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05/21/2007 - 00029081CITY COUNCIL MEETING CITY OF FRIDLEY MAY 21, 2007 The City Council meeting for the City of Fridley 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 Varichak Councilmember Saefke Councilmember Bolkcom OTHERS PRESENT: William Burns, City Manager Scott Hickok, Community Development Director Richard Pribyl, Finance Director/Treasurer Layne Otteson, Assistant Public Works Director Fritz Knaak, City Attorney Deb Skogen, City Clerk JoAnne Zmuda, 6051 Fourth Street NE Pete Borman, Fridley `49er Days President Virgil Haugan, 6010 7th Street NE Tim Hughes, 59th and 7th Street Tom Sutterland, 5850 7th Street Tom Myhra, 6360 Able Street NE Dick and Ardyce Edwards, 6050 7th Street NE Amy Zheng, 1632 Rick Creek Road NE Pete Eisenzimmer, 6535 Oakley Drive NE Don Findell, 6850 Siverts Lane NE PUBLIC SERVICE ANNOUNCEMENT: Layne Otteson, Assistant Public Works Director, provided a brief update on the Street Reconstruction Program. This summer's project involves the area north of 73rd Avenue, south of 61st Avenue and north of I-694. The typical construction project involves removing the pavement and going into the boulevards ten feet and removing the grass, landscaping and anything that would impact the reconstruction of curb lines and street construction. This summer's project will involve about 375 Fridley residents. The work for utilities will include water main, sanitary and storm sewer. Storm sewer e�tensions and catch basins will help provide a safer and faster draining area. Staff has found a very aggressive contractor who has already started stripping and grading streets in the northern area. The excess materials will be FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 2 taken to ball fields one and two at Community Park. Home plate and the infield will be raised which should assist with drainage on the fields. The street project should be completed in early November but may be finished early. If anyone has questions regarding this project they may contact him at 763-572-3551. Councilmember Saefke asked if the residents will be notified prior to the curb being installed. Mr. Otteson answered that residents would be notified less than a week but more than three days before the curb installation would occur. Mayor Lund asked if the drainage would be improved on 6th Street and 63rd Avenue. Mr. Otteson answered the area has been looked at and the pipe in that area is small and flat. There is not a lot that can be done with this area but the capacity can be increased by putting in more inlets and replacing the catch basins. The grade of the street will also be improved which will help the drainage. Mayor Lund stated that replacing this pipe would be an expensive project and asked if there was any way to install a mechanical pump that was pressurized to force feed the pipe. Mr. Otteson answered that this would be called a lift station and that idea has not been discussed. Staff is aware there is a problem in that area but a lift station would involve e�tended maintenance costs and upfront dollars, as the lift station is expensive to install and maintain. Councilmember Saefke asked if catch basins would be installed on 61st and 63rd Avenues. Mr. Otteson answered that catch basins in that area are not in the plan but they will adjust the high point of the road to shift more water away from the problem area. The street will also be lifted up so the driveways will not be so steep and the drainage should improve. Councilmember Saefke asked if this was a cost savings mechanism. Mr. Otteson answered yes. Instead of excavating down, the good gravel would be stripped from the top and excess material from other jobs would be used at that location which saves on trucking costs. Councilmember Saefke asked if the City saved substantially on the bids this year since it is a slow season for construction. Mr. Otteson answered that the prices were lower this year and the City probably saved over $300,000. Councilmember Bolkcom asked if the reseeding from the prior project would be taking place sometime in the ne�t few weeks. FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 3 Mr. Otteson answered that currently a few people are working on this issue and that it is a very slow process. The City will be using a hydro mulching process where the material may look white in appearance but there is seed in the material. The project has been started, but he is not sure when it will be completed. Councilmember Varichak asked how the other improved ball fields at Community Park were doing. Mr. Otteson answered that the fields look good but it is less than a year old and it takes time for the grass to mature. The fields are draining much better and they are practicing on the fields. APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council meeting of May 7, 2007. APPROVED WITH CORRECTION ON PAGE 19. NEW BUSINESS: 1. Receive the Minutes of the Planning Commission Meeting of May 2, 2007. RECEIVED. 2. Resolution Authorizing Final Changes in Appropriations for the General Fund, Special Revenue Funds, and the Capital Improvement Fund for the Year Ended 2006. William Burns, City Manager, said overall, General Fund expenditures are over $100,000 under budget. Most of the General Fund's over expenditures represents three major items: Street lighting ($55,000) due to energy costs, Fire Department Retirement Fund ($68,000), and legal costs associated with prosecution of additional crimes in 2006. The expenditures for the Special Revenue Funds are all offset by current year revenues. The Capital Improvement Fund adjustments were largely accommodated by applying unspent appropriations for capital outlay items. Staff recommends Council's approval. ADOPTED RESOLUTION NO. 3. Claims (131706 - 131896) APPROVED. 4. Licenses. ADOPTED THE LICENSES AS SUBMITTED AND AS ON FILE. FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 4 5. Estimates. APPROVED. Councilmember Bolkcom asked to correct Page 19 of the City Council meeting minutes. In the si�h line of the second paragraph, "father" should be changed to "farther." MOTION by Councilmember Barnette to approve the consent agenda with the correction to the minutes. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. ADOPTION OF AGENDA. Councilmember Varichak asked for removal from the table the license regarding livestock as it relates to pigeons at 6632 Rice Creek Road NE to place the item as l0A on the agenda. MOTION by Councilmember Varichak to adopt the agenda with the addition of Item 10A. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. OPEN FORUM (VISITORS): Peter Borman, President of Fridley `49er Days, reminded residents of the upcoming Fridley `49er Days on June 13 through 17. This year there is a new venue. The carnival will be located at the Fridley High School parking lot and the bands and food vendors will be at Commons Park. Other events will be held at the Community Center. Councilmember Barnette asked where the parking would be this year. Mr. Borman answered that parking will be at the Community Center and at the Fridley Middle School. Some limited parking and handicap parking will be at Commons Park in the south parking lot. There will be fireworks on Saturday night at 10:00 p.m. If residents want more information they check out the Fridley website. William Burns, City Manager, mentioned that a schedule of events is also listed in the City Newsletter. PUBLIC HEARING: 6. Consideration of Mill and Overlay Project No. 2007 — 2. MOTION by Councilmember Saefke to waive the reading of the public hear notice and to open FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 5 the public hearing. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY, AND THE PUBLIC HEARING OPENED AT 7:50 P.M. Layne Otteson, Assistant Public Works Director, stated that this mill and overlay project includes the streets of 61st Avenue and 7th Street. This is the second year on the City's assessment policy for major maintenance of streets that have concrete curb and gutter. This program will continue the upkeep of our existing streets. It has been determined that patching is no longer sufficient to maintain a safe travel surface in several areas of the street. The City continues to spend a lot of money on maintenance with seal coating and crack sealing. A notice of this meeting was published in the Sun Focus and individual letters were mailed on May 8. The project consists of removing the top two inches of the deteriorated asphalt and repaving the street. The project area is 61 st Avenue from University to 7th Street and 7th Street from 61 st Avenue to 53rd Avenue. Mr. Otteson stated that the total estimated cost for the project is $66,000 for 61st Avenue and $233,000 for 7th Street for a total of $299,000. The funding for the project will be $181,000 from the City of Fridley. The amount of $118,000 will be assessed to properties. On 61st Avenue, non R1/R2 properties were assessed as part of the project. Non R1/R2 assessment is calculated by dividing the total cost by the length of the roadway, then each side of the street pays 50% of the cost per foot to resurface the street. The estimated cost per centerline foot is $63.38, non R1/R2 properties that are abutting 61st Avenue are assessed 1/2 which is $31.69 per foot of frontage. The City of Fridley pays the remaining cost. On 7th Street, 67 properties are designated as R1/R2 properties and will be assessed $1,017 each. This is the cost for a standard 32 foot wide residential street. The existing street is 44 feet wide, so the amount is prorated down. The non R1/R2 assessment is calculated by dividing the total cost by the length of roadway. Each side of the street pays 50% of that cost per foot to resurface the street. The estimated cost per centerline foot is $34.16. The non R1/R2 properties abutting 61st Avenue will be assessed $22.08 per lineal foot of frontage which is 1/2 of the total cost per foot. Again the remainder will be paid with City funds. Mr. Otteson stated that the assessment options are as follows: 1. A lump sum paid within 30 days of the assessment hearing which is after construction. 2. Having the assessment added to property taxes and paid over 10 years with an interest rate of 6 1/2 to 7%. The interest rate is unknown until the time of final assessment. 3. Senior Citizens meeting certain criteria (age 65 and income level) and request to have the assessment deferred until the future sale of the property. Interest would start to accrue until the sale of the property occurs. FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 6 Virgil Haugan, 6010 7th Street NE, asked if the Community Center and the vacant land down to the ball field were being assessed and who was paying the charges. Mr. Otteson answered that the property would be paid by the City of Fridley. This would be figured in as a non residential area so the residents would not have to subsidize that area. Mr. Haugan asked if 7th Street was a County-owned road. Mr. Otteson answered that 7th Street is a MSAS (Minnesota State Aid Road) which means that the City gets money back from the State to maintain that road. Councilmember Barnette asked for clarification regarding the land by the ball field. The City is paying for that and it is not figured into what the residents are paying. Mr. Otteson answered that is correct. Mr. Haugan asked if everyone is being assessed the same amount. Mr. Otteson answered yes, the residential portion is divided up equally between the residents. The non-residential properties are assessed per lineal foot which is substantially higher. Councilmember Barnette asked if any other factors were used in the senior rates besides age. Richard Pribyl, Finance Director/Treasurer, answered that income also qualifies. He reminded people that the interest would accrue over a period of time if the fees were deferred and they would be paid at a later date. Mr. Haugen commented that about 80% of the people who use the streets in Fridley do not live in Fridley and he felt residents were being assessed unfairly. Mayor Lund agreed but said it was a public road and it is our responsibility to maintain the road. It is a busy street that is in need of repair. Councilmember Saefke asked about the St. William's property on 61st and if they were assessed. Mr. Otteson answered that St. William's was assessed as a commercial property. Tim Hughes, asked if the residents involved in this project would be getting new gas meters like other streets that are being repaired. Mr. Otteson answered that projects with complete reconstruction offer an opportunity for gas lines to be replaced. This current project is a mill and overlay project and the gas company would have to replace the meters on their own because they would disturb the