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CCM 12/12/2016 CITY COUNCIL MEETING CITY OF FRIDLEY DECEMBER 12, 2016 The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:00 p.m. ROLL CALL: Mayor Lund Councilmember Barnette Councilmember Varichak Councilmember Saefke Councilmember Bolkcom OTHERS PRESENT: Wally Wysopal, City Manager Darcy Erickson, City Attorney Scott Hickok, Community Development Director Shelly Peterson, Finance Director James Kosluchar, Public Works Director Valerie Bruggeman, AT&T, 901 Marquette Avenue th Jay Littlejohn, Verizon Wireless, 150 South 5 Street PRESENTATION: Allina Health: One Hospital, Two Companies Sarah Criger , Mercy Hospital, spoke about Allina’s One Hospital-Two Campuses project. APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council Meeting of November 28, 2016: Councilmember Saefke asked for the following corrections to be made: thth change storm water to sanitary sewer Page 8, 4 paragraph, 4 sentence; seconded by Councilmember Saefke Page 10 top of the page the motion was APPROVED AS AMENDED. OLD BUSINESS: 1.Second Reading of an Ordinance Amending Chapter 205.30 0-5, Telecommunications Towers and Facilities District, to Add Language to the Code the Defines and Regulates “Small Cell” Technology within the Right-of-Way, as Well as Other General Housekeeping Amendments; and Adopt Official Title and Summary Ordinance. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 12, 2016 PAGE 2 THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON THE REGULAR AGENDA. 2.Approve Legal Services Agreement Extension between the City of Fridley and LeVander, Gillen & Miller, P.A. APPROVED. 3.Approve Employment Agreement Extension between the City of Fridley and Walter Wysopal. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON THE REGULAR AGENDA. 4.Resolution Authorizing the Fridley City Prosecutor to Enter Into and Execute the Master Service Agreement for Minnesota Court Data Services for Governmental Agencies ADOPTED RESOLUTION NO. 2016-73. 5.Claims ( 174886 – 175039): APPROVED. 6.Licenses: APPROVED LICENSES AS SUBMITTED AND ON FILE. ADOPTION OF PROPOSED CONSENT AGENDA: Councilmember Bolkcom asked for Item Nos. 1 and 3 to be removed. MOTION by Councilmember Barnette to approve the Consent Agenda with the removal of Item Nos. 1 and 3. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. OPEN FORUM, VISITORS: Linda Hamilton, North Suburban Hospital Board, spoke about the North Suburban Hospital District. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 12, 2016 PAGE 3 ADOPTION OF AGENDA: MOTION by Councilmember Bolkcom to approve the Agenda with additions of Item Nos. 1 and 3. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. Second Reading of an Ordinance Amending Chapter 205.30 0-5, Telecommunications Towers and Facilities District, to Add Language to the Code the Defines and Regulates “Small Cell” Technology within the Right-of-Way, as Well as Other General Housekeeping Amendments; and Adopt Official Title and Summary Ordinance. Scott Hickok, Community Development Director, stated this afternoon he received information from the City Attorney and AT & T. Even with this information staff’s recommendation would stay the same. This is the second reading of the ordinance. As staff evaluates the information they would bring back any changes to Council via an amendment. Staff does not want to fall outside of the moratorium. Staff recommends approval of the second reading and any changes will be brought back for an amendment. Darcy Erickson , City Attorney, noted that Council could extend the moratorium. Councilmember Bolkcom asked if AT & T has had an opportunity to read the information and if someone was present tonight. Mr. Hickok replied yes, Ms. Bruggeman was at the first reading and she is also here tonight. MayorLund noted that it has already been mentioned that staff is open to any changes. The changes would come back as an amendment. Valerie Bruggeman, AT&T, 901 Marquette Avenue, said they wanted to provide comments and were not sure of the process in terms of the second reading. There are issues around the definitions, some of the approval processes, and the timing. Jay LittlejohnVerizon Wireless, , 150 South Fifth Street, said that he first heard about this today at noon. The issues go beyond the definitions. They can work within the system and they do not have any current applications pending. They intend to expand and can work within the terms. Councilmember Bolkcom noted the public hearing was on November 14. A month later some changes came but we can work with them. She asked where the language came from for this ordinance. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 12, 2016 PAGE 4 Mr. Hickok replied the ordinance was studied throughout the metro area. The League of MN Cities was involved, as well as the City Attorney. He is confident staff can give Council recommendation to approve and bring any changes forward in an amendment. Motion by Councilmember Bolkcom to waive the second reading of the ordinance and adopt Ordinance 1340 on second reading and adopt the official title and summary ordinance, and order publication. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 3. Approve Employment Agreement Extension between the City of Fridley and Walter Wysopal. Councilmember Bolkcom noted that the city attorney requested to review some changes. DarcyErickson, City Attorney, noted the following typographical errors in the agreement. impartial opportunity Page 44, spelling error “” allow him6.25% should be 6.5% Page 48 section 12 “”; section 13 and in the next strike the first sentence paragraph, MOTION by Councilmember Bolkcom to approve the employment agreement extension between the City of Fridley and Walter Wysopal as amended. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 2017 BUDGET AND PROPERTY TAX PUBLIC MEETING: 7.Presentation of the 2017 City of Fridley Budget. Shelly Peterson , Finance Director, stated the budget overview presented tonight is the revised 2016 and 2017 proposed budgets. This document contains information to provide the citizens of Fridley, elected officials and other interested parties with descriptions of the 2017 proposed municipal services and investments for the upcoming year as well as the means to pay for those services and investments. The City continues to monitor operational expenditures to achieve cost savings without negatively impacting the service levels. The budget was developed with significant budget restraints anticipated for 2017. Although restrictive, the 2017 budget is designed to allow for the current level of services to taxpayers. The budget does not include any major new initiatives or enhancements to existing services. Ms. Peterson stated the General Fund budget provides funding for the day-to-day operations of essential City services. Nearly 50% of the budget is for Public Safety (Police and Fire), over 20% Public Works (Streets and Parks) and the remaining 30% provides funding for Recreation, Community Development and administrative operations. 75% of the City’s total levy provides FRIDLEY CITY COUNCIL MEETING OF DECEMBER 12, 2016 PAGE 5 resources for these operations. There is no increase in the operational tax levy. 75% of the total City levy and 65% of the resources needed to support the General Fund Operations. Ms. Peterson stated Chapter 7 of the City Charter limits the 2017 operational levy to an increase not to exceed the change in the 2015 CIP. The final 2014 CIP was 232.013 and the final 2015 CIP was 230.567. This calculates to a reduction in CIP and therefore results in no change in the 2017 operational levy over the prior year’s levy. The preliminary levy was adopted by Council on September 26 and included the amount needed for the first debt service payment on a $50M Capital Improvement Plan bond for the construction of a new Civic Campus. Ms. Peterson stated the 2016 levy included prepayment of existing debt. This allowed the City to better position itself for the proposed 2017 Civic Campus project debt levy and to lessen the impact to the taxpayer. The estimated impact on a median valued residential home in Fridley for 2016 value of $156,600, the City’s portion of taxes was $600. In 2017, for a home valued at $170,200, the City’s portion of taxes is $715 which is an increase of $115 or 19%. There is no increase in Local Government Aid. As presented at the September 26 Council meeting, when establishing the preliminary levy, with no increase in the operational levy and no increase anticipated in LGA from the State, staff is proposing $756,700 in LGA be directed to the General Fund in 2017. Ms. Peterson said in 2012, Council made an effort to dedicate all LGA to capital projects or other one-time related costs and to not rely on LGA for operational or recurring costs. That practice was modified when developing the 2016 budget. This was a result of expenses increasing at a rate higher than the allowable levy increase. Staff is proposing an additional shift of about 60% in LGA back to the General Fund with the 2017 budget. This resulted in the deferment of $330,000 in equipment scheduled for replacement in 2017. Ms. Peterson noted the City does not anticipate any new revenue sources in the General Fund for 2017. Building permit revenue is anticipated to remain strong, and staff is projecting a 16% increase over the 2016 initial projections. Personnel costs make up over 77% of the General Fund expenditures. No new positions are proposed in the 2017 General Fund budget. Step increases for newer employees are estimated to be $105,000. 2016 was an election year, 2017 will not include that $55,000 expense. A position was eliminated in Finance in 2016 resulting in approximately a $56,000 savings for 2017. A 2% COLA adjustment is estimated to be $188,000. The City must remain competitive with other similar cities. In general, Fridley pays 2% to 4% below the average for comparable cities. Ms. Peterson stated the remainder of the operational budgets included a 2% inflationary estimate over the prior year’s budget. This 2% adjustment is not sufficient to cover expenditures increasing at a higher rate (such as electric or gas utilities). Departments were required to cut other areas of their budget to compensate for that difference. This document also includes the 2016 revised budgets. These figures should represent the final 2016 budget. General Fund highlights include building permit revenue anticipated to exceed initial projections by nearly $150,000; personnel costs anticipated to fall below budgeted estimates (vacancies throughout the year and elimination of a full-time position); and earlier this year Council approved the transfer FRIDLEY CITY COUNCIL MEETING OF DECEMBER 12, 2016 PAGE 6 of $900,000 from the General Fund to help replenish reserves in Capital and Internal Service funds. Ms. Peterson said that Fridley’s General Fund balance policy is to maintain 35% to 50% of the next year’s budgeted expenditures. This guideline is to provide cash flow for expenditures in the first half of the year until the first half tax settlement comes in July. With the 2016 budget revisions, staff anticipated the fund balance to be