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CCM 12/08/2014 CITY COUNCIL MEETING CITY OF FRIDLEY DECEMBER 8, 2014 The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:04 p.m. ROLL CALL: MEMBERS PRESENT: Mayor Lund Councilmember Barnette Councilmember Saefke Councilmember Varichak Councilmember Bolkcom OTHERS PRESENT: Wally Wysopal, City Manager Darcy Erickson, City Attorney Scott Hickok, Community Development Director Julie Jones, City Planner James Kosluchar, Public Works Director Darin Nelson, Finance Director and Treasurer Kay Qualley, Environmental Planner, Pam Reynolds, 1241 Norton Kevin Faye, 6034 Fourth Street Ron Bloch, 5201 Pierce Street NE Leroy Anderson, 7581 Alden Way Jim Woodison, 6241 Sunrise Drive NE Pat Delaney, 6250 Riverview Terrace Eric Larson, 69th Place Richard Svanda, 1521 Woodside Court Brenda Michnowski, 6297 Jackson Street John Krack, 7629 Lakeside Road NE Jim Kiewel, 1627 Rice Creek Road Ted Kueppers, 7361 Tempo Terrace Adam Hardy, 6845 Channel Road NE Norma Rust, 5735 Quincy , Gary Alfernes570 Rice Creek Boulevard , Justin Foell6005 Gardena Circle Joan Olson, 6320 Van Buren Brian DuRose, Gibralter Avenue PROCLAMATIONS: Student Foreign Exchange Week - December 8-14, 2014 Daniela Fernandes from Portugal Simen Angell-Olsen from Norway FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 2 APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council Meeting of November 24, 2014 Councilmember Bolkcom referred to the "Informal Status Reports" section. At the end of the first sentence, she asked that the following sentence be added: "She also wanted to thank the residents who attended the informal session." APPROVED AS CORRECTED. OLD BUSINESS : 1. Second Reading of an Ordinance Amending Fridley City Charter, Chapter 7, Taxation and Finances, Section 7.04 Preparation of Annual Budget, and Section 7.05 Passage of Budget. WAIVED THE READING OF THE ORDINANCE AND ADOPTED ORDINANCE NO. 1318 ON SECOND READING AND ORDERED PUBLICATION. 2. Resolution Denying Final Plat, P.S. #12-01, and Easement Vacation, SAV #13-02, Pertaining to the Columbia Arena Property, Located at 7011 University Avenue N.E. (Ward 1). ADOPTED RESOLUTION NO. 2014-88. NEW BUSINESS: 3. Special Use Permit Request, SP #14-05, by University Auto Sales & Service, LLC, to Allow an Indoor Used Car Sales Facility, Generally Located at 7700 University Avenue N.E.; and Resolution Approving Special Use Permit, SP #14-05, for Indoor Auto Sales, Petitioned by University Auto Properties, LLLP, the Property Owner of 7700 University Avenue N.E. (Ward 3). APPROVED SPECIAL USE PERMIT, SP #14-05, by University Auto Properties, LLP, AND ADOPTED RESOLUTION NO. 2014-89. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 3 4. Special Use Permit Request, SP #14-08, by University Auto Sales & Service, LLC, to Allow an Electronic Changeable Message Sign as Part of the Free-Standing Sign, Generally Located at 7700 University Avenue N.E.; and Resolution Approving Special Use Permit, SP #14-08 for an Electronic Changeable Sign, Petitioned by University Auto Properties, LLLP, the Property Owner of 7700 University Avenue N.E. (Ward 3). APPROVED SPECIAL USE PERMIT, SP #14-08, BY University Auto Sales & Service, LLC, AND ADOPTED RESOLUTION NO. 2014-90. 5. Special Use Permit Request, SP #14-06, by DeMars Signs to Allow an Electronic Changeable Message Sign as Part of the Free-Standing Sign, Generally Located at 661 Highway 65 N.E.; and Resolution Approving Special Use Permit, SP #14-06, for DeMars Signs, on Behalf of Crooners Real Estate Company, LLC, the Property Owner of Crooners Lounge and Supper Club, Located at 6161 Highway 65 N.E. (Ward 2). APPROVED SPECIAL USE PERMIT, SP #14-06, AND ADOPTED RESOLUTION NO. 2014-91. 6. Request for Public Hearing Postponement for Special Use Permit, SP #14-07, by TCO Design, to Allow a Comprehensive Home Health Care Use in an R-3, Multi- Family Zoning District, Generally Located at 5310 Fourth Street N.E. (Ward 1). Councilmember Bolkcom asked that the e-mail requesting the postponement be added. APPROVED. 7. Resolution Amending Resolution No. 2014-54, which Approved a $1,500,000 Loan to the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota. Wally Wysopal , City Manager, stated this loan provides for any extraordinary expense paid before principal. This was an amendment to the existing resolution of agreement that would require any TIF (tax increment financing) monies would be pay any extraordinary expenses before the HRA and City received their payment of principal. ADOPTED RESOLUTION NO. 2014-92. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 4 8. Resolution Approving the Anoka County Fire Protection Council Joint Powers Agreement. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON THE REGULAR AGENDA. 9. Receive Bids and Award Water Treatment Plant No. 3 Filter Drain Pump Improvement Project 459 . RECEIVED BIDS AND AWARDED PROJECT TO MUNICIPAL BUILDERS, INC. 10. Approve Change Order No. 1 for Water Main Project No. 427/Sewer Forcemain Project No. 433 Mr. Wysopal stated this was for $8,000 or 3 percent of the project cost. APPROVED. 11. Claims (166317 - 166452) APPROVED. 12. Licenses APPROVED THE LICENSES AS SUBMITTED AND AS ON FILE. 13. Estimates Sunram Construction, Inc. 20010 - 75th Avenue North Corcoran, MN 55340 Main Street Bike/Walk Project No. ST2011-22 Estimate No. 5..............................................................$15,390.00 Blackstone Contractors, LLC 7775 Corcoran Trail East Corcoran, MN 55340 Oak Glen Creek Erosion Control Project No. 380 Estimate No. 7..............................................................$ 4,632.52 APPROVED. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 5 APPROVAL OF CONSENT AGENDA : Councilmember Bolkcom requested that Item No. 8 be removed and placed on the regular agenda. MOTION by Councilmember Barnette to approve the proposed consent agenda with the removal of Item 8 and addition of the e-mail under Item No. 6. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. OPEN FORUM: No one from the audience spoke. NEW BUSINESS: 8. Resolution Approving the Anoka County Fire Protection Council Joint Powers Agreement. Councilmember Bolkcom stated not in the agreement itself, but in the Bylaws, on Page 75 in Section 19, it says "Written Action. Any action required or permitted to be taken at a Board of Director's meeting may be taken by written action signed, or consented to by authenticated electronic communication. . .." There is comment about how the business is related to a quorum. She asked Attorney Erickson to explain this. Darcy Erickson , City Attorney, stated she had a brief conversation with Jennifer Urban, the attorney for the Joint Powers; and they discussed the written action Councilmember Bolkcom had a question about. Essentially, a JPA is subject to the open meeting law. If there is going to be action by just a written instrument, that would be very difficult. It needs to mesh with the requirements of the open meeting law. Attorney Erickson stated she recommended Council approve the Joint Powers Agreement and the attached Bylaws with the understanding that the JPA entity and legal counsel are looking into that matter. The entity cannot do anything in contravention of the open meeting law, but there will be some consultation with the Department of Administration for clarification. That power is a power that non-profit entities have but, because this is a governmental entity, so there is kind of a grayish line that they want to clarify. MOTION by Councilmember Bolkcom to adopt Resolution No. 2014-92. Seconded by Councilmember Saefke. Councilmember Bolkcom asked that the By-Laws come back to Council for review. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 6 ADOPTION OF THE AGENDA: MOTION by Councilmember Bolkcom to approve the agenda. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 2015 BUDGET AND PROPERTY TAX PUBLIC MEETING: 14. Presentation of the 2015 City of Fridley Budget. Darin Nelson, Finance Director and Treasurer, stated the major component of the budget is the tax levy. Fridley levy limits are unique as we have, in addition to the Council's levy setting authority, two additional authorities that govern the levy. The first is the City's Charter and, based on the City's Charter, the City's levy is limited to the lower of either 5 percent or the CPI for all urban consumers in the Minneapolis/St. Paul metropolitan area. The City's cap for 2015 is 1.94 percent according to the Charter. Mr. Nelson stated the other authority that governs the City's levy limit is the State Legislature. Compared to previous years, the Legislature did not impose levy limits for 2015. Mr. Nelson said about 89 percent of the City's levy is allocated to the general fund with the remainder being designated to debt service, Springbrook Nature Center, and capital project funds. Mr. Nelson stated on August 25, Council approved a preliminary levy of $11,734,607. That is an increase of 1.94 percent, the City's cap for 2015. Mr. Nelson stated as to a breakdown of how the levy is allocated comparing 2014 and 2015, the general fund is the majority, and there are some changes in allocations and shifting of funds to the general fund from capital project funds for this year. The bottom line is 1.94 percent, and that equates to just over $223,000 additional levy for this year. Mr. Nelson stated the question often asked is, what impact does 1.94 percent have on the homeowners in Fridley. Commercial and residential properties are reacting differently in the current market, and that is having a dramatic impact on property taxes. For taxes payable in 2014 (which is your value actually in 2013), residential property saw about a 10 percent decline in value throughout the City, and commercial properties stayed relatively flat. That shifted the tax burden from residential properties over to commercial properties. The City actually had a 2.3 percent levy increase last year, but yet residential properties saw decreases in about the 10 percent range. Mr. Nelson stated this year, we are seeing increases in residential properties. The residential market is beginning to recover with increases of 15 to 18 percent in market values. Property taxes are consequently going up. Commercial properties have also increased but at a much lower rate. The property tax burden for 2015 is shifting from commercial property back over to residential. In essence, what we wanted to do is take three separate homes and demonstrate over FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 7 a three-year span the tax comparisons. Taxes are generally going up for 2015, but they took a pretty dramatic decrease in 2014. Mr. Nelson stated the market is really playing two different factors here. There is the commercial and the residential and the two interact differently. They both come into play in determining property tax liability. Mr. Nelson presented charts comparing the levy over the last ten years. Debt service will be declining. For 2016, there is one debt service bond that will be paid off in 2016 so there will be a small decline there. Mr. Nelson stated in reviewing operations, the City continues to monitor expenditures to achieve cost savings without negatively impacting service levels. An example of this was the extensive analysis completed this summer regarding the labor distribution for the City's three utility funds. Mr. Nelson stated the analysis concluded the Storm Water Fund was relying heavily on Engineering and Public Works employees for both the general fund and sewer utility fund. We did an extensive analysis on each individual's time and whether it was being costed to the job they were actually doing. We found a lot of the employees, Engineering staff specifically, and then a lot of the sewer employees, were doing work that actually should have been charged to the Storm Water Fund. The Storm Water Fund is an enterprise fund just like the Water and Sewer Funds but it was not standing alone on its own. With the help of Jim Kosluchar, the Public Works Director, we have allocated the labor accordingly. In 2015, each fund will stand on its own. Mr. Nelson stated the general fund does not have as much flexibility as some of the other funds. Therefore, it is imperative we make sure the general fund is not paying for other funds' expenses. That is really what was happening. By doing the labor redistribution, it freed up some funds within the general fund which has allowed the City to rehire or have in the budget for 2015 a police officer position that has been frozen in prior years. Mr. Nelson stated another initiative of Council and the staff is we continue to be independent of local government aid (LGA). We have dedicated all of the City's LGA over the last couple of years to capital project funds so it is no longer in the operational budget. LGA is not budgeted in the General Fund. The State has the ability to pull LGA (the City gets its second half of the LGA payment December 20), and we want to make sure the City covers itself. With LGA dedicated to capital project funds, it is intended to be used for one-time purchases which we are more able to adjust in the budgets if we need to at the end of the year or the following year. Mr. Nelson stated we also have a goal of eliminating capital equipment certificates. The City last issued those back in 2010 and 2012. This budget, along with the 2015 through 2019 CIP, does eliminate any of those future capital equipment debt issuances. Mr. Nelson stated we also want to improve on our capability to measure outcomes and current budget linkages so the public can better understand the performance of their tax dollars. The City revised the budget last year to make it more of a narrative form and included indicators and key measures. We intend to take the budget a step further in the upcoming year. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 8 Mr. Nelson stated as for the overall economic climate, property values in the City have increased for the first time in a couple of years. The City's housing stock is also beginning to recover. There was an 18 percent on average increase in property values for residential properties. Distressed sales have declined. Commercial redevelopment continues to be an economic driver within the City. There are a couple major projects going on right now that are adding both jobs and capacity to the City. Mr. Nelson stated the improving economy, increase in home values, and the City's conservative management practices has paid off for the City in its bond rating. Moody’s was in the City for a review, and they confirmed the City's Aa1 credit rating, which is the second-highest rating that any City can receive. The City is eliminated from receiving a AAA rating as it just does not have the size to achieve that rating. The negative outlook rating has been removed. In 2012, we had a negative outlook rating because of the declining values in the City. Mr. Nelson stated moving over to the General Fund, the budget also includes a revised 2014 budget. The budget includes a column for the original 2014 budget and then a revised 2014 budget. Every year we would come to Council after the end of the year and do reappropriations for donations that would come in which would offset expenditures. We tried to incorporate a majority of these into the revised budget column. This should be the final budget for 2014. Mr. Nelson stated the General Fund are revenues coming in higher than anticipated. We have had some additional building and permit revenues related to the redevelopment taking place. Municipal state aid came in a little higher than anticipated. Also, the City had some public safety grants that were not anticipated. Mr. Nelson stated with the expenditures coming in on budget for 2014, we estimate about a $345,000 surplus compared to the original budget which was about a $30,000 to $35,000 surplus. We want to make sure the City's fund balance stays at that appropriate guideline, which was about 35 to 50 percent of expenditures. Ensuring a small surplus each year will keep that percentage where we want it to be. Mr. Nelson stated looking at the 2015 budget for the General Fund, we are shifting the allocation of the levy. The levy is going to increase in the General Fund by $337,000 or about 3.4 percent. The City's total revenue is only increasing about $100,000 or .7 percent. The cause for that is the City is shifting part of the tax levy from the Capital Equipment Fund to the General Fund. In addition, the City is transferring the liquor store profits that had typically gone into the General Fund, to the Capital Equipment Fund and to the Park Improvement Fund. The idea behind this shift is the City wants to demonstrative that liquor store proceeds are purchasing tangible items. In the past, it has been hard to promote the liquor store proceeds since they reduced the general operating budget but were not tied to any specific item or service. Mr. Nelson stated as to the expenditure side, the City has expenditures increasing about $134,000 or .9 percent. The City has included the addition of a frozen police officer position from a number of years ago. What really aided here was the reallocation of labor, shifting those actual Public Works costs to the appropriate funds. Also, there is a moderate cost of living adjustment for personnel of 1.5 percent. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 9 Mr. Nelson presented a breakdown of the revenue from the general fund. The taxes are a vast majority of how the City derives its revenue. The City has about 69 percent or about three- quarters of its revenue within the General Fund coming from taxes. The remaining part comes from licenses, charges for services, etc. The City is heavily dependent upon property taxes for its General Fund just like any other municipal government would be. Mr. Nelson stated Public Works and Public Safety equate to about 70 percent of the City’s expenditures from the General Fund. Being a service organization, the City's personnel costs are going to be a majority of the costs. Three-quarters of the City's costs are dedicated to personnel. There is very little supplies and the remainder leftover for other services and charges. Mr. Nelson stated the budget also includes a capital projects funds. This is the second year of the City's stand alone Capital Improvements Plan. In June, Council reviewed a draft version of the CIP and reviewed it again in August before approving the CIP in late August when the Council also approve a preliminary levy. Mr. Nelson stated the CIP is the driver of the operational budget, and 26 percent of the entire budget is dedicated to capital outlay. The 2015 CIP items are included in this budget for final review and approval. Mr. Nelson stated moving onto Enterprise Funds, these funds do incorporate the utility budget and the rate increases approved at the November 24 Council meeting. Mr. Nelson said within a $38 million budget, there are other sources, bond proceeds, at $4.2 million. That is not a reoccurring item. That happens once every so often. Also, under "other income" the bond money from the State for the SPRING project is included in there. Mr. Nelson stated the number are a little different for expenditures. They have about $37,500.000 in 2014 compared to about $40,420,000 in 2015. A lot of that again is because of the bond issuance. It probably will not be issued in 2014 but will be issued in 2015; however, we have a couple of years to spend all those proceeds. We will issue it the one year and not necessarily spend it all in that same year. Mr. Nelson stated when they bring all the funds together, here is how the City-wide revenue is derived. As we saw in the general fund, property taxes made up 66 percent of the revenue within that fund. When we put all of the funds together, property taxes are about 28 percent and the user fees and charges, that include utility fees, and liquor receipts which is $4,000,000 a year or so, become a significant piece of the pie with some smaller pieces included within intergovernmental revenue and other income. Mr. Nelson said with respect to the expenditures, a lot of the CIP projects that are Public Works related or Police and Fire related continue to be major factors. Mr. Nelso n stated the general government may seem a little heavy here, but that includes liquor store expenditures as well. Mr. Nelson stated the City has complied with the appropriate sections of the City Charter that require certain formats and information be contained within the budget document, and the budget FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 10 needs to be approved by the Council and submitted to the County by the end of December. No action is required for tonight. Mr. Nelson stated the budget is available and has been available on the City's website for a few weeks. We also put up a video that came up from Anoka County that he saw out on Twitter a week or so ago that explains the distribution of taxes and how taxes are derived. Councilmember Barnette said for many, many years they have talked about how low Fridley residents' property taxes were compared to most of them in Anoka County partly because Fridley has a large commercial/industrial base. It used to be that the commercial/industrial paid 60 percent, and residential only 40 percent. He asked if that has changed much. Mr. Nelson replied that percentage has completely flip flopped now. It is now 60 percent residential and 40 percent commercial/industrial, give or take 1 or 2 percent on either side. Mr. Wysopal said it does not just have to do with redevelopment but also some of the changes in the property tax classification rates at the State level. Mr. Nelson replied, yes, the fiscal disparities program is experiencing shifts in contributions and the distributions. Councilmember Bolkcom asked if this is just a presentation. There is no actual action item on the agenda, correct? Mr. Nelson replied, correct, they will take formal action at the December 22 City Council meeting. Pam Reynolds, 1241 Norton, stated in one of the last slides, it says it complies with everything in the Charter. The Charter says that the Council shall approve their compensation and renumeration by the first meeting of November. That was never an agenda item. It was not in compliance with the Charter. Councilmember Saefke said it was not on the agenda as Council decided not to give themselves a raise for 2015. Therefore, it is not part of the budget. Mayor Lund stated there was no change in the budget. Ms. Reynolds replied, but the Charter says you have to approve whatever it is. Mayor Lund stated historically they have never approved a line item such as their compensation, only when there has been an increase. Councilmember Bolkcom stated in the past they have always either denied or approved it at a meeting. This is the first year they have not done that since they were not giving themselves a raise. They will look into it. Kevin Fay , 6034 Fourth Street, said regarding the 40/60 split, Mr. Nelson mentioned that would kind of be made up with some of the changes that are taking place. He asked is that because of a FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 11 shift back over to commercial heavier taxing or is that because of the shift the City seems to desire in more upscale residential properties? Mr. Nelson replied it has taken many years to make the 60/40 split. They have seen a decline in values in commercial properties over the years, and residential properties have kind of taken the place of that. It may take years to get it back to that. Mayor Lund stated it is actually from the State legislatures. They are making the shift. There was a major shift throughout the State of Minnesota which has been taking place for the last decade, and a lot of it has to do with the local government aid shift. They have changed the formulas. It is a State thing. PUBLIC HEARING/NEW BUSINESS: 15. Consideration of Organized Residential Solid Waste Collection by Districts; and Motion to Set a Date for Taking Formal Action on the Proposal for Organized Residential Solid Waste Collection by Districts. MOTION by Councilmember Bolkcom to open the public hearing. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE HEARING WAS OPENED AT 7:49. Mr. Wysopal stated the process has taken about 12 months to arrive at a draft proposed agreement, and they have met with all five haulers. Those haulers include Ace Solid Waste, Waste Management of Minnesota, LePage & Sons, Republic Services, and Walters Recycling and Refuse. They followed the State Statute in this regard. It was a fairly new statute, and they were obliged to meet with those haulers who are currently licensed to do business in the City and have accounts. The City staff met exclusively with them during the last year. Mr. Wysopal stated they had a number of meetings and they took into consideration all of the haulers' concerns, as well as the concerns the City had with regard to developing a proposal. There was a minimum 60-day negotiation period that is required by statute. It took longer than that, but the City was not interested in a quick decision but a good decision. Mr. Wysopal stated this came about as a result of the Environmental Quality & Energy Commission which made a recommendation to the City Council to address this issue. In December of last year, the City Council made the recommendation to do that, and staff began meeting with the haulers. Mr. Wysopal stated the goal was to organize garbage collection by districts. They divided the City into five zones. From the beginning, the haulers did not reveal their books of business because they felt it was a trade secret, but they were very willing to participate in the rest of the process. Staff held off on requiring them to disclose who their customers were. The haulers told staff they would have no problem with identifying who their customers were if the City Council FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 12 were to enter into an agreement. If the City Council did not enter into an agreement, they did not want to have all of their accounts made public. They have had a very good relationship with the haulers in terms of good dealings and fair play. The haulers were very up front and open with staff and staff was with them, and they exchanged ideas in very good negotiation sessions. Mr. Wysopal s tated the crux of the agreement is that single-family homes, duplexes, and triplexes are affected here. They do not include any of the townhomes, manufactured home parks, apartment buildings, and commercial or industrial areas. The garbage would be picked up on days that recycling is collected. Mr. Wysopal stated the problems City staff identified included wear and tear on the streets, some environmental issues, and concerns about noise and safety. Price was not the number one issue. Staff was dealing with issues that affected the City and its assets. However, staff was concerned about fair pricing and wanted the prices to be uniform through the City for the same types of services. Mr. Wysopal stated the services they have now under this proposed agreement would remain the same. The 30, 60, or 90 gallon container options would be available to the residents. Any additional services, such as yard waste or special items such as refrigerators and sofas, would be picked up on a separate operation with the hauler. Mr. Wysopal stated the haulers would be responsible for the billing under this proposal. It became evident to the City staff as they went through the negotiations that the haulers have a tremendous respect for their customers. Staff felt it would be a good idea to allow the haulers to retain the billing operation and, therefore, the customer relation piece as well. Mr. Wysopal stated the haulers would divide the City up based on their average customer count six months prior to the commencement of the negotiation period. That language comes exactly out of the State Statute. What it means is that the five haulers would have no less of a market share in 2015 if this were to be enacted than they do today. As a matter of fact, they may pick up some additional accounts because not every resident in Fridley has garbage collection even though it has an ordinance that requires that. Mr. Wysopal stated with respect to snowbirds, people who take off for a month or more at a period of time would be able to contact the hauler and request they not be billed for that period of time. The one-month period was suggested by the haulers as that is what they have as current practice. Mr. Wysopal stated the City would guarantee payment only if the resident was in arrears and that would be after 75 days. The City was able to offer that guaranteed payment so that the haulers would be able to do the collection of the homes even though a homeowner may not make payment. This they felt was very similar to what the City currently does. It is exactly what it does with the water and sewer accounts. If the City has delinquent accounts, it submits it to the City Council for assessment onto the homeowner's property, and then the City gets the collection of that money in due time along with fees that go with it. The City has the Charter authority to be able to assess for unpaid garbage bills. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 13 Mr. Wysopal stated staff felt there are five key points this proposal addresses. One, it is an asset preservation for the City. The roads represent over a $67 million asset to the City, and they need to be protected. Two, the City feels it keeps within the spirit of the Charter if it spends wisely. We are all familiar with the Charter limitation. It also has a reciprocal relationship that the City is a wise spender of taxpayer dollars. At $67, million the streets represent the largest asset in the City. Any percentage of savings on that is going to be big. Mr. Wysopal s tated third, the City also wanted to reduce the number of code enforcement situations that are related to garbage. The numbers are also quite impressive in terms of gross numbers of code enforcement issues the City deals with related to garbage. Mr. Wysopal said fourth, it will improve the rates for most of the City's residents. They recognize that under the current system residents may be paying what the haulers presented as the market rate or they may have what they call “sweetheart deals.” There might be some residents who can show that their current bill is less than what the City negotiated. Staff feels that cost is not everything, because there are the dollars that are being used by the City for the deterioration of the streets. The garbage collection system is the only business that operates in the City on a public street that contributes significantly to its deterioration, but that does not pay any taxes, etc., towards that. For example, the City's cable provider, Comcast, has their cables, in the City's right-of-way; and the City receives hundreds of thousands of dollars from Comcast in return for being in the City's right-of-ways. Mr. Wysopal stated fifth it addresses environmental safety and noise improvements. Kay Qualley, Environmental Planner, stated they are doing sort of a 5-4-3-2-1 on the key points Mr. Wysopal talked about. The call she gets most frequently at the City is on noise impacts. Road impacts and then proper disposal of garbage as well which Julie Jones, Planning Manager, will be addressing shortly represents the rest of the calls. Ms. Qualley stated with respect to fuel consumption during collection activities, one of the things the Minnesota Pollution Control Agency has put out is that open hauling systems typically use higher amounts of fuel than cities with organized systems that are organized or in zones. Fewer vehicle miles traveled also results in less air pollutant materials and particulate matters from heavy daily waste collection vehicles. Public concern is increasing about the human health impacts because of emissions, and this is just another category of emissions. Ms. Qualley stated another thing that happens every couple of years is a hazardous spill. Although infrequent, by reducing the number of trucks in the neighborhoods, they are also hoping that number will continue to decrease. Ms. Qualley stated probably they could spend the rest of the night talking about potential environmental benefits, but safety is probably the other thing they hear about with the potential for garbage truck conflicts with autos, bikes and pedestrians. A lot of schools would like kids to walk more, but they are uncomfortable with traffic and sidewalks being absent in some areas, etc. Reducing the number of potential conflict points with all of the modes of transportation could be a possible benefit as well. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 14 Ms. Qualley stated because 17 percent savings in this negotiated draft contact is an average, some people will pay more and some people will pay less. At the open house on November 20, a lot of people reviewed the additional benefits for a contract of this sort and said, well, I might pay a little more; and right next to them was someone who paid a little less. Ms. Qualley presented pricing information for the first year for 30, 60, and 90 gallon cart sizes. The $80 yard waste cost per season includes 12 compostable bags and 12 bundles. That $4 per additional bag is a Metropolitan solid waste bag surcharge if you exceed your cart and you have a bag sitting out there. You could be surcharged if you had additional bags beyond 12 bags of yard waste or 12 bundles. Julie Jones , City Planner, stated as far as the code enforcement key points, this is something she brought up to the City Council over a decade ago. She was concerned about all of the staff time they were spending on code enforcement related to the City's open system and at the time the Council directed staff to try and get the garbage haulers to at least change their routes so they would pick up on the same day as recycling, which they have done voluntarily for the most part over the years. The City still continued to have problems. Ms. Jones stated outside storage and solid waste issues are the City's top two code enforcement violations. The last year she has full data was for 2012, when they did systematic inspections on residential properties over the summer. In that year the City had approximately 400 code enforcement cases that were outside storage and solid waste related cases. That was about 30 percent of the City's cases which is pretty average because the City will have between 1,000 and 2,000 code enforcement cases a year. Probably a good 25 percent of those cases related to households that either did not have garbage service at all or had inadequate garbage service. They know from other cities that have gone through this process that, once they become organized, you find that about 10 to 25 percent of the population does not have garbage service even though the City Code requires weekly garbage service. Ms. Jone s stated this takes a great deal of staff time. A lot of these cases are not just a simple letter or two but involves multiple letters, multiple inspections, abatements, and citations. Determining whether someone has garbage service is very time consuming in the City's current system. When the City gets a call that says my neighbor is stockpiling their garbage in their garage or back behind the shed, the City has to call all five haulers and confirm whether there is an account for that address and then go from there. Ms. Jones stated in an organized system, staff would simply be able to go to a map and determine what company is servicing that particular address. Also in an organized system, the haulers will be more willing to work with the City and let it know when they have a property within their route area that does not have service or is not putting out garbage. Ms. Jones stated as to other difficulties with the open hauling system, even though the City requires weekly garbage service, the City knows there is a high percentage of people in the community who do not contract for service. Probably the City's biggest problem with that is with duplexes which of course they are proposing to be included in this proposal. With a duplex, the owner of the duplex who does not live there, requires the renter to contract for garbage service, and they do not do anything to follow up to make sure the renter does contract for FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 15 garbage service. Sometimes people are using their recycling carts for their garbage service. Sometimes they are disposing it in other places that are not legal. Ms. Jones stated the biggest problem the City sees is that people jump from one hauler to the next in an open system. They will contract with company "A", not pay that company, and when that company takes away their cart, they will contract with the next company down the list, and keep going down the line. It is not unusual for the City to have code enforcement cases where they talk to all five garbage haulers, and all five of them give staff the same story that these people owe them money and they would not provide them a garbage cart again until they pay the amount they owe in arrears plus pay the next three months forward. Ms. Jones stated they feel like an organized system can give the City more accountability as far as code enforcement because staff will have a way of knowing that everyone has garbage service. In the proposal the haulers have provided, there is an opt-out option for people that maybe do have a legal means to get rid of their garbage. Ms. Jones stated there really is more incentive for the occupant to pay for monthly garbage service in this system, too, because if they do not, as they heard from the City Manager, the proposal in the contract is that after 75 days, the hauler can turn those delinquent bills over to the City; and the City would be able to assess that unpaid amount. That allows the City to help solve some of these long-time problems. In the current system staff is often dealing sometimes for years on some of these cases trying to get the people to contract for proper garbage service. Ms. Jones stated, where do people dump their trash when they do not have service? Well, at the nearest apartment building, park, or business; and that is a cost to everyone in the community. It is a very unfair and difficult thing and has been a real problem in the community. Inadequate service really is a cost to the taxpayers, not just in terms of the property owners who are getting illegally dumped on, but it is also a cost in staff time for all of these cases they are dealing with code enforcement-wise. Mr. Wysopal stated he made references in his earlier comments that staff is very aware of the restrictions the Charter places on the City's levy limitation; but it also has a reciprocal requirement that the City takes care of the assets it has. The City needs to protect its investments and over $60 million in its streets. James Kosluchar, Public Works Director, said the City's streets are a public asset with an estimated value of $67 million. It has 80 plus miles of centerline asphalt streets in the City and 220 lane miles of asphalt streets in the City. The street assets are owned by the public, and it is the City's charge to maintain them in the most efficient way possible. Mr. Kosluchar stated vehicle loading is the major factor in street deterioration. Stresses because of vehicle turning movements and starting and stopping can also deteriorate pavement. Environmental factors caused by water intrusion and frost, can have impacts. However, with Fridley's typically well-drained soils, proper minor maintenance can largely address these. In other words, if they do frequent sealcoating, crack sealing, and pothole sealing and make sure that water cannot intrude and, in knowing the City has a good drainage subbase later, it can typically mitigate those environmental factors quite well. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 16 Mr. Kosluchar stated vehicles cause pavement stress which will eventually require major maintenance to avoid pavement failure. Heavy vehicles, such as refuse trucks, cause greatly increased loading. Mr. Kosluchar stated deterioration because of a loading vehicle is considered in design of pavements using a unit of loading known as an ESAL or equivalent single axle load. He presented a listing of different ESAL factors for different types of vehicles, including residential recycling trucks and residential trash trucks. There are some variations in some of these ESAL calculations depending on the type of truck, the spacing of axles, etc. Generally it has been the City's practice that residential trash trucks of the type they have in Fridley are typically 1,000 to 1,500 times the loading of a single-passenger vehicle. Mr. Kosluchar stated heavy vehicle loads have the greatest impact on pavement life. The damage caused by a particular vehicle is roughly related to the load increased by a power of 4. Doubling the load of a vehicle or a tire or an axle produces 16 times the damage of the foremost single load. MnDOT no longer takes into consideration passenger vehicles in its latest revision to pavement design software. They just say passenger vehicles are negligible so they only consider heavy vehicles in their design calculations at this time. Mr. Koslucha r stated seasonal load restrictions also address heavy vehicles through Minnesota statute. There is an exemption for certain refuse vehicles. Again, traffic loading during the spring thaw results in five to eight times the amount of damage to pavement and that is often because of subsurface moisture. Mr. Kosluchar stated heavy loading concerns have been recognized by public roadway officials for a long time. Multiple heavy vehicles are required to serve customers under the current open collections system arrangement, and it reduces cost efficiency in maintaining the City's roads. The intensity of loading has increased over the past decade to maximize refuse collection efficiency on the hauler side. They want to get as much as they can with each load. Trucks and their payloads have gotten heavier over the past decade. Mr. Kosluchar stated excess trucks under the current system can consume the design life of the pavement or reduce the length of time between major rehabilitation. Mr. Kosluchar stated in August of this year, a final version of a heavy vehicle impact tool was developed by Dr. W. James Wilde, P.E. He is with the Minnesota State University-Mankato. The tool compares the impact of vehicle loading that was expected when the pavement was designed to the impact of the vehicle loading including additional vehicles. The City actually hired Bolton & Menk, Inc., a civil engineering firm, to use this tool and develop a model of refuse vehicle impacts to Fridley’s asphalt pavements. The model considers the impacts on the City-maintained asphalt streets which are 95 percent of its local streets, not County or State. The model considers loading factors only. The model considers impacts of an organized collection system for refuse with one hauler vs. the current system of five haulers. Mr. Kosluchar stated the heavy vehicles model provides comparative predictions of traffic loading and predicted pavement condition. Analysis was performed on 547 asphalt residential street segments in Fridley. A comparison of one refuse vehicle trip per week vs. five refuse vehicle trips per week was performed. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 17 Mr. Kosluchar presented a chart showing where the excess heavy loads consume over 10 percent and over 30 percent of the total ESAL’s impacting the streets. Commercial areas were not analyzed. They also did not analyze for the concrete streets in the southeast corner of the City. Mr. Kosluchar said the results of the analysis show that according to this tool the refuse trucks and the current open refuse collection system consume a significant portion of pavement life estimated by the model at 17.9 percent over Fridley's asphalt streets. This is all Fridley's asphalt streets on average. This results in worse pavement conditions that require street resurfacing sooner. Mr. Kosluchar stated the heavy vehicles model estimates an excess cost because of heavy vehicle loading under the current open collections system is just over $4 million over 20 years or $208,000 annually. Over the long-term, savings through extension of paving life would be realized if they were to convert to a reduced traffic scenario under an organized collection system. They would not see savings in year zero or year one. The savings would migrate upward. Generally over the pavement life cycle, what they would be able to do is extend some streets and take them out of the reconstruct mode and come back to them five years later. They would delay that major maintenance and, therefore, save those dollars. Those projects are funded by a special assessment through benefitting property owners, and MSA has funds which are State aid funds originating from gas taxes. Mr. Kosluchar stated impacts of trucks routing into and out of a neighborhood are not considered under this analysis. Impacts of starting, stopping, and turning vehicles (particularly heavy vehicles) are not considered. Additional minor maintenance and changes to costs or increased costs on the open collections system vs. an organized collection system are not considered. Changes in the numbers of haulers or heavy vehicles are not considered. Mr. Kosluchar stated it also does not consider how much of that potential savings could be captured. The analysis gives them an ideal condition. Obviously they know with scheduling the City's pavement maintenance and rehabilitation, that it could capture the majority of that savings. The City probably would not be able to capture it all, because the City does not typically jump around and do a small street segment in one corner of the community and then in another. The City tries to combine them together for the economy but at the same time extend the life significantly for all of the City's asphalt pavement. Mr. Kosluchar stated he asked himself if this was consistent with estimated impacts on other communities. Some estimates