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CCM 11/13/2017 CITY COUNCIL MEETING CITY OF FRIDLEY NOVEMBER 13, 2017 The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:00 p.m. ROLL CALL: Mayor Lund Councilmember Barnette Councilmember Saefke Councilmember Varichak Councilmember Bolkcom OTHERS PRESENT: Wally Wysopal, City Manager Darcy Erickson, City Attorney Shelly Peterson, Finance Director Scott Hickok, Community Development Director Deb Skogen, City Clerk Paul Hyde, Fridley Land, LLC APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council Meeting of October 23, 2017. APPROVED. NEW BUSEINSS: 1.Receive the Minutes from the Planning Commission Meeting of October 18, 2017. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON THE REGULAR AGENDA. 2.Preliminary Plat Request, PS #17-04, by Fridley Land LLC to Replat the Lot North of 4800 East River Road, to Allow Further Redevelopment of the Property. This Replat will Create Two New Industrial Lots (Ward 3). APPROVED. 3.Resolution Scheduling a Public Hearing on December 18, 2017, on a Proposed Amendment to Fridley City Charter, Chapter 7, Taxation and Finances and Directing Publication of the Text of the Ordinance in Full. ADOPTED RESOLUTION NO. 2017-63. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 13, 2017 PAGE 2 4.Approve a Joint Powers Agreement between the City of Fridley and County of Anoka for Signal Painting at Various Intersections in the City of Fridley. APPROVED. 5.Claims 178593 – 178800. APPROVED. ADOPTION OF PROPOSED CONSENT AGENDA: Councilmember Bolkcom asked for the Planning Commission meeting minutes to be removed and placed on the regular agenda. Paul Hyde , Fridley Land LLC, stated things are moving very fast with the Northern Stacks development and they are starting the sixth building. They are fortunate this is a good leasing market and continue to fill buildings up before they are built. For the broiler room, they are talking to several tap rooms and a photo studio/office space. They hope to have someone in there by the second quarter of 2018. Mayor Lund said the location is great and looks to be highly successful. Mr. Hyde replied that he could not have done it without Council and staff. He was able to capture companies who were moving out of Minneapolis and St. Paul and moving north. There is a diverse group of companies which makes for a stable investment. He has a great partnership with the City which has resulted with one or two companies moving in. MOTION by Councilmember Barnette to approve the Proposed Consent Agenda with removal of item nos. 1. 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 AGENDA: MOTION by Councilmember Bolkcom to approve the agenda with the addition of Item No. 1. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 13, 2017 PAGE 3 PUBLIC HEARING/NEW BUSINESS: 6.Consider the On-Sale Intoxicating Liquor License Application for GYU Sum (Elizabeth) Hwang, Applicant, to Operate Kings Restaurant, Located at 1051 East Moore Lake Drive N.E.; 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 AND THE PUBLIC HEARING OPENED AT 7:09 P.M. Deb Skogen, City Clerk, stated that Gyu Sum (Elizabeth) Hwang, applicant, has applied for an on-sale intoxicating liquor license to operate Kings Restaurant located at 1051 East Moore Lake Drive. The restaurant serving authentic Korean food has been owned and operated by Suki Pak Collopy since 2001. Ms. Collopy is in the process of selling the business to Ms. Hwang who hopes to take ownership December 1, 2017. Ms. Skogen noted that Section 603.07 of the Fridley City Code requires a public hearing to consider the approval of an on-sale intoxicating liquor license. The Notice of Public Hearing was published in the Fridley Sun Focus on October 20, 2017, meeting the ten-day advance notice requirement. After the public hearing, the City Council has the ability to approve the license at the same meeting. Ms. Skogen said Ms. Hwang has been working at Kings Restaurant since 2009. She obtained a Bachelor of Science in Food & Nutrition from Korea National Open University and is a certified Korean Food Craftsman from the Korea Test Institute. Kings Restaurant is known in the Twin Cities as a best Korean restaurant receiving an award in 2009 and 2012. The cuisine serves not only Korean but also Japanese and Chinese food. Ms. Hwang is looking to expand the business and to diversify the customer base. Ms. Skogen said staff received the liquor license application on September 15, 2017. The Police Department conducted the background investigation and credit history of the applicant and found no reason to deny the application. The Fire Marshall found no outstanding issues or reasons to deny the license. Ms. Skogen said staff recommends the following actions: 1. Hold a public hearing for an intoxicating liquor license for Gyu Sum (Elizabeth) Hwang, Applicant, to operate Kings Restaurant located at 1051 E Moore Lake Drive; and 2. Motion to approve liquor license to Gyu Sum Hwang for Kings Restaurant at 1051 E Moore Lake Drive. Ms. Skogen said Jay Hwang is the manager of the restaurant and Elizabeth is the CEO. They have worked there over 9 years and the current owner wants to sell to Elizabeth. The landlord is asking for a personal guarantee for the new lease assignment. They are here today for the liquor license. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 13, 2017 PAGE 4 Councilmember Saefke asked what the owner had to do with making Elizabeth the owner on the lease. Mr. Hwang stated the landlord said the assets were not enough to pay the lease every month. The existing lease does not end for 4 ½ years. The current owner wants to retire but the landlord is not 100% sure they will be able to pay every month on time for the lease. Mayor Lund asked if they struggle to pay the lease, would the current owner ensure payment would be made. Mr. Hwang said the landlord is asking for 18 months of guaranteed payment. Councilmember Bolkcom asked if they felt comfortable that the current owner will sign on for 18 months. Mr. Hwang replied yes, the current owner agreed to sign and will continue to run the business through December or January if needed. Councilmember Bolkcom asked if Council closed the public hearing to approve this contingent on the signed lease; what would happen if the lease was not signed in February. Ms. Skogen replied the current liquor license is valid until the end of April, so they would continue to operate under the old license. If the lease is not signed the license cannot be issued. Councilmember Bolkcom thought Council should continue the hearing until they have a signed lease. Ms. Skogen suggested closing the public hearing and then when paperwork is ready this can come back to Council under “Licenses.” MOTION by Councilmember Varichak to close the public hearing. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED AND THE PUBLIC HEARING CLOSED AT 7:24 P.M. 7.Consider Transferring Property from the City of Fridley to the Fridley Housing and Redevelopment Authority for Development (Ward 1) (Continued October 9, 2017). MOTION by Councilmember Saefke to waive the reading of the public hearing notice and open the public hearing. Seconded by Councilmember Barnette. Scott Hickok, Community Development Director, noted that Item Nos. 7 and 8 will be presented together. A public hearing was opened on August 14, 2017. Council expressed concern over the transfer of property where the park/play structures exist. The hearing was held open for additional public comment. Staff held additional public meetings to gain input. Additional input FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 13, 2017 PAGE 5 was offered, and the developer prepared a new plan based on input. Anoka County and the general public reviewed the plans and concurred with the concepts. A refined park plan will be produced. Staff recommends the City authorize transfer of the parcels to the HRA. Councilmember Saefke said he was opposed to the transfer the first time this was presented because he felt the neighborhood did not have a chance to provide input. Since then, a few neighborhood meetings were held, and he heard consensus that this plan is satisfactory to the neighborhood. He asked about the patio homes and if there were any reconfigurations. Mr. Hickok replied the developer had a timeline to work under for exclusive negotiations which ended on November 2. There was not enough progress to stay with that developer. By the end of November, a RFP will go out to developers for just the patio homes. The area will have around 29 to 30 units and will stay within the boundaries that are defined. Councilmember Bolkcom said there have been two neighborhood meetings with the entire layout of the patio homes and others. Separate RFPs will be sent out at different times for development. She asked if the senior housing, for example, would change anything related to the park. She wanted to make sure the developer is aware of the area that is going to be reserved for the park. Mr. Hickok replied that a lot of work went into where we are at today and there is not a lot of flexibility within the patio home layout. We will look for a developer and make sure we can build at a price we can afford. MOTION by Councilmember Saefke to move into record the letter of understanding found on pages 69-70 of the agenda. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Pam Reynolds, 1241 Norton, asked how the land was acquired. Mr. Hickok said it was public land, and the City is ready to convey that area to the HRA for development. Ms. Reynolds asked how the park land could be given to the HRA without a vote. Mr. Hickok replied the park land was bought with no strings attached. The land was not bought solely with park purpose in mind. This piece of land has been analyzed and there is nothing that would prevent us from doing this. Mayor Lund added the Springbrook Nature Center was obtained through an exchange of land and has restrictions. That is not the case with this park land. Mr. Hickok stated this land was purchased and never dedicated as park land. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 13, 2017 PAGE 6 Ms. Reynolds noted that Lots 2 and 3 were acquired by eminent domain by the County. She asked if that made a difference. Mr. Hickok replied there is no case preventing them from advancing this property into development. Ms. Reynolds asked when the transfer occurred if the yellow area on the map would belong to the City. Mr. Hickok said the plat shows the pond feature, and Outlot A, C, D, and F are subject to this discussion. The City will take on the maintenance of the road. Ms. Reynolds said when this is all said and done, all of the land where taxpayers are building the Civic Center will belong to the City. Mr. Hickok replied this was a mutual decision on how all that will rest. Right now, the item is up for discussion for development purposes. Ms. Reynolds said at their next meeting, the Environmental Quality & Energy Commission will be reviewing the Comprehensive Plan for parks and trails. Their desire is to preserve open space and other desired features, and now we are transferring parks for development. She said she does not agree with all this development. Mr. Hickok replied that preserving open space is on natural features. In this development area, we are preserving the natural areas. Areas that are mowed and maintained are not natural. Mayor Lund added the pond will bring back what was once there--wetland and ponding areas. Councilmember Bolkcom said instead of a field, an enhanced park will be developed to connect the City park to the trail. People are happy about the change and to have a better park. We are still pursuing a field for soccer practice. MOTION by Councilmember Saefke to close 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 CLOSED AT 7:59 P.M. MOTION by Councilmember Bolkcom to approve Transferring Property from the City of Fridley to the Fridley Housing and Redevelopment Authority for Development. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 13, 2017 PAGE 7 NEW BUSINESS: 8.First Reading of an Ordinance Pursuant to Section 12.06, of the City Charter Declaring Certain Real Estate to be Surplus and Authorizing the Conveyance Thereof (Ward 1) MOTION by Councilmember Saefke to waive the reading of the ordinance and adopt the ordinance on first reading. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY . 9.First Reading of an Ordinance Amending Fridley City Code, Chapter 101. Animal Control, by Redefining or Adding Definitions to Section 101.01 Definitions; Creating a New Section 101.04 Allowing for and Regulating Chickens; Creating a New Section 101.05 Allowing for and Regulating Honey Bees; Amending Section 101.14 Changing Kennels to Multiple Pet Locations and Renumbering Sections of this Chapter as Required Deb Skogen, City Clerk, said staff received a directive from the City Council in March to review the city code to allow for the keeping of bees. In addition, staff received numerous requests to keep chickens and apply for a kennel license. These issues were discussed and staff researched and reviewed requirements and regulations from other cities, the state, the animal health board, various animal associations, and the League of Minnesota Cities. Based on this research and review, an ordinance was drafted addressing these three key areas. Information has been provided to the City Council throughout the process. A draft ordinance was presented to the City Council at their work session on October 23, 2017. As a result of the discussion, a few small revisions were made to the draft ordinance. Chickens: This ordinance creates Section 101.04 providing a purpose for the keeping of chickens and for the licensing, conditions and regulations of keeping chickens. Honeybees: This ordinance creates Section 101.05 providing a purpose for the keeping of honeybees and for the licensing, conditions and regulations of keeping honeybees. Multiple Pet Location: This ordinance amends Section 101.01, the definition of a kennel, from residential to a place of business licensed by the Minnesota Board of Animal Health and creates a new definition called “multiple pet location.” In addition, Section 101.14 is renumbered to Section 101.16 and amended to use the new definition of multiple pet location for the licensing, conditions and regulation on residential lots having more than three dogs or cats at one location. Ms. Skogen said each of these sections provides for an inspection process for the licensing or complaint of a nuisance. Each section also includes an appeal and hearing process for the applicant if a license is denied, revoked or non-renewed. New fees are also created to address the licensing and inspection fees. As more time is spent on the original inspection and review it is recommended the initial fee be $100 with a renewal fee of $25. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 13, 2017 PAGE 8 Ms. Skogen said that Staff recommends the City Council hold the first reading of an Ordinance Amending Fridley City Code Chapter 101. Animal Control by Redefining or Adding Definitions to Section 101.01 Definitions; Creating a New Section 101.04 Allowing for a Regulating Chickens; Creating a new Section 101.05 Allowing for and Regulating Honeybees; Amending Section 101.14 Changing Kennels to Multiple Pet Locations and Renumbering Sections of this Chapter as Required. Mayor Lund said to be oted on page 77 to be consistent with the fee structure on page 90. It may be a misprint on the top of page 77; should be $100 not $25 for the original license fee. MOTION by Councilmember Saefke to waive the reading of the ordinance and adopt the ordinance on first reading. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 10.Resolution Providing for Water, Sewer, Storm Water and Recycling Rate Changes. Korrie Johnson, Assistant Finance Director, said in May of 2017, City staff authorized Ehlers Inc. to begin work on a utility rate study designed to shape the rate structures for the water utility and sanitary sewer utility funds for 2018 and beyond. The findings and recommendations were presented to Council on September 25, 2017. The resolution included with this memo reflects those recommendations and, if adopted by Council, would take effect January 1, 2018. The rate study identified a rate structure intended to stabilize rate increases from year-to-year and increase equitability among customer classifications such as single family, multi-family, small and large commercial. Ms. Johnson stated the long-range consumption and expenditure forecasts were applied to the recommended rate structure to enable the utility funds to be self-sustaining without relying heavily on debt to fund capital and to maintain low to moderate rate increases going forward. A significant portion of the costs in these funds are required regardless of flow through the systems. The Water and Sewer Utilities require major operating and infrastructure costs just to maintain the availability of service. Ms. Johnson reviewed the Water Utility Fund. Since 2012, this fund has averaged just over 8% rate increases year-to-year. Ehlers is proposing a rate structure designed to increase revenue 9.8% in 2018 with only moderate increases needed to stabilize this fund going forward. Water sales have declined in recent years while expenses have continued to increase. Since 2012, per capita residential consumption has declined 22%, while Fridley’s population increased only 3%. In order to meet the Water Utility needs, Ehlers is proposing to break the usage tiers into more concise groups and increase the cost per tier for residential. The opposite will hold true for commercial customers with large commercial seeing a higher base fee. Irrigation rates will be billed at the highest tiered amount. These changes will help achieve equitability among our customer classes, and provide greater cost control for customers who wish to conserve water. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 13, 2017 PAGE 9 Ms. Johnson said since water sales have declined in recent years and prior assumptions were based on higher consumption estimates, it has been detrimental on cash reserves even with significant rate increases. To put this decreased consumption in a different light, Met Council is encouraging residential consumption at a conservative rate of 75 gallons per person per day, which many cities are well above. Fridley’s residential consumption for 2016 is calculated at about 63 ½ gallons per day per person. The study used a conservative approach to consumption forecasts when projecting future rate increases. Ms. Johnson stated staff is recommending a restructure of consumptions tiers, customer classifications and base charges. If consumption meets projections, this rate restructure would provide funding to support operations, scheduled infrastructure rehabilitation and debt obligations for 2018. Ms. Johnson reviewed the Sanitary Sewer Utility Fund. Sanitary sewer charges are dependent on water consumption. With a decline in water usage, the Sewer utility also has seen significant rate increases over the past several years. In 2016 and 2017, rates increased by 9%. Ehlers is proposing a rate structure designed to increase revenue by 4.3% for 2018 with 2019 and beyond increasing at a moderate rate. Ms. Johnson noted the largest portion of our sewer expense comes from the Metropolitan Council Environmental Services (MCES) wastewater transmission and treatment charges which makes up over 70% of total operating costs, and are largely outside of the City’s control. While we have edged downward in our share of MCES charges relative to other communities in recent years, MCES costs are projected to continue their increase. Ms. Johnson noted that this utility has major operating and infrastructure costs just to maintain the service no matter how much or how little flow passes through our system. To offset current MCES charges along with future increases, staff is recommending a rate restructuring with higher base charges and usage rates. The most significant of changes would be for residential users where that base charge would include the first 8,000 gallons of usage. We are also adding a class for 2 and 3 unit multi-family, where the base charge would include the first 24,000 gallons of usage. Ms. Johnson reviewed the Storm Water Utility Fund. The storm water fund had a 75% rate increase back in 2015 to support operational expenses and capital projects. With significant projects for a third consecutive year staff is recommending a 3.5% rate increase for storm water for the upcoming year. For the single family residential property, this is an increase of .10 cents per month. The Solid Waste Abatement Fund for 2017 the recycling rates were frozen due to a charter restriction limiting the City’s ability to increase rates to support expenditures. Effective November 2, 2017 the Charter was modified allowing the recycling rates to be adjusted to provide the revenue necessary to support anticipated expenditures for 2018. Staff is recommending an 11 cent increase per month for a residential home owner. This rate increase will provide for a balance budget for 2018 and provide the funding necessary to support the increase projected with the recycling hauler contract which makes up over 80% of the Solid Waste Abatement Funds expenditures each year. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 13, 2017 PAGE 10 Pam Reynolds, 1241 Norton Avenue, noted that the new tier for commercial will pay the same as residential. She asked why commercial will get 250,000 for 2.25 per 1,000 gallons and she gets 8,000 gallons. Also under the sewer residential pays a $50 base fee – she is sure that was incorrect because commercial base fee is only $20. She asked what was included in that fixed charge. She also wondered how the City could do that because the Charter says in Chapter 11 that all charges shall be just and reasonable. The goal in Fridley is to provide safe housing for families and businesses. If rates keep rising, it will force people out of their houses. Young families cannot afford to pay a $50 flat fee. Since restrictions went off in 2007 there have been rate increases every year. Mayor Lund replied that Ehlers is an expert in this field and brought forth critical findings. To compare Fridley to other communities is difficult because there are a lot of differences. Unfortunately, we are getting penalized for being conservative. Because this commodity must be self-sufficient, we have to raise the rates. Shelly Peterson, Finance Director, noted that a study was done and staff time is being charged to each enterprise fund accordingly. Wally Wysopal , City Manager, stated the action item for Council is the rates. There was a 20% reduction in water consumed by customers whether they were residential or commercial. This resulted in a 20% reduction in the City’s revenue source. Staff is trying to change the rates to make them fair. We have a good understanding of water and sewer personnel costs and the largest cost is from Met Council which we cannot do anything about but pay it. Improvements have been made to the system to make sure the system doesnot take more flow than what is coming into Fridley. These changes may look drastic, but the customer’s bill will compare to what they are paying now. Ms. Peterson noted that even though the base rate went up, the new rate includes consumption that it did not before. The overall bill only increases 2.94%. Mr. Wysopal added that changing the tiers was to make sure in the future we take into account significant consumption users. We needed advice from a consultant to break the bills down. The bottom line is the average customer will see an increase just short of 3%. Mayor Lund noted this is an attempt to stabilize the rate structure. Instead of relying on people to buy more water, the base rate goes up because we still have fixed costs. Ms. Reynolds said the rates are not higher for commercial or industrial. Ms. Johnson replied the commercial and industrial sanitary sewer are calculated based on actual water usage every single month of the year which brings in more revenue for the City. Residential water rates were based on winter water usage only. Councilmember Bolkcom asked how long the study was done and if it was a thorough study. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 13, 2017 PAGE 11 Ms. Johnson replied that Ehlers worked with staff for two months. They are well known for utility rate studies. The study was done through 2024 and we are looking at moderate increases going forward. Councilmember Bolkcom noted this is not something Council or staff took lightly. This was well thought out and needs to happen. Compared to other communities, Fridley is sitting in mid- range for rates. Ms. Peterson said commercial usage was subsidizing residential and now it will be fairer. Mayor Lund stated that even though commercial is using a lot of water, they are also paying more revenues. That is not the case with residential. Even with this increase, it will still take 3 to 5 years to get back to where we should be. MOTION by Councilmember Bolkcom to adopt Resolution No. 2017-64. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. Receive the Minutes from the Planning Commission Meeting of October 18, 2017. Councilmember Bolkcom said on Page 8, last paragraph Stacks VIII should be Stacks VII. Also, in the second paragraph on Page 9 and the first paragraph on Page 10 did not make sense. MOTION by Councilmember Bolkcom to withhold receipt of minutes until further clarification. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY 11.Informal Status Reports. There were no informal status reports. ADJOURN: MOTION by Councilmember Barnette to adjourn. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED AND THE MEETING ADJOURNED AT 8:54 P.M. Respectfully submitted, Krista Peterson Robert L. Barnette Recording Secretary Mayor Pro Tem