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07/26/1999 - 00000614THE MINUTES OF THE REGULAR MEETING OF THE FRIDLEY CITY COUNCIL OF JULY 26, 1999 The Regular Meeting of the Fridley City Council was called to order by Mayor Jorgenson at 7:34 p.m. PLEDGE OF ALLEGIANCE: Mayor Jorgenson led the Council and audience in the Pledge of Allegiance to the Flag. ROLL CALL: MEMBERS PRESENT: Mayor 7orgenson, Councilmember Barnette, Councilmember Billings, Councilmember Wolfe, and Councilmember Bolkcom MEMBERS ABSENT: None. PROCLAMATION: Law Enforcement Sunday - Au u.°� st 1, 1999 Mayor Jorgenson proclaimed August 1, 1999, as Law Enforcement Sunday to honor the efforts of the men and women who serve in law enforcement in our local communities. A representative of Woodcrest Baptist Church, 6875 University Avenue, expressed the church's gratitude for the outstanding performance of all local law enforcement personnel by honoring them on August 1, 1999. Woodcrest Baptist Church recognized the need to offer spiritual support and to honor the law enforcement departments throughout the northern metropolitan area for their dedication and courage in performing their duties. APPROVAL OF MINUTES: City Council Meetin� Minutes of July 12, 1999 MOTION by Councilmember Bolkcom to approve the regular City Council meeting minutes of July 12, 1999. Seconded by Councilmember Wolfe. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR JORGENSON DECLARED THE MOTION CARRIED UNANIMOUSLY. APPROVAL OF PROPOSED CONSENT AGENDA: NEW BUSINESS: 1. RECEIVE THE PLANNING COMMISSION MINUTES OF JULY 7, 1999: Mr. Burns, City Manager, recommended Council's approval to receive the Planning Commission Minutes of July 7, 1999. CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 3 RECEIVED THE PLANNING COMMISSION MINUTES OF JULY 7, 1999. 2. RESOLUTION NO. 48-1999 APPROVING A SUBDIVISION, LOT SPLIT, LS #99-01, TO CREATE TWO RESIDENTIAL LOTS, GENERALLY LOCATED AT 1132 MISSISSIPPI STREET N.E. (WARD 2): Mr. Burns, City Manager, explained that Ms. Monica Lane petitioned the City to split a 45,200 square foot lot at 1132 Mississippi Street for purposes of constructing a single-family dwelling. The proposed lots would be 85 feet and 75 feet wide and 17,942.25 square feet and 20,334 square feet in area. Staff recommended Council's approval with the following stipulations: 1) Petitioner shall e�tend current 10-foot easement along the entire western boundary; 2) Petitioner shall pay $750 park dedication fee for new lot prior to issuance of building permit; 3) Petitioner shall grant code required 12-foot utility and drainage easement along southern boundary of property; 4) Petitioner shall pay all water and sewer connection fees; 5) Petitioner shall record a 12-foot driveway easement along both sides of common property; 6) The current 15-foot private easement along eastern boundary of property shall be vacation, or new home and accessory building shall be set back 15 feet from the eastern boundary so as to not encroach into the easement. ADOPTED RESOLUTION NO. 48-1999. 3. RESOLUTION NO. ??-1999 TO APPROVE AN AMENDMENT TO THE COMPREHENSIVE SIGN PLAN FOR UNIVERSITY BUSINESS CENTER (7920 - 7996 UNIVERSITY AVENUE) (WARD 3): Mr. Burns, City Manager, explained that Duke Realty purchased these properties from Steiner Development and wished to amend the sign plan to accommodate their marketing objectives. Duke Realty would like to convert from gold lettering to white internally lit lettering. Since the proposed changes are consistent with the sign ordinance staff recommended Council's approval. ADOPTED RESOLUTION NO. ??-1999. 4. APPROVE TEMPORARY SIGN PERMIT FOR MICHAEL SERVETUS UNITARIAN CHURCH (6565 OAKLEY DRIVE N.E.) (WARD 1): Mr. Burns, City Manager, stated that the application asks for permission to display a temporary banner over Mississippi Street near Able Street. The banner advertises the church's annual Labor Day Auction. The banner would be displayed August 5 through September 7. Staff recommended Council's approval. APPROVED TEMPORARY SIGN PERMIT FOR MICHAEL SERVETUS CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 4 UNITARIAN CHURCH. 5. RESOLUTION NO. 49-1999 AUTHORIZING AN INCREASE IN EMPLOYER HEALTH INSURANCE PREMIUM CONTRIBUTIONS FOR THE 1999-2000 PLAN YEAR: Mr. Burns, City Manager, explained the cost of employee health insurance has risen by more than thirty percent (30%) for the ne�t health contract year (September 1, 1999 to August 31, 2000). Since the City has a good experience rating with its employees, staff recommended that Council adopt a self-insurance option with a stop loss carrier and a third party administrator. Mr. Burns stated that while the City's portion of the premium would not rise, its actual premium costs would increase from $378 to $488 per month for single coverage. Staff recommended approval of these new premium costs effective September 1, 1999. ADOPTED RESOLUTION NO. 49-1999. 6. CLAIMS: APPROVED PAYMENT OF CLAIM NUMBERS 88186 THROUGH 88443. 7. LICENSES: APPROVED LICENSES AS SUBMITTED. 8. ESTIMATES: APPROVED ESTIMATES AS FOLLOWS: Carl J. Newquist, Esq. Newquist & Ekstrum, Chartered 301 Fridley Plaza Office Building 6401 University Avenue N.E. Fridley, MN 55432 Services rendered as City Prosecuting Attorney for the Month of April, 1999 $ 17,347.67 Bituminous Roadways 2825 Cedar Avenue South Minneapolis, MN 55407 1999 Street Improvement (Sealcoat) Project No. ST. 1999 - 10 Estimate No. 1 $ 54,199.63 CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 5 Mayor Jorgenson asked if there were any questions or concerns from the public on any of the items. No persons in the audience spoke regarding the proposed consent agenda. MOTION by Councilmember Bolkcom to approve the consent agenda. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR JORGENSON DECLARED THE MOTION CARRIED UNANIMOUSLY. ADOPTION OF AGENDA: MOTION made by Councilmember Billings to approve the adoption of the agenda. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, MAYOR JORGENSON DECLARED THE MOTION CARRIED UNANIMOUSLY. OPEN FORUM VISITORS: Mayor Jorgenson invited members of the public to come forward to address any items not on the agenda. Mr. Richard Harris, 6300 Riverview Terrace, spoke regarding reopening the public hearing to take more testimony pertaining to the franchise fee. Mayor 7orgenson stated that the public hearing regarding the franchise fee was held two weeks ago. She stated that the public hearing could not be reopened. She stated that generally Council is very open to additional comments. Mr. Knaak, City Attorney, stated that the Council and the public could have discussion even though the information would not be classified under the public hearing but would be recorded for public record. Mr. John Howard, 7549 Tempo Terrace, inquired about the cost to operate Springbrook Springbrook Nature Center each year. Mr. Burns stated that the cost was in the neighborhood of $260,000. Mr. Howard stated he felt that was quite a lot of money. He thought the franchise fee was not very much being that it was only $3.00. He stated that he was more willing to pay it on the water bill. Mayor 7orgenson stated that Council would rather speak regarding the franchise fee later CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 6 under the Franchise Fee Ordinance. Mr. Bruce Steffen, 148 Gibraltor Road, stated that he had a question regarding the regulations for contractors who come to the community to do work in the City. He stated that when he wants to do work on his house, he has to buy a permit, take pictures, etc., yet when the contractors come to his home, they do it in one day and they are gone. He felt the building inspectors did not even see what the contractors do. Mayor Jorgenson stated that, technically, the contractors were supposed to apply for a building permit. The work also needs to be inspected. She stated the City has a brochure available regarding building permits and how to go about getting them. She stated that Mr. Steffen should speak with Barbara Dacy, Director of Community Development, or Scott Hickok, Planning Coordinator, regarding the work that was done on his house. Ms. Dacy stated that she would call Mr. Steffen to establish a time to meet with him. Mr. Steffen stated that the contractors had used residents' back yards for bathrooms. Councilmember Bolkcom stated that Mr. Steffen could telephone the Contractor's Division of the State of Minnesota. She said the State is very responsive to all complaints they receive because each person who is a contractor has to apply for a license. Ms. Dacy stated that she was not sure if a satellite bathroom was required for contractors. Councilmember Wolfe stated that having a satellite bathroom was an OSHA requirement, but he did not remember what the stipulations were. Mr. Lenny Brandt, 190 Craigbrook Way, stated that Springbrook Springbrook Nature Center was supposed to be all-volunteer from the beginning of the campaign to have a Springbrook Nature Center. He stated that he had always felt the Springbrook Nature Center was a big joke. He stated that the City was paying dearly for the Springbrook Nature Center, and he has not even been there. He stated that the City would have had all the money they needed had they built a golf course. Mayor Jorgenson stated that there was only one person on the Council who was on the Council at the time the Springbrook Nature Center idea came about. Councilmember Bolkcom stated that in a citizen survey a couple of years ago, there was an overwhelming response of people supporting the Springbrook Nature Center versus the golf course. The golf course would have only benefited a few people. The Springbrook Nature Center was one of the top ten areas for sightseeing in the Twin Cities. Mr. Brandt stated that he thought the people who were writing letters favoring the Springbrook Nature Center were people who did not live in Fridley. He thought the Springbrook Nature Center was a lousy place and should have been a golf course that CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 7 would have put Fridley on the map. He stated that he was going to have a referendum for the last vote, but he was getting too old for this. Mr. Harris, 6200 Riverview Terrace, stated that there was an article in the last Focus News pertaining to a City reserve fund of $35,000,000. He asked how the City accumulated $35,000,000 dollars and what the City was doing with it. He asked what happened to zero based budgeting. He stated the City was not supposed to be a profit- making organization. Mr. Billings stated that the $35,000,000 was not reserve money. Some was special assessment money that was being collected. When the City does a street project they bond for it and issue special assessments so people can pay over twenty years. During the time period the money is being collected, the money goes into the bank until the City starts paying off the bonds. The budget runs from January 1 to December 31, but residents pay property taxes in May, and the County gives the City its share of property taxes in July. The City has to have half of its money in the bank just to be able to pay the bills from January to July. When the City gets the first half of the money from the County there is not $35,000,000 of e�tra money sitting there. Mr. Harris asked just how much is sitting there. Councilmember Billings stated that he was not sure of what money Mr. Harris was referring to, and he was not able to tell Mr. Harris how much money is in reserves without researching it. Mr. Burns, City Manager, stated that he did not see the report Mr. Harris was referring to. He stated that a lot of the money was ear-marked for depreciation or replacement of the infrastructure like the storm sewer system. The City also needs a certain portion of it for working capital. He stated that the last number he saw was appro�mately $17,000,000 or $18,000,000. The money was also helpful because it generates interest revenue and helps to keep property taxes down. He stated that the City has been dipping into the reserves over the years at an increasing rate. The projected budget for this year shows the City using $1.3 million and ne�t year up to $1.5 million. The amount being used for property purposes has been reduced. If the City does not have the balance the bond rating would not be as high as it was. If you let the balance go down you do not have the interest rates to offset revenue. Mayor Jorgenson stated that some of the money was set aside for projects like Riverview Heights. She stated that the only thing being assessed back to the residents was the cost of concrete curb and gutter. The City does not assess for streets. Mr. Harris asked if the City's policy of not assessing for streets had changed. Mr. Burns stated that in 1992 the City started an annual neighborhood street reconstruction program, and, as Council policy, it was determined that the property owner CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 8 would only bear the cost of curb and gutter. CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 9 Mr. Burns stated that the report Mr. Harris saw in Focus News was an annual report the City was required to publish. Mr. Burns said the City was not disputing Mr. Harris' numbers. Mr. Harris stated that he was going to see if he could track the article down. Mayor 7orgenson asked the members of the public to state their name and address every time they speak at the podium so the recording secretary