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CCM 10/13/2014 CITY COUNCIL MEETING CITY OF FRIDLEY OCTOBER 13, 2014 The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:04 p.m. ROLL CALL: MEMBERS PRESENT: Mayor Lund Councilmember Barnette Councilmember Saefke Councilmember Varichak Councilmember Bolkcom OTHERS PRESENT: Wally Wysopal, City Manager Darcy Erickson, City Attorney Deb Skogen, City Clerk Scott Hickok, Community Development Director James Kosluchar, Public Works Director Darin Nelson,Finance Director Mike Maher, Director of Springbrook Nature Center Nicholas Grivna Drew Swenson Mary Tjosvold RECOGNITION: Nicholas Grivna Drew Swenson Completion of their Eagle Scout Service Project at Springbrook Nature Center APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council Meeting of September 22, 2014. APPROVED. FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 2 NEW BUSINESS: 1. Resolution Directing Preparation of the Assessment Roll for the 2014 Lateral Repair Project. ADOPTED RESOLUTION NO. 2014-69. 2. Resolution Confirming the Statutory level of Tort Limits. Wally Wysopal, City Manager, stated this is a resolution confirming the statutory level of tort limits at $500,000 for a single event and $1,500,000 for a group. This is an annual item before the Council. ADOPTED RESOLUTION NO. 2014-70. 3. Resolution Receiving Recommendation of the Fridley City Charter Commission to Amend Fridley City Charter, Chapter 7, Taxation and Budget, Section 7.04, Preparation of Annual Budget, and Section 7.05, Passage of Budget by Ordinance; Scheduling Public Hearing Date of November 10, 2014; and Directing Publication of Hearing Notice. ADOPTED RESOLUTION NO. 2014-71. 4. Motion to Receive and Acknowledge the Fiscal Year 2015 Budget for Twin Cities Gateway. APPROVED. 5. Receive the Minutes from the Planning Commission Meeting of August 20, 2014. RECEIVED. 6. Claims (165509-165767) APPROVED. 7. Licenses. APPROVED THE LICENSES AS SUBMITTED AND AS ON FILE. APPROVAL OF CONSENT AGENDA: MOTION by Councilmember Barnette to approve the proposed consent agenda. Seconded by Councilmember Varichak. FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 3 UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. OPEN FORUM: No one from the audience spoke. ADOPTION OF THE AGENDA: MOTION by Councilmember Bolkcom to approve the agenda. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. PUBLIC HEARINGS: 8.Consider the Proposed Assessment for Street Project No. ST 2014-01. MOTION by Councilmember Bolkcom to open the public hearing. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY, AND THE HEARING WAS OPENED AT 7:12 P.M. Darin Nelson, Finance Director, stated the project assessment pertains to the mill and overlay of City streets as part of the City's annual resurfacing plan. The 2014 street improvement project includes the north industrial area which is west of University Avenue from Community Park north to 83rd Avenue over to the railroad tracks. Mr. Nelson stated the total number of properties to be assessed is 95, and all of them but 2 are commercial properties. A total final assessment for the project cost is $962,168.24. The two single-family residential properties will have a proposed assessment of $2,135. The commercial properties are based on the linear footage of the street adjacent to the property at a cost of $31.62 per foot. Mr. Nelson stated the assessment payback is ten years and the interest rate they use is 5.25 percent. It is the same amount they have used over the last several years which is based off the federal prime (currently 3.25) rate plus 2 percent. Mr. Nelson stated written and/or oral objections will be considered at this public hearing. No appeal may be taken as to the amount of the assessment unless a signed, written objection is filed with the clerk prior to the hearing or is presented to the presiding officer at this hearing. FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 4 Mr. Nelson stated property owners have until the close of business on November 26 to pay all or a portion of the assessment interest free. A deferral option is available for retired or disabled homesteaded property owners. There are qualifying factors to be eligible for the senior or disabled deferral. You have to be at least 65 years old, retired by virtue of permanent and total disability and the deferral application must be made within the first 30 days after the final assessment roll is approved by Council. There are also income guidelines that have to be considered. Contact the Finance Department if there are questions. Councilmember Bolkcom asked staff whether they have heard from any of the business owners. James Kosluchar , Public Works Director, said they received two calls earlier last week clarifying the amount, and then one follow-up call today on how the assessment was calculated. Councilmember Bolkcom asked about the ridge and sloping on some of the streets. It seems more evident in this project than she has seen in the past. Mr. Kosluchar replied, they can look into that. It is basically the asphalt roll pattern and the way they paved the streets, which will sometimes create a seam. There are some punch list items. One was some loop detectors that were put in after the fact that got nicked when the milling machine went over. These streets were awfully flat to begin with and they try to crown where they could. Typically they will drop the crown closer to the gutter line. They also see this more with the width of these streets. Many of them are well over 40 feet wide. Councilmember Saefke stated in years past once in a while there has been a mistake on the property number, have these been double checked? Mr. Nelson replied, yes. They have confirmed them and are confident they are correct. MOTION by Councilmember Bolkcom to close the public hearing. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE HEARING WAS CLOSED AT 7:23 P.M. 9. Consider the Proposed Assessment for Oak Glen Creek Erosion Control Project No. 380. MOTION by Councilmember Bolkcom to open the public hearing. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE HEARING WAS OPENED AT 7:23 P.M. FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 5 Mr. Kosluchar stated in 2011, Fridley, along with the Anoka County Conservation District and Coon Creek Watershed District, developed plans for mitigating erosion on lower Oak Glen Creek west of East River Road. The Anoka County Conservation District obtained a grant to assist in funding the project. Match funding is from special assessments and the City's stormwater utility. Mr. Kosluchar stated the City of Fridley administered the work through a joint powers agreement with the Anoka County Conservation District. The project was bid in June 2013. Construction began later in that year and was substantially completed in June, 2014. The structural component was completed in March, 2014. Fortunately, the City had good bids that came in well under budget and only punch list items remain--mainly planting items. They do have a two-year warranty on all the plantings associated with this project. Mr. Kosluchar said they had a lot of partners on this project. The Minnesota Conservation Corps crews helped. The Anoka Conservation District obviously secured outside funding and had vision for the project. The Board of Water and Soil Resources for the State of Minnesota provided funding for this project. The Conservation Corps assisted with tree removal, making funding go farther on the structural components and plantings of the project. Coon Creek Watershed District provided on-site reviews of the project and provided design assistance. The Mayor and Council supported the project and assisted in some critical meetings with the residents, and Blackstone Contractors worked in some fairly difficult conditions over the winter. Obviously the residents of lower Oak Glen Creek attended numerous meetings on the project. They probably had four meetings before they secured funding for the project. They provided their insight and their history and allowed easements to be obtained that they needed to do the project and put up with the construction in their backyard. Mr. Kosluchar stated the total project cost was $424,625. The Clean Water Fund project grant is $339,700 (80 percent). The City's share of the project is $53,335. Basically they envisioned on having the match be shared 50/50 with the property owners. Because they had some dollars for some up-slope structural components that benefited or could be presumed to benefit particular properties, they took that out of the assessment portion; and the City stormwater fund will pay for that. The assessment for each property is $1,629.49. He thinks they talked about a $2,000 assessment. Darin Nelson, Finance Director,stated the assessment payback period is similar to the City's reconstruction projects. The assessment payback is ten years, and the interest rate is 5.25 percent. All written and/or oral objections will be considered at this meeting. No appeal may be taken as to the amount of the assessment unless a signed, written objection is filed with the clerk prior to the hearing or is presented to the presiding officer at this hearing. The property owners have until November 26 to pay a portion of the assessment interest free. Again, a deferral option is available to retired or disabled property owners. They should contact the Finance Department at 763-572-3520 for more information. Councilmember Bolkcom asked if staff had heard from any residents regarding the assessment. FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 6 Mr. Kosluchar said he talked to a couple of residents on site about the project. There were no questions on assessments. Councilmember Bolkcom saidwhat is left to do is some planting and educating people about how to maintain their property. Mr. Kosluchar said they do have some plantings and need to review those on site. They are starting to work with property owners. Councilmember Bolkcom asked when it would take place. Mr. Kosluchar replied starting tomorrow. Councilmember Bolkcom stated she wanted to say she thought it had been a collective project. She remembered one of the first meetings and talking about the money and how much it would cost and thanked Mr. Kosluchar for the project. There was a lot more work done than they originally thought could happen with that type of money and it was probably one of the worst winters to do a project because of the cold conditions. Jacob Smith , resident, just wanted to say thank you very much and thanked Councilmember Bolkcom who helped and worked with them quite a bit. To Mr. Kosluchar he said he greatly appreciated all his efforts. Councilmember Bolkcom stated the assessment can be paid ahead of time without paying any penalty. Darin Nelson, Finance Director, said people can pay the amount off at any time without any penalty. They would have to pay for this year's interest. Councilmember Saefke asked what they saw in the future for upstream corrections for the creek. Mr. Kosluchar replied there is funding actually in the second round that the Anoka County Conservation District was essential in obtaining for some detention pond expansion. That is at the old McGlynn's pond site. The City has a pond there that is much too small to handle the peak flows coming off the watershed. The project is actually in the early planning stages right now. MOTION by Councilmember Bolkcom to close the public hearing. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE HEARING WAS CLOSED AT 7:38. FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 7 PUBLIC HEARING/NEW BUSINESS: 10. Considering Issuing an On-Sale Intoxicating Liquor License to Mary M. Tjosvold for Crooners Lounge & Supper Club, Inc., Located at 6161 Highway 65; and Motion to Approve Liquor License and Other Required Licenses for Crooners Lounge and Supper Club (Ward 2). MOTION by Councilmember Varichak 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 HEARING WAS OPENED AT 7:38. Deb Skogen , City Clerk, stated this is a public hearing and approval of the on-sale intoxicating liquor license for the applicant, Mary Tjosvold, for Crooner's Lounge & Supper Club located 6161 Highway 65, formerly known as the Shorewood Restaurant. Ms. Skogen stated Mary Tjosvold has applied for an on-sale intoxicating liquor license to operate Crooner's, a restaurant at 6161 Highway 65. Section 603.07 in the City Code requires a public hearing to be held to consider the on-sale intoxicating liquor license. Notice of a public hearing was published in the Fridley Sun Focus on October 3, 2014, and meets the ten-day requirement. Ms. Tjosvold is the CEO of Mary T, Inc. Crooners will be operated under the Mary T, Inc. umbrella. Ms. Tjosvold has no firsthand knowledge of operating a restaurant serving alcohol but has experience in the food industry through Camilla Rose Care Center kitchen, as well as other care facilities, and the manager who will be operating the bar does have bar experience. Ms. Skogen stated Ms. Tjosvold understands the importance of the food to liquor ratio and is trying to exceed gross food sales of at least 65 percent if not higher. Crooners will be open to the public as a restaurant and will have a lounge for musical acts to perform featuring music of the 50's and 60's. The Police Department completed their background investigation and found no issues with the business or the individuals who will manage the business. Section 603.07.1.D also allows the City Council to approve the liquor license on the same night as the public hearing. Staff recommends the following conditions that Council hold the public hearing and after it is done a motion approving the on-sale intoxicating liquor and other related business licenses to Mary M. Tjosvold and Crooner 's Lounge and Supper Club. Councilmember Bolkcom said the memo states minimum gross food sales of 40 but striving for food sales of 65. The ordinance is actually 40/60. Ms. Skogen stated the City's ordinance is 40 percent. They are going for at least 65 percent if not higher, well above the minimum food requirements. FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 8 Councilmember Bolkcom asked if they are aware of the ordinance. Ms. Skogen replied, yes, they are.. Ms. Tjosvold stated her and her mother, Margaret, who is present have been doing business in Anoka County for 37 years. Also present is her husband who is an entertainer, Laurie is going to be the bar manager, and Ryan has a long history in being a general manager for different restaurants. They need to know who Mary T is and what company is coming into Fridley. She asked them to watch the first four-minute CD and then she will tell them a little more of the plans for the restaurant. Two videos played. Ms. Tjosvold stated in her video they were trying to express in there they have redone all the landscaping, the pavement and they are fixing it up inside. The roof leaked. The air conditioner and heater did not work. The kitchen equipment was a little bit iffy. They have come in there and tried to make a difference; but the real goal is to have a place where people can come, have great food, also serve liquor, and listen to music. That is their game plan. MOTION by Councilmember Varichak to close the public hearing. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE HEARING WAS CLOSED AT 7:54. MOTION by Councilmember Varichak to approve the liquor license and other required licenses for Crooners Lounge and Supper Club. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. NEW BUSINESS: 12. Resolution Adopting the Assessment for the 2014 Street improvement Project No. 2014-01. MOTION by Councilmember Bolkcom Adopting Resolution No. 2014-72. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 13. Resolution Adopting the Assessment for the Oak Glen Creek Erosion Control Project No. 380. MOTION by Councilmember Bolkcom Adopting Resolution No. 2014-72. Seconded by Councilmember Saefke. FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 9 UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 14. Resolution Approving Grant Agreement between the City of Fridley and the Metropolitan Council to Accept the State Bond Grant of $5 Million to Improve the Springbrook Nature Center (Ward 3). Mike Maher, Executive Director of Springbrook Nature Center,stated the City of Fridley was included in the 2014 bonding bill in the amount of $5 million to design, construct, and furnish improvements to Springbrook Nature Center through the SPRING project. This evening he is requesting the City enter into an agreement with the Metropolitan Council who was designated by the State of Minnesota to administer the grant. Mr. Maher stated he and Parks and Recreation Director Jack Kirk developed a business plan that projects out 8 years. There are a few areas where they would have some increased expenses. Obviously with a larger facility there would be some additional need for staffing. There were a number of part-time positions that were included that would be additional above and beyond their current staff. The single largest area of increased expenses would be staffing. He said the other area they anticipate some additional costs would be with utility services. Mr. Maher stated the purpose of the business plan is to be able to demonstrate that a larger facility would incur some additional expenses, but they would also be able to show additional revenues which would be able to be brought in through a number of different areas. They do anticipate increases in their ability to offer programming to the community. Mr. Maher stated in another significant area they project increased revenue is rentals. They foresee developing a facility that would be able to accommodate community celebrations such as anniversaries, weddings, and business rentals. Mr. Maher stated the Nature Center operations are supported through tax levies through the City of Fridley residents. They will notice minimal increases shown in their business plan that would be consistent with what they see right now which would be increases no greater than are in the Charter for the levy. They do not see any additional increase above and beyond what they would normally see in