at 51% of the proposed expenditures. Ms. Peterson said budgeted special revenue funds include Cable TV (franchise) which includes use of fund balance for server and equipment replacement and funding for an Imaging Acceleration Project. Solid waste abatement fees to customers are subject to the Charter restriction. A review mid-year due to contracted curbside recycling charges increasing but fees to customers were required to remain flat. This could result in the use of the fund balance. Police activity PSDS is reimbursed through Anoka County and includes 2% COLA and step increases. Springbrook Nature Center levy is subject to the Charter restriction. Rental and Day Camp programs revenue is anticipated to double, a 12% increase in expenditures primarily for part-time staff and programming supplies. The increased expenditures are offset by projected revenues. Projects adopted in the CIP have been included are Building Improvement Fund, Street Improvement Fund, Park Capital Improvements, Information Technology Fund and Equipment Fund. Ms. Peterson reviewed the water fund projections and indicated there are significant infrastructure and metering projects beginning in 2016 with completion in 2017. Increased debt payments in 2017 with the 2016 issuance and a 9% increase in rates will increase the average residential household water charges by $15 annually. Sewer Fund Projects MCES disposal fees make up nearly 80% of the Sewer operating budget and Fridley is expected to pay 4.9% more in 2017. 2017 includes $615,000 in capital and infrastructure improvements. A 9% increase in rates will increase the average residential household sewer charges by $29 annually. Storm Water Fund Projections for 2017 includes $825,000 in capital and infrastructure improvements. A 4% increase in rates will increase the average residential household storm water charges by $1.50 annually. Liquor Operation Projection sales are anticipated to increase 2% over what was projected for 2016. There are no capital improvements proposed for 2017. This includes transfer out of $338,500 (same as 2016); $175,000 to the Capital Equipment Fund, $75,000 to the Park Improvement Fund and $88,500 to the General Fund. Reserves are projected to remain stable. Ms. Peterson said Council will hold a public meeting on the proposed budget tonight and the public is welcome to comment on the budget. The 2017 levy and budget would be adjusted if a successful petition is received prior to the reverse referendum period ending. Council adopts the final 2017 levy, 2017 budget and revised 2016 budget on December 27. No action is required tonight. NEW BUSINESS: 8.Resolution Receiving Report and Calling Hearing on Improvement for Street Rehabilitation Project No. ST. 2017-01. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 12, 2016 PAGE 7 Jim Kosluchar , Public Works Director, stated each year, the City performs major rehabilitation of selected streets in a planned neighborhood according to its pavement management plan. The project proposed for 2017 is in the Parkview and North Park neighborhood. On August 22, 2016, City Council authorized initiation of this project. Staff has developed a feasibility report that has evaluated streets in the area and considered conditions, utility improvements and other typical elements that may be incorporated into the project. A project open house was held on November 1. Preliminary information was presented to property owners and residents affected by the construction. Two hundred fifty-eight notices were mailed for the open house and 13 people attended. Feedback was gathered and incorporated into the feasibility report which is being presented to the City Council this evening. Mr. Kosluchar noted the project was generally well received, and there were some valuable suggestions on project details and construction methods that will provide for a better project and reduce construction impact. A survey has also been mailed to all affected properties. Ms. Kosluchar said the feasibility report outlines the project, budget, and schedule, and provides some detail on the extent of construction. The feasibility report concludes that the project is cost effective, necessary and feasible. Staff requests the City Council move to adopt the resolution. If approved, staff will notify affected owners by mail and advertise the hearing for January 9, 2017. Councilmember Bolkcom said she did not see any comments from neighbors. Mr. Kosluchar has a memo and will share all comments with Council. Councilmember Bolkcom noted on Page 121 it talks about storm water but there is no project going on right now. Mr. Kosluchar replied they are promoting water quality and education through rain gardens. There is a large storm water pond in this area and they talked about a retrofit and that it can be fairly expensive. This is not necessary for the project to move forward. MOTION by Councilmember Varichak to adopt Resolution No. 2016-74. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 9.Appointment to Environmental Quality and Energy Commission . MOTION by Councilmember Bolkcom to continue the appointment to Environmental Quality and Energy commission to December 27. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 12, 2016 PAGE 8 10.Informal Status Reports: Councilmember Bolkcom noted that the next City Council meeting will be on Tuesday, December 27. ADJOURN: MOTION by Councilmember Barnette to adjourn. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED AND THE MEETING ADJOURNED AT 8:55 P.M. Respectfully Submitted, Krista Peterson Scott J. Lund Recording Secretary Mayor