can accurately record the minutes. Mr. Burns stated that the Finance Department, in preparation for the franchise fee proposal, provided him with a statement of the City's reserve status. The Finance Department stated that the unreserved discretionary fund balances have decreased significantly. As of about six to eight weeks ago, the estimate for the end of 1999 would be $37,950,559 in reserves. Mr. Thomas Rafferty, 148 Horizon Circle, stated that he would like to see something done to control what was happening with everybody getting road rage. People pass on the inside when you stop to let someone cross the street and then they honk their horn. It was unsafe to walk down Main Street. If you put on your left turn blinker people will pass you on the inside going 50 m.p.h. in a 35 m.p.h. zone. He felt that someone was going to get killed unless the City did something about it; however, he did not know what to do. He has never seen anyone get a ticket. He would like Council to see what they could do to get some control. Mayor Jorgenson stated that there were two more police officers about to be hired to help out with this kind of thing. She stated that it was not only people who were speeding, it was people ignoring stop signs, traffic signals, not using turn signals, cutting in front of other people, etc. Councilmember Bolkcom asked if the speed sign could be put on Main Street. She also asked that the Police Department be alerted to the above-mentioned problems. Mayor Jorgenson thanked Mr. Rafferty. PUBLIC HEARING: 9. APPLICATION FOR SPECIAL LEGISLATIVE FUNDING FROM THE MINNESOTA DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT FOR THE TRUNK HIGHWAY 65 HIGHWAY IMPROVEMENT PROJECT DESIGN FEES: MOTION by Councilmember Barnette to open the public hearing at 8:20 p.m. Seconded by Councilmember Wolfe. CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 10 UPON A VOICE VOTE, ALL VOTING AYE, MAYOR JORGENSON DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING WAS OPENED AT 8:20 P.M. Ms. Dacy, Community Development Director, explained the purpose of the public hearing was to receive comment on an application that the City was making for the Department of Trade and Economic Development. The legislature recently allocated the City $500,000 to use toward fees for improvement on State Trunk Highway 65. In order to get the paperwork initiated the money was allocated to the State Department of Trade and Economic Development. Their procedure is to require a public hearing and submittal of an application. The Minnesota Department of Transportation insisted on a recent study for a sheet pile wall for State Trunk Highway 65 over Moore Lake. Ms. Dacy stated that the City was well aware of some of the traffic issues along this roadway over Moore Lake. It was been suggested that the study investigate the addition of a new northbound lane from the Lake Pointe intersection across to Moore Lake Drive and an additional southbound lane. The purpose of this improvement would be to improve traffic flow since the amount of traffic is expected to increase within the ne�t five to ten years. The City is making an application for Federal funding to pursue this project. The recommendation to Council tonight is to have the public hearing. The resolution will be considered later this evening. Once it is adopted, it would authorize the City to begin the application process. Councilmember Bolkcom stated that at the Planning Commission meeting there was a question if there would be any change in the lighting for the causeway. Ms. Dacy responded that they have not proceeded to that stage in design yet. Mayor Jorgenson asked if there would be an opportunity for the public to get involved more. Ms. Dacy stated that there would be more opportunities being that the City is at the beginning of the process. Councilmember Bolkcom asked if the actual median would be different--possibly more attractive. Ms. Dacy stated she could not answer that question at the moment because the project was only in the beginning phases of planning. Councilmember Wolfe asked about the additional lanes. Ms. Dacy replied that what was the shoulder of the road would become the third lane. Mr. Flora, Public Works Director, stated that the purpose of the study was to see if the CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 11 addition of two more lanes was possible across Moore Lake. Councilmember Bolkcom asked at what point the information from the study would be shared with the public. Mr. Flora responded that the first question was to determine if it was capable to build a new road over Moore Lake. Councilmember Bolkcom asked if the $500,000 was just to decide whether it could or could not be done. Ms. Dacy explained that the $500,000 was the allocation from the State for design and engineering fees for the project, if funded. The current study will determine if it can be as a sheet pile wall. Mayor 7orgenson asked if any members of the Council or the public had any additional comments regarding the public hearing. No other members from the audience spoke. MOTION by Councilmember Barnette to close the public hearing at 8:31 p.m. Seconded by Councilmember Wolfe. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR JORGENSON DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING CLOSED AT 8:31 P.M. NEW BUSINESS: 10. SPECIAL USE PERMIT, SP #99-04 BY JEFFREY VOGEL, GRACE EVANGELICAL FREE CHURCH, TO EXPAND THE EDUCATIONAL, ADMINISTRATIVE, AND GYMNASIUM SPACE OF THE CHURCH, GENERALLY LOCATED AT 755 - 73� AVENUE N.E. (WARD 1): Mr. Hickok, Planning Coordinator, explained that Grace Evangelical Free Church was applying for this special use permit to allow expansion of their educational, administrative and gymnasium space of the existing facility. The coniferous trees along the church property are intended to remain as part of this special use permit. The lot was relatively flat covered by existing church buildings, parking lot and landscaping. In 1964, the first building permit was issued. In 1983, Special Use Permit #83-13 was granted for an addition, and in 1990, there was a special use permit granted for an addition that would also be used for daycare. The special use permit for the daycare was null and void after a twelve-month period because the church failed to exercise its right and expand during that time. Staff recommended approval of this special use permit with stipulations. Churches are CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 12 permitted special use permits in an R-1 Zone District, and the expansion the church CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 13 proposes complies with the stipulations recommended by staff and approved by the Planning Commission. Mr. Hickok