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07/12/2004 - 00026395CITY OF FRIDLEY CITY COUNCIL MEETING J U LY 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-at-Large Barnette, Councilmember Billings, Councilmember Wolfe, and Councilmember Bolkcom. OTHERS PRESENT: William W. Burns, City Manager Scott Hickok, Director of Community Development Richard Pribyl, Finance Director Jack Kirk, Director of Recreation and Natural Resources Rebecca Brazys, Recording Secretary Fritz Knaak, City Attorney Malcolm Mitchell, Chair, Springbrook Nature Center Foundation Peter Borman, `49er Days Chair Peter Eisenzimmer APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council Meeting of June 28, 2004 APPROVED NEW BUSINESS: 1. Resolution No. 2004-34 Amending the Housing Replacement District Plan for Housing Replacement District No. 1 to include Phase IV. Dr. Burns, City Manager, explained that the Housing Replacement Program allows the HRA to collect tax increment on scattered housing sites that it has acquired since 1995. The action before Council tonight approves Phase IV by adding 8018 Ashton Avenue N.E., which was recently sold. While the City received the money from the sale of the property, the increment collected over 15 years will be held by the HRA for use in FRIDLEY CITY COUNCIL MEETING, JULY 12, 2004 Paqe 2 of 12 furthering its redevelopment programs. The HRA approved the amendment at their meeting on July 1. Staff recommends Council's approval. ADOPTED RESOLUTION NO. 2004-34. 2. Resolution No. 2004-35 Ordering Improvement, Approval of Plans and Ordering Advertisement for Bids: Marion Hills Reservoir Replacement Project No. 356 (Ward 1). Dr. Burns, City Manager, stated the 2004 Water System Capital Improvements Plan includes $550,000 for the replacement of the Marion Hills water storage tank. The design of the tank has been completed and staff recommends Council approve the plans and authorize staff to seek bids for the project. Bids will be opened on August 2, awarded on August 9, and the existing tank torn down shortly after Labor Day. Construction should be completed by mid-December. Staff recommends Council's approval. ADOPTED RESOLUTION NO. 2004-35. 3. Claims. APPROVED CLAIM NOS. 117045 THROUGH 117209. 4. Licenses. APPROVED THE LICENSES AS SUBMITTED AN AS ON FILE. 5. Estimates. APPROVED THE FOLLOWING ESTIMATES: Northwest Asphalt, Inc. 1451 Stagecoach Road Shakopee, MN 55379 2004 Street Improvement Project No. ST. 2004 — 1 Estimate No. 2 $192,915.92 Magnum Company LLC 7309 Lake Drive Lino Lakes, MN 55014 Woodside Court Improvement Project No. ST. 2004 — 2 Estimate No. 2 $ 29,482.68 FRIDLEY CITY COUNCIL MEETING, JULY 12, 2004 Paqe 3 of 12 MOTION by Councilmember Barnette, seconded by Councilmember Wolfe, to approve the Consent Agenda. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOULSY. ADOPTION OF AGENDA MOTION by Councilmember Bolkcom, seconded by Councilmember Wolfe, to adopt the agenda. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOULSY. OPEN FORUM (VISITORS): Consideration of items not on agenda — 15 minutes. Peter Borman, Chairman of the `49er Days Committee, thanked the Council and all the City departments and staff inembers who helped make this year's event successful. OLD BUSINESS: 6. Resolution No. 2004-36 Declaring a Question to be Placed on the Ballot at the Next Regular Municipal Election, to Levy a Tax Which is in Excess of the Inflationary Index for Tax Levy Requirements for 2004 to the County of Anoka for Collection for the Purpose of Continuing Programming at Springbrook Nature Center (Tabled September 8, 2003). MOTION by Councilmember Bolkcom, seconded by Councilmember Wolfe, to remove this matter from the table. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Pribyl, Finance Director, said a resolution was passed on July 28, 2003, in compliance with Section 7.02 of the Fridley City Charter, defining the need for a tax levy greater than the defined index for use with the Springbrook Nature Center. The need was due to the State Legislature cutting city and state aid for 2003 and beyond. Dramatic budget cutting measures were required to provide a budget for 2004 and a draft for 2005. One of the major cost reduction plans was to eliminate the naturalist programming at the Springbrook Nature Center. Based on the feedback staff received, it appears that public opinion is in support of levying an additional $275,000 in taxes to support the programming, maintenance and administration for Springbrook Nature Center. Pursuant to the City Charter, a public hearing notice was published three times prior to the public hearing (July 31, August 7 and August 14, 2003). The public hearing was held August 25, 2003. At the close of the public hearing, Council reviewed the FRIDLEY CITY COUNCIL MEETING, JULY 12, 2004 Paqe 4 of 12 resolution that would have placed this levy on the ballot for 2004. Council tabled the resolution to this meeting. The resolution must be approved by a 4/5 vote. It would begin the election process