12/06/2010 - 29323CITY COUNCIL MEETING
CITY OF FRIDLEY
DECEMBER 6, 2010
The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:30 p.m.
ROLL CALL:
MEMBERS PRESENT: Mayor Lund
Councilmember Saefke
Councilmember Varichak
Councilmember Barnette
Councilmember Bolkcom
OTHERS PRESENT: William Burns, City Manager
Fritz Knaak, City Attorney
Scott Hickok, Community Development Director
James Kosluchar, Public Works Director
Darin Nelson, Financial Director/Treasurer
John Crelly, Assistant Fire Chief
PRESENTATION:
Federal FEMA Grants by John Crelly, Assistant Fire Chief.
APPROVAL OF PROPOSED CONSENT AGENDA:
APPROVAL OF MINUTES:
City Council Meeting of November 8, 2010.
APPROVED.
City Council Meeting of November 15, 2010.
APPROVED.
OLD BUSINESS:
1. Second 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
#10-02, by Ashland, Inc., for the Properties Generally Located at 7201 — 7299 and
7315 Highway 65 N.E.) (Ward 2).
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 2
William Burns, City Manager, stated Ashland, Inc. has requested that the City rezone property
at 715 Highway 65 from M-1, Industrial, to C-2, General Business. Ashland wants to redevelop
the site for an industrial clothing retailer. In order to avoid spot zoning, staff determined that two
properties to the south should also be rezoned. These other properties are 7299 and 7201
Highway 65. Staff notified the owners of these properties, the SuperAmerica property and the
vacant parcel to the south of it, and found that they have no problems with the rezoning. Council
approved the first reading on November 15. Staff recommends approval of the second reading of
this ordinance.
WAIVED THE READING OF THE ORDINANCE AND ADOPTED ORDINANCE NO.
1273 ON SECOND READING AND ORDERED PUBLICATION.
NEW BUSINESS:
2. Receive the minutes from the Planning Commission Meeting of November 17, 2010.
RECEIVED.
3. Approve Consulting Services Agreement between the City of Fridley and GIS
Rangers for 2011.
William Burns, City Manager, stated Fridley has been a partner with Columbia Heights and
Andover for many years in contracting for these services. Due to budget constraints, the contract
for 2010 is only $17,136. This year, the Public Works Director this year is asking that the 2011
rate be raised to $29,702 or by 73.33 percent. The additional $12,566 has been included in the
2011 utility budget and would be used for underground mapping of our water, sewer, and storm
water lines.
Dr. Burns stated approximately 90 percent of our contract work will be done at the base rate of
$35.70 an hour, an amount that has not been changed for several years. The remaining costs will
be subject to specialty rates identified in the contract. Staff recommends Council's approval.
APPROVED.
4. Approve School Resource Officer Program Agreement between the City of Fridley
and Independent School District #14.
William Burns, City Manager, stated the contract provides for the services of one Fridley police
officer at both the high school and middle school. In return for the nine-months of service,
School District #14 will pay Fridley, $35,540 or 6.9 percent more than in the 2009-2010 school
year. There are no other contract changes. Staff recommends Council's approval.
APPROVED.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 3
5. Claims (148586 — 148920).
APPROVED.
6. Licenses.
APPROVED THE LICENSES AS SUBMITTED AND AS ON FILE.
APPROVAL OF PROPOSED CONSENT AGENDA:
MOTION by Councilmember Barnette to approve the consent agenda as presented Seconded
by Councilmember Varichak.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
ADOPTION OF THE AGENDA:
MOTION by Councilmember Bolkcom to approve the agenda as presented. Seconded by
Councilmember Saefke.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
OPEN FORUM:
Marv Weiss, 6111 Rainbow Drive, stated when his street was resurfaced, he had an engineer
from the City come over and take a look at it. The street was all cracked, and he asked what
happened. The engineer's exact words were, the inspector was not here and was someplace else.
He said when they redid 61st Avenue, they will come back and redo your section of the road.
Mr. Weiss said all of Rainbow, down to the Sylvan Park, is all cracked. Other areas in Sylvan
Hills have no cracks. He called them back this summer after 61St Avenue was done. He was
told, well, you guys only wanted two-inches of asphalt put on it. He said nothing has ever been
done.
Mayor Lund asked Mr. Weiss if he had any other discussions with City staff.
Mr. Weiss replied no. Their street cracked immediately. The engineer looked at it and said, yes,
that is really bad. We should dig that up and redo it.
Councilmember Barnette asked who he spoke to.
Mr. Weiss said the engineer was at his house, looked at it and said, when we do 61st we are
going to have them come back and redo it.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 4
Mayor Lund said they will have City staff look at that particular section in front of his house.
They recently had a public hearing relating to the street projects. They had a considerable
amount of discussion, most of it pertaining to the east side where they have some noticeable
deficiencies in that project. He did not recall ever hearing much about any issues in Mr. Weiss'
neighborhood.
Councilmember Bolkcom asked Mr. Kosluchar to make sure they get back to Mr. Weiss in a
reasonable amount of time and asked that Council be copied so they know what the resolution is.
Audrey Nelson, 250 — 61St Avenue NE, said she left a message for Jeff Jensen who is in charge
of snowplowing for the City, because he is sending out the sidewalk plows. The sidewalk plows
are going through first, and then the street plows go through, and for the most part she has been
cleaning up the ends hersel£ However, with the last snowfall it was over two feet deep. This
happened last year, too. Mr. Jensen said the sidewalk plows go out at 4 a.m., the same time as
the street plows. He basically stated there was nothing they could do about it. If they got a
chance they would try and come back and clean up the ends of the streets that have a little bit of
snow at the end. She said she measured it. It is two-feet deep, and makes the sidewalks unusable.
She said 61st Avenue is a truck route. She has watched adults and children having to walk in the
street. It is e�tremely dangerous.
Mayor Lund stated he can see it happening where somebody's sidewalk gets plowed before the
street as they have a rotation system so nobody is last or first all the time. It is probably very
tough for a sidewalk plow to come after the road is plowed all the time. He does not know what
you are gaining by having the street plow come first, put the windrow in, and then having the
sidewalk plow come and leaves a windrow on either the street or either side of the sidewalk.
Councilmember Bolkcom stated they have to try and climb over it at the end of the sidewalk.
Ms. Nelson stated actually she looked at all of them on 61st and they were all like that except for
those who used their own snow blower to clean them.
James Kosluchar, Public Works Director, stated the crews are doing cleanup at intersection
corners and thought 61st Avenue was pretty high on the priority list. He does know there was a
lot of cleanup after having seven inches of snow. On the State and County routes, the City has to
clean up the bus stops because they will not.
Councilmember Bolkcom asked if there was a solution for what is a priority. She asked if the
City takes care of the stuff that MnDOT is supposed to take care of before we clean up our own
sidewalks.
Mr. Kosluchar replied, no, we do not take care of those immediately. Some of the walk areas
the City does clean up are near bus stops, and we will clean those at the same time. The
Mississippi walk, for instance, is one the City cleans out. He is surprised that 61st was not done,
but the City was down a couple pieces of equipment.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 5
Dr. Burns stated the City just finished rebuilding the two sidewalk plows. He asked if they were
serious problems.
Mr. Kosluchar replied there are actually three units. One is a serious problem which is the third
one that was not rebuilt. One that was rebuilt had a pump go out which is under warranty, and
the second one had a window broken.
2011 BUDGET AND PROPERTY TAX PUBLIC MEETING.
7. Presentation of the 2011 Budget for the City of Fridley.
William Burns, City Manager, stated the budgeting process in Fridley is actually a year-around
process and starts early in the year with a Council/Commissions survey. From there they have
about four budget adjustment sessions with the department managers to address the financial
emergencies the City is facing. He had reviews with department managers and their staff, and
ultimately the Council gets the budget in June. At the first budget work session this year, staff
talked with Council about budget adjustments. One of the most important parts in understanding
the budget is to understand the legislative conte�t in which the budget is directed. This year the
legislature was in an election year and, as is typical then, they did not do much with major
substantive issues including the $6.2 billion deficit. They did impose a number of new costs to
the City. They raised the employer's cost for retirement benefits and made the City start paying
for some of the costs for capital improvements for the treatment plant in the southern part of the
metro. Typically those treatment plant capital improvement costs are paid for through
connection charges, but nobody is building. What they did is dump the cost for the indebtedness
over into the operating costs.
