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12/08/2003 - 29231CITY OF FRIDLEY CITY COUNCIL MEETING MINUTES DECEMBER 8, 2003 The regular meeting of the Fridley City Council was called to order by Mayor Lund at 7:30 p.m. PLEDGE OF ALLEGIANCE: Mayor Lund led the Council and audience in the Pledge of Allegiance to the Flag. ROLL CALL: MEMBERS PRESENT: MEMBERS ABSENT: Mayor Lund, Councilmember Barnette, Councilmember Billings, Councilmember Wolfe and Councilmember Bolkcom. None. APPROVAL OF PROPOSED CONSENT AGENDA: 1. RESOLUTION NO. 67-2003 RECEIVING THE FEASIBILITY REPORT AND CALLING FOR A PUBLIC HEARING ON THE MATTER OF CONSTRUCTION OF CERTAIN IMPROVEMENTS: NORTH PARK NEIGHBORHOOD STREET IMPROVEMENT PROJECT NO. ST. 2004 —1. Dr. William Burns, City Manager, said the resolution received the preliminary report and called for a public hearing on the 2004 street reconstruction project. The project included portions of Lynde Drive, Regis Terrace, Regis Trail and the reconstruction of the University East Service Drive between 61St Avenue and Mississippi Street. Staff recommended Council's approval. ADOPTED RESOLUTION NO. 67-2003. 2. RESOLUTION NO. 68-2003 ORDERING PREPARATION OF REPORT ON IMPROVEMENT: WOODSIDE COURT STREET IMPROVEMENT PROJECT NO. ST. 2004 — 2. Dr. William Burns, City Manager, stated that under the terms of the Theilmann Plat, the City would construct the extension of Woodside Court, borne by the developer. The resolution initiated the assessment process. Council's approval. ADOPTED RESOLUTION NO. 68-2003. development of the with the costs to be Staff recommended FRIDLEY CITY COUNCIL MEETING MINUTES OF DECEMBER 8. 2003 PAGE 2 3. RESOLUTION NO. 69-2003 ACCEPTING THE PRELIMINARY REPORT, WAIVING PUBLIC HEARING, AND ORDERING FINAL PLANS AND SPECIFICATIONS: WOODSIDE COURT STREET IMRPOVEMENT PROJECT NO. ST. 2004 — 2. Dr. William Burns, City Manager, said the resolution ordered the preparation of the final plans for the Woodside Court Extension Project. Staff recommended Council's approval. ADOPTED RESOLUTION NO. 69-2003. 4. RESOLUTION NO. 70-2003 AUTHORIZING A PRELIMINARY AGREEMENT FOR THE REPLACEMENT OF THE TRAFFIC CONTROL SYSTEM ON T.H. 47 (UNIVERSITY AVENUE) AND 69 AVENUE. Dr. William Burns, City Manager, stated that this was an agreement with the Minnesota Department of Transportation that would provide for signal replacement at State expense. Under the terms of the agreement, MnDOT would pay $228,000 of the $240,000 total cost. While the City was responsible for $12,000, the money was reimbursable from the City's state aid account. Staff recommended Council's approval. ADOPTED RESOLUTION NO. 70-2003. 5. RESOLUTION NO. 71-2003 IN SUPPORT OF AN APPLICATION FOR A MINNESOTA LAWFUL GAMBLING PREMISE PERMIT FOR FRIDLEY LIONS CLUB (JOE DiMAGGIO'S) (WARD 2). . Dr. Willia,n Burns, City Manager, stated the proposed lawful gambling premise permit application was for a two-year renewable permit. The current permit expired on February 28, 2004. Staff recommended Council's approval. ADOPTED RESOLUTION NO. 71-2003. 6. RESOLUTION NO. 72-2003 IN SUPPORT OF AN APPLICATION FOR A MINNESOTA LAWFUL GAMBLING PREMISE PERMIT FOR CLIMB THEATER (AMF BOWLING CENTERS, DB/A MAPLE LANES) (WARD 2). Dr. William Burns, City Manager, stated the proposed application was for a two-year renewable permit. The current permit expired on February 28, 2004. Staff recommended Council's approval. ADOPTED RESOLUTION NO. 72-2003. 7. CLAIMS. APPROVED CLAIM NOS. 114363 THROUGH 114510. FRIDLEY CITY COUNCIL MEETING MINUTES OF DECEMBER 8, 2003 PAGE 3 8. LICENSES. APPROVED THE LICENSES AS SUBMITTED AND AS ON FILE. 9. ESTIMATES. APPROVED THE FOLLOWING ESTIMATE: Midwest Asphalt 5929 Baker Road Suite 420 Minnetonka, MN 55345 Hickory Drive Watermain Replacement Project No. 350 Estimate No. 4 $11,395.53 Councilmember Barnette asked what constituted the replacement of a traffic signal. Mr. Jon Haukaas, Public Works Director, said MnDOT had a program of signal upgrades. They sent a notice to several cities that had signal systems that fell under their criteria and said they had money available. The signal at 69t" Avenue and University Avenue was one of the signals. No one in the audience spoke regarding the proposed consent agenda. MOTION by Councilmember Barnette to adopt the agenda as presented. Seconded by Councilmember Wolfe. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. ADOPTION OF AGENDA. MOTION by Councilmember Bolkcom to adopt the agenda as presented. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. OPEN FORUM, VISITORS. Mr. Jerry Bahls, 7514 Alden Way N.E., issued an invitation to the annual Audubon Christmas Bird Count on Saturday, December 20, 2003. They will meet at the Springbrook Nature Center. Ms. Pam Reynolds, 1241 Norton Avenue N.E., spoke about the Met Council's Blueprint and the City's Comprehensive Plan including research, demographics, future development and FRIDLEY CITY COUNCIL MEETING MINUTES OF DECEMBER 8, 2003 PAGE 4 redevelopment. She asked Council to call for a moratorium on redevelopment and development until such time as the citizens of Fridley can be actively involved in the Comprehensive Plan. Throughout the process, she said there was one part that kept getting left out and that was the citizens. She did not want the City to become filled with multi-family homes and apartment buildings. She stated in the long run it was the citizens who had the right to decide. Ms. Joanne Zmuda, 6051 Fourth Street N.E., said she was watching the last Housing and Redevelopment Authority meeting and the word "blight" was brought up in conjunction with the Gateway West project. She asked what the definition of "blight" was and where it was defined. She lived a block off of the University Avenue Service Drive. If a developer wanted to build townhomes or condominiums in an area and the homeowners in that area did not want to sell, could someone from the HRA or whoever did the housing inspections determine whether a home was blight. Mayor Lund said they would not have inspectors going to homes on behalf of the developer trying to find things that would be code deficient in order to condemn homes or consider them blight. Dr. William Burns, City Manager, suggested that staff contact Ms. Zmuda regarding this matter. PUBLIC HEARINGS: 10. CONSIDERATION OF THE 2004 CITY OF FRIDLEY BUDGET. MOTION by Councilmember Billings to waive the reading of the public hearing notice and open the public hearing. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Mayor Lund indicated that Items 11 and 12 on the agenda would be continued until January 5, 2004. Ms. Donna Reisner, 6424 Pierce Street N.E., wanted to let staff know there were new people living in the area. Councilmember Bolkcom said if anyone did not get a letter to call and talk with someone from the Community Development Department. Councilmember Barnette said the letters were also sent to people who attended previous meetings and left their addresses. Mayor Lund asked what the process was for mailing the letters. Mr. Scott Hickok, Community Development Director, said the letter went out to an area of about 500 feet from the boundary of the property in all directions. FRIDLEY CITY COUNCIL MEETING MINUTES OF DECEMBER 8, 2003 PAGE 5 Mayor Lund asked where the addresses came from. Mr. Hickok said they did the best they could from the assessor's data. The information was updated on a regular basis. In addition to the name, they also included "current owner" on the envelope. Dr. William Burns, City Manager, began his presentation on the 2004 budget. He stated the State legislature session resulted in a loss of $733,000 in state aid for 2003. Another $1.1 million was lost for 2004 and $1.75 million was lost for 2005. By 2005, the City will have lost 86 percent of its state aid revenue. The cuts in State aid were done in order to balance the state's budget and get rid of a$4.2 billion state deficit. There were a number of issues in the legislative session that impacted Fridley. With respect to the Northstar Corridor Project, no money was designated at the State level. The City was involved with three legislative issues. One was to prevent wine from being sold in grocery stores. The City assisted the School District unsuccessfully in promoting authority to create a levy for the operation of the Community Center. The City was also involved in trying to keep the County from creating an economic development authority with taxing powers in the City of Fridley. He said a major concern was with levy limits and the question of whether or not they would be established for 2005. The City was also concerned with what the State would say about an alternative civil process the Police Department was considering for traffic enforcement. Dr. Burns stated that this year's budget issues were addressed by a yearly council/commission survey and were discussed during the budget work sessions. One of the biggest issues was the Springbrook Nature Center and whether or not Council would support eliminating funding for the Springbrook Nature Center. They debated eliminating contributions to a number of outside agencies, such as Values First, Mediation Services of Anoka County, `49er Days, the Fridley Youth Sports Association, etc. They discussed the curfew violation center and the fact that the budget did not provide for its continuation. They talked about utility rates and the need for a 9 to 10 percent utility rate increase. They looked into levying back 60 percent of the lost 2004 local government aid, which was allowed by the State. Council opted to levy that back. During the second budget work session held in October, the Springbrook Nature Center was a main concern. Ultimately, Council decided not to put the question of the