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04/12/2004 - 00026529CITY OF FRIDLEY CITY COUNCIL MEETING AP RI L 12, 2004 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: Mayor Lund, Councilmember Barnette, Councilmember Billings, and Councilmember Bolkcom. MEMBERS ABSENT: Councilmember Wolfe PRESENTATION: Mayor Lund presented a plaque to Richard Young in appreciation for his years of service on the Parks and Recreation Commission. APPROVAL OF THE PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council meeting of March 29, 2004. APPROVED. OLD BUSINESS: 1. Ordinance No. 1194 Amending Fridley City Code, Section 205.07, R-1 Single Family Dwelling District Regulations, and Section 205.08, R-2, Two Family Dwelling District Regulations, and Section 205.09, R-3, General Multiple Dwelling District Regulations, Related to Accessory Uses (Zoning Text Amendment, ZTA #04-01). Mr. Burns, City Manager, said this amendment was approved by the City Council on first reading on March 29, 2004. Staff recommended Council's approval. WAIVED THE READING AND ADOPTED ORDINANCE NO. 1194 ON SECOND READING AND ORDERED PUBLICATION. FRIDLEY CITY COUNCIL MEETING MINUTES OF APRIL 12, 2004 PAGE 2 2. Ordinance No. 1195 under Section 12.06 of the City Charter Declaring Certain Real Estate to be Surplus and Authorizing the Sale Thereof, Generally Located at the Northwest Corner of Ely Street and Ashton Avenue. Mr. Burns, City Manager, said staff recommends Council's approval. WAIVE THE READING AND ADOPTED ORDINANCE NO. 1195 ON SECOND READING AND ORDERED PUBLICATION. NEW BUSINESS: 3. Motion to thank Mr. Donald Savelkoul for his generous $2,000 donation to the City of Fridley and authorize staff to utilize $2,000 from the City's fund balance to support the Nature Center's current year operating budget. Mr. Burns, City Manager, said staff recommends Council's approval. APPROVED. 4. Approve Liquor License Renewals. Mr. Burns, City Manager, said staff conducted the annual liquor license renewals and the licensees have all submitted the necessary insurance, bond and other documentation. Staff recommends Council's approval. APPROVED THE FOLLOWING LIQUOR LICENSE RENEWALS: AMF MAPLE LANES, BROADWAY BAR & PIZZA, FRIDLEY CRAB HOUSE MUSIC CAFE, JOE DIMAGGIO'S, KING'S RESTAURANT, MAIN EVENT, MINNESOTA SPORTS CAFE, SANDEE'S, SHARZ AND STUART ANDERSONS. 5. Appointment — City Employee. Mr. Burns, City Manager, said staff recommends the appointment of Jason Rustman as the assistant liquor store manager. APPROVED THE APPOINTMENT OF JASON RUSTMAN AS ASSISTANT LIQUOR STORE MANAGER. 6. Claims. APPROVED CLAIM NOS. 115959 THROUGH 116147. 7. Licenses. Mayor Lund questioned why there is a difference in fees within the same category for licenses. FRIDLEY CITY COUNCIL MEETING MINUTES OF APRIL 12, 2004 PAGE 3 Mr. Pribyl, Finance Director, explained that the fees are based on a schedule and the amounts reflected are correct. MOTION by Councilmember Barnette, seconded by Councilmember Bolkcom, to approve the proposed consent agenda as presented. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. ADOPTION OF AGENDA. MOTION by Councilmember Bolkcom, seconded by Councilmember Billings, to adopt the agenda as presented. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. OPEN FORUM (VISITORS): Consideration of items not on agenda. Tim Byrne, 6053 Woody Lane N.E., stated he recently learned that the Islamic Center is going to expand their school and that the property between 1310 and 1314 Hillcrest will become a parking lot. He referred to the city zoning ordinance regarding setback requirements for this parking lot. He asked who determines if this setback is being met. Mr. Hickok, Community Development Director, stated there is no application before the City at this time for this project. There has been one discussion on this matter a couple of years ago when they were considering temporary classrooms. The Islamic Center is planning an open house on their campus to look at the school expansion. At or around that time, they will submit an application to the City for the expansion. At this time, there is no plan for the housing portion of their property. The school expansion will be on the west and northwest area of their site. Councilmember Billings suggested that once Mr. Byrne receives notification of the Planning Commission meeting regarding this matter, he should contact Mr. Hickok's office or attend the meeting. The City Council makes the ultimate decision on granting a special use permit. The Planning Commission holds the initial hearing and makes recommendations. Councilmember Bolkcom suggested that Mr. Byrne contact the Islamic Center. PUBLIC HEARINGS: 8. Consideration of an Ordinance amending Section 7.02, Power of Taxation, of the Fridley City Charter. FRIDLEY CITY COUNCIL MEETING MINUTES OF APRIL 12, 2004 PAGE 4 MOTION by Councilmember Bolkcom, seconded by Councilmember Barnette, to waive the reading of the public hearing notice and open the public hearing. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Don Findell, Charter Commission Chairman, stated as the budget issues were being resolved by the City Council, it became clear that the process of dealing with water and sewer rates was becoming more cumbersome. This was a direct result of the Charter amendment that was passed in November, 2000. The issue of raising water and sewer rates would have to be approved by a super majority in the general election. As a result of that requirement and even though Fridley has raised the rates to the maximum the past three years, there is still a deficit of almost $460,000 for 2003. That money had to come out of reserves in order to cover the cost of providing sewer and water and storm water service. The Charter Commission hosted a public forum on February 10, 2004, which was broadcast live on the Fridley cable channel. There was a small audience with one speaking in favor and one speaking against the amendment. Some of the reasons in support of the Charter amendment include: • To eliminate large deficits in these services. • To eliminate the potential problems of subsidizing water and sewer with the transfer of dollars from the general fund. • Would permit the City Council flexibility to deal with the unique problems associated with these specific services. Mr. Findell further explained that the limitations placed on the water and sewer rates was another unintended consequence of the 2000 amendment voted on by the public at large. In addition, large users of the water and sewer systems are actually being subsidized by the City because the rates cannot be raised. The amendment before the Council removes water, sewer, storm water rates, and recycling fees from the section of the Charter which limits any increase in fees and taxes to the inflation index or 5%, whichever is less. The language being added to Section 7.02-3 reads: A. For the purposes of this subsection, "fees" includes sales and use taxes, utility charges (other than water, storm water and sanitarv sewer), B. For the purposes of this subsection, the term "fees" does not include: Water, storm water and sanitarv sewer charqes; recvclinq fees; Mr. Findell said the language on the ballot in 2000 did not specifically name utilities with the fees that were affected. The language approved by the voters was "For the purposes of this subsection, fees include but are not necessarily limited to sales and use taxes, business occupation taxes, excise taxes, license fees, permit fees, and any discretionary monetary charged by City government." The actual language that included utility charges was added into the language of the amendment in April 2001 by the Ad Hoc Committee. FRIDLEY CITY COUNCIL MEETING MINUTES OF APRIL 12, 2004 PAGE 5 Additional support for the proposed amendment before the Council include: • The rate increases to be approved by voters become very cumbersome. • Using reserves would force future residents to pay for improvements by borrowing money at higher rates of interest rather than using reserves as a security plan for bond issues. In summary, Mr. Findell stated the proposed Charter amendment will eliminate potential for long-term subsidy of water and sewer services by the general fund. It will provide cost recovery for federal, state, and county mandated water quality recycling requirements. We will maintain all other spending restrictions which require the City Council to obtain direct voter approval for any other program that increases costs above the 5% or the rate of inflation. The only thing the amendment is taking out is the utilities, including water, sewer, storm water and recycling. The Charter amendment will require a unanimous vote of the City Council. Councilmember Billings asked for clarification. It is his understanding that this amendment modifies the language submitted by the Ad Hoc committee and approved by the City Council in 2001. Mr. Findell stated that is correct. Councilmember Barnette asked if the proposed amendment was unanimously approved by the Charter Commission. Mr. Findell replied there were 10 members at the meeting when the vote was taken; 7 voted in favor and 3 against. Those opposed did not feel the Charter Commission should put forth an amendment that the electorate had voted on in 2000. Peter Eisenzimmer, 6535 Oakley Drive N.E., said he was a member of the group who petitioned the City on the Charter and brought it to a vote in 2000. The water, sewer and storm water were included and he thought it was ridiculous that the City cannot live on a budget. He stated the Charter Commission was warned not to change the language. Mayor Lund explained that even if the Council approves this amendment, the citizens can put this matter on as a balloted item. Mr. Eisenzimmer stated he will collect the signatures to put this matter on the ballot. Tim Nord stated he takes issues with using the term "subsidize" in relation to water bills. He also referred to the comment that taking this matter back to the voters would result in a minority of the citizens making the decision. If the Council approves the amendment, that is a much smaller number than the