Dr. Burns stated they changed the election laws. There are additional costs associated with
absentee balloting and other election changes. One nice thing that happened this year is a piece
of legislature that applied to about seven cities which enabled the Fridley HRA to begin to do
scattered site acquisition projects and demolishing blighted buildings in areas where there were a
lot of foreclosures.
Dr. Burns said in 2011, we have a Republican legislature with possibly a Republican governor.
We know that some of the top issues will be LGA. Fridley has something like $1.9 million that
is indicated for 2011. In light of the State's budget crisis, we are not very optimistic about
getting it. We have a Republican legislature and think that may generate some interest in putting
wines back in the grocery stores. If that happens, it will impact the profitability of our local
liquor stores. The Governor's levy limits expire in 2011. No doubt the Legislature will address
levy limits in 2011. He speculates, with the Republican legislature, our chances of getting a
renewal of the levy limits are probably pretty good.
Dr. Burns stated regarding the talk of restructuring government, there are not very many
specifics. He thinks it is something the City needs to pay attention to in 2011 as it might impact
Fridley's local government.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 6
Dr. Burns stated the focus in the budget sessions was largely on budget cuts and revenue
adjustments, including those put in place in 2010. He thinks they were very aggressive in 2010.
They froze employees' salaries, and for the most part, they are still frozen. They eliminated
employee travel and conference expenses. The City actually has seven full-time positions that it
has not filled. Two of the seven have been replaced by temporary employees, but there is a net of
five for which there have not filled. The City has also reduced seasonal parks maintenance
expenditures. It has eliminated the employee leave sellback The City has suspended about
$174,000 in information technology depreciation charges. We have eliminated University
Avenue mowing.
Dr. Burns stated for 2011 we have also identified a number of other new revenue and
expenditure adjustments. These include a one-time transfer of an additional $420,000 from an
expiring TIF District which was done this year. We are planning on using $550,000 in
equipment certificates for the purchase of vehicles and other large equipment for 2010 and 2011.
Up to this point, we have never borrowed money to buy squads, fire trucks, dump trucks, etc.
We have transferred an additional $80,000 in state aid street money to fund street maintenance.
Typically that money is used for construction and capital improvements as opposed to operation.
The City has cut another $20,000 in seasonal employees. We have eliminated the lighting of
tennis and basketball courts in most City parks.
Dr. Burns stated we have transferred $58,500 in new antenna lease revenue to the general fund.
We have increased the interfund charge to the storm water utility fund by $108,000 to cover the
cost of 1.5 Public Works employees. The biggest issue for everyone was the general fund
property tax levy. We made a decision to try to levy back $1.2 million in lost state aid and
market value homestead credit for 2010. If that were to happen, it would raise the City's portion
of local property taxes by 12.95 percent and would raise the City's share of property taxes for the
owner of a home valued at $175,200 by $64. We do not know if that is going to happen.
Dr. Burns stated another big issue in formulating this year's budget was the utility rate
increases. After much discussion, rates were raised by 5 percent for each of the City's three
utilities. The increase does not cover costs for 2011 and will leave all three funds with
substantially reduced cash balances. We have been working hard to catch up on repairs to our
utilities so the costs are a little bit higher than they normally would be.
Dr. Burns said there are several other budgeting issues which arose during budget discussions
with the City Council. Originally the City did not have funding for our summer code
enforcement intern. Council did put $8,300 back in the budget to restore that service. We also
talked about restoring the second school resources officer position. It was determined not to put
the second one back in place as the school district had requested. Employee health insurance is
always a yearly budget issue. Originally they thought they were going to have about a 15
percent increase; ultimately the employee health insurance increase came to about a 2 percent
increase.
Dr. Burns stated we also had a lot of discussion about the future of the Six Cities Watershed
District. The City is getting a lot of pressure from the State to improve the drainage problem in
the Six Cities Watershed Maintenance Organization. As we do this, the costs for that
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 7
organization keep going up so there is a lot of pressure to try and find another way, other than
through a water maintenance organization, to address those costs. The water maintenance
organization costs are borne by local taxes, and they are accounted for within the levy limits that
are found in the City Charter as well as the Governor's levy limit. What we are hoping is we can
get a different organization. The City discussed the possibility of getting out of Six Cities and
becoming part of a watershed district that has independent taxing authority and would not impact
our levy limit.
Dr. Burns said Alexandra House asked for a$25,000 contribution. Alexandra House is the non-
profit organization which focuses on domestic abuse and helping individuals who have been
subjected to domestic abuse. The City reluctantly declined that and left it up to individual
Fridley residents to support that organization.
Dr. Burns stated the expenditures for all funds are budgeted at almost $16 million or $124,932
less than was budgeted for 2010. Most of that is attributed to the general fund. The general fund
expenditures for 2011 are projected at $13,940,049 or $187,185 less than the amount budgeted
for 2010. Most of the reduction in the expenditures is for personal services. In fact we spent
about 75 percent of our general fund expenditures for salaries, fringe benefits, and other personal
service costs. For example, the Police Department is about 36 percent of the budget, Fire is 9.8
percent and Public Works is 25.6 percent. The City Council is at .87 percent. If you look at the
budget also by department the changes for 2011 vary from department to department. The Parks
and Recreation budget is down by something like 8 percent. The Finance Department budget is
down by 6 percent. On the other hand the Police Department's budget is up by 2 percent for
2011.
Dr. Burns stated in the personal service areas, personal costs are $10,558,265, a$108,783
decrease. A lot of this is due to the reduction in the costs of temporary employees. Many of
those costs are found in the Parks and Recreation Department, as well as the Streets Division of
the Public Works Department. We see a$12,786 increase in the public employee retirement
funding. That has a lot to do with the State legislation. They are seeing a$16,689 decrease in
workers' compensation costs and an $11,984 increase for health insurance.
Dr. Burns stated there are a variety of other fund charges. The City has no election planned for
2011, so the contractual services related to election judges are not there and we will save over
$40,000. The equipment purchases out of the general fund for ne�t year are about $8,000 bigger.
It includes three dump trucks, four police squads, a couple of plows, and some roof repairs to
Fire Station No. 2.
Dr. Burns stated general fund revenues are at $14,593,596 or 4.9 percent greater. It does
include the property tax increase that we may be able to levy, depending on what the Department
of Revenue ultimately says. We are not expecting LGA and have eliminated it as a line item in
the general fund budget. In 2010 the City had $759,414.
Dr. Burns stated we have another category of funds called the special revenue funds for which
there are a special source that has to be accounted for separately. Those funds are at $195,196 or
$34,254 more budgeted than in 2010. The cable television fund is up by $19,269. The grant
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 8
management fund by $27,595. The police activity fund is down a little bit, and the Springbrook
Nature Center fund is up by $7,563. The cable television fund has a$19,269 increase which is
mostly for the purchase of another replacement cable channel server which helps to automate the
playing of television shows on the Fridley's cable television channel.
Dr. Burns stated revenues for the cable television fund come from cable franchise fees
amounting to $211,050 in 2011; and they can only be used for cable-related purposes. The grant
management fund shows an increase of $27,595. Most of this is associated with the State Home
Improvement (SHIP) grant. The grant revenues which are accounted for in this fund also come
from the Section 8 housing program and the Title III federal grant that is used to run the City's
Chores and More program in addition to the SHIP grant. Another fund the City has labeled the
special revenue fund is the Solid Waste Abatement fund. That fund will increase by $16,412. It
reflects a shift of the portion of the recycling coordinator's salary to the grant management fund
and includes a$12,333 increase for the City's curbside collection program.
