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CHA 04/24/2009 CITY OF FRIDLEY CHARTER COMMISSION AGENDA MONDAY, APRIL 24, 2009 AT 7:00 P.M. LOCATION: Fridley Municipal Center Meeting Room 1, Lower Level 1. CALL TO ORDER: 2. ROLL CALL: 3. APPROVAL OF AGENDA: 4. APPROVAL OF MINUTES March 23,2009 5. Administrative Matters n A. Commission Vacancy 6. Discussion of Proposed Amendment to Chapter 7 7. Discussion of Future Items 8. ADJOURNMENT Next Regular Meeting: Monday, May 18, 2009 at 7:00 p.m. in Meeting Room 1 in the Lower Level CITY OF FRIDLEY CHARTER COMMISSION MEETING March 23,2009 CALL TO ORDER: Chairperson Borman called the Charter Commission meeting to order at 7:00 p.m. ROLL CALL: Members Present: Borman,Braam,Findell,Hoiby,Holm,Jorgenson,Kranz,Nelson,Reynolds,Ryan, Scholzen,Shaw and Soule Members Absent: Kirkwood and Plummer Others Present: Deb Skogen,City Clerk/Staff Liaison 1. APPROVAL OF AGENDA Commissioner Braam MOVED and Commissioner Reynolds seconded a motion approving the agenda. UPON A VOICE VOTE,ALL VOTING AYE,CHAIRPERSON BORMAN DECLARED THE MOTION CARRIED. 2. APPROVAL OF MINUTES Commissioner Braam MOVED and Commissioner Holm seconded a motion to approve the February 23,2009 Charter Commission minutes. UPON A VOICE VOTE,ALL VOTING AYE,CHAIRPERSON BORMAN DECLARED THE MOTION CARRIED. Commissioner Reynolds ask to make a correction to the March 3,2009 meeting minutes on page 2 of the minutes, the paragraph should read: "Commissioner Reynolds said the proposed ordinance takes all of the amendment language out. Ms. Skogen said it was a draft to return it to the original language prior to the 2000 amendment. She said the proposed ordinance was drafted by staff for discussion by the Charter Commission." Commissioner Reynolds MOVED and Commissioner Hoiby seconded a motion to approve the March 3,2009, Special Charter Commission minutes as amended. UPON A VOICE VOTE,ALL VOTING AYE,CHAIRPERSON BORMAN DECLARED THE MOTION CARRIED. 3. ADMINISTRATIVE MATTERS Chairperson Borman reviewed the report of the Nominating Commission recommending the nomination of Cindy Soule,Chairperson;Rick Nelson,Vice-Chairperson;and Carol Hoiby, Secretary. He opened the floor for nominations for each office. Hearing none,he closed the nominations. Commissioner Holm MOVED and Commissioner Findell seconded a motion approving the nominations as recommended by the Nominating committee by acclamation. CHARTER COMMISSION MEETING OF MARCH 23,2009 PAGE 2 UPON A VOICE VOTE,ALL VOTING AYE,CHAIRPERSON BORMAN DECLARED THE MOTION CARRIED. 4. DISCUSSION OF CHAPTER 7 Deb Skogen reviewed the information and timeline for charter amendments noting if there was an election all precincts would be open. She also reviewed the two amendments that were included in the packet. The first amendment was drafted by staff for discussion during the Special meeting on March 3,2009 and the second was drafted by staff based on the discussion of the special meeting. There was also a discussion of which school districts had elections and if all precincts were open,did the city charge any portion of the election to the school districts. Deb Skogen said they are billed based on the number of registered voters that live in that school district in that precinct. Commissioner Jorgenson asked at the March 3`d meeting Commissioner Reynolds discussed HF 979 that pertained to the missing levy money and that the city could levy 100%of their lost LGA and asked if there was a senate bill. Commissioner Reynolds said there was a house and senate bill. The senate was to have a hearing the next day and the bill sent to the House Local Government committee. Commissioner Jorgenson wondered if there were levy limits imposed if the city could go to the voters to request a levy increase. Commissioner Holm said if the Charter was changed and no action was taken by state law,there would be no impact on the City,the City could not levy. Commissioner Soule said the first information they received about the budget was during the March 3`d meeting. She said it sounded like the city was going to be more in a deficit,but the departments have dug deeper. She said the city had made additional cuts to the budget in light of state cuts but to balance the budget they have had to go into the reserves. Is it really important to move on this issue tonight or is it something that could be discussed for a few months and table for the summer to see the outcome of legislation? Is it important for an election this year or in 2010? Commissioner Jorgenson felt the Commission should take more time to consider the request to bring it before the voters in 2010. She felt people are highly suspicious of the federal bailouts,the debt and encumbrance at the state level and feel it would cause further distress if changed. Commissioner Kranz felt overreaction would be the worst thing to do under the current circumstances without having the knowledge of what is going to happen. Commissioner Reynolds said the current language allows