street and boulevard which is not to be restored in this project. FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 7 Mr. Hughes said that the residents in this project will not get new gas meters like everyone else, just new roads. His biggest complaint is that since the townhomes were constructed, he lives on two busy streets and he is paying for a new road in front of his house when the current one is perfect. Police cars run so fast down this road the windows in his house shake. Evidently the road is safe enough for police cars. Mayor Lund said if the road was perfect, staff would not waste the money to fix the road. There have been several complaints that 7th Street is a rough street. Mr. Hughes said the road is rough down by the bridge by Medtronic's because of the big trucks going in and out of that area, but the road in front of his house is perfect. The road from 57th Street to 63rd Street is better than most of the streets in Fridley. Mr. Otteson said that the road rating system is done annually. The rating system shows that 61st Avenue is one of the top five candidates. When spring comes and the frost is out of the ground, staff looks at what areas are worst in terms of spending a lot of maintenance dollars. It looks as if more maintenance dollars would need to be spent on 61st and 7th as the streets are coming apart quicker. The curbs will not be touched in this project. This is just a mill and overlay project. Once you add up crack repairs, wedges, and spot repairs, the costs can add up. The City does not want to spend money on streets if it is not needed. Mr. Hughes said that the City has done an excellent job at maintaining the streets between 61st and 57th Street. Tom Sutterland, 5860 7th Street, asked who would pay for the Medtronic area. Mayor Lund answered that Medtronic would be assessed at the higher rate. Mr. Sutterland stated that the street is in great shape and there are a lot worse in the City. The rescue, police and ambulances go fast down the neighborhood and drive okay. Many people go down 7th Street because it is safer and there is less traffic. Councilmember Bolkcom suggested for residents who see fast rescue vehicles going through the area to contact Don Abbot to complain giving the date and time of the incident. Mr. Sutterland added that no one stops at the stop sign on 59th Street either. Police have been there and ticket people all the time. He questioned why they are resurfacing the road when it was done three years ago. They laid down gravel and oil and re-striped the road. Mayor Lund stated that this is a seal coat which is not done every three years but there is no guarantee when the road will break up again. He asked if the residents are saying that only certain sections of this road need to be replaced. Mr. Sutterland answered that is correct. Councilmember Bolkcom asked if the street does not need to be done now if another FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 8 assessment could be done again to determine if this is needed. She wanted to make sure that residents understood that the City would not come back ne�t year if all of a sudden the road started falling apart. If residents do not want it done, the City will move on to another area so it could be a gamble that it will not get done for quite some time. Mr. Otteson said he understood the position of the residents. Staff is trying to determine what areas fall apart the most and cost the most to maintain. In the future, if a complete reconstruction is needed, the cost to the residents will more than double. The reason staff is in favor of this project is because the price went down this year and you need to consider the increase in price for a future project and deeper excavation may be needed. Also the residents are only being assessed for a 32 foot wide road vs. a 44 foot wide road. Property owners are only being assessed 1/3 of this project and the City is taking in the rest of the cost. Councilmember Saefke asked if it was possible for a spot overlay. Mr. Otteson said that is possible, but the cost would increase because mobilization for vehicles to come in and do the project is a large part of the cost of the project. Using smaller pavers for smaller projects is not as cost efficient, so the price would be higher. Mr. Haugen asked if the street drains would be brought up to the street level. Mr. Otteson said that the manholes would be adjusted. Councilmember Saefke said there is a contractor coming in to do the project on University and 7th Street and he asked if the same contractor could do a spot repair. A number of water main breaks have happened along 7th Street over the years and when a patch is done it will leave a crack. He asked if there was a new method used to take care of the problem with cracks. Councilmember Bolkcom questioned if more patches were done if it would create more problems and the City would need to keep sealing the area. Mr. Otteson said that you do end up with a seam and it can be felt when you drive over it. When a water main breaks, the patch is usually high or low, as it is hard to match the seams from all areas. With the mill and overlay proj ect you dig down and rebuild the area. Mr. Sutterland commented that if a water main breaks, a patch will be done over the new road again and soon they will be back to patches, seams and ruts. Councilmember Bolkcom asked if there was anyone else present who was not in favor of the project. She asked how many properties on 7th Street would be affected by this project. Mr. Otteson stated that there are 57 properties on 7th Street that are R1/R2 and 11 non R1/R2 properties. Ardyce and Richard Edwards, 6050 7th Street, agreed that the road is okay the way it is, except where the stop signs are located. They questioned why fix the road if it is okay with all FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 9 the traffic that travels the road. Sometimes they can wait 10 minutes to get out of their driveway because they are the third house down from 61 st and need to watch from both areas. They are 50 year Fridley residents and just put in a new driveway and landscaping. Mayor Lund said there is no guarantee there will be no problems if the street project is done. Things break over time like water mains. Mr. Edwards asked if a stop sign could be installed for people coming out of the Community Center. Mr. Otteson took note of the request and said he would look into the possibility. Councilmember Saefke asked if anyone at the meeting was in favor of the street reconstruction project and no one raised their hands. Mayor Lund reminded citizens that this will be an action item at the ne�t Council meeting on June 11. Councilmember Bolkcom asked if staff could go back and look at the situation again and find out how many times the street was patched. There are 68 people who live on this street and only three residents are complaining. Mr. Otteson said he would look into the project further. Councilmember Bolkcom asked if a report could be created about the reasons that support this street project. Councilmember Varichak said the three people who spoke felt there are certain parts of the street that need to be done but not the entire street. MOTION by Councilmember Saefke to close the public hearing. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE PUBLIC HEARING CLOSED AT 8:35 P.M. 7. Consideration of an Ordinance Proposing to Amend Section 7.02 of the Fridley City Charter Pertaining to Utility Rates. MOTION by Councilmember Barnette to waive the reading of the public hearing notice and to open the public hearing. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED AND THE PUBLIC HEARING OPENED AT 8:36 P.M. FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 10 Richard Pribyl, Finance Director, said that in addressing the needs of the City related to the continuing losses in the utility funds and the concern as to whether or not the City is allowed to bond for needed capital improvement projects, the City of Fridley had its Bond Counsel, Briggs and Morgan, review the situation. They prepared an e�tensive memorandum as to the legality of the Charter's restriction on utility fees within the Enterprise Funds. The memorandum indicated that they understood the State Law to supersede the Charter in this particular case. They felt the Charter could not limit the City from charging residents for the utility services they provide by charging rates that were intended to recover actual costs. Based on this information and the results of the 2006 election, the Fridley City Council adopted Resolution No. 2007-15 on February 26, 2007 directing the City Attorney to draft a letter requesting an opinion from the Attorney General regarding whether or not the City Charter is in conflict with State law in relation to the annual limitation imposed on utility rates. The Attorney General provided their response to the City Attorney on April 18, 2007. The Attorney General's office would not provide an opinion on this issue. Mr. Pribyl stated that in 2001, the utility fees were included in a Charter amendment that limited the water, sanitary sewer and stormwater rates to increase by the lesser of 5% or the Minneapolis/St. Paul consumer price index. Staff and City Council are very concerned about this issue, since a large portion of cost is beyond the control of the City Council. As of December 31, 2001, which was the first total year of restriction, the operating loss for utilities was $144,881. This amount reflects the net loss for that particular year. Utilities continued to lose money. The operating loss for the period ending December 31, 2003, was $795,736. In 2004, an amendment was recommended by ordinance to the City Council to remove the restriction for the utilities. In 2004 enough signatures were collected to have the question on the ballot and it did fail with a yes vote of only 38%. Utilities continued to lose money through 2004 and 2005. In 2005, City Council recommended an ordinance to the Charter Commission to remove the restriction. In 2005 the City adopted the ordinance, sent the question to the electorate again, and the question failed again with a yes vote of 39%. By the end of 2005, the total funds lost were $939,290 and the Council then decided to ask for a rate increase of about $26.00 per year. The question failed with a yes vote of 48%. By December 31, 2006 the utility funds were at a loss of $1,261,275. By the end of 2007, the funds will be depleted and necessary maintenance will be carried into future years. Mr. Pribyl stated that the City has considered a number options regarding the rates, but each time the City considers some change in the rates, it violates the limitations within the Charter. Both City Council and the Charter Commission agree that this change to the Charter is necessary to stop the erosion of capital from causing deeper and significant harm to the City's finances. Pete Eisenzimmer, 6535 Oakley Drive NE, provided his opinion on the matter. Pete Borman, 120 River Edge Way, stated that he is on the present Charter Commission and is all for the change. This has been brought to the City of Fridley 3 times, not 5 times. The City is losing money to the cost of over a million dollars because of the restrictions that are within the Charter. FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 11 Tom Myhra, 6360 Able Street N.E., stated he has heard concerns from citizens and they have said that they are against this change. He said the Concerned Citizens of Fridley's concern is housing, and not this issue. He has had conversations with Councilmember Barnette. He said he voted yes for this change last time. He said Council needs to convince people that there is a lock box on the funds and it will not be used for anything other than utilities. Last time, more people voted for the change than those who were against it. Many did not vote because they did not know why the funds are needed. This fund is not all bad and it is a good source of funds for emergency use. Mayor Lund stated that the City has never used the utility reserve funds for other purposes. Funds spent have always stayed in those accounts for ongoing maintenance. Mr. Myhra stated that numerous people do not believe that. He suggested hiring a public relations professional to give suggestions on what the City needs to do and the best way to do it. Councilmember Barnette said he agreed that the information on how important this change is needs to get to the public. A1 Stahlberg, 8055 Riverview Terrace, stated that he agreed with Mr. Myra in that the residents do not believe Council. He asked if Council could live with just a 5% increase. Mayor Lund replied no. Five percent would certainly help and lessen the loss, but if we want to build up a savings account to fix equipment, 