provided by other communities include Roseville estimated at $188,376 per year, Oakdale estimated at $120,000 to $300,000 per year, and Robbinsdale at $150,000 per year. Arden Hills indicated there was no savings. These amounts were developed without the benefit of this tool but seem to be in the ballpark. Mr. Kosluchar stated Fridley's asphalt pavements are significantly impacted by additional refuse trucks operating under the current system. The model prediction is the most exact prediction currently available for a Fridley street, and it shows opportunity for real cost savings over the long-term. Moving to an organized refuse collection system would have a positive impact by extending asphalt pavement life, resulting in reduced frequency of major maintenance FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 18 and special assessments and local costs associated with construction funded by gas taxes and other sources. Mr. Kosluchar stated, finally, in order to maintain the Fridley's roadway assets in the most efficient way possible over the long-term, organized refuse collection is superior to the current open refuse collection system. Also, organized collection would provide the City and its residents with significant long-term savings. Councilmember Bolkcom said staff only mentioned the first year. She asked if they could talk about the rest of the contract. There were some questions some people had related to fuel surcharges, etc. The Agreement that was worked out is for seven years. Mr. Wysopal stated the Agreement does call for a seven-year service term. That was at the request of the haulers. They wanted to have as long a term as possible to recoup their investments and capital equipment, etc. As they negotiated price, they saw the cost to the customer has two components to it. The first cost component being the actual cost involved to go down the street, collect it, and then go to the garbage dump. The second cost component has to do with the actual tipping fee which is the charge from the ERG plant, the flow control for the County of Anoka and what they charge per ton. Mr. Wysopal stated they extrapolated how much garbage is collected by pound in a 30, 60, 90 gallon container. They came up with some costs and then tried to contain those costs as much as possible. For that first component, the collection cost, they tied that to the CPI so that the portion of the bill that is attributed to the collection can only go up on an annual basis as much as the CPI goes up. The second part of the cost, the tipping fee, would only increase the property owner's bill if there was a commensurate increase at the ERG plant. If there is no increase at the ERG plant, the customer’s bill would not go up for that particular cost factor. If there was an increase of a dollar per ton, they extrapolate that back down to the actual per unit collection. Mr. Wysopal stated the numbers, however, in the contract are the limits that can be charged. It cannot be affected by any additional charges the hauler would want to include. Fuel service charges that are common on most residents' bills would not be added to these numbers. Any taxes that come up have to be applied. They cannot get around that. There would not be any fuel service charges on these bills primarily because they looked at ways to identify what the current costs are for fuel right now and is represented in those numbers. Any increases would be a part of the CPI. Ron Bloch , 5201 Pierce Street NE, stated he has been following this for the past year or so. He is very much in favor of the Council going ahead. He is the block captain on his block. A few years ago, he contacted everybody on the block and tried to convince them to go with a single hauler. It made no since to him to have multiple trucks coming up and down their block. He did manage to convince most people. It would be nice if those couple of people who wanted to stay with their haulers would be willing to pay more when it comes time to redo the streets at an earlier time. He has his doubts there. Mr. Bloch stated they have been presented with a whole host of good reasons why they should go ahead with this. The only reason he can think of opposing this is freedom. People like the freedom to choose. The City does not give them the freedom to choose their fire service, police FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 19 service, or utility services. This service is like those services, which makes sense for the City to go ahead and enact this plan. Leroy Anderson , 7581 Alden Way, stated he is all in favor of this. A few weeks back at their monthly meeting, Councilmember Barnette stated there is little disparity in what some people are being charged so he looked into it. To make a long story short, he has the smallest garbage can available and he is paying $30 more than his neighbor is paying for identical services. Jim Woodison , 6241 Sunrise Drive NE, stated he stands in opposition to the plan. He could dispute more or less everything that has been presented tonight in one shape, form, or another. However, the reason he is here tonight is more of choice. He believes they have limited choices today in many things they do. This is one choice that they should keep. Mr. Woodison stated he happens to be in the industry. He sells semi trucks. He disputes the fact the trucks are loaded all the time. The wear and tear on the streets is progressive based on the weight of the truck. He disputes the factors such as the green footprint. He made a note during the comments about whether it is a function of the truck and the specking of the truck or whether it is function of the provider. For example, if the truck is built wrong and the bridge is wrong, you are going to have damage. But he would rather choose a waste hauler that is green, natural gas, wave of the future. Diesel is going to be a thing of the past eventually. They did not take into account the options that are afforded to them. Mr. Woodison asked how they would compel a vendor when the choice is taken away from him. While he is only one voice, he still has a choice. When Turner left, Comcast had no motivation. You hear about it in the paper all the time, falling asleep while on hold. Seven years? He scoffs at it. What is the life cycle of a truck? 30 years? What is compelling the vendor to keep modern? What is compelling them to do anything? Mr. Woodison stated he is with Walters. They could not always get the lid all the way down. The previous provider, $20 surcharge. They had a choice. The customer service he received at Walters was better than the previous vendor. He had a choice. Mr. Woodison stated he shared with various members what Bloomington was doing and why St. Paul was an abysmal failure. Why do they have to do what everyone else does? We do have a choice, and he implores them to think hard about removing their choice and controlling as the public the vendor instead of the City controlling the vendor. He is the guy writing the check. He should have that choice. Councilmember Saefke stated he was going to read Mr. Woodison's e-mail but seeing how Mr. Woodison has already covered the material, he will put it into the record along with Mr. Wysopal’s responses to his questions. MOTION by Councilmember Saefke to receiving Mr. Woodison's November 27, 2014, e-mail. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, THE MOTION WAS CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 20 Pat Delaney, 6250 Riverview Terrace, stated it is a no brainer that this project should go through. The saving on the streets with not having the 5 or 6 trucks running around making noise and pollution is ridiculous. Eric Larson , 69th Place, stated he is not 100 percent opposed to the City's plan. It has some merits. However, right now he currently pays $162 a year. Under the City's proposed plan, he is going to pay $309. That is a terrible deal. He thinks they could have done a lot better negotiating. Mayor Lund asked what size cart he used Mr. Larson replied he has a large cart and he has yard waste. The yard waste is included in that figure. He has been getting a good rate for about five years. If someone tries to give him a bad rate, he calls around and gets the best rate he can get. Mayor Lund asked who his hauler was. Mr. Larson replied Ace. He had Walters before. It seems they could do a lot better than the numbers the City was given. Councilmember Barnette asked what he was paying every three months? Mr. Larson replied, the yard waste goes the whole season. He is paying $36.50 per yard waste can for the entire season, and he is paying a monthly rate of $10.50 for a large can. He realizes that is a good rate. They are almost doubling his rate with the plan. His yearly rate is $162. He does not think the haulers are giving the City a good rate. Mayor Lund stated they definitely agreed that was part of the premise of the discussions was if there is an economy of scale, they would get a better deal. Mr. Larson stated he might not even mind paying just a little bit more to having only one truck coming. There is a benefit to that. Councilmember Bolkcom asked what is a little bit more? Mr. Larson stated a little might be $40 or $50, not $150. Councilmember Saefke asked Mr. Larson whether he has a fuel adjustment column on his bill. Mr. Larson replied, there is one. It is $1.70 a month. Councilmember Bolkcom asked whether that was added onto the $162. Mr. Larson replied, the $162 does not include that. Richard Svanda , 1521 Woodside Court, stated he moved to Fridley in 1975. Shortly after he moved into the City, he was appointed to the then Environmental Quality Commission and has been there ever since. Shortly after he was appointed, he was assigned by the Commission to represent the Commission at a City Council meeting where the curbside recycling program was FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 21 being debated. There was a decision made at that meeting to proceed with curbside recycling which he views as an organized collection proposition, and they have the one hauler carrying all the recycled materials. It has been very well run and very efficient and has served the community and the residents very well. Mr. Svanda stated the second gentleman talked about saving on his garbage rate. In 2010 when the Commission sponsored public meetings on this issue, he started getting a feeling that maybe he was paying a little too much for garbage and yard waste. He conducted a survey of the Commission members and different neighbors who had different haulers than he did, and he concluded he could save over $100 if he changed haulers. During the first year after that he saved $114. Under the proposal here the yard waste rate is approximately what he is paying now, and he uses the 30-gallon garbage can for garbage. He will save about 18 percent there which will be about 38 percent. Mr. Svanda stated he figures from the beginning of the formal discussions here in Fridley to the organized collection, he is going to save about $150; and he considers that very substantial. He had a number of points to talk about, but staff has done an exemplary job of their presentation and the points he was going to make are points they already made with regard to increased efficiencies. He is a retired civil engineer so the discussion about the wear and tear on roads makes imminent sense to him. He has not reviewed the points to kind of validate the numbers; but it makes intuitive sense to him that garbage trucks are having much more of an impact on the roadways than automobiles. Mr. Svanda stated in the Council's budgetary discussion they talked about the certain limitations that are placed on the City through levy limits. It seems as though the money that is projected to be saved on roadways, for example, could go a long ways towards addressing the financial needs of the community and/or of moderating future levy increases. He would encourage the City Council to adopt the necessary resolutions to make organized collection of garbage in Fridley a way of life for the future. Brenda Michnowski , 6297 Jackson Street, stated she had her current bill. She pays $9 a month plus there is a fuel surcharge ($5.74 for three months) on there. She understands she is getting a sweetheart deal, but she worked hard to get the deal. She called all the haulers and shopped for the best deal. She does have the medium sized cart. Also, Fridley is an aging community with a lot of senior citizens in it; and she happens to be very good friends with a senior in Fridley. She calls the Star Tribune, Comcast, the haulers and she explains she has a friend who is a senior citizen; and she is on a fixed income. Every one of those calls she makes, she get a deal for her. There are a lot of other people in Fridley who could take advantage of that freedom. Councilmember Bolkcom asked if she had yard waste pickup? Ms. Michnowski replied, it is $73.50 Councilmember Bolkcom replied, so it is a little more than what is proposed here. John Krack , 7629 Lakeside Road NE, stated he kind of has mixed thoughts about this. On the surface it looks like a good idea but first thing he looked at was what the financial impact would be. He expects to see his bill go up about 50 percent. He is currently paying $27 a quarter plus FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 22 fees which are about $38 so about $35 per quarter for a medium-sized container, and they are looking at going up to around $52.35 a quarter under the new proposal. As has been noted, he fully expects the operators will be saving a lot of money in that they will be restricted by one area. He agrees the City could have gotten a better deal from these haulers. He also has taken advantage of the competition. He goes around every few years and tries to get the best deal. That is part of the rationale for choice. Mr. Krack stated he is with Republic right now and they will do a vacation hold for a minimum of two weeks. This proposal limits it to four weeks' minimum. He thinks that has to be reconsidered, too. If Republic can do it for two weeks, why can't the rest? Mr. Krack stated he has the option of paying on-line by credit card. It is very convenient. He does understand there is damage to the streets; but he questions the methodology used to determine that. Out of $4 million plus savings or additional cost to the streets every 20 years, he figures there is roughly 4,000 operations caused by those extra four trucks going through once a week over 20 years, that comes out to about $1,000 damage to the City's roads per truck for going down his street. That sounds awfully high. Mr. Krack stated he also questions whether 20 years is a reasonably useful life. They moved into their house in 1980. They had their streets replaced once in 2013. By these calculations, if the street is good for 35 years, then they really got a bargain if it costs them $4 million over a 35- year period vs. a 20-year period. The other method they use to compute the additional cost of building the streets to support the additional damage comes out over $100,000 every 20 years. Maybe they should look at making the pavement a little thicker and spending that $100,000 every 20 years and supporting the additional traffic that these trucks bring. Councilmember Bolkcom asked if he has had his street resealed. Mr. Krack replied, they come through every so often and do the sealing; but they are not assessed for that. He knows it is a cost for the City; however, the City will pay for that anyway as you get deterioration from weather and atmospheric conditions. The only assessment they have had was last year when they dug up the entire street and replaced it. Mr. Krack stated his big concern is the pricing and the inability, once this goes into effect, to negotiate a better deal. Jim Kiewel , 1627 Rice Creek Road, stated he believes the anticipated savings would be $150,000 per year if they enacted this. Mayor Lund stated it was like $208,000 and they took some other factors into consideration, making it 75 percent of that, which is where the $150,000 came from. Mr. Kiewel asked how many would be willing to relinquish your freedoms or your choice for $150,000 a year. Mayor Lund replied, they are just taking public comment. There are a lot of other factors that were brought into that presentation. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 23 Mr. Kiewel said it was on the board. Anyone who did not receive a bill or missed it, that amount would be certified to their taxes and/or to their utility bill. Mayor Lund replied after 75 days, the haulers would pass the bill over to the City; and it would be assessed on the property taxes. Councilmember Bolkcom stated, similar to water or sewer or anything else they do not pay for. Mr. Kiewel replied, he personally would not be willing to sacrifice his freedom for any amount of money. He just would not do that. He thinks the definition of socialism is the combination or control of the means of production and industry. Any time a government entity comes to him or the citizens here and states they are going to save them money or things are going to be wonderful, they are adding a third party. Mr. Kiewel stated he has a fundamental mistrust as they are probably aware of, of government, of social engineering or controlling individual choices. It really is not worth sacrificing their freedom for that. Pam Reynolds , 1241 Norton Avenue N.E., stated she is vehemently opposed. She wants to choose her own hauler. She wants to set her rates. She wants to be in charge of her own household budget. She does not want government controlling anything that she cannot have them control. One thing no one has talked about is that 70 percent of Minnesota cities have an open hauling system. She is not going to cheer that they could end up becoming another of 20 around Fridley. Roseville Council just put it aside and said they are not talking about it. There are so many cities right now that are jumping on the band wagon to go to open hauling. Everybody started out with, oh, it is so noisy and so bad for the environment. They got down to the only thing left to wave their flag for was the streets. Ms. Reynolds stated the industry polices itself. Most of the haulers are going to trucks that burn natural gas. The old behemoth garbage truck spitting and spewing the diesel fumes are not there anymore. Her biggest issue with this is she wants to pick. If Walters ticks her off, she wants to get on the phone, and she wants to get rid of them. If her rate gets too high, she wants to be able to get a better one. By eliminating free market, you eliminate competition. By eliminating her right to choose, you have eliminated her right to choose. Ms. Reynolds stated the saving of such a little dab of money on streets, you have to do them anyways. It is not like, for how many years, has the City been maintaining the streets; and all of a sudden a light comes on and they say, oh my God, look at how much money they could save if they took way the people's rights to pick their own garbage man. Ms. Reynolds stated she does not see anything in the document that gives a senior discount or anything that covers the senior who currently shares with their neighbor because they have one little Target bag full of trash a week. She sees nothing in there that tells her who they are going to control next. What if she has a private lawn care service, is that next? Because of this proposal her garbage and yard waste service is going to almost double. Mayor Lund asked what she was paying now? FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 24 Ms. Reynolds replied her bill is $39 something for three months. That is not a sweetheart deal; she has been with the same company for four or five years. She switched because she was not getting the service she wanted. If it is like anything else the City does, it will not enforce it so it will not matter. Ms. Reynolds stated Ms. Jones talked about how many code enforcement violations are based on solid waste. At the EQEC meeting she pointed out 143 that were probably a real issue. The rest of them are because someone leaves their garbage can in front of the house or they do not store it inside. Ms. Reynolds stated something else she noticed in the document, where is the control when it comes to townhouses. She understands they operate under a homeowners association which is a business pretty much, but on her street the townhouses are at the end of the street. Therefore, if they still have their own garbage hauler, and the City assigns her one, she is still going to have double. Most of the people on her street pretty much use two haulers. Sooner or later she is going to get assessed for the street being done. If they noticed in Mr. Kosluchar's presentation, the word, "predicted" is on the flag where it says, how much extra road life they are going to get and how much less they are going to pay. Because nobody has figured it out. They have a chart where you can plug in the numbers that tells her how much damage that truck is doing to my street. On her street she sees kids out there, picking rocks out of the street, banging things, and people dragging things. Ms. Reynolds asked if they remembered Mr. Juaire driving the D9 cat down the street on the metal runners. He damaged the street, and it has never been repaired because right where he was running that thing is exactly where the surface breaks up all the time. They put a patch on it. The road has not buckled or failed, and she still has probably 7 or 8 garbage trucks. However, she thinks when they hit Norton Avenue they are pretty much empty as it is where they start their route. Ms. Reynolds stated the other thing is what happens to people who have long-term contracts with a garbage hauler so as to maintain a price for a longer period of time. Or, a very unique thing she came across is there are some people in this City who currently have a lifetime service provided for free as a result of a buyout of a smaller garbage company by a large one. It kind of sounds to her the City is going to say, it does not matter what deal you worked out with your hauler or what kind of contracts you have. Ms. Reynolds stated this is not necessary. She asked, if this goes through, then who is next? The one thing Mr. Wysopal pointed out was that this is the only industry that does not pay to use the City's streets in a franchised sort of fashion. They do pay wheelage taxes and those sort of things. However, what about the post office? UPS? FedEx? The Post Office truck runs along her gutter every day. She does not know what one weighs, but it drives in the same place every day. Eventually the curb is going to give. Are they going to stop the United States Postal service? It is wrong to mess with the free market system, and it is definitely wrong to take away her right to achieve a better rate and maintain the budget in her household by using competition. Ted Kueppers , 7361 Tempo Terrace, stated he appreciates what staff has prepared and agrees with many of the items they have brought up; and he and his wife have discussed these prior to this time and agree with them and support the organizational use of refuse hauling. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 25 Adam Hardy , 6845 Channel Road NE, stated he has a couple of concerns. A lot of them have already been addressed by several members. He stands in opposition to the proposal. It is about freedom and a lot people have already touched on it. That is one of the main reasons he opposes it. According to the website, residents will save an average of 70 percent from current rates. He would like to know if those savings are going to be reflected on his taxes. Mayor Lund asked how so, because he is getting a savings? The haulers are the ones who are giving him a savings for those who will get a savings. Does he mean because of the wear and tear on the streets? Mr. Hardy replied right. Mayor Lund replied, there would not be a cost savings. It means that they will not have to raise the taxes or charge assessments according to some of these studies. Mr. Hardy stated he would be willing to pay the assessment for the street because his freedom is that important to him. The non-residential dwelling units, how is their refuse collected? Can they pick and choose their own hauler right now? Mayor Lund replied, under this proposal it is up to three units. The townhouses and mobile home parks have single collection sites. A lot of them do not have the carts. Mr. Hardy stated they are still able to negotiate with any of the five haulers in the City. Mayor Lund replied correct. Mr. Hardy stated he wanted to know why the City wants to negotiate on his behalf when he is capable of doing that himself. Mayor Lund replied, that was pretty clear in the presentation that it is about long-term cost savings to one of the City's most expensive assets in the community. Mr. Hardy stated the City thinks they can do a better job of negotiating his service than he can. Mayor Lund replied, not necessarily. There have been some comments here by people who are getting some pretty good deals. Mr. Hardy replied, exactly, and he wants to keep his pretty sweet deal if that is okay with the City. Apparently not, because in this proposal they want to raise his rates. Mayor Lund asked how much his rates would rise. Mr. Hardy replied on his current rate right now, it would probably go up about 20 percent. However, apparently hearing from other people he is getting robbed on his yard waste right now. His real concern here is his right is being taken away to negotiate his own services, his own prices. Norma Rust , 5735 Quincy, stated it sounds like a good deal; but she is opposed to it because it takes away her freedom. She knows of previous neighbors who combined their garbage FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 26 collection services because of the minimal amount of garbage they had and because of their limited income. For her, if she were to come under this type of program, she would have a 100 percent increase in her garbage collection because she does not have garbage collection now. She takes it to another place. Mayor Lund asked if she takes it to her employer. Ms. Rust replied another property that they have. Councilmember Bolkcom stated but it would not increase. It is her understanding in the new agreement, if Ms. Rust can show that she is taking it to her business because they know Ms. Rust has an apartment complex, as long as she can show that and fill that out, she would not have to have garbage collection at her home. Mayor Lund replied it is the opt-out clause. hen a garbage truck comes to the City Hall, they should put this proposal in Ms. Rust stated w there and let the garbage hauler haul it away once and for all. Gary Alfernes, 570 Rice Creek Boulevard, stated he is all for it and the biggest reason for him is to have less trucks going around the neighborhood. He has been hearing some people who are getting some really good deals. He has been happy with his hauler. He is surprised at some of the prices some people have been getting. He does not even know what his new price would be but he is all for it. Justin Foell, 6005 Gardena Circle, stated he is for organized collection. It has never really been an issue of cost for him. During the summer when there is composting, nine garbage trucks come by on a given day. Although looking at the presentation today, he pays $40 for composting currently for the entire season. They apparently are not getting a good deal on their composting. By inviting five trash haulers, they have kind of created this haulers union and it seems like the contract term is really long. He was just wondering if anyone knew how the contract renegotiation works and, if they cannot do it in like two minutes, it is probably too complex. Mr. Wysopal asked Mr. Foell is he saying that the seven-year period is too long and how does the renegotiation happen? Mr. Foell replied, his concern would be that if they feel they are not getting a good deal, they are going to have to wait a really long time to try and get a better deal. Whereas, on their own right now they can change whenever they want. He would think a yearly basis would be more normal. Mayor Lund stated that is a little short-term for him. The biggest thing that comes to mind right away is that it is a good thing for the haulers as they have a dedicated seven-year contract with what they are proposing. With that they can go to the bank if they need to get new equipment, new trucks, etc. It gives them some stability. Seven years is a long time though especially if they are not happy with it. Councilmember Bolkcom stated State Statute says they can go from three to seven years. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 27 Mr. Wysopal stated as to how the renegotiation would occur, they would put the haulers on notice that it is time to renegotiate. They would be gathering data from every year on how things are going. They would be looking at the other cities and what the prices are and go to the negotiation table with direction from the City Council as far as what items they need to negotiate on. It is completely up to the City and the haulers to decide if they want to go into an extension of the term. It is not obligated. They would come into it just like they would on any contract and say, okay, what do they need to work on. What needs to be better. What are our business points. Councilmember Bolkcom stated right now the proposal is for seven years. The renegotiation would be somewhere maybe in the sixth year. Joan Olson , 6320 Van Buren, stated she is a 48-year resident of the City. She remembered when her street was rebuilt. Her 48-year old son was in kindergarten. Her street was sealcoated only one time. Mayor Lund asked, sealcoated or redone? Ms. Olson replied, nothing. Mayor Lund stated the sealcoat program is every eight years. Ms. Olson replied, she has not seen one. She is opposed to it. She wants to keep her hauler. They are very good. She uses the yard waste in the spring and in the fall. She has a lawn service. Everything is mulched right back into the lawn. She does not have grass clippings. She still pays for it but she does not need it. She lets her neighbors use it if they need extra. She wants to keep what she has, and she likes her walk-up service. Mayor Lund asked if she is disabled. He did notice in the contract that for those who are handicapped or have some disability, they do have a walk-up service. Ms. Olson replied, she has a disability and she has enough of a slope in her driveway that her kids would have 16 fits if she tried to haul a garbage can down there. Councilmember Bolkcom stated that would not change. Mayor Lund stated he read in the contract they would still have valet service for those who need it. Ms. Olson stated she gets it for free from her hauler. She called several others and they wanted $6 to $10 a month extra to do it. She is against it. Brian DuRose , Gibralter Avenue, stated every year he calls up his trash hauler and he has not paid for more than nine months of service in the last three years. He just changed haulers and he got three months free because he asked for a better deal. What the City did was sent out a notice to five trash haulers and said give me a bid, and every one of those people called each other and said, okay, we are all going to bid $35. How many bids were different of the five? Mayor Lund replied, that actually was not the case. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 28 Mr. DuRose asked how many bids were different? Mayor Lund replied, he did not know. He was not a part of the negotiations. Mr. DuRose stated, another example is, he had Sirius radio. It was $86 for six months. He called up and said, he would like a better deal, and they said they could offer $50 a month. He said it was not good enough, let me talk to your supervisor. Supervisor got on the line. He got Sirius radio for $25 for six months. It is their fault they do not negotiate with their trash hauler. Councilmember Bolkcom said she never thinks of it. Mayor Lund stated this item may come up at the next Council meeting. They need to take this input. He does not know if they will even make a final selection at the next meeting. They need to discuss the input they have received tonight. It is a worthwhile venture. They should be looking at these things. Mayor Lund stated governments get criticized often and maybe rightfully so about spending taxpayers' money and maybe not so wisely. On the alternative side it is only right to look for alternatives to save money, and that was the premise. They never did look at just going to one hauler. Why should they not be getting a better deal like some of them are getting. He is certain they would have gotten a better deal in the negotiation if they had gone to a single hauler. They felt that they have had five haulers in the City for a number of years, and it is kind of a nice deal for them to know they do not have to sit there and fight each other for trying to steal the other guy's business. However, they also do not lose business this way. Mayor Lund stated he heard a lot of positive things. Staff has done a lot of work and negotiations over the last 11 plus months. The EQEC looked at this almost three years ago. They are listening to people, and the fact is, it was citizen input that started this whole thing three years ago. Mayor Lund stated the one thing that is prevalent here in this room is cost and probably No. 1 is freedom of choice. Understand that there is always a give and take in negotiations. He asked they be given time for them to weigh in on this. Councilmember Barnette stated he very much encouraged people to call them and e-mail them. They need to get all those opinions. That is why they got elected is to serve the public. Councilmember Bolkcom stated she just had one e-mail in support of it from a couple who lived over on Alden Way. Another one on her own street, and another one from a gentleman who lives on Riverview Terrace supporting the project for some of the very same reasons that were part of the staff presentation. Councilmember Bolkcom asked, going back to if there is a renter in a duplex, and the renter does not pay for their garbage, then it goes on the utility bills for the actual homeowner of the property, correct? Ms. Jones replied correct. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 29 Councilmember Bolkcom stated on Page 82, she does not undersatand (H). It says the City shall not amend the City Code during the term of this Agreement in any way that prohibits, frustrates, or makes it economically prohibited for a hauler to maintain his Class I license unless required by state or county law or mandate. What does that mean? Mr. Wysopal stated that is telling her the concern from the haulers is that they have this Agreement and then the terms of the Agreement are changed via an ordinance, and they are then without the customers they thought they had. This Agreement ties the performance of the license to the ordinances, etc. It is a protection that they do not go and do anything that would violate the terms of this Agreement through an ordinance as opposed to changing the Agreement within the seven-year period of time. Councilmember Bolkcom stated she and Mr. Wysopal have discussed this. It actually says they can pick up garbage from 6:30 a.m. to 8:30 p.m. but then it says in the Agreement, if you have not had your garbage picked up at 4:30 p.m. (a lot of people do not get home until after 4:30). The way she reads this is that if she does not get home until 5:00 p.m. she can call her hauler and leave a message. She might not get it picked up the next day, but they have to promise it by the following day. In the meantime she should not get into any trouble for leaving her garbage out there, correct? Mr. Wysopal replied correct. Councilmember Bolkcom stated, on Page 86, something very simple but under 18(b), the last sentence, is the word, hauler shall notify the City of said purchase or acquisition and provide the City with "contract" information for the new party.” Should it be contact? Attorney Erickson replied, she believed the word should be "contact." Councilmember Bolkcom asked Attorney Erickson is it not true in the way the State Statute is that they could not really just pick one hauler, and say, okay, you are the magic person. They would have to negotiate with all five of them. Attorney Erickson replied, the statute requires that you have a mandatory negotiation period with all of the haulers. You have to have a minimum of 60 days. Essentially the State carves out an exception that requires the City, before it goes to look at going out for an RFP from a single hauler, that it sit down with the currently licensed haulers in the City. It allows them an opportunity by statute to preserve their market share. Councilmember Bolkcom stated tonight it was mentioned that seven years is a long time. This is speculation on Mr. Wysopal's part but what would happen if it were only for three years since there were concerns voiced here related to cost. For one thing, could they go back and negotiate a cost? Maybe not as high as here. Maybe after three years look at it and see if it makes sense. It sounds like Mr. Wysopal had really good negotiations. The haulers need to make money, too, and have to pay their employees. However, what if it was only for three years and they look back and investigated whether it made sense. Mr. Wysopal replied, when they completed negotiations, both the haulers and the City, himself, said we need to have an agreement that we can live with if it is approved and without major change in the contract itself. He would constitute the change in the term as a major change FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 30 because the pricing was reflecting on that. That is not saying that they were very open to small detailed types of things that might need to be relooked at but they felt very good about the proposal. From the City's standpoint, the seven-year term was a reasonable term and it has annual meetings involved so that service requirements can be addressed. He thinks this one seems to go more towards the price piece which concerned him. Councilmember Bolkcom asked what it meant. Mr. Wysopal said his concern is that this is a foundational issue. They would be kind of negotiating back from the Council table. That is not saying that it cannot be done but, as they left negotiations, they said this is the best the haulers can do, the best the City is expecting, and they would not be coming back to negotiating the significant terms and conditions of the agreement. Smaller things that have been brought up tonight certainly can be talked about, but the term piece is a major thing. It is not to say they could not go back and say we want to talk about it because there is an issue here. However, it sounds like they are going back to negotiate the price of it. Councilmember Bolkcom stated they heard from people who were against it, and their concern was that it was taking away their ability to talk to the hauler about complaints. Even if they do not change the price but they only do it for three years instead of seven years, does that make it more palatable for people who are against it? Mr. Wysopal stated they can explore that with them if that is the will of Council. They just want to be careful about trying to negotiate too much from the Council table. If the price is the issue, that should be talked about publicly and go forward with it. One thing he has learned about the haulers in the last 11 months is they are excellent companies and they are excellent people. They work hard to do the service they have and to earn the service they have gotten. They are reasonable people and, if there was a reasonable explanation of why seven years or some other term would be better, they would be willing to at least sit down and talk about it. Councilmember Bolkcom stated way the contract reads is, if you sell your house your yard waste goes away. Someone else who comes in your house does not get that yard waste. If she pays that $80 and goes from Hauler B to Hauler C, does that Hauler B pay Hauler C so that she does not pay the yard waste again? Mr. Wysopal replied, from what he understands from the haulers is that, in their current practice, if you are under an open system, if you were to move, they would honor your previous payment to wherever you move if you use them as a hauler; but the new homeowner would not be able to take advantage of what you paid for already. Under the proposed Agreement that would be the same. Councilmember Varichak asked how they would determine if the haulers are meeting the requirements. Mr. Wysopal replied there are a couple of ways. One is in just the continued relationship that they have with the haulers. He thinks they are in good stead with them now to be able to have that relationship to say that we got these calls. This is an issue and let's work on it. Remember the first point of caller contact is to the hauler itself. If the resident feels they are not getting FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 31 good service, they can call the hauler right away. If that is not being addressed, the resident can call the City who would work with them to remedy the issue. There are sections in the Agreement that deal with this. The majority of what they would be doing is having the ability to work specifically with that hauler and say, this resident is having issues, here is what they are, let’s get them worked out. They would discuss issues at the overall performance review on an annual basis the haulers. Councilmember Varichak stated if the billing goes delinquent, then the City takes over. Have they estimated how much staff time it would take? Mr. Wysopal stated their estimates are it would be a very low amount of time. It would be higher in the first year of operation and then go down based on experiences other cities have had with this similar type of thing. On an ongoing basis they would be able to do it with the existing staff in the Finance Department. Councilmember Varichak asked can they even estimate the amount of delinquent people who do not pay their utilities, how many would not pay their garbage fees; and what does that equate for the savings for the streets? Mr. Wysopal replied, their estimate on the high side was about $90,000 a year that people would not be paying. The City would be assessing fees on top of that to recover it. Therefore, the City's time cost of money would come back to it and then some of the fees. Councilmember Bolkcom stated just like if someone does not pay their water bill, there is an administrative fee. Councilmember Varichak asked does that come back to the City now and go on the tax rolls. That just goes to the hauler, right? Mr. Wysopal replied, that is correct. If the hauler does not get payment, they just stop servicing that unit. That is the common practice. Mr. Krack stated the point on the delinquent payers is well-taken, but couldn't that be handled under the existing program by inviting the haulers to turn that complaint over to the City and then have the City put it through the collection process? Mr. Krack stated the whole process looks like the situation is where they got together with the haulers and put together the design and poured the concrete which is now hardening, and now they come out to the public and ask for suggestions. The suggestions they offer require some major changes to the deal they cut with the haulers. They sat here a year ago on December 2 and listened to a presentation that took absolutely no comments from the public, and nobody even considered the cost which is the concern of many of them and the choice. It would have been very helpful if they would have had some kind of a session mid-Fall to say what are your big concerns on this. Mayor Lund stated they have to understand that he and the Council received this Agreement the same time it was presented to the public. They were not a party to those negotiations. Mr. Krack stated who negotiated it then? FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 32 Mayor Lund replied the City Manager met with the haulers on 11 different occasions during the process. Mr. Krack stated then maybe the City Manager should have had some meetings with the public to get their suggestions. Mayor Lund stated they could have made comment at any time via e-mail or letter. Now he finds out that some people have some really awesome deals. Mr. Krack stated they did not know all of this was going on until they got notice of the information session. Councilmember Bolkcom stated she would like Attorney Erickson to speak on the whole process of what State Statute says they can and cannot do. Attorney Erickson stated the Statute Statute, 115A.94 sets a mandated process for organizing collection. It is the sole process that exists, and the City has been following that process. To Mr. Krack's point it is kind of backwards to the extent that the Statute mandates that you go and meet for 60 days at a minimum with the haulers and then you come forward with a proposal. There were many meetings at the EQEC level where citizen input was sought, and she believed was provided, as to what were priorities, concerns, etc. The way the Statute sets forth it is kind of a different process where there is negotiation that precedes the presentation and public hearing. And that is a requirement and the legislation was just changed in 2013 to create that process. That was done at the legislative level with lobbyists on both sides of the issue, the cities have their lobbyists and the haulers have theirs. There is give and take in legislation. Mr. Krack stated then there needs to be a provision in the process which they are having right now with the public hearing where the public can comment but then they have to have the provision where they can go back and renegotiate with the haulers. The concrete has been poured. They heard Mr. Wysopal say it would be almost like tearing it apart and starting it over again to go back and try and negotiate some of the major terms of this deal. Attorney Erickson stated there is nothing that prevents the City from doing that, but the results of the negotiation sessions were what the haulers believed to be their best offer. Otherwise, they are going to have a constant pick, pick, pick at the issues that they may never get a resolution. The intent of this is to solicit a proposal from the haulers and then have this open meeting. Otherwise there could be ongoing public meetings. The intent is that the parties walk away with a pretty firm proposal. Mr. Krack stated he expects the haulers would say they don't want to put anymore time into this. They are happy with the situation the way it is now. His big concern is the public for the most part is left out of the decision-making process until tonight. Attorney Erickson replied, again, she would say the Statute contemplates that City staff goes and discusses this with the haulers and then brings the haulers' proposal to the City Council and the public for comment. That is Subdivision 4(d) and it is a relatively new provision. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 33 Mr. Wysopal stated the other piece of this is answered through two things, one, what if that price was one of the components that the Council directed himself and the staff to negotiate about. It was one of the items. It was not the highest item. The highest item had to do more with the street impacts and the cost that the City was incurring on these roads. And then the environmental and safety issues and price was one of the issues. Mr. Wysopal stated, as to the second part of his answer related to what are the next steps? The next steps are the Council can accept the Agreement and execute the Agreements and move forward. The other option would be for the Council to reject the Agreements and end the process. The third option would be to reject the Agreements and create a committee (this again is out of the Statute the City Attorney talks about) by the Council by whomever they choose. Whereas, the negotiations that took place were between the haulers and the City in a closed environment. Again that was specified by Statute that is completely different than how they normally do business. Mr. Wysopal stated the haulers had at risk if they chose not to be a part of that. They could lose their market share and be excluded if they chose to exclude themselves. They all chose to negotiate in good faith. They worked on all the information that was presented. And it was not a bid. They did not say, okay, you five haulers send us your best bid. It was we have to sit down and say what are prices; and they worked together to figure out what their average market rate was and, based on what they considered their market rate numbers, the number that was negotiated is about 17 percent below that. If the Council were to decide to go to a single hauler, then they would say, okay, everybody, here are our specifications, give us a bid and that drives the price down. Mr. Wysopal stated comparing Fridley's prices to the most recent city to do this process - St. Anthony was the first city they were aware of to go through this process and successfully negotiate an agreement. Fridley's numbers are right in line with theirs. However, if they compare their numbers to Blaine which has a single hauler based on a one bid price, these numbers are higher. They are probably more in line with what are the sweetheart deals they heard today. Again, that was not the direction they were given. Mr. Woodison stated he would take his opposition off this proposal if they could somehow go back and say, a shorter term, for the very reason Councilmember Bolkcom spoke of it. He is willing to give up his freedom for three years. No one disputes they are trying to do the right thing. They do not want these haulers to be relaxed. Seven years is relaxed. Councilmember Bolkcom asked with Councilmember Barnette asking for persons to call him and e-mail him where do those comments go? Why close the public hearing tonight? She asked how long was St. Anthony's agreement for? Mr. Wysopal replied, five years. Councilmember Bolkcom asked what have the agreements been for some of the others who have gone to organized hauling in the last couple of years? How long are their agreements? This is the first night people have really received a chance to give them their input. She would like to continue the public hearing so they can pursue some of these other options. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 34 Mayor Lund stated it was his intent to close the public hearing and then have discussion after the public hearing because there are sufficient outcomes from this that she and others have expressed. Councilmember Bolkcom asked Mr. Wysopal when he said that the percentage of people would save 17 percent, where did that come from? Mr. Wysopal replied, that was from the number the haulers represented and they verified with actual bills, statements, from people. They have to understand if you take five different haulers and figure out what their average cost per level of service was and they verified it the best they could and said, yes, that is pretty accurate. MOTION by Councilmember Bolkcom to continue the public hearing to December 22, 2014. Seconded by Councilmember Barnette. UPON A VOICE VOTE. COUNCILMEMBER BARNETTE, VARICHAK, SAEFKE AND BOLKCOM VOTING AYE, WITH ONE ABSTENTION, THE MOTION WAS UNANIMOUSLY PASSED. NEW BUSINESS: 16. Resolution Approving Adoption of a Master Plan for the Northstar TOD Area as Prepared by HKGI. Ms. Jones stated they have asked the City's consultants to come in and present the final master plan to them for tonight. Jeff Miller, HKGI, stated Brian Harjes is also here from HKGI. Mr. Miller is a planner and Mr. Harjes is a landscape architect. They have been working with the City since February on this and they have met with the City Council three times during that process in developing the plan. He is aware they have seen a lot of this information. They have all the important components to present, and they are open to questions at the end. Mr. Miller stated TOD is transit-oriented development and TIF is tax increment financing. They will see a lot of references to these as they go forward. The purpose of this master plan is to provide guidance for the use of the transit TIF funds since they can only be used for transit- related improvements. It is also meant to entice private redevelopment by showing parks, improvements, and access to transit that should be amenities for redevelopment when it occurs in this area. It is also meant to guide future TOD applications from developers by proactively showing them what the City has preliminarily approved and is hoping will happen in this area but is not meant to open what the redevelopment looks like. Mr. Miller stated just as a reference the background planning of this process was the TIF district which was established in 2008, the overlay district in 2011, the East River Corridor Study in 2012, and then the Islands of Peace Park Plan the City undertook the process for that last fall and then Anoka County subsequently also planned it since it is a regional park managed by the County. The goal of the master plan is to build upon previous plans: Islands of Peace Plan which they saw a year ago for the first time; leverage amenities which include the river, the parks FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 35 which are pretty hidden in this area, the school; and the transit station among other things probably. Also, to tie those things together to create a place around this transit station area. Mr. Miller stated another goal is to reconnect the community to the river in the Islands of Peace Park. Also to plan and characterize infrastructure improvements like roadways, bike trails, storm water planning in the future, and those sorts of things. Lastly is to identify potential funding opportunities and partnerships. One of the best ways to attract win funding and grant money is to have a really good plan that you can use to show that you know what you want for that area. Mr. Miller stated, as to project involvement, there were three meetings with the HRA and the City Council over this process. There were two open houses and then staff met with many stakeholders including property owners in this area, the school district, the County, Metro Transit, etc. Mr. Miller stated as to the first key component of the plan they would be adopting, the first one is the land uses and streets. The key features include a mixed use area at the corner of Interstate 694 and East River Road, the John Allen site, which has already been approved. They expanded and enhanced Islands of Peace Park on the west side of the district, a new loop parkway better linking the park and existing and future housing to East River Road, and redeveloped housing along that parkway and across from that park within walking distance of the school and to the transit station as that area redevelops over the coming years. Also, redevelopment within the underused transit park and ride lots, both east and west of the station. They met with Metro Transit and they are very open to looking into that process. Industrial and commercial businesses are anticipated to stay in place on the east side of East River Road. Mr. Miller stated, lastly, there are three traffic signals shown on the plan including an additional one at Island Park Drive that they have discussed with the County; and they would be open to that when there is enough redevelopment and traffic to warrant that. Brian Harjes, HKGI, stated he just wanted to touch briefly on appeal of the redevelopment concept. He presented a graphic to kind of illustrate what could be developed in the future. It is intended to show footprints and kind of take that next step beyond the land use plan to kind of tie the urban design features of the district together. What they see are building footprints. It may not develop exactly like this, but the intent of the ordinance as it is written today reflects this kind of development character with buildings towards the street. Parking, organized away from the public view either in surplus lots or a potential for structured parking. They can see predominantly in these plans on the west side of East River Road it is a housing focus, a narrow area right at the 53rd Street intersection a potential for some mixed use in that area. Mr. Harjes stated they have two numbers here. Really one to illustrate the growth of net housing units with or without the southern leg of Georgetown. A lot of the focus of potential redevelopment maybe in the first ten years or so of the plan. It would be north of 57th Avenue all the way up to the school. In that zone the transformation could occur where they would have about 650 to 800 units and then a transformation even much more long-term beyond that about 950 to 1,150 housing units in that area for net growth. Mr. Harjes stated projected office development is really focused at the John Allen site towards the southwest corner of that. The light industrial development is another component of the John FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 36 Allen project. There is a small portion along Main Street, just southeast of the TOD station. Also, some potential retail in kind of a one-third, two-thirds split of maybe some commercial pad infill sites near the Home Depot and others, as well as some of that opportunity for a little mixed use retail right at the 57th Avenue intersection. Mr. Harjes stated some of the key features are the pedestrian/bike network. There is the Main Street sidewalk lanes. Those have been improved. There is additional funding being prepared for a bridge over I-694. A lot of the plan illustrates trail connections towards the school with the safe routes to school program as well as extensive trails through Islands of Peace Park both kind of on top of the bluff where the new park area would be and as long as some enhancements to the trails down along the riverfront, the natural areas of the park. As well as the strong activity along the East River Road corridor itself, both from the station all the way to the trail that exists along 694. Mr. Harjes stated a lot of talk early on in the process was the about the potential for a roadway connection from 57th Avenue. SRS Consulting Engineering Company who was a partner with them on this project looked at that extensively and just concluded the cost to be too prohibitive at this moment but to allow for that planning to still continue as ongoing discussions both at the railroad and adjacent properties may open the opportunity for that in the future. However, the plan does reflect the opportunity for near term pedestrian crossings over that rail line as an opportunity for a bridge, local connection there as well. Mr. Harjes stated street design concepts was another good point that Mr. Miller talked about. There are four main streets they really focused on trying to develop the design character for each of these. The East River Road section really was just continuing the same vision if you will that was set forth in the East River Road master planning that was done in 2012. They are carrying that forward and trying to merge and blend some of the same design ideas between other key streets such Main Street, the new parkway street, as well as the residential parkway. Mr. Harjes presented a graphic from the East River Road plan and the top section shows more of a central component of the street where you may have a treed boulevard as well as a treed median. The lower section shows the extent near the intersection where you may have turn lanes and bus pulloffs for a transit facility. It is a little wider section of that area to accommodate those turning movements. They have kept that in play and bringing that thinking throughout. Mr. Harjes stated the Main Street section on the right shows some of the recent improvements with the bike lane and the sidewalk components with the light industrial being to the left side of the graphic and the existing residential to the right side. Mr. Harjes stated two new features involved really that little mixed use section along 57th Avenue along 57th Avenue from East River Road down to the parkway. The graphic on the left shows a plan and then a corresponding section below it. Envision the river on the north side of the graphic, just beyond the park, East River Road, just off the map to the south. This street would have the ability of on-street parking to serve some of the commercial businesses. It would have a center median with kind of a high quality storm water treatment and natural open space amenity to draw people from East River Road down towards the park in that location. In addition to that they are tying in bicycle facilities along there as well. So a combination of striped on-street bike lanes that lead to a green painted identifiable connection all the way into FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 37 the park. It is a combination that can balance transit bike commuters at the same time as recreational bikers that want to get to the park. Mr. Harjes stated the other image on the right is the parkway section which really tries to create more of a residential character with the housing facing the park and provide on-street parking as well. A couple of images that were shown at the open house, and just for reference, this is to kind of give everybody of the flavor, the potential character for development in these areas. He