CCM 12/10/2018
CITY COUNCIL MEETING
CITY OF FRIDLEY
DECEMBER 10, 2018
The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:04 p.m.
MEMBERS PRESENT:
Mayor Lund
Councilmember Barnette
Councilmember Saefke
Councilmember Varichak
Commissioner Bolkcom
OTHERS PRESENT:
Wally Wysopal, City Manager
Scott Hickok, Community Development Director
James Kosluchar, Public Works Director
Dan Tienter, Finance Director
APPROVAL OF PROPOSED CONSENT AGENDA:
APPROVAL OF MINUTES:
1.City Council Meeting of November 26, 2018.
APPROVED.
OLD BUSINESS:
2.Second Reading of an Ordinance Second Reading of an Ordinance Amending Chapter
220 of the Fridley City Code Related to the Residential Rental Property Maintenance
and Licensing Code;
and
Adopt Official Title and Summary Ordinance.
THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON
THE REGULAR AGENDA.
NEW BUSINESS:
3.Resolution Deferring Special Assessment Payments for the Property Located at 125
Alden Circle N.E. in Regard to 2018 Nuisance Abatement.
ADOPTED RESOLUTION NO. 2018-63.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 10, 2018 PAGE 2
4.Resolution Designating Precincts and Polling Locations for the 2019 Election Year.
APPROVED RESOLUTION NO. 2018-64.
5.Approve Comprehensive Sign Plan for Gaughan Companies at 8300 University Avenue
(Ward 3).
APPROVED.
6.Claims (183128 – 183345)
APPROVED.
ADOPTION OF PROPOSED CONSENT AGENDA:
MOTION
by Councilmember Barnette to adopt the proposed consent agenda with removal of
Item No. 2. 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 adopt the agenda with the addition of Item No. 2.
Seconded by Councilmember Varichak.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
TRUTH-IN-TAXTION PUBLIC HEARING:
7.City of Fridley Budget.
MOTION
by Councilmember Barnette to open the public hearing. Seconded by
Councilmember Bolkcom.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED AND THE PUBLIC HEARING OPENED AT 7:03 P.M.
Dan Tienter,
Finance Director, presented the City of Fridley Budget. He highlighted the
following:
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 10, 2018 PAGE 3
Near–term economic growth for the State of Minnesota (State) and region continues to
improve/remain stable. The Federal Reserve recently increased the Federal Funds Rate by 25
basis points to a target of 2.00% to 2.25%, with more increases anticipated in 2018 and 2019.
However, the State predicts slower economic growth beginning in 2019 and decreasing each year
until 2023. Nevertheless, the State predicts a $1,544,000,000 surplus for State Fiscal Year 2020
through 2021. Growing trade policy disputes with major international trading partners create
uncertainty in long–term economic forecasts.
Conservative revenue and expenditure assumptions:
Single step salary increase for eligible employees and a 3.00% Cost of Living
o
Adjustment (COLA);
Reallocation of current resources based on need and actuals history;
o
Budget adjusted to better reflect actual expenditures;
Limited adjustments to external revenues.
Consistent with previously approved City Council actions and guidance
o
Supports current compliment of Full–Time Equivalent (FTE) employees
o
The proposed 2019 General Fund Budget is structurally balanced
o
The proposed 2019 Budget does not include any adjustment to address the wage
disparities between union and non–union staff or any expenditures for the pending Park
System Master Plan.
Building permit revenue still strong in 2018
Approximately $89,300,000 in additional valuation constructed year–to–date
o
Assumptions
o
Trend indicates increase of approximately $60,000 in 2019
Assuming an approximate 6.7% increase in permit revenues, or about
$49,000
Other Financing Sources
“Closed Bond” Fund
o
Monies accumulated from closed debt service
Approximately $4,753,020 at the end of 2017
Assumptions:
Eliminated as part of the Proposed 2019 Budget ($104,600)
Local Government Aid (LGA) certified to remain the same as 2018
o
Anticipated to remain stable
Assumptions:
Reallocation of $86,700 from the General Fund to the Capital
Equipment fund
Personnel Services
77% of the General Fund Expenditure Budget
o
Approximately $374,600 increase for 2019
o
Assumptions
o
Single Salary Step increase for eligible employees
3.0% COLA
7.0% increase in health and Workers’ Compensation insurance premiums
Approximately $60,000 elections cost reduction
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 10, 2018 PAGE 4
Supplies, Other Services and Charges
Civic Campus Adjustments
o
Gas and Electric utility charges for Civic Campus estimated to increase
$235,800 from current charges
Custodial for both City Hall and Public Works estimated to increase up to
$81,900
Assumptions
o
An increase of 2.5%, or approximately $91,000, across all non–personnel
expenditures, based on the July, 2019 CPI – Midwest
Continued maintenance of the current Municipal Center pending the
conveyance to a third–party
The Capital Investment Program (CIP) consists of a collection of Capital Project Funds designed
to coordinate the financing of capital improvements and projects. The City currently maintains
five Capital Project Funds:
1. Building Capital Improvement Fund;
2. Street Improvement Fund;
3. Parks Capital Improvement Fund;
4. Information Technology Projects Fund; and
5. Capital Equipment Fund.
Building Capital Improvement Fund
$250,000, Public Safety and Public Works Storage Facility
o
The Proposed 2019 Budget assumes the use of approximately $210,000 of fund
o
balance
Street Improvement Fund
$480,000, West Moor Lake Drive Improvements
o
$910,000, Street Rehabilitation Project (69th Avenue)
o
The Proposed 2019 Budget assumes the use of approximately $733,000 of fund
o
balance
Parks Capital Improvement Fund
$300,000, Springbrook Nature Center Pavilion Improvements
o
$375,000, Civic Campus and Locke Pointe Park Improvements
o
The Proposed 2019 Budget assumes the use of approximately $456,000 of fund
o
balance
Information Technology Projects Fund
$110,000, Virtual Storage Network (VSAN) Replacements
o
$122,000, Personal Computer and Technology Replacements
o
The Proposed 2019 Budget assumes the use of approximately $168,000 of fund
o
balance
Capital Equipment Fund
$135,000, Self–Contained Breathing Apparatus Replacement
o
$127,000, Public Safety (Police) Vehicle Replacement
o
Staff continue efforts to defer certain capital equipment expenditures
o
The Proposed 2019 Budget assumes the use of approximately$117,000 of fund
o
balance
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 10, 2018 PAGE 5
Generally, Special Revenue Funds are funds designed to account for the activities of specific
revenue sources and are legally restricted for a specific purpose(s). They may support both
capital and operating expenditures:
The City currently maintains four Special Revenue Funds:
1. Cable Television Fund
2. Solid Waste Abatement Fund
3. Police Activity Fund
4. Springbrook Nature Center Fund
Marketing and Communications Fund (i.e., Cable Television)
$89,000, reallocation of personnel expenditures from the Cable Television Fund
o
to the General Fund
Based on past revenue changes, staff anticipate an approximately 2.9% increase
o
franchise fee revenues
Solid Waste Abatement Fund (i.e., Recycling)
$36,100, cost increase for the recycling services contract
o
Given the commodity values of recyclable materials, staff anticipate a need for
o
additional revenue to support current service levels
Police Activity Fund
$273,600, Toward Zero Deaths Grant revenue, with a corresponding increase in
o
“Payments to Other Agencies”
Springbrook Nature Center Fund
$50,000, donation from the Springbrook Nature Center Foundation to support the
o
construction of a new pavilion/activity center, with a corresponding increase in
“Operating Transfers”
At present, the Proposed 2019 Budget estimates an operating surplus of
o
approximately $24,300
Generally, Enterprise Funds are designed to account for certain proprietary activities for which
fees or rates are charged to external users for goods or services.
The City currently maintains four Enterprise Funds:
1.Water Utility Fund
$3,800,000, Locke Park Treatment Plan Rehabilitation
Assumptions and Other Considerations:
At present, the Proposed 2019 Budget anticipates an increase in both the
base fees and volume rates
Water consumption continues to decline – approximately 22% since 2012,
despite an increase in population of approximately 3% over the same time
The Proposed 2019 Budget also assumes the issuance of approximately
$3,800,000 in Water Utility Revenue Bonds to support planned projects
2. Sanitary Sewer Utility Fund
$270,000, Sanitary Sewer Collecting System Lining
$310,000, Lift Station Rehabilitation
Assumptions and Other Considerations:
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 10, 2018 PAGE 6
At present, the Proposed 2019 Budget anticipates a 4.4% increase in the
volume rates, but no increase in the base fees for both Residential and
Multiple Family – Three Units of Less user classes
The Proposed 2019 Budget also assumes the issuance of approximately
$1,060,000 in Sanitary Sewer Utility Revenue Bonds to support planned
projects
Typically, Metropolitan Council Environmental Services charges
comprise more than 70% of the total fund expenditures.