reviewed the architect's version of the original plan versus the newer step plan as proposed by the City. There is a distance of 80 feet from the back of the neighboring house to the church. Mr. Hickok reviewed the sight line from the house displaying the 39- foot high proposal versus the 36-foot high proposal. With a stepped 36 foot high wall, additional space was gained from the sight line. You would also gain a perception that you do not have a three story mass 80 feet away from the residential property. This eliminates nearly 1,000 square feet of space from the church administration building which was a concern for the church. Staff recommended that the east face of the administration building be broken into step components. Councilmember Bolkcom asked what the height requirement was for a single family home. Mr. Hickok stated that, typically, the overall height would be around 17 feet. A two-story home would be around 30 feet with the cutoffline being 35 feet. Councilmember Bolkcom stated that the building resembled an apartment building with the windows and the brick. Mr. Hickok stated that the design was done for massing purposes. Final details of the e�terior have yet to be made. The proposed detail of the e�terior for now was a mix of brick and stucco that would complement the brick element. There would also be a glass element that would match the brick and stucco features. Councilmember Wolfe asked Mr. Hickok if stepping of the church was something the church would have to do. Mr. Hickok stated that it was staff's recommendation to Council that the special use permit was a qualified permitted use in compatabilities and stipulations regarding compatibility to neighbors. Councilmember Bolkcom asked why the petitioner did not desire the stepping of the structure. Mr. Roland Peterson, spoke regarding the church's expansion. Mr. Peterson currently serves as the Chair at Grace Evangelical Church. He wanted to remind Council that the church had been part of Fridley since 1964, creating values and impacting lives of people. He stated that the church was growing and has a severe space need. The church has youth ministries, children's ministries, music ministries offering concerts, and a wide range of activities for the community. Mr. Peterson said the church has a severe need for space or they would not be requesting the addition. CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 14 Mr. Peterson stated that the church has no problem with the stipulations other than the one regarding the stepping of the building. There would be a loss of 1,000 square feet when they needed all the space they could get their ministry. The cost for stepping was also a concern. There would be another $200,000 added, which may make it impossible to complete the project. He stated that stepping would probably create roof problems with leaks. Mr. Peterson stated they would make the church very attractive to the neighborhood and would be able to adhere to all the stipulations except the stepping stipulation. He felt the church had responded appropriately by lowering the height to 36 feet. Mr. Scott Roberts, representative of Genesis Architect, who was working with Grace Evangelical Church, spoke regarding the architectural plans for the church. He stated that all of the stipulations were acceptable except for the stepping. Mr. Roberts presented diagrams to show the angles of view from the neighboring house pertaining to the height of the proposed version. He stated that City staff recommended stepping back 5 feet per floor to achieve the visual interests with the surrounding neighborhood. The church would like staff to consider the 36 foot height of the building versus stepping. He noted that the 36-foot height would accomplish the same goals in terms of blocking the sun or creating shadows as would the step version. Mr. Roberts stated that the base e�terior would be brick, and the upper floors would possibly be stucco to lighten the building and give it a smaller scale. He stated that as a consideration, the church does not have any issues with the other five stipulations including lowering the height to 36 feet, which is one foot above the requirements for residential, even though the church falls into commercial in terms of the guidelines. The church was trying to fit into the residential neighborhood which was what they were trying to do with the planning of the church. Councilmember Wolfe asked Mr. Roberts if the building could be built further into the ground. Mr. Roberts stated that it was possible; however, there was a real high water table. They could conceivably lower the building two feet, but it may present difficulties, internally, with circulation flow. Councilmember Barnette stated that many homes to the north have ground water problems. Councilmember Bolkcom stated that the City would have to determine exactly what causes the ground water problems. She asked if lowering the building two feet into the ground would lower the height to 34 feet. She asked if the church had any neighborhood input before they brought the plans to Council. CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 15 Mr. Roberts stated that there was communication to the neighborhood prior to the Planning Commission meeting via a handout that showed the plans and general views at that point in time. The church contacted the individual neighbors along the affected side. Mayor Jorgenson asked if any neighbors present would like to voice any concerns. Mr. Jim Sweeny, 7320 Jackson Street, stated that his particular concern was regarding the 28-foot height of the gymnasium. He strongly recommended lowering the height of that portion of the building. He asked how many trees were going to be put in for screening, how large the trees would be, and when they would be put in. He wanted the trees put in before the construction started. He stated that it looked like the trees were to be 20 feet tall. He stated that trees are dormant for two to three years after they are first planted. Councilmember Barnette asked Mr. Sweeny how tall the trees were in his yard at the present time. Mr. Sweeny responded that he has an 18-foot tree, a 14-foot tree, and some bushes that he would like to see replaced with trees. Councilmember Billings asked if Mr. Sweeny would like 20 foot trees planted in his yard. Mr. Sweeny stated that the tree would have to be 17 or 18 feet high if possible. Mr. Hickok stated that healthy trees of 14 feet have a good chance of surviving, but anything taller would need a lot of maintenance to survive. Ms. Gwen Nawrocki, 7310 Jackson Street, who was also a member of Salem Baptist Church in New Brighton, stated that Salem Baptist Church completed a building project. Grace Evangelical had