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CCM 06/12/2017 CITY COUNCIL MEETING CITY OF FRIDLEY JUNE 12, 2017 The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:07 p.m. ROLL CALL: MEMBERS PRESENT: Mayor Lund Councilmember Barnette Councilmember Varichak Councilmember Saefke Councilmember Bolkcom OTHERS PRESENT: Wally Wysopal, City Manager Darcy Erickson, City Attorney Shelly Peterson, Finance Director David Mol, Redpath and Company PROCLAMATION: ‘49er Day Community Pride Day- June 17, 2017 PRESENTATION: ‘49er Day Ambassadors APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council Meeting of May 22, 2017. APPROVED. Special City Council Meeting of May 26, 2017. THIS ITEM WAS REMOVED FROM THE CONSENT AGEND AND PLACED ON THE REGULAR AGENDA. FRIDLEY CITY COUNCIL MEETING OF JUNE 12, 2017 PAGE 2 OLD BUSINESS: 1. Second Reading of an Ordinance Amending the Fridley City Code, Chapters 602. 3.2% Malt Liquor, Section 602.14 Patio Endorsement; 603. Intoxicating Liquor, Section 603.26 Patio Endorsement; and 606. Intoxicating Liquor On-Sale Clubs, Section 606.12 Patio Endorsement to Allow for Live Entertainment on Patios at Liquor Establishments with Patio Endorsements WAIVED THE READING OF THE ORDINANCE AND ADOPTED ORDINANCE NO. 1343 ON SECOND READING AND ORDERED PUBLICATION. 2. Second Reading of an Ordinance to Amend the City Code of the City of Fridley, Minnesota, by Making a Change in Zoning Districts (Rezoning Request, ZOA #17-01, by Brad Dunham with Round Lake Commons II for 7699 Highway 65 N.E.) (Ward 2). WAIVED THE READING OF THE ORDINANCE AND ADOPTED ORDINANCE NO. 1344 ON SECOND READING AND ORDERED PUBLICATION. NEW BUSINESS: 3. Special Use Permit Request, SP #17-02, by Round Lake Commons II, LLC, DBA Topwash, to Allow for a Car Wash Use in a C-2, General Business Zoning District, Generally Located at 7699 Highway 65 N.E.; and Resolution Approving Special Use Permit, SP #17-02 to Allow the Construction of an Express Car Wash Use Building Generally Located at 7699 Highway 65 N.E. APPROVED SPECIAL USE PERMIT REQUEST, SP #17-02 BY ROUND LAKE COMMONS II, LLC, DBA TOPWASH AND ADOPTED RESOLUTION NO. 2017-27. 4. Resolution Approving a Six-Month Extension for Recording of Final Plat, P.S. #16- 01, by Fridley Land LLC, to Allow Further Redevelopment of the Properties, Generally Located at 41 Northern Stacks Drive and 4800 East River Road N.E. (Ward 3). ADOPTED RESOLUTION NO. 2017-28. 5. Approve Construction Cooperation Agreement for Restoration of Community Park in Fridley, MN, between the City of Fridley and the Metropolitan Council. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON THE REGULAR AGENDA. FRIDLEY CITY COUNCIL MEETING OF JUNE 12, 2017 PAGE 3 6. Approve License Agreement to Allow Temporary Storage of Equipment, Materials and overflow Parking at Locke County Park between City of Fridley and Anoka County. APPROVED. 7. Appointment – Parks & Recreation Commission. Wally Wysopal, City Manager, stated this is for the appointment of Elizabeth Graham to the Parks & Recreation Commission. Her term will expire on April 1, 2020. APPROVED. 8. Claims: 1705-ACH PCard; 176785 – 177005. APPROVED. 9. Business License. APPROVED. ADOPTION OF PROPOSED CONSENT AGENDA: Councilmember Bolkcom requested that the Special City Council Meeting Minutes be removed and placed on the regular agenda. Councilmember Barnette requested that Item No. 5 be removed and placed on the regular agenda. Councilmember Bolkcom asked when the trail would be reopened. Mr. Wysopal replied he did not have an answer at this time. Mayor Lund asked if she was referring to the one by the ball fields. Councilmember Bolkcom replied, yes, and over the trestle. MOTION by Councilmember Barnette to adopt the proposed consent agenda with the removal of the Special City Council Meeting Minutes and Item No. 5. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING OF JUNE 12, 2017 PAGE 4 OPEN FORUM, VISITORS: No one from the audience spoke. ADOPTION OF AGENDA: MOTION by Councilmember Bolkcom to approve the agenda with the addition of Special City Council Meeting Minutes and Item No. 5. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. NEW BUSINESS: 10. Receive the 2016 Comprehensive Annual Financial Report. David Mol , Redpath and Company, presented the 2016 Comprehensive Annual Report. Mayor Lund stated the abbreviated report shows the need for the 9 percent increase that Mr. Mol spoke about in his presentation so the City could get back into the black. If they look at that chart, the sewer, 10 out of the past 11 years, the sewer fund operated in the red. This answers the question as to why the City had such a significant increase. In total among those three enterprise funds, water, sewer, and storm water, it is interesting to note that 7 of the past 11 years, the City operated those collectively in the red. Mayor Lund stated as to the water fund, he looks at the chart and then looks at how many years the City was in the red. The numbers in the red do not agree with the chart. He asked if that was because this chart includes depreciation. Mr. Mol replied, yes, that is correct. The summary on that page is the entire fund and, what the graph is attempting to illustrate, is the operating side of things, and does not include the non- operating income expense. Councilmember Bolkcom