3. Storm Water Utility Fund
$220,000, Storm Water System Upgrades
$200,000, Oak Glen Creek Erosion Control Project
Assumptions and Other Considerations
At present, the Proposed 2019 Budget anticipates a 3.5% increase Storm
Water Utility Rate
The Proposed 2019 Budget does not anticipate any borrowing to support
planned projects, and estimates a fund surplus of approximately $325,300
4. Municipal Liquor Fund
$18,400, Rewards Program Increase
$276,000, Cost of Goods Sold Increase
The Proposed 2019 Budget estimates more than $6,200,000 in sales
Assumptions and Other Considerations
The Municipal Liquor Fund will continue to transfer $388,500 to the Parks
Improvement and Capital Equipment Fund and $51,250 to the General
Fund as an Administrative Charge
The profitability of the Municipal Liquor store may be negatively
impacted by additional competition in the near future
In the interim, sales at both stores increased approximately 6.3%
Mr. Tienter said that per Minn. Statute §275, the City must certify a proposed and final property
tax levy to the county auditor by September 30 and five days after December 20 of each year,
respectively. Per the aforementioned statute, the Final Property Tax Levy may not exceed the
Proposed Property Tax Levy. As discussed at a previous Conference Meeting, staff assumed a
5.00% increase for the non–debt service levies for 2019. However, upon further budget review
and based on updated property tax information, staff recommend a 6.50% increase for the non–
debt service levies for 2019. Assuming a 6.50% increase in the non–debt service property tax
levies, staff anticipates an increase of 4.64%, compared to 4.86% in the previous year. The
General Fund Property Tax Levy represents approximately 68% of the revenue for general
operations.
The Average Residential Homestead, $207,900 (Current MLS, $215,500), Median Residential
Homestead: $203,000 (Current MLS, $215,000), Property values anticipated to increase
statewide (4.6% for Pay 2018). Between 2018 and 2019, the average valued home increased in
value 8.8%, compared to 7.0% the previous year. Coupled with change in the property tax levy,
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 10, 2018 PAGE 7
this resulted in a $38 increase (or $3 per month) in City property taxes. Approximately $83 of
the change may be attributed to increase in valuation.
Mr. Tienter said that tonight the City Council is holding the public meeting on the 2019 budget
and levy. On December 17 the City Council will adopt the final 2019 budget, the 2019-2023
CIP, tax levies and revised 2018 budget. On December 21, the final 2019 levy will be certified to
Anoka County.
Councilmember Bolkcom
asked if the presentation would be part of the minutes.
Mr. Tienter
replied yes, the presentation will also be on the City’s website.
Larry Miskowic
asked if the light rail that comes through the City of Fridley costs the City any
money or if the City receives anything from it.
Mayor Lund
replied that goes through Met Council and it does not affect the City. The City
does not pay anything special for the Northstar Rail. Funds come from the state.
Scott Hickok,
Community Development Director, noted that indirectly the City would have
some benefits, as the rail will bring in new development and taxes.
Don Grant
said he tried to find this information prior to this evening but unable to do so. The
presentation was full of information and he would like to know where he could find more
information and details.
Mr. Tienter
replied that the summary is on the website, but he could email the proposed budget
presentation to Mr. Grant.
Mr. Grant
noted that the City is bonding for a number of items and that the new building is very
nice. He asked if it would be better to pay for things outright rather than pay interest over time.
Mayor Lund
said this is the largest bond Fridley has ever had. The interest is low, at 3.1% over
the life of the loan. It is a lot of money and the interest adds up. They try to minimize bonding
without having to raise taxes and bonding is done every two years to save money.
Councilmember Bolkcom
noted that the projects that need to be done usually have to do with
an aging infrastructure, so it takes more money to complete the projects.
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 AND THE PUBLIC HEARING CLOSED AT 7:36 P.M.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 10, 2018 PAGE 8
OLD BUSINESS:
8.Second Reading of an Ordinance Under Section 12.06 of the City Charter and
Minnesota Statutes Section 465.035 Regarding Certain Real Estate and Authorizing
the Conveyance Thereof (Former Fridley Municipal Center) (Ward 1).
Scott Hickok
, Community Development Director, stated that on November 26, Council held the
first reading of the ordinance regarding the transfer of property in accordance with City Charter,
Section 12.06. Tonight, Council is asked to consider the second reading to convey the property to
the HRA so the HRA can negotiate on behalf of the City to build a senior housing facility on the
former City Hall site. Construction would start in the spring of 2019. The HRA will sell the
property and the proceeds would come back to the City.
MOTION
by Councilmember Saefke to waive the reading of the ordinance and adopt Ordinance
No. 1365 on second reading and order publication. Seconded by Councilmember Barnette.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
9.Second Reading of an Ordinance Amending Fridley City Code, Chapter 104, Pertaining
to Tree Management;
and
Adopt Official Title and Summary Ordinance.