Salem's sympathy because they know what Grace was going through. At first, Salem was not an attractive building. The neighbors did not like the church and dumped garbage in the church's yard and parking lot. The pastor of Salem asked the residents why they dumped the garbage. The neighbors said they did it because the church looked like a pink jail. If the congregation did not care about its appearance, neither did the neighbors. Now the church has been remodeled and looks very nice. It was getting a very good response from the neighbors. Ms. Nawrocki stated that she felt the trees were not as important as the appearance of the building. She wondered if the architects considered sloping the roof line rather than stepping. She stated that she felt the church needed to have an opportunity to grow, but they also needed to have a good looking building to attract the people in the community. She stated that Grace did not get in touch with Salem, so Salem did not know about the addition. A representative from Salem was not able to come to the first meeting due to a vacation. CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 16 Mr. Hickok stated that a sloped roof would reduce their third level and diminish the space they would need. He stated that staff's recommendation does not necessarily require flat roof steps. The roof could be pitched over each step, which would look very nice architecturally. It would also alleviate the flat roof problem. Ms. Barbara Sweeny, 7320 Jackson, stated that the big gymnasium was not needed to teach children about religion. She stated that they have to put up a lot with the church as neighbors, with the one-way street, and the noise and traffic. As a result, they have had to put up a fence to block out some of the congestion. Mayor Jorgenson asked if any other members of the public would like to express any concerns. Mr. Peterson explained that the church was really trying to be a good neighbor. He invited everyone to come and visit Wednesday evenings to view the type of ministry programs they have. He felt the gymnasium would provide an excellent ministry for them, especially with the problems youth are having today. He stated that he could not emphasize enough how much the church needed the space. The gymnasium would also function as a fellowship area for them. He stated that the church would like to continue being a part of Fridley, but if they are not able to expand they may have to move away. The church does not want to move. Councilmember Barnette stated that he knows the church has made a lot of accommodations and are good neighbors. He was sympathetic to the church. He felt that once the addition was done attractively the neighbors would not notice that it was a church. Councilmember Billings asked what the recommended stipulation regarding the e�terior of the church was. Mr. Hickok explained that the discussion supported all of the stipulations except the stepping of the church. Stipulation No. 5 was about the architectural banding that would take away the original appearance to create a triple paneled design. The church was certainly for banding to create a visual connection. Councilmember Billings asked about the elevation of the current floor level. Mr. Roberts stated that the e�sting entryway steps to the building are appro�mately 4 feet. It steps down 4 feet to the main sanctuary floor, and then another 4 feet to the lower level so that it was essentially tri-level. Councilmember Billings asked Mr. Hickok if the bottom line for stepping on the illustration was for purposes of seeing more sun, shade, etc. In terms of the sight line, he asked what the advantage was for stepping. CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 17 Mr. Hickok stated that there was a perceived presence, a mass that was created by a straight up wall that was an imposing feature from a distance. There was a psychological break of bringing the first step more in line with the scale that was around it, so if you look out you have a visual break of the building that stops your eye. Though it might not let a greater degree of sunshine in compared to a straight up wall, it does have the other feature about it that makes it more powerful as a structure and as close to a single story residence. Mr. Roberts stated that he felt the church could accomplish the goal of breaking down the scale just as adequately as having a base that is brick From there they could change the material to a beige color. Councilmember Bolkcom stated that it seemed there was still some work that could be done between the church and the neighborhood in trying to make the two groups feel more comfortable with the whole project. Mr. Roberts stated that the church was striving toward talking to neighbors individually. Councilmember Bolkcom asked if there was any way the two groups would have time to get together to discuss the matter in more detail to come up with some examples. Mayor Jorgenson asked when the church anticipated construction on the project to start. Mr. Roberts stated that they would like it to start in the spring. From the church's standpoint, it was very important for them to start their capital campaign and approve the plan so the design could start immediately. Councilmember Bolkcom stated that she thought this could be a win-win situation for everyone. She personally would not vote for this tonight because she felt there needed to be more details worked out. MOTION by Councilmember Billings to table consideration of this item, in order to ascertain the necessary information to fully examine and study the request, and to e�tend the review period for City Council action an additional si�ty days, and to notify the petitioner in writing of the si�ty-day e�tension as soon as possible. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR JORGENSON DECLARED THE MOTION CARRIED UNANIMOUSLY. Mayor Jorgenson stated that the neighborhood would be notified when this would be on the agenda. 11. RESOLUTION NO. 50-1999 AUTHORIZING APPLICATION FOR SPECIAL LEGISLATIVE FUNDING FROM THE DEPARTMENT OF CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 18 TRADE AND ECONOMIC DEVELOPMENT AND AUTHORIZING EXECUTION OF THE AGREEMENT (TRUNK HIGHWAY 65 HIGHWAY IMPROVEMENT PROJECT DESIGN FEES): MOTION by Councilmember Barnette to approve the adoption of Resolution No. ??-1999 authorizing application for special legislation funding from the Department of Trade and Economic Development and authorizing execution of the agreement (Trunk Highway 65 Highway Improvement Project Design Fees). Seconded by Councilmember Wolfe. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR JORGENSON DECLARED THE MOTION CARRIED UNANIMOUSLY. 