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CHM 04/27/2009 - 29984CITY OF FRIDLEY CHARTER COMMISSION MEETING April 27, 2009 CALL TO ORDER: Chairperson Soule called the Charter Commission meeting to order at 7:02 p.m. ROLL CALL: Members Present: Commissioners Borman, Braam, Findell, Hoiby, Holm, Jorgenson, Kranz, Nelson, Reynolds, Ryan, Soule and Scholzen Members Absent: Commissioners Plummer and Shaw Others Present: Deb Skogen, City Clerk/Staff Liaison Cindy Ruschy, Staff Assistant APPROVAL OF AGENDA Commissioner Borman MOVED and Commissioner Braam seconded a motion approving the meeting agenda. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SOULE DECLARED THE MOTION CARRIED. APPROVAL OF MINUTES The minutes were provided to the Commissioners at the beginning of the meeting, as City Clerk Skogen had just finished the minutes that afternoon. She recommended tabling approval until they have had time to read the minutes. Commissioner Nelson MOVED and Commissioner Braam seconded a motion tabling approval of the March 23, 2009 Charter Commission meeting minutes to the neat meeting. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SOULE DECLARED THE MOTION CARRIED. ADMINISTRATIVE MATTERS Skogen informed the Commissioners that Commissioner Mary Kirkwood had passed away last week. A card was provided to the Commissioners by Chairperson Soule to sign and provide to her family thanking them for her service to the City. A vacancy now exists and Skogen will have that information put on the cable and in the Sun Focus. DISCUSSION OF CHAPTER 7 Commissioner Holm said he had prepared Amendment C for the Commissioner to discussion. His amendment was drafted to recognize the vote by the electorate to restrict the city council action. To put it in context they could proceed promptly and adopt an amendment or wait for the legislature to act and for further discussion. He recommended waiting and suggested a timeframe of ending in October. Commissioner Holm MOVED and Commissioner Nelson seconded a motion to proceed to adopt amendment A, B or C or other amendment to adjust Chapter 7 to provide additional flexibility to the city council to increase revenues through taxes or fees with an October 2009, or sooner, end date. Adopted 5 -18 -09 CHARTER COMMISSION MEETING OFAPRIL 27, 2009 PAGE 2 COMMISSIONER SOULE ASKED FOR FURTHER DISCUSSION. SEEING NONE SHE REQUESTED A VOTE AND THE MOTION CARRIED WITH A 10 TO 2 VOTE. COMMISSIONERS REYNOLDS AND JORGENSON VOTING NAY. Commissioner Reynolds felt there was a problem with setting a timeline because there was so much happening at the legislature. She appreciated the work City Manager Burns had done, but had trouble removing all of the fee language. She said recycling was supposed to be self- funded and that there should not be increased above what the Charter states. She did not think removing the requirement to go to the voters should be deleted. She said the Mounds View Charter allowed their city to increase by a maximum of 5 %, or CPI plus 2 %. She felt setting parameters was more important and agreed the super majority restriction could go away. Commissioner Borman suggested leaving the 5% cap and removing the CPI restriction. This would allow the City to raise taxes without causing the city harm and believed the super majority restriction should be changed to simple majority. Commissioner Jorgenson said she had trouble with amendments B & C and did not want to micromanage, she felt comfortable with the Mounds View language. Commissioner Holm said the language in the section was not actually the original language, but language agreed to by a Task Force. He said recycling had to match the cost of providing the service. He said amendment C would not allow the city to put in a new fee like franchise fees or street lighting fees. He said Dr. Burns made a very good argument and the City does have a history of being frugal. He wondered why the city council should continue to have the flexibility. Commissioner Borman said he had been reading about other cities imposing street lighting fees. Commissioner Jorgenson disagreed that the state, county and city just wanting to fix problems by increasing taxes. The number of foreclosures and properties that are currently not paying taxes. She wondered how unpaid taxes were collected and was concerned the foreclosures were creating the valuation decrease of residential properties. She said about $4 -5 million of the budget actually came from property taxes and the rest of the revenue came from other funding sources. She felt it was time the city did things differently, which might include combining some services with other cities. Commissioner Kranz said the average market value for a house in Fridley was $175,000 and now it is $150,000 the City appears to be losing