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CHA 04/03/2017 TO: Charter Commission Members FROM: Deb Skogen, City Clerk and Staff Liaison Date: March 30, 2017 Re: Charter Commission Meeting of April 3, 2017 Monday This is a reminder to you that the next Charter Commission meeting will be held on , April 3rd at 7:00 p.m. in Conference Room A on the Upper Level. In order to ensure a quorum, please remember, the Charter Commission policy requires a member to call or e-mail me before 10:00 a.m. Monday, April 3rd, as to whether or not you plan on attending the meeting. Please contact me at (763)572-3523 or e-mail at deb.skogen@fridleymn.gov, or Jake at (763)572-3508 or jake.foster@fridleymn.gov as to your attendance. If we do not have a quorum by 10:00 am, we will send out an e-mail to see if additional members will attend. If by Noon there will not be a quorum, we will send out an e-mail to all members and post a notice on the door announcing the cancellation of the meeting for those Commissioners who did not contact me, but came to the meeting. Oaths of Office will be given to the newly appointed Commissioners. The Commission has been discussing Chapter 7 pertaining to the levy restrictions. A memo has been provided for reference. A presentation will be made by staff and an additional handout may be provided. An update will be provided on the ordinance recommending amendments to Chapter 2 of the Charter. If you have any other questions or concerns, please feel free to contact Jake. CITY OF FRIDLEY CHARTER COMMISSION AGENDA MONDAY, APRIL 3, 2017 7:00 P.M. LOCATION: FRIDLEY MUNICIPAL CENTER CONFERENCE ROOM A UPPER LEVEL 1.CALL TO ORDER: 2.ROLL CALL: 3. APPROVAL OF AGENDA: Motion approving the April 3, 2017 meeting agenda 4. APPROVAL OF MINUTES Motion approving the March 6, 2017 meeting minutes 5. ADMINISTRATIVE MATTERS A. Oath of Office B. Update on Chapter 2 6. OLD BUSINESS A. Discussion of Chapter 7 7. NEW BUSINESS A. 8. FUTURE MEETING TOPICS/COMMUNICATIONS A. 9. ADJOURNMENT Motion to adjourn the meeting Next Regular Commission Meeting Date: May 1, 2017 CITY OF FRIDLEY CHARTER COMMISSION MEETING MARCH 6, 2017 CALL TO ORDER: Vice Chairperson Ostwald called the Charter Commission meeting to order at 7:00 p.m. ROLL CALL: Members Present: Commissioners Gary Braam, Zach Crandall, Manuel Granroos, Cindy Soule, David Ostwald, Barb Reiland, and Richard Walch Members Absent: Commissioners Don Findell, Rick Nelson, Ted Kranz, Avonna Starck, and Pam Reynolds Others Present: Scott Lund, Mayor Ann Bolkcom, Councilmember Ward 3 Wally Wysopal, City Manager Jake Foster, Management Analyst Bruce Nelson, Charter Commission Appointee Richard Johnston, Charter Commission Appointee APPROVAL OF AGENDA Commissioner Braam MOVED and Commissioner Granroos seconded a motion to approve the agenda. UPON A VOICE VOTE, ALL VOTING AYE, VICE CHAIRPERSON OSTWALD DECLARED THE MOTION CARRIED. APPROVAL OF MINUTES Vice name rather than his, and needed to be updated. Commi should be changed to the correct spelling. With no other changes, Commissioner Braam MOVED and Commissioner Walch seconded a motion approving the Charter Commission meeting minutes as amended of February 6, 2016. UPON A VOICE VOTE, ALL VOTING AYE, VICE CHAIRPERSON OSTWALD DECLARED THE MOTION CARRIED. Draft CHARTER COMMISSION MEETING OF MARCH 6, 2017 PAGE 2 ADMINISTRATIVE MATTERS A.Oath of Office for Appointments As Ms. Skogen was not able to attend and is the City official that performs the swearing-in duties, the staff and commissioners in attendance decided to delay the swearing in of the new commissioners Commissioner Reiland MOVED and Commissioner Granroos seconded a motion allowing for participation by appointees despite not being sworn in. UPON A VOICE VOTE, ALL VOTING AYE, VICE CHAIRPERSON OSTWALD DECLARED THE MOTION CARRIED. B.Election of officers The commissioners reviewed the Nominations Committee Report, David Ostwald for Chairperson, Donald Findell for Vice Chairperson, and Manuel Granroos for Secretary. Vice Chairperson Ostwald opened the floor to further nominations. As there were no further nominations, Vice Chairperson Ostwald closed the nominations. Commissioner Soule MOVED and Commissioner Reiland seconded a motion to move the Nominations Committee Report for the appointment of the 2017-18 Charter Commission officers. UPON A VOICE VOTE, ALL VOTING AYE, NEWLY-ELECTED CHAIRPERSON OSTWALD DECLARED THE MOTION CARRIED. C.Update on Chapter 2 Amendment Mr. Wysopal provided an update for the Chapter 2 Amendment. The ordinance had the first reading the previous Monday. There were no additional questions or comments on the th Amendment. He said the second reading will be on the consent agenda for March 13. Mr. Wysopal also noted that Ms. Skogen was unavailable for family reasons. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON OSTWALD DECLARED THE MOTION CARRIED. OLD BUSINESS A.Discussion of Chapter 7 provide recommendations for how Chapter 7 can be appropriately updated. He asked Mr. Wysopal and Mr. Foster to begin their presentation. Draft CHARTER COMMISSION MEETING OF MARCH 6, 2017 PAGE 3 Mr. Wysopal said city staff has spent a great deal of time working through solutions and recommendations. They have tried to get to the essence of what Chapter 7 sought to achieve. He said Fridley stood alone as to the type of the restrictions He said staff has looked to other Charter Cities for ideas and how the State law impacts city tax levies while consideration of what elected officials are responsible for within responsible local government. Mr. Foster stated he would address the one page printed handout provided initially, and would move to the handout. He reiterated what Mr. Wysopal said and summarized the impacts the levy and fee restrictions in Chapter 7. He added staff recommended moving these restrictions toward a process-driven solution. After the summary, Mr. Foster spoke to the handout provided to Commissioners at the meeting. He stated staff recommends the City move to a more simplified Chapter 7 that would