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CCM 08/26/2013 CITY COUNCIL MEETING CITY OF FRIDLEY AUGUST 26, 2013 The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:00 p.m. ROLL CALL : MEMBERS PRESENT : Mayor Lund Councilmember Barnette Councilmember Saefke Councilmember Varichak Councilmember Bolkcom OTHERS PRESENT : Liz Kray Code Enforcement Intern Scott Hickok, Community Development Director Darin Nelson, Finance Director/Treasurer Wally Wysopal, City Manager Darcy Erickson, City Attorney , Jack KirkDirector of Parks and Recreation PRESENTATION: Code Enforcement Report by Liz Kray Liz Kray, Code Enforcement Intern, stated she is in her last year at UMD majoring in geography and urban regional studies. Her internship at Fridley has been very rewarding. This summer, she visited all of the commercial and industrial sites in Fridley. There were 335 of them. Of those properties, 225 had violations (67 percent) and the violation count was 435 violations. Those were broken down into three different districts: Industrial, 206 (48 percent); Commercial, 143 (33 percent); and Onaway, 82 (19 percent). She did spend a lot of time up in the Onaway District which was kind of a problem area. She focused on parking lot striping. Ms. Kray stated she sent out 407 first notices; 94 finals, 9 weed letters (she did not have to do any weed abatement as they all mowed), 15 temporary sign letters, and 1 abatement letter (for which she has a reinspection on Wednesday before abating it). She does have 57 inspections tomorrow and Wednesday. Right now there are 310 closed cases and 125 open cases. Ms. Kray stated last time they did commercial/industrial code enforcement was in 2009. There were 392 violations at that time. The big things they looked at were dumpsters not being enclosed and outdoor storage. This year, outdoor storage was still one of the top two along with parking lot maintenance. Property maintenance was third on both of them, dumpster enclosures was a little bit behind. FRIDLEY CITY COUNCIL MEETING OF AUGUST 26, 2013 PAGE 2 Ms. Kray stated there were 113 properties that were inspected in both 2009 and 2013 that had some sort of violation. Her top violation was exterior storage which made up 123 of the 435 violations (29 percent). She spoke of one victory where a property owner did come into compliance with both weed recommendation of 10 inches or less and got rid of a lot of outdoor storage on the site. Mr. Hickok stated it was the best the site had looked in the 19 years he has worked for Fridley. Ms. Kray stated as to parking lot stripes, she noticed a lot of stripes were either faded or did not exist at all. She sent 104 letters out to 104 businesses in Fridley to either stripe or repair their parking lot. She never told them to reseal or replace their parking lot. They will see a lot of new parking lots around Fridley with nice fresh stripes. Ms. Kray stated in the Onaway District, a big issue was parking lots. A lot of them did not have stripes. She ran into a couple of problems with business owners not wanting to stripe. She explained that they had to come into compliance with the Code, and they were then more than willing to do that. Ms. Kray stated as to property maintenance, there were 56 violations (13 percent) of the 435. A lot of it was fencing. A couple violations were for signs or buildings that needed to be repainted or repaired. She showed a photo of a loading dock that was completed a couple of days ago. There were a lot of extensions given for parking lot striping and building and property maintenance because staff knew contractors were in their busy season and could not get out right away. That is one of the reasons there are so many open cases. With respect to striping, they are scheduled for the next month to month and one-half. So are a couple of the property maintenance cases. Ms. Kray stated the last of the top five were illegal temporary signs. These included the flashing signs and the flashing “Open” signs, window coverage of 40 percent, and banners and temporary signs without permits. Ms. Kray stated right now currently 71 percent of the violations are resolved. This will go up by the end of the week; 125 of the violations are not unresolved with 50 of them being reinspected on Tuesday and Wednesday. She does have 39 current extensions, and there are 8 properties applying for a special use permit, with 3 of them on before the City Council the next month or so. There may be 5 more the following month. Councilmember Bolkcom stated comments came up at the street reconstruction and some of them were by businesses that are somewhat struggling and they actually delayed their road construction. They asked whether somehow those could go together because some of the people read that the notices stated they had to basically repave their parking lots. She