stated regarding the audit management letter comparing the City’s percentage income vs. percentage of sales, the state average is 5.9 and the City’s is 7.9. She asked if that was a big deal. Mr. Mol replied this is really some benchmarking information they included. This is comparing the City’s liquor operations with a report that is published annually by the State Auditor on municipal liquor operations. They have different groupings--metro area municipal liquor operations, outstate, different regions. This is giving them benchmarking information to compare their operations with an average of all metro. Shelly Peterson, Finance Director,stated the City is above average in good ways as far as expenditures go and when they look at the gross sales for the liquor stores. Councilmember Bolkcom stated there was a recommendation stating the above balances are not expected to be repaid within a reasonable time and that they recommend the HRA review the FRIDLEY CITY COUNCIL MEETING OF JUNE 12, 2017 PAGE 5 likelihood of repayment of the above loans and authorize transfers for any that may not be repaid. She asked whether that is something they are going to be exploring? Ms. Peterson replied it is her understanding the intention is to pay back those loans. Councilmember Bolkcom asked if they would be reclassified as a transfer. Mr. Mol replied they would not be transfers. This is just really an annual reminder. There are significant dollar amounts. Ms. Peterson stated the HRA just met with Greg, their accounting person, to go out ten years, and based on the increment they are anticipating, these loans should all be paid off in full. Councilmember Bolkcom stated on page 24 there are two things that were noted, corrected and uncorrected financial state adjustments. She asked if this is a normal pattern or if it is unusual for the receipt of revenue for unbilled utility accounts that were not recorded as of December 31. Ms. Peterson replied there are three quarters in the current year, 2017, where they code a portion of that back to the prior year. They had some computer issues the year before so they only did two of those three adjustments. The system did one. That same entry was made this year, not realizing that one of those months was a correction from the prior year in the system. It was an anomaly they do not anticipate to ever happen again. Councilmember Bolkcom stated the second one there says the receivable from the Met Council was overstated. Ms. Peterson replied, correct. That was a new system issue where the software vendor was able to automate a process and they were still performing the annual journal entry not realizing the system had automated it. It was a duplicate entry. Councilmember Bolkcom stated on page 25, for MSA, the recommendation is the City consider improving cash flow by requesting advances for the MSA eligible projects. She asked if this was something they were going to look at. Ms. Peterson said they are working with the Engineering Department and Mr. Kosluchar. When they award the bid, the City is eligible to receive 90 percent of the MSA. In the past they would wait until the project was nearly complete. They will be moving forward and asking for those funds early. MOTION by Councilmember Bolkcom to Receive the 2016 Comprehensive Annual Financial Report. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING OF JUNE 12, 2017 PAGE 6 11. Resolution Accepting and Ratifying the Council Action of May 22, 2017, to Adjust the Original McGough Construction Company Request for Proposal (RFP) to Allow a McGough Staff Fee of 3.0%, Rather than 2.4%; This Modification Will Not Impact the Guaranteed Maximum Price (GMP) from McGough Construction Company, Fridley’s Construction Manager at Risk, for the City of Fridley’s Civic Campus Project which Includes: City Hall, Police, Fire and the Public Works Buildings. Wally Wysopal, City Manager, stated was brought to their attention at the Council meeting on May 22, regarding the fee from the construction manager, McGough Construction. When they set out on this journey of building the civic campus with a construction manager at risk, they had good intentions that a 2.4 percent fee would cover that. As it turns out, there was a considerable amount of additional work that was related for McGough to take care of in terms of personnel, legal, and that type of thing as they were forging new ground into this whole delivery method. Mr. Wysopal stated when it came to Council for their approval at their last meeting, the guaranteed maximum price, staff brought it to their attention the fee was actually going to be at 3 percent, not 2.4 percent; and that it did not affect the bottom line guaranteed maximum price. They did not have the opportunity at the Council meeting to bring this resolution forward to make it clear that the fee for construction management was 3 percent and not 2.4. Mr. Wysopal stated the Council’s action tonight is purely technical. It does not affect any price or fees that are going to be charged. MOTION by Councilmember Saefke to adopt Resolution No. 2017-29. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 12. Resolution Adopting Policy for Transfer, Sale, Disposal or Donation of Surplus Equipment and Surplus Property. Shelly Peterson , Finance Director, stated on August 1, 2016, a law went into effect allowing cities to donate surplus equipment to non-profit organizations. In order for cities to be able to do this, a policy must be adopted by the City Council. There is a limited scope on what the City can donate to non-profit organizations and includes equipment used in Public Works, firefighting equipment, emergency medical equipment, and cell phones. Ms. Peterson stated with that limited scope, staff has developed a policy that will also encompass all of the City’s other surplus property and provide staff with a point of reference moving forward on how they handle any surplus equipment they need to dispose of. Ms. Peterson stated it does not change the City’s current process very much. They identify, they determine the fair market value, and they have always prioritized. When they say “prioritize”, what she means is they look to see if another department can use the equipment first. FRIDLEY CITY COUNCIL MEETING OF JUNE 12, 2017 PAGE 7 They look to sell the equipment, and they look to trade in the equipment. Once those efforts have been made, this policy helps outline disposal methods. Ms. Peterson said based on those disposal methods and what the fair market value is, what this this policy will do is require staff to go to Council with a declaration of the surplus equipment and property. That declaration will include any surplus equipment they have determined eligible for donation, and then with all other surplus property with a fair market value of $25,000 or more they wish to dispose of. Those would be items similar to the buildings over at the civic campus that they were unable to sell, transfer, or trade in. They need to find the least expensive method for disposing of the items. Ms. Peterson stated in anticipation of the move to the new civic campus, this policy will provide staff with procedures to handle the significant surplus equipment and the surplus property they are anticipating. Staff recommends Council adopt this policy for the transfer, sale, disposal, or donation of surplus equipment and surplus property. They have given them two separate names because surplus equipment is what the State defines as eligible for donation, and surplus property is anything else the City may have that does not meet that criteria. Councilmember Bolkcom asked how they defined “minimal.” Ms. Peterson replied they look at what they have; for example, in the City’s garage they know what a typical vehicle of that age and make is worth. The City has had its office furniture at city hall looked at to see if they can repurpose, refurbish, or sell it. There is not a lot of desire for the modular furniture they currently have at City Hall. Staff will go through that effort with every piece of property to determine if there is any value in it. Councilmember Bolkcom stated they do not normally have things that have a value over $25,000 they are basically declaring in the past. Is it more related to moving the civic campus or are there things the City has actually looked at and have actually sold or given away? Ms. Peterson replied the State of Minnesota has a website staff can go to and sell property to other cities. Fire trucks is a perfect example. The example that was recently brought up was the City had some landscaping materials over at Public Works that needed to be moved. To dispose of it would cost more than just putting a free sign on it to have somebody come and just take it away. This was designed to be able to donate to non-profits for certain unique items, and handling what is coming ahead with a lot of the equipment and materials the City needs to move for the new buildings. Councilmember Bolkcom asked so only things worth $25,000 or more would come to the City Council. Ms. Peterson replied, it would be anything the City is looking to donate that meets the requirements of being donated, and/or anything the City needs to dispose of and was unable to sell, trade in, or transfer. For those items, it would be $25,000 or more. FRIDLEY CITY COUNCIL MEETING OF JUNE 12, 2017 PAGE 8 Councilmember Bolkcom asked if that was what No. 8 said. Or was it covered in the previous item, because that says donated surplus equipment. Ms. Peterson replied No. 8 states any surplus equipment. What she and Attorney Erickson tried to do is distinguish between surplus equipment and surplus property. Surplus equipment would be anything eligible for donation. Surplus property would be anything that is not eligible for donation. Paragraph No. 8 states that any surplus property with a value of $25,000 or more would come to Council to declare surplus. Mayor Lund stated surplus equipment, regardless of fair market value, and surplus property over $25,000. Ms. Peterson replied correct. Councilmember Bolkcom asked with respect to No. 12, could donating be a conflict of interest because both she and Mayor Lund are on the board of non-profit organizations who could be receiving the property. Attorney Erickson replied she does not know that the donation would be of the type of equipment their organizations would be looking for just because it is such a narrowly defined set of types of property under the statute. She does not think that their membership in an organization would be a conflict because they are not personally taking title to the property. Mayor