the City Council to go to the voters to request additional money for services. She felt if the council said the City needs more money because of the loss in LGA,or they need this much money for the police department or fire department,that the voters would say ok. She felt changing the language would probably not happen based on the economy. She said if the state was not going to use the sales tax money for LGA as required when it was authorized,then the sales tax should go away. Commissioner Nelson didn't think waiting a year would improve the city's finances, it was unrealistic. Fridley is not unique in any way to this demise and the cuts that are made now,eventually they will have to buy the squad car, maintain the university avenue corridor or other things. He said the City would not retain employees by cutting their insurance benefits or freezing their salaries for two years. To make cuts because the citizens don't think the council will spend the money wisely is pretty short sighted. Would rather move this forward and let the council decide if they want to move it forward this year or not. He said to strap their hands now,might make it harder in the future. If not comfortable rather than delaying issue are two different reasons. We are here to do what is best for the city,not to delay the process. Commissioner Jorgenson said she understood,but said there were 158 foreclosed homes,there are over 200 people laid-off,things are not getting better for people and to place an additional$50 or$60 on these people isn't going to CHARTER COMMISSION MEETING OF MARCH 23,2009 PAGE 3 help. We were appointed by a district judge,not elected. The Charter Commission takes the time to see how it will impact the community and to watch legislation at the state level that may affect the City. She felt it would cause more distress in the community and felt it might be a good time for cities to review how they do business. She has looked at what other cities have done and how they may have saved money. She also wondered if it might be time for cities to combine services. She said there were some communities that did not provide a police department, because they used the sheriff's services. She felt the city could not continue to spend more and more and getting less and that it needed to be reviewed to see if it could be done better. Commissioner Kranz said he hasn't seen anything like this economy. He said all of the contracts with the Star and Tribute that the union had negotiated in good faith were thrown out in the bankruptcy. The losses some individuals have taken with wage cuts are up to 40%. He said we were in a unique position because we don't know what things will be like next year and that is why he was in favor of not overreacting and taking some time. Commissioner Borman said there was still the unknown of what the Legislature will do and felt there should be more time for discussion. Commissioner Hoiby asked why the Commission couldn't discuss how they wanted the amendment to appear and then wait to see what happened. Commissioner Findell felt the amendment petitioned for in 2000 was a knee-jerk reaction to the Council approving franchise fees changing what had worked for 57 or 58 years. He said it has caused many problems and this Commission has worked to change the wrongs. He said they did not understand the unintended consequences it has caused. The City's bond rating almost went to nothing and the City lost the ability to bond for the utilities. It does not make sense that the electorate should be making decisions the City Council should be making. Commissioner Hoiby agreed and said individuals do not look at all of the information but rather a personal thing. Commissioner Reynolds said she had read the budget message and gone through the budget line-by-line and said she had found things she felt could be cut—she typed a report and sent it to the city manager. She said one of the cuts was depreciation on IS—taking it out of the budget—the city manager said the IS fund is sitting okay,so they can take it out—it's not like it is real money—it is depreciation. She agreed the average voter would not look at these issues. As she read the purpose of the Charter was to meet the needs of the people—the people who said if they need more money they need to come to us. Commissioner Findell said the change in the charter language strapped the City and almost stopped the City from doing business. He said they had to call an ad hoc committee to change the original petition language. Putting it back where it was,no other community other than Mounds View has restrictions as tough as Fridley. Commissioner Borman wondered about the supermajority to pass an issue. Commissioner Reynolds didn't think that Mounds View did. Commissioner Jorgenson felt the biggest thing was the governor tying the hands of the city. The City has gone through its reserves based on the loss of LGA and the cutbacks from the legislature. Commissioner Holm said the game