showed the Islands of Peace parkway section. The small segment that could potentially have a mixed use component from 57th Avenue looking to the west, down towards the park in East River Road. In the far distance of that elevation they can see as they always talked about as a Park Centrum building, an opportunity to make that maybe a park gathering space that has a rental lease tenant which could be a restaurant or a small service use. Four to six-story housing lining the street there. Mr. Harjes stated, moving up the road a little bit to the next parkway access, a little lower of character of building height away from kind of that mixed use street but again allowing the combination of pedestrian and bicycle enhancement along the corridor integrating bus stops in that area as well. Mr. Harjes stated on the other side of the railroad tracks at the station, looking back along 61st Avenue to the west and towards the transit station in the distance again, that housing coming towards the street, enhanced streetscape and characteristics along the boulevard parking and including bicycle activity as well. Mr. Miller stated the last part of this is the City's TOD overlay district which the City has in place already, has landscaping and streetscape standards in it. One of the reasons for working on this project is to specify what those standards should be. What is shown here is the character of the streetscape elements that would be amended into the zoning district after this process. This project is not going to change in the zoning district but as a follow-up to this project. This would get incorporated into the zoning for this area. It shows a bench, trash receptacle, bike rack, planters, bollard and aerial lights, the character that they would want to have in that area as redevelopment comes to this area. If they remember the last session they had, they looked at some different options and got the City's preferences in this area. Mr. Miller stated there is the complimentary street light which is a down-facing light even though it is a more contemporary light. It was preferred the benches were not wood so he showed metal benches and waste receptacles. They feel these are complementary and there is the design element that have the organic or natural features and then a bench with a similar style without the images. He showed metal bike racks which would be in this area and metal movable planters would be an option. One of the things in the overlay district is that if there is not enough space on some of these sites to meet all of the landscaping tree requirements there is some flexibility in the ordinance to replace it without things like planters, planting beds. Mr. Miller stated another piece of it is in the overlay district it talks about sidewalks and pedestrian pathways, that they should look different than the street and be called out. There is the option to do scored concrete or colored concrete with patterns or concrete pavers and that would include pedestrian crossings of driveways as well. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 38 Mr. Miller stated the ordinance does have standards for fencing and walls and railings. This is specifying what is desired in that area. He should one of the substitutes for if it is difficult on the site to fit all the required trees, there is flexibility in the ordinance that the developer could do public art or land mark signage or way finding is also something they wanted in this area. He showed the planters that were an option instead of trees or there is one you could actually put trees in there as well. Mr. Miller stated, lastly, they talked about the stormwater. He showed tree trenches which instead of having the traditional pond which takes up a lot of development space, the idea is to have this area look at more innovative ways where there are tree trenches or green roofs or underground cisterns. There are about 7 or 8 ways you can handle stormwater including these two. That would be brought into the ordinance as well. Mr. Miller stated the scope of the project was for them to recommend changes to the ordinance. The recommendations are that the overlay district refers specifically to the TOD TIF district master plan and what is in there. Add a requirement for a streetscape plan from developers. Sections that are not in overlay district today that should be added really to benches, waste receptacles by racks and bollards, add a table with design specs for those features which gets into who manufactures them and how to contact them, the materials, etc. Lastly, add other regulations related to varying materials, colors in this area, way finding signage pavements, and then storm water. Ms. Jones stated as far as kind of wrapping up this project, they are asking for the City Council's approval for this master plan. They do need to complete this project by the end of the year. They are looking probably as the next step to this doing some amendments to the City's TOD overlay zoning district to add some of these specifics they had given the City for streetscape. The whole idea of that overlay district and the language that is in there now is that the City would eventually do that but wanted some time to work on a complete plan to go with that. They will likely also want to complete a minor comprehensive plan amendment to incorporate these documents and drawings into the City's comprehensive plan as well as incorporating some of these drawings they would like to have as a guide in the comprehensive plan. Ms. Jones stated they are already looking at some funding opportunities because of the Islands of Peace Park being next to the river which is a national park and does open some opportunities for the City particularly since the MRT bike trail recently got designated as not just a national bike trail but a national water trail as well and there is some new funding that is expected to come along related to that. Staff is looking at some federal grants to possible use as leverage to get some state money or vice versa, use some State DNR grant trail money to generate some federal money and looking at some opportunities and where they can push through grant funds to do some of these trail connections rather than waiting for tax increment financing funding through the City's capability with the transit TIF Fund in the future. They will be looking at that and of course using this plan as a guide for those grant applications. Councilmember Bolkcom stated the space ship lights are kind of wild to her. That is just a thought and they do not have to go with quite that design. She likes the idea of the smaller lights but they would get dated quick. It was a great process. The attendance at the neighborhood TOD meetings were not huge but at first the people who came were a little leery but they came back and were incredibly excited. The ones she spoke with were very happy there was going to FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 39 be some new development in that area. Some of the housing, the apartment complexes, are some of the worst ones in the City as far as maintenance and that type of thing. It would be nice to get rid of some of the stuff on East River Road, all the signs, etc. and have some better streetscape which goes along with the whole master plan they had a few years ago. People wanted to have more kind of a parkway. Mayor Lund stated he is not necessarily keen on those lights either but he does like the idea of the downcast. MOTION by Councilmember Bolkcom Adopting Resolution No. 2014-94, the Master Plan for the Northstar TOD Area as Prepared by HKGI. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, THE MOTION WAS CARRIED UNANIMOUSLY. 17. Approve Agreement between the City of Fridley and Partners & Sirny, LLP, to Provide the Design Services for the Renovation and Addition to the Interpretive Building at Springbrook Nature Center (Ward 3). Jack Kirk, Director of Parks and Recreation, stated he is here to talk about the architectural design services for the Springbrook Nature Center project. The SPRING project committee which is what they call the local group that is working very hard on helping with the design were very involved with reviewing the proposals and also the interviewing of three architect firms for this project. The three firms which were interviewed were Perkins and Will; Rafferty, Rafferty, Tollefson and Lindeke; and Partners & Sirny. While they felt that all the firms were very good and they did a nice job in the interview process, the committee felt that one firm did stand out and was the best fit for the project that is on the table right now. That firm is Partners & Sirny, and the lead architect with that firm is Paul Anderson. Mr. Kirk stated Partners & Sirny demonstrated through the interview process a really good understanding of the overall SPRING project and they come with some excellent experience in very similar nature center interpretive building projects. They put together a really good team for the building design, landscape architecture, the structural, mechanical, the electrical components of the project. They have lined up Hoisington Koegler Group to provide the landscape architect services; BKBM Engineers to provide the civil and structural engineering services; and Engineering Design Initiative to provide the mechanical, electrical, and fire projection design. All of those firms have really excellent reputations for doing really quality work. Mr. Kirk stated something that really impressed the committee was the previous successful nature center buildings that Partners & Sirny and the architect, Paul Anderson, have been involved with. They designed the Lebanon Hills Nature Center in Eagan, Richardson Nature Center in Bloomington, the Interpretative Center at North Mississippi Park in Minneapolis, the Midwest Center for Wind Energy in Lincoln County, the McCall Pond Environmental Center in Savage, and the St. Croix Natural Scenic Riverway visitor center in St. Croix Falls. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 40 Mr. Kirk stated Partners & Sirny is ready to begin work with us upon approval of an Agreement and they expect if the Agreement is approved they would begin working with them this week. It is his recommendation that the City Council approve an Agreement with Partners & Sirny to be the architects to provide the design services for the renovation and expansion of the Springbrook Nature Center interpretative building. Councilmember Bolkcom stated on the first page, on page 217, it says Partners & Sirny's representatives at the interview were clear. Is that what he meant to say? Mr. Kirk replied, he believed they were clear. Councilmember Bolkcom stated she found this Agreement really hard to read. You had to flip back and forth, things were crossed off. Where does it say that the B3 is included in here? She is concerned about the cost and there was a lot of discussion about that. Also, on page 44, it talks about liability, $2 million, and workers' compensation is $100,000, and professional liability at $500,000 but over on which is page 6 of their Agreement they have, and maybe it is on there, page 242, 2.62 it says automobile liability and there is no number in there. Is 2.24 null and void? It is only everything on these other pages, is that the Agreement they are supposed to be looking at? She asked if Mr. Kirk understood her question? Mr. Kirk replied, sorry, he did not think he did. Councilmember Bolkcom stated there is a whole bunch of information starting on page 219 and it talks about additions and deletions and the document has important legal consequences. Is everything up to page 242 just null and void? Attorney Erickson stated she has not reviewed this contract. She saw it for the first time today, but what they have used is kind of a standard document that is used in construction industry. It is an AIA document. Having prefaced with her experience with the document and first seeing it tonight, it looks to her like what they have done is, starting on page 245, prepared a list of changes to the standard contract. It is not necessarily part of the contract from what it is saying on its face. Councilmember Bolkcom stated on page 6 it says 2.61. There is $2 million there. Is everything up until there all part of this contract? Attorney Erickson stated the way she understands it is, basically it is like looking at a redline. The redline is essentially an addendum. It shows you what they have changed. The items that have changes are the ones with the lines on them, so 2.61 was changed, 2.64 was changed, 2.65 was changed. Councilmember Bolkcom stated but 2.62 has no number. Attorney Erickson replied, right it has no numbers. The way she would interpret this is that there is no obligation to provide any automobile liability coverage. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 41 Councilmember Bolkcom asked, who is paying this liability? Are they paying or is this something the City incurs? Attorney Erickson replied, it is a requirement that the architect provide this kind of coverage. Councilmember Bolkcom stated so 3.13 has been changed. Where is that in that paragraph? Attorney Erickson replied, it is crossed out so it is deleted so you would not see it in the contract. Councilmember Bolkcom asked, so this is the real contract on page 224? Attorney Erickson replied, yes. The first portion before 242 shows the contract. It is just for ease of someone being able to pick up the contract at a later date and know that it has been changed from the standard AIA contract. That is how she is interpreting the two sets of documents. Mr. Kosluchar stated if they go to 1.1.7, page 221, then can make an addition to state the design shall be to B3 standards. Attorney Erickson stated to piggyback on that then they could approve the contract subject to the inclusion of that language. Mayor Lund asked whether that is something Partners & Sirny will go along with? Mr. Kirk replied, they knew about that the project has to be built to B3 standards since it is a State bonding project; and that was in the RFP and in the interviews it was discussed. MOTION by Councilmember Bolkcom to Approve Agreement between the City of Fridley and Partners & Sirny, LLP, to Provide the Design Services for the Renovation and Addition to the Interpretive Building at Springbrook Nature Center with the inclusion of Section 1.1.7, that the project shall be constructed pursuant to the B3 guidelines. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 16. Informal Status Reports Councilmember Bolkcom stated as far as the SPRING design committee, there was some discussion at their first two meetings, that they need to bring the public in but first they have to meet with the architect and design team to look at what they need and then there will be some opportunities for people who work at the nature center and people who use the nature center to provide input as to what they like about the nature center now and what they would like to see happen. It will be a very important part and a lot of it will be including the schools and other groups who use the nature center. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 8, 2014 PAGE 42 ADJOURN: MOTION by Councilmember Barnette, seconded by Councilmember Varichak, to adjourn. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 10:38 P.M. Respectfully submitted by, Denise M. Johnson Scott J. Lund Recording Secretary Mayor