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CHM 09/23/2002 - 00027172CITY OF FRIDLEY CHARTER COMMISSION MEETING September 23, 2002 CALL TO ORDER: Vice Chairperson Findell called the Charter Commission meeting to order at 7:05 p.m. ROLL CALL: Members Present: Suzanne Alvite Warren, Don Findell, Anita Gerrety, Harry Heck, Bill Holm, Janet Johnson, Nancy Jorgenson, Deborah Monden, Maynard Nielsen, Cynthia Soule, Francis Van Dan, and Dale Warren Members Absent: Char Fitzpatrick, Craig Gordon, and Regina Querimit Others Present: Deb Skogen, City Clerk/Staff Liaison Richard D. Pribyl, Finance Director Commissioner Jorgenson asked if anyone else had gotten a letter from Roseville Good Government League asking the members if they could attend some meetings. The Commissioners had all received the letter but would most likely not be attending. APPROVAL OF AGENDA: Commissioner Alvite Warren MOVED and Commissioner Jorgenson seconded a motion moving the discussion of the Bylaws amendment to the neat meeting in light of our guest and other meeting The Commissioners briefly discussed this issue and determined they wanted to take a vote on the issue so Commissioner Alvite Warren rescinded her motion. Commissioner Holm MOVED and Commissioner Warren seconded a motion to delete items 3 and 4 from the agenda for this meeting and approve the amended agenda. UPON A VOICE VOTE, ALL VOTING AYE, VICE CHAIRPERSON FINDELL DECLARED THE MOTION CARRIED UNANIMOUSLY. APPROVAL OF MAY 20,2002, CHARTER COMMISSION MINUTES: Commissioner Monden MOVED and Commissioner Jorgenson seconded a motion approving the May 20, 2002, Charter Commission Minutes. UPON A VOICE VOTE, ALL VOTING AYE, VICE CHAIRPERSON FINDELL DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. ADMINISTRATIVE MATTERS Commissioner Heck MOVED and Commissioner Jorgenson seconded a motion approving the bylaws amendment as proposed in the memo dated July 29, 2002. CHARTER COMMISSION MEETING OF SEPTEMBER 23, 2002 PAGE 2 Commissioner Monden wondered if people would call the staff liaison by a time specific. After a brief discussion it was determined that it would be good practice for the members to call, but that it would not be put in the by -laws. UPON A VOICE VOTE, ALL VOTING AYE, VICE CHAIRPERSON FINDELL DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. DISCUSSION OF CHARTER AMENDMENT — CHAPTER 7 "SINKING FUNDS" Finance Director Rick Pribyl was present to discuss the terminology of sinking funds. In May he had proposed a terminology change to update sinking funds to make the terminology reflect the terms that were being used in the field currently. After further review, he proposed the following change to Section 7.15.2, Attachment 1. The proposed changes reflected the net debt of the city not to exceed 2% of the market value and to change sinking fund to debt service fund. He said debt service fund was more current and more applicable in today's language, but if the Commission did not want to change the language, sinking fund would be fine. He said the city's comprehensive annual financial report has information on the city's legal debt margin. He said the due to the fact that the city's debt was pledged by a revenue stream, the city currently has no applicable debt. He said if the city needed to, it could raise approximately $29,985,182, reflecting 2% of city's market value as allowed by Minnesota State Law. Commissioner Holm wondered if there were some TIF districts that would not support the debt and Commissioner Jorgenson wondered if any changes the Legislature made had any impact on TIF. Commissioner Findell asked if Mr. Pribyl's recommendation was to update the paragraph and whether or not the change would impact how the city operated. Mr. Pribyl stated it would be his recommendation to make the proposed change and said the City would still operate the same and fall within the current law and state's legal parameters. Commissioner Heck wanted to know the difference between bonded debt and net debt. Commission Van Dan said bonded debt meant there was a security for the amount of the bond for some type of improvement. Mr. Pribyl said net debt was the gross debt less any applicable reservations less any other revenue streams. He stated that the definition of net debt was in the financial statement each year. (Gross debt less TIF, less special assessment less revenue bonds which brings the city to zero.) Commission Van Dan used an example of a toll bridge, noting the toll would provide revenue for the bonded debt and that the bridge was an improvement and is used as a security in case of failure to pay the bonded debt and sell it to someone else. Net debt had no secured debt in case of forfeiture or failure there is no security. Mr. Pribyl, said if the bridge was self- supporting, the debt would be subtracted from the original gross computation. Commissioner Jorgenson ask if the city were approving a TIF revenue bond would the bond have the full faith of the city behind it and could the city be responsible for the debt if the HRA defaulted? Mr. Pribyl said it was very rare that a bond was not paid and that most of the time it would be refinanced under another general obligation TIF bond; but, if there had been a default on the part of a TIF, the city would have been responsible. Commissioner Heck wondered if there was enough money coming in to pay the service debt and wondered where you would find the information. Mr. Pribyl said it would be in the Debt Service Funds section of the city financial statement. Commissioner Holm wondered how many bonds the city had. Mr. Pribyl said the city financial reports show one, but we have about five. He said in the past 10 years that about 10 bonds have matured from special assessments CHARTER COMMISSION MEETING OF SEPTEMBER 23, 2002 PAGE 3 when city was young. Mr. Pribyl noted that now reconstruction projects usually assess the project about $50,000 to $70,000 /year for concrete curb and gutter. He stated the city now temporarily self -funds a lot of these projects and looks for the best time to bring a number of them to the market. Commissioner Holm thanked Mr. Pribyl for his presentation and answers. Mr. Pribyl said he would help with any other issues they might have in Chapter 7 as it relates to how the city does business. Commissioner Heck MOVED Commissioner Warren seconded a motion to add this item to the agenda for the neat meeting. UPON A VOICE VOTE, ALL VOTING AYE, VICE CHAIRPERSON FINDELL DECLARED THE MOTION CARRIED UNANIMOUSLY. ADJOURNMENT: MOTION by Commissioner Monden, and second by Commissioner Jorgenson to adjourn the meeting. UPON A VOICE VOTE, ALL VOTING AYE, VICE CHAIRPERSON FINDELL DECLARED THE MOTION CARRIED AND THE MEETING WAS ADJOURNED AT 7:35 P.M. Respectfully submitted, "dAeour? - Debra A. Skogen, City Clerk/Staff Liaison Deborah Monden, Secretary