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CHM 09/28/2009 - 29987CITY OF FRIDLEY CHARTER COMMISSION MEETING September 28, 2009 1. CALL TO ORDER: Chairperson Soule called the Charter Commission meeting to order at 7:02 p.m. 2. ROLL CALL: Members Present: Peter Borman, Gary Braam, Don Findell, Carol Hoiby, Ted Kranz, Rick Nelson, Pam Reynolds, Noel Ryan, Cindy Soule and Lois Scholzen Members Absent: Bill Holm, Nancy Jorgenson, Leslie Plummer and Keith Shaw Others Present: Deb Skogen, City Clerk/Staff Liaison Cindy Ruschy, Staff Assistant 3. APPROVAL OF AGENDA Commissioner Borman MOVED and Commissioner Hoiby seconded a motion approving the meeting agenda. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SOULE DECLARED THE MOTION CARRIED. 4. APPROVAL OF MINUTES A. May 18, 2009 Minutes Commissioner Braam MOVED and Commissioner Nelson seconded a motion approving the Charter Commission meeting minutes of May 18, 2009. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SOULE DECLARED THE MOTION CARRIED. B. June 10, 2009 Minutes of Special Meeting Commissioner Borman asked why when individuals ask questions it is referred to as wondered in the minutes. Deb Skogen said minutes are a synopsis and aren't typed verbatim. She said wondered was similar to asked so she usually uses the word wondered. Commissioner Borman MOVED and Commissioner Braam seconded a motion approving the special meeting minutes of June 10, 2009. Commissioner Reynolds suggested the following change: on page 2, fourth paragraph from bottom change the word that to than; and on page 5 fourth paragraph from the bottom change decoared to declared. Commissioner Kranz suggested the following change: on Page 4, eighth paragraph from the top, change the fourth sentence to read, "he said the negotiators with the..." UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SOULE DECLARED THE MOTION CARRED REFLECTING THE NOTED CHANGES. Adopted 10 -26 -2009 CHARTER COMMISSION MEETING OF SEPTEMBER 28, 2009 PAGE 2 5. ADMINISTRATIVE MATTERS A. Commission Vacancy Deb Skogen noted the Commissioners had two applications in their packets. Ted Flickinger was present to answer their questions, but Nancy J Sauter had withdrawn her application. In addition she had received an application from Anthony Zmuda who had also withdrawn his application. So, at the present time there was only one application for the one vacant position. Commissioner Borman asked Mr. Flickinger about his service on the Dassel City Council. Mr. Flickinger stated he served many years on the council, was a volunteer firefighter, Cubmaster and member of the PTA. He said he moved to the City about six years ago and wanted to serve his community. He felt he was a good listener and would do a good job. Commissioner Borman MOVED and Commissioner Hoiby seconded a motion recommending the appointment of Marion D. Flickinger to the Chief Judge of the Tenth Judicial District to fill the vacant term of Mary Kirkwood ending April 22, 2010. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SOULE DECLARED THE MOTION CARRIED and directed staff to prepare and forward the letter to the Chief Judge. B. Status of Ordinance No. 1260 Deb Skogen told the Commissioners the charter amendment had been adopted by the City Council on July 27h and a referendum petition had been submitted on September 25h. Staff has had the opportunity to informally verify the sufficiency of the petition with the exception of finding duplicate signatures. In order for the petition to be sufficient, 5% of the registered voters or 773 signatures were needed. She said the state voter registration system (SVRS) made it much easier to verify registered individuals then in the past. The petition provided signatures from 1038 individuals, of which 886 appeared to have come from registered voters. So the petition and ordinance will go back to the City Council on October 12'h for their reconsideration or their decision to send it to the voters. If the City Council were to call for a special election, the earliest date the City could have an election would be December 4h, but since it is a Friday, the most likely date would be Tuesday, December 81'. 6. DISCUSSION OF PROPOSED AMENDMENT TO CHAPTER 7 Commissioner Reynolds said the Commissioners had decided to use the Holm agreement as a template but felt it was not agreed to be a proposal. She said when she looked at the document she wondered why the Mounds View language was incorporated into the Holm amendment instead of a stand alone amendment showing just the change to 7.02. She said Keith made a motion in May to use the language, however, it was not specific that it be incorporated into the Holm Amendment. Deb Skogen said they were using the Holm amendment as a template and discussing Section 7.02 at the time. Her notes reflect changes to the Holm amendment. Commissioner Reynolds said she did not intend the amendment, adding the Mounds View language, to be incorporated into the Holm amendment because she did not agree with all of the language. She also felt the amendment should be deleted now as she believed the City Council and the staff don't really believe it will have any valuable impact. She said Rick Pribyl and the Mayor both had stated it would not help. She said at the 2 d reading on July 27h, a letter from the Department of Revenue stated an election in December would not affect the 2010 budget, but only the 2011 budget. Adopted 10 -26 -2009 CHARTER COMMISSION MEETING OF SEPTEMBER 28, 2009 PAGE 3 Deb Skogen said the letter stated if a city was going to have an election to request an additional levy for 2010, the election would have to be held November 3,d. She said if the City was going to raise any type of revenue, levy, targeted levy, it couldn't be levied until the following year. If it was a new fee, that could have gone to voters in December. Right now the Charter does not allow the City Council to go to the voters for anything to increase revenues for 2010. With the referendum petition having been submitted, the only election that can be held this year would be a special election to amend the charter by approving Ordinance No. 