5% would not be enough. If maintenance is deferred too long, the cost for repair will continue to rise and the delivery of services to residents will also be affected. Mr. Stahlberg asked if the utility bill could be broken down listing the increase for utilities, water, sewer, maintenance fees, etc. People would then know where the money is going. Councilmember Saefke stated that Mr. Stahlberg mentioned charging a service fee. Most utilities charge a connection fee which is above and beyond the use of the product. This fee is for transportation and distribution of the utilities. City Charter does not allow Fridley to charge a connection fee, so the City is trying to recoup and now does not have enough funds to even get a loan. The City needs collateral such as reserves. Interest rates are increasing and today you cannot float a bond for utilities. The restrictions of the Charter include the utilities. The City has used up the reserves to the point they cannot even borrow money. Mr. Stahlberg asked if the utility bill could be itemized. Councilmember Bolkcom stated that the utilities are itemized in the budget by line item. The rates are set at a level to provide services. It is a State Law that the City cannot increase the prices anymore than the cost of living. It is just like a homeowner who puts away money for maintenance, the City needs to do the same. FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 12 Mr. Stahlberg asked if this could be itemized on the resident's bill so people can see where the money is going. Itemize the bill with categories such as: pass-through costs, utility costs and maintenance costs. Most people do not read the City budget or understand it. William Burns, City Manager, stated that the amount of money in reserves is based on depreciation of assets such as the water towers and water main lines. These items need to be replaced over a number of years so there is no fixed level in the reserves. Right now we need $1.1M to fix the water tower and do not have a dime in appreciation. The Charter has gotten us into this situation. Water is something that you cannot do without. It is a matter of public health, safety and welfare. We need to respond to the maintenance needs to continue these services to the residents. Mr. Pribyl said that is what the City has been advocating for years is that they should be maintaining a level of cash reserves to take care of infrastructure maintenance. Don Findell, 6850 Siverts Lane, said he was on the Charter Commission in 2000 when this issue first came up. Now we are seeing the unintended consequences due to the action taken. For years the Charter Commission has been trying to right the wrong, to get the budget back in line to where it should be. We hire City Managers, Finance Managers, elect Council Members to take care of these things. For citizens to think that they are so much more able to manage the City finances without having all the details does not work. He is not in favor of the public micro managing this situation. The legality of these issues are well within the requirements of the State to maintain adequate finances by selling a commodity, water/sewer, to residents. The City can raise rates to build reserves, not to make a profit. The City cannot overcharge for the water/sewer on the bill. Citizens need to know and understand what it takes to maintain things like the water tower. Residents need to know that we have good people managing our affairs. He hopes there will not be a referendum coming because this must be done. Carol Hoiby, 5380 Seventh Street N.E., Charter Commission member, said she is in favor of this and does not think people understand. This is only $26 per household, which is not a lot of money for the services we are getting. Mr. Eisenzimmer, said that he has listened to the people talk tonight and they are all for it. If he was on the Charter Commission he would be for it too. The City needs money so why did we give Medtronic a tax increment of $600,000 to build projects on our money. HRA does nothing but give away money and this is our money that we should be collecting. Mayor Lund stated that this item is on utility rates only and asked if he could keep his comment to that subject. Mr. Eisenzimmer said he will get a referendum started. Mayor Lund commented that he was sorry Mr. Eisenzimmer felt this way. It has been on the ballot three times and it is too bad it has to go on again. Mr. Eisenzimmer said that if they do not do what the Charter says, there will be a referendum. FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 13 JoAnne Zmuda, 6051 Fourth Street N.E., stated that she did not understand the issues but she does not think anyone in Fridley is against paying their fair share of the water. She asked why the City could not have more tiers. Fridley does not encourage water conservation. Raising the rates is fine if it is fair for all the citizens. She read that the City of Breckinridge states that with respect to public utilities for commercial and home use, the city and public utilities commission are authorized to set reasonable rates including rates in excess of the precise amount required to offer utilities. The City Council may transfer funds from the public utility funds to other expenditures. Mayor Lund stated that historically this has not been done by the City of Fridley. Fritz Knaak, City Attorney, said that the situation with Breckinridge was unique. The rule of thumb is the City can add charges that can include anticipated reserves that are prudent in the normal management process. The City Charter in this situation prevents this from happening to the e�tent that the City can ignore the Charter and get into a situation where they would not be able to provide services. In this situation, State law would prevail. This is not the case tonight but there is an opinion that the City's language may be in violation with State law. The City cannot make money or profit off of its utilities. What the City can do is charge for the services that are provided which includes, under State law, the provision for prudent reserves that are necessary for operation. Ms. Zmuda said she did not think anyone minds paying their fair share, but a lot of people feel like they are subsidizing businesses and the fact that there is no cap on how high these increases can go on bothers people. Many residents are on a fixed income and