Dr. Burns stated revenues for the solid waste abatement fund includes $308,724 in recycling
fees which ultimately the residents pay; and $71,350 in SCORE funding which comes from the
State to the County; and $16,705 in transfers from the City's post bond fund. The Police
Activity Fund sees a$3,761 decrease. Costs are for one police officer who was hired to replace
the officer who was sent to the federal Drug Enforcement Task Force. Revenues for this fund
are those derived from the drug enforcement program itsel£ Forfeiture monies and other like
sources of revenue have been disappointing and to date have not covered the cost.
Dr. Burns stated there is an increase in the Springbrook Nature Center fund of $7,563 which is
for STEP increases. Most of it though is associated with the Columbia Heights school district
contract. They are actually paying Fridley $5,000 to $6,000 to operate an environmental
education program in their school system. Revenues include $314,400 in levy proceeds
approved in 2004 and $89,900 in program revenues including the contract fees we get from
Columbia Heights for their program.
Dr. Burns stated another area of funding is the capital improvement fund. We have budgeted
$731,000 in capital improvement expenditures. Most of this funding goes to streets. The general
capital improvements fund is typically spent for buildings and then the parks portion of the
capital improvements fund is spent for parks improvements. The building projects mainly
consist of putting in replacement heating, ventilation, and air conditioning units for City Hall.
The Parks project includes replacement of park furnishings, playground equipment, and
replacement of the carpeting and flooring at the Fridley Community Center. He believed they
are using donation money to pay for the carpeting there.
Dr. Burns stated the fourth category is the enterprise fund. Technically the City is not budgeting
for those the same way that it budgets for the other categories of funding. However, there is a
substantial amount of money that is spent on enterprise funds. The budget includes $13,414,519
for four enterprise funds. That amount is $461,000 greater than in 2010. The expenditures for
the water fund are up by $177,157 or by 6.8 percent; the sewer fund expenditures are up by
$209,435 or 4.6 percent; the storm water fund is up $140,130; and the municipal liquor fund is
down by $64,808.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 9
Dr. Burns stated the $177,157 increase in the water fund is accounted largely for by charges
associated with depreciation for new water system projects. There is $15,888 increase associated
with a shift in health insurance plans, a$30,700 increase projected for chemicals used to treat our
water, and an $11,070 increase for debt service cost for water system projects. A 5 percent rate
increase for the water fund will be insufficient to offset both operating and non-operating
expenses and will result in a$668,801 reduction in cash balances.
Dr. Burns stated the sewer fund includes a$209,465 increase (a 4.6 percent increase). A large
percentage of that is a cost that is levied against the City by Metropolitan Council's
environmental services division. Their increase amounts to $172,300 for sewage treatment.
Fridley's sewer goes south to a regional system for treatment. We do not have a lot of control
over the charges they levy against us. In addition, there is $36,470 in additional personal service
costs; and $14,133 in additional depreciation cost for the sewer fund. The 5 percent increase for
sewer is insufficient to offset both operating and non-operating costs and will result in a
$321,802 reduction in cash balances for that fund.
Dr. Burns stated the storm water fund increase is $130,140 which is largely accounted for by
$108,000 for additional interfund charges for 1.5 public works employees. There is also a
$7,100 increase for depreciation charges; and $10,000 in additional costs for professional
services needed to prepare the City's storm water prevention plan. The 5 percent storm water fee
increase will be insufficient to offset expenses and will result in a$134,818 reduction in cash
balances for that fund.
Dr. Burns stated the liquor operations fund shows a$64,808 reduction. This decrease reflects
plan delays and filling one full-time position. Expenditures include a$350,000 transfer to the
general fund. The City relies very heavily on the liquor fund to fund Police, Fire, Public Works,
and other general fund services.
Dr. Burns stated there are also debt service payments out of the 2011 budget, including
$1,058,135 for street improvements; $787,284 for water system improvements; and $15,867 for
sewer system improvements. The City also has the equipment certificates it issued to pay for
squads, trucks, and other equipment. That will cost us $13,834 in debt service payment in 2011.
There is another $11,912 in debt service for storm sewer projects.
Dr. Burns stated the City's 2011 property tax levy, at least before the Department of Revenue
cuts us back, is $11,430,818, which includes the following: $1,328,707 for the general fund;
$781,511 for debt service on street improvements and equipment certificates; $413,400 for the
Springbrook Nature Center; and $6,200 for the Six Cities Watershed Maintenance Organization.
Dr. Burns stated the tax impact of these amounts is affected by changes in valuation rates for
different property classifications. There has been considerable shifting for 2011 taxes. In
general the property valuation for residential properties is declining faster than the property
valuation for commercial and industrial property. That tends to shift more of the burden onto the
commercial and industrial property.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 10
Dr. Burns stated the impact on the Fridley home valued at $175,200 will increase taxes from
$602 this year to $666 or by $64. The City's property taxes are just part of the property taxes.
There are also the County's property taxes, school district taxes, and special district properties.
Dr. Burns stated the unreserved governmental fund balance is actually going up for 2011 if there
is a State reduction in our levy. If it becomes a permanent reduction, the City will see about
$900,000 come off of that $17,285,000. Comparing the revenues and expenditures for the last
six years, including 2011, the City has projected that it would have a little bit of a surplus
($53,000) for 2011. Again that will change depending on what the Department of Revenue does.
Dr. Burns stated regarding the different revenue sources, in the year 2000 about 38 percent of
our revenue came from Local Government Aid (LGA); and only about 35 percent of our revenue
came from property taxes. That has changed dramatically in the last ten years. For 2011 the
City is projecting 71 percent of its revenue coming from property taxes, and only 5 percent
coming from LGA. The City also looks at its overall budget in terms of constant dollar
expenditures and how it has progressed in terms of spending when you take into account
inflation. From 1995 to 2009, the City has seen a little over 5 percent increase in general fund
expenditures. That amounts to about .36 percent increase per year.
Dr. Burns stated the overall budget is constructed within an economic conte�t as well as a
legislative conte�t. The City looks at four or five economic factors. New construction for
Fridley for 2010 is at almost $27,000,000 compared with $42,160,000 in 2009. However, the
$27,000,000 compares favorably with recent years.
Dr. Burns stated Fridley's unemployment rate dropped from 8.1 percent in 2009 to 7.1 percent
in 2010. That is encouraging, but the jobs are declining in Fridley. They have declined from
22,269 jobs in 2009 to 21,143 jobs or by 5.1 percent at the end of September 2010.
Dr. Burns stated regarding property values, the values of all Fridley properties dropped by 7.7
percent between 2009 and 2010. The value of single-family properties has dropped by 9.2
percent. The value of non-homesteaded buildings having three or fewer units dropped by 13.8
percent. Values of apartment buildings having four or more units dropped by just 4.5 percent.
Commercial values have dropped by 6.1 percent. Industrial values have dropped by 5.9 percent.
The tax capacity has decreased by 7.5 percent in 2010 on top of a 4.3 percent decline in 2009.
Dr. Burns stated in the public assistance area, cash assistance and/or food stamps is up 16.9
percent since the end of September 2009. The number of District #14 students receiving free or
reduced lunches is up 3.8 percent since the end of September 2009; and 21.4 percent since the
end of September 2008. On the bright side, crime rates are down by 5 percent as of October 1.
Dr. Burns stated budgeting is a year-long process heavily impacted by what the State legislature
does. As they go forward they will be particularly concerned in 2011 about the State's response
to its deficit. The budgeting process this year once again focused on maintenance of existing
services at the least possible cost. He thinks the City right now is at the end of its ability to keep
that level of service if it has to make further cuts.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 11
Dr. Burns stated while we have had some recent increases in labor costs, basically the 2010
adjustments remain. The City is facing two small increases to police and firefighter salaries
which amount to about 1.3 percent for each contract. Additional revenue and expenditure
adjustments for 2011 includes levying back the State Aid which may or may not happen and
bonding for equipment purchases. That is an important part of the City's budgeting this year.
The general fund budget for 2011 is actually a little less than 2010, and the three utility budgets
are up by 3.6 percent. As a result of these budgets, property taxes on the average valued home
will increase by $66; and the average quarterly utility bill will increase by $5.22. The average
homeowner will be paying about an additional $7 a month for utilities and property taxes if that
happens.