their current facility projected out into the future. Mr. Maher stated the final point to highlight is revenue. They feel they have done due diligence to be able to anticipate what their challenges would be and anticipate what areas they would be able to have additional success with. They show some areas of increased expenses but they also have shown very thoroughly they can offer additional programming. Mr. Maher stated for the very last line, net revenue, they will see for the first several years as they approach construction and even as they get into construction, they are still showing overall net revenue for the Nature Center. Year four, 2017, in the business plan they anticipate that as they open a brand new facility and, for example, they look to the community to host weddings and receptions, it will take some time to get the word out about what they have to offer at the facility and find partner schools that will be able to utilize an expanded facility. Just in the FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 10 interest of being realistic and being conservative, they have shown a modest loss for years four and five as they begin use of this new facility. Nothing significant--$12,506 and $11,502 in those two years. Mr. Maher stated the important thing to point out is in years six, seven, eight and beyond, they are projecting revenue over expenses. They see that growing fairly quickly from $458 in year six, 2019; to $13,654 in year seven, 2020; and in the final year of the business plan, year eight, 2021, an amount of $30,860 revenue over expenses. If they project that out, the way the Nature Center budgeted structure revenue over expenses is set aside in a fund, referred to as the Springbrook Fund, they feel that amount will provide funds that will be necessary for increased needs of a larger expanded facility. Councilmember Bolkcom asked if they anticipated having special exhibits. Mr. Maher stated that was one area they looked at on an earlier version of the business plan. They talked about potentially having some space that could be used for seasonal exhibits or exhibits that come in from, for example, the Smithsonian and other places. In further discussions they determined at this point in time, they did not want to include that in the business plan. They kept it on there as a potential source of future revenues because they did not want to totally abandon the idea. Councilmember Bolkcom asked if they will be able to expand the special exhibits if there seems to be an interest in that. Mr. Maher replied they anticipate having some space. They felt as they go through the process of creating some conceptual design for exhibits, it was important that there is seasonal variation and change and, whether they leave some space open for smaller scaled seasonable exhibits or leaving some space open for these sort of special exhibits, they have not gotten quite that far in the exhibit concept design. They do not anticipate leaving a large empty space in the building that they would designate a special exhibit area. More of just smaller areas they would be able to create small fascinating seasonal exhibits. As they get into the design process, they just wanted to have that as an option when they look at square footage and room use with their architects. Councilmember Bolkcom asked if nature centers normally did not have special exhibits. Mr. Maher replied, from his experience, it is typically done at larger scale museums. They did research pretty extensively the cost to bring in some of these exhibits and it is often in the tens of thousands of dollars and, generally when you go these larger museums, you will pay an additional cost above and beyond the normal admission fee. At Springbrook Nature Center, they do not have an admission fee. They have program fees but do not charge people to come into the building and feel, generally speaking, that has been a very good model for them. They did look at bringing in a special exhibit that would cost $15,000 to $20,000 and charging $5 a person, how many people would have to come through the door. In the course of doing those calculations, they determined that it was not a good focus of their business plan at this time. FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 11 Councilmember Bolkcom said because they do not expect the new facility to be up and running until June, 2016, is that why there is such a deficit? Why the drastic change between years three and four. Mr. Maher replied, they anticipate being able to maintain operations throughout the construction. There will be some challenges, and they do not know the exact construction process at this point in time. They thought through some contingencies for doing offsite programming for some of their camps--holding some of their events at other community parks. The rationale for putting that in there is once they are in that facility and it is completely open, they will be bringing on new staff right away and bringing on those additional costs right away. They just wanted to project a little bit of a lag time when they bring on the additional staff until they get up to what they anticipate as the level of rentals, the level of additional school programs, etc., that they see generating the needed revenue to balance it out. It was just an attempt to really be conservative. It is possible they will not see that deficit. They do see the Springbrook fund having those reserve funds as helping with any deficiencies they might see in revenue. Councilmember Saefke asked if the business plan was conservative or aggressive. Mr. Maher replied, when they talked about this, they tried to make it realistic. They would say it is on the side of being conservative. This is about the fourth or fifth version of a business plan that has existed as this project has changed and evolved. This is really his first opportunity as a nature center director to look at a business plan and be able to put in his input based on what he has seen from their operations. They really tried to be realistic with getting things