asked if they could work closer with that because some of them said they would have probably waited but felt they had to stripe it. The City does offer some programs for businesses or homeowners to work with a contractor so that they may have been able to do even more improvements. FRIDLEY CITY COUNCIL MEETING OF AUGUST 26, 2013 PAGE 3 Councilmember Bolkcom said she thought the word “violation” makes people think they are in major trouble. She asked if they could look at the wording. A person gets a letter and they feel they are in trouble and need to do something right now. In the Onaway District, there are probably a few owners and a lot of other business people who are in those buildings and just leasing them. She said she was incredibly impressed by Ms. Kray’s work. Ms. Kray stated there are a couple of extensions out until next spring/summer where people want to resurface or reseal but they do not have the money. Councilmember Bolkcom stated perhaps they need to bold that on the bottom. They should call someone and not get so upset. Scott Hickok , Community Development Director, stated it is in the last paragraph. They encourage them to call. Staff is very impressed with Ms. Kray working with the businesses in which they have this rapport and discussion. If they need an extension, all people have to do is call. Councilmember Bolkcom stated in no way is she saying it did not happen for people who called in. Other residents had some of the same issues. Mr. Hickok stated once they think they are in trouble they may stop reading to see what the full solution is. He would encourage them to read it all the way through and then call. Councilmember Bolkcom asked if Ms. Kray would send her the map of the violations. APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES : 1.City Council Meeting of August 12, 2013 APPROVED. NEW BUSINESS : 2.Approve Encroachment Agreement for 165 Stonybrook Way N.E. (Ward 3). Wally Wysopal , City Administrator, stated this agreement provides for waiver of liability to the City in case there is any sewer or drainage work that needs to be attended to. This came up through the title company as the property was being sold. The City Attorney has drafted and has addressed it with an encroachment agreement. The City is held harmless for all liabilities in case the subject shed needs to be replaced or removed. APPROVED. FRIDLEY CITY COUNCIL MEETING OF AUGUST 26, 2013 PAGE 4 3.Approve Change Order No. 1 for Street Rehabilitation Project No. ST2013-01. Mr. Wysopal stated this is a .6 percent increase over the total project cost. It is about a $5,200 increase and about $2,500 is coming from CenterPoint Energy expenses because of some of the gas lines they had punctured through the City’s sewers. Those gas mains have since been abandoned, but the damage was done and needed to be replaced. There are also six broken gate valves the City found and several sinkholes that had to be repaired. Staff recommends Council’s approval. APPROVED. 4.Appointments – City Employees. Mr. Wysopal stated the City is recommending the appointment of two City employees. Matt Kohner is taking on the position of Assistant Fire Chief effective September 16. Second, Cleveland McCoy is the new Program Supervisor in the Parks and Recreation Department effective August 27. Mr. Wysopal stated Matt Kohner’s experience goes back to 2008 from the City of Ramsey. He has been the Fire Marshal there and also a firefighter and Assisting Fire Chief in the paid on-call division since 2002. In the year 2000, he was the Forest Lake Fire Inspector, and from 1991 to 2006, he worked as a production manager at Micro Control in Fridley. He has multiple memberships in professional associations. He also has education and training that go beyond the requirements of the position. He has been working on his technical degree in fire protection; and has a two-year degree in mechanical drafting from Southwestern Technical College in Winona. Mr. Wysopal stated Cleveland McCoy was a Recreation Specialist Coordinator with the Hubert H. Humphrey Job Corps since 2011. He managed recreational facilities and coordinated and created sports programs for those students. He has also worked as a relief counselor for at-risk youth in South Carolina where he grew up in the Charleston area, and has been a director of sports for the Baptist High School summer camp in Hollywood, South Carolina. He has a degree in physical education activity management from South Carolina State University, and he has played some professional indoor football. APPROVED. 