funding for the Springbrook Nature Center on the ballot in 2003, but to put it on the ballot in 2004. In the interim, $265,000 was reallocated for the Springbrook Nature Center with the understanding that new fees would be raised by Nature Center staff and the Springbrook Nature Center Foundation. Another major issue was whether or not City employees would be given a cost of living adjustment. Council informally decided that a 2 percent cost of living adjustment would be allowed. Employee health insurance was also discussed. Another important issue was the replacement of the Fire Department's self-contained breathing apparatus. Council put $193,000 back in the budget for that equipment. Values First dues in the amount of $5,700 were put back in the budget, and $4,000 was put back in the budget for support of the Fridley Youth Sports Association. Dr. Burns said that during the year, staff had been working with a consultant to determine the cost of delivering certain City services and to adjust fees accordingly. The results were discussed with Council during the October work session. The fee increases amounted to around $98,000 and were primarily in the community development and public safety areas. FRIDLEY CITY COUNCIL MEETING MINUTES OF DECEMBER 8, 2003 PAGE 6 Dr. Burns said overall, the 2004 budget was almost $1.3 million less than what was budgeted in 2003. The general fund budget was $637,670 or 4.9 percent less. Overall, 8.8 percent was taken out of the 2003 budget for 2004. The departments most impacted by the general fund cuts were the Public Works Department and the Recreation Department, although every City department suffered some cuts. There were also a number of personal service cuts that amounted to $308,168 or 3.34 percent. The number of employees who were in the 2003 budget but were not in the 2004 included 9 full-time and 4 part-time employees. Dr. Burns said cost of supplies went up by $124,733. That was attributable to the purchase of the self-contained breathing apparatus. Contractual services went down by $235,545 or 9.75 percent. There were many different cuts in different service areas, including the City's contribution to the North Metro Mayors Association, expenditures for national conferences by City staff and Council, the City's contribution to Mediation Services for Anoka County, University Avenue corridor mowing, attendance at warming houses and other items. Dr. Burns said $206,600 was budgeted for capital outlay expenditures. The equipment purchases were limited to four small dump trucks for Public Works and four police cars. The next category of funding was the Special Revenue Funds. Included in that was the Cable Television Fund which was budgeted at almost $10,000 less in 2004. The most controversial item was the elimination of public access cable programming. A maintenance contract on the City's cable television equipment was also cut. The Grant Management Fund was a Special Revenue Fund that was used to account for federal and state grants. The costs in 2004 would be $72,182 or $118,454 less than 2003. The reduction reflected the loss of grant funding for a police officer and a youth specialist. The Solid Waste Abatement Fund which was a Special Revenue Fund was down by $12,500. The decrease reflected the elimination of the yard waste site. The Police Activity Fund, another Special Revenue Fund, was budgeted at $478,393 or $138,198 more than what was spent in 2003. The money will be used for three school resources officers and technological improvements in the Police Department. Dr. Burns said $65,000 was budgeted in the Capital Projects Fund. The amount was somewhat misleading in that it included $600,000 that was funded from a combination of State aid, special assessments and the storm water fund. Those outside revenues did not show up as part of the 2004 budget. Everything else, except far a$15,000 improvement to the police evidence room, had been taken out of the capital improvements budget. Dr. Burns said the Enterprise Funds was another major area of budgeting. They were not in the official budget for the City. In 2004, they would be spending $12.6 million from four funds. The Water Fund was close to $2 million. The Sewer Fund was $3.7 million. He said that 73 percent of all costs from the Sewer Fund were attributed to sewage treatment. The Storm Water Fund was up a little. The Municipal Liquor Fund increased by $376,000, which was for the cost of goods sold. The amount of $450,000 was transferred to the General Fund from this fund. Dr. Burns said with respect to the tax impact of the 2004 budget, the $657,890 cost of the 60 percent levy back will add about $70 to the cost of property taxes on the average value Fridley home. He discussed fund balances and the financial health of the City. He said the amount in the General Fund had been declining. Between the end of 2002 and