need to know how much their bills will be every month. Mayor Lund responded that the cap would be what it would take to pay the bills and offer services. Raising the tiers is beyond the restrictions in the Charter. The tiered structure would cost a considerable amount of money to do a feasibility study. Keep in mind that in the last 40 years Fridley has historically one of the lowest rates in the State. Ms. Zmuda said that according to the Charter the rates can be raised up to 5%. Mayor Lund added or the lesser of the rate of inflation. A problem is that we are subsidizing the commercial water user currently by operating at a loss. A small water user does help subsidize the use of water for heavy users. The Charter restrictions states that we cannot raise the rates to where they need to be so commercial users are getting a huge benefit. William Holm, 7424 Melody Drive, and member of the Charter Commission, asked if there was a first and second reading of the ordinance. Dr. Burns said that the first reading will be on June 11 and the second reading on June 25. Mr. Holm asked if it requires a unanimous vote to approve a Charter amendment. Dr. Burns said that is correct, it would need a 5/0 vote to pass. FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 14 Mr. Holm asked if a petition is brought forward do they get two months to collect the necessary signatures before bringing it to Council. Mayor Lund said that once all the signatures are validated this item would be back to square one. Mr. Holm said that this item has been brought before the voters twice with a 38% yes the first time and 39% the second time. We need to educate voters on the need for this Charter change and that this increase is necessary to run this operation to break even. If this goes to the voters again, there is an issue again of educating the voters. Mayor Lund said that on the ballot vote to change the rate increase it takes a majority vote. It assumes that those who do not vote on the item vote no. Mr. Holm said it is important for people to know that right now we have used up all the money in the water fund. Unless something is done, in 7 to 8 years we could start bankrupting the City unless we resolve this problem. Water and its subsidy will take over all of City finances. Debra Skogen, City Clerk, stated that this would require a super majority, as State law supersedes the City Charter. This would require 51% of those voting on the question to vote yes for the question to pass. There would be 60 days after the second reading for a Referendum Committee to submit a petition. MOTION by Councilmember Barnette to close the public hearing. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE PUBLIC HEARING CLOSED AT 9:33 P.M. 8. Consideration of Special Use Permit, SP #89-08, for Sam's Auto World, Generally Located at 7570 Highway 65 (Ward 2) MOTION by Councilmember Saefke to remove this item from the table. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE , MAYOR LUND DECLARED THE MOTION CARRIED AND THE ITEM WAS REMOVED FROM THE TABLE AT 9:36 P.M. Mr. Hickok stated that the ne�t two items on the agenda involve two similar businesses. This particular item is for Sam's Auto World and the ne�t item on the agenda is for Sam's Auto Parts. Sam's Auto World is at 7570 Highway 65. Council may recall that in 2006 there was great concern about auto sales taking place at this location. Staff investigated found that there were auto sales taking place and asked Council to review Special Use Permit, SP #89-08, and consider revocation of that permit. The owner of Sam's Auto World said he would relinquish their state license to sell vehicles and understood there was a problem at their store. Recently, staff was FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 15 still concerned that auto sales were happening. Further investigation has determined that all vehicles that were being offered for sale have been eliminated from this site. There were also concerns in the past about outdoor storage and salvage operations possibly happening at this location. The last item to clean up was the auto sales and this has been done. Staff recommends not taking any action to revoke the special use permit and staff will continue to keep an eye on this site. Councilmember Bolkcom asked if this is a public hearing and not an action item. Mr. Hickok said that this item comes with a recommendation from staff not to revoke the special use permit at this time. Mayor Lund asked if it would be appropriate to postpone this item indefinitely. Fritz Knaak, City Attorney, answered that this item could be put back on the table again if the public hearing is tabled. If the public hearing is closed, Council is not required to take subsequent action. MOTION by Councilmember Varichak to close the public hearing. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE PUBLIC HEARING CLOSED AT 9:39 P.M. NEW BUSINESS: 9. 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, by Sam's Auto Parts, Generally Located at 1240 - 73 1/2 Avenue) (Ward 2). Julie Jones, City Planner, stated Sam's Auto Parts is located at 1240 - 73 1/2 Avenue. The property needs to be rezoned because the G1 zoning does not allow outside storage of parts. Because of the outside storage, the business also had to have an annual junkyard license. Mr. Hoosline is asking to expand the business that the City did not want in this location back in 1976. Several times the business was sent letters to come into compliance with the stipulations. Staff cannot recommend that Council approve this item. Councilmember Bolkcom asked if the owner had a problem with the list of stipulations. Lawrence Marofsky, Attorney for Sam's Auto Parts, stated that the owner would comply with the stipulations. They would prefer the service station would remain but planned to tear down the house. Councilmember Bolkcom stated that this is an opportunity to clean up this area and it would be important to comply with the stipulations as listed. FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 16 Councilmember Barnette asked if the underground gas tanks were removed from that site. Mr. Marofsky said they were removed and the owner would comply with any pollution stipulations. Councilmember Bolkcom said this business has been there a long time and this is a great opportunity with the rezoning to clean up this area. She is in favor of this item along with all the stipulations that are listed. Mayor Lund asked if the garage could stay for the owner to use. Councilmember Bolkcom said that the building is non-conforming so it needs to be removed. Mayor Lund stated that the operation has been there a long time and he does not want to put anyone out of business. MOTION by Councilmember Varichak to approve waive the reading and approve the ordinance on first reading with the following seventeen stipulations: Property owner conduct soil testing and provide City and other applicable government authorities proof of clean soils prior to installation of any new impervious surface on any of the parcels involved in the approved application. 