will change and we should work expeditiously and that the Commission should amend the language to allow the council with a better means of running the City. At the same time,he did not personally agree with either of the amendments. As he looked at the history of what has happened in 1999,they did not want a franchise fee,in 2000 if you do put in a franchise fee,you have to go to the voters to request it. He said the other part that came about were restrictions on the city council before the loss of LGA. He felt an amendment that kept the restrictions on franchise fees,but recognizes that the ballgame has changed and we need to provide the city council with additional authority. He said there may be restrictions at the state level which might make that point moot,but felt it was important to discuss. He did not feel the amendment had to be put off until 2010. Commissioner Borman wondered if the Commission continue or table the discussion. He also wondered about changing the super majority restriction could help the council. CHARTER COMMISSION MEETING OF MARCH 23,2009 PAGE 4 Commissioner Jorgenson said she liked the idea,but felt the situation is not there because of the charter restrictions, but maybe language could be added which would say in the event in the loss of LGA,the city shall have the ability to raise taxes to offset that loss. Skogen said the governor has proposed the loss of LGA for 2009 and 2010. Commissioner Borman wondered how a city could prepare its budget,expecting money to come in,and then the state cuts the budget. Commissioner Braam said it was like someone paying you with a personal check or a payroll check which bounces after you have paid all of your bills and people are coming back to you now. Skogen suggested adding language that might help if there was a state deficit with a loss of funding to the city,that the city council would have the ability to pass a levy and would have to follow it by holding a public hearing and adopting a resolution. Commissioner Jorgenson said in January of 2001 there was 38 million in the reserve,they are down to less than 8 million now because of the cutbacks in LGA and other emergency provisions. She said the reserves were invested, but it is also not receiving the returns investments used to have. Commissioner Braam said we have to decide how to move forward,things are never going to be the same and do not think the City will live on LGA like they have in the past. Maybe it is the chance for the Charter Commission to lead the way,come up with suggestions on how to live through this and raise revenue. I did not like the city manager's idea of raising taxes,but wondered if charge for services could be increased. Commissioner Borman said discussed having the fire departments charge for services or the police department when /1 you call to report issues. Commissioner Soule said the City still has an opportunity to get franchise fees if they go to the voters. Commissioner Holm said the voters spoke loudly about franchise fees—the council has to go to the people. He said it was difficult to generate a team of people who could promote helping the city raise additional funding. Commissioner Borman wondered if the intent was making the City Council go to the voters to increase the levy. He wondered if changing the super majority to a simple majority would help the council if they went to the voters. He wondered if it was up to the City or up to the"No Fee Committee"to promote against the levy. Deb Skogen said the city could only provide education. Commissioner Braam said people appreciate the city's services,but felt it came to accountability. He said if the City said it would cost me an additional$100,would I feel like I received that$100 in services—voters want to make sure they are getting their monies worth. Commissioner Holm said he would send a proposal together and forward it to Deb Skogen. After further discussion,the Commissioners wanted to know where the reserves went and what reserve funds were used. 5. ADJOURNMENT: Commissioner Holm MOVED and Commissioner Kranz seconded a motion to adjourn the meeting. UPON A VOICE VOTE,ALL VOTING AYE,CHAIRPERSON BORMAN DECLARED THE MOTION CARRIED AND THE MEETING WAS ADJOURNED AT 8:29 P.M. CHARTER COMMISSION MEETING OF MARCH 23,2009 PAGE 5 Respectfully submitted, Debra A. Skogen, Carol Hoiby, Secretary City Clerk/Staff Liaison /∎ Amendment(A)—Removing all 2000 amendment lanaguge ,-� Ordinance No. AN ORDINANCE AMENDING SECTION 7.02 OF THE FRIDLEY CITY CHARTER WHEREAS,the City of Fridley,Minnesota,under the powers vested in it under Minnesota Statutes Section 410 and its own City Charter,has the power to amend its Charter,and WHEREAS, after review and consent of the Charter Commission, the City Council has determined the current language of the charter related to restrictions on the tax levy and fee restrictions may cause deep and significant harm to the finances of the City and that a change in charter language is necessary to mitigate future harm from being caused by the charter to the City's finances. IT IS HEREBY ORDAINED THAT THE CHARTER BE AMENDED AS FOLLOWS: FRIDLEY CITY CHARTER CHAPTER 7. TAXATION AND FINANCES. Section 7.02. POWER OF TAXATION. 