12. FIRST READING OF AN ORDINANCE OF THE CITY OF FRIDLEY, MINNESOTA, AMENDING THE CITY CODE TO INCLUDE A NEW CHAPTER 409, ENTITLED "FRANCHISE FEES:" Mr. Burns, City Manager, summarized the proposal and addressed the definition of customer categories. The proposal for the franchise fee would levy what amounts to a sales tax on the utility bills provided by both Minnegasco and Northern States Power Company (NSP). For residential customers it would be a three percent (3%) sales tax that would cost an average of $36 per year for both utilities. For about ninety percent (90%) of the commercial and industrial customers there would be a flat rate charge costing them about $13 per month. For a majority of the commerciaUindustrial customers it would cost a couple of dollars per month. The revenues that would be accrued to the City as a result of the franchise fee would amount to about $716,000 per year. Mr. Burns stated that franchise fees are needed to balance the General Fund budget. The City had been gradually taking more money from fund balances. For the last six years the City has spent more than what it took in. Part of the reason was that over the last few years the City has added many new programs. The City has added five police officers and was anticipating adding a si�th one in the year 2000. The City started a housing inspection program. There are a lot of other items, as well, that the City has instituted in the last six years that represent considerable new cost to the General Fund budget without offsetting revenues. The franchise fees are needed to offset the state's changing definitions of property tax classifications. The money would give some fle�bility to address future issues and problems. It would also help to expand corridor maintenance over Highway 65, improve streetlights, and it would help to keep the City from drawing on balances for street reconstruction. Other things on the future horizon are: additional fire equipment and additional public safety personnel. The franchise fee would give the City more tax diversity than a property tax increase. It was incremental in nature. Mr. Burns felt it was easier to pay a couple of dollars per CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 19 month on a utility bill than pay $50 or so for property taxes. The franchise fee would CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 20 apply to all property. Since all properties are users of the services of the City it would enable the City to capture some of the costs of the services. The definitions of customer categories have been updated with the addition of Subsection 3 to Chapter 409 of the proposed ordinance. The customer categories are subject to change, and the City has defined those categories as those established by the two utility companies and approved by the Minnesota Public Utilities Commission. The definitions are available upon request at the Municipal Center. They will be posted on the City's Internet site for public inspection. The definition of a residential customer, as defined by the utility companies, was a customer who lives in a private residence and is served by a separate electric meter. Definitions of commerciaU industrial customers are based on the amounts of energy used which was a simple matter of determining. Mayor Jorgenson stated that she received many of telephone calls from residents trying to determine where they fit for customer categories. The residents called the utility companies and were told by the customer service representative of Minnegasco or NSP that they needed to ask the City. Mayor Jorgenson stated that she wanted to make sure the Minnegasco representative was aware of that. The information was on the gas bill on the lower portion of the bill. She stated that the City was trying to diversify the tax base in Fridley to be able to provide better services. That was why the City decided against raising property taxes. Mayor 7orgenson stated that she received a copy of the annual summary that Mr. Richard Harris referred to earlier. She explained that one of the largest components was for the Fridley Housing and Redevelopment Authority (HRA). Their budget of $10 million was included in the auditor's report. Mr. Harris stated that when a report was published like the one in Focus News, the City should tell the residents where that money was, who had it, and what was happening to it. Councilmember Bolkcom stated that besides putting it in Focus News, it could also go in the City newsletter. She stated that there were questions about why the money for the franchise fee was going to Minnegasco and NSP. She thought the City could explain what the HRA does and what the benefits are. Mr. Burns stated that one of the advantages of the franchise fee would be that the City would not have to bear the cost of collecting the fee. The City might be able to earn a little bit of interest on the fee to off-set their costs because the fees would be collected on a monthly basis. The City does not have access to Minnesgasco or NSP customer files so the money would have to go directly to the utility companies. Mayor Jorgenson stated that she received a lot of telephone calls from Fridley residents asking Council not to raise the property tax. Residents felt they were going to be taxed CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 21 right out their homes. The franchise fee would be based on personal consumption of electricity and gas. If a resident were a single person living in his or her home they would probably not consume as much as another resident would with a bigger house and/or a bigger family. MOTION by Councilmember Barnette to receive a letter from Independent School District 14. Seconded by Councilmember Wolfe. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR JORGENSON DECLARED THE MOTION CARRIED UNANIMOUSLY. The letter was received July 19, 1999 from Dr. Mary Ann Nelson, Superintendent, with regard to the school district's concerns about the franchise fee. Mayor Jorgenson stated that the City was trying to address the citizens' needs and concerns. Fridley's population was aging. She said that roads need to be replaced, and stores need to be replaced. The primary reason for the franchise fee was to help cover the costs without direct assessment. Mayor 7orgenson thanked the audience for attending the meeting. The public hearing on the franchise fee was held two weeks ago, but members of the audience would have the opportunity to speak this evening. Mr. Hank Melcher, 6500 Pierce Street, stated that his concern was that the City was changing the whole philosophy of taxation. He felt that as a homeowner he did not object to a higher property tax; however, he objected to the fact that what the City was trying to do was to move the tax base out to