started. Councilmember Saefke stated he just wanted to make sure people understood that this business plan is more of a realistic one. Mayor Lund stated on page one, line six of the business plan, it does not carry across the total amounts. He asked if it got entered into the dollar amounts. Mr. Maher replied he would check on that. Councilmember Bolkcom stated she is a little surprised, too, that the outdoor events really do not increase in years three, four, five, and six. She thought that was going to be one of their big sells was the outdoor activity and the outdoor business rentals. Would that not necessarily be something that would grow? They would only have six events in year eight? On page three, the bottom number, party events. It really does not change. Mr. Maher replied, that really was a deliberate decision to be conservative. If you look at that, you might be able to say in the particular area they are not showing dramatic growth. If you go and look at all the different areas where they see expanded programming with schools, with rentals, and you add them together, they feel that with what they projected as increases in staffing, they could only add so many programs. The market will dictate if they are seeing incredible interest in these particular items. They do not currently do those types of events because they do not have the facilities. It is difficult to predict exactly how popular these programs or rentals will be. FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 12 Mr. Maher said to summarize what they see as sort of a timeline, some upcoming items would be to submit an informal predesign document to a number of legislative committees, that would happen yet this month. Once they have done that and received approval for the informal predesign, the following steps would be to interview and recommend contractor project management, November, 2014; interview and recommend contract for architectural design, November, 2014; establish a design advisory committee, December, 2014; finalize design of new facility, March, 2015; finalize request for proposal for building construction, April, 2015; award construction contract, May, 2015; begin construction July, 2015; purchase furnishings and equipment during construction phase, September, 2015, through June, 2017; and complete construction of interpretative building and park improvements, July, 2017. Mr. Maher stated once the grant agreement is signed, they will be required to sign a State of Minnesota general obligation bond finance declaration which would subject them to state statutes annual reporting but also be a part of that grant agreement with additional items such as submitting their annual budget and showing that they are a profitable operation. Councilmember Bolkcom asked because there is a fair amount of work that needs to be done and reported to the State, do they anticipate the project manager doing a lot of the reporting or is that more staff's issue. Mr. Wysopal replied the anticipation is this work would be done by the project manager. The project manager would keep track of all the expenditures and do the proper recording to the State. Councilmember Bolkcom stated it would be nice for someone to summarize what the whole agreement entails so people understand what the City's obligation is during the project and how they get paid, etc. Wally Wysopal, City Manager,stated the first part of the presentation is really what they intend to do with the facility. However, it should not be mistaken that the business plan they looked at tonight is also being approved tonight. That was done so the public knows what they intend to do with the facility. Again, the grant is coming from the State of Minnesota and is being administered through the Metropolitan Council which is the legal entity that has the right to receive the grant funds and then distribute them to the City. They are holding $5 million. What they will do then is, if this Agreement is signed, they will disburse the funds to the City when they present the claims that they received from the project manager and then the City will have about 15 days or three weeks of float and that is between the time that the City receives the bills, they have to pay them through the Council's process, and then the City in turn asks the Metropolitan Council for that money. Mr. Wysopal stated the facility becomes a designated facility by the State. What that means is they have to keep it as a pledge to do what they say they intend to do with the building. That is, create it as a nature center. Therefore, on an annual basis, they have to send in to the State documentation that says yes, it is still being used for what they said it must be used for and on an annual basis they also have to provide a budget. That budget just says that the expenses have to be covered by whatever revenues. Those revenues will come from the property tax levy the City FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 13 has for Springbrook. It can also come from fees or any other sources. The operational budget needs to be adopted by resolution which the City would normally do on an annual basis and then submit that to the State. Because this project is already being looked at as having predesign done, they will only have a construction contract and that is what they have in front of them tonight. That is a good thing because then they do not have to do all kinds of reporting back to the legislative committee, both in the House and the Senate, to approve this to make sure the project meets their standards. What they have seen so far was enough and they will have to provide them with some information and then they will be able to apply that in an annual report. Mr. Wysopal stated they will have to provide some reporting. They have the right to operate as they choose. They can hire a third party if they want to manage the facility. That is not the City's intent. They can hire people to operate the facility, as the City intends to. And if they have to lay them off they are not obligated to give any State requirements. The