1260. Commissioner Borman asked if the 3.9% levy restriction was still in place until 2010 that was imposed by the Governor. Deb Skogen said there was huge mix up on what could or couldn't be levied back or what was unallotted or said to be unallotted. There was a suggestion to increase the levy to 15 %. After discussing the issue with the LMC, the city attorney and the Department of Revenue, it was determined the city could not levy in 2010 for funds that they did not yet receive, so if there is money unallotted in 2010, it would have to be put into the 2011 levy. Commissioner Reynolds said the formula used to determine LGA was so convoluted in itself, because you have to plug in demographics from within the community and it depends on where you are in the state as well. Commissioner Borman said he thought there were about 14 different formulas. Deb Skogen said the City usually receives the LGA information from the Department of Revenue. This year they proposed a levy and then proposed an unallotment. We found out the unallotment was not as much as anticipated. Commission Reynolds said the state levy limit kicked in before the charter levy limit, so the Charter did not restrict the levy this year. Commissioner Borman said that was part of the discussion in April or May as to whether the LGA would stay in place or not. Commissioner Reynolds said in March Rick Pribyl thought the state levy limit would give the City $650,000, but based on the LGA calculation and the levy calculation, the state levy limit hit before the charter restrictions. She said the charter limit was set at 3.8% and the state limit was 2.9 %. She said she still didn't understand it. Deb Skogen asked Commissioner Reynolds what she wanted to do with the Mounds View language within the Holm amendment. Commissioner Reynolds felt it should be taken out. Chairperson Soule wondered what the rest of the Commissioners wanted to do with the language Commissioner Reynolds felt there should be a separate document of 7.02 with the Mounds View language from the original text, not integrated into the Holm agreement. She said if the Holm agreement was used, why wasn't staff's amendment regarding special election and majority incorporated into the Holm amendment as well. Deb Skogen said there was no further discussion after the Mounds View language was and the Charter Commission only addressed the recommendations brought by staff in June. Commissioner Kranz said he remembered when the Holm amendment was brought up, the other two proposed amendments were dropped. Commissioner Reynolds felt they did not drop the original one. She said her notes reflected that they only agreed to use the Holm amendment for the special election template. She said when she made the recommendation she was not referring to the Holm amendment but to the original, and the motion did not refer to the Holm amendment. Adopted 10 -26 -2009 CHARTER COMMISSION MEETING OF SEPTEMBER 28, 2009 PAGE 4 Commissioner Borman said there were different proposals and were discussing the Holm amendment. Commissioner Reynolds said they still had the original and that is what she thought they added the amendment to Commissioner Findell wondered about Ordinance No. 1260. Deb Skogen said if the City Council were to reconsider Ordinance No. 1260, the Charter amendment would be repealed and the Commissioners would have the opportunity to come back and review the language . She said staff felt, due to the pending financial crisis, it was urgent and that was why the proposed amendment came to the Charter Commission in June for discussion and approval. It is about educating people now, to ask for a special election if you needed one. Commissioner Findell said if the petition was sufficient and the Council decided to rescind this ordinance, the Charter Commission could start over. Commissioner Borman said, even if they decide to move forward with it, nothing was changed from the original. He asked Commissioner Reynolds if she wanted to scrap the proposed ordinance change on the Holm Amendment and start over. Commissioner Reynolds said, according to the City Council and the Finance gurus, the proposed Mounds View language would not help, so it should be removed. She said it could be done now or when it is discussed later. Commissioner Hoiby asked Commissioner Reynolds if that was something they told her or where they might have said it. Commissioner Reynolds said it was said at the public hearing on July 13"' and the 27"' and it doesn't help. She said the Mayor wanted to know why it wouldn't work and she said Mr. Pribyl said it would not help. Commissioner Findell felt the best solution for everyone involved was the amendment adopted in June. It gave the voters exactly what they wanted from 2000, the ability to say yes or no to raising their taxes. Only difference is they can say it more often than by not having to wait up to two years and having the city go bankrupt. Commissioner Reynolds said she has been in touch with the initial group that wrote the language and told her they did not want a special election. Commissioner Findell said they were looking for involvement in allowing the voters to have a say in having their taxes raised. He felt the language in Ord 1260 provided the most control to the voters. Commissioner Hoiby said when this original language was passed, the City was no where near the financial crisis issues that are happening now. She didn't even think they could have foreseen these issues coming up. So when things like that happen, things need to change sometimes, just like our own households.. Commissioner Findell felt it still gave the voters the most control and felt the people that were interested in the issue would come and vote in a special election. Chairperson Soule asked if they wanted to continue to discuss Chapter 7 or wait until after the October 12"' meeting. Commissioner Borman said it depended on whether the Council rescinded the ordinance. Commissioner Hoiby said if the charter wasn't amended, the issue could come back again Adopted 10 -26 -2009 CHARTER COMMISSION MEETING OF SEPTEMBER 28, 2009 PAGE 5 Commissioner Borman said