Dr. Burns stated the expenditures and revenue changes for 2011 will leave the City with
$17,285,000 in unreserved governmental funds. While financial projections depend very heavily
on e�ternal variables, such as what recently happened to the City through the Department of
Revenue, staff believes that, based on what they see now, the City will have adequate reserves to
cover its cash flow needs through 2016. We might want to ratchet that back based on what they
found out on Thursday to 2015.
Dr. Burns stated the City needs to recognize that many of the adjustments it has made in the last
two years are temporary. We cannot freeze wages, deny travel/conference expenses or put a
hold on IT depreciation charges forever. The City also needs to realize that, although cash flow
needs will be met, cash balances are dwindling at a rapid pace. Unless it finds a way to protect
these balances, it is likely to be projecting out. For 2011 the cash balances are actually growing
but, as you get beyond 2011, they are seeing a rapid diminution of cash balances. Unless the
City finds a way to protect these balances, it will likely be forced to make cuts in City services.
Dr. Burns stated additionally they should emphasize that current economic circumstances, along
with Charter restrictions on property tax, levies, and fees, have forced the City to begin
borrowing for vehicles and equipment. Dwindling cash balances at this point may also force the
City, as they have the State of Minnesota, to borrow money to meet operational needs. The City
does not want to get there. It is an expensive way to operate and would be unfortunate if the City
had to do that. While the City's financial picture is less than rosy, it can be proud that it has been
able to continue to provide quality services at an affordable price.
Mayor Lund asked if they will have some eminent changes.
Dr. Burns replied they may very well have some major changes in the property tax levy. If the
City is forced to abide by what the State told them on Thursday, he thinks they will see
something like rather than a 12.9 percent increase, something like a 3.85 percent increase. The
impact on the average home instead of $64 will be $19.
Mayor Lund stated it seems to be somewhat unfair that the City works on trying to resolve its
budget issues early on in the process and throughout the balance of the year only to have last
minute adjustments and changes that may significantly impact the City in the eleventh hour.
Coupled with that there is the fact that we will not know what will happen in the ne�t legislative
session ne� year.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 12
Councilmember Barnette stated people often ask tell him the market value on their home went
down and ask why the taxes did not go down accordingly. He asked how Fridley's taxes
compared to other cities in Anoka County.
Dr. Burns replied, part of the problem with the tax system is the valuations are about 18 months
behind. The decline in value the homeowner feels today is not the decline the City uses for the
valuation process. Another part of this is even though values overall have gone down, the cost is
still there to be redistributed among the property owners. Unless costs are reduced even further,
those taxes are not going to go down which is true for not only the City, but the School District,
County, and everybody else.
Dr. Burns said they compare Fridley with nine contiguous cities and look at the costs for the
owner of the average home and the average water user. These are principally property taxes and
utility charges. After adding them up, they found that out of the 10 cities, Fridley is typically 9
in the list. Blaine seems to be doing things a little less expensive than Fridley. Blaine is newer,
however, and has a newer sewer system and younger streets.
Councilmember Barnette stated he thinks that is a significant point to be made. Fridley is not a
new city. Over the years staff and Council have been very frugal in watching the tax dollars and
providing what he feels are quality services.
Matt Faulkner, 6230 Trinity Drive NE, asked what they saw one to two years from now in
terms of the base of the City's general fund's revenue in terms of the actual property taxes. Do
they see that as leveling off at some point? He asked if the increases were going to continue to
fall on their property tax portion.
Mayor Lund replied even people a couple years ago at the State legislature did not really
recognize how severe the economic downturn was until they were well into it. He thinks
property taxes are somewhat of a regressive tax, and it is doubly hard for most people to swallow
given the high unemployment. He keeps hoping the legislators will correct their problems with
not being able to balance their budget or continue to shift it downstream for later years to create
their balanced budget. He said the City would like to increase its tax base. If you have more
businesses and more construction, that adds to the tax base. If you have more people and
businesses putting into the pot of taxes, it spreads it all around for everybody else and will make
the taxes go down.
Mr. Faulkner asked about the industrial and commercial portion and the loss of manufacturing
jobs. He did not really know right now in terms of percentages what the overall balance is
between commercial/industrial and individual homeowners but is there anything else the City
could potentially do as a side note to kind of encourage growth and overall developing that base?
There are several businesses taking a downturn in Fridley. What could the City potentially do?
Dr. Burns stated they are still seeing a fair amount of new construction which is encouraging.
However, they have been losing some manufacturing jobs which is not good.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 13
Mayor Lund stated, as far as shifting the burden more onto the commercial rather than the
residential, the City cannot that locally. Those regulations are set by the State. Because of the
economy, the City is getting many more petitions for reduction in valuation on
commercial/industrial properties which also puts on more pressure as those values come down
probably on the residential portion of the property tax burden.
Mr. Faulkner stated he was not necessarily saying the City should shift the burden but more
with the overall pie, the City would be drawing in a larger base from GI properties.
Mayor Lund stated Fridley does have a lot, many more than other communities, but under fiscal
disparities it has to share that wealth.
Councilmember Bolkcom stated one of things the City is doing is to have tax increment
financing (TIF) districts. As any business comes to Fridley, the City should talk to the
development department and see what would attract them. The problem is the City is pretty
developed, but it does have some older buildings that had to be torn down. Also, it is continuing
to give some grants and loans to rental housing to help keep those people living in those
properties and remain part of the City's tax base. Having good schools and everything will
attract people to our community also.
Councilmember Saefke stated unlike state or federal government, the City is down at the
grassroots level. The City cannot do the same magic tricks the state and federal government
does. The City has to have a balanced budget at the end of the year.
Councilmember Saefke stated throughout the last ten years or so, particularly in the last eight
years, most of the magic tricks have come about by shifting budgets within the state and taking
away, for instance, LGA for local governments which they have counted on since 1972. That
revenue was supposed to have come from sales taxes, etc. Even though it is certified to the
various cities and communities. This leaves the City at the ground level in the lurch. To provide
the same services that citizens are used to, we have to pay. It seems to him they are paying twice
because that money that was for the LGA was instituted through a tax from all of us to provide to
cities in an equitable manner. Although there may be some dispute on the distribution and how
that formula was, at least it was something the City could count on for a period of time.
John Perry, 6684 Central Avenue NE, stated he had a 10 percent decrease in the value of his
house and 15 percent increase in the taxes for the City of Fridley. That amounts to a 25 percent
increase in the rate. How much do residential properties values have to go down before they
start cutting the City budget to reflect that? They are saying they have to up the tax rates because
the values have gone down. Why is the City not cutting the budget by 10 percent? That is what
he sees happening. He asked they arrived at the $175,000 house increase. His value is $180,000
and he is seeing an $86 increase which is not that different.
Councilmember Saefke stated his house went down in value about $20,000 from $169,000. His
City tax went up $50 which was based on the 12.93 percent that the state legislature said they
could levy back to people that the City did not get in LGA in spite of the fact there is a little
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 14
proviso in the City Charter. The law was specific in that the City Charter did not matter in this
particular instance. His overall taxes went down 8/lOths of a percent.
Mr. Perry stated his overall taxes are up 2 percent. Most of it is the City's increase. He asked if
the foreclosures affect Fridley's base.
Councilmember Saefke stated the cost of government pretty much stays the same from year to
year. If the value of your house goes down, about the same percentages, the City still has to
come up with a set amount of money to operate.
Mr. Perry asked, why doesn't the City spend 10 percent less?
Councilmember Saefke asked what he would suggest they cut. Police? Fire?
Mr. Perry replied, he did not know what percentage those make up the budget. He would say
put the new vehicles on hold.
Councilmember Saefke stated this is the first year that they actually went out and bonded for
new equipment.
Mr. Perry asked why do it at all.
Councilmember Saefke replied, because the equipment has been delayed already in budgeting
processes in previous years. You cannot expect equipment to last forever. Particularly squad
cars. Most of the squad cars are recycled to another department at the City when they are not
sufficient to operate as police vehicles any longer because of high mileage, body work, etc. As
they heard tonight they had two sidewalk plows on the weekend of a snow event. The City did
not buy new ones because it was cheaper to recondition two of the three that it had.