5.Claims (160712 – 160872). Councilmember Barnette asked how successful the Canada Goose management program was. Jack Kirk, Director of Parks and Recreation, stated they do keep coming back and is why they have to stay on top of it. They recognized going into it they were not going to get rid of all of the geese and it was going to be an annual process. The goal was to keep it up during the prime summer months to have the number of geese reduced, and that is what it does. FRIDLEY CITY COUNCIL MEETING OF AUGUST 26, 2013 PAGE 5 Councilmember Barnette asked what the City does with the geese. Mr. Kirk replied, for almost 30 years now the City has been contracting with a company which removes them. When they first did it they were taking 100-120 those first couple of years, then it got down to about 60 a year. The last couple years it was 40. This year it was 25. Councilmember Varichak asked if at one point the eggs were also taken from the site. Mr. Kirk replied, there are different options. Usually they do some addling or oiling of the eggs so they do not hatch. In addition, they have also worked with the wildlife service. The problem they have at Moore Lake is finding the nests. APPROVED. 6. Licenses. APPROVED THE LICENSES AS SUBMITTED AND AS ON FILE. APPROVAL OF CONSENT AGENDA : Councilmember Bolkcom asked under the Workshop, if they could add the word, “designee” to the sentence in Section 3.7 on page 21, third sentence. MOTION by Councilmember Bolkcom to receive a new document modified on page 5, Section 3.7. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. MOTION by Councilmember Barnette to approve the proposed consent agenda. 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. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. OPEN FORUM : No one from the audience spoke. FRIDLEY CITY COUNCIL MEETING OF AUGUST 26, 2013 PAGE 6 NEW BUSINESS : 8. Resolution Certifying the Proposed Tax Levy Requirements for 2014 to Anoka County. Darin Nelson , Finance Director/Treasurer, stated the proposed 2014 levy complies with the City Charter requirements regarding inflationary increases and public disclosure. The total proposed 2014 levy equals $11,511,288, which is approximately $259,000 more, or 2.3 percent of an increase over the 2013 levy. Of this proposed levy increase, 1.6 percent or $175,000 is planned to be dedicated towards the capital equipment fund. Mr. Nelson stated in 2010 and 2012, equipment certificates were issued for capital equipment replacement purchases as a way to achieve capital equipment purchases the City had foregone and did not have the available resources to purchase. Mr. Nelson stated the goal of Council and staff is to reduce and eventually eliminate capital equipment certificates and the corresponding interest expense in hopes of reducing tax levies, etc. With the dedicated levy and increased Local Government Aid, this goal should be realized. Mr. Nelson stated every year the question is, what effect does this levy increase have on the average homeowner within the City of Fridley. Preliminary tax estimates are difficult to determine at this point in time. The County has not received the City’s fiscal disparity information yet and truth in taxation notices come out later this fall. Staff can do some estimates and come up with some general calculations, which he will provide further in his presentation. Mr. Nelson stated also affecting the taxes is the shift in market value. Residential values from 2012 and 2013 declined 5.78 percent, and the commercial/industrial values declined 4.46 percent. In essence, this is going to shift the tax burden a little bit more over to the commercial/industrial and away from the residential properties. Mr. Nelson stated these changing valuations among the different property types will offset the property tax burden. Because of the larger percentage declines in other property types, residential property owners will likely see a lower percentage increase compared to the total levy increase of 2.3 percent. Mr. Nelson stated an average home valued with an estimated market value of $135,000 will receive a tax increase of approximately $12 which is estimated on the high side and not taking into consideration the shift of property values. This same home last year saw a $30 decrease in City property taxes even though the property tax levy last year increased 5.1 percent. There again it was because of residential properties declining at a higher rate than commercial/industrial. Mr. Nelson stated Truth-in-Taxation notices will be mailed to all property owners in mid- November. That is when this proposed tax levy will be on the statements. This proposed levy is required to be provided to the County Auditor by September 16. This proposed levy is the FRIDLEY CITY COUNCIL MEETING OF AUGUST 26, 2013 PAGE 7 maximum amount that can be certified by the County Auditor. The amount can be reduced prior to that time but cannot be increased. Mr. Nelson stated in keeping with State law regarding budget meeting for the 2014 budget, the City is announcing tonight that the public meeting for the 2014 budget and tax levy will