Jim Kosluchar,
Public Works Director, stated that Council approved the Emerald Ash Borer
Mitigation Plan at the February 12, 2018, council meeting. This plan was developed to
proactively address the threat of emerald ash borer while preserving the benefits of Fridley’s
urban forest. The Plan was also intended to increase the resiliency of the City’s urban forest
against future unknown pests by increasing tree species diversity.
Mr. Kosluchar
said the execution of this plan is supported in the City Code through Chapter
104 which was designed to respond to the removal of trees infected with Dutch elm disease and
oak wilt. City staff has reviewed Chapter 104 alongside the regulations of other cities, state
guidelines, and recommendations of the Arbor Day Foundation and identified areas to be
updated. The goals of these updates are to:
1.Clarify goals of the City’s tree management program – expand from pest management
to resilient urban forest and explicitly state the right to manage trees on land such as
parks and rights-of-ways (Tree City USA requirement)
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 10, 2018 PAGE 9
2.Clarify the City’s definition of a public tree nuisance – shift from specific disease
(Dutch Elm, Oak Wilt) to the characteristics of a nuisance tree
3.Clarify the City’s response to a public tree nuisance – align with standard methods of
field diagnosis, notification, and tree replacement; explicitly clarify management
right-of-way trees and remove items outside of City jurisdiction (transportation of
firewood-MDA)
4.Update licensing requirements and referenced statutes
Mr. Kosluchar
said a first reading of the ordinance was held on April 23, 2018. Following
direction from Council, staff updated language to further clarify the definition of a public tree
nuisance. Staff recommends the City Council waive the second reading and adopt this ordinance
and the title and summary ordinance.
Councilmember Bolkcom
asked for an explanation on page 94, Section 104.04, number 2.
Mr. Kosluchar
replied that would take place in a natural area where people would not be routed.
If a tree fell, it would be okay. It is not considered a hazard unless there was reasonable
expectation the tree falling would be hazardous to someone.
Councilmember Bolkcom
asked if it would be a nuisance if there was a tree in her back yard
and it could fall on her neighbor’s fence.
Mr. Kosluchar
replied yes.
MOTION
by Councilmember Saefke to waive the reading of the ordinance and adopt Ordinance
No. 1366 and adopt the official title and summary ordinance and order publication. Seconded by
Councilmember Varichak.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
2. Second Reading of an Ordinance Amending Chapter 220 of the Fridley City Code
Related to the Residential Rental Property Maintenance and Licensing Code;
and
Adopt Official Title and Summary Ordinance.
Pam Reynolds,
1241 Norton Avenue, asked if this was an attempt to make rental property safer
by limiting the number of police calls.
Scott Hickok
, Community Development Director, replied the ordinance makes it incumbent
upon the owner of the property to make sure there are not reoccurring problems or a nuisance.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 10, 2018 PAGE 10
Ms. Reynolds
said that it talks about a class the owner has to take in order to certify they
understand the new language. She asked where the class would be held, who it would be taught
by, and how it would be communicated to the rental property owners.
Mr. Hickok
replied the property owners contacted the police and were engaged in the
modifications. The property owners were educated about what will change and given an
opportunity to be educated further through police presentations. The classes will be taught at this
facility.
Ms. Reynolds
asked if this is only for new leases or if old leases would need to be renewed.
Mayor Lund
replied that new is underlined and old is crossed out.
Mr. Hickok
added that the crime-free addendum will be on all new leases. This modification is
currently part of state law and is an opportunity for owners to understand and include this
language as part of their lease.
Mayor Lund
said property owners could choose to make modifications to an existing lease or
wait until renewal.
Mr. Hickok
noted that when the lease is renewed, the crime-free addendum will be added.
Ms. Reynolds
asked how out-of-state or City property owners could comply.
Mr. Hickok
replied it is the owner’s responsibility to know what happens locally, so they would
need to be here and/or represented so they know what the expectations are.
Councilmember Bolkcom
added that they have to have a local representative.
Ms. Reynolds
asked if anything would be tied to the license with regards to paying utilities.
Councilmember Bolkcom
replied that they would not get a license if utilities are not up to date.
Mr. Hickok
added that there is a minimum standard for any rental unit that includes heat, water,
and sanitary conditions. If any of the minimum standards are in jeopardy, it is discussed with the
property owner.
Jay Karlovich,
City Attorney, noted that unpaid utilities are levied to the taxes which are paid in
January and October.