a sublime area where the City did not know how much tax revenue would be generated to the secondary tax. He was also concerned about the double tax for the schools and churches. Mr. Melcher asked if citizens would also have to pay a franchise fee on garbage haulers. He said he thought the City was screwing up with the little niches of having a pot here and a pot there and that the City has a potpourri of all kinds of neat stuff out there that was not funded. He stated the City should be up front with the citizens and say that it was money the City needed, to avoid getting into the reserve fund, which is unacceptable. He stated that he would rather have his property value taxed. Mayor Jorgenson stated that it was the legislature that came up with the franchise fee on the electric and gas utilities in order to help the citizens diversify their tax base. The legislature was redoing the tax system as we know it. Mr. Melcher said the entire tax system was being diffused. He felt that paying property tax was his contribution to helping run city government. Mayor Jorgenson stated that the legislature tinkers with the funding formula. When they CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 22 do that, the City ends up having the shortfalls of funding. The City was constantly CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 23 playing catch-up trying to figure out how they could continually balance the budget, never knowing for certain what the City was going to be paid. Mr. Melcher asked if the City had to do an audit function for the City to figure out what NSP and Minnegasco were paying the City. Mayor 7orgenson stated that there would be some auditing procedures. The maximum that the percentage fee could go up in twenty years was one percent. Mr. Melcher stated that he thought the City was opening the door for taxation in other places. Mr. Burns said the State legislature did not permit the City to do that. Mr. Melcher thanked Council. Councilmember Wolfe asked for clarification on ta�ng the schools. Councilmember Billings stated that it was a mechanism to collect revenues to collect money from some of the sources that are receiving services from the City but are not paying anything to the City at the current time. Councilmember Bolkcom stated that another example of where the City was giving back to the schools was by providing a police officer for the school. Mr. Burns stated that the franchise fee would generate $716,000. The City probably could not raise that amount of money through additional property taxes. Mr. Edwin H. Sevorsky, 491 61gt Avenue, stated that he was against the franchise fee. He asked how long the three percent (3%) franchise fee was going to last. Councilmember Barnette stated that the franchise agreement could only go up one percent (1%) in the ne�t twenty years. Mr. Sevorsky stated that he was paying six and one-half percent (6.5%) already on his gas and electric bill. He felt that payment was already his three percent (3%). Mr. Barnette stated that it really was not that much of an addition. It was a reasonable way to do generate funds but was not too intrusive. Councilmember Bolkcom stated that the City would have to hold a public hearing in order to increase the franchise fee. Mr. Lenny Brandt, 190 Craigbrook Way, asked how the franchise fee would affect churches. CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 24 Mayor Jorgenson stated that churches would be subject to it also. They pay sales taxes just like members of the public. Mr. Brandt stated that this way people would be paying double tax for schools and churches. He felt the schools and churches should be excluded. Mayor Jorgenson stated that people from other cities use the schools and church services in Fridley. Mr. Leslie Coyle, 6271 Si�th Street, has lived in Fridley for forty years. He felt the homeowners and the little guy were responsible for paying the bill versus the big businesses. Mayor 7orgenson stated that the big businesses like Medtronic are paying more property taxes than all of the members in the room. The only assistance Medtronic was getting was parking ramp assistance from the HRA. That was a separate ta�ng jurisdiction. Single family homeowners are not being taxed for that development. The money coming from that development would come from the increase in property value and would be reused on that property. Mr. Donald Giorgio, 185 Craigbrook Way, stated that he did not want the Springbrook Nature Center to be built. He suggested that the residents of Fridley be able to get in to the Springbrook Nature Center free of charge, but have non-residents pay of $3 or $5 per person, so they are paying a tax and not the residents. Mayor Jorgenson stated that she probably would have to pay someone $40,000 a year at the Springbrook Nature Center to collect the admission as tax. She stated that the City has looked at keeping the Springbrook Nature Center open only a portion of the day versus 24 hours a day. Mr. Giorgio stated that he thought si�ty percent (60%) of the people who use the Springbrook Nature Center were not from the City of Fridley. He said he is tired of paying $250,000 per year for the Springbrook Nature Center. Mr. Gary Brisbin, 7560 Brigadoon Place, stated that this was a very complex and difficult situation. Taxes, of course, are the price people pay for civilization. He thought that Council was doing a great job dealing with the situation. The public might disagree with Council and think they could have done it better. Nonetheless, Council has really struggled with the issue. He thanked Council for listening to the public all night. Mayor Jorgenson thanked Mr. Brisbin. Mr. Richard Harris, 6200 Riverview Terrace, stated that the City's basic problem was that the tax base was too narrow. A study was done previously when he was involved with the CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 25 City. Before the City took on the great River Road Park and one other project, they found that less than 34 percent of Fridley land was being taxed. He suspected it was less now. There were large tracts of land that paid no property taxes, and there was a large tract of land that was administered by the U. S. Navy that pays no property tax. Mr. Harris stated the City of Fridley tried to levy taxes against the City of Minneapolis Waterworks but was unsuccessful because Minneapolis is considered a city of the First class by the State of Minnesota, while Fridley is considered a city of the Second class. A Second class city cannot levy taxes against a First class city. Mr. Harris stated that Burlington Northern Railroad, who has large chunks of land, pays four percent (4%) gross earnings tax to the State of Minnesota. He stated that he