1. The City shall have, in addition to the powers by this Charter expressly or impliedly granted, all the powers to raise money by taxation pursuant to the laws of the State which are applicable to cities of the class of which it may be a member from time to time, provided that the amount of taxes levied against real and personal property within the City for general City purposes shall not exceed in dollars, a tax levy that is greater than the prior year tax levy increased by an inflationary index, or 5%,whichever is least. Said inflationary index shat be that defined by the U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index for all Urban Consumers in the Minneapolis, St. Paul metropolitan area. ' - . . . ., !! - - faith and credit of the City, provided, however, that long term, general obligation epemtiens-e€ e-City. (Ref Ord 1152) 2. The City Council may also levy a tax in any year against real and personal property within the City in addition to said limit as defined in paragraph 1 provided the Council shall: A. Adopt a resolution declaring the necessity for an additional tax levy and specifying the purposes for which such additional tax levy is required. B. Hold a public hearing pursuant to three (3) weeks' published notice in the official newspaper of the City setting forth the contents of the resolution described in Subdivision A. C. Adopt after such public hearing a resolution by an affirmative vote of a least four(4) Ordinance No._ Page 2 members of the Council which resolution provides for such levy. shall-be-presented election. (Ref. Ord. 592, 1102 and 11/7/00 Amendment) D. The additional tax levy shall take effect if 51% of the votes cast at said election are in-faver-ef-its-adeptien, A. For the purposes of this subsection, "fees" includes sales and use taxes,recycling Ord 1152) _ --., - . -., _ -- , . . - - other charges collected in cases of restitution or violation of law or contract. The term "fees" also does not include rental housing fees;building permit fees, liquor must be limited to the actual cost of the service being provided. The term "fees" 429. (Ref Ord 1152) C. For the purposes of this subsection, "fee increase" includes a new tax or fee, a (Ref Ord 1152) D. For the purposes of this subsection, "city" includes the city itself and all its defined in Chapter 1 of this Charter. "City" shall not include any body of Ord 1152) specific emergency measure authorized in Chapter 7, Section.08 (7.08). (Ref 11/7/00 Amendment) 2 Ordinance No:_ Page 3 PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS DAY OF , 2009. Scott J. Lund,Mayor ATTEST: Debra A. Skogen,city Clerk Public Hearing: First Reading: Second Reading: Publication: 3 Amendment(B) (language discussed at special meeting) n Ordinance No. AN ORDINANCE AMENDING SECTION 7.02 OF THE FRIDLEY CITY CHARTER WHEREAS, the City of Fridley,Minnesota, under the powers vested in it under Minnesota Statutes Section 410 and its own City Charter,has the power to amend its Charter, and WHEREAS, after review and consent of the Charter Commission,the City Council has determined the current language of the charter related to restrictions on the tax levy and fee restrictions may cause deep and significant harm to the finances of the City and that a change in charter language is necessary to mitigate future harm from being caused by the charter to the City's finances. IT IS HEREBY ORDAINED THAT THE CHARTER BE AMENDED AS FOLLOWS: FRIDLEY CITY CHARTER CHAPTER 7. TAXATION AND FINANCES. Section 7.02. POWER OF TAXATION. 1. The City shall have, in addition to the powers by this Charter expressly or impliedly granted, all the powers to raise money by taxation pursuant to the laws of the State which are applicable to cities of the class of which it may be a member from time to time, n provided that the amount of taxes levied against real and personal property within the City for general City purposes shall not exceed in dollars, a tax levy that is greater than the prior year tax levy increased by an inflationary index, or 5%, whichever is least. Said inflationary defined by the U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index for all Urban Consumers in the Minneapolis, St. Paul metropolitan area. (Ref. Ord. 592, 1102 and 11/7/00 Amendment) Nothing in this provision shall be construed to impair any general obligation the City may have in support of otherwise lawful indebtedness or similar obligation supported by the full faith and credit of the City, provided, however, that long-term, general obligation indebtedness shall not be used for the purpose of funding the routine and daily business operations of the City. (Ref Ord 1152) 2. The City Council may also levy a tax in any year against real and personal property within the City in addition