that would ask the voters whether they would like to pay additional taxes to maintain the programs at the Springbrook Nature Center. If the resolution was approved and the question of the levy was not approved by the voters, Council would then pass a final resolution levying taxes without the $275,000. Councilmember Bolkcom asked how staff came up with the figure of $275,000. Mr. Kirk, Director of Recreation and Natural Resources, said they evaluated all the equipment and needs of Springbrook Nature Center well into the future. They came up with about $30,000 per year. They also looked at the budget level of $300,000 for 2003, which allowed them to be open Sundays and evenings, provide programs to the public and provide a maintenance person which had been cut out of the budget. The level of the budget would work at $303,118 plus $30,000 per year for the replacement items. They felt a reasonable level of revenue from programming would be about $58,500. Subtracting the revenue would leave a balance of about $275,000. In previous years, Springbrook Nature Center had an income of around $40,000. In 2002, it was $55,000. This year they instituted an admission fee, raised a number of other fees and scheduled fundraising events. The $58,500 figure does not include any admission charges as they found that people were not paying admission fees as they had hoped. It also does not include as many of the fundraising events. Dr. Burns, City Manager, stated the nature camp fees were raised about 25 percent and asked if the projected amount includes the increase. Mr. Kirk stated it included the level they thought they would end up with. Councilmember Barnette asked if inflation continues to occur, how the additional costs would be covered and if they would need to ask for another referendum to increase the amount. Mr. Kirk explained that the $275,000 figure could go up at the same rate the City budget is allowed to increase. Mr. Pribyl explained it is controlled by the Charter Amendment so that the amount can increase based on the amount of inflation, but no more than 5 percent. Councilmember Barnette asked if the expectation was that any additional amount required would have to be covered by additional fees. Mr. Kirk responded they would take a look at how they would have to adjust fees to make up the additional revenue. Councilmember Wolfe asked Mr. Pribyl about the impact on individual taxpayers and how the $26.00 figure will be affected by inflation and increased home values. FRIDLEY CITY COUNCIL MEETING, JULY 12, 2004 Paqe 5 of 12 Mr. Pribyl said the figure will go up as values go up and the increase is approximately $1.30 per $10,000 worth of valuation. Pete Eisenzimmer, 6535 Oakley Drive N.E., expressed his concern that housing prices continue to increase and this tax levy will add to that increase. Mayor Lund said the levy will be placed before the voters. The question was the dollar amount that would be placed on the ballot. Councilmember Bolkcom asked if the resolution should say 2005 rather than 2004. Mr. Pribyl responded that 2004 refers to the action Council will take during 2004 for taxes payable during 2005. Councilmember Bolkcom asked if Council passed a motion agreeing to place the question on the ballot. Mr. Pribyl responded there was a second motion on the resolution on September 8, 2003. Dr. Burns asked if the dates needed to be changed on the resolution as the resolution was tabled in 2003. Mr. Pribyl explained that the approved resolution that defined the need for this levy does not need to be modified because the need still holds. MOTION by Councilmember Billings, seconded by Councilmember Bolkcom, to offer a substitute motion to adopt an updated resolution. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Councilmember Billings stated in the title of the resolution before Council in 2003, the date was 2004. In the current resolution, the date is still 2004. Mr. Pribyl stated Council can change it to 2005. Councilmember Billings asked if the year in the first "whereas" paragraph should be changed. Mr. Pribyl stated if the heading is going to be modified, this paragraph should also be modified. Councilmember Billings asked if any resolution should be acted upon this year. FRIDLEY CITY COUNCIL MEETING, JULY 12, 2004 Paqe 6 of 12 Mr. Knaak, City Attorney, stated the Charter states that a resolution is required declaring the need for the tax levy and that was done by the Council in 2003. Just because the need was declared in 2003 does not mean the tax had to be levied in 2003. Councilmember Billings stated he just wanted to make sure that the City Attorney is comfortable that this will meet any legal challenge. MOTION by Councilmember Bolkcom, seconded by Councilmember Barnette, to approve the updated resolution. MOTION by Councilmember Bolkcom, seconded by Councilmember Billings, to amend the title of the resolution to read "Index for Tax Levy Requirements for 2005." Mayor Lund asked if the first "Whereas" paragraph should also be amended to read 2005. Councilmember Bolkcom said Mr. Knaak indicated that it refers to actions that took place last year. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION TO AMEND THE RESOLUTION CARRIED ON A UNANIMOUS VOTE. Councilmember Wolfe said if this passes, the ballot will reflect the figure of $275,000. Mayor Lund responded that is correct. Councilmember Billings questioned if the ballot will include all the resolution text from the "Whereas" down. Mr. Pribyl said it would. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION TO APPROVE RESOLUTION 2004-36 CARRIED ON A UNANIMOUS VOTE. Councilmember Bolkcom asked if there is anything else the City Council needs to do in order for this matter to be on the ballot in November. Mr. Pribyl explained that staff will review the resolution with the City Attorney and forward it to Anoka County. Mr. Malcolm Mitchell, Chairman of the Springbrook Nature Foundation, thanked the Council for their support. FRIDLEY CITY COUNCIL MEETING, JULY 12, 2004 Paqe 7 of 12 NEW BUSINESS: 7. Request by Jarrett Hickman to forgive charges for Nuisance Abatement. Mr. Hickok, Community Development Director, stated the property in question is at 1275 Norton Avenue N.E. and has been the subject of numerous code violations. In January, 2001, staff sent a letter to William and Fay Covey regarding an outdoor storage problem on this site. That was corrected through code enforcement efforts. In September, 2001, another code enforcement action was required because of a car on blocks for a period of time. This problem was corrected. About a year later, the property was again observed with outdoor storage code enforcement problems. The property was in a general state of disrepair. Staff sent a letter to the property owner on September 5, 2002. Records indicate the property was sold in October 2002. No compliance was gained through the letters sent to the property address. Mr. Hickok stated at that time, Mr. Jarrett Hickman began calling about this property and asking if a duplex could be built on the site. Staff indicated to Mr. Hickman that there were code enforcement issues on this site. Paul Bolin and Stephanie Hanson spoke with Mr. Hickman about the issues. Letters were mailed to the property and Mr. Hickman was notified through telephone conversations, yet no action occurred. The code violations remained. Mr. Hickok said that after the verbal discussions with Mr. Hickman, a letter was sent to Mr. Hickman on November 4, 2002 indicating the property would be abated. This is standard procedure spelled out in Ordinance 128 of the City Code. The letter indicated Mr. Hickman had three options: he could clean up the property within 20 days; he could notify staff of an alternative plan if he needed additional time beyond the 20 days; or he could ask for a hearing. None of those were done. In December, 2002, staff contracted with Advance Restoration to do the clean-up on this property at a cost of $1,890.59, plus the 25% outlined by the City Ordinance for administration fees. In January, 2003, the City's Finance Department began to send monthly bills to Mr. Hickman and added the standard late payment penalty for non-payment. An entire year went by and no payment was received. Mr. Hickman subsequently sold the property to PMJ Development. Mr. Hickman had not paid for the clean-up. City staff turned this matter over to a collection agency and in April, 2004, Mr. Hickman was contacted by the collection agency. Mr. Hickman then contacted the City Manager and Planning staff claiming that he had not been properly notified. Mr. Hickok said staff recommends that Council not release Mr. Hickman from his obligation to pay for the abatement done on the property he owned at the time of the abatement. To release Mr. Hickman would weaken the City's position on public nuisances and would set a future precedent for those not wanting to pay for nuisance abatements. A review of the facts with the City Attorney indicated that all standard enforcement procedures and notification practices were followed. Additionally, Mr. Hickman was made aware of the problems through telephone conversations with Paul Bolin and Stephanie Hanson. If Council were to forgive this abatement fee, the City FRIDLEY CITY COUNCIL MEETING, JULY 12, 2004 Paqe 8 of 12 would need to use resident tax payer dollars for IC Systems, the collections agency. The Assistant Finance Director has indicated the cost to the City to date would be $567.15. In conclusion, staff recommends Council not forgive Mr. Hickman's debt. The City made proper attempts to notify Mr. Hickman and he was the property owner at the time of the abatement. It does not matter whose mess it was to begin with. The property became the responsibility of Mr. Hickman when he purchased it. Ms. Amy Hickman, 3010 Hennepin Avenue South, stated she is a real estate agent and her husband is a mortgage broker. They buy properties that need to be rehabbed, clean them up, bring value back to the neighborhood and then sell the property. Unfortunately, the