construction will have to meet the requirements of the State. They have to do project management that would be trade union wage. The prevailing wage would apply and they would have to buy steel in the United States. Mr. Wysopal stated beyond that, this facility really then becomes the City's to manage. He believes there is about a 37-year payback time. Within 37 years, if the City does not decide to operate it as a nature center anymore it would have to pay the prorated amount of that $5 million back. After 37 years it is the City's to manage and to do with it what it chooses. They also want to make sure the City's understands that when it comes to major capital, the daily maintenance and operations are all part of that budget. What is not included in this is if there are major repairs to roofs, etc. Obviously, if those things occur because of hail damage, etc., the building would be insured like any other City building, and it would be covered under the City’s insurance. However, the cost of a new air conditioning unit or a new roof over a 50-year period time, do not come out of the proposed operations budget. That would become part of the regular maintenance of City buildings like it has in Public Works, City Hall, or anywhere else. Mr. Wysopal stated they can operate the building as they see fit, so if one year something does not go well and they want to do something else, they have that flexibility. What they have to do is use it as a nature center or give the money back. Councilmember Barnette asked how the funds being raised by the Springbrook Foundation applied to this. Mr. Maher replied there are a lot of things happening right now. They look at this project as being specifically the building, new interpretative center, and some parking improvements as being part of a larger project called the SPRING project. That project was developed about ten years ago through a cooperative effort between the City of Fridley and Springbrook Nature Center Foundation through public input. It developed a master plan for redevelopment and revitalization of Springbrook Nature Center. They anticipate the costs of the amenities and improvements which include a new redeveloped interpretative center, improvements to the parking area, outdoor pavilions, outdoor classrooms, to be about $7.6 million. FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 14 Mr. Maher stated they propose the $5 million would go exclusively towards the renovated, expanded interpretative center and parking improvements. At the same time that this is happening, the Springbrook Nature Center Foundation is raising funds that would go towards additional improvements. They are embarking on a private fundraising campaign and the approach would be they never exceed expenditures beyond what the Foundation has funds for. Mr. Maher said they anticipate that $5 million will be available. The Springbrook Nature Center Foundation has assets right now available to spend just under $300,000, with the goal to raise an additional several million dollars through a campaign. When they reach the fundraising goal, they would go ahead and move forward on additional outdoor amenities, such as an outdoor amphitheater, outdoor pavilions and classrooms, etc. Councilmember Barnette stated this grant does not rely particularly on the amount of money that the Springbrook Foundation has raised. Mr. Maher stated their best estimates right now without going through the formal design process with an expanded interpretative center and parking improvements, they projected forward some offsets they received a number of years ago and they believe that to be, as they envision it right now, a $5.4 million project. They are anticipating the difference between the $5 million and $5.4 million would be raised by the Springbrook Nature Center Foundation. However, on this particular project the interpretative center and parking would not exceed any amount that is not raised by the Springbrook Nature Center Foundation. Mr. Wysopal stated this grant is a non-matching grant. It does not depend on the City's funds or the Foundation funds. This is really good because come the start-up of this project, they will be spending the bond money. It is their plan not to spend more than what they have. At some point in time when they start moving forward on the construction, they will be working with the Foundation to let them know what they are in need of and make sure they are ready to advance those funds to them. In either case, they are not going to spend the money they do not have. Again, it is a non-matched program which really helps with the administration of it as well and also, the $5 million is being requested by the City and not the Foundation. MOTION by Councilmember Bolkcom to adopt Resolution No. 2014-74. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Councilmember Bolkcom asked if someone wanted to be involved in the committees is there a way they can apply. How are they going about getting public input? There have been a lot of meetings already with different individuals working on the whole SPRING project. How are they going to let people know about what is upcoming other than what they have heard here tonight? Will it be online? Mr. Maher replied they would form a design committee, but they have not formalized or finalized that committee yet. Throughout this process, they have worked with Springbrook Nature Center staff, City of Fridley staff, and included representations from the Springbrook FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 15 Nature Center Foundation, Fridley Parks and Recreation Commission; and they anticipate looking for additional committee members. They will have a manageable number of people but if someone was interested in giving some input on things they would be open to perhaps interviewing them or meeting with them. Mr. Maher stated he anticipates they will have community input throughout the process and will also try to keep the community well informed through the City's newsletter, and the Springbrook Nature Center website. Local