be held on December 2 at 7 p.m. at the Fridley Municipal Center. Also scheduled is another budget work session on October 21 at 7 p.m. in Rooms 1 and 2 also in the Fridley Municipal Center. Mr. Nelson stated staff recommends Council approve the resolution certifying the proposed tax levy requirements for the 2014 levy. The general fund will have approximately $10,053,000; Springbrook Nature Center, $339,300; capital equipment fund, $175,000; and the bonded indebtedness, $942,000; for a grand total of $11,511,288. Mayor Lund stated they had a budget session last Monday night, and a lot of the questions were addressed at that point. The good news for him is the City is using the increased LGA to hopefully stop seeing equipment certificates in the near future. This is a real plus for Fridley. MOTION by Councilmember Saefke to adopt Resolution No. 2013-40. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 8. Resolution Adopting the 2014 Proposed Budget. Darin Nelson, Finance Director,stated in accordance with State law, the certification of the proposed budget must be to the County Auditor by September 16. The City is following the open process requirements in Chapter 275 of the State Statutes. By having this item on the agenda, the City is complying with Section 7.05 of the City Charter requiring that the proposed budget be the principal item of business at the last regular meeting of August. It is anticipated that 2014 will be a busy year for many departments within the City. Most notably, major multi- year redevelopment projects are nearing fruition and are projected to provide a spike in building permit revenues for not only next year but for several years after. Mr. Nelson stated the City also has antenna lease revenues which are expected to increase with the recent approval of the Verizon lease at the Commons Park water tower. Also, this year the legislature implemented two changes that are beneficial to the City from a financial standpoint. The first was the LGA formula. It is anticipated to bring the City an additional $450,000 per year starting in 2014. That is an increase from $760,000 to about $1.2 million. Over the last several years, they have worked hard as a staff and Council to take that uncertainty from LGA out of the operating budget and move it over to the capital budget. With capital projects, the City has a little bit more leeway. They are a one-time purchase rather than an ongoing operation. Mr. Nelson stated the City has dedicated those LGA funds to the capital equipment fund, the building improvement fund, and also the parks improvement fund over the next several years. FRIDLEY CITY COUNCIL MEETING OF AUGUST 26, 2013 PAGE 8 Mr. Nelson stated the second legislative change was the elimination of the general purpose sales tax. Back in the early 1990s, the State mandated that cities and counties start paying sales tax again. Effective January 1, 2014, cities will now be exempt from this requirement. This change is anticipated to save the general fund approximately $75,000. They will be discussing these savings and the effect on the budget at the December 2 public meeting as well. Mr. Nelson stated the total proposed general fund expenditures are set to increase around 2 percent (1.998%). This will include a modest 1.5 percent COLA increase for personnel services. In addition, I.T. funding is being fully restored which is an additional $50,000 per year. I.T. funding is at a 75 percent level for this year and it will be fully restored for 2014. Mr. Nelson stated 2014 is also an election year, which has adds an additional $40,000 to the budget. Mr. Nelson stated regarding the breakdowns for the general funds, the total revenues are scheduled to change from the 2013 budget to the 2014 budget by about 1.5 percent. Taxes increase about .3 percent. That includes delinquent taxes and penalties as well. Mr. Nelson stated licenses and permits include building permit fees which are expected to increase. The charges for services is a line item that includes the antenna rental line item. Mr. Nelson stated the total for the 2014 budget is just under $15 million which is again a 1.5 percent increase over 2013. Mr. Nelson stated on the expenditure side of the general fund, the City had personal services, supplies, other services and charges, capital outlay and other financing uses. Here they have a 2 percent change in expenditures. Personal services is going up 1.9 percent and that includes COLA. Other financing uses include the additional $50,000 for the I.T. transfer. Mr. Nelson stated recapping the revenues and expenditures, the revenues are budgeted right now at $14,979,000; and the expenditures are $14,995,000, giving the City a change in fund balance of a deficit at the moment of $15,000. For the current year, the City budgeted a surplus of $51,000. There was some