Mr. Perry asked why the City was plowing sidewalks. He has a bike path across the front of his
house. The City said they were going to do all the maintenance on it. It has never been plowed.
Dr. Burns stated he does not think the City ever told him it was going to be plowed.
Mr. Perry said if that does not need to be plowed, why do sidewalks?
Councilmember Barnette stated there are kids in the City going to school who need those
sidewalks.
Mayor Lund stated they understand Mr. Perry's frustration. He is not alone. They are all in
that same predicament. To take 10 percent out of the City's budget would be a significant
reduction in basic services. They could cut down plowing of sidewalks. At the last meeting he
heard people complaining because they did not plow the asphalt bike trail system. The City does
do the concrete sidewalks. It is usually in the higher pedestrian traffic areas, such as around
schools and City Hall and the library, etc.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 15
Mr. Perry asked whether anyone ever explored the idea of combining the Police and Fire
Departments with Spring Lake Park and Columbia Heights as a regional fire department at a
lower cost.
Mayor Lund replied, it is the same thing with the schools. He has had that discussion with other
people in other governmental units, whether it was schools or cities. The City has looked at that.
For example, why not combine Police? You are still going to have to have a certain amount of
police out there doing patrols in different shifts, 365 days a year. Certainly there may be some
savings; but they are going to be relatively small. You might be able to combine
administratively, but you are still going to have to have the bulk of the police forces there. The
City routinely looks at combining services. Tonight they had an item on the consent agenda and
they are combining services with Columbia Heights and Andover. The City does that with the
sealcoating of the streets. Some people might say, do not do the sealcoating of the streets. Of
course if the City does not do that, the lifespan of the streets are shortened and ultimately you
pay more in the long run. For every suggestion that is out there, he can say they have already
been looked at. If it makes sense they will certainly do that.
Councilmember Saefke stated right now the City has regional dispatching for emergencies.
That used to be handled by individual communities including Fridley. The City went to a county
system. He was a firefighter in Fridley for a number of years. They have had mutual aid
contracts with all the surrounding communities, along with the Police Department. They may
have the combination pumper ladder that Columbia Heights does not have. There are automatic
responses for residential and commercial fires in the City of Fridley who get two other
departments automatically responding. They may not call it "regional" but in effect it is. Same
with Public Works when St. Anthony had a tornado, and Fridley Public Works was down there
helping them clean up. Those are mutual aid contracts. The City has borrowed frost breakers,
etc., to the City of Mounds View. The School Districts would not borrow teachers just like that
because they are on contract.
Mr. Perry stated the School District reduced his assessment.
Dr. Burns stated we do have a lot of cooperation right now, particularly in the public safety area.
There are hardly any boundaries in public safety. There has been a lot of cooperation and
consolidation in that respect. You have to look at the impact of size. Talking about
consolidation and restructuring, if you look around you will find that bigger is not always less
expensive. In fact he thinks the opposite is true. You lose some things when you lose local
control of local services.
Mayor Lund stated we are all paying the sales tax. Rather than us benefiting from it, they take
it away to fund the shortfalls at the State level and they take the Local Government Aid away
from the City.
Councilmember Bolkcom stated foreclosed homes are not included.
Councilmember Varichak stated they just received two canine dogs that are now used in the
surrounding Anoka County areas. The City borrowed dogs for a long time from Blaine, Coon
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 16
Rapids, etc., to help us in our community; and now we have the opportunity to help the other
communities. Parks and Recreation do the same thing with events. If they do not have enough
kids in the area, they contact other cities and merge the kids together for one big event so there is
only one bus for it. Staff does try and combine as much as they possibly can with the other
communities.
Mayor Lund stated they also eliminate programs.
Richard Harris, 6200 Riverview Terrace, asked if the retirement increase is being paid out of
the general fund.
Dr. Burns replied, it is being paid out of all the funds he talked about, where there are
employees attached to the fund.
Mr. Harris asked if it was the City's portion.
Dr. Burns replied there is an employee increase and a City increase. The City's increase was
something like .25 percent and in non-public safety areas was 4/lOth of a percent in the public
safety area. If the employee works for the water fund, it would come out of there.
Mr. Harris asked what departments are short employees?
Dr. Burns said they have not replaced three police officers and two full-time Finance
Department positions. One has been replaced with a temporary full-time employee. There is a
1.5 position down in the Public Works garage that is vacant. We have one temporary employee
down there now. Ralph Messer just retired from the Fire Department, and he has not been
replaced. From 2003 on we have cut a number of other employees.
Mr. Harris stated regarding cable television, the City is spending $19,000?
Dr. Burns replied, that is to replace a piece of equipment that allows us to do television
programming.
Mr. Harris asked, where do those funds come from?
Dr. Burns stated it comes from a 5 percent franchise fee when you pay Comcast.
Mr. Harris asked if Council knew who the City's representative for the Board of Fiscal
Disparities was. He has asked different people for several years who it is. Over a quarter of the
commercial/industrial tax total bill is fiscal disparities. He made it clear must have been 30 years
ago that he does not mind paying for Fridley, but he does not want to pay for south Minneapolis.
It does not seem to get to the legislatures. Those numbers have been increasing substantially in
probably the last ten years, more than they had before.
Fritz Knaak, City Attorney, stated fiscal disparities is a form of distribution system that is
automatic. There is no separate board.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 17
Mr. Harris asked who decides these numbers?
Attorney Knaak replied the numbers are actually set by our legislature. The City of
Minneapolis is finally a net contributor to the system after some decades where it has not been.
They like Fridley are actually contributing money into the fund. That has been part of the
formula that has been in place since the early 1970's.
Mr. Harris stated there has to be somebody.
Attorney Knaak replied it is your legislator.
Mr. Harris stated but if you try and talk to your legislators about fiscal disparities, all you get is
a blank look. He asked Councilmember Barnette if he is the Northstar representative?
Councilmember Barnette replied, yes.
Mr. Harris stated he noticed that increased substantially on the taxes. The ridership is not there,
is that correct?
Councilmember Barnette replied, the ridership is down from what they projected. The money
that was allocated and set by Northstar is going to the different rail authorities--Anoka County,
Sherburne County, Becker County, etc., was set by them. It did go up considerably.
Mr. Harris asked who he could talk to about that.
Councilmember Barnette replied he could contact Commissioner Dan Erhardt who is the
chairman of Northstar Commuter Rail or Tim Yantos who is probably more knowledgeable
about the money. They are both at Anoka County.
Mr. Harris asked if the wages were frozen for this year?
Dr. Burns replied, yes, they are. They are frozen for 2010 and 2011 with the exception of the
Fire and Police contracts. For those there is a market rate adjustment of 1.3 percent for each of
those groups.
Mr. Harris stated he noticed there is a substantial amount of money being increased for sewer
charges from Met Council. Is our water and sewer usage up or down?
Dr. Burns replied, probably down.
Mr. Kosluchar stated water is down.
Mr. Harris asked about sewage.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 18
Mr. Kosluchar stated it is counter-intuitive because there are some fixed costs with the water
system. When water usage is down, rates actually have to go up to cover those fixed costs.
Councilmember Bolkcom stated the City's big increase was not related to our sewage rollover.
Met Council thought all these houses were going to be built and had all this money to fix costs
into the structure but there is no one in those homes and they are not being built. We all get to
pay for that, too. The $76,900 was just our share.
Dr. Burns stated the other thing is the treatment costs went up to $172,000 or $175,000 and that
is just passed onto the City by Met Council. Sewer rates are based on water usage. If
conservation rates are driving your water usage down, they are also driving your sewer usage
down; but you still have the overall bill to pay.
Councilmember Barnette stated was it not a year or so ago that the Metropolitan Sewer Board
raised the City of Fridley's rate to 9 percent. We have no control over that.
Mr. Harris stated you look at all these line items and there are very few that you can talk about.
There are those that are just there.
Dr. Burns stated while we have these e�ternally imposed costs, the City does control a lot of its
expenditures. A large part of what the City spends is for personnel, for example.
Mr. Harris referred to the difference in the amount of construction, $42 million and then $27
million. How much of that is private sector and how much is public sector?