felt the legislative session did not do the City of Fridley any favors. He said he understood the franchise fee was going to tax everybody including the U. S. Navy. Mayor Jorgenson stated that was correct. Mr. Harris stated he wanted to be in attendance when the City attempts to collect the bill from U. S. Navy, the City of Minneapolis and Anoka County. Mayor Jorgenson confirmed that everybody pays taxes. Mr. Harris stated he asked the representative from NSP if someone would be taxed if their billing address was not within the City of Fridley. Mr. Swintek said he would get back to him about that. Mr. Harris stated that he thought there were basic flaws in the ordinance. He thought a lot of people would fall through the cracks. Mr. Harris stated that he thought machine shops would hit the limit for the franchise fee because it takes a lot of energy to get the motors running. He stated that the franchise fee tax was by meter, not by individual owner. Mr. Billings stated that according to NSP, there are only thirteen users that would hit $150 dollars. Mr. Burns stated that ninety percent (90%) of the customers would be paying less than $13.00 per month. There were also safeguards to make sure that the smaller users in the larger categories did not pay exorbitant amounts of franchise fees. Mr. Burns suggested that Mr. Harris come in to the Municipal Center to meet with him. Mr. Burns stated that some single entities do have multiple meters. They would pay the flat fee which, for the most part, would be a couple of dollars a month. Mr. Harris stated that with the school district paying $10,000 for the franchise fee it would not be fair because that is one entity with multiple meters. CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 26 Mr. Burns stated that you could start eliminating the meter concept, then they would be paying three percent (3%) of their total bill. Mr. Harris stated that it appeared the franchise fee was going in because of Medtronic. He thought the e�tra police officers were being paid with federal money. Mr. Burns stated that the City does have some grant money for police officers. The one starting ne�t year will have federal money that will provide a large part of the salary for three years. The City has budgeted appro�mately $8,000 for the police officer starting ne� year. Mr. Harris asked if the City would be talking about this tax if the Medtronic building had not been built. Mayor Jorgenson and Mr. Burns both answered in the affirmative. Mr. Harris stated that he would be very surprised if Medtronic was not up and paying its own way within five to seven years. Mr. Burns stated that he thought, overall, the City would benefit very well from Medtronic. Mr. Harris stated that the whole property tax thing was smoke and mirrors. Councilmember Barnette stated that Mr. Harris raised a lot of good questions, especially the one regarding the billing address for the franchise fee. Mr. Harris stated that he was not against the Springbrook Nature Center or parks, but it is a very expensive system. He thought Council should be up front with folks, and tell them where their money is going. Mayor Jorgenson thanked Mr. Harris for bringing up some very good points. Mr. Al Swintek, Reliant Energy/Nlinnegasco, apologized for any confusion regarding the customer service department not being able to answer residents' inquiries. He stated that classifications of customers was something that should be very easily answered, but if someone asked the question regarding what the franchise fee was associated with that rate class, it was possible that the customer service representative did not know that information. The fees in the ordinances may be where the breakdown occurred. Mr. Swintek said he would follow up with the customer service department. Mr. Harris asked what the City would do if the U. S. Navy and the City of Minneapolis refused to pay. Minneapolis is First class, and a city of the Second class cannot levy taxes against a city of the First class. CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 27 Mr. Knaak stated that those distinctions are not meaningful anymore. Fridley is a charter city, and that is the only distinction. CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 28 Mr. Thies, NSP, stated that the telephone agents would provide the accurate customer classifications for any customers calling in. They could also call Mr. Thies directly at 612- 493-1631. Mr. Swintek stated that the telephone number to call Minnegasco for any questions would be 612-321-4727. Mr. Swintek's direct number is 612-321-4799, if there are any problems. Mr. Swintek stated that it is really helpful to have account numbers handy when customers call. Mayor Jorgenson asked if any other members of the audience had any comments. No other persons in the audience spoke. Mayor Jorgenson stated that they would be taking a vote on the first reading, but the results of that vote did not mean that if it passes, the franchise fee would remain as it was. Council would continue to look for additional information regarding the questions of mailing addresses and multiple meters. Councilmember Bolkcom stated that Council would be watching the franchise fee very closely to see what kinds of issues they have and what kind of revenues were generated. Councilmember Wolfe asked if there would be any possible changes in the franchise fee. Mr. Burns stated that at this point there would not be any more changes. He said he would be very happy to look at what Mr. Harris brought up. MOTION by Councilmember Bolkcom to approve the first reading of an ordinance amending the City Code to include a new Chapter 409 entitled "Franchise Fees." Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR JORGENSON DECLARED THE MOTION CARRIED UNANIMOUSLY. INFORMAL STATUS REPORTS Councilmember Bolkcom stated that a letter would be mailed this week regarding the Craig Way area signs stating that there would be a meeting at 7:00 p.m. on August 4 at the Municipal Center. She will be there as well as Mark Daily, from Anoka County. Councilmember Billings stated that on Tuesday, Wednesday and Thursday of this week there would be a series of ineetings on the commuter rail project. The public meeting will be at Fridley Municipal Center Thursday on July 29 from 4:00 p.m. to 7:00 p.m. CITY COUNCIL MEETING OF JULY 26, 1999 PAGE 29 ADJOURN: MOTION by Councilmember Bolkcom to adjourn the meeting. Seconded by Councilmember Wolfe. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR JORGENSON DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE JULY 26, 1999 MEETING OF THE FRIDLEY CITY COUNCIL WAS ADJOURNED AT 11:32 P.M. Respectfully submitted, Signe L. Johnson Nancy J. Jorgenson Recording Secretary Mayor