CCM 11/24/2014
CITY COUNCIL MEETING
CITY OF FRIDLEY
NOVEMBER 24, 2014
The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:00 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
Scott Hickok, Community Development Director
James Kosluchar, Public Works Director
Darin Nelson, Finance Director
APPROVAL OF PROPOSED CONSENT AGENDA:
APPROVAL OF MINUTES:
City Council Meeting of November 10, 2014.
APPROVED.
OLD BUSINESS:
1.Extension Request for Final Plat Approval, PS #14-01, by tri-Land Development, Inc.,
th
to Subdivide the Existing Large Lot, Located at 250 – 57 Avenue, to Create Two
th
Separate Parcels from the Original Lot, for Development along 57 Avenue N.E.
(Ward 3)
APPROVED.
NEW BUSINESS:
2.First Reading of an Ordinance Amending Fridley Charter, Chapter 7. Taxation and
Finances, Section 7.04 Preparation of Annual Budget; and Section 7.05 Passage of
Budget.
APPROVED.
FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 24, 2014 PAGE 2
3.Resolution Abating a Portion of the Assessment for the Removal of the Public Nuisance
Building at 6101 University avenue N.E. (Former Citgo Station) (Ward 1).
APPROVED RESOLUTION NO. 2014-84.
4.Resolution Ordering Preparation of a Preliminary Report and Preliminary Plans and
Specifications for 2015 Street Rehabilitation Project No. ST2015-01.
APPROVED RESOLUTION NO. 2014-85.
5.Approve Sanitary Sewer Utility Easement Agreement with Tri-Land Fridley Market
(Ward 3).
APPROVED.
6.Approve Agreement for Public Safety System Manager/Administrator Services between
the Anoka County Joint Law Enforcement Council and the City of Fridley.
APPROVED.
7.Claims (1411 ACH PCard and 166146-166316).
APPROVED.
8.Licenses.
APPROVED THE LICENSES AS SUBMITTED AND AS ON FILE.
APPROVAL OF THE CONSENT AGENDA:
MOTION
by Councilmember Barnette to approve the consent agenda as submitted. Seconded
by Councilmember Varichak.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
OPEN FORUM, VISITORS:
No one from the audience spoke.
ADOPTION OF THE AGENDA:
MOTION
by Councilmember Bolkcom to adopt the agenda as submitted. Seconded by
Councilmember Saefke.
FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 24, 2014 PAGE 3
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
NEW BUSINESS:
9.Resolution Providing for Water, Sewer and Storm Water Utility Rate Changes.
Darin Nelson,
Finance Director, said staff worked with the 5-year pro forma statements in order
to determine the breakeven point for all three of the utility enterprise funds for 2015. In addition,
staff also updated the 20-year long-range forecasts, to aide in estimating both long-term
operating and capital needs.
Mr. Nelson
stated the 20-year forecasts also aid in projecting future rate increases. These long-
range forecasts were presented to Council at the October budget work session. The goals of the
long-range forecasts are to enable the utility funds to be self-sustaining without relying on debt
to fund ordinary capital outlay and to maintain low to moderate rate increases in the future.
Mr. Nelson
said in 2011, Council approved the first year of a multi-year plan to increase rates to
a level needed to sustain utility operations, capital outlay, and debt service. The objective was to
raise rates for 3 years (2012-2014) in order to meet necessary cash flows. After this 3-year
timeframe, staff was anticipating rate increases to moderate and mirror inflationary rates. As
with all projections, variables change and modifications are required to maintain the course.
Unfortunately, this was the case with our projections.
Mr. Nelson
said MCES is increasing their treatment charge by 3.5% next year with indications
that future rate increases are being planned in the 5% range. This charge itself accounts for 75%
of the annual sewer budget, including capital outlay. These charges are larger than originally
projected and it is imperative that we stay ahead of these rate increases. Just as we have been
doing with the sewer rates, water rates have also increased at higher than average rates over the
past couple of years. We have control over the rate, but we do not have control over the
consumption. Our water consumption is down 8% compared to 5 years ago.
Mr. Nelson
said the last two summers have been relatively wet which has caused our sales to
decrease and subsequently causes our projections to not be realized. We utilize a rolling multi-
year average for water consumption projections, but a few wet or dry years can play havoc with
estimating projections. An extensive analysis was done on the storm water fund this past
summer to ensure that this fund is self-sufficient and not relying on outside resources. Staff
concluded that the storm water fund was relying heavily on Public Works and Engineering staff,
but is not financially supporting those resources.