Dr. Burns replied, a lot of the $42 million was public sector because of the $18 million for the
Minneapolis Water Works plant. A lot of it had to do with the huge amount of renovation that
was done at Medtronic and the Rice Creek campus. There was a lot of value associated with the
remodeling at Lifetime Fitness.
Mr. Hickok stated there was a Minneapolis EOC that was built down in the southern part on our
public property.
Mr. Harris stated he thinks it would be interesting if Dr. Burns could break those two numbers
apart. He feels much better about the private sector because that adds to the tax base. He and
some of his cohorts have been discussing with Mr. Hickok their great concern with the economic
health of Fridley. Something that was not in the budget presentation was the vacancy rate in the
commercial/industrial area. This is a critical area. As the vacancy rate goes up, we lose jobs and
opportunity for employment. It was the feeling of the people he has been talking to that maybe
we should all get together and try and figure out what we can do about this.
Mayor Lund stated he is all open for suggestions. Fridley has been an importer of daytime
workers for many years. It has more people here in the daytime than it has sleeping here at
night. It is very disturbing to see a lot of vacant industrial/commercial properties.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 19
Mr. Harris asked, is there something they can do as far as incentives? He does not know if
there is or if it is even legal.
Mayor Lund stated the incentive they have which they use quite sparingly is Tax Increment
Financing (TIF). If it is used wisely and prudently, it can be of significant benefit to this
community. Other than that there are very few incentives. When they were dealing with the
water issue a few years back, he recalls one of the incentives for businesses to locate here was
the e�tremely low water rates that Fridley offered.
Councilmember Bolkcom stated there are a couple of things they could do. They could get
together ne� year and talk about this. Invite our state senators and representatives to be part of
that conversation. Another example is the street improvement project that the City was going to
do in the one neighborhood. They heard loud and clear from those business owners that they
could not afford it ne�t year. The City decided not to go ahead with their improvements and wait
because they said that would basically put them under. Looking at other things the City could
do, she asked if there are some other loans and grants the City can do to fix up some of those
buildings.
Mr. Harris stated they are seeing a lot of exodus out of Fridley.
Councilmember Bolkcom stated she did not think it is any different in any other communities.
Mr. Harris stated they are leaving Fridley and going to Maple Grove and Ramsey. He was
talking to the vice president of one as they were loading the trailer and moving out of state. He
asked him why they were leaving and was told you can have your cold weather, your high taxes,
and your goofy laws. We are going to Texas. Mayflower has gone to Maple Grove. WCEC
which used to rent from them, has gone to White Bear. He does not know why they want to get
out of Fridley. This is all since the first of the month. The City has lost several more businesses
in the area. He asked if they could put something together in the spring.
Dr. Burns stated one alternative, too, is to talk to the Housing and Redevelopment Authority.
They are the portion of the City that functions for economic development and redevelopment.
OLD BUSINESS:
8. Consideration of Payment of Estimate for Valley Paving for the 2010 Street
Rehabilitation Project No. ST2010-01 (Tabled October 25, 2010).
MOTION by Councilmember Bolkcom to remove this item from the table. Seconded by
Councilmember Saefke.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
Mr. Kosluchar stated the estimate was tabled on October 25 because of some concerns with the
finished product. Staff had some knowledge of some of the items and did a more e�tensive list
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 20
and provided a list of corrective items to the contractor on November 10. Subsequently they
worked through that list with the contractor. They had a meeting on November 23 and requested
formally that the contractor provide a response to those corrective items entirely. The contractor
indicated they would have it the ne�t day. Staff did not get it until December 1 and the list was
not complete, specifically with respect to two items.
Mr. Kosluchar stated staff recommends Council table the estimate against to December 13.
Staff did discuss with the contractor at the end of last week those two items in addition to
everything else that needs correction. It seems they understood where staff was coming from.
He does not think they are quite yet at an impasse with them. They will have an estimate of
some sort at the December 13 meeting. In defense of the contractor they have corrected all the
items that the City expected them to this fall. The majority of the corrective items are going to
have to wait until spring because of the scope and temperature requirements. They did correct
the items that needed to be corrected before winter.
Councilmember Bolkcom asked Mr. Kosluchar if on December 13, will he not only have how
they are going to correct it, have when they are going to correct it and have a timetable for
Council along with what the City is going to be paying them this year.
Mr. Kosluchar replied, his expectation is, yes. They did receive some information on schedule,
but it was a little bit sketchy; and he thinks it needs to be refined. A lot of it has to do with
weather restrictions. There is no date certain. It is generally a matter of weeks they are
proj ecting.
Councilmember Bolkcom asked whether the contractor does realize if they do not have the
information to the City before ne�t Monday that they will not get paid this year as Council has
no more meetings this year?
Mr. Kosluchar replied, yes, they discussed that.
Councilmember Bolkcom asked Mr. Kosluchar if he would be able to answer the couple of
e-mails he received from people asking questions by the 13th also?
Mr. Kosluchar replied yes.
Councilmember Varichak asked that he sends the responses to Council also so they are
updated.
MOTION by Councilmember Bolkcom to table consideration of the payment of the estimate for
Valley Paving for the 2010 Street Rehabilitation Project No. ST2010-01 to December 13, 2010.
Seconded by Councilmember Saefke.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 21
NEW BUSINESS:
9. Special Use Permit Request, SP #10-11, by Terrence Rothenbacher, Carlson
Professional Services, for Columbia Arena Development, LLC, to Convert the
Existing Columbia Arena Building into an Independent, Assisted, and Memory
Care Senior Living Facility, Located at 7011 University Avenue N.E. (Ward 1).
and
Resolution Approving Special Use Permit, SP #10-11, for Carlson Professional
Services, Generally Located at 7011 University Avenue N.E.
Scott Hickok, Community Development Director, stated the request is made by Terry
Rothenbacher representing William Fogerty, the owner of Columbia Arena at 7011 University
Avenue. He is requesting a special use permit to convert the building into an independent
assisted living and memory care facility. He is also requesting a variance to reduce the side yard
setback from 15 feet to 12 feet to recognize the placement of the existing building, and a
variance to reduce that side yard setback of the proposed future building expansion to be as close
as 14.4 feet from the property line rather than 15 feet.
Mr. Hickok stated Columbia Arena was originally constructed in 1968. In 1974 a variance was
granted to reduce the setback from 25 feet to 13 feet to allow the construction of an addition of
another sheet of ice for this facility. As a result of the variance being approved, the addition was
constructed in 1975; and several interior modifications were made to the building over the past
several years.
Mr. Hickok stated in 2009 the property was granted a rezoning from M-2, Heavy Industrial, to
R-3, Multi-Family. The preliminary plat and a special use permit for senior living and special
use permit for a medical clinic were approved at that same time. The redevelopment did not end
up coming to fruition; however, the rezoning to R-3, Multi-Family, does stand.
Mr. Hickok stated the existing Columbia Arena building will be converted into 84 senior living
units: 36 independent units, 31 assisted living units, 16 memory care units, and 1 guest unit.
There will be a variety of amenities available to residents including medical assistance,
transportation, housekeeping, salon, and fitness. The e�terior of the building will be remodeled
to allow the construction of a porch on the front of the building and the installation of several
windows, dormers, and skylights.
Mr. Hickok stated some improvements will include the removal of the unused existing asphalt
and repaving of the front parking area to accommodate the new development. New landscaping
will be installed as well as potential construction of a storm pond for storm water retention.
There will be a parking lot in front of the building for residents and guest parking, and also 18
garage stalls and additional surface parking to the south of the existing building.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 22
Mr. Hickok stated City Code allows independent living and assisted living and nursing homes
as a special use permit in the R-3, Multi-Family, district, provided they meet the Code
requirements related to building site requirements and if the parking requirements have been met.
Mr. Hickok stated City Code would require 78 parking stalls for this project based on the ratios
for independent living, assisted living, and nursing homes. They are proposing more parking
than that, 81 total stalls; 18 enclosed garages, and 63 parking stalls on the surface.