2. Once Petitioner owns all of the property used for his business, owner shall file necessary documents with Anoka County to combine the parcels for tax purposes. The single family home, garage, and numerous accessory buildings in disrepair at 1240 73 '/z Avenue and 7340 Central Avenue be removed. 4. Petitioner to obtain approval of grading and drainage plan from the watershed district. 5. Petitioner to obtain any necessary approvals to operate an auto recycling center from the appropriate governmental authorities. 6. Petitioner to obtain all necessary permits prior to construction. 7. Site Plan needs to be adjusted to provide code required curbing/paving installation setbacks. 8. Petitioner to meet all building and fire code requirements. 9. City Engineering staff to review and approve final grading and drainage plan prior to issuance of permits. 10. Storm pond maintenance agreement must be filed prior to issuance of land alteration permit. FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 17 11. Petitioner shall obtain any required NPDES Permit and provide N URP ponding for entire site. 12. Final landscape plan to be reviewed and approved by City Staff prior to issuance of land alteration permit. 13. Provide proof that any existing wells or individual sewage treatment systems located on the site are properly capped or removed. 14. Property owner of record at time of land alteration to correct any deficiencies in the water and sewer connections to the buildings on site. 15. Secondary access curb cuts and gates in fence on Lot 16 and 17 on 73 '/z Avenue must be removed as part of redesigned site plan. 16. Any business signs that are not approved currently by a sign permit must be removed from the site until a permit is obtained. 17. Petitioner to reduce screening fence height to 8' or obtain variance. Seconded by Councilmember Bolkcom. Councilmember Bolkcom asked what the time frame would be for the owner to complete the stipulations. Ms. Jones stated that a time frame would be included in the second reading. Deadlines will be put in place for certain parts of the stipulations. Councilmember Bolkcom asked that the timetable be sent to the owner so he is well aware of the time table expectations. Ms. Jones said the property owner would get a copy of the time table. Fritz Knaak, City Attorney, said the time table would be attached to the special use permit and not the rezoning request. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 10. Preliminary Plat Request, PS #07-04, by Bruce Westman, to Reconfigure Two Lots, Generally Located at 100-110 Mississippi Place (Ward 3) Scott Hickok, Community Development Director, stated that the petitioner is requesting to reconfigure Lots 2 and 3, Block 2, to create Lots 1 and 2, Block 1, Sarah Addition. The replat will change the property lines from east-west on these two parcels to north-south. The subject FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 18 properties are R-3 multi family residential. These properties were developed in 2002 and the two parcels were part of that single family property at 111-64 1/2 Way. There were always two separate parcels but they were encompassed by one single family home. In 2002, the property owner decided to sell pieces of his back yard and create 100 Mississippi Place. As a result, a twin home was constructed on the property which takes access off from Mississippi Place. Also in 2002, the property owner was told to combine 100 Mississippi Place and 110 Mississippi Place of the Johnson's River Lane addition. The lot that went east and west was to have one parcel with the twin home on the property. Apparently, the lot combination was never filed and now the petitioner is seeking the current replat request to separate the lots with the north south property line which would allow the property owner to sell the lots individually. Staff is not asking to change the current R-3 multi family residential zone. The R-3 section of the code does allow this type of two family dwelling. Two family dwellings in this district are also subject to the R-2 district regulations. Fridley City Code does require that on R-2 lots, the minimum lot width be 75' and have a minimum lot area of 10,000 square feet. The proposed lots will be 94.54 feet in width with a square foot dimension of 16,574 square feet. The two family minimum lot request is met by this proposed plat. Mr. Hickok said that this request would allow each of the units to be on its own lot and sold separately. The existing twin home is set for lot coverage requirements; however the fence along the western and eastern property line is non-conforming and is over the required 4' of height in the front yard of the property. Staff has stipulated in the recommendation that the front yard fence be reduced to 4' in the front yard and that a landscaping plan be submitted to staff prior to final plat approval. On May 2, the Planning Commission approved this plat with three stipulations. A fourth stipulation was added by Anoka County after the Planning Commission meeting. Staff recommends approval of plat with the following stipulations: 1. Petitioner shall remove or reduce the height of the fence to 4 feet in the front yard on the west and east side of the property prior to final plat approval. 2. Petitioner shall submit landscape plan to be reviewed and approved by City staff prior to final plat approval. 3. The line separating the two lots shall align with the party wall of the twin home. 4. Final plat shall show right of access along CSAH 1(East River Road) to be dedicated to Anoka County along the entire length of the eastern edge of the property. 