total number of voters. Having the voters decide is more democratic. FRIDLEY CITY COUNCIL MEETING MINUTES OF APRIL 12, 2004 PAGE 6 Councilmember Bolkcom explained that what Mr. Findell had stated was that every time the City wanted to raise the fees above the cost of living, the matter would have to go on the ballot. He was not referring to the overall Charter amendment change. There is a difference between deciding on the amendment and deciding on the fees. Mr. Nord stated the City is not subsidizing anything. The general fund is taxes paid by the citizens. The issue is whether or not the few members of the Council decide this issue or if the people decide. If the Council votes yes, the residents would have no control over the inflationary increases in their water and sewer. If the Council votes no, there is an inflationary control because they would simply have to transfer our savings to pay this. Councilmember Billings explained that the Charter Commission was saying that the largest users of water in the City are business users. That means if we do not charge what it costs to produce the water and remove the waste, then those large users are not paying their fair share for that water and that money comes out of the property taxes. The surplus Mr. Nord referred to has been going down since 1988 because the Council has chosen to spend down those reserves rather than raise money. In addition, when those reserves came into play, the majority were a result of the growth the City was experiencing. In fact, the City has the largest commercial and industrial base in Anoka County. The State legislature is changing the ratio of taxes between businesses and homeowners and now we are getting to the point that they are drawing closer. The majority of the rate that is paid for sewer does not stay in the City of Fridley. The Metropolitan Sewer Board processes the wastewater and charges the City by cubic foot. If large users are using a lot of water and we do not collect from them a rate that is equal to what we are spending, then we have to take the money out of the tax pool. The whole process here is to try and put everyone on an equal plain. Mr. Findell commented that reserve funds are set aside for specific purposes. There is not just a"big fat checkbook". If we use those funds, they will not be available for those purposes. Also, as the reserves are depleted, the City will have to borrow the funds and pay interest on those loans which, in the long run, will cost the citizens a lot more than increasing the rates. Councilmember Billings asked Mr. Pribyl to comment on the history of the sanitary sewer rates. Mr. Pribyl, Finance Director, explained that since 1998, the City has had an overall decrease in sewer rates of 3.6%. MCES rates have increased by 18.52%. In 2000, the City reduced its rate based on a one-time windfall from MCES as far as a rebate back to the City. The City has been holding that rate down since then. The City has not had a history of raising these rates at all. Councilmember Billings stated it would be reasonable to say that the Council is prudent in the charges they make for this service. FRIDLEY CITY COUNCIL MEETING MINUTES OF APRIL 12, 2004 PAGE 7 Mr. Pribyl stated in his experience with this Council and other areas of the metro area, Fridley's rates are in the median range. Nancy Jorgenson, 5730 Polk Street N.E., questioned the official publication for this public hearing as it states the date of April 12, 2003. The City newsletter stated this meeting was actually held two weeks ago. That may be why there are not more people present this evening. She agreed with Councilmember Billings that the Council has been fiscally responsible with regards to sewer rates. She was one of the dissenting Charter Commission who voted not to send the Council an ordinance amendment, but to send a recommendation to place the item on the ballot in November. She also asked that we do a parallel course in the event that the Council did not see fit to approve this amendment by a 5-0 vote, so it could still be brought to the voters this fall rather than waiting another 2 years beyond this general election. There is a lot of confusion over what happened in 2000 and 2001, but she believes that the voters thought they were considering utilities. She stated she was the chair of the Ad Hoc Committee and they kept coming back to the phrase "utilities". The Charter Commission looked at this last summer and rejected this amendment. It was then brought before the Charter Commission again by one of the Charter members. Mayor Lund explained that the published date was most likely a clerical error. The newsletter Ms. Jorgenson referred to is prepared in advance and the hearing date changed after the newsletter's publication. He also stated that Council will not be taking legislative action on this matter tonight. Councilmember Bolkcom asked if the error in the public hearing date is a concern. Fritz Knaak, City Attorney stated what the Council would normally do is conduct the public hearing and then put in a corrective