Mr. Hickok stated as staff understands it the petitioner/owner hopes that eventually there will be
more development on this site whether that is through additional residential development or
medical/retail/office development. That is not clear at this time but that is their hope.
Mr. Hickok stated the proposed project is in compliance with the height, lot coverage, and all
setback requirements except for that east side setback.
Mr. Hickok stated the Planning Commission unanimously recommended approval of the special
use permit at their November 17 meeting with additional stipulations ensuring that the project
will provide trail access from the building to the existing park trail south of the property. The
Appeals Commission unanimously recommended approval of the variance at their November 3,
2010, meeting.
Mr. Hickok stated staff recommends Council's approval with nine stipulations.
Councilmember Saefke stated he noticed in some of the information that there is some
contamination on the property. He asked to what e�tent of if the property owner would have to
rectify that.
Mr. Hickok replied, correct. They have had analysis done not only on the structure but on the
soil conditions. As part of the reconstruction of this facility they have looked at things like
asbestos in the building. Because of the era in which the building was built, asbestos was very
common in the construction and installation of floor tiles, ceiling tiles, etc. It is their plan to
demolish and remove any of that contaminated material, bag it, and take it out as required by
law. They would then clear the building readying it for reconstruction. There was a long talk
about the soil conditions inside the building because it was basically a glacier inside the building
for all those years and was frozen down to a very deep level. As a result of that they will
basically be building a building inside the shell of the building. They are using very similar
foundation design as the Faulkner senior building on Old Central. Some soil correction was
necessary. They are taking care of that.
Councilmember Saefke stated he thinks this is a really good use of a sturdy building, and it
really surprised him how well the planning went for that. He asked if a study had been
completed.
Terrence Rothenbacher, Columbia Development Corporation, stated they have completed
Phase I studies. They have already seen the bids back on that. There are a few walls that have
vermiculite it in them, less than they expected. There is a lot of miscellaneous asbestos in the
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 23
light fi�tures, etc., which is what they expected. The rest of the building was built like a brick,
very sound and ready to go.
Councilmember Saefke stated the City does have a senior housing development being built
currently and another one on the drawing board. He asked if they had done any marketing
studies.
Mr. Rothenbacker replied, Ebenezer will be the end user in this product; and they are very
comfortable. In every city they go to they do an independent study before they proceed. They
are actually very excited about this project and feel it will fill up very quickly. A lot of it is
because of the location and other different things that most people do not think about. They like
the safety training area just for the fact it will be activity for the people to watch and there is a
park there.
Councilmember Saefke stated he was quite surprised to see the establishment will actually have
a cinema in it.
Mr. Rothenbacher stated it will be a mi�ture of everything and in the end it will be combination
from their studies that they determine will work.
Councilmember Saefke asked if he knew what the price would be for the units.
Mr. Rothenbacher replied he could not actually give a price at this time.
Councilmember Saefke asked if the memory care units were studio apartments.
Mr. Rothenbacher replied, he believed so.
Councilmember Bolkcom asked if all the asphalt is going away that is not being used. Would
there be grass in some of the driveway area?
Mr. Rothenbacker replied it is 50/50, asphalt and grass right now.
Mr. Hickok stated there was a plan, for example, kitchen deliveries will come in off of 71st
Avenue, the north end of the building. They are going to redo the asphalt coming in a drive off
of 71st Avenue. That also doubles as the access into the fire training site behind. There will be a
drive off the north end of the building that will be curbed and guttered. Front parking will be
new asphalt with curb and gutter. On the south side of the building, the garages will be rather
close. That area will have new asphalt. The area south of the garages and in the northwest
corner will be landscaped and irrigated.
Mr. Rothenbacker stated they will leave a strip there for parking for the park with kind of a
contiguous easement until further development occurs which they do not know when it will be.
Councilmember Bolkcom stated it is not a stipulation. It is basically just an agreement. Who
will maintain that parking area?
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 24
Mr. Rothenbacker replied they have not worked out those agreements yet.
Councilmember Bolkcom asked if it would be a City expense.
Mr. Hickok replied the City's understanding is that they are going to leave it because they
understand the City's interest and desire to have parking because of the programming there.
They would not remove a portion of it; they would leave parking along the southern boundary to
help with the park They also would not go to the expense, as he understands it, to curb and
gutter the new asphalt there because their hope is to put another development ancillary on that
south side.
Mr. Rothenbacher stated hopefully they can leave it there, and the park can use it until such
future date and at that time if there was another building going in there it could be a multi-
functional parking lot.
Councilmember Bolkcom stated and the ne�t building or development that would come in there
would still come back to City Council.
Mr. Hickok replied yes.
Councilmember Bolkcom stated what they agreeing to is related to the variance and related to
only this project before them tonight, correct?
Mr. Hickok replied not only would this special use permit need to be revisited because they are
changing the site plan, but if they do a small clinic or something like that, because the zoning is
residential, that would have to have a special use permit.
Councilmember Bolkcom asked if they have received any other comments.
Mr. Hickok stated they have not received any concerned calls about additional traffic or whether
this was the right use for the location. It is about how many units is it going to be, how is it
going to be laid out, etc. There has been no negative comments, but rather curiosity-type
questions.
Councilmember Bolkcom stated the only additional stipulation is the one related to the trail.
The petitioner is in agreement with that?
Mr. Rothenbacher replied, absolutely. It is very useful for the project also to connect to that
trail. They have not determined a location yet. It would be best to have it at the east end of the
project. As the design progresses, they will put it in there.
Councilmember Saefke stated during the proposed first development of a senior building, there
was some concern about noise coming from the north side off of 71st Avenue because of the
railroad tracks to the warehouse and municipal trucks from the municipal garage and fire trucks
coming in and making noise, etc. when they are doing training. Does that still seem to be a
problem?
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 25
Mr. Rothenbacker replied, actually Ebenezer sees that as an amenity. The safety building
behind there is an absolute amenity. It gives people something to watch.
Councilmember Saefke asked if the building was going to be pretty sound proof?
Mr. Rothenbacher replied, it will be sound proof to a point but they are not trying to eliminate
activity.
Mayor Lund asked if there will be any easement or some other type of agreement for the
perpetual availability to get to the Fire Department facility.
Mr. Hickok replied there is a perpetual agreement.
Mayor Lund stated regarding the south parking, some of the bituminous is being left there for
the park That will not be in any perpetual agreement as they do not know at this time what or
when that will be developed.
Mr. Hickok stated that categorizes the kindness of the developer right now to wait it out and see
what that becomes on the south side. There may be interest in a short-term easement although
there has not been discussion about putting it into some perpetual arrangement..
Mr. Rothenbacher stated the north side is covered by a written document in place and filed as a
document to give the City perpetual easement.
Mayor Lund stated he is a little uncomfortable with how that leaves the City in the future as to
the accessibility of the park or what an alternative would be available to the City if not conducive
with the development of that southern piece of property.
Councilmember Bolkcom stated it is not our property begin with.
Mayor Lund stated they did have some type of an agreement for parking previously because
they knew what the facility was going to be and the parking that worked, and they were going to
be kind enough to let the City use that parking. Was that an informal agreement with the
previous petitioner?
Mr. Hickok replied, they were going to allow it through an easement but the difference was
what that end use was going to be and they do not know here.
Mayor Lund asked if there would be any park dedication fees.
Mr. Hickok replied, no. Park dedication fees would be exacted at the time of a plat. There is no
plat being requested. It may be such a thing that a future development would require separate
ownership, requiring a plat, and at that time the plat then would involve a park dedication fee.
Mayor Lund stated at that time they may be able to make some consideration in lieu of the park
dedication fee.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 26
Mr. Hickok stated that was the case with the other development they are talking about. As part
of their park dedication consideration, they were going to give a perpetual easement.
Mr. Rothenbacher stated in all fairness, with a facility like this, it is in Ebenezer's best interest
to work with the City also and provide parking, etc.
Mayor Lund stated the City has had a couple of projects that have come to this particular site, as
well as other parts of Fridley, where they have had a number of developers who have gone
through this whole process only to find out they do not have the financing.