5. Petitioner shall submit a covenant for filing with Anoka County Recorder's Office for this property. The covenant shall define future maintenance expectations between the property owners. 6. Petitioner shall pay park dedication fees at a rate of $1,500 per lot which is standard for a sub-division of this type. The petitioner is aware of the additional stipulations. FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 19 Councilmember Bolkcom asked if the petitioner is in agreement with the additional stipulations. Mr. Hickok answered that the additional stipulations were left on a voice mail message so he was not sure. Councilmember Bolkcom asked how staff would make sure this was filed properly. Mr. Hickok answered that there is a distinct difference in the two requests. The petitioner is asking for a plat which is required before the units can be sold independently. With the stipulations, a lot of the protections are built in to make sure the correct paperwork will be filed. Bruce Westman, petitioner, said at the Planning Commission meeting, it was discussed keeping the fence at the 6' height. The fence will reduce the noise and add privacy. By reducing part of the fence and not the rest, it would look funny. Mr. Hickok stated that Mr. Westman would need to request a variance to keep the fence at the 6' height. Councilmember Varichak asked if the driveway would be okay shared or if the driveway should be split. Mr. Westman answered that he owns and has sold other twin homes and a shared driveway has never been an issue. Councilmember Saefke asked if the sewer and water would be split. Mr. Westman answered yes. MOTION by Councilmember Bolkcom to approve Preliminary Plat Request, PS #07-04, by Bruce Westman, with the following six stipulations: 1. Petitioner shall remove or reduce the height of the fence to 4 feet in the front yard on the west and east side of the property prior to final plat approval. 2. Petitioner shall submit landscape plan to be reviewed and approved by City staff prior to final plat approval. 3. The line separating the two lots shall align with the party wall of the twin home. 4. Final plat shall show right of access along CSAH 1(East River Road) to be dedicated to Anoka County along the entire length of the eastern edge of the property. 5. Petitioner shall submit a covenant for filing with Anoka County Recorder's Office for this property. The covenant shall define future maintenance expectations between the property owners. FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 20 6. Petitioner shall pay park dedication fees at a rate of $1,500 per lot which is standard for a sub-division of this type. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND MOTION CARRIED UNANIMOUSLY. 10A. Consideration of Livestock License as it relates to Pigeons at 1632 Rice Creek Way. Amy Zheng, 1632 Rice Creek Way, stated that her husband would like to have 30 to 50 pigeons on his property. There have been no complaints or problems from neighbors, but the license says they can only have 10 pigeons. Scott Hickok, Community Development Director, stated that on April 23, a license was requested for racing pigeons. Since City of Fridley does not have a license that is specifically for pigeons, staff reviewed the livestock ordinance. Under the livestock section of the City Code, there is no limit on the number of pigeons residents can have. Very few cities have an ordinance permitting this. Eagan, White Bear Lake and Champlin allow up to 100 pigeons on residential properties. The loft would allow 1 to 2 square feet per pigeon depending on the ordinance. In this case, the Zheng loft is 180 square feet which would allow 90 to 180 pigeons. Although some cities allow this, more cities do not allow this. The Animal Humane Society recommends putting a limit of three animals for all domestic pets (rabbits, dogs, cats etc.). Mr. Hickok stated that Ms. Zheng came in prior to the research of the Animal Humane Society and the City gave them a license for up to 10 birds. This is a reasonable and realistic authorization from now until they decide not to do pigeons anymore. Mayor Lund asked if this is an action item tonight and if it falls into the 60-day rule. Mr. Hickok said this is an action item and June 10 is the end of the 60-day time frame. This should be acted on as a land use request and dated today. The license is not before Council but the livestock license is what would allow them up to 10 birds at this location. Ms. Zheng said reminded Council that the pigeons do not make noise like a dog. They are very nice birds and no one has complained. Mayor Lund said that the noise may not be a problem but 100 birds' droppings may be a problem. The birds could perch on neighbors' patios or fences. Ms. Zheng said that they were only asking for 30 to 50 birds. These birds do fly back to their home. Councilmember Bolkcom asked to move into the record a memorandum dated May 17, 2007, from Scott Hickok Seconded by Councilmember Varichak. FRIDLEY CITY COUNCIL MEETING OF MAY 21, 2007 PAGE 21 UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Councilmember Barnette asked if the pigeons breed and what happens if there are 16 pigeons. Ms. Zheng answered that baby pigeons need to be cared for about 2 to 3 months and then they would sell them or give them away. Mr. Hickok added that the cost of these birds is between $6,500 and $7,000 for one bird. If they have breeding birds or more than 10 birds they would still need to limit the number to 10. Even if they sell or give the birds away, many times these birds come back to where they were born and breed. MOTION by Councilmember Varichak to approve the livestock license for 10 birds at 1632 Rice Creek Road. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED 11. Informal Status Reports Councilmember Saefke said he attended the first annual Police Department Open House on Saturday and it was very successful. There were exhibits and an enjoyable time was had by all. Councilmember Varichak congratulated the seniors at Fridley, Spring Lake Park and Columbia Heights High Schools and wished them success in the future. William Burns, City Manager, said that the City newsletter will be going out to citizens during the first week in June. ADJOURN: MOTION by Councilmember Barnette to adjourn, seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MEETING ADJOURNED AT 10:35 P.M. Respectfully Submitted by, Krista J. Monsrud Scott J. Lund Recording Secretary Mayor