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CCM 11/25/2019 CITY COUNCIL MEETING CITY OF FRIDLEY NOVEMBER 25, 2019 The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:02 p.m. ROLL CALL: MEMBERS PRESENT: Mayor Lund Councilmember Councilmember Tillberry Councilmember Eggert Councilmember Bolkcom Councilmember Ostwald OTHERS PRESENT: Wally Wysopal, City Manager Daniel Tienter, Director of Finance/City Treasurer Jay Karlovich, City Attorney Scott Hickok, Community Development Director James Kosluchar, Public Works Director Nic Schmidt, City Civil Engineer Art Montour, 261 Ely Street NE Terry St. Martin, Broadway Party and Tent Rental Harry Walters, 262 Ely Street Terry Pierce, 8020 Ruth Street Michael Kane, 382 Ironton Street th David Wyandt, 139 – 79 Way NE Jim Burnett, 377 Ironton Street Paul Kralovec, 200 Hugo Street Scott St. Arnold, 350 Ironton Street Carole Budzeak, 259 Liberty Street Maureen DeMars, 223 Ely Street NE Tim Gardiner, 371 Ironton Street NE Dave Super, 190 Liberty Street Barb Dorumsgaard, NTM, Inc. APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF CITY COUNCIL MINUTES: 1. City Council Meeting of October 28, 2019. APPROVED. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 2 2. City Council Meeting of November 12, 2019. APPROVED. OLD BUSINESS: 3. Second Reading of an Ordinance No. 1377 Amending the Fridley City Code, Chapter 1, Legislative Body, Pertaining to Ward Map. WAIVED THE READING OF THE ORDINANCE AND ADOPTED ORDINANCE NO. 1377 ON SECOND READING AND ORDERED PUBLICATION. NEW BUSINESS: 4. Resolution Designating Polling Locations for the 2020 Election Year. ADOPTED RESOLUTION NO. 2019-69. 5. Resolution Approving Gifts, Donations and Sponsorships for the City of Fridley. ADOPTED RESOLUTION NO. 2019-70. 6. Receive Bids and Award the 2018 Street Rehabilitation Project No. ST2018-01. RECEIVED THE BIDS AND AWARDED THE CONTRACT TO NORTHWEST ASPHALT OF SHAKOPEE, MINNESOTA, IN THE AMOUNT OF $785,555.60. 7. Approve Change Order No. 3 (Final) for West Moore Lake Trail and Street Resurfacing Project No. 17-21. APPROVED. 8. Claims: (1911-ACH PCard; and 187178 – 187305). APPROVED. ADOPTION OF PROPOSED CONSENT AGENDA: MOTION by Councilmember Bolkcom adopting the proposed consent agenda. Seconded by Councilmember Tillberry. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 3 OPEN FORUM, VISITORS: No one from the audience spoke. ADOPTION OF AGENDA: MOTION by Councilmember Bolkcom adopting the agenda. Seconded by Councilmember Eggert. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. PUBLIC HEARINGS: 9. Consideration of an Ordinance Repealing and Replacing in its Entirety Fridley City Code, Chapter 407A. Cable Television Franchise (Continued October 14, 2019). MOTION by Councilmember Bolkcom to remove the public hearing from the table. Seconded by Councilmember Tillberry. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING WAS REMOVED FROM THE TABLE AT 7:06 P.M. Wally Wysopal, City Manager, stated the City has still not received a response from Comcast. They need more time to respond to some of the proposed changes and get their legal department at the corporate level in agreement. Staff apologizes for the delay although this franchise does not expire until the end of next year. They just wanted to try and get it done as soon as they can. Staff is asking for a continuation to the December 23, 2019, City Council meeting. MOTION by Councilmember Tillberry to continue the public hearing. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING WAS CONTINUED AT 7:08 P.M. 10. Preliminary Assessment Hearing on 2020 Street Rehabilitation Project No. 2020-01 (Ward 3). MOTION by Councilmember Bolkcom to open the preliminary assessment hearing. Seconded by Councilmember Eggert. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PRELIMINARY ASSESSMENT HEARING WAS OPENED AT 7:08 P.M. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 4 Nic Schmidt, City Civil Engineer, stated each year the City of Fridley performs major rehabilitation of selected streets in a planned neighborhood according to its pavement management plan. The proposed 2020 project area includes streets in the Springbrook neighborhood, which is bounded by the railroad to the east, East River Road to the west, Ironton th Street to the north, and 79 Way to the south. City Council authorized initiation of this project th August 12, 2019. He said the candidate streets include 79 Way, Ashton Avenue, Ely Street, Hugo Street, Ironton Street, Liberty Street, Longfellow Street, and Ruth Street south of Ruth Circle. Mr. Schmidt stated some of the work elements included in the project are removal of the pavement which will be via reclaim; some water main and hydrant replacement; and storm sewer, utility, and drainage improvements. These include upgrade of the Springbrook Creek culvert as it crosses Ironton Street. Staff is working with the Coon Creek Watershed District to upsize the capacity of that crossing. They are also planning on removing the cul-de-sac at the Ironton and Ashton intersection. This is a reduction of 4,000 square feet of impervious area. They are also considering rain gardens. They will do spot curb replacement, repaving the streets, and then final restoration. Mr. Schmidt stated they plan to open bids and award the project in March 2020. Also, staff has talked about the projects with private utilities and CenterPoint Energy is going to replace gas main and services. However, they will not be doing any work within Ashton Avenue as they have already upgraded the pipe. That work is slated for probably after road restrictions are lifted so they are looking at late April or early May. Mr. Schmidt stated construction could fluctuate depending on the contractor’s schedule, but a good window to take into consideration could be from June to September 2020. Once the project is completed, they will have the final review which will be October 2020. The notice of assessment will also be in October 2020. The assessments begin January 2021. Mr. Schmidt stated a project open house was held September 17 and preliminary information was presented to property owners and residents affected by the construction. The presentation emphasized the importance of communicating with staff with questions or concerns before and during construction. He said he would be the project engineer. Mr. Schmidt stated there were 178 invites mailed and 22 persons attended. Feedback was gathered and incorporated into the feasibility report. The project was well received generally, and valuable information was gathered regarding the existing conditions of the neighborhood. That will provide for a better project and reduce construction impacts. A questionnaire was made available to all attendees. A questionnaire was also mailed to all property owners prior to the preliminary hearing and they have been receiving responses. Mr. Schmidt stated they developed a feasibility report after the open house. Staff developed their report, evaluated streets in the area, considered roadway conditions and utility improvements, and provided details on the extent of the construction. The feasibility report concluded the report was cost-effective, necessary, and feasible. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 5 Mr. Schmidt stated the total estimated project cost is $1,985,000. Of that $350,000 will be paid by the City, and Municipal State Aid funds will also be used for that; $663,000 will be assessed to the adjacent properties; $880,000 will be paid for by the Water Utility Fund which is for the water replacement right now slated for Longfellow and Liberty Street. There is $34,000 in sanitary sewer being paid by the Sanitary Sewer Utility Fund, and a lot of that is routine maintenance that goes along with street rehabilitation. They also have $58,000 from the Storm Sewer Utility Fund, and the City will also be submitting a grant with Coon Creek Watershed District for some of the City’s surface water quality improvements they plan on making. Mr. Schmidt stated the project is subject to special assessments, and there are two categories-- which are low density residential (LDR) and non-low density residential (NLDR) which are essentially commercial properties or large apartment buildings. There are several commercial properties and several large apartment complexes within the project area. Mr. Schmidt stated the properties are being assessed for the street rehabilitation only. Just the street and no utility work. All those come out of the designated utility funds. Properties with driveways on the project streets are assessed. Corner lots are only assessed on one side. Mr. Schmidt stated the assessment is based on the following: The City divides the proportional street improvement cost for the assessed area by the number of residential properties. With LDR property assessments, everyone receives the same assessment. Breaking that down throughout the project area, he believes they have street widths ranging from 22 feet wide up to 41 feet wide but only 30 feet of that roadway is assessed to the properties for the LDR assessment. Mr. Schmidt stated the intersections and non-assessable properties such as parks are taken out of the assessment. Ruth Circle Park is a big park with large frontage. There are also multi-unit residential properties. This is for duplexes up to fourplexes. Up to four units they pay the lower of the non-low density residential rate or the residential rate reduced by 50 percent for each unit over 1. As an example, if you own a duplex, that would be the 1 assessment plus a one-half. Duplexes have an assessment of 1.5 vs. 1. Mr. Schmidt stated as to the recent assessment history for residential properties, going back to 2013, the City had an assessment of $2,074. They have maintained that kind of low $2,000’s for a couple years. The West Moore Lake Trail Project was completed this past summer, and the assessment for that project was $2,112. In addition to the 2020 Street Project, the City has two other street projects slated for this year; and those preliminary assessments are at $2,350 and $2,425. The preliminary estimate for the City’s 2020 street project is $3,000. Mr. Schmidt stated the final assessments are based on the actual construction costs. When they get the bids and the project is complete, that is what the City bases its assessment on. They are somewhat conservative when doing the preliminary estimate because they would rather deliver in the beginning a little higher price and then hopefully getting good bids. As noted in the schedule, they are going to bid the project in late winter/early spring, and they hope to get bids earlier in the season with the contractor. The City is prepared to get the final design plans completed prior to the beginning of the season. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 6 Mr. Schmidt stated also they have the commercial property assessment. Non-LDR equals all other properties including commercial, industrial, and high-density residential or apartments. Again, these properties are assessed for the street rehab only. With the commercial properties, this is assessed differently than residential. The assessable frontage is measured along the street being rehabbed. The non-LDR assessment is calculated by dividing total cost by length of total property frontage to determine the cost per foot. Each side of the street contributes 50 percent of the cost per centerline foot to resurface the street, and for the 2020 street project the estimated assessment or $40 per lineal foot. Going back to 2011 the City had a $24.30 per lineal foot and that was for a 40-foot wide street rehab. There was $39.12 cost and more recently with the th City’s other three projects slated for this season, they have 2018-01 (69 Avenue over by th Medtronic) at $33.43; and the 2019, 69 Avenue over here and University Avenue Frontage Road, at $31 a lineal foot. These are based on the actual construction costs. Mr. Schmidt stated the City has three payment options which, upon the completion of the project and the final assessment. The first option is a lump sum payment within 30 days of the final assessment hearing which will be held in October/November 2020. Option 2 is the amount being assessed to the property taxes and paid over a 10-year term with an interest rate to be calculated by the Finance Director as 2 percent over the prime rate. Using the West Moore Lake project as an example, the interest rate was 7.25 percent. The third option is for senior citizens, retirees, and individuals with a qualifying disability who may request to have the assessment deferred. Note that interest accrues until the deferment is terminated. Mr. Schmidt stated staff requests the City Council open the preliminary assessment hearing and hear all those who desire to address Council. Councilmember Bolkcom asked why there was such an increase to $3,000? Is something going to be different next year with the construction season or is it the petroleum gas? Mr. Schmidt replied one thing is the increased cost in materials. For example, with the 2017 street reconstruction project they were seeing bituminous prices at $58 or so per ton and now they are seeing upwards to over $80 per ton. That is a direct reflection of increasing costs. Councilmember Bolkcom asked and what he contributed that to. Mr. Schmidt replied oil prices. Mayor Lund stated that and the demand of contractors who are so busy with work that even if you can even get a contractor to call you back you are doing well. The costs for labor are going up in general as well. Art Montour, 261 Ely Street NE, stated he has a concern about water drainage. They do not have any on their street. The water drains down to the end of the block, turns a corner, and goes another 70 yards. They end up with water at the end of their driveways because it is not draining good. Is there something they can do about it? FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 7 Mr. Schmidt replied there is a known problem with the catch basins at Ruth Street and Ely Street. They will be looking at the capacity and the drainage to that. They will be redoing the street to ensure that and reestablishing the crown in the street to make sure the water gets to the curb and then redoing any offset curb; curb that is settled or offset to ensure that it gets to the corner of Ruth Street and Ely Street. One thing they could do is look at any opportunities to intercept that water prior to getting all the way to the corner to the west. They are definitely aware of the issue and have done extra survey work in that vicinity to try and correct it. Mr. Montour stated their street is not due to get a water main but with all the work on the roads, is that going to affect the water main? Mr. Schmidt replied, since the water main is 7 ½ to 8 feet deep, the street work should not affect the water main. Right now, they have Longfellow and Liberty Streets slated for water main, and they are looking at the budget. How they pick those segments is based on water main break history. Ely, between Ruth and Ashton, has a lower incident of water main breaks so the water main is in pretty good condition. Also, there is a little bit of history in that area for service replacements and so that would be his service from the main to the house. The City does know those repairs can be difficult because there is also a high-water table in the area that they need to consider. The water main should be fine. Terry St. Martin, Broadway Party and Tent Rental, 8101 Ashton and 181 Ely Street NE, stated she is the owner of Broadway Party and Tent Rental. In June on Mondays and Fridays they typically have more traffic. This is just more to be aware of and to maybe work around. Mr. Schmidt stated he will note that and asked Ms. St. Martin if she received a questionnaire. Ms. St. Martin replied, she did not. Mr. Schmidt stated he will follow up and ensure she gets a questionnaire and encouraged her to fill it out. He will note the increased schedule to coordinate with the contractor to make sure they have access throughout the week, particularly Mondays and Fridays. Harry Walters, 262 Ely Street, stated his mother has lived in Fridley since 1948. He retired early to take care of his mother who is 97 years old. He asked how his mother was supposed to pay for this on a fixed income. Mayor Lund replied if they do not want to pay the lump sum, there are the two other alternatives. They can put it on a 10-year assessment, so they pay it with your property taxes and there is some interest included. The other thing is it can be deferred if she meets certain criteria. It will be paid at the time of the sale of the home and interest will accrue. Mr. Walters stated his mother’s medication is about $600 a month. He has been spending his money to help pay for his mother’s medication, the bills and the house. With this coming up, if he was not living there, she would be living in a nursing home which is a burden to the State and is not right. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 8 Mayor Lund stated understands that his mother is on a very tight and small budget with medication and everything. In some communities, residents are fully assessed. Only about a third of the entire project is going to be assessed to the property owners. Mr. Walters stated his only alternative is to defer her until they sell the house. That is probably the only thing he can do since he retired early his social security is nil. With her she pays most of it in medical bills and medication. Mayor Lund asked Mr. Walters if his mother is able to pay her property taxes now. Mr. Walters replied, he pays them. Mayor Lund replied they can go on the 10-year plan, but her taxes will be a little higher. Mr. Walters stated they went up $200 so far this year again. If they are going to be going up and up, are they going to be pricing everyone out? Mayor Lund replied they do not like to say they are going to price everybody out, but it is inevitable that costs do go up. Mr. Walters stated his dad built the house in 1948. They have been there the longest of anyone. He does not understand why the City wants to raise all their taxes or pay for this stuff when they do not get that great of service anyways. The snow plowing is not that great. Mayor Lund replied, rarely has he had anybody complain about the City’s plowing. Fridley’s plowing is about second to none. Mr. Walters replied, he did not think so. He asked what the alternative was when they do not come around for a couple of days and you have a 97-year old lady that has to go to the doctor, and the ambulance cannot even find the house. Now that he knows she can defer, that is the only alternative that she has. Mayor Lund stated he is sure there are others in similar types of boats. He said there was only so much they can do as a City Council. They are not going to degradate the streets to the point where everybody is complaining. Mr. Walters stated they should have fixed them years ago. The last time they worked on that street and in 1964 when they put the sewers in. Their street address when his father moved in there was 345 Liberty Street and they put in the street in 1964. That is when they put all that stuff in. They have not done anything but resurface and scrape it, resurface and scrape it. They could have done something earlier. Mayor Lund stated they would still have been at this point anyway. Mr. Walters stated not if the City would have taken care of it years ago. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 9 Mayor Lund stated the roads all have a life expectancy. Council appreciates Mr. Walters’ comments and will take them into consideration. Councilmember Bolkcom asked Mr. Tienter if there is an opportunity for City staff to help Mr. Walters work through some other options. Daniel Tienter, Director of Finance/City Treasurer, replied, yes. When the City goes through the final assessment hearing, these options will also be presented to anyone subject to the assessment. At that point in time, staff would be more than happy to work with any property owner to walk them through the deferment process. Councilmember Bolkcom asked if there was an opportunity before then to go through a couple of those options with Mr. Walters beforehand and some of the different requirements for Option 3. She said that is something staff can do before next year. Mr. Tienter replied, yes. They would be happy to work with any property owner who is interested in any of the three options. It is just worth noting that the time for application would not be until after the final assessment hearing. Councilmember Bolkcom stated to Mr. Walters there is an opportunity for him to meet with City staff before and go over these options in more detail. He can always get his own loan, too. Mayor Lund told Mr. Walters it would be at his initiative to contact staff and make an appointment to visit with them or he can get up quietly and give them his phone number to contact him and set up an appointment. He can do that now or at the end of the meeting. Terry Pierce, 8020 Ruth Street, asked on Hugo is there any intent to make that a wider street especially with the creek area. The Coon Rapids Watershed District took care of the area behind their house all the way to the river because they were having issues there. However, it is such a narrow street. Mr. Schmidt stated the improvements they are going to be working on at the stream crossing is on Ironton. Their plan is to add a second culvert to increase capacity. Right now, that width, Coon Creek Watershed District, that has been identified as a choke point in the system. Coon Creek Watershed District did some restorative work on Hugo this past winter. Ms. Pierce stated they did nothing on the street. Her concern is that street is so narrow. Are they going to cut into the yards there and make the street wider? Are they just going to improve it? Mr. Schmidt replied, no, they are going to replace the pavement within that corridor. Ms. Pierce stated it will be helpful if staff could explain to some of them who are impacted about where they might have to park, if notices will be going out, and how the staff will be communicating with them. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 10 Mr. Schmidt stated throughout construction, there are major milestones and items they need to keep the property owners informed about because it will impact access to their driveways. For the most part during the project, people will be able to access their driveway. However, if they happen to have some curb replacement within their curb cut or if there are curbs impacting their driveway, they may have to park on the street for 5 to 7 days as the concrete cures. Mr. Schmidt stated there may be streets impacted by the water main replacement, and there may be times they have to park around the corner and walk to their house for that evening. Particularly if they have any special access needs complete those questionnaires to ensure staff can communicate with the contractor who they will need to maintain access for. They also have a project web page specific for this project where they will post all of the notifications and updates on. He also encouraged people to sign up for the e-mail list to get these. They will also be doing a lot of hand delivering of the notices as well. Going door to door to drop off notices. A lot of times he will be delivering the notices. A lot of times there will be two doors and usually folks do not use their front door and have a side access door to get in and out of their garage. He will try and pick the one they will see best but throughout the project, it is good to check both doors for the notices. Councilmember Bolkcom asked Mr. Schmidt to tell the property owners what they should look for on the website. Mr. Schmidt replied, if they go to the City website at www.fridleymn.gov and do a word search, right in the center towards the upper part of the web page, if you type in “2020 Street Project” or just “Street Project”, it will bring you to a page with all of the projects listed. You can click on the 2020 Street Project for all notices and updates. Also, the presentation given at the open house is on the project page. It is a good idea if you did not attend the open house to go back and look through that. The presentation outlined what to expect during construction. You can also sign up for e-mail updates. Councilmember Bolkcom asked if it was too late for the property owners to have their sewer televised. Mr. Schmidt replied one of the first questions in the questionnaire mentions that the City will provide complimentary sanitary sewer service televising. It is a good time to take advantage of this service. It is free and you can take a look at your sanitary sewer service and see how it is. A couple of things that can happen, and one of the big ones, is root intrusion from trees. As the neighborhoods age, the trees get bigger and those roots can grow into and between the pipes and clog the sewer. If there is a problem, you may need to fix it; but it is better to do it now before rather than after the street project and there is a new road that would have to be cut into. Mr. Schmidt stated if they would like to have that complimentary televising service, make sure you know where your cleanout is located in your house, that you can open it, and it is accessible to the City’s crews. You may have to call a plumber if you do not know where it is or you cannot open it. That way, the City’s crews can come and open it up and televise your sewer. Councilmember Bolkcom stated and the City works around their schedules for that to happen. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 11 Mr. Schmidt replied, absolutely, he believed the time slots are 7 a.m. to 2 p.m. for making appointments for those. They will show up on time, too. Councilmember Eggert stated he thinks he is the only one who had his street done in the last couple of years. He did arrange for looking at his sewer line, and they are in and out really quick. You can look on the screen and actually see your main. It is very helpful. James Kosluchar, Public Works Director, stated as to the notices, property owners will get at least five probably more like ten notices. Sometimes the City gets notification from the contractor they are going to do some immediate work in order to keep the project moving, which is in all of their best interests. He encouraged people to look for those notices. Do not just set them aside. Subscribing to the e-mail list is a very good thing. In the presentation it talked about scheduling between June and September. The City does not allow the contractor to deconstruct a street for four months so there is a time limit to them basically. Once they take the pavement off, they have a certain time limit, and generally it is between four and six weeks maximum they can have that street open before the pavement goes down again. Councilmember Bolkcom stated and if people have a special event happening, that is something they will want to let the crew know about. Mr. Kosluchar replied, absolutely, if there is a graduation or a family reunion, personal events. Mayor Lund asked how many people in the room remember receiving a questionnaire? There are quite a few people who did not. It would be helpful for them to get a hold of the questionnaire. Michael Kane, 382 Ironton Street, stated the notice of the meeting in September arrived just days before that scheduled meeting. It did not give them much lead time to plan on coming to the meeting. It should have come earlier. Councilmember Bolkcom asked Mr. Kane what he thought was a good time, because City staff struggle with sending it out too early. Mr. Kane replied a couple of weeks. Mr. Schmidt stated they discussed when to send the notice out and a couple of weeks was kind of more on the far end, but it could probably go either way. Mr. Kane stated they probably would have gotten more people at tonight’s meeting if the notice had gone out earlier so people could plan for it. Mr. Schmidt stated he did receive calls within two days of sending them. Mr. Kane stated Ironton Street is a truck route servicing the businesses along the railroad tracks. They see 18-wheelers and big box trucks going up and down their street all the time. They FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 12 should be contributing to fixing up their section of the road. It is residential traffic in most other places, but those 18-wheelers do a lot more damage to the roads than cars going up and down. Mr. Kane stated as to Option 2, he looked it up and these special assessments are not tax deductible as they are. He asked if it got wrapped into property taxes does it become tax deductible then. Mayor Lund stated as far as the trucks, that is why Mr. Kane is paying approximately a third for the road. The City gets some State aid and other monies to help businesses as well. If they are in the project area as well, they get assessed as a commercial business. Mr. Kane stated he was given the impression that all the houses on these different streets are being assessed a different amount. Mayor Lund replied, that is correct, but it is a different amount for commercial. Councilmember Bolkcom stated they get assessed more. Mr. Kane stated he has read the law on this and it says that even properties that benefit from the improvement that do not abut the improvement can be assessed for the cost. Besides paying for the portion in front of their businesses, they should be contributing to his part of the road because they are using it to access their business traffic between East River Road and their businesses. Mayor Lund stated that is a good comment. They will consider it. Mr. Kane stated he has a copy of the law if they want to look at it. Councilmember Bolkcom asked, how would you figure out how many trucks and whose trucks were using the road. At this point they cannot change how they are doing the assessment for this next year. Mr. Kane replied, they could stop making Ironton a truck route. Make the end where it joins Ashton Road inaccessible from Ironton Street. Then it stops being a truck route. The other road that is accessible from East River Road is the stoplight where that little strip mall is at. Mayor Lund stated they will take a look at that. Mr. Tienter stated as to Mr. Kane’s second inquiry, it is his understanding of federal and state tax law that even if the special assessment is applied to the property taxes, it is still at its root a special assessment and, therefore, not tax deductible. Mayor Lund stated as to the assessment policy, the City’s policy has been very consistent, and they would have to look at other projects to change this midstream. Mr. Kane stated since they are doing all this reconstruction work anyway, can they narrow where Ironton meets Ashton so it does not function as a truck route anymore? FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 13 Mr. Schmidt stated one thing they are doing at the intersection of Ironton and Ashton is they plan to remove the cul de sac there. Mr. Kane stated it used to be a dead-end street so it could return to being one. Mr. Schmidt stated is this an opportunity for the neighborhood to petition this change. Mr. Kosluchar stated this is beyond the scope of the project as they see, but it is something they can take into consideration and give a recommendation back to Council. It is easy to say they will eliminate truck traffic on a street, but the solution may double the truck traffic on another street. Those end results of decision-making must be thought through prior to making a recommendation. Mr. Kane stated but the alternative is bordered by a big apartment complex and parking lot. It is not even residential on one side of the street all the way from East River Road to Ashton. Mayor Lund stated they will be paying an assessment, too. Mr. Kane stated, yes, but they will not be bothered by additional traffic because no one lives on the side of the street is not resided on by anyone. th David Wyandt, 139 – 79 Way NE, asked if they are aware of the flooding that happens every year at the end of his street and if there are any plans to take care of that? He asked how they assessed what curbs needed to be redone. th Mr. Schmidt replied, late in the summer they did some patch work to 79 to reestablish the crown in the road to help get it to the curb line. Again, similar to Ruth Street and Ely they have th done extra survey work to address the drainage issues on 79Avenue N.E. They are aware of that issue. Mr. Wyandt stated also since the City is doing this work, if you do not want to hire your own contractor for widening the driveway, is that something that could be tacked on as a cost? Mr. Schmidt replied, in the past the City had included that in their street projects but due to issues with warranties, who owns the work after that fact, the City has stepped back from that. You can always approach the contractor directly, but otherwise people find their own contractor. Again, if you do plan on widening your driveway, let the City know so when they put in the curb, they can make sure they make the driveway wider. Mr. Wyandt asked if the City is getting a loan from somebody and then extending that through the property owners. If they look at the projection, if they take the deferred cost for ten years and put it on the property taxes, the project is actually costing the property owner $5,000 instead of the $3,000. That is on top of they are already getting property taxes that are supposed to be going to help