eliminate redundancy and an over-complexity, while adhering more closely to Generally Accepted Accounting Principles (GAAP), the State , and State Statute. He added the solution should set wide parameters for City government through the Charter while upholding the protection of citizen interest, and relying on the recall provision for added protection. He further detailed how the Charter should be ordinance and city code-driven. Mr. Wysopal said citizen interest would be protected with this recommendation as an actual deliberation process would be created with the removal of the levy and fee restrictions. He added the Council is unable to have dialogue around competing priorities as these limitations remove any flexibility as to what is funded. Mr. Foster addressed how tying the levy to an index or a fixed percentage is also detrimental. There are several scenarios that these concepts cannot account for. He reiterated how the process-driven solution can provide further accountability and transparency for City Council. Mr. Foster detailed the obscurity of such limitations. He noted that Fridley and Mounds View are the only two cities in the State of Minnesota with levy restrictions, but restriction is more flexible. In addition, Mounds View has franchise fees in place to further capture lost revenue. Commissioner Soule asked if there were any other cities that do not have franchise fees on gas and electric utilities. Mr. Foster said he believed that Fridley was the only city in the surrounding area that had neither franchise fees in place. Commissioner Soule by capturing non-property tax paying parcels which are not exempt from franchise fees. Mr. Wysopal said she was correct, but Fridley did not have a lot of non-property tax paying parcels, but rather had a great deal of commercial/industrial property. Mr. Wysopal did not think franchise fees were a good solution for Fridley as their tax base has a large percentage of commercial/industrial property. Draft CHARTER COMMISSION MEETING OF MARCH 6, 2017 PAGE 4 Chairperson Ostwald asked if the City ever had franchise fees. Mr. Wysopal said they did not. Mr. Foster described how the restrictions in Chapter 7 occurred, and that it was largely reactionary to a franchise fee ordinance passed by Council in 1999. Commissioner Soule said she believed the language for the restrictions that were on the ballot in 2000 in response to the recalled ordinance were decided by an ad hoc group which included many recall petition proponents. She thought there were some personality conflicts between the Mayor at the time and those that were petitioning for the reverse referendum which created a lot of conflict. Council member Bolkcom added that people who were running for state offices also got involved. Further discussion took place regarding the initial implementation of the Chapter 7 restrictions. Mr. Foster then described additional impacts of the Chapter 7 restrictions before detailing how . Mr. Foster described how West St. Paul once had a levy restrictions, how it differed from iction, and how it has since been removed. He also described how Mounds ied Commissioner Crandall asked what the differences, if any, in total levy were for West St. Paul before and after the levy restriction was removed. Mr. Foster said this information would be made available to the commissioners. Mr. Foster described the arguments for and against using indexes and fixed percentages for limiting t(page four of the handout). Mr. Foster described numerous other considerations city staff took into consideration while developing their recommendations. He suggested the Charter Commissioners should keep these items in mind while updating Chapter 7 (listed on page five of the handout). Commissioner Crandall raised concerns regarding using a process-driven solution for the Chapter 7 restrictions. He thought it could be difficult to properly notify the public when such meetings take place. Commissioner Walch thought it may provide a potential issue, but felt the City knew how to communicate about public meetings. He wanted to have the City properly broadcast these meetings. Mayor Lund said this is an issue he and Council often struggle with. Further discussion took place between the commissioners and other attendees surrounding these potential issues. concerns. He said these issues are certainly something that would need to be considered and approached creatively to ensure when any changes are made to Chapter 7. Further discussion took place regarding how citizens can be properly notified of public meetings. Draft CHARTER COMMISSION MEETING OF MARCH 6, 2017 PAGE 5 Mr. Wysopal said restrictions in place, as these conversations do not take place to begin with. Commissioner Reiland said the commission largely agrees that something needs to be done regarding Chapter 7, but they want to be sure transparency is considered throughout the budget discussion period. Chairperson Ostwald said as long as every reasonable effort is made to provide transparency and notify the public, it is all that can be expected of City staff and Council. Additional discussion took place regarding how these efforts could be made. Mr. Foster detailed the potential budget setting process (page six of the handout). The commissioners reviewed the process while Mr. Foster provided the main bullet points for updating the lan Mr. Wysopal said staff C- because they wanted the feedback of the Commissioners in regards to their proposal/recommendations. Chairperson Ostwald said there appears to be consensus that Chapter 7 needs to be updated. Mr. Wysopal and the Commission discussed the timeline for these changes, leaving it largely open- ended. Councilmember Bolkcom thought it might be a good idea for the Charter Commissioners to Chapter 7. Commissioner Walch asked if staff - Chapter 7 might look. He felt the Commission was largely unqualified to address any of the finance/best-practice issues within the chapter. He said Chapter 7 is unworkable as it is and that the concerns everyone has raised need