Bolkcom asked, and what were those. Mr. Conwell replied that they had some areas outside that were built for storage. Councilmember Bolkcom asked, what did "outside" mean. Mr. Conwell replied the landscaping that had been done; and they had just put some plants on there and pushed carts up ne�t to it which he assumed would be okay but apparently was not. Mayor Lund said there was also some temporary signage and there are no temporary signage permits. They understand in the course of business, they want to display products and materials and signage is helpful. It is easy to forget about those things. However, it is a little unusual they get to the eleventh hour with repeated violations. It seems like Home Depot has not taken it very seriously up to this point. Mr. Conwell replied, that is a fair assessment. He can speak to one point on the communications piece. Not that he can guarantee anything at this particular point, but he started with this company 13 years ago at the Fridley Home Depot. He has traveled all around and is back home with no intentions of leaving. Councilmember Bolkcom asked Attorney Knaak, as far as special use permits, does Council have some latitude. Could they come back in ApriUMay of ne�t year if they do not revoke the special use permit now? Would it make sense to continue the public hearing until then so they do not have to go through this process again, or does it make sense to close the public hearing and make a decision. She does not necessarily want to have to come back and look at how they are behaving in April/May/June of ne�t year which seems to be their busiest time. What would be the smart thing to do? FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 16 Attorney Knaak replied they are having a hearing and, if they choose to revoke the special use permit, it would have to be based on the testimony they have heard. In fact, they have pretty much admitted that they have not been in compliance. Council has this information. He recommends Council close the public hearing. Frankly if they continue the public hearing for a long time, it dilutes, weakens it. Its purpose is to have a full public hearing so that it can stand as the basis for a decision. If there is a subsequent review, obviously the more stretched out it is, the longer the testimony, the longer the observation. Attorney Knaak stated ordinarily in a situation like this he would recommend they take the testimony and then they have their record. They are not required to move immediately or move any time in the future, but it has to be within a reasonable period of time. Even the ne�t meeting or the meeting after they do not have to. In these cases a couple of things can happen. You can choose to do nothing and leave it alone. They can choose, based on this record to revoke or commonly what occurs is a dialogue can occur and they may end up revoking the prior conditional use permit as part of discussion, and another one gets borne as a result. Those are the three options as he sees it: Council can do nothing, they can revoke (and this is of course after the hearing) and they can revoke and with the property owners can essentially create a new one. Councilmember Bolkcom said one this Attorney Knaak mentioned was Council can do nothing, and he is saying do not continue the public hearing. She was trying not to go back to another public hearing during the summer as far as them following the stipulations that they have (No. 7) that is why she was saying it would make sense to continue the public hearing. Attorney Knaak is saying Council could revoke their special use permit and put a conditional one but then would they put another stipulation that it is reviewed in "X" amount of time? Attorney Knaak stated they can choose to revoke but, based on the information, do it in a way so Council is giving them basically a grace period before it is implemented. The Council actually has quite a few options. When asked if Council has the discretion, he always comes back at that with caution because it has to be based on the information Council has received. If Council is going to rule against them and take away the special use permit, they need to do it as close to the hearing time as possible. Attorney Knaak stated if they are looking at doing something different and are talking about e�tending the time or something like that, he would still have the hearing and close it. They have some options. It is something they have done when they continue a decision on whether there is going to be a decision. They can have and review, for example, findings of fact based on the hearing that provide for termination and Council cannot continue that. Continue action on that and it will be out there for everybody to see, based on the record. They can continue that for six months if they think that is a reasonable period of time. If there is compliance in that timeframe, they can just simply not pass it, permanently table it, or vote not to do it. Attorney Knaak stated one scenario he would see here and he is not recommending anything, as it is Council's decision, is to close the public hearing. They have their record. Ordinarily he would suggest or recommend staff prepare findings for the Council to consider which they can take or leave at their discretion but they are in front of them. Based on that, they review it, if FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 17 they are comfortable with what they see, they put that on the agenda, and they continue it. Again, they would have discussion with them and say, okay, here is what it is. Here is what is anticipated will be done; however, it is not being voted on right now. But they will continue this for six months. If they see compliance and, if they do not have a problem, it goes away. Councilmember Bolkcom stated and that makes sense. Mayor Lund stated there could be some type of discussion at the ne�t meeting when they actually take some type of action. Councilmember Bolkcom stated she disagrees because she wanted to know whether she needed to continue the public hearing. She was not trying to make a plan. John Anderson, 5909 Second Street, stated he was not prepared for this. It seems to him the easiest solution would be to drop the stipulation. From what he heard from Mr. Hickok, the City has taken a position not to allow outdoor sales to protect the interests of three large corporations within the city. Mayor Lund stated not necessarily. It relates to outdoor storage, not necessarily outdoor sales. They want products to be stored inside a facility or contained in a facility. The City has outdoor storage laws and ordinances in place, and it does not pertain to just these big box stores. Mr. Anderson replied, correct; but in the stipulation it says there are no outdoor sales, and that was one of the violations. They are not putting a bunch of plants out in the parking lot and leaving them out there. Mayor Lund stated, yes, outside the perimeters of their nursery they have put products, material outside and there have been other infractions in the past. Councilmember Bolkcom stated they have had sod outside. They may have only had two carts this year, but they have had a lot more stuff outside. Mr. Anderson stated product for sale. Not inventory. Not machinery or anything like that. Councilmember Saefke stated they have had lawnmowers and stuff in the past. Mr. Anderson replied, things they are trying to sell, so why wouldn't removal of the stipulation just solve the problem? Obviously they are not going to do something that is not going to make them money. It is something they are doing well enough in this division. The City has threatened to basically remove the store from the City. Mayor Lund stated they are not threatening anybody. Mr. Anderson replied, sure they are. That is what the revocation is. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 18 Mayor Lund said as far as removing the stipulation, they can certainly ask for that. He is remiss in the fact that they agreed to those stipulations. Mr. Anderson said that is fine, but it is not working out. Mayor Lund stated and now they have to abide by those stipulations. He would not allow an exception. Mr. Anderson stated Mr. Hickok said it has been the City's desire not to allow any other vendors other than the three large businesses. Mr. Hickok replied, that is wrong. They are talking about being consistent. Every special use permit in the City where garden sales are permitted is to be consistent. The second part of what he said is the City has taken a position that they do not allow outside vendors without the permission of the primary property owner. In other words, some cities have garden centers come to town where it has no relationship to the retail that is happening on that site. And those garden centers come in with a split rail fence and the concrete rock and the hoop house, but they are not there the rest of the year. It is not part of the retail mix of the store. The City has within its discretion the ability to say, look, if you are going to do outdoor garden sales, it is going to be part of your retail mix, it is going to be architecturally integrated into the building, and we are going to be consistent. It is not about protecting three businesses. It is about having everyone playing on the same level playing field. Mr. Anderson stated Mr. Hickok just admitted purposely doing it in his last sentence. He does not want to impact market share of the three large businesses. Mayor Lund stated he would think the other businesses would say, wait a minute, we abide by your ordinances and your stipulations. We have a more permanent structure and then others can come in and just put their product out in their parking lot. We do not think that is fair. Mr. Anderson stated you know we have Constitution Week coming ne�t week. Mayor Lund asked if Mr. Anderson was testifying on behalf of Home Depot. Mr. Anderson replied, he is not testifying on behalf of anybody. He is testifying because he is embarrassed. Mayor Lund stated to Mr. Anderson he is not helping Home Depot's case. Mr. Anderson replied, he is not trying to help Home Depot. He is embarrassed by the people they have elected on this Council. Mayor Lund stated that is not appropriate testimony for what they are dealing with this evening. Mr. Anderson replied, they are threatening to remove a business; and that is easy grounds for recall. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 19 Mayor Lund asked him if he had something to say pertaining to the issue before them. Mr. Anderson replied, as a citizen of Fridley, he advocates removing the stipulation. Mayor Lund thanked Mr. Anderson for his testimony and stated they will consider that. Pam Reynolds, 1241 Norton Avenue NE, asked in February 2010 with the Cub master plan for Triland Properties, their Stipulation No. 15 which says, "Site plan must be redrawn to relocate outdoor sales areas to a location off of an access drive aisle. Fence design around the outdoor sales area shall be reviewed and approved prior to issuance of a building permit." She asked why they were not working with Home Depot. They were willing to work with Triland to allow them to have an outdoor garden center. It is a temporary thing as she recalls. It has some kind of posts that stick into a setup so it can be removed. They are not talking about like a Linder's where they pick up the shop. She asked why they were not trying to accommodate this business. She is saying as a citizen of Fridley, she does not want to see Home Depot have to keep coming back because of a couple of carts of flowers. Or even a pallet of mulch. As a customer, it does not make her very happy to have to throw mulch into a cart and then haul it out the store and throw it in her car, if she can pull up somewhere. She is just wondering if there is not a better way to do this than the stipulation that is in place that says you just cannot do it at all. Because this is a temporary situation. It is the same as with Triland Properties would be a temporary situation. Mayor Lund replied, he understands her point. Ms. Reynolds stated it would be much easier for Council, staff, and the business if there was some kind of an agreement reached allowing them to continue the business in the peak period without all of the interference. She would rather see two carts of flowers and mulch. At least they are keeping it where their garden center is. To say that other businesses do not do it is not exactly true. You just do not catch them doing it. She does not know if Home Depot leaves those carts out there when they close at night. They must bring them back in. So, it really is not outdoor storage. It is temporary placement of product. Mayor Lund replied she makes a valid point. He is going to ask staff to respond. It is a two- way street. It is not up to staff. They can suggest some of these things and ask for them. They do not want them to feel they are trying to oust them or significantly damage their business as the testimony said. They do realize the significance of this. Mayor Lund stated it has gotten to a point where it is repetitive and, by Home Depot's own admission, there has been a disconnect of communication. It is not about trying to hurt a business. The City understands perfectly that Home Depot provides a significant amount of employment, and they help the tax base. It is not a comfort zone for him personally to be passing judgment on a business whose loss would be very detrimental to our community. On the other hand, he cannot look the other way if they do not want to agree by the stipulations. They agreed to them initially, and they should live up to them. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 20 Mayor Lund asked staff if there have been any discussions over the years about Home Depot doing something similar to what the City approved for Triland. Mr. Hickok replied in testimony they heard earlier this evening, there had been several different things that have happened over the course of time during that one period. They had asked about doing something like the Home Depot store in Maplewood had done with the temporary chain link fence area for their bulk materials in the parking lot. A short time later they did come in and expand their garden center allowing them to do offloading and have space for the product that is being priced and put properly in the garden center as well as the stuff that is already in the garden center for sale. It has been 16 years of dialogue, discussion, and open mindedness on the part of staff. There were citations issued in 1995. There has been an incredible amount of dialogue. Mr. Hickok stated the good news is the Home Depot people understand. They heard testimony tonight that they can do it within their existing garden center. Because of a communication problem they had not been doing so. They are not asking to have anything else in their parking lot right now. They have the largest garden center in all of Fridley right now in terms of square feet. The City did accommodate them when they needed additional square foot dimension. Mr. Hickok stated and how does that relate to the area across the way? That is a tiny garden center that SuperValu feels they need as part of their product mix--a part of their standard resale, to be consistent with their other stores within the SuperValu line. The Cub Food stores all advertise they have a garden center. They had to come up with a garden center plan that was architecturally compatible with this building and would fit in with the overall PUD there. There has not been any inconsistency here. If anything, Home Depot has been given consideration for not just one garden center special use permit, but review of a second and even a third. This Council and its predecessors have granted very large accommodations to allow them to do what they need to do there. Ms. Reynolds stated they have their garden center operational for about eight weeks. She can understand where it could be at some point in the season a little bit overflowing. She thinks it is a little bit nitpicky to jump on them about three carts of flowers that can be moved back inside at the end of the day. It is not outdoor storage. It is temporary placement. Councilmember Bolkcom stated she disagrees with Ms. Reynolds on the fact that it is not just three carts of flowers. Over the years it has been numerous things. She goes to the Home Depot quite a bit. They have to remind themselves they are here to look at a special use permit that has a stipulation in it. That stipulation is no outdoor sales. Home Depot may want to change it, Ms. Reynolds might want to change it; but there is a process to do that. It is not for City to take this on. As Attorney Knaak said, they are here tonight to hear testimony and come back with findings of fact, and there are many different options for Council. Ms. Reynolds stated but as a citizen of Fridley, she does not want see another business chased out over something as silly as flowers in a cart or even mulch sitting outside the area. It is not like they are storing garbage or something. It is part of the business that last eight weeks. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 21 Councilmember Bolkcom reminded her of the Triland conversation, they did have conversation about plants, plants outside, plants with fertilizer in them, and watering the plants. As Mr. Hickok mentioned that development actually would have impervious surface so it could be filtered out. Right now, depending on what is outside, rains can cause fertilizer to go out into the streams/rivers. Mayor Lund stated it is not just about a couple of carts' worth. He recalls issues about the fertilizer and types of things that can have an environmental detriment. He can recall one time they had granite slabs displayed outside their front doors. It is not nit picking, they have a history of it. The City does not want to run them out of town just for some carts, plants, either. He does not think that would justify revocation quite frankly, and he does not agree with the statement about just removing the stipulation either. It was placed in there; he thinks there is validity having it in there. He is not willing to make an exception because they might as well throw outdoor storage out the window, having that restriction. Ms. Reynolds' point is well taken. There have been some interactions. He is going to ask Mr. Tesmer to reply as to whether they would like some dialogue with staff about some other options similar to Triland. Mr. Tesmer stated tonight he views it as a conversation around the issue they are having. Can they have other conversations? They absolutely can, but he does not think that is on the Council's agenda this evening. Recent knowledge about a piece of grass they previously had no knowledge they owned, that piece of land does not have a value to them. Could it have some value to the City of Fridley and could there be some declaration in the future? Absolutely. Could they have discussion about an architecturally-correct garden center? He would welcome that conversation, but that is not the issue here tonight. Mr. Tesmer stated he is here tonight saying they can live within the stipulation the City has, and they will. If in the future they want to have conversations about other things, he welcomes it. He assumes the City would as well, but he views these as two completely separate issues. Mayor Lund replied, he agrees and appreciates Mr. Tesmer's candor in saying that Home Depot can live within the stipulations and are okay with them. Mr. Tesmer stated would they welcome that? He absolutely thinks they could drive more garden business if they had that, and they would welcome something like that. They could hire more people to work at Home Depot if they had it. How much e�tra comp would it be? He does not know but he knows it would be a few percent, and a few percent on two million dollars' worth of garden business is some money that allows him to hire some people. Mayor Lund stated from what has been talked about here, it would be of interest to the City if Home Depot wants to look at the situation if it is a hardship for them. It is better to approach the staff on something rather than staff having to repeatedly inspect or check. Mr. Tesmer stated, yes, it is time the City does not have to spend doing that either. Agreed. MOTION by Councilmember Bolkcom to close the public hearing. Seconded by Councilmember Saefke. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 22 UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING WAS CLOSED AT 9:28. Mayor Lund asked whether Council would like staff to do a findings of fact for revocation of the special use permit as they have been discussing at the public hearing and give Council an opportunity to discuss that and how they may want to proceed at the ne�t Council meeting. Councilmember Bolkcom asked whether the Mayor would entertain they wait until October 10? The ne�t meeting is ne�t week and would not allow them time to work out a lot of details. Mayor Lund asked staff if they had issues with a delay with waiting until October 10. Ms. Jones stated the findings of fact have already been done. Councilmember Bolkcom stated there is more information here tonight and she would not like to do it ne�t week. Mayor Lund stated he is not against waiting until October 10. Mr. Hickok replied, staff has no problem with coming back with it in October. Councilmember Bolkcom stated and she would like staff with the City Attorney look at whether they revoke this and have a new special use permit with stipulations and have a review process, or table the revocation until say like July 2012. 6. Consideration of Amending the Fridley City Code, Chapter 206, to Include Sanitary Sewer Cleaning Services to the List of Licensed Contractors. MOTION by Councilmember Saefke to open the public hearing. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING WAS OPENED AT 9:29. James Kosluchar, Public Works Director, stated the City's sewer supervisor indicated the City has had about half a dozen cases in 2010 where contractors partially blocked sanitary sewer mains during their service cleaning operation. Staff believes a licensing process would protect residents by identifying procedures that sewer cleaners need to follow. Mr. Kosluchar stated sanitary sewer contractor licensure would include mailing procedures for notification to the City when the sewer lines are cleared, avoiding the potential for main backup; providing for communication to residents, including important City policies that they need to be aware of, and making sure contractors have adequate insurance. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 23 Mr. Kosluchar stated they propose a change to Chapter 206 of Fridley City Code, basically adding a sewer cleaning contractor as a licensed contractor in the City. They are having a public hearing tonight. This is not required for this particular ordinance change, but staff felt it was a good idea and Council agreed. The first reading of the ordinance could be as soon as September 19, and the second reading on October 10. If approved this fall or any time prior to January 1, 2012, they could have these in process. Mr. Kosluchar stated the draft application staff has drawn up, which has been sent to some of the contractors, is an annual application. There would be a nominal $35 fee. Originally they had talked about a$100 fee, and there is a$35 fee stipulated for a contractor's licensure generally with the City so they thought they would be consistent. Mr. Kosluchar stated the draft application includes contactor's liability and workers' compensation insurance certificate, a background check, contractor's acknowledgment that they will disseminate information provided by the City of Fridley, and notification of the City by the contractor when cleaning of sanitary sewer services is performed. Mr. Kosluchar said the Public Works Department sent a letter, draft ordinance language, and a draft application to 15 contractors known to work in the City of Fridley and contractors listed in the Fridley yellow pages. The City has received three comments. One letter from Drain King Sewer and Drain Cleaning dated September 9, one call from a contractor and one call from Senator Pam Wolfe's office calling on behalf of a concerned contractor about the proposed licensure. Mr. Kosluchar stated in Drain King's letter there was concern expressed about finding a contractor at 2 a.m. and if permits are required to be pulled the cost is passed onto the consumer. The City's response is that every job is not required to be licensed under the proposed process. The City is available on-call if required to assist locating a licensed contractor. Drain King asked the question about whether a building sewer cleaning contractor would license only internally. The license would require internal drain cleaning as well, and the sewer connections to the main and within the City rights-of-way would be the sewer cleaning the City would license. Mr. Kosluchar stated Drain King pointed out no other city in the metro area licenses these contractors, and they are correct. Actually statewide staff could not find another City that licenses these contractors. Staff has talked with the League of Minnesota Cities Insurance Trust and they support such type of licensure. They are very interested. Drain King also added that licensing creates no issues for them, and staff expects no issues would be created for any reputable contractors other than there is some additional process and paperwork on an annual basis they need to provide and a small fee. MOTION by Councilmember Bolkcom to receive a letter from Drain King dated September 8, 2011. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 24 Councilmember Bolkcom asked about the other contractors' comments. Mr. Kosluchar replied the comments were related to the application and the depth of information requested in the application form. It was a four-five page application. Some of those pages are breakouts and attachments from other types of applications for a contractor license including a background check which was a single page. Staff had a supplement that was one and one-half pages, and it included a list of vehicles that would be used by the contractor. The one comment was that may be unnecessary, and he agrees that it may be unnecessary. The City does use that, however, for other contractors. The other comment was whether the background check was necessary. Councilmember Bolkcom asked if Council had received a copy of the application. Mr. Kosluchar said he thought it was provided in the packet. Councilmember Bolkcom asked if that application is the normal routine for anyone who applies for a permit. Mr. Kosluchar said he thought for three types of contractors, it is about five or six pages. Councilmember Bolkcom asked what kind of questions it goes through. Mr. Kosluchar replied, basically there is on page on insurance—liability and workers' compensation. Councilmember Bolkcom asked if they had to show the City a copy of that. Mr. Kosluchar said there is an introductory page as well that is general information on the business and insurance information. There are some questions related to sewer work and acknowledgments that they will contact the City when they do cleaning, etc. There is a signature page. The background check is the final page. Councilmember Bolkcom asked if that was the normal routine for anyone who applies for a permit. Mr. Kosluchar replied, those are actually licensed through the State. For the City's contract licensure, there are two groups. One is very similar but does not include the background check and then there is the group that is actually processed by Finance and Public Works, and those do require a background check. Councilmember Bolkcom asked if someone has a problem at their home, how they would know the contractor is licensed in the City Mr. Kosluchar replied there are a couple of inethods. They could provide them with their certificate. The City does list contractors on-line. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 25 Councilmember Bolkcom asked what would happen if they do not have a computer. Mr. Kosluchar replied, when they do any kind of emergency repair or maintenance, including sanitary sewer or water utility repairs, if the contractor does the work without a permit, they obtain a permit as soon as possible. Councilmember Bolkcom asked but this is not a permit, this is a license. They do not have to have a permit for every job they do. Mr. Kosluchar replied, correct. They do not have to have a permit for every job they do. If they do not have a license and they are saving your basement from being flooded by cleaning out your sewer drain, the City is not going to object. The City will request they obtain a license as soon as possible thereafter. Councilmember Bolkcom stated unless you have someone you work with all the time, you start dialing and whoever promises to come right away is who you get. There might be ones who do not have a license. In the meantime, say they do have a license and they clean it out for her and they might push something out. Then what does that person who has the license do and if it is after hours. How does that prevent the ne�t person over from having the same problem because they have pushed it out and now it has gone over into theirs? Mr. Kosluchar replied, they will leave a number for them to call and contact the City. Councilmember Bolkcom replied, and someone would go out and inspect that night? Mr. Kosluchar replied, they have a person on duty 24-7 so they could make a determination based on a conversation with the contractor if they were able to converse with the contractor. That might be shallow, flat, which might be subject to back up. They would then be going out to check on it. Councilmember Bolkcom asked how would that person on-call know that? They do not have all that information at home. Mr. Kosluchar replied, they would be getting a phone call from the contractor. And if they did not talk to them in person, the number would roll to their pager and would be called out. Councilmember Bolkcom asked is he saying, if she had a sewer backup at her home, and she has a licensed person, they call this number and leave a message, "I cleaned out Ann Bolkcom's line" and the ne�t thing that person would go out and inspect it? How would that protect her two neighbors on either side? Councilmember Saefke stated the City keeps telling citizens if you have a sewer backup, the first number you should call is the City so they can check the main line first before you get too involved with your personal one because you may not be the only one having a backup. It may be in the main line. And so you already got your weekend duty person on call who has already gone out to check the main and typically they would help provide the homeowner with people FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 26 you may know who are licensed or give other advice as well and leave a number where the contractor could call them so they could check the line afterwards as well. Councilmember Bolkcom stated she would bet not half the people who live in Fridley know to call the City first. Mayor Lund stated the City has tried to advertise that on numerous occasions. Most people are not aware of it and do not think of that when it happens. Councilmember Saefke stated he also thinks the homeowner has a little bit of a personal responsibility as well. Not to say that in an emergency people are not going to call the first plumber they can find to come out and do it. However, there should be some due diligence, just like in any other activity or contract you may want to hire. The vast majority of sewer contractors are above the board and honest; however, once in awhile you might get a clinker. Dr. Burns stated and the City has experienced that. Councilmember Saefke replied also most citizens are unaware the City will televise your home line free of charge. That service is provided as part of the resident's service from the City's own sewer department. Councilmember Bolkcom asked she does not understand how someone having an actual license makes it different. Councilmember Saefke replied it is like any other service. You have to take a little responsibility yourself. Councilmember Bolkcom stated you can use a licensed contractor and still have problems. Councilmember Saefke stated you can be a licensed electrician and they can sell you stuff that you do not want or need. Councilmember Bolkcom stated that is the only problem she is having. This is not going to solve that with people who do that now. Dr. Burns stated there have been a number of incidences of fraud in our own City from sewer cleaning outfits where people were forced to pay for something they did not need. A licensing process allows the City to keep a record of these. It may not know about all of them, but the process itself allows the City to set something up where they screen and take note of complaints about a given company. Councilmember Bolkcom asked if there is something in the licensing process that will allow the City not to provide a license legally? Can the City say someone cannot have a license? FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 27 Mr. Kosluchar replied there are two things important to him in the licensure. One is the notification by the contractor. If they fail to notify frequently, the City knows on repeated events it is not a mistake that they fail to notify. If they purposely fail to notify, the City talks with the attorney and suggests a method to reject or revoke their license. If they continue to try and work in Fridley, then they go down another road with some method of enforcement. He does not think they would have to go there. The contractors in this town would abide by that communication requirement. The other requirement is to make sure that any of the clientele they approach in Fridley has information relating to the City's policies on sewer maintenance and that the contractor is not telling them you own to the right-of-way line. It is the City's responsibility to maintain the rest of the sewer service. This incorrect according to our ordinance, yet people will adamantly stand there and live with a backup and wait for the City to come and rescue them from their own service they are responsible to maintain. That is a very limited bit of misinformation. There are bigger pieces of misinformation that do get floated around to the homeowners and sometimes puts the homeowners in a position where they feel they have to do something they do not necessarily need to do. Councilmember Barnette stated what is interesting is that Mr. Kosluchar mentions, for instance, plumbers, electricians, and so on are licensed by the State. Why is it that sewer cleaners have always apparently been forgotten? Councilmember Bolkcom asked why we are the first City to do this. Mr. Kosluchar replied because each City's policy on its utilities is different. Councilmember Bolkcom stated she finds it hard to believe other cities are not concerned about those things. Councilmember Barnette stated he has had the situation where he had a large group over, say for Christmas, and then have a sanitary sewer backup. You want to have it taken care of right now. He knows a couple who do it as a business but apparently are not licensed. He is going to call them right away. That is what he is going to do as a homeowner to get the problem taken care of. He is probably not going to call the City or go through the phone book. He asked how this was going to change that? Mr. Kosluchar stated there are about 15 total contractors the City knows of who either work in Fridley or who are in the yellow pages. They are probably going to know about the City's license procedure. On the outside chance they do not, again, the City is not going to impede any kind of emergency service; however, if the City knows about it they are definitely going to ask them to license themselves in Fridley. At some point, all the contractors would be licensed in Fridley and would not have a problem with being licensed. Councilmember Bolkcom asked if she is a plumber, already licensed, does she need a license in Fridley to clean the sewer lines? Mr. Kosluchar replied, certainly. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 28 Dr. Burns stated this idea came up through the Council/Commission survey process. It came from our sewer maintenance foreman. He thought there was a need for it. Mayor Lund stated he believed this came about from his request looking into licensing, and he was surprised to find no other cities had it. The purpose was because from time to time every year there have been several cases in the City where a larger backup problem has been caused by shoving whatever is in the lateral into the main. It would be great if they would all voluntarily notify the City when a sewer contractor/plumber cleans out the sewer of somebody's home or business so the City can do an inspection of the main. There are cases every year where multiple homes get backed up. Mayor Lund stated it was really an exploratory thing to see about licensing and see how that might better aid us and others. He only brought it up because he saw that every year the City has this issue. Will the City get compliance from having licenses? No. However, in the industry they tend to self-police. The fee is only to pay for staff's time to do the background check. Councilmember Bolkcom asked, how many times a year are they talking as far as the main sewer backing up into other properties? Mr. Kosluchar replied, he cannot say they have had many backups. They have had about half a dozen instances in 2010 where contractors left debris in the main. Councilmember Bolkcom asked how the City heard about it. Mr. Kosluchar replied, usually what happened in those cases was the owner needed to do some additional repair work or requested the City's televising service and then they found out about it. Councilmember Bolkcom stated so they had the work done and they called the City. Councilmember Saefke stated not only is it dangerous but you can get hepatitis. There are all kinds of nasty germs. He understands the League of Minnesota Cities is kind of interested in this particular ordinance, and he can see their interest in it because he thinks it protects the City in some aspects, especially when it comes to liability on sewer main backups. If a contractor fails to notify the City, the contractor has some liability then if the main itself is plugged and another basement gets flooded which brings to mind one other thing kind of an aside to the last comment. If you do have a sewer backup and, this is from his experience, if the water continues to rise. You have two things to think of. One, someone is running water in your house and you do not want to do that at all. Second, if it continues to rise, the City main may be suspect even though they are supposed to be checking valves in floor drains, etc. Also, if you do have a sewer backup and you suspect it is in your own line, until you get it repaired or fixed, do not use any water or flush any toilets or do any laundry or anything like that because it would just get worse. Councilmember Bolkcom asked if they could just contact the different plumbers and drain cleaners, and send them an informational packet telling them when they are in the Fridley you need to do these things. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 29 Mr. Kosluchar replied, they could try and have them voluntarily do it. The City has repeatedly requested some contractors to contact the City. Part of the problem is that they change staff. Councilmember Bolkcom asked once the contractor, plumber or drain cleaner calls the City and it notices they have pushed something up there, does the City push it back? Mr. Kosluchar replied, no, they collect it and dispose of it. That is another free service the City provides. They just have to be notified, that is all. Part of the protection here is for the unknowing neighbor who might not have any idea their neighbor has a backup and the neighbor happens to be downstream. Terry Overacker, 502 East Main Street, stated he is a plumbing contractor. He is also the contractor who called Mr. Kosluchar. He does not oppose the license. It is $35 a year which is not a big deal. He has some issue with the application itself. His company is reputable. If you go home tonight and your sewer line is plugged up at 2 in the morning, you call his company, he is the guy who is going to answer the phone and he will ask how can I help you. He said he started his company in Fridley in 1997. To this date he has not received a packet from the City of Fridley informing him of what its procedures are to clean the drain. He talked to Jim but that was just on Friday. He can assure them a homeowner could care less about the City's telephone number when they have water and sewage backing up in their basement. Mr. Overacker stated if the City wants to license a program so everybody is on the same page, and it is a level playing field, that is awesome. His company carries $4 million worth of liability. The difference is he was also the contractor who was off of East River Road a few years ago and cleaned a house sewer across the street and directly across the street, a day and a half later, the City cleaned its line. Blockage from a block up the street flowed downhill and put three feet of sewage in a person's basement across the street. His customer called him, thinking he had something to do with it. Mr. Overacker goes out there. They go across to look at his house, and he called the City and immediately it started being resolved. Mr. Overacker stated Fridley is the only one that wants to do this. Is Fridley going to set precedence in Minnesota? Absolutely. Is it a good thing? He does not know. They will have to tell him in five years. On the draft he received of the application, there was a series of information about vehicles. Every seven years they give you a new set of tags for your truck. His staff will not remember to call the City and tell them they got new plates on the truck. He buys trucks all the time. Every year they buy a brand new truck, they retire a truck. He will not remember to call and add that. They got the billboard on the side of the truck that says, "Terry Overacker Plumbing Incorporated" and big phone numbers. He can be seen two blocks away and can be seen who is cleaning that line. He does not think that part is going to work for the City. Mr. Overacker stated regarding the sewer packet the City wants to hand out, his employees complain now because he gives them too much literature to give to his customers that pertains to his company. If they are dispatched and the closest guy says he is out of packets and the customer does not get a packet, is Mr. Overacker going to get a letter saying you did not give a packet? Maybe if the customer calls the City. However, there are customers who do not even FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 30 want to talk to the City because they do not want inspectors in their house. On the other hand, with the application, they have a background investigation check If a reputable company is going to drug test their employees, they are going to do a background check and a criminal check. These guys are handling thousands of dollars of his money. He wants to know who they are. There is always going to be a company who is going to beat the system and do it every day. Mr. Overacker stated he thinks this goes a little deep. He does not have anything to hide at his company. His company would pass this with flying colors, but he is not the guy going into the house. He is sitting at a desk a minimum of ten hours a day. His guys are going in and out of the houses, and the City will not have their information. He told his guys, okay, we are all going to go down to the City of Fridley and fill this out. Even though they are great guys, they are going to think their privacy just got invaded because of a job. Mr. Overacker stated regarding the process of cleaning the drains, he has been doing it since he was 14 years old. No. 1, when you clean a drain, if you just have an electric auger and it goes down there with four or six inch cutters in that four-inch line, if this pipe is a 100 feet to that house is full of water, anything you cut loose in the process is going to flush into the City's main drain and there is nothing they can do about it. Most companies that clean drains cannot afford cameras. That is a$12,000 investment for one truck. He has five trucks on the road today. That is $60,000 he has to put in his trucks to do what they want him to do which is a major burden. Mayor Lund stated he has not heard anyone talk about having that. Mr. Overacker stated it was when talking about whether the plumbers/drain cleaners should camera. He personally feels if he has a line that is clean, it should be cameraed. Unfortunately as a business they cannot do it for free like the City can. So they have to charge for that service. You are doing that customer a service to make sure you get all the roots cut. Unless it is presented to people, they do not know that. Mr. Overacker said he is curious to know what the City provides to the customer, for instance, if you have to dig the lineup. He knows about the City providing the camera as they have been out on a couple of jobs his business did. Regarding notifying the City, again, unless you live in Fridley you do not get the paper that says, notify the City. He has been open for 19 years and never received a letter from the City. He personally thinks it is a great idea if the City wants a contractor to call and protect somebody from being flooded out. He also knows he does not have a phone number to call. If the roots are minimal, if there is a big bog then they have to call. If Councilmember Bolkcom had her line cleaned out tonight and tomorrow Councilmember Barnette goes in and cleans his line, which put the roots in the system that floods up the line? Is the City going to go to his insurance company and say, hey, you cleaned up this line and it plugged up this guy's house. However, the guy up the street may have actually done the damage and Mr. Overacker gets the bill for it. His insurance company will fight that tooth and nail he is pretty sure. He thinks it is a great idea to go out and flush that main like they did off of Fairmont that time. However, it is that middle of the night call the City is not going to get. He would not want to carry the packet as he has enough of his own paperwork to hand out, but he would certainly carry a laminated card in his wallet for emergency services. The City could provide the card for every plumber/drain cleaner and they could put it in their truck. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 31 Mayor Lund stated to Mr. Overacker they will certainly take his comments into consideration. Joan Zmuda, 6051 Fourth Street NE, asked regarding the background check, who is that going to be done on, the owner? Is it for all the guys who work for the company? Mayor Lund replied, it would be the applicant, the license holder or the owner of the establishment. Ms. Zmuda replied, as an old lady who lives alone when she has somebody come in her house to clean her drain, she would like to know they pass this thing. If they are going to do a background check, they should do it for all the employees. MOTION by Councilmember Barnette to close the public hearing. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING WAS CLOSED AT 10:18. Councilmember Bolkcom asked when this would come back to them. Mr. Kosluchar stated they could bring it back at the ne�t City Council meeting. Mayor Lund asked staff whether they feel confident they can look at the issues without further discussion within the ne�t week. Mr. Kosluchar replied the draft of the ordinance language is very simple and they could just basically add sanitary sewer cleaning contractor to the list of contractors. It is more on how they process the application. He asked if they wanted to go forward with licensing contractors. Mayor Lund replied, he is okay with ne�t week. Councilmember Bolkcom said if the ordinance was on their agenda ne�t week, she would vote against it. Councilmember Barnette stated he felt the same way. No other cities have done it. The State has not done it. Are they just adding another burden on the City that probably is not necessary? He would have to give some thought to it. Mayor Lund stated it would save the City in the long haul from having multiple or larger problems. Councilmember Bolkcom stated she would still like to know how many times a year the City has a problem. Mayor Lund stated last year they had six that they know of. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 32 Councilmember Varichak stated it is nice to be the ones who first start it but not for the sake of just starting it. Councilmember Bolkcom asked could they do an informational packet with just a little sticker. Mayor Lund suggested they bring it back for further discussion. Councilmember Bolkcom asked if they could also see the application. Mr. Kosluchar replied, he will provide them. NEW BUSINESS: 7. Resolution Certifying Certain Lands Forfeit in Anoka County, Specifically 8100 East River Road, and Recommending that the Property be Retained by the Anoka County Highway Department for Use with Future Improvements to East River Road (Ward 3). Mr. Hickok, Community Development Director, stated as part of the standard practice, the County has asked when it reaches the point of tax forfeiture for the City to certify its forfeiture status and also to indicate costs it had into the property, etc. This is the site of the Texaco station that was badly damaged by a fire, and the owners chose not to do anything about it. The City had to act and, as a result from the cleaning up that site the City has accumulated $83,168.48. The County asked the City to sign a resolution earlier in the year. The City asked the County for an e�tension to work with the County Highway Department to see if they might have a need for that property. Mr. Hickok stated one thing the City wanted to make sure of was that communication happened between the County Highway Department and the land title office and they wanted to see if there is a way, since this property has gone tax forfeiture, for getting the City's abatement funds back. The County's position on that to the Highway Department was the City would not be able to recover those funds. The City has had some good discussions with the Highway Department. They agreed to at least future discussions on ways to offset the City's costs that it has in that site with future city side costs on that corridor improvement project. Mr. Hickok stated he recommends Council's approval. Mayor Lund stated he for one does not want to give it to the County unless they are getting reimbursed those funds. Mr. Hickok stated the only problem is the property does not belong to the City. Through the tax forfeiture process what this resolution does it starts them on their way then to putting up the property up for sheriff's auction. Instead of having this just go as a standard certification as tax forfeit and being put on the ne�t roster for sheriff's auction, the resolution will be pointing out the County highway department is interested in it and, by them having it, that may be the City's way to get back funds it has invested in the site because they need it; and the City will have some FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 33 costs in that improvement project somewhere along the line. They may be willing to offset those costs for what the City has invested in it. Councilmember Bolkcom asked if it is a buildable lot. Mr. Hickok replied, it is zoned commercial. It is a C-2 zoning which would require 20,000 square feet. Councilmember Bolkcom stated it is a buildable lot. It could be sold to someone as commercial property, and could go back on the tax roll. We would then get some money back. She asked what the City's costs would be for the improvements. Mr. Hickok replied right now the opportunity for the City to get the money back for the abatement is slim. The taxes owed on this parcel are owed to the County. The County in essence has the claim to this property, and the County would hold it if they needed it for their highway purposes. In the future when they are doing their work on the realignment of the roadway, they may have a purpose for it and may be interested because the City has already taken on the expense of cleaning it up and making sure the tanks are not underground. They may be interested in helping the City out with an offsetting cost somewhere in the process. Councilmember Bolkcom stated she cannot see where they would want to give the City some money back Yes, it does make sense for the City to be part of that realignment; but they already invested $83,000. If push comes to shove, put it back on the tax rolls and get the money back. Mayor Lund stated, yes, but it has been pointed out the City does not have that right because they are going to take it. Councilmember Bolkcom stated, right, but if it was sold to someone, and became a commercial property, it would go back to the tax rolls. Mayor Lund replied but they will not let it go to Sheriff's sale. They have the first right to it if it goes to a Sheriff's sale because there are taxes owed on it. Mr. Hickok stated the Highway Department has indicated an interest in the property. Councilmember Bolkcom asked they needed a resolution. Mr. Hickok replied, state law. State law requires the local jurisdiction to certify the property when it becomes tax forfeit. It is an obligation. MOTION by Councilmember Bolkcom to adopt Resolution No. 2011-38. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 34 8. Approve Change Order No. 2 to Valley Paving, Inc., for 2010 Street Rehabilitation Project No. ST2010-01. James Kosluchar, Public Works Director, stated this is the final change order for this project. The change order includes all additions to the eastern area of the project. They had a prior change order that included both the western and eastern areas of the project. The first three items are related to repaving that happened on Mississippi Street, east of Central Avenue. That was where the pavement kind of rolled when you drove over it. It was uneven. Staff worked with County and initially they were trying to determine the cause. Staff did some additional testing and found out the mat was uniform, so that County agreed there was apparently a base issue with those areas and the paving. This would be the $19,633.53 for these three things which would basically be a County cost. The County agreed the change order should go forward with these costs included. Mr. Kosluchar stated Item Nos. 4 and 7 and 12-15 are grouped together because those are all related to Central Avenue and reconfiguration of the intersections, one at Rice Creek Road and two at Mississippi Street, but mainly at Rice Creek Road. This was because Anoka County was working with the City on a reconfiguration of that intersection. The City did not receive it in time to incorporate it into the initial plan, and staff knew there were going to be some changes. Mr. Kosluchar stated Item Nos. 8-11 are related to substandard base in the eastern area on three street segments. The City added approximately one-half inch of asphalt depth on these three segments. They included River Edge Way, Ben Moore Drive, and Kerry Lane. They were deficient in the base once the asphalt was removed; therefore, the City had to add additional thickness of asphalt. Mr. Kosluchar stated the final item, Item No. 16, is a water valve manhole on Mississippi Street, east of Highway 65. There was a water valve manhole there which was unmarked and actually not visible when the survey was initially done for the project. When they milled down, the contractor discovered the manhole. Mr. Kosluchar stated the total of the change order will be $54,185.37; and it raises the contract to $986,062.72. Of that amount, $28,289.25 will be reimbursed by Anoka County. That will leave $25,896.12 which will be paid by the City from its MSA account. Mayor Lund asked if all the corrections through Valley Paving have been made that the City identified last year. Mr. Kosluchar replied, it is his understanding that all those corrections have occurred. There are some turf issues remaining, but those actually did not crop up until this spring; therefore, those were not on the initial list last fall. In addition, this change order does not include any adjustments that were discussed previously. Staff discussed some of those adjustments, such as they have a handful of deduct items, with the contractor. One of those includes liquidated damages. Those will be included on the ne�t pay request. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 35 Mayor Lund asked if that is still an item of contention or disagreement between the contractor and the City on liquidated damages. Mr. Kosluchar replied staff has spoken with the City Attorney on a couple of occasions about the how to process that. Basically the City will deduct it off the ne�t payment. Councilmember Varichak asked whether this is still under budget. Mr. Kosluchar replied, he does not have an answer yet on the numbers. He can certainly provide that to the City Manager to forward to them. Councilmember Bolkcom questioned how the amounts add up. Mr. Kosluchar stated the total cost for Item Nos. 8-11 should be $24,521. Councilmember Bolkcom asked about the City paid for something and did not know about it right away but it is settled after the compaction. Mr. Kosluchar replied, it was within a day or two. He thinks he actually had a call the ne�t day about the road surface. Staff was out there that night and saw it. Councilmember Bolkcom asked if the contractor knew. Mr. Kosluchar replied, no, it was settling as the City was paving. Staff pointed it out to the contractor, but it was on their last pass of the day. They were actually very close to the end of their final paving pass. Staff pointed it out to them before they left and talked about it trying to figure out what happened. They made some adjustments the ne�t day in the rolling intensity and reduced it from what the contract required and they did not have the same problem on the south side. Councilmember Bolkcom stated but in the meantime, they did the whole thing and they did not notice it. It was $19,000 more because it had to be milled and paved again. Mr. Kosluchar stated what happened when they were paving this section of street, they lay the asphalt at a thickness, they try to define their yield, they lay it down, and they basically come in with their rollers. As they were rolling it, that is when they started to see the warping of the surface. Once they get the finish roller on it, you are done. Mayor Lund asked if the contractor had some liability to perform under the contract and if so, why are we paying for the change order rather than the contractor. Mr. Kosluchar replied, certainly. That was the position of staff and the County. He thinks what everybody came around to is the fact that based on the pavement cores they took, etc., there was no evidence there was any kind of problem with the paving method necessarily. It had to do with either the compaction or the solids or a combination. In the end the County said they would accept the request for the change order. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 36 MOTION by Councilmember Varichak to approve Change Order No. 2 to Valley Paving, Inc., for 2010 Street Rehabilitation Project No. ST2010-01. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 9. Motion to Approve Automatic Meter Reading (AMR) System Implementation. Mr. Kosluchar, Public Works Director, stated since the water system is from about the 1960's, staff has looked at the reader replacement schedule in recent years and typically AWWA standards says 20 years after installation. Fridley's meters are about 30 years old and are currently being replaced on a 40-year cycle. The City has been looking whether they should accelerate this meter replacement program. One percent of lost billing equates to roughly $60,000-$70,000 per year. It is not only water revenue the City is talking about, it is sanitary sewer as well, because the sewer obviously is based off of a metered amount. Mr. Kosluchar stated staff has been studying implementation of AMR, along with meter change-out for the past two years and continued to research available options until recently. Residential currently is typically a self-read local meter. Commercial typically has an AMR device already installed that enables the City to read in difficult conditions. A lot of times the meter pits are difficult to access in commercial establishments. Industrial establishments require security clearances, etc., and it is time-consuming to read those. In addition, non-readers get the AMR's installed after a certain number of cycles of no readings for residential properties. The City uses an Itron AMR system, and it is a drive-by AMR system. About 10 percent of our 8,800 meters are currently AMR. Mr. Kosluchar stated the benefits for the utility of AMR systems include reduced meter reading costs, ability to access difficult-to-read meters, improved customer service because staff can feed back information more quickly, meter reader safety in difficult to read locations, reduced read- to-bill time, improved leak detection and fraud indicators (can be converted to smart readers at some point where they can indicate a suspected water leak because of sudden high consumption), and also reduced workers' compensation risk. Mr. Kosluchar stated one of the customer benefits of AMR systems is accurate and more frequent billing statements can be done. There is improved customer service. The City can provide detailed usage information, because it is electronic and downloadable. There is improved meter reading accuracy through the reduction of errors and manual readings. There is improved consumption information for tracking and budgeting purposes for the City. Mr. Kosluchar stated there are two main types of AMR systems. One is a drive-by where a vehicle is equipped with a radio read data collector which is what Fridley currently has. Staff collects the readings by driving a vehicle around the intended route which is in close proximity of the computer. The data is downloaded at the billing office. There are lower up-front costs for this type of system, but it has higher operational costs including fuel, vehicle, and employee time to collect the data. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 37 Mr. Kosluchar stated the fixed network is newer type of AMR system and it is because technology has improved so that transmission from meters to a location has a longer range. What happens is you have six mounted antennas that collect data. The receiver is connected to a central processing unit or computer that catches data from the field. These are more suitable for densely populated areas such as Fridley and urban areas. One of the advantages is the ability to capture readings on demand or on a more frequent basis. Mr. Kosluchar stated if they look at the existing AMR meter locations, there is really not a pattern. Staff has held a number of ineetings with the City Manager, Finance Department, and Public Works staff to determine the best course. Staff has done interviews with the vendors, and interviews with other cities which are in different stages of migrating to an AMR system. Of particular help were interviews from agencies, such as Roseville's Water Department who in 2010 were awarded a contract for AlVII� implementation. Mr. Kosluchar stated they have narrowed down the process. One option would be a complete contract change-out for about $2.2 or $2.5 million. The City of Fridley could change out the entire system with new AMRs. The advantages include the quickest method to get to a functioning fixed network and limited impact on staff resources. The disadvantages include the cost. It is the highest-cost alternative, difficult selection process, and a sharp learning curve for staff. Basically, everything is implemented at once and while, they would expect some training, staff would be basically on its own at some point with the entire system. Mr. Kosluchar stated another option would be select purchase equipment and contract installation. This alternative staff has kind of developed as a medium alternative which would implement over four or five years a complete AMR system. The City would provide services in this case such as meter installation to reduce costs. It would basically hire some additional seasonal personnel to do installation. Advantages to this approach include getting network installed soon with some savings vs. a complete change-out by contract. Disadvantages include cost, most difficult, and the process would impact workload. Staff actually developed an RFP for this option to kind of determine what they would want to incorporate in this option. Mr. Kosluchar stated the last option staff discussed was self-implementation. Under this alternative, the project would be implemented over 10 plus years. Maybe 14 years. The City would purchase new equipment and install. There would be a gradual migration to a fixed network This is similar to what the City is doing right now except on a little more accelerated pace. The advantages include the fact that this is the lowest cost option, roughly $1.4 million over time, and staff is familiar with the system. Therefore, it would require less staff workload. The disadvantages are slow realization of a fixed network system and benefits thereof. Mr. Kosluchar stated in early 2011 as staff was evaluating these options, new technology from the City's current vendor made what staff thought is the most viable option. There is a new meter transmitter that can be migrated from a drive-by system which the City currently has to a fixed network The City can migrate this network at any time from a drive-by network to a fixed network at some future point. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 38 Mr. Kosluchar stated staff recommends the City do the self-implementation option with updated equipment compatible with the metering system it has which utilizes existing AMR capabilities without a third system in place. Staff is familiar with the system, it is low cost, and it is budgeted. Right now it is under our CPI budget. With the City's new radar purchased in 2011, our range is e�tended and quite good, so staff is much happier with the existing AMR than they have been in the past. The new meter transmitter they have is incorporated to a single unit which is a nice feature because it avoids having to have a transmitter mounted on the basement ceiling and wired, especially in unfinished basements. Mr. Kosluchar stated on Council's approval, the City would purchase the meters this fall and installations would start in 2011 and would continue on an annual deployment after that. Staff is recommending Council approve moving forward with the AMR implementation as described, with the installation of 500 meters plus or minus annually. Councilmember Bolkcom asked if it is in the budget now and asked if they knew what the cost would be. Mr. Kosluchar replied, it is about $95,000 for 500 meters; and it is in the City's budget. There is actually $150,000 in the budget but that did include upgrades to the City's collector. Councilmember Bolkcom asked who has installed the City's AMR so far. Mr. Kosluchar replied, staff has been installing the transmitters in the most recent rounds. Other cities have been installing them piecemeal. No other cities have installed a full-blown system yet because the meter transmitter is so new. It just came out in early 2011. Councilmember Bolkcom said she thought they were going to look at a fixed network. Mr. Kosluchar said their idea was to install a couple years' worth of ineters and then have that location for fixed antenna installation at that point. When the City has enough meters in the field that makes it worthwhile for the fixed antenna to be out there. As discussed earlier, they would probably start around Commons Park because the antenna transmitter is going to have really good range there and they will also have fiber optic connections there. Councilmember Bolkcom stated she was told the fixed antennas were not that expensive so why would the City wait? Mr. Kosluchar replied, one of the things they would have to do is some FCC permitting in order to install that antenna, so it would probably be pushed off until about a year from now to do that. It would be probably about a couple of years of installation which would be about 1,000 additional meters more than what the City has now. Councilmember Saefke asked if staff had taken into consideration that when they change out the meters, once in a while they wind up with a leaky valve or some other problem? What is the City's response? Do its own repair work or hire it out to a subcontractor? FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 39 Mr. Kosluchar replied plan is to take the recyclable meters being taken out of service, and any kind of reimbursement the City gets for scrap value on those meters would go into a pool to pay for the cost of any of those shutoffs failing. He thinks they would have to do it with a contractor. The work is going to be so variable and of immediate need. That is one way to pay for those. Councilmember Varichak asked if the AMR's already installed in people's houses need to be replaced. Mr. Kosluchar replied they would in order to work with the fixed network To work with the drive-by network, no, not at this time. The whole issue here is range and the newer meters that are available have a larger range and have the capability to reach a fixed network. MOTION by Mayor Lund to approve the Automatic Meter Reading (AlVII�) System Implementation. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 10. Resolution Authorizing Application for Clean Water Funds for the Oak Glen Creek Erosion Control Project. Mr. Kosluchar, Public Works Director, stated a current request for applications has been made available for State funding through the Board of Water and Soil Resources (BWSR). This is actually Legacy Funding that was approved by voters in 2008. City staff has identified two projects that are well suited to be funded by this clean water fund program. Staff has two resolutions they are requesting Council consider for approval. These authorize applications for funding and specify provisions for matching funds. Mr. Kosluchar stated the first part is the Oakland Creek erosion control. The City has been working with the residents along Oakland Creek, west of East River Road, for the past two years in regard to their erosion issues with the creek The Anoka Conservation District (ACD) and City of Fridley developed a project design to mitigate erosion and subsequent stream bank failure around river lots from East River Road to the Mississippi River. Most recently staff has had a couple of group meetings with the residents. At the July 10 meeting, the residents supported an approach to fund this project, including non-City fund resources. Staff realizes the funding sources available to the City and the residents were not great. Mr. Kosluchar stated the project is well suited for the funding program. The ACD would be the applicant for this project. Unfortunately, because of the difficulty of getting on board with Coon Creek, Coon Creek did not sponsor this project at this time. Fortunately, the ACD stepped up and advised they could be the applicant. Mr. Kosluchar stated cities can provide the match between monies budgeted for the project in anticipated resident contributions. Basically if the City doubles its money budgeted, it more than covers the match required for this project. Staff recommends approval of the resolution. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 40 Councilmember Bolkcom asked about the origin of the funds to match, the $85,000. Mr. Kosluchar replied, it is $45,000 budgeted in the CIP for this project from the City's standpoint. The remaining $40,000 could be assessed to the property owners. Councilmember Bolkcom asked whether it would not come out of some type of storm water capital improvement? Mr. Kosluchar replied, storm water CIP. Dr. Burns, City Manager, stated the City has some money coming from the Clean Water Legacy Program, there are some assessments, and there is some local participation from the storm water fund. He asked what the four numbers were. Mr. Kosluchar replied, $411,000 is the total project estimate. The grant request would be $326,000; $85,000 would be the match and the components of the match would be the $45,000 that is in the City's storm water CIP, and they would request a$40,000 match from another source. Most likely starting with the residents and the assessments. Councilmember Bolkcom asked how long would this take to happen? Mr. Kosluchar replied, these are for projects constructed in 2012. Being that staff has a design, he thinks they have a real good leg up on it. Councilmember Barnette stated the City has no easements to access this property. Mr. Kosluchar replied, that is correct. Councilmember Barnette asked what if residents did not want to do this. Mr. Kosluchar replied the Anoka Conversation District has done a great job of getting an assessment as to the level of interest of the property owners. There may be one or two individuals who might not be interested in providing a permanent easement. There are other options they can look at, temporary construction easement or eminent domain if that is necessary. All in all the residents along this route support providing at least access for the project if not some kind of funding contribution. MOTION by Councilmember Bolkcom to adopt Resolution No. 2011-39. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 41 11. Resolution Authorizing Application for Clean Water Funds for the Springbrook Nature Center Water Replacement Project (Ward 3). Mr. Kosluchar, Public Works Director, stated this project is for the Springbrook weirs. The City budgeted for placement of three weirs along Springbrook Creek within the Springbrook Nature Center property because of corrosion and embankment failure concerns with the existing weirs put in over 20 years. The City had obtained a commitment of contributing cities under the former WMO to assist us in payment for replacement of the weirs. Mr. Kosluchar stated the project is well suited for this program as well. In this case, the City of Fridley would be the applicant for this project, and the maximum component is budgeted. Staff recommends approval of this resolution. This particular project does not have any kind of residential or outside component other than the grant and the City match. The total project would be $160,000; and the City's match would be $60,000. Dr. Burns asked whether it would come out of the storm water fund or the Springbrook Nature Center fund? Mr. Kosluchar replied, it actually comes out of the storm water fund. Councilmember Bolkcom asked because it is water that has to be manageable whether the nature center is there or not? Mr. Kosluchar replied, that is correct. It provides a great deal of flood control. When they were looking at river flooding down near Buffalo and the Riverview Heights neighborhood, one of the control methods was to impound as much water as possible during a peak runoff event at Springbrook Nature Center. In addition to that, there is a water quality benefit all the way along Springbrook. Councilmember Varichak asked if staff asked the Springbrook Nature Center to share in the expense. Mr. Kosluchar stated he does not know that there has ever been a past history of that a physical improvement just because of it being a park and water-related. If things go forward with Coon Creek Watershed District, he thinks the City would have some leverage on the other communities to participate as well. Dr. Burns stated that amount would take away a significant amount from the Springbrook Nature Center's fund. Mayor Lund stated the Water Management Organization, prior to disbanding, had agreed to do that. Are they still a willing participant? Mr. Kosluchar replied, he would think they will be and it would be just a matter of formalizing the Coon Creek Watershed District with the incorporation of these areas. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 42 Mayor Lund stated even though they are making this application for the clean water funds, the City will still see about getting the new watershed district-affected parties to participate in the City's $60,000 amount. MOTION by Councilmember Bolkcom to adopt Resolution No. 2011-40. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. Resolution Consenting to the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, Adopting a 2011 Tax Levy Payable in 2012. Councilmember Bolkcom stated she had a question from a resident who was asking how they can find out how the HRA spent their money. Is there a simple way for them to go on-line and find that out? Dr. Burns replied, he does not think the HRA budget is on-line but if someone had a specific question they can answer it for them. Councilmember Bolkcom asked if it was something they could put on-line. Darin Nelson, Finance Director/Treasurer, replied absolutely. He knows Mr. Bolin is working on something. Councilmember Bolkcom stated the citizen was just asking for information related to the levy. Mr. Nelson stated the HRA levy for 2011 would be reduced through the Market Value Homestead Credit elimination and moving to the market value exclusion. This not going to affect the HRA for 2012. That levy for the HRA will be based off of 2011 market value. They can actually determine now what that levy is going to be and this will not apply to the HRA levy for 2012. However, for 2013 that is a whole different story. The market value exclusion will dramatically affect the HRA levy. Councilmember Bolkcom asked how it will affect the City's levy. Mr. Nelson replied it will shift the tax burden but unknown where. MOTION by Councilmember Bolkcom to adopt Resolution No. 2011-37. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 12, 2011 PAGE 43 12. Informal Status Reports ADJOURN. MOTION by Councilmember Barnette, seconded by Councilmember Varichak, to adjourn. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MEETING ADJOURNED AT 11:33 P.M. Respectfully submitted by, Denise M. Johnson Scott J. Lund Recording Secretary Mayor