property in question had more problems than they were aware of. They purchased the property in October, 2002, and the code enforcement issues with the property had been going on before they purchased it. They contacted the previous owners and told them the property needed to be cleaned up and they agreed. So when they found the property had been cleaned up, they thought it had been done by the previous owner. When they purchased the property, their goal was to demolish the home and build a new home or a duplex. After looking at the numbers, they decided they could not proceed and sold the property to the current owner in April, 2003. They only owned the property for 7 months and because they did not live on the property, they did not receive the letters that were sent by the City staff. They had planned to clean up and had hired dumpsters, but the City got the clean-up done before they could get to it. Mayor Lund commented that with both Mr. and Mrs. Hickman being real estate professionals he is surprised that they did not address the code enforcement issues on or before closing. He could understand that the Hickmans may not have received the letters, but there had been verbal discussions between Mr. Hickman and City staff so they were aware of the issues. Councilmember Barnette asked if a title search had been done before the property was purchased. Ms. Hickman responded there were no title issues which is one of their arguments. Mr. Hickok stated the City has two approaches they can take; they can go to assessment or go through an administrative process of billing the owner. The administrative route was chosen in this case, so this would not have come up on a title search. It is clear there was knowledge of the issue. Mr. and Mrs. Hickman owned the property for 7 months, 5 months after the clean-up occurred. Between the time of the clean-up in December and the time they closed on the property in April, they would have known there had been some costs incurred. In fact, the Hickmans spoke to Dr. Burns, the City Manager, in April and to other staff inembers. Councilmember Wolfe asked if staff had gone after the previous property owners. FRIDLEY CITY COUNCIL MEETING, JULY 12, 2004 Paqe 9 of 12 Mr. Hickok explained that the previous owners addressed prior code enforcement issues within the deadline. Councilmember Bolkcom asked about the certified mail receipt addressed to Jarrett Hickman. Mr. Hickok said even before the Hickmans purchased the property, there were verbal discussions with Mr. Hickman and he was informed of the code enforcement issues. As far as the certified letter, the practice is to send a certified letter and an identical standard letter at the same time because some people do not pick up a certified letter. Councilmember Bolkcom said if the certified letter was not signed for, do they know it was received. Mr. Hickok stated the law requires staff to make a reasonable attempt to notify the property owner, and they did that. Ms. Hickman stated she and her husband do not inquire about properties until they own the property. She added they never called the City prior to purchase. She also stated they purchased the property on October 30 and the City sent the abatement letter November 4. They knew they had to do some things on the property and requested at closing that the previous owners clean up. She stated they did not own the property when all the problems were taking place and thought those issues should have been taken care of before the property was sold. Also, there were no clouds on the title. Mr. Hickman stated they purchased this property with the best of intentions. The letters Mr. Hickok referred to were mailed to 1275 Norton, but they did not reside on this property. He claimed that not only did they not receive the letters, they did not speak to anybody at the City until after they purchased the property. He called to enquire about setbacks and no one mentioned any difficulties with the property. He also called the tow truck company to pick up the junk cars on the site, but because he did not have the title, the tow truck company could not pick up the vehicles. He stated the first correspondence they received on this matter was in April, 2003. Prior to receiving the letter in April, they believed that the previous owners had removed the items from the property. Mayor Lund stated staff did what they were legally required to do and the City did spend the money to clean up the property. He did not believe taxpayers should be forced to cover the costs. Councilmember Wolfe asked if staff has access to property sales. Mr. Hickok stated eventually the tax records do come to staff but if they purchased the property in October, staff would not have had any personal information for some time. FRIDLEY CITY COUNCIL MEETING, JULY 12, 2004 Paqe 10 of 12 Councilmember Billings asked if this was the first property the Hickman had purchased and he questioned why they did not escrow funds to cover the cleanup. Ms. Hickman responded