Ms. Reynolds
asked how much of the language that was changed can be transferred from the
owner, like the property owner who is responsible for snow removal, and gives that
responsibility to the lease.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 10, 2018 PAGE 11
Mr. Hickok
replied that is the purpose of Chapter 220, to help clarify language and prescribe
behavior protocol. That example is a private issue that the City does not get into.
Councilmember Bolkcom
said that this has a lot to do with behavior. City staff worked with
landlords to talk about behavior so it does not move from one property to another with the same
behavior. This was something that the landlords and police developed to help the property
owners.
MOTION
by Councilmember Varichak to waive the reading of the ordinance and adopt
Ordinance 1364 on second reading and adopt the official title and summary ordinance and order
publication. Seconded by Councilmember Barnette.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
10.Resolution Amending Resolution No. 2014-54 and Rescinding Resolution No. 2014-92
which approved Interfund Loans Associated with the Proposed Columbia Arena
Redevelopment Project, Accepting HRA’s Repayment of a City Loan and Authorizing
Expenditures.
Scott Hickok,
Community Development Director, said when the HRA and the City were
looking to purchase and demolish Columbia Arena, the City loaned $1.5M to the Authority to
put towards the purchase of the property. The transaction was memorialized in Resolutions
2014-54 & Resolution 201492. The loan to the City was to be paid back from TIF funds, after
the Authority had reimbursed itself. At the time of the purchase, there was no discussion of the
arena site being anything more than a future private development that would pay for the land and
generate tax increment.
Mr. Hickok
stated that four years later, those original assumptions are no longer correct. The
scope of the project greatly expanded, and the private sector portion includes former City and
park land now being made available to the HRA. The HRA and City staff have spent a great
deal of time determining how the City loan should be repaid. The combination of land sales and
tax increment collected are projected to make the HRA whole and allow the HRA to repay the
City from the HRA’s General Fund. The City will be immediately repaid $1M from the HRA’s
General Fund which the City intends to use for pending related costs. The remaining $500,000
will come from an annual payment made from the Authority’s General Fund.
Mr. Hickok
said his resolution rescinds the original agreement found in HRA Resolution No.
2014-92, amends Resolution No. 2014-54 and memorializes the approach described above. The
HRA adopted a similar resolution on December 6. The project projections for land sales and
increment generated support this approach to make the Authority whole in the project and allow
it to repay the City Loan. Staff recommends approval of the attached resolution.
Councilmember Bolkcom
asked how the interest rate is determined.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 10, 2018 PAGE 12
Dan Tienter
, Finance Director, replied that Section 2 and 4 are referencing two different loans.
Section 2 is the loan between the HRA and City and the loan in section 4 are the loans the HRA
made internally to finance the funds back to the City--$500,000. The original resolution
proposed to refund the money owed to the City from the TIF district but required complex
reporting. The HRA opted to pay the City from their general fund and advance themselves the
funds from the TIF district. The interest rate in Section 4 is the maximum interest rate. The
interest rate is only for the TIF loans, not the City loan.
Pam Reynolds,
1241 Norton, asked if the HRA pays back the $1.5M if the HRA then owns the
dirt under this building.
Mayor Lund
replied the City borrowed money from the HRA; the City does not own property.
Wally Wysopal
, City Manager, stated that the City Council authorized the $1.5M to acquire the
Columbia Arena site. The building and complex were not in any plans or vision at that time. The
HRA needed money to do redevelopment and the City loaned money under specific terms. The
HRA is asking to revise those terms to return most of the money upfront and the balance over
time. The City did not invest in this land with the thought of having a new City Hall here. The
old City Hall dirt is owned by the City and addressed to transfer that property to the HRA.
Ms. Reynolds
said she isfully aware when the money was loaned this was not in the plans. The
way the loan is being paid back is confusing.
Mr. Hickok
said that the HRA intended to pay back the City. This site was purchased and later
developed as the Civic Campus. The transfer of the land, plats, and tax increment district was
created, and the tax-exempt parcels were taken out. Now there are a number of parcels being
developed that are HRA parcels. The parcel under City Hall and Public Works are the City’s
property, the other properties are homes and townhomes.
Ms. Reynolds
understood the platting but thought the $1.5M was tied to the City Campus and
wanted to make sure the City owned the dirt under the building.
MOTION
by Councilmember Saefke to adopt Resolution No. 2018-65. Seconded by
Councilmember Varichak.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
11.Informal Status Reports.
Councilmember Bolkcom
said that 65 families were served with coats, jackets, hats and mittens
from the Coats for Kids Drive. Thank you to everyone who donated.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 10, 2018 PAGE 13
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 8:13
PM.
Respectfully submitted,
Krista Peterson Scott J. Lund
Recording Secretary Mayor