Mr. Nelson
said starting on January 1; labor distribution will now include the Storm Water
Fund. In the past, there was only an arbitrary administrative transfer charge to the fund which
was less than adequate to support the level of service being provided to the Storm Water Fund.
FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 24, 2014 PAGE 4
Mr. Nelson
said the recommended rate increases are as follows:
Water
– 5% or $8.62 per year for the average household*
Sewer
– 7% or $25.70 per year for the average household*
Storm Water
– 75% or $14.72 per year per residential property
Estimated annual additional cost for all three utilities = $49.04 or $12.26 per quarter
*Average household is based on 20,000 gallons per quarter.
Staff recommends Council’s approval of the resolution.
Mayor Lund
asked what could be anticipated in the future.
Mr. Nelson
replied they are projecting the water fund to do well in the future. The rate increases
reflect 5% across the board, but down the road after the debt service is paid off, the cash balance
will begin to grow. At this time, rates will be able to be moderated and/or stabilized.
Mayor Lund
noted that after 2023, the cash balance escalates well above the need. In 8 to 10
years if cash flow balances increase, funds may be refunded.
Mr. Nelson
replied that staff would like to moderate the rates. With an aging infrastructure, we
need to stay on top of it. The rates in the sewer fund are higher than the other utilities. With the
large increase in storm water for 2015, there should not be a need for more than minimal
increases in the future.
Councilmember Barnette
said if you break down the increase per household, it is a little over
$4 per month. Staff did a good job with the rates.
MOTION
by Councilmember Barnette to adopt Resolution No. 20140-86. Seconded by
Councilmember Varichak.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY
10.Resolution Approving Recycling Service Fees.
Scott Hickok,
Community Development Director, reviewed the 2014-2015 Solid Waste
Abatement Program (SWAP) Fees. The Recycling Program SCORE funds are not assured from
the County and cannot pay for all expenses associated with recycling, and only augment fees.
Mr. Hickok
stated expenses include the recycling pickup contract increase to $7.41 per
household/quarter in April of 2015, recycling drop-off events, billing, apartment recycling
inspections and education. Residents would experience a slight increase of 1.94% in recycling
fees. In 2014, residents paid $7.60 per household in quarterly recycling fees. For 2015, using
FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 24, 2014 PAGE 5
the maximum allowable 1.94% would be a 15 cent per quarter increase, or $7.75 per household
per quarter.
MOTION
by Councilmember Saefke to adopt Resolution No. 2014-87. Seconded by
Councilmember Bolkcom.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY
APPEAL HEARING:
11.Consideration of Appeal Request from James Kiewel, 1627-31 Rice Creek Road
(Ward 2) (Continued November 10, 2014).
MOTION
by Councilmember Varichak to continue the appeal request from James Kiewel,
1627-31 Rice Creek Road, to December 22, 2014. Seconded by Councilmember Saefke.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY
Wally Wysopal,
City Manager,noted that Mr. Kiewel requested to continue this hearing.
12.Informal Status Reports
Councilmember Bolkcom
thanked all who helped organize the garbage hauling information
session and the residents who attended the information session. Information can be found on the
website.
Wally Wysopal
, City Manager, added the public hearing for organized garbage collection is on
December 8 and information can be found on the City’s website.
Scott Hickok
, Community Development Director, announced that the Minnesota Association
Soil & Water Conservation District recognized Fridley to receive an outstanding conservation
award on December 9. Staff has done an outstanding job to receive this prestigious award.
Mr. Wysopal
said the City of Fridley retained an AA1 Bond Rating and the negative outlook
has been removed. This is the highest rating the City of Fridley can get. This rating is a
testament of the good financial management of the Finance Director and City Council leadership
as well as the development that continues to happen in Fridley. The negative outlook was
removed due to the new development that helps keep the rating high and strong. Thanks to Paul
Bolin, Jim Kosluchar, Scott Hickok and the HRA. The bond rating relates to the FICO score and
helps reduce loan costs. One concern is the declining population in Fridley. We need to
encourage people to move into Fridley.
Mayor Lund
thanked everyone for their hard work and noted that Fridley is in a better position
than it was 10 years ago.
FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 24, 2014 PAGE 6
Councilmember Saefke
attended the Fridley High School Alumni Choir concert on Sunday at
the Methodist Church. The next performance is Sunday at 4:00 p.m. and is free of charge.
Councilmember Varichak
welcomed Crooners Supper Club & Lounge to Fridley and wished
them success in their business adventure.
ADJOURN:
MOTION
by Councilmember Barnette to adjourn. Seconded by Councilmember Varichak.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 7:38
P.M.
Respectfully Submitted,
Krista Peterson Scott J. Lund
Recording Secretary Mayor