notice. Councilmember Bolkcom asked if there was time to do that before the next meeting. It was determined that there would be time for the corrective notice and to proceed at the April 26 meeting. Mayor Lund commented on Ms. Jorgenson's wanting this matter to go before the voters. He is concerned that it will be very difficult to get the information out to the voters and making them aware that they must vote on the issue or it is a no vote. This item would be on the bottom on the ballot and could be easily missed. Francis van Dan, 6342 Baker Avenue N.E., recommended that the City have an employee who would scrutinize amendments and ordinances and that the verbiage be changed in the ordinance and made clearer for the citizens. Councilmember Bolkcom asked if Council can change the verbiage of an amendment presented. FRIDLEY CITY COUNCIL MEETING MINUTES OF APRIL 12, 2004 PAGE 8 Attorney Knaak responded the Council would send the amendment back for any changes to the verbiage. AI Stahlberg, 8055 Riverview Terrace N.E., asked about the 9% increase for sanitary sewer and what that cost would be per household. Mr. Pribyl explained the 9% was an amount they were looking at to break even and was an estimate only. He did not recall the exact amount but believed it to be approximately $6.00 per year per average household. Mayor Lund stated during budget hearings they discussed an estimated total increase for water and sewer of $15.00 per year per average household. Mr. William Holm, 7424 Melody Drive N.E., a member of the Charter Commission, stated they were very open about the process. They held an open forum and identified a figure of $4.00 to $5.00 per quarter which would enable the City to break even on its provision of water, sanitary sewer, storm water and recycling fees. The City is financially sound and the Charter Commission believes that it is appropriate with this amendment to keep it that way. They did not think it made economic sense to continue to subsidize water and sewer at the expense of the general fund. Mr. Eisenzimmer said it should be brought to the voters. Councilmember Billings asked how much undedicated reserves there were. Mr. Pribyl responded that he would estimate the City has around $7 million. Councilmember Billings asked if he is referring to funds used for cash flow. Mr. Pribyl stated this money is not used for cash flow and has not been designated for a specific purpose. Councilmember Billings asked if there is a fund for the street improvement projects scheduled. Mr. Pribyl stated the $7 million would be consumed for the planned street projects over the next 4 years and we will probably need more. Councilmember Billings asked how much money is available beyond the cost of the street improvements. Mr. Pribyl said we do not have any. We basically have uses for all the capital we currently have. Councilmember Billings then stated if we have to take from the general fund for water and sewer projects, there would not be sufficient funds for the street improvements. FRIDLEY CITY COUNCIL MEETING MINUTES OF APRIL 12, 2004 PAGE 9 Mr. Pribyl stated that is correct. Councilmember Billings stated, in other words, if we do not raise the fees to cover the cost of water and sewer, we will not be able to provide streets that are drivable. Mr. Nord asked when the street improvements will be completed. Mayor Lund stated they are about 7 to 8 years out for completion of all the street improvement projects. Councilmember Bolkcom said that other cities actually assess the whole street improvement back to the residents who live on that street. Fridley only assesses the concrete curb and gutter and was trying to keep it that way. Councilmember Bolkcom stated another method of covering costs would be to charge residents for street improvements as other communities are doing. Fridley is trying to avoid that. MOTION by Councilmember Bolkcom, seconded by Councilmember Barnette, to continue the public hearing to April 26, 2004. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. OLD BUSINESS: 9. Motion to remove the first reading of an ordinance to amend the City Code of the City of Fridley, Minnesota, by making a change in zoning districts (Rezoning Request, ZOA #04-01, by John DeMello, Profitmax, Inc.,) and Preliminary Plat Request, PS #04-01, by John DeMello, Profitmax, Inc., from the Table. and Resolution Nos. 2004-29 and 2004-30 of the City of Fridley denying the application of John DeMello, Profitmax, Inc., by or on behalf of Spring Valley Estates for the rezoning of certain property to S-2 and requesting the replatting of that same property for the creation of a high density condominium development. MOTION by Councilmember Billings, seconded by Councilmember Bolkcom, to approve the resolutions denying the application of John DeMello (Profitmax, Inc.) on behalf of Spring Valley Estates for the rezoning of certain property to S-2 and requesting the replatting of that same property for the creation of a high density condominium development. FRIDLEY CITY COUNCIL MEETING MINUTES OF APRIL 12, 2004 PAGE 10 Councilmember Bolkcom asked if this matter should be removed from the table before action is taken. Mr. Knaak, City Attorney, stated if this matter was tabled at the last meeting, it should now be removed from the table. MOTION by Councilmember Barnette, seconded by Councilmember Bolkcom, to remove Rezoning Request, ZOA #04-01, Plat Request, PS #04-01 from the table. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Councilmember Billings asked Mr. Knaak to advise on the best way to proceed on this matter. Attorney Knaak stated there was a failure of an affirmative vote at the last meeting leaving the issue on the table. The statute requires the Council must take an affirmative vote to deny such an application. What is before the Council this evening is the motion to deny that was made at the last meeting. The purpose of the resolution is to provide the Council with reasons for the denial. Councilmember Billings stated as he understands it, the Council must take three separate actions; one to deny the rezoning, one to deny the plat request, and one to approve the resolution. Mr. Knaak stated the Council has before it a motion to deny the petition. It was tabled with direction to staff to come up with something in writing. He suggested that the Council move as a substitution of the original motion to deny, this resolution because the resolution is, in fact, a resolution denying the petition and then the language of the resolution would be before the Council for vote. Councilmember Bolkcom pointed out that Councilmember Billings has already moved to approve the resolution. Mr. Knaak stated the Council has a motion to deny on the table and he recommends that motion be amended to include the resolution. Both petitions can be voted on together as long as the reasons for the denial are the same. MOTION by Councilmember Billings, seconded by Councilmember Bolkcom, to amend the motion to deny Preliminary Plat Request, PS #04-01, by substituting Resolution No. 2004-29. MOTION by Councilmember Billings, seconded by Councilmember Bolkcom, to amend the last line of Resolution No. 2004-29 to include the words "The application of the Developer (Preliminary Plat Request, PS #04-01) is therefore denied." FRIDLEY CITY COUNCIL MEETING MINUTES OF APRIL 12, 2004 PAGE 11 UPON A VOICE VOTE, MAYOR LUND, COUNCILMEMBER BILLINGS AND COUNCILMEMBER BOLKCOM VOTING AYE AND COUNCILMEMBER BARNETTE VOTING NAY, MAYOR LUND DECLARED THE MOTION TO AMEND RESOLUTION NO. 2004-29 CARRIED ON A 3 TO 1 VOTE. UPON A VOICE VOTE TO SUBSTITUTE RESOLUTION NO. 2004-29 TO DENY PRELIMINARY PLAT REQUEST, PS #04-01, MAYOR LUND, COUNCILMEMBER BILLINGS AND COUNCILMEMBER BOLKCOM VOTING AYE AND COUNCILMEMBER BARNETTE VOTING NAY, MAYOR LUND DECLARED THE MOTION CARRIED ON A 3 TO 1 VOTE. MOTION by Councilmember Billings, seconded by Councilmember Bolkcom, to amend the motion to deny Rezoning Request, ZOA #04-01, by substituting Resolution No. 2004-30. MOTION by Councilmember Billings, seconded by Councilmember Bolkcom, to amend the last line of Resolution No. 2004-30 to include the words "The application of the Developer (Rezoning Request, ZOA #04-01) is therefore denied." UPON A VOICE VOTE, MAYOR LUND, COUNCILMEMBER BILLINGS AND COUNCILMEMBER BOLKCOM VOTING AYE AND COUNCILMEMBER BARNETTE VOTING NAY, MAYOR LUND DECLARED THE MOTION TO AMEND RESOLUTION NO. 2004-30 CARRIED ON A 3 TO 1 VOTE. UPON A VOICE VOTE TO SUBSTITUTE RESOLUTION NO. 2004-30 TO DENY REZONING REQUEST, ZOA #04-01, MAYOR LUND, COUNCILMEMBER BILLINGS AND COUNCILMEMBER BOLKCOM VOTING AYE AND COUNCILMEMBER BARNETTE VOTING NAY, MAYOR LUND DECLARED THE MOTION CARRIED ON A 3 TO 1 VOTE. NEW BUSINESS: 10. Informal Status Reports: Mr. Burns, City Manager, said a conference meeting was scheduled for April 19, 2004, at which time the following issues would be discussed: 2 a.m. bar closing, Comprehensive Plan revisions, redevelopment strategies, replacement of aerial truck, the University Avenue fence, and Parks capital improvement funding level. The meeting will start at 7:00 p.m. in the lower level of City Hall. The meeting is open to the public. Mayor Lund announced that on April 24, there will be a fundraiser for Springbrook Nature Center at the Outback Steakhouse. All proceeds will go to the Springbrook Nature Center Foundation. FRIDLEY CITY COUNCIL MEETING MINUTES OF APRIL 12, 2004 PAGE 12 Mayor Lund announced that on April 24, the Fridley Historical Society will hold their annual lasagna dinner at the Fridley Community Center. Councilmember Bolkcom stated the Springbrook Yard and Garden Show will be held on Saturday, April 17, 2004. Councilmember Bolkcom stated Commissioner Jim Kordiak is offering free assistance to senior citizens and people on disability in completing homeowners' and renters' tax credit forms. ADJOURNMENT: MOTION by Councilmember Barnette, seconded by Councilmember Bolkcom, to adjourn the City Council meeting. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION TO ADJOURN CARRIED UNANIMOUSLY. Respectfully submitted, Rebecca Brazys Recording Secretary ������ Scott J. Lund Mayor