Lund mentioned cell phones. He said he cannot imagine they do not have value. Mr. Wysopal stated there are some things that very well have value. The salt shed and pole barn do have value. Under different circumstances you could probably make that work out. However, with the City owning it, taking employee time to try and track down how to try and get the money out of the cell phones, etc. will exceed the value of the cell phone donation. The policy will allow the City to dispose of those items without incurring that additional cost to the City. The same thing happened with some IT equipment, computers, etc. Staff had three pallets wrapped up and no one will take them because they do not want to spend the time to take them all apart. Eventually you will find somebody who will take them and they will go to third world countries or wherever the labor cost is lower. Mr. Wysopal stated he thinks it is very clear that No. 12, under the examples that were presented, would not prevent any member of the Council or a City employee who is a part of a non-profit group organization from participating in this. What No. 12 is saying is that you are taking it personally, you would take the property and say you are doing this for that organization. That would not be the case. Staff would not work with it that way. They would make sure that the Lions or Rotary Club, etc. would be taking possession of that property and not the individuals themselves. Attorney Erickson stated they can certainly follow up with the League but that is a fair reading of their model policy which they have tried to incorporate. FRIDLEY CITY COUNCIL MEETING OF JUNE 12, 2017 PAGE 9 Councilmember Bolkcom stated sometimes instead of saying City Manager, they say Designee. Would that change that policy to incorporate others? For example, No. 14, the City Manager may cause the title to be transferred. Mr. Wysopal replied he would prefer it that way because as the Charter sets things up in the ordinances he is responsible for those things. Certainly it could be a delegated thing but when there are titles and those kinds of things, his signature is on those. It would make the responsibility chain complete and clear. Councilmember Bolkcom stated No. 15 is on transportation, and then in Exhibit A is ask how they plan on transporting the equipment. There is no timeline. Ms. Peterson replied, she believed in this document it is up to the discretion of the department that needs to dispose of it. Councilmember Bolkcom stated asked if they wanted to know how long it would take someone to take the equipment. What if there is more than one person who is interested? Ms. Peterson replied they did not look at the possibility of two people giving them identical offers for a piece of equipment. They would work with them. Councilmember Bolkcom stated it said somewhere else that if there were more than one organization, staff would go back and let the other know so it is kind of a fair policy. Attorney Erickson stated the policy will address that in No. 12 because it talks about the impact on the City. If the City needs to get rid of it by a certain date to accomplish clearing the property or getting the surplus property out of City storage, that is a factor the City can consider and, if it had competing identical offers from non-profits that is relevant for it to be considered. Councilmember Bolkcom asked who would fill out Exhibit A. Ms. Peterson replied the organization would fill that out. Mayor Lund stated the timeline is important because it has to work for the City, too. The other thing is if it is agreeable for a non-profit to take it, then he would think they want to make sure they are utilizing a licensed, bonded contractor that has insurance so the City does not have any liability. There should be some show from this non-profit when it asks at the bottom of the form how they planned on removing and transporting the equipment that they have someone who is licensed, bonded, insured to protect the City’s liability. Ms. Peterson agreed that could be something they add to the policy. Attorney Erickson replied on Exhibit B there is a Disclaimer of Warranties, but they could also put indemnification in there and require if there is any damage, harm, or loss caused by the removal of the property and transport off of the property owned by the City that they indemnify us. FRIDLEY CITY COUNCIL MEETING OF JUNE 12, 2017 PAGE 10 MOTION by Councilmember Saefke to adopt Resolution No. 2017-30. Seconded by Councilmember Bolkcom with the inclusion of insurance and indemnification language. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 12A. Approve Minutes of the Special City Council Meeting of May 26, 2017. Councilmember Bolkcom referred to the paragraph 6 on the second page of the minutes which states, “Mr. Kosluchar said it was a small change but was unaware if there would be significant cost savings in changing public works to a hydraulic type elevator.” They had discussion that they truly did want them to pursue looking at whether there was a difference. They had to approve the elevator bid that day because it was one of the first things they needed to do related to starting the building, but they wanted them to look at the electric traction vs. hydraulic. The City is not going to maintain its own elevators. It will have a service company take care of them. Mr. Kosluchar said they needed elevators with this company in the specifications. He said they needed to have an elevator that opened both ways for equipment. She asked that be reflected in the minutes because she wants to make sure they look at that down the line. Councilmember Varichak referred also on that same page, second paragraph from the bottom, the motion does not show it was seconded. She is sure it was done by Councilmember Bolkcom. MOTION by Councilmember Bolkcom to approve the Special City Council Meeting Minutes of May 26, 2017, with the corrections as presented. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. Approve Construction Cooperation Agreement for Restoration of Community Park in Fridley, MN, between the City of Fridley and the Metropolitan Council. Councilmember Barnette referred to the third paragraph of staff’s memorandum for this item. “It is important to note that this agreement relates to Community Park only, and the disposition of Plaza Park and final restoration is subject to the City’s discretion, including removal and repair of the temporary trail.” That really is kind of contradictory. Councilmember Bolkcom asked if it was going to be repaired back to grass. Councilmember Barnette stated in talking with the residents of that area, they would like very much to have that trail removed. He realized that is up to the City, but he wants to make that clear. Mayor Lund asked if that is what the City was planning on doing. Councilmember Barnette stated it is his understanding there was still some discussion about that. FRIDLEY CITY COUNCIL MEETING OF JUNE 12, 2017 PAGE 11 Mr. Wysopal replied that is not what they are asking. They are not taking any action on that. Councilmember Bolkcom stated it was her understanding the temporary trail is going away. Councilmember Barnette said that was not his understanding. Mr. Wysopal stated this action they are asking Council to take is not going to impact anything other than Community Park. The things that are related to Plaza Park and the trail Councilmember Barnette is referring to is not affected by this resolution. Mayor Lund stated it does say after that the Parks & Recreation Commission and staff are reviewing alternatives for park final restoration. Councilmember Barnette stated he understands but he wanted the City to understand almost unanimously the neighbors want that trail out of there. Councilmember Barnette referred to paragraph 1 of the agreement. It talks about the restoration of the City’s baseball field. In Item 4 again it mentions the baseball diamonds. In No. 1 under Scope and it talks about upgrading the scoreboards. His understanding in listening to the Parks and Recreation Director Jack Kirk and others, that Fields 5 and 6, were seldom used. There was some discussion of moving the soccer fields from the Columbia Arena site over to those fields. Why would they redo the baseball fields if they are not ever going to be used? Mr. Wysopal replied, this agreement allows the City that flexibility because the Metropolitan Council will be providing them with the funds to do it. Basically the dollar amount that was arrived at was based on restoring it to what it was previously. They cannot pay to make something different, but they certainly can use the monies to do it as they choose to make it like it was. It gives them that flexibility and the Parks & Recreation Commission is aware of that. Councilmember Barnette stated and the value was something like $23,754? Mr. Wysopal replied, right, and that estimate was derived at by the City’s engineering department. The 7 percent fee includes the cost of City employees managing the program, etc. They are covered and made whole by all of that. Councilmember Barnette asked if the decision would eventually be made by the Parks & Recreation Commission. Mr. Wysopal replied correct. This will be a part of their discussion, so nothing will be happening in that area until the Parks and Recreation Commission has final review of it. Councilmember Bolkcom asked when it would take place. Mr. Wysopal replied, it would probably be after the Parks & Recreation Commission’s next meeting which he believed is in September, so it would be an October/November time period. FRIDLEY CITY COUNCIL MEETING OF JUNE 12, 2017 PAGE 12 Councilmember Bolkcom asked if they felt confident that late in the year they can put grass down and have it grow. The money is theirs so they do not have “X” amount of time to spend it. It takes longer than that. They do not have to use it up. The money is basically extended to the City to use as it needs to repair it. Mr. Wysopal replied they will repair it after the Parks Commission looks at it. If the City Council is satisfied with where they are going with it, then the Metropolitan Council has 30 days to pay them when they turn in the receipts. MOTION by Councilmember Barnette to approve the Construction Cooperation Agreement for Restoration of Community Park in Fridley, MN, between the City of Fridley and the Metropolitan Council. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 13. Informal Status Reports: None. 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 8:12 P.M. Respectfully submitted by, Denise M. Johnson Scott J. Lund Recording Secretary Mayor