Mr. Rothenbacher replied, he knows they are very comfortable with the financing. He is not at
liberty to say who will be the backer of it or who the mortgage company, etc. will be. So far they
are very comfortable with it. It seems like a go. He cannot give them a 100 percent guarantee
but it seems up to this point a very viable project.
Dr. Burns asked Mr. Rothenbacher, without getting specific, can he say that there is any
financial commitment whatsoever right now?
Mr. Rothenbacher replied, he does know that over half the money is committed to the project
which is all he is at liberty to say right now. Within two weeks it should be set. All the final
bids are coming in as far as construction and ne�t summer's grading and blacktop, etc. Their
intention is to move forward very quickly and do a lot of work inside this winter.
MOTION by Councilmember Saefke to approve Special Use Permit Request, SP #10-11, by
Terrence Rothenbacher, Carlson Professional Services, for Columbia Arena Development, LLC,
and adopt Resolution No. 2010-89 with the following nine stipulations:
1. The petitioner shall obtain all necessary permits prior to construction.
2. The petitioner shall meet all Building code, Fire code, and ADA requirements.
3. The petitioner shall comply with all sign code requirements for installation of new
signage on the property.
4. Landscape plan to be reviewed and approved by City Staff prior to issuance of
building permit.
5. The petitioner shall receive Rice Creek Watershed District approvals prior to
issuance of a building permit.
6. City engineering staff to review and approve grading and drainage plan prior to
issuance of building permits.
7. If the proposed development is modified to be used for units other than,
independent living, assisted living and memory care units, a new special use
permit will need to be obtained.
8. Per Section 205 of the Fridley City Code, this Special Use Permit will become
null and void one year after the City Council approval date if work has not
commenced or if the Petitioner has not petitioned the City Council for an
e�ension.
9. Park trail access is to be provided.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 27
Seconded by Councilmember Bolkcom.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
10. Variance Request, VAR #10-08, by Terrence Rothenbacher, Carlson Professional
Services, for Columbia Arena Development, LLC, to Reduce the Side Yard Setback
from 15 Feet to 12 Feet to Recognize the Placement of the Existing Building and to
Reduce the Side Yard Setback of a Proposed Future Expansion to be as Close as
14.4 Feet from the Property Line, to Allow for the Conversion of the Building to a
Senior Living Project, Generally Located at 7011 University Avenue N.E. (Ward 1).
MOTION by Councilmember Saefke to approve Variance Request, VAR #10-08, by Terrence
Rothenbacher, Carlson Professional Services, for Columbia Arena Development, LLC.
Seconded by Councilmember Bolkcom.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
11. Special Use Permit Request, SP #10-12, by John Fierrier, CSM Properties, to
Increase the Lot Coverage Requirement from 40 Percent to 43.3 Percent to Allow
the Construction of a Building Addition, Generally Located at 490 Northco Drive
(Ward 1).
and
Resolution Approving Special Use Permit, SP #10-12, for CSM Properties,
Generally Located at 490 Northco Drive N.E.
Scott Hickok, Community Development Director, stated this is a request for a special use permit
to increase the lot coverage from 40 percent to 43.3 percent to allow construction of an addition
on the building currently located at 490 Northco Drive. The addition will be used as office space
and will really be used to present a nice front entrance to the facility that right now has a rather
non-descript front entrance.
Mr. Hickok stated lot coverage became a factor when the petitioner submitted a building permit
application for the proposed addition. During the review of the building permit application, it
came to staff's attention that the building was at 40 percent. Our Code requires anything over 40
percent and up to 50 percent required a special use permit in the Industrial Districts. Expanding
the building an additional 1,500 square feet, therefore, would require that special use permit and
staff asked the petitioner to apply and they did.
Mr. Hickok stated based on a breakdown of uses within the building after the addition, 231
parking stalls are required for this site. The petitioner has stated they have 128 parking stalls.
As a result they do fall short of ineeting the Code requirements by 103 stalls. Last year when the
petitioner was going through the SUP process for outdoor storage, staff inet with a representative
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 28
of both Carter Day and Kwik File, the two tenants in the building. It was determined that Carter
Day has one shift and a maximum number of 115 employees. Kwik File runs two shifts and a
maximum of 55 employees. Between the two businesses they have a maximum of 170
employees who would be there at any one given time. Carter Day has a parking agreement with
Target to the east, giving them 100 more parking stalls if they would need them. The petitioner
has also agreed to a proof of parking which the City has allowed in lieu of parking. We do not
want to get asphalt down there if we can help it if they are not going to use it. They have agreed
to a proof of parking of 134 stalls on their site in the event that additional parking would be
warranted.
Mr. Hickok stated staff has determined this is an agreeable solution. Carter Day has been
located there since 1970. Kwik File has been there since 1987. To staff's knowledge, parking
has never been an issue on this site. The Planning Commission heard this item on November 17,
2010, and approved it with four stipulations. City staff recommends Council's approval.
John Fierrier, CSM Properties, stated Carter Day is a great tenant. They have been here for a
long time. They really started looking for another site elsewhere because they wanted more
presence on their entry. They wanted to have a nicer look for people coming in, and they came
up with this solution and staff was fantastic to work with on this.
MOTION by Councilmember Saefke approving Special Use Permit Request, SP #10-12, by
John Fierrier, CSM Properties, and adopt Resolution No. 2010-90, with the following four
stipulations:
1. Any future expansion of the building will require special use permit review.
2. Any future expansion of the building will require a new parking analysis.
3. The 60 foot no-build zone on the east side of the building shall remain free and clear
of any storage for necessary fire protection.
4. Per Section 205 of the Fridley City Code, this Special Use Permit will become null
and void one year after the City Council approval date if work has not commenced or
if the Petitioner has not petitioned the City Council for an e�tension.
Seconded by Councilmember Barnette.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
12. Informal Status Reports
Mayor Lund the Historical Society has produced the third printing of their history of Fridley
book It is currently on sale for $29.95. It is available at the History Center museum which is
open the second and fourth Saturdays of the month or at Bob's Produce Ranch.
Dr. Burns stated the budget message is on the City's website.
Councilmember Bolkcom stated Donna Bahls was wondering where the City was at with the
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 29
Six Cities Watershed. Was Mr. Kosluchar going to put together some discussion with some of
the other watersheds?
Dr. Burns stated he did not know. He would have to get a report to her on that.
Councilmember Bolkcom asked if they can look at the snowplowing. Maybe there is a way to
do something different. They rotate how the streets are plowed, but they do not really rotate the
sidewalks.
Dr. Burns stated he does not recall ever having this issue.
Councilmember Bolkcom stated it just seems like they are having more issues than they have in
the past.
Councilmember Saefke stated he read in the police report the City cited 100 cars for parking in
the street. You need to be off the street from 2 a.m. to 6 a.m.
Councilmember Barnette stated and if there is snow, they start plowing an hour after the
snowfall stops.
Mr. Hickok stated there is a memo for the Council regarding where the City is at with the
Mississippi Corridor Critical Area process. They have talked a little about this that the DNR has
been working with rules along the river corridor, and staff has a response it is preparing back to
the DNR. The Council will see a more formal memo about that in their ne�t packet. They had
hoped to have their rule-making process done by the end of the year, and then it would go to the
legislature. If they do not have it completed, then the process kind of starts over. There is a
deadline date for response by December 16.
Mayor Lund asked if they would be able to review that before it is sent to the DNR.
Mr. Hickok replied it will be done in a way that allows them to respond if there are other
concerns they might have.
Mayor Lund stated the reason he asks is because of the ongoing concerns of others along the
Mississippi critical corridor area.
Councilmember Bolkcom asked Dr. Burns if they can include the two county commissioners in
Fridley also if they set up a committee for the business owners?
Dr. Burns replied sure.
Councilmember Saefke introduced the new Finance Director/Treasurer, Darin Nelson.
FRIDLEY CITY COUNCIL MEETING OF DECEMBER 6, 2010 PAGE 30
ADJOURN.
MOTION by Councilmember Barnette, seconded by Varichak, to adjourn.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MEETING ADJOURNED AT 10:38 P.M.
Respectfully submitted by,
Denise M. Johnson Scott J. Lund
Recording Secretary Mayor