to said limit as defined in paragraph 1 provided the Council shall: A. Adopt a resolution declaring the necessity for an additional tax levy and specifying the purposes for which such additional tax levy is required. B. Hold a public hearing pursuant to three (3) weeks' published notice in the official newspaper of the City setting forth the contents of the resolution described in Subdivision A. C. Adopt after such public hearing a resolution by an affirmative vote of a least four(4) Ordinance No._ Page 2 members of the Council which resolution provides for such levy. shall-be-presented election. (Ref. Ord. 592, 1102 and 11/7/00 Amendment) D. The additional tax levy shall take effect if 51% of the votes cast at said election arc 3. Any other fees created,or increased beyond the limits set forth in subsection 1, shall require voter city council approval as stipulated in subsection 2. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS DAY OF , 2009. Scott J. Lund,Mayor ATTEST: Debra A. Skogen, city Clerk Public Hearing: First Reading: Second Reading: Publication: 2 To: Charter Commission Members Date: April 2,2009 From: Bill Holm Subject: Charter Amendment re Chapter 7, Section 7.02 Attached is a draft of an additional alternative that I request be considered as part of our deliberations concerning a change to the City Charter. This alternative, labeled as Amendment(C), eliminates certain restrictions on fee increases or tax levy increases. Currently,the Charter requires the City Council to obtain voter approval for any increase above the rate of inflation or 5%,whichever is less. In this regard, it is similar to the language provided in Amendment alternative (B) which was discussed at our special meeting and at our regular meeting on March 23. In addition, however,Amendment(C) retains the current language which requires the City Council to get voter approval of franchise fees or any other"new" fees that impact all homeowners and/or residents of Fridley. Reasons why I suggest we consider this alternative: 1. It recognizes that the "rules" by which the City imposes tax levy and fee increases has changed due to actions taken (or not taken) at the State legislature and the Governor which have dramatically reduced and may eliminate Local Government Aid (LGA). The Council clearly needs more flexibility in establishing a tax levy and in changing fees for current services. 2. It retains the requirement for voter approval of a franchise fee or similar measure. As you recall, the voters overwhelmingly opposed establishment of a franchise fee about 10 years ago (I believe it was in 1999.) In the aftermath of that vote, it was my impression that voters were against the franchise fee not only because it increased their own taxes, but also because it impacted the costs incurred by school districts, churches and other non-profit organizations. School districts in particular have been struggling with funding just as the city has struggled over the past decade. Amendment (C) is obviously more restrictive than Amendments (A) or(B), but it more accurately reflects voter sentiment regarding franchise fees. I have, however, suggested that the Charter do away with the supermajority vote requirement if a new fee is requested by Council and needs voter approval. Since Amendment alternative (C) is more restrictive, major changes in municipal services will continue to require voter approval before they can be implemented. For example, city garbage collection service could not be established without voter approval. While not a big issue today, that might become a significant issue if garbage collection became a problem. Other potentially new municipal services (wi- fe?)would be similarly affected in that such services would require voter approval before they could be implemented. I look forward to our continued discussion of alternatives for this important proposed Charter amendment. 3. Creation of any new fees shall require voter approval as stipulated in this subsection. A. For the purposes of this subsection, new fees includes sales and use taxes, gas and electric franchise fees, and any other fee that produces a tax burden or direct financial obligation for all property owners and/or residents of Fridley. B. For the purposes of this subsection, "city" includes the city and all its departments and agencies that are organized to exercise the "Powers of the City" as defined in Chapter 1 of this Charter. "City" shall not include any body of government owing its existence to separate constitutional or statutory authority outside of the Charter, regardless of whether that body of government has jurisdiction or performs duties and services within the boundaries of the City. (Ref. Ord. 1152) C. To create a new fee, The City Council shall: - Adopt a resolution declaring the need for establishing a new fee and the purposes for which the new fee is required. - Hold a public hearing pursuant to three (3) weeks notice published in the Official newspaper of