that it was their first purchase and they believed that the previous owner would do the cleanup. Councilmember Billings stated this is a difficult situation because the Hickmans had good intentions when they purchased the property, but Fridley residents do not want to be responsible for this bill. When the abatement was done, the Hickmans were the property owners. He reviewed the actual costs to the City for this abatement issue and stated the City lost approximately 6% to 7% interest if payment had been made in 2003, $165. He then added the $165 to the $567 for the collection agency costs and added that to the original balance of $2,363. He said if the Hickmans now paid $3,100 the City would be in the same shape as if it had received the payment when it was due. Mr. Pribyl agreed. Councilmember Billings stated it is his opinion that this is a timing issue. He is willing to accept that they did not know about the abatement, but he does not believe the cost should be the responsibility of the taxpayers. It appears that staff extended reasonable efforts to contact the Hickmans. He would be willing to support a motion to reduce the payment to $3,100. Councilmember Bolkcom said there were two dumpsters worth of trash and being in the real estate business, the Hickmans should have been more aware. She was concerned that reducing the abatement amount would set a precedent. She wondered why the Hickmans waited over a year after being contacted by the collections agency to try and resolve the issue. Mr. Hickman said they did not know and were not made aware of the abatement until they were contacted by the collections agency. When they closed on this property in 2002, the previous owners were living in Colorado and were represented by a power of attorney, so they never spoke to the owners. Also, when they sold the property, they thought the bill would stay with the property and pass on to the new owner. Councilmember Bolkcom explained that the property was actually cleaned up while the Hickmans owned the property which is why it is their responsibility to pay for it. Mr. Knaak stated the cost is the responsibility of the property owner at the time the abatement occurs. In an abatement, the City has three options: they can bill it, which is the way most people prefer to have it done; the City can sue the owner; or they can assess the property which is usually the least attractive. Had the City proceeded with an assessment that would have shown as a lien when the property was sold by the Hickmans. FRIDLEY CITY COUNCIL MEETING, JULY 12, 2004 Paqe 11 of 12 Mayor Lund stated he likes the idea of giving the Hickmans the benefit of the doubt and reducing the amount due as Councilmember Billings suggested. Mr. Hickman stated the City could have found out who they were and contacted them directly regarding this matter. He also stated they believed that if the abatement was not assessed to their property, then it would not be their responsibility. Councilmember Bolkcom stated it was too late to certify this abatement to the County in 2002. Ms. Hickman stated they purchased the property in October. The first letter was sent in November and the property cleaned in December. It really left little time for them to take action. Councilmember Barnette asked how many abatement issues go unpaid. Mr. Hickok responded they have been very successful collecting the code enforcement abatement fees. Councilmember Bolkcom was still concerned about setting a precedent for future abatement issues. MOTION by Councilmember Billings, seconded by Councilmember Barnette, to direct staff to accept payment of $3,100 on or before August 1, 2004, as full and complete consideration of the abatement process of November, 2002, for the property located at 1275 Norton Avenue N. E. If said payment is not received on or before August 1, 2004, Council would direct staff to continue with the abatement process as though this motion did not exist. Mayor Lund asked if that meets with the City Attorney's approval. Mr. Knaak stated the Council has the authority to settle the matter this way. Mr. Hickman stated this was reported on their credit record and they would like some type of letter from the City stating the matter has been addressed. Councilmember Billings recommended Mr. Hickman get together with Mr. Pribyl and the collection agency to work this out. UPON A VOICE VOTE, MAYOR LUND, COUNCILMEMBER BARNETTE AND COUNCILMEMBER BILLINGS VOTING AYE AND COUNCILMEMBER WOLFE AND COUNCILMEMBER BOLKCOM VOTING NAY, MAYOR LUND DECLARED THE MOTION CARRIED. FRIDLEY CITY COUNCIL MEETING, JULY 12, 2004 Paqe 12 of 12 8. Informal Status Report Councilmember Barnette stated Banfill-Locke Center for the Arts held its first family day on Sunday and it was a success. ADJOURNMENT. MOTION by Councilmember Barnette, seconded by Councilmember Wolfe to adjourn. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MEETING ADJOURNED AT 9:30 PM. Respectfully submitted, Rebecca Brazys Recording Secretary ������ Scott J. Lund Mayor