the end of 2004, $2 million FRIDLEY CITY COUNCIL MEETING MINUTES OF DECEMBER 8, 2003 PAGE 7 would be lost in fund balance in the unreserved discretionary area. Since 2000, fund balance had declined by around $4.7 million. The 2004 budget would require $927,322 from fund balance. On the revenue side, notwithstanding cuts and fee increases for 2004, the City would be using $1.9 million in internal transfers to balance the budget. He said the internal transfers would come from the Liquor Fund and the Police Activity Fund. Altogether, $1,891,000 was being transferred from internal funding sources to support the General Fund. Dr. Burns said with respect to external environment, this year's research revealed that while construction had rebounded, it was still not back to where it once was. The number of jobs in Fridley was shrinking alarmingly. Between 2001 and 2002, the City lost over 1,000 jobs, and 622 of them were in the manufacturing area. Unemployment had remained fairly constant at 4.56 percent. It was similar to the unemployment average for the metropolitan area, as well as for the State of Minnesota, and was less than the national unemployment rate. He said it remained unclear as to what impact, if any, those changes would have on demand for public services. There was an increase in crime rates. The major offenses or the Part I crimes which were murder, rape, robbery, etc., decreased somewhat. The incidents of smaller, less significant crimes, particularly disorderly conduct, increased. In looking at food stamps and cash assistance from Anoka County, there was a slight increase. In checking with School District 14, there was a decline in the use of free or reduced meals. There was not a consistent pattern and it was hard to determine how the economic environment actually impacted the demand for services. Dr. Burns said the budget before Council reflected the restoration of Springbrook Nature Center funding, and Council's decision to grant employees a 2 percent cost of living adjustment. While it included the 60 percent levy back of lost State aid revenue, it authorized a 1.8 percent rather than a 9.2 utility rate increase requested by staff. Discretionary fund balances would shrink from $19.3 million available in 2002 to just over $17 million at the end of 2004. Dr. Burns said they needed to be concerned with what the State legislature did with levy limits. Additional revenues should be sought for support of the Springbrook Nature Center. The need for improvements to the City's three utility systems required rate increases greater than the amount currently allowed by the City Charter. To correct this problem, the City should seek a Charter change that allowed the City to raise utility rates without voter approval or take a sizeable rate increase to the Fridley electorate in 2004 for approval. He thought the City should continue efforts to locate a new Fridley liquor store in the Wal-Mart area. Additional budget reductions would be necessary for 2005. He stated that the budget before Council was proactive in that it represented a strong effort to reduce services and increase revenues. Those adjustments needed to be expanded more in 2005, in a manner that allowed Fridley to maintain strong essential services without destroying City reserves. Dr. Burns presented the 2004 budget for Council's consideration. Councilmember Barnette asked why it appeared that it would be necessary to go to a referendum on utility costs. Dr. Burns said the biggest issues were the capital improvements that were necessary to keep the utilities in operating condition. FRIDLEY CITY COUNCIL MEETING MINUTES OF DECEMBER 8, 2003 PAGE 8 Councilmember Barnette mentioned the sewer rates and said they were really out of the City's hands. Dr. Burns said while they would choose to reduce the cost of sewer operations, the City only controlled about one-fourth of the costs. Councilmember Barnette said there were a lot of things the City did not have control over and the Charter limited the City's ability to charge for them. Dr. Burns said they tried to stretch capital improvements out by borrowing and paying debt service on them, but with an inflation rate of 1.8 percent, it was very difficult to provide a new water storage tank without asking for more than that. Mr. Richard Harris, 6200 Riverview Terrace N.E., asked about fiscal disparities. Dr. Burns said the City was a contributor because of its industrial tax base. Mr. Harris said that on the proposed taxes for 2004 he received on his industrial property, there was a large increase in fiscal disparities. He asked that was given back to the City. Mr. Richard Pribyl, Finance Director, said he was in the process of reviewing this matter to try to account for the increase. Councilmember Bolkcom asked Mr. Pribyl to explain what fiscal disparities was. Mr. Pribyl said when it came to the valuation of