the City, setting forth the contents of the resolution to establish the new fee. - Adopt after such public hearing a resolution by an affirmative vote of at least four (4) members of the Council which shall be presented as a clear and concise "plain language" ballot question at the next regular municipal election. (Ref. Ord. 592, 1102, and 11/7/00 Amendment) - The new fee shall take effect if approved by a majority of the votes cast on that ballot question. Amendment(C) (Holm Amendment) Ordinance No. AN ORDINANCE AMENDING SECTION 7.02 OF THE FRIDLEY CITY CHARTER WHEREAS,the City of Fridley, Minnesota,under the powers vested in it under Minnesota Statutes Section 410 and its own City Charter,has the power to amend its Charter, and WHEREAS, after review and consent of the Charter Commission, the City Council has determined the current language of the charter related to restrictions on the tax levy and fee restrictions may cause deep and significant harm to the finances of the City and that a change in charter language is necessary to mitigate future harm from being caused by the charter to the City's finances. IT IS HEREBY ORDAINED THAT THE CHARTER BE AMENDED AS FOLLOWS: FRIDLEY CITY CHARTER CHAPTER 7. TAXATION AND FINANCES. Section 7.02. POWER OF TAXATION. 1. The City shall have, in addition to the powers by this Charter expressly or impliedly granted, all the powers to raise money by taxation pursuant to the laws of the State which are applicable to cities of the class of which it may be a member from time to time, provided that the amount of taxes levied against real and personal property within the City for general City purposes shall not exceed in dollars, a tax levy that is greater than the prior year tax levy increased by an inflationary index, or 5%,whichever is least. Said inflationary defined by the U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index for all Urban Consumers in the Minneapolis, St. Paul metropolitan area. (Ref. Ord. 592, 1102 and 11/7/00 Amendment) Nothing in this provision shall be construed to impair any general obligation the City may have in support of otherwise lawful indebtedness or similar obligation supported by the full faith and credit of the City, provided, however, that long-term, general obligation indebtedness shall not be used for the purpose of funding the routine and daily business operations of the City. (Ref Ord 1152) 2. The City Council may also levy a tax icy year against real and personal property within the City in addition to said limit as defined in paragraph 1 provided the Council shall: A. Adopt a resolution declaring the necessity for an additional tax levy and specifying the purposes for which such additional tax levy is required. B. Hold a public hearing pursuant to three (3) weeks' published notice in the official newspaper of the City setting forth the contents of the resolution described in Subdivision A. C. Adopt after such public hearing a resolution by an affirmative vote of a least four(4) Ordinance No._ Page 2 members of the Council which resolution provides for such levy. shall-be-presented election. (Ref. Ord. 592, 1102 and 11/7/00 Amendment) D. The additional tax levy shall take effect if 51% of the votes cast at said election are in-faver--ef-its-adeptien, 3. Creation of any new fees shall require voter approval as stipulated in this subsection. Any A. For the purposes of this subsection,new"fees" includes sales and use taxes, recycling fees, gas and electric franchise fees and any other fee that produces a tax burden or direct financial obligation for all property owners and/or residents of Fridley. (Ref Ord 1152) - . •- --- -• - . . . - ion,the term"fees"does not include: Utility copying, sales of municipal liquor store products,or civil and criminal fines and other charges collected in cases of restitution or violation of law or contract. The must be limited to the actual cost of the service being provided. The term "fees" /129. (Ref Ord 1152) C. For the purposes of this subsection, "fee increase" includes a new tax or fee,a (Ref Ord 1152) B.D—For the purposes of this subsection, "city" includes the city itself and all its departments and agencies that are organized to exercise the "Powers of the City" as defined in Chapter 1 of this Charter. "City" shall not include any body of government owing its existence to separate constitutional or statutory authority outside of the Charter,regardless of whether that other body of government has jurisdiction or performs duties and services within the boundaries of the City. (Ref Ord 1152) specific emergency measure authorized in Chapter 7, Section.08(7.08). (Ref 2 Ordinance No. Page 3 11/7/00 Amendment) C. To create a new fee,the City Council shall: 1) Adopt a resolution declaring the need for establishing a new fee and the purposes for which the new fee is required. 2) Hold a public hearing pursuant to three (3)weeks notice published in the official newspaper of the City, setting forth the contents of the resolution to establish the new fee. 3) After such public hearing,adopt a resolution by an affirmative vote of at least four(4)members of the Council which shall be presented as a clear and concise"plain language"ballot question at the next regular municipal election. 4) The new fee shall take effect if approved by a majority of the votes cast on that ballot question. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS DAY OF ,2009. Scott J. Lund,Mayor ATTEST: Debra A. Skogen,city Clerk Public Hearing: First Reading: Second Reading: Publication: 3 Memo to: The Fridley Charter Commission From: William W. Burns, City Manager Subject: Charter Change Recommendation Date: 4-27-09 Although I concur that Bill Holm's recommendation for a Charter change may be a good compromise solution, I also would like to restate what I think is the ideal and ask that you reconsider the ideal as well. We are in very difficult financial times and very close to the elimination of what I regard as some very important City services. Having just completed budget review sessions with department managers, I know that the departmental budgets are about as tight as they can get without beginning to cut services. I also know that many of the adjustments for 2010, such as wage freezes, the freezing of merit steps, and the elimination of travel and conference expense are temporary measures that will not last forever. Additionally, I know that, in addition to losing more than$1 million in LGA,many of our revenue line items, such as transfers from liquor operations, and building permit fees have fallen very significantly. At the same time, I believe that Fridley City Government has a long track record of very responsible financial management and very affordable costs for residents. We also have very solid municipal services that are not excessive and are responsive to the needs of Fridley residents. Additionally, our City Councils have been hard working and responsible as well as very cautious in adding unnecessary costs to Fridley tax payers. In view of all of this, I would like to recommend that you adopt language similar to the falling: The City Council shall have the power to levy taxes and raise fees as authorized by Minnesota statutes that are sufficient to cover the costs of City expenditures and to compensate for losses in revenues, such as those provided by the State of Minnesota. All other limitations on property tax levies and fees currently found in the Fridley City Charter are hereby repealed. Fridley has a very good City Government and a very responsible City Council. I sincerely seek your help in making the continuation of good government in Fridley possible. Thank you. To: Charter Commission Members Date: April 2,2009 From: Bill Holm Subject: Charter Amendment re Chapter 7, Section 7.02 Attached is a draft of an additional alternative that I request be considered as part of our deliberations concerning a change to the City Charter. This alternative, labeled as Amendment(C),eliminates certain restrictions on fee increases or tax levy increases. Currently,the Charter requires the City Council to obtain voter approval for any increase above the rate of inflation or 5%,whichever is less. In this regard,it is similar to the language provided in Amendment alternative(B) which was discussed at our special meeting and at our regular meeting on March 23. In addition,however,Amendment(C) retains the current language which requires the City Council to get voter approval of franchise fees or any other"new" fees that impact all homeowners and/or residents of Fridley. Reasons why I suggest we consider this alternative: 1. It recognizes that the"rules" by which the City imposes tax levy and fee increases has changed due to actions taken(or not taken)at the State legislature and the Governor which have dramatically reduced and may eliminate Local Government Aid(LGA). The Council clearly needs more flexibility in establishing a tax levy and in changing fees for current services. 2. It retains the requirement for voter approval of a franchise fee or similar measure. As you recall,the voters overwhelmingly opposed establishment of a franchise fee about 10 years ago (I believe it was in 1999.) In the aftermath of that vote,it was my impression that voters were against the franchise fee not only because it increased their own taxes, but also because it impacted the costs incurred by school districts, churches and other non-profit organizations. School districts in particular have been struggling with funding just as the city has struggled over the past decade. Amendment(C)is obviously more restrictive than Amendments(A)or(B),but it more accurately reflects voter sentiment regarding franchise fees. I have,however, suggested that the Charter do away with the supermajority vote requirement if a new fee is requested by Council and needs voter approval. Since Amendment alternative(C)is more restrictive, major changes in municipal services will continue to require voter approval before they can be implemented. For example,city garbage collection service could not be established without voter approval. While not a big issue today,that might become a significant issue if garbage collection became a problem. Other potentially new municipal services(wi- fe?)would be similarly affected in that such services would require voter approval before they could be implemented. I look forward to our continued discussion of alternatives for this important proposed Charter amendment. • • �. Amendment(IV(language-discussed at special meeting) . s ter _ Ordinance No. .AN ORDINANCE AMENDING SECTION 7.02 OF THE FRIDLEY CITY CHAR WHEREAS,the City of Fridley,Minnesota,under the powers vested in it under Minnesota - Section 410 and its own City Charter,has the power to amend its Charter,and WHEREAS, after review and consent of the Charter Commission,the City Council has de - the current language of the charter related to,restrictions on the tax levy and fee restriction cause deep and significant harm to the finances of the City and that a change in charter necessary to mitigate future harm from being caused by the charter to the City's finances. IT IS HEREBY ORDAINED THAT THE CHAR'Ib'lt BE AMENDED AS FOLLOWS: FRIDLEY CITY CHARTER CHAPTER 7. TAXATION AND FINANCES. Section 7.02. POWER OF TAXATION. 1. The City shall have, in addition to the powers by this Charter expressly or impliedly granted, all the powers to raise money � K ney by taxation pursuant to the laws of the State which are applicable to cities of the class of which it may be a member from time to time ; provided that the amount of taxes levied against real and for general City personal property the City g ty P shall not exceed.in dollars,a tax levy that is greater than the prior year tax levy increased by an inflationary index, . .. . _.. _ ...i ... defined by the U.S. Department of Labor,Bureau of Labor Statistics Consumer Price Index for all Urban Consumers in the Minneapolis, St Paul metropolitan area. •' _ . ' , .. _ , .... . :. Nothing in this provision shall be construed to impair any general obligation the City may have in support of otherwise lawful indebtedness or similar obligation supported by the full faith and credit of the City,_ provided, however, that long-term, general obligation indebtedness shall not be used for the purpose of funding the routine and daily business operations of the City. (Ref Ord 1152) 2. The City Council may also levy a tax ' -�;nst real and personal property within the City in addition to said limit as defined in paragraph 1 provided the Council shall: A. Adopt a resolution declaring the necessity for an additional tax levy and specifying . the purposes for which such additional tax levy is required. B. Hold a public hearing pursuant to three (3) weeks' published notice in the official newspaper of the City setting forth the contents of the resolution described in Subdivision A. C. Adopt after such public hearing a resolution by an affirmative vote of a least four(4) Ordinance No. Page 2 members of the Council which resolution provides for such levy. se-presented • 3. Any other fees created,or increased beyond the limits set forth in subsection 1,shall require voter city council approval as stipulated in subsection 2. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS DAY OF ,2009. Scott J.Lund,Mayor ATTEST: Debra A. Skogen,city Clerk Public Hearing: First Reading: Second Reading: Publication: • 2 3. Creation of any new fees shall require voter approval as stipulated in this subsection. A. For the purposes of this subsection, new fees includes sales and use taxes, gas and electric franchise fees, and any other fee that produces a tax burden or direct financial obligation for all property owners and/or residents of Fridley. B. For the purposes of this subsection, "city" includes the city and all its departments and agencies that are organized to exercise the "Powers of the City" as defined in Chapter 1 of this Charter. "City" shall not include any body of government owing its existence to separate constitutional or statutory authority outside of the Charter, regardless of whether that body of government has jurisdiction or performs duties and services within the boundaries of the City. (Ref. Ord. 1152) C. To create a new fee, The City Council shall: - Adopt a resolution declaring the need for establishing a new fee and the purposes for which the new fee is required. - Hold a public hearing pursuant to three (3) weeks notice published in the Official newspaper of the City, setting forth the contents of the resolution to establish the new fee. - Adopt after such public hearing a resolution by an affirmative vote of at least four (4) members of the Council which shall be presented as a clear and concise "plain language" ballot question at the next regular municipal election. (Ref. Ord. 592, 1102, and 11/7/00 Amendment) - The new fee shall take effect if approved by a majority of the votes cast on that ballot question.