pay for some of this stuff for this. It would seem feasible to him the first option, deferring the payment for a year which would be October 2020, if you take that option for the whole year you are not paying that payment, does interest accrue on that as well because you are FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 14 doing a lump sum and it is deferred? If you take the lump sum it would essentially be lessening the $2,000 cost. Mr. Tienter replied in Option 1, the assessment does not become payable until Council actually orders the final assessment which will happen next year after the project is complete and after a final public hearing. The property owner would have 30 days after that to pay. No interest is applied during that time period. Mr. Wyandt stated and at that time, you would be paying an extra $2,000 if you take the 10- year out option. Mayor Lund said they could get their own loan. Mr. Wyandt asked if the property owners were paying the City’s interest cost. Mayor Lund stated they are not bonding for these projects. Mr. Wyandt stated so it is money that you guys loan out. Mayor Lund replied yes. It has always been the policy. Mr. Schmidt stated as to curb replacement and how the City determines which curb gets replaced, the two key factors are (1) any offset curb that a snowplow would catch on, they try and eliminate and (2) on those same sections impede the surface water flow. If they are sunk down, leaves and sediment build up, and it just continues to get worse. A good example of this would be on Ely Street as the water is trying to make its way to the corner to Ruth. Councilmember Bolkcom suggested he fill out the questionnaire if he has questions. Jim Burnett, 377 Ironton Avenue, stated Ironton Avenue is not a truck route. Mayor Nee signed the bill with them and Jani Seeger, and they put the sign up in 1985. About a year later they took the sign down for some reason. They had no problems. Now they have all kinds of problems and would like the sign back up. Mayor Lund asked what the sign said. Mr. Burnett said, “No Trucks.” Paul Kralovec, 200 Hugo Street, stated if he understands this correctly, the City has two other projects that will be in construction next year. It looks like the two projects are $600 or $700 less for assessments. If the price for materials is the major cost here, why are those projects so much less? Mayor Lund stated the costs have exponentially gone up just this year. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 15 Mr. Kralovec said they are being constructed next year at the same time as their project so why would that project be significantly less if they are being done at the same time. Mr. Kosluchar replied, those projections were set forth in their particular year. In 2019 they saw an uptick in construction costs of about 15 to 20 percent. Not only in Fridley but county and metro-wide for these types of projects. Council will note that tonight they approved a bid on 2018-01 on the 2018 project, and the bids came in under estimate, so they are hoping to kind of dial back and reduce this cost insofar as possible. The City shares in the cost and it is in the City’s best interest to reduce costs where they can. Staff was just cautious with this projection because of the history they saw this spring with similar projects. That was established before the City received bids on this more recent project. Recent signs are encouraging, and they hope it will continue. Mayor Lund stated the big difference was those were the final estimates and this is a preliminary estimate. Mr. Kralovec asked but those have not started yet and so are they not in the same spot. Mayor Lund stated they were awarded previously. Mr. Kosluchar stated they estimate units of say, tonnage of asphalt, lineal feet of curb the City is going to replace on these projects after they have developed plans so they have a pretty good handle on what quantities there will be. Those are not final quantities. They may be subject to a change order here or there. Sometimes reducing the amount, sometimes increasing the amount. The final assessment is based on actuals. Typically, it does not stray much from bid prices. Mr. Kralovec said he lives on the corner of Hugo. He has noticed the buses are barely able to turn. If you have two cars going each direction, they are not able to pass because it is such a narrow street and the turn is tight. He asked if there was any way to address that. It definitely gets in the way of traffic. Mr. Schmidt said it possibly creates a safety concern. He said staff can evaluate and model the turning movements through that intersection. Scott St. Arnold, 350 Ironton Street, stated when they talked about doing something with the culvert the goes through his yard, he asked if they would pipe the creek. There have been years and years of flooding with railroad ties and other things flowing through it. He asked if they would be adjusting the size or volume or adding to it. They did not do anything on the other side on Hugo with the culverts. You have one big four-foot culvert feeding three 60-inch culverts. The last storm when they had 11 inches of rain, he had to put in new flooring. The water came up 11 inches above the sill line and flooded his house. He was told the weirs were not adjustable down in Springbrook but sometimes they manage to get adjusted after a heavy rain. Mr. Schmidt replied, City staff is working in hand with Coon Creek Watershed District, and they have identified that as kind of a choke or pinch point for the flow to back up at that crossing for Ironton. They plan on increasing the capacity. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 16 Mr. St. Arnold stated over the past many years he has paid for all the repairs. Maybe the City owes him money. Carole Budzeak, 259 Liberty Street, stated they mentioned Liberty Street was going to be getting a new water main. Will there be any time they will not be getting water? Mr. Schmidt replied, during water main construction, before the start of the project the contractor is going to set up a temporary distribution system so that will run above ground and likely come off of one of a few hydrants in the neighborhood. Instead of everything being underground, because they are going to dig up and replace that, it will be above ground and service Ms. Budzeak’s house. Aside from a short down time of a couple hours for them to hook up her house, there should be uninterrupted water service. Once the new water main is brought online, they will remove the temporary distribution system. One inconvenience with that is there could be like a two to three-inch pipe running across their driveway they could ramp up so they can get in and out of the driveway but still maintain the service to her home. Ms. Budzeak asked if they would be going into the grass areas of yards. Mr. Schmidt replied, they could. Typically, the sanitary sewer runs down the middle of the road. You can see the manholes in the middle of the road and intersections, and the water main is offset to one side of the sewer, so it runs between the center of the road and close to one of the curb lines. It would be the north or south curb line. Typically, their replacement policy is to put in the new main and then come back, hook up their old service to a new service, that is installed to the main. The majority of the work, the long and short, on the short side, it will go a little bit into the yard but on the long side all the work should remain within the street. Maureen DeMars, 223 Ely Street, asked how the rain gardens are going to look, if they were optional and does the City make suggestions on rain gardens. Mr. Schmidt replied, what they have planned are larger rain gardens slated for the proposed reduction in the cul de sac area, Ironton and Ashton, and then in the park as well. As part of the questionnaire there is a question, if you are interested in a rain garden, and those are smaller rain gardens. Staff will evaluate the site as to whether it has good soils and drainage. For example, it is not advantageous to put a rain garden at the top of the hill because it will not see a lot of runoff. There are strategic areas to place rain gardens. Usually those are anything from 10 by 15 feet to a little larger and then landscaped. Your site may not be suited for a rain garden, but that does not mean there are not other options. Ms. DeMars stated she is on a street without the gutters so anything they can do to kind of slow down the impact would be beneficial. Ms. DeMars asked when they do the sanitary sewer service, she knows it is free and optional. She asked if the results go back to the City and if there was any impact if they found anything wrong. She asked if the property owners were accountable for having it fixed before this starts. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 17 Mr. Schmidt said it was for their information. th Ms. DeMars said with respect to 79 and Ashton, she knows the City had to do a patch job there because the road gets really bad because of that convenience store as well as the trucks. They do th get a few stray trucks because they get lost. She asked if the type of pavement used on 79 and by the convenience store and then on Ashton down to Broadway would be more of a commercial grade to handle the extra traffic because it is a main road with bigger vehicles using it. Mr. Schmidt replied you want to have a good sub-base, 6 to 8 inches of gravel and then with the pavement section they have found, he would have to look back, they do soil borings throughout the project during the feasibility study and look at those cross sections. They would design all of the roads at a minimum of a 9-ton per axle capacity. However, through their feasibility report and looking at the roads they are able to see those cross sections and ensure during construction they are building the roads as they intend. Also, there is a stringent inspection process that they go through as each step of the road construction process to look for deflection in the subgrade, and that is how they ensure they have a good subgrade. If there are any points of failure, they go in and correct those areas before paving. Ms. DeMars stated they have had sporadic water pressure issues at least on her street onto Ely. For example, you will do the sprinkler at the same level and some days it is really low and other days it is normal and high. She did not hear that Ely was in scope for new water sewer. They are just doing the road, correct? Mr. Schmidt replied, they are not doing any sanitary sewer replacement. That is independent of the water main. They have a high-water main recurrence on Liberty and Longfellow and so they are targeting those areas first. They do plan on at least including Ely Street for water main replacement when they go out to bid as an alternate. If prices come in really well, they may include that segment of Ely as well. He said he would talk to the City’s Water Division and see if they are aware of any water pressure issues. Councilmember Bolkcom said to Mr. Tienter going back to Ms. DeMars question she does not have to fix her sanitary sewer, but there are some programs the City offers, correct? Mr. Tienter replied, that is correct. The City does have a lateral utility repair program whereby the City will arrange for the property owner to have the service line in question repaired. The property owner does have to sign their own contract. The City just provides the connection, and then the City would be willing to assess that portion to their property taxes over a five-year period and there is an interest rate attached to that. Ms. DeMars stated she has clay pipe and she knows it is good now as she has had it inspected. She asked whether the program involves just replacing just what is broken. Mr. Kosluchar replied, the replacement is selected by the property owner. Sometimes they can slip-line the sewer, sometimes it needs a spot repair, and sometimes it all needs to be replaced. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 18 Councilmember Ostwald stated he recommended if they do get in there and they find there is damage especially where your line ties into the main, have it repaired, because it is a lot cheaper once they are already in there than it is for them to dig back down there to do it Michael Kane stated a neighbor from across the street was trying to say there are a lot of young families moving onto Ironton Street and there are a lot of younger children running around and there is a traffic issue. Aside from the trucks. They have a lot of cars which speed up and down the street. He does not think they are residents, as residents usually drive a lot more conservatively because they live there and respect their neighbors. He asked how the City felt about adding one or two speed bumps on the street. Mayor Lund stated he will defer the question to Mr. Kosluchar. They do highly frown on them because of damage to the plows, etc. Mr. Kosluchar stated there is a fairly high threshold to reach to get some type of speed bumps implemented. The first thing they do is they have some measurements taken on vehicles and their speeds. However, they will do that based on his observation. Mayor Lund stated they will inform the Police Department as well. Councilmember Bolkcom stated actually what they find most of the time is the speeding is not from people who do not live in the neighborhood. Tim Gardiner, 371 Ironton Street, stated he does not like the speed bump idea. He likes the other one better. He lives on a hill and as far as he knows none of these streets have ever had sidewalks. Why would they be spending money putting them in now. If that is the case, will they be taking up some of his yard to do it and then how does that affect the slope of his driveway? Mr. Schmidt replied, sidewalks are not part of the project. Mr. Gardiner stated as to the traffic. They had that sign up when he graduated high school. It was “No Trucks” except deliveries. He left for college and it was gone when he came back. The real traffic change happened when they started putting in the islands on East River Road, so it blocked off all the other streets (Longfellow and Liberty) and choked out the access. Nobody wants to go to the light, so they all come down Ironton. You can sit and watch them go right over to Ashton to go to the other neighborhoods, so they do not have to sit at the light or if they have to loop around for Hugo. He liked the other idea if they just would not have it through. Ironton is narrow and they do have the culvert. They got people parked on either side. It is one way and you will have to stop if you are meeting traffic. On Ashton two semitrucks can pass each other with people parked on both sides. It is a much bigger street. Mayor Lund stated they will look at that and see if they can come up with some solutions. They certainly want to make this as painless as possible for people. East River Road was a County project, there was a hearing for that, too, and he knows there was a lot of comments. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 19 Councilmember Bolkcom stated to be honest the County did that without any input from them. It was a done deal. Mayor Lund stated it is safer to have people go to intersections with lights or stop signs rather than having as many connections as it had. It just diverts or moves the problem more often than not. It was all about East River Road getting some safety improvements because there were so many ins and outs. Mr. Gardiner stated the neighbor down his street had small kids and was requesting something. Someone from the City brought out one of the speed meters. They looked at the numbers which came up to be 70 percent of people were speeding down that road and that was set right next to Ashton. The neighbor was told in order for the City to do anything about it, it had to be 73 percent. Councilmember Bolkcom stated the City could maybe do some signage related to truck traffic th going even onto 79, but is there anything they can do with the median that is there? Mr. Kosluchar asked if the median was right at the signal. Councilmember Bolkcom replied, yes. Mr. Kosluchar replied, yes, they can look at it. Paul Kralovec stated he lives on Hugo and when coming off East River Road there is not actually a turn lane to turn onto Hugo Street. There is a turn lane going onto Ironton. Especially with all the speeding on East River Road it is sometimes dangerous to try and turn there because it is more of an angled turn. He knows that is outside the scope of the project, but can it be possibly addressed to maybe try and divert traffic away from their street because sometimes he is forced to go onto Ironton just to avoid getting rear ended. Mayor Lund stated they would have to have a discussion with the County Engineer. They just redid that street and he does not know why they did not put in a turn lane. Probably because the traffic counts were too low to make it viable to put one in. Mr. Kosluchar stated they have had a similar question quite a bit further south on East River Road recently. The County did look at that on the City’s behalf. They did find that the existing shoulder was not wide enough to support a turn lane. Then they are looking at construction, moving the curb, etc. There is a limited chance a turn lane would be put in with doing all that construction based on his traffic. They can advise them and have them look at this location, too. Dave Super, 190 Liberty Street, stated his house faces Ashton. When they did shut down all those entrances and exits on East River Road, it brings all that traffic by him. He understands there was no through traffic before on Ironton. He asked if they can put in a couple of stop signs on Ashton. Some of the people might not want to go all the way through over to Ironton and it would slow the traffic down in front of his house considerably. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 20 Mayor Lund stated there will be several eyes looking at this area that has been brought up tonight to see what can be done. Mr. Schmidt stated installing stop signs on Ashton did come up at the open house. At the open house they did consider putting the speed display signs out as well. He would suggest they also extend that time and for those display signs to be on Ironton as well. Mr. Kosluchar stated it has been the long-standing policy of the City in concurrence with engineering studies that the City does not put up stop signs to slow traffic. Typically, what studies have shown is when those stop signs are put up, it slows traffic right at the point of the stop but in between stop signs drivers make up the time and they actually drive faster. There are other ways to slow traffic, but the first step is to gather some data. Barb Dorumsgaard, owner of NTM, Inc., stated they occupy the property between 140 Liberty Street and 151 Longfellow. They do have a lot of truck traffic coming into the business. The shipping address is 151 Longfellow. She is wondering if perhaps they can have a sign directing their trucks to their business on Longfellow. Maybe on the corner of Longfellow and Ashton. Councilmember Bolkcom asked whether they are the same trucks that deliver all the time, and if so, could Ms. Dorumsgaard let them know. Ms. Dorumsgaard said occasionally they do get lost. They have new drivers. The drivers know they should not be in a residential area and that they can get ticketed. A lot of times they see that neighborhood and they back out. She does not know how they back out, but they back out. She did call and ask the City. Property owners probably do not want that sign on the corner of their property. It is just an idea. Ms. Dorumsgaard stated she is a little concerned about when Longfellow is going to be done with their trucks coming and going. They have 34 employees coming in and out and there is the water main, too. They have a couple of things on their property, too. On Liberty and Longfellow, they have a mound, a tree with grass and curbing that goes all around it. It goes right up to the street. If the City is taking out the curb, can they just take that out as well? Mr. Schmidt replied, the business may do that, yes. They can have further discussion on that. The daily traffic that is something the City coordinates with the contractor. Maureen DeMars asked on the corner of Ashton, right by the park, the City said they are getting rid of the cul de sac. She asked if the street is still going to go through? Mr. Schmidt replied one of the things they are trying to address is some of the visitors that they are aware of who hang out there. It would just kind of be a through street. MOTION by Councilmember Bolkcom to close the public hearing. Seconded by Councilmember Tillberry. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 21 UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING WAS CLOSED AT 8:41 P.M. NEW BUSINESS: 11. Resolution Ordering Final Plans, Specifications and Calling for Bids: 2020 Street Rehabilitation Project No. ST2020-01. MOTION by Commissioner Bolkcom to adopt Resolution No. 2019-71. Seconded by Councilmember Ostwald. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 12. Resolution Providing for Water, Sanitary Sewer, Storm Water & Solid Waste Abatement Rates for 2020. Dan Tienter, Director of Finance/City Treasurer, stated when the City goes about setting rates and charges in its budgets, it uses a conservative revenue and expenditure model which is designed to eliminate any type of unforeseen budget hole. The City does reallocations annually on a three-year rolling basis to better reflect its actual expenditures and limits adjustments to revenues accordingly. Mr. Tienter stated consistent with the Charter and previous approvals and Council actions, staff sets these rates so if you have intervening plans such as the just approved street project, that does have components that are supported by the enterprise funds so those are included in the City’s projections. It supports any of the full-time equivalents or employees who are supported by the utility fund and the City does have a handful of assumptions. Mr. Tienter stated beginning the enterprise funds are designed to account for their proprietary activities or what is often referred to as business activity, so they only rely on the rates and fees and charges that they apply to support their activities. The City does currently have four funds at the City which are water, sanitary sewer, storm water, and municipal liquor. As part of the action here tonight, the City Council will be setting rates and charges for the first three funds. Mr. Tienter stated it is worth noting the City annually reviews these charges for services through the regular budget process, and it conducts several work sessions with Council to seek its advice and input on the rates. From time-to-time, the City also commissions a third party which studies the last half. In 2017, that was done by the City’s financial advisor, Ehlers and Associates, Inc. As a result, there were several modifications to the rate and fee structures. Mr. Tienter stated these are designed to accomplish two things, first to provide stable and predictable changes in the charges for service so that people who are paying their rates can just appreciate kind of slower increases over time. Second, to maintain appropriate cash and fund balances limiting the need to issue debt for ordinary capital expenditures. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 22 Mr. Tienter stated as discussed with Council, when the rate structure changed, the goal was to maintain the City’s cash and fund balances in an amount that was appropriate to fund the operations and then also to support regular capital expenditures like some of the activities that were mentioned in the street project. It is worth noting that if the City has very large projects, the City may still have to issue debt or interfund loans. Mr. Tienter stated for the water utility, he wanted to highlight a handful of the projects that are being supported for next year, so people have a better understanding of where the water rates and charges go to. There is $1.1 million for the Locke Park Water Treatment Plant Rehabilitation Project which is a two-year project. The $1.1 million is being carried over from the original $3.6 million cost of the project. The overall cost of the project has not changed. It is just the expenses get divvied up between two separate years. Mr. Tienter stated they have $840,000 for distribution system reconstruction related to streets. As was discussed in the previous public hearing, three street projects will be constructed next year. Of the 2018, 2019, and 2020 projects, this appropriation is a little larger than it has been in years past. We have $500,000 to extend the distribution system and that is principally for a connection crossing I-694; and that project is designed to improve the efficiency of fire flows in that area. Mr. Tienter stated as to some assumptions and considerations, at this point in time, the fund will begin paying an interfund loan to the Community Investment Fund. This is related to the Locke Park Plant