commercial and industrial properties and trying to put each of the communities on an equal footing, all the communities had to share in value increases. Anytime we wound up having new valuation as it related to commercial and industrial value, the City had to contribute a portion of that to the pool. Anoka County was in charge of the distribution from the pool to each of the communities. It was an attempt to try to equalize the valuation. Councilmember Barnette said that because Fridley had a large commercial and industrial base, a community like Andover, which had very little commercial and industrial properties, received some of Fridley's money. Mr. Pribyl agreed. Mr. Harris asked about the general tax. Dr. Burns said he thought it went back to the school districts. It was something that was enacted in 2001 as part of the tax reform and it represented a shifting around of money. They took a piece of the commercial and industrial tax base out from under the City's general jurisdiction and placed it in a separate category that was controlled by the State so that the State could take over all the mandated services for the education system. The State was the levying agent. � FRIDLEY CITY COUNCIL MEETING MINUTES OF DECEMBER 8, 2003 PAGE 9 Mr. Harris said the City was not participating in the general state tax. Dr. Burns said that was his understanding. Councilmember Billings said the money went to the State's general fund. He said Mr. Harris would need to contact his State representative and senator. Mr. Harris asked if there was going to be a hearing on the taxes for 2004. Mayor Lund said this was the public hearing on the 2004 budget. Mr. Harris asked about the property tax valuations. Councilmember Billings said that would be taken care of in the spring at the City's Board of Review hearing. When Mr. Haxris received his taa� statement from the County in March or April, there would be some dates listed for the City's Board of Review and the County's Board of Equalization. Councilmember Barnette asked why there was an increase on commercial, industrial and residential properties. Mr. Pribyl said the State tax was one that the City could not reconcile. There had been an effort by the legislature to move some of the tax burden to the residential properties. Councilmember Barnette asked if Mr. Harris's situation was different. Mayor Lund said it was not. Councilmember Billings said the State legislature kept tinkering with the formulas. This was the end result. Mr. Harris asked who at the State level set the general State tax. Councilmember Billings said he thought the rate was set by statute and then applied to the valuations. Mayor Lund asked if anyone wished to address the City Council on the 2004 budget. There was no response from the audience. Councilmember Billings said by statute the budget could not be approved at this meeting. He asked if the hearing had to be continued or of it could be closed. Mr. Pribyl said the hearing could be closed. At the next Council meeting on Monday, December 15, 2003, the Council would be considering a resolution to formally approve the budget and the tax levy. FRIDLEY CITY COUNCIL MEETING MINUTES OF DECEMBER 8, 2003 PAGE 10 MOTION by Councilmember Billings to close the public hearing on the 2004 City of Fridley budget. Seconded by Councilmember Ann Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 11. CONSIDERATION OF A REZONING REQUEST, ZOA #03-02, BY TOWN CENTER DEVELOPMENT, LLC, TO REZONE PROPERTY FROM C-1, LOCAL BUSINESS; C-2, GENERAL BUSINESS; M-1, LIGHT INDUSTRIAL; AND C-Rl, GENERAL OFFICE TO S-2, REDEVELOPMENT DISTRICT TO ACCOMMODATE REDEVELOPMENT. GENERALLY LOCATED AT 1282 MISSISSIPPI STREET; 6490, 6400, 6352 AND 6300 CENTRAL AVENUE; AND 1271 EAST MOORE LAKE DRIVE (WARD 2)(CONTINUED NOVEMBER 24, 2003 . MOTION by Councilmember Wolfe to continue the public hearing until January 5, 2004. Seconded by Councilmember Barnette. Councilmember Bolkcom said the reasons the public hearing was being continued were to allow the developer to hold a meeting on Saturday, December 13, at 2:00 p.m. at Sandee's Restaurant, and to receive traffic counts. Councilmember Wolfe said they were also waiting for more information on different uses for the building. Councilmember Billings said at the last meeting there was a motion passed to extend the 60-day period for a second 60-day period. Mr. Hickok, Community Development Director, agreed. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 12. CONSIDERATION OF A PRELIMINARY PLAT REQUEST, PS #03-08, BY TOWN CENTER DEVELOPMENT, LLC, TO CREATE TWO SEPARATE LOTS TO ALLOW FOR THE CONSTRUCTION OF A SENIOR HOUSING DEVELOPMENT, GENERALLY LOCATED AT 1282 MISSISSIPPI STREET AND 6490 CENTRAL AVENUE (WARD 2)(CONTINUED NOVEMBER 24, 2003). MOTION by Councilmember Wolfe to continue the public hearing until January 5, 2004. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING MINUTES OF DECEMBER 8, 2003 PAGE 11 13. CONSIDERATION OF MODIFICATIONS TO THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1 AND THE TAX INCREMENT FINANCING PLANS FOR TAX INCREMENT FINANCING DISTRICTS NOS. 1 2, 3, 6, 7, 9,10,11,12,13,14,16 AND 17. MOTION by Councilmember Bolkcom to waive the reading of the public hearing notice and open the public hearing. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Grant Fernelius, Assistant Housing and Redevelopment Authority Director, said the action concerned modification to the City's redevelopment plan and the underlying tax increment financing program. This item was more administrative in nature, but it did require City Council review and approval. As part of the process, a public hearing was necessary. The City's redevelopment plan was originally adopted in 1979. Since then, 17 tax increment financing districts had been created. At the current time there were only 12 districts that were actually active. The redevelopment plan guided the implementation of the tax increment financing program. The last time the plan was updated was in 2000, in response to the Gateway East Redevelopment project. He said they were not asking to do any new projects or expand the tax increment district boundaries. The modifications were necessary as a result of mandates from the Office of the State Auditor. One of the mandates concerned the modifications to tax increment budgets. Previously there were no requirements that the budgets be updated any time there were changes in the actual costs in those districts. Now the Office of the State Auditor required modifications to the budgets in order to account for either increased expenses or revenues if any changes had occurred. The actual tax increment financing costs had changed from the original estimates. Each time a tax increment district was created a budget had to be identified. The revisions were to new estimates for revenues and expenses over the life of each district. The City contacted each of the affected taxing jurisdictions, including the County and school districts. Tonight's public hearing was part of the process. The City had complied with the publication requirements. The Fridley HRA approved the changes. Once the public hearing had been closed, there was a resolution on the agenda that would approve the changes. Ms. Pam Reynolds, 1241 Norton Avenue N.E., she said she did not understand what it was, how much money was involved, and what percentage it was. She said she knew it somehow directly reflected on how the HRA was funded. She asked what it meant to the average homeowner in any of those districts. Mr. Fernelius said tax increment financing was a redevelopment tool that the City used in order to fund redevelopment projects. The action would not affect homeowners. The City was updating its redevelopment plan so that it could comply with reporting requirements from the State. Ms. Reynolds asked if the tax increment financing had something to do with how the HRA got its funding. FRIDLEY CITY COUNCIL MEETING MINUTES OF DECEMBER 8, 2003 PAGE 12 Mr. Fernelius said that was true for redevelopment projects that the HRA was involved in. Most of the projects that the HRA engaged in over time were projects where there was a direct relationship to a developer, such as the Christenson Crossing development. The new taxes generated by that development assisted with recouping the development costs such as acquiring the properties and relocating residents. The action this evening was more of a budget exercise as opposed to an action to increase a levy or increase the amount of taxes that a particular district might generate. Councilmember Bolkcom said it did not matter where someone lived. It was a city-wide levy. Ms. Reynolds said that all of the TIF areas were within the areas that had been set aside as redevelopment areas. Mr. Fernelius agreed. Mr. Burns said they all represented a project or corporate project within a geographic location in Fridley. They did not represent any new projects. Councilmember Barnette said when Medtronic purchased their land and were going to build, they wanted to put in parking ramps. Part of the tax increment financing was as they built on to their property and increased the value of the property and paid additional taxes, the additional taxes generated for a period of time were used to pay for the parking ramps. Once they were paid off, the new revenue would then go to the school districts, the city, the county and the state. It was an attempt to assist industries. Ms. Reynolds asked if it was City or HRA revenue. Councilmember Barnette said it was HRA. The City would not realize any additional taxes until such time as the parking ramps were paid off in 2025. Mr. Fernelius said in 2011, one-half of Medtronic's valuation would go on the tax rolls. Councilmember Bolkcom said