late-breaking information on the City’s health insurance rates at the end of last year which changed the amount from a deficit to a surplus. Mr. Nelson stated as to the general fund forecast, which is presented at the workshops each year, there are two distinct areas. The fund balance policy of the City is to maintain its reserve at a 35- 50 percent funding level of next year’s expenditures. The City needs that because of the timing of when its tax proceeds come in. Its fiscal year ends December 31. It gets a large amount of money at the beginning of December and then the next tax proceeds do not come in until approximately the end of June. Therefore, the City needs about five to six months of operating capital to make it through for cash flow purposes. The fund balance policy of 35-50 percent, goes along with what the State Auditor’s office recommends as well. The actual fund balance for 2012 was about 52 percent of what the City’s fund balance policy is. This gives the City some cushion in case there are unforeseen events or disasters, etc. For 2012, the revenue FRIDLEY CITY COUNCIL MEETING OF AUGUST 26, 2013 PAGE 9 outpaced the expenditures by a little. As the City budgets for 2013 and 2014, and forecasts them out in the future, the amounts pretty much mirror each other. The graph he is presenting has kind of changed the couple of years he has been with the City. It is a lot more even keel at the moment and looks healthier than it did a couple of years ago and kinds of takes that uncertainly out of there. Mr. Nelson stated the remaining steps in the budgeting process are as follows: The Council budget work session is to be held on October 21 at 7 p.m. The public meeting on the budget will be held on December 2 which will include discussion on both the levy and the budget resolutions. Finally, at the December 9 Council meeting, a resolution will be presented to the Council requesting approval of both the 2014 final tax levy and final budget. Mr. Nelson stated the budget before Council should be viewed as the proposed budget for 2014. Staff recommends Council’s approval of the proposed budget for 2014. Mayor Lund stated again they did go over this at quite a length at their budget session last Monday night, and he does not see anything new. MOTION by Councilmember Saefke to adopt Resolution No. 2013-41. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 9. Motion Approving the 2014-2018 Capital Improvements Program (CIP). Darin Nelson, Finance Director, stated this is a new process for this year. The CIP is the City’s plan to provide and maintain facilities for citizens and businesses of Fridley within the constraints of limited resources. Similar to the annual operating budget, the CIP is a policy document. While a detailed capital expenditures in the City over the next five years, changes in the City’s priorities and available resources require that the plan be re-evaluated on an annual basis. In the past, the CIP was incorporated as part of the annual budget. This year the CIP is a stand-alone document. They have had two Council work sessions dedicated to reviewing the CIP—one in June and the other last Monday evening. The goal of creating a separate CIP document is to focus on capital projects over both the upcoming year and the foreseeable future. Capital projects often require planning well into the future to assure financing and implementation procedures are in alignment. Mr. Nelson stated the highlights of the CIP include addition of new LGA funding for 2014 and beyond. As they touched on before, the 2014 LGA funding anticipates an increase from $760,000 to $1.2 million. The City’s goal is to eliminate the capital equipment certificates and be able to plan for this within the capital equipment budget with the LGA and the tax levy which will help them eventually eliminate the need for issuing those equipment certificates. Subsequently, that will lower the tax burden on individuals and businesses as well. FRIDLEY CITY COUNCIL MEETING OF AUGUST 26, 2013 PAGE 10 Mr. Nelson stated the approval of the CIP is not the last step in the budget and planning process. The capital items in the 2014 columns will be included in the 2014 annual budget under each respective fund. Council will review the entire budget at the October work session with the ultimate approval set for December. In October they will be reviewing the 2014 projects at that time. Mr. Nelson stated staff recommends the resolution as presented. MOTION by Councilmember Saefke to adopt Resolution No. 2013-42. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 10. Informal Status Reports. There were no informal status reports. ADJOURN: MOTION by Councilmember Barnette to adjourn. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 8:20 P.M. Respectfully submitted, Denise Johnson Scott J. Lund Recording Secretary Mayor