Rehabilitation Project. We are also retiring a 2004 A revenue bond, so essentially those two debt issues will offset one another and will have a modest impact on the overall fund. Mr. Tienter stated based on those changes and the other cost pressures and assumptions that are mentioned, staff recommends a 5 percent increase in the quarterly fixed charge for residential and commercial/industrial users. That does sound like a large percentage but in terms of the math, it is actually a $1.00 increase on a quarterly charge of $21. For the industrial users with meters greater than 1-inch, staff is proposing a 5.5 percent increase which is actually a $3.00 increase in the quarterly charge. Overall, staff recommends increasing the volume rates at 3 percent across all user classes. It is important to note that the water utility, since 2012, has experienced about a 22 percent decrease in the amount of water being sold because of efficiency of machines and people saving water. Over that time, the City had a 3 percent increase in population. The only way to make up that difference is to increase their rates to fund the ordinary expenses of the water utility. Mr. Tienter stated consistent with the philosophy of the City Council, the rates are designed to have the commercial and industrial users pay slightly more than their proportionate share of the overall cost of funding the utilities so there is a slight subsidy to the residents. The residents do pay slightly less on an overall basis. Mr. Tienter stated at some time in the future the Council may have to talk about additional interfund loans to support additional capital projects, but for the next several years the fund is in good shape. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 23 Mr. Tienter stated for the sanitary sewer, much of the projects, about $800,000 for the Embers Restaurant lift station were actually deferred from 2020 to 2021 and that reflects the timeline for the associated street project. So those expenses are still planned for the next couple of years but will not appear in 2020. The only thing that remains is $155,000 in collection system reconstruction; and that is related to those same three street construction projects. Mr. Tienter stated the main thing to note in the sanitary sewer utility fund is about 3 out of every 4 dollars the City spends is actually for the wastewater charge levied by Metropolitan Council Environmental Services. They have advised the City that charge will go up about 1.9 percent or $108,000. It went up about 9 percent last year so over the two years that rate has increased in excess of 11 percent. Mr. Tienter stated based on those factors, staff recommends a 2 percent increase for residential and multi-family users (three units or less) and then a corresponding 10 percent increase in multi-family users (four units or more) and commercial/industrial properties. Those are a $1, $2, and $2 increase respectively across each of the classifications. Staff is proposing the same 3 percent increase in the volume rates. Those are designed to cover the ongoing cost of the fund. Mr. Tienter stated staff is projecting that the ending cash balance is actually quite strong, and it will exceed its capital thresholds every year except for 2021 when the City does have that $800,000 of additional costs. Mr. Tienter stated as to the Storm Water Utility Fund, the City has three projects planned which will cost $200,000 each. The City has some storm water upgrades that are city-wide improvements which are about $168,000. Carry over expenses are included in that number. Also, corresponding storm water repairs and crossings at Alden Way and Oak Glen Creek. For Alden Way that is for the lining of two aging 54-inch pipes just upstream of the Stonybrook outfall which the Council has already authorized significant work on so that is consistent with that project. Then the Oak Glen Creek is for improvements west of Commerce Circle and the conveyance underneath the railroad that was originally planned for 2019 but was carried over to 2020 because the Council is in the process of negotiating the easement which it approved at a previous meeting. Mr. Tienter stated based on those factors and the project activities, staff proposes a 3 percent increase in the storm water utility fee on a per-acre basis. It goes from about $28.71 to $29.57. Then the City does apply what is called a residential equivalency factor which is basically an approximation for all of the residential lots which are basically a third of an acre for all the residents which is a $.29 increase based on that overall increase in the acreage cost. Mr. Tienter stated in many years the non-capital and capital expenses do outpace the funding sources, and there is a corresponding draw-down in the ending cash balance. At some point in time the City Council may need to consider certain revenue-raising options either modifying the rate increases year-over-year, securing interfund loans from the community investment fund, or modifying the scope of the project. Council will be given the opportunity every year of this projection when the City sets the budget annually to discuss those options and how they would like to finance and support the storm water utility. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 24 Mr. Tienter stated just for reference, if you are a residential user using about 18,000 gallons of usage per quarter, you would see between all of the utility charges a 3.62 percent for water, 2.33 percent for sanitary, 2.33 percent for storm, and overall change in your bill of 2.95 percent. That is consistent with that 3 percent increase for those usage rates. Mr. Tienter stated if you are a typical commercial user using 90,000 gallons a quarter, the corresponding increase is about 3.53 percent for water, 3.2 percent for sanitary, 3 percent for storm, and overall change of about 3.26 percent. Mr. Tienter stated the City does participate in an annual survey through AE2S which is an engineering firm. This year the City ranked about 18 out of the 33 participating municipalities. Last year Fridley was about 17 out of the 30. On a percentile basis the City actually went down. Mr. Tienter stated as to special revenue funds, these are funds which are legally restricted based on a specific revenue source. They have to be segregated in separate funds. The City has four funds. It only sets rates for one of them though, the solid waste abatement fund which staff generally refers to as recycling. For solid waste abatement the City does have an increase in the overall cost of the recycling services contract and there is a corresponding increase in the service revenue to support that contract. The Council has been made well aware of the economics of recycling materials are not favorable right now so you do see a corresponding increase in the cost to actually process those materials since they are not as desirable in the market, and 84 percent of this budget supports that contract. If there is any movement in that contract you do see the corresponding change in the rates that support it. A 9 percent increase or about $.81 on a quarterly basis. Mr. Tienter stated this fund is essentially run as a break-even operation. In 2017, 2018, 2019, and 2020 the ongoing expenditures match the funds; and the fund balance remains relatively constant over time. Mr. Tienter said on December 9, there will be the Truth in Taxation hearing. On December 23 Council will be asked to adopt the budget in its entirety including the operating budget, the CIP, the levy, and the revised budget. Mayor Lund stated the good news is it did not go up very high. Mr. Tienter replied, that is a direct result of the restructuring of the rates Council did in 2017. They do see that stable predictable change over time, relatively modest increases in the rates to support really the costs. One percent above the rate of inflation is what they are looking at now. MOTION by Councilmember Eggert to adopt Resolution No. 2019-72. Seconded by Councilmember Ostwald. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 25, 2019 PAGE 25 13. Informal Status Reports. There were no informal status reports. ADJOURN: MOTION by Councilmember Ostwald, seconded by Councilmember Eggert, to adjourn. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 9:01 P.M. Respectfully submitted by, Denise M. Johnson Scott J. Lund Recording Secretary Mayor