the City wanted the parking ramp built. Mayor Lund asked Ms. Reynolds if they answered her question. Ms. Reynolds said they had, but she would do more research. She said that at the HRA meeting they were talking about dollars from one tax increment district being moved somewhere else because of Gateway East. Dr. Burns said part of the exercise was to correct deficits that existed in each of the tax increment districts and that was what they were talking about at the HRA meeting. There was no new net t�ation for anyone in Fridley. Mayor Lund said legislation on the state level a couple of years ago made it increasingly difficult to do new TIF projects. FRIDLEY CITY COUNCIL MEETING MINUTES OF DECEMBER 8, 2003 PAGE 13 Mr. Fernelius said as a result of the property tax reform, about one-third of the revenue from the tax increment districts was diverted to the State. Mr. Richard Harris, 6200 Riverview Terrace N.E., said when he read the public hearing notice in the paper, it sounded like funds were being shifted from one group of districts to another district. Mr. Fernelius said there was no shifting of funds by this action. There were some inter-fund loans from the general fund to some of the individual districts. He said they were prohibited from pooling funds from one district to another. Mr. Harris asked if there was one district that was receiving the major part of the fund redistribution. Mr. Fernelius said there were 12 tax increment districts. The were four major tax increment districts: the Center City District, the Moore Lake District, the North Area Industrial District, and the Medtronic Development. Mr. Harris asked if any of the districts were almost paid off. Mr. Fernelius said they were. The first district to expire was TIF District 14 and that would begin in 2006. Moore Lake District expired in 2007, the North Area expired in 2008 and Center City in 2009. Over the next four or five years, the larger older districts would expire. What that meant was all of the increment generated in those districts would start going back to the taxing jurisdictions. Mr. Harris asked if that was reflected in the proposal. Mr. Fernelius said the budget for the individual districts was reflected in what was presented. MOTION by Councilmember Bolkcom to close the public hearing. Seconded by Councilmember Wolfe. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. NEW BUSINESS: 14. RESOLUTION NO. 73-2003 MODIFYING THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1 AND THE TAX INCREMENT FINANCING PLANS FOR TAX INCREMENT FINANCING DISTRICTS NOS. 1, 2, 3, 6, 7, 9, 10, 11, 12, 13, 14, 16 AND 17 TO REFLECT INCREASED PROJECT COSTS AND INCREASED BONDING AUTHORITY WITHIN REDEVELOPMENT PROJECT NO. 1. MOTION by Councilmember Bolkcom to adopt Resolution No. 73-2003. Seconded by Councilmember Barnette. FRIDLEY CITY COUNCIL MEETING MINUTES OF DECEMBER 8. 2003 PAGE 14 UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 15. FIRST READING OF AN ORDINANCE AMENDING CHAPTER 205, SECTIONS 205.13 205.14 205.15 205.17 205.18 205.19 205.20 RELATED TO PARKING FOR A FURNITURE STORE USE IN THE COMMERCIAL AND INDUSTRIAL DISTRICTS (ZONING TEXT AMENDMENT, ZOA #03-01� BY DAVID BAILLIE, FURNITURE OUTLETS USA, INC.) (WARD 31. Mr. Scott Hickok, Community Development Director, said that staff recommended approval of the first reading of this ordinance. At the last Council meeting there was discussion about building elements on the site. He said a plan had been submitted by the developer that modified a portion of the building. Councilmember Bolkcom said this would allow a furniture store to have one parking stall for every 400 square feet of showroom space. Mr. Hickok agreed. MOTION by Councilmember Ann Bolkcom to waive the reading and approve the ordinance on first reading. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 16. INFORMAL STATUS REPORTS. Dr. William Burns, City Manager, stated that Call on the Council would be taped on Tuesday, December 9. Councilmember Bolkcom issued an invitation to a Christmas sale being held by the Banfill- Locke Center for the Arts. Councilmember Bolkcom said she would like to discuss sewer inspections and employee lay-offs after the Council meeting. Councilmember Barnette reminded the audience of a meeting to be held on Saturday, December 13, by the Town Center Developer at 2:00 p.m. at Sandee's Restaurant. Mayor Lund congratulated the Fridley Alumni Choir for an excellent performance on Sunday, December 7. Dr. Burns said the City's most recent newsletter was sent out to residents. FRIDLEY CITY COUNCIL MEETING MINUTES OF DECEMBER 8, 2003 PAGE 15 ADJOURNMENT: MOTION by Councilmember Barnette to adjourn the City Council meeting. Seconded by Councilmember Wolfe. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Respectfully submitted, � � /� , ��C� ' - e oberta S. C ins Secretary �� , Li Scott J. L d Mayor