the Council could come before the voters next fall if the amendment isn't approved or is rescinded. So if it is not changed, the Council couldn't do anything until 2011 because it would be after November I't when the levy needs to be in place. Commissioner Nelson said the Commission could delay this and have the lights turned off in the city, but if they wanted to act to give the Council the flexibility, they might think about removing the consumer price index and allowing them to increase it up to 5 %. Commissioner Borman agreed and suggested deleting the CPI plus 2% and wondered if that was back to the way the language was before the 2000 petition. The original language only referred to the CPI and did not refer to 5% or whichever is least. Commissioner Nelson said the pre - language penalized cities that wanted to hold their levy at zero and if the next year they needed more, they couldn't increase it more than the previous year plus the CPI. Some of the cities with that language have gone to the Legislature to try to get more, but because they had a zero % levy increase, the Legislature points them back to their voters to get more. Commissioner Reynolds said based on the way the city can levy back, the levy this year is 6.3 which exceeds the charter but what gets added to it are legal under statute and the charter cannot restrict it. She said the Charter may restrict it somewhat, but it doesn't restrict the state from making allowances that increase it above what the CPI is. She said it could have gone as high as 15% had they been allowed to figure in the 2010 unallotment of LGA. Commissioner Kranz said the inflationary rate was almost nil and Commissioner Reynolds said the Department of Labor defines it at -1.7 %. Commissioner Kranz said if there was a minus inflation or cost of living rate, there won't be any raises in social security either. Commissioner Braam said what was coming from the Legislature would at some time becoming to an end and we need to think about what the City will do. Commissioner Reynolds did not agree a special election would help. She felt if the city needed to make the case to the voters, the voters should get all of the information they need instead of trying to slip it by during a special election. Commissioners Nelson and Braam asked what they would be slipping by and didn't understand her opposition to having a special election. Commissioner Reynolds used the numbers from the 2007 and 2000 election and felt less people dropped off during the regular election than came to vote in the special election. Commissioner Braam wondered if she had heard from people who had said they couldn't vote or weren't allowed to vote. Commissioner Nelson asked about all of the voters who vote in the general election were uninformed. Deb Skogen said 2007 was not the first special election pertaining to utilities, there were two charter amendment questions and one utility rate increase question prior to the special election in 2007. Commissioner Ryan MOVED and Commissioner Kranz seconded a motion to table the discussion on Chapter 7 until after the October 12th Council Meeting. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SOULE DECLARED THE MOTION CARRIED 7. DISCUSSION OF FUTURE AGENDA ITEMS Adopted 10 -26 -2009 CHARTER COMMISSION MEETING OF SEPTEMBER 28, 2009 PAGE 6 Chairperson Soule said she would not be at the next meeting, but Commissioner Nelson, the Vice Chairperson, will be here to conduct the meeting. Proposed discussion will be Ordinance 1260 and Chapter 7. Commissioner Reynolds asked about the word "all" in Section 7.02.3.a and thought we need to get additional information on this issue. She wondered if franchise fees pertained to this. Deb Skogen said a franchise fee would affect all properties in the city including rental properties, tax- exempt properties like the churches, schools and the city, but it would be a flat rate charge by the meter. What has been discussed is a flat fee which would be paid to the city quarterly. If you use a percentage, it is harder for the gas or electric companies to calculate and you would not have the same fee coming in. In 1999 there were three cities that had franchise fees and now there are about 45 cities. If a flat rate of $1.50 or $1.75 were used, it could bring in the city approximately $800,000 to 1 million. The franchise fees would cost the average homeowner about $39 annually vs a tax levy which would cost the average homeowner $82 annually. She said franchise fees have been discussed by staff to help gather information, but nothing has been brought to the city council for their discussion. If the city was looking for another revenue stream, franchise fees would come directly from the gas and electric companies and at this time, the state would not be collecting those dollars. Commissioner Borman asked (wondered) how many cities, since we changed our charter have adopted franchise fees. Deb Skogen said about 42 and there are more cities discussing this issue now. Commissioner Borman said it could be less money for the consumers, everyone would pay it and it would be cheaper than having the city request a tax levy. Commissioner Hoiby said the word franchise fees scares people and felt it needs to be explained. She said if something didn't change, the city would be in a crisis. Commissioner Kranz said he had just seen a news article about a town in Illinois who had five squad cars repossessed by the bank that were sitting empty and he had lost 3/4 of his staff as well. He was driving around in a suburban that was loaned to him by the Governor until they could get their financing back in order. He said a small town in Florida has now loaned two of their old squads to help them out. Commissioner Nelson requested annual calendars for 2009, 2010, 2011. 8. ADJOURNMENT: Commissioner Braam MOVED and Commissioner Nelson seconded a motion to adjourn the meeting. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SOULE DECLARED THE MOTION CARRIED AND THE MEETING WAS ADJOURNED AT 8:10 P.M. Respectfully submitted, Debra A. Skogen, City Clerk/Staff Liaison Carol Hoiby, Secretary Adopted 10 -26 -2009