publications have showed a lot of interest in the project. Certainly word will be out and they can always visit the City’s website which is a good source for information about the project. Councilmember Saefke stated because Springbrook Nature Center is a gem in the northern suburbs, he is certain the Springbrook Nature Center Foundation would accept any donation from anyone from outside the City as well as within the City. 15. Resolution Requesting Concurrent Detachment from Fridley and Annexation to Spring Lake Park of Certain Lands, Pursuant to Minnesota Statute 414.061. Scott Hickok, Community Development Director, stated the addresses for the properties are 7609 University Avenue and 315 Osborne Road. There is a triangle piece that is adjacent to the Emmanuel Christian Center. The portion of that triangle piece that contains the multi-tenant center will be purchased by the Emmanuel Christian Center. In June Emmanuel Christian Center contacted the City and asked if they could turn this site into parking for their church. On July 8 staff discussed the concept with Council in a work session and conducted additional research. They contacted the church to make sure they were going to cover administrative costs they might encounter for this process, and they worked on those costs and covering those expenses. Mr. Hickok stated they engaged in several discussions with the city administrator for Spring Lake Park. Annexation oftentimes happens when one municipality or another cannot serve properties with utilities. That is not the case here. Fridley does serve these properties with water and the City of Spring Lake Park serves them with sewer. There are annexations that happen also by individual cities petitioning the State Annexation Board. There are "friendly" annexations that happen as cities find situations like ours in this request. Mr. Hickok stated there was one other time in about 1996 a detachment annexation was brought in the northwestern part of the City right along the river. The City of Coon Rapids could not serve an area consisting of three properties which they could not reach with utilities but Fridley could. Mr. Hickok stated the church agreement to purchase the multi-tenant center in Fridley had started the process. As they talked to Fridley and what they were trying to accomplish, staff thought there would be dual jurisdiction there. Fridley Code does not allow parking as a principle use either. That was going to be problematic. The Religious Land Use and Institutional Persons Act (RLUIPA) would say that if this is part of their mission to serve as part of their organization, the City might have difficulties with zoning that would put a restriction on that as a principle use even though the City Code does not necessarily say it can be. FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 16 Mr. Hickok stated the owners of the church and their attorney representative did a very nice job of speaking with the property owners just to let them know what was happening and get a sense from them on what their positions might be. Of course the multi-tenant center tenants were very interested in moving forward with the sale of their property to the church. The oil change store said they did not have an issue with it and hoped that their tax position really would not change moving from one city to the other. Being in the same school district, they really do not anticipate there would be a noticeable difference. Mr. Hickok stated internally they had some comments from the Police Department. They talked a little bit about the fact the Fridley Police Department needs to provide services for them on Sunday morning between 10 a.m. and 12 p.m. It is such a large congregation, they have difficulties getting out on Osborne Road without police directing traffic. The Police Department have said they need a CSO with an opticom to keep the signal light at University turning green so the cars can continue to flow. It is a bit of an effort but is something the City will continue. Initially they thought the annexation with Spring Lake Park would put that burden on them. Osborne Road is still the responsibility of Fridley, and the Fridley Police Department will continue to take that on. Mr. Hickok stated Mr. Kosluchar pointed out that there is a park in Spring Lake Park that has a tiny piece of property in Fridley. It is north of Osborne. It has a little bit of the lake bed and little bit of the shoreline across the street from Fridley residential property. The question was while they are doing this annexation, why not clean this up and ask if they are interested in that as well. Then at that point everything north of Osborne Road would be Spring Lake Park. Both cities are interested in doing that but there is a public hearing requirement which will be on their next agenda. That will also go to the State Annexation Board if Council concurs with that detachment. Mr. Hickok stated as to Parks and Recreation comments, there has been history with some glass on the lake bed at the lake in Spring Lake Park. Sand was brought in several years ago to make a softer bed and there was glass in that. Fridley's Park and Recreation maintenance staff had a crew to take that out, and the DNR stopped them and said they needed to leave it alone. Fridley has made that clear to the City of Spring Lake Park. Mr. Hickok stated a little bit less than $5,600 a year would be collected as the City's portion as the taxes on these two properties. Fridley staff had talked to the City of Spring Lake Park about paying kind of a diminishing scale, the first year 100 percent, the second year 80 percent, the third year 60 percent, to help soften the blow of taking that off the tax rolls. Related to the park the Spring Lake Park City Administrator reminded Fridley there will be maintenance that they will pick up from taking on that park piece. They saw that as offsided penalties and really hoped Fridley would see it that way and not a tax thing. Spring Lake Park will pay for maintenance of the park and Fridley will lose the taxes. Mr. Hickok stated as