about $25,000 per house. If the tax base stays the same, it is a lot of money. It sounds like they should be paying less taxes. Commissioner Jorgenson said the taxes don't go down but rather get redistributed. Commissioner Findell said if a person's property was worth $150,000, but actually worthy $350,000, they would get a bonus by not paying taxes on that amount. Commissioner Braam said commercial properties remain the same and then one day the value goes up because it has been undervalued. Commissioner Soule wondered if anyone wanted to see the actual petition language. The Commissioners agreed and it will be included in the next agenda packet. Commissioner Holm said if commercial values were the same and residential properties went from $200,000 to $150,000 and you were paying $1000 in property taxes on a $200,000 home, while the value of the house might go down, you are still going to pay $1000 in property taxes. So you pay the same amount even though your house might be valued less. It all depends on the total levy. Adopted 5 -18 -09 CHARTER COMMISSION MEETING OFAPRIL 27, 2009 PAGE 3 Commissioner Nelson said the Senate bill has the LGA restored, the House bill has some restored but not to the extent of the Senate. Commissioner Jorgenson felt the residential taxes were lower because the city had more commercial and industrial property. Commissioner Nelson reviewed property homestead values in other communities around the City. There was a discussion about administrative fines or administrative tickets for traffic violations and whether or not the City could do them like Forest Lake did. It was unsure as there seems to be some dissension between the state and Forest Lake and whether or not it can actually provide for administrative fines for traffic tickets. Commissioner Borman wondered if the Commission needed to start from scratch and go line by line or use one of the proposed amendments. Commissioner Findell favored the Holm Amendment because it took into consideration not only the petition language but also the direction of the task force that amended the language. Because they were holding their concerns in the charter in a much more worthwhile manner, rather than it was originally written, and it follows the guidelines they were trying to provide. Commissioner Jorgenson asked if anyone was in favor of Amendment A. Commissioner Holm said that gave the most flexibility to the Council and entrusted them to be frugal in the future as they have been in the past. Commissioner Findell said the word "all" in Section 7.03.3.A includes everyone and not just certain types of property owner and wasn't sure it was appropriate. Commissioner Nelson MOVED and Commissioner Findell seconded a motion that Amendment A be taken off the table and no longer considered for discussion. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SOULE DECLARED THE MOTION CARRIED. Commissioner Nelson said if the LGA is restored, the City would still be frugal and not raise taxes. They could adopt B or the Holm amendment. He said every city council was wrestling with this and know if they go over the top, they would not be re- elected. They were all their willing to do their best for the city. He said he was aware of all of the foreclosed properties but he also liked having the police come up and down the road on a consistent basis and having the city come and fix a water main break and patch the road quickly. Those services come with costs and he was willing to pay for those services. He felt the discussion of the Commission could help provide direction to the Council and the public at the public hearing. He did not feel the City Council's hands should be tied in the city they all live in and that we want to have all of the services. He said there are cities that have been successful by removing the police department, and those that haven't. But those are questions that really need to be asked before decreasing services. He would rather provide an amendment and let the public decide. Commissioner Holm said it was an issue of local vs non -local control which had its benefits and risks. He said undoubtedly you need to address cost savings at some point. He felt the main sticking point between Amendment B and C — one calls for council approval and one for voter approval on fees. Commissioner Nelson MOVED and Commissioner Jorgenson seconded a motion to use the Holm C Amendment as a template for discussion. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SOULE DECLARED THE MOTION CARRIED. Commissioner Reynolds asked for the section of Chapter 7 that was changed in February changing the word least to less. Adopted 5 -18 -09 CHARTER COMMISSION MEETING OFAPRIL 27, 2009 PAGE 4 Commissioner Soule said the Commission talked about the Mounds View charter showing no limitations. The Commission would cross out the 5% and change to the inflationary index. Commissioner Borman said the inflationary index has been about 1.2% or 1.3 %, which isn't very much. Commissioner Braam said they got into trouble because the Met Council fees increased higher than what the City could increase their fees. He wondered if there was some language that could be put in about pass - through fees or fees that are increased by another agency that the city has no control over. Commissioner Reynolds felt they needed to keep the language. Commissioner Braam said they needed to put in some type of protection that any fees incurred by the city are passed on. Commissioner Borman wondered what another external fee imposed on the city that might incur, other than utility fees that would impact the cost of running the city. Commissioner Holm said if it impacts any particular operation that is charged for separately than property taxes, the city could pass on those fees. Commissioner Jorgenson said an instance might be where the State decided a state highway was turned back to a city or county . The cost of maintaining that road would not be a new cost to the city. Commissioner Jorgenson said there were a lot of things that could be turned back over to the cities and discussed the city's water supply and the possible need to upgrade three of the city's wells due to possible contamination. Commissioner Borman wondered if there was language that could address that. Commissioner Nelson said hopefully the city would budget ahead of time for a project like that rather than increasing taxes to do the project. He said we could beat themselves up about the unknown, but we don't always know the unknown. Commissioner Findell said Chapter 11 still covers the passing on excessive costs, as you cannot make a profit on utilities. Commissioner Reynolds felt it was also addressed earlier in Chapter 7 where it talks about what type of funds to be kept. There was then a discussion about whether or not they could plan for things that might or might not happen in the future and it was agreed they could not. Commissioner Nelson MOVED and Commissioner Findell seconded a motion changing super majority to simple majority. Commissioner Soule wanted to clarify the language and understood it to mean the removal of the vote by the public for the tax increase over and above the rate of inflation and requiring it be a supermajority of the council. There would be no vote over and above that rate for the public. The Commissioners agreed. Section 3 creates a vote for new fees but only requires a majority rather than a super majority for approval. Commissioner Reynolds wondered about keeping 7.03.E regarding natural disasters. Commissioner Nelson suggested moving it to 7.03.4 as it does not reflect new fees and the Commissioners agreed. Commissioner Reynolds said the referendum/petition committee was aware of the changes that were made to the petition and they were not happy with the language either. Commissioner Holm said Section 7.02.1. shows the word "as" was crossed out and shouldn't be and staff should look up the definition impliedly and suggested changing it to granted or implied. Adopted 5 -18 -09 CHARTER COMMISSION MEETING OFAPRIL 27, 2009 PAGE 5 Commissioner Reynolds did not feel the council should be able to raise taxes without going to the voters and felt the amendment gave them too much power. She felt there were going to be some parameters in place that allow them to generate revenue, beyond that amount, the voters need to have a say in going above that percent. Commissioner Braam said the council was elected by the citizens and the citizens would have a say about the increase in taxes at a public hearing. He said if people were concerned, they would attend a meeting. Commissioner Borman said it could also be repealed by referendum. Commissioner Reynolds felt with this language the city would end up with a referendum petition. Commissioner Jorgenson said the amendment changes the language back to what the council had before 2000 petition. Commissioner Findell said the petition was introduced because the franchise fees were adopted after the voters told them not to adopt them. FUTURE ITEMS The Commission will continue the discussion of Chapter 7 and really review Section 7.03. Please provide a copy of the C Amendment with strikeouts on the blue and without strikeouts — so as it would read on another color paper. ADJOURNMENT: Commissioner Kranz MOVED and Commissioner Hoiby seconded a motion to adjourn the meeting. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SOULE DECLARED THE MOTION CARRIED AND THE MEETING WAS ADJOURNED AT 8:30 P.M. Respectfully submitted, Debra A. Skogen, City Clerk/Staff Liaison Carol Hoiby, Secretary Adopted 5 -18 -09