to Planning comments, this makes sense really from a planning perspective. The Emmanuel Christian Center does a very nice job of landscaping. That quadrant in the intersection will probably look like the landscaped edge of their parking lot. It does open up a nice view into their facility. FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 17 Mr. Hickok stated Council's action is to approve the attached resolution for this detachment and the next steps would be Spring Lake Park on or about October 27 approving the annexation. This would then go the State Annexation Board, and then within 30 days, it will make a decision before the end of this year. Councilmember Barnette asked when Spring Lake Park will deal with the former swimming beach. Mr. Hickok replied, that was a bit of a surprise to him. They are not certain exactly how they will proceed, since the DNR asked Fridley to stop and leave it alone. Fridley posted signs there saying, you don't want to swim, you could get cut. Right now Mother Nature has taken over again and created a buffer along there. As Dan Buchholtz, the Spring Lake Park City Administrator said, they have a real nice beach on that lake in another location. They will just continue to direct people to the beach area, and they will just leave that corner swimming area alone. Councilmember Barnette stated would Fridley ask them in the future to annex that or will they come to us? Mr. Hickok stated Fridley is going to post a public hearing notice. The reason it is not on tonight is they needed time to research how they came upon the park. Ray Statler in Public Works did a very nice job of researching it, and as long as it stays park, it is okay. It will go to Parks and Recreation on November 3 and will come back for Council's first meeting in November as a public hearing. Councilmember Barnette it sounds like it was a good process where two cities agree on something that will help them. Mayor Lund stated there will be some loss to the City in property taxes. If they do succeed in annexing the other property that will make it somewhat of a trade. Then there was some discussion about moving the jurisdiction from the middle of University Avenue to the east side so that the Fridley Police Department would have full jurisdiction by them splitting the jurisdiction between the north and southbound lane. He did not think Spring Lake Park was for that because of the MSAS monies. Mr. Hickok replied, that is correct. It used to be that Local Government Aid had some tie-ins to the roadways and accidents, etc. It does not anymore, but they do not want to lose the opportunity at some point in the future to have that segment of roadway because they have very few state roadways in Spring Lake Park. Mayor Lund stated it makes good sense to him if that is what they want to do, annex that property off of University and Osborne. This deal is not a consummated deal between the property owner and the church. What if the deal falls through, they already annexed that property, and then the property owner still has to pay the property tax. Somebody really benefits, and it is not Fridley, if the deal falls through. Is there some kind of caveat or some restriction that this annexation is concurrent with the changing of the property? FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 18 Mr. Hickok said there is no caveat. They had to trust and believe that the purpose in buying the multi-tenant center was true and correct. They literally held off the sale of the property until this action could happen. They do, however, have a lease with one tenant and they cannot demolish the building until that lease is done. It remains a tax paying entity only until that lease runs out and then they do plan to demolish it. They would then be looking at about $2,600 of taxes being paid and that would be by the oil change place. Mayor Lund asked when the lease expired. Mr. Hickok replied he thinks it is a little over a year. Mayor Lund asked if the tenant would be paying rents to the church. Mr. Hickok replied correct. Mayor Lund stated now that the City's uses its CSOs and police officers for the traffic flow, they obviously reimburse the City for that. Is there some thought by the church at some point to change their path? He did not think they could. He knows they want to go out on University and that is an absolute no. He does not know how much further their property goes to the east where they can maybe have more stacking room on University or a dedicated lane which would be extremely expensive for them to add. Mr. Hickok replied, he has gotten to know not only the City Administrator for Spring Lake Park but the church representatives also very well. They have worked through redesigning their parking lot for them, helping them figure out how to do that. There is no real good answer there that would not upset an internal residential street. Really they do not have enough run distance on Osborne Road at any point to come out and still have enough distance for cars to stack at that intersection. It operates at a Level F as soon as their service gets out. They cannot come out of their parking lot. They cannot get through the intersection. That is why the CSO has to be doing there. The church did not have an interest in going on to the residential street. They want to be a good neighbor. Mayor Lund asked if they had problems during the week with some of the evening events. Mr. Hickok replied it does not sound like that is an issue. MOTION by Councilmember Saefke to adopt Resolution No. 2014-75. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING OF OCTOBER 13, 2014 PAGE 19 16. Informal Status Reports Mr. Hickok stated on November 5, from 6 to 7:30, at the Stephenson Elementary cafeteria they will be having an open house for anyone who would like to come and talk about the TOD plan. ADJOURN: MOTION by Councilmember Barnette, seconded by Councilmember Varichak, to adjourn. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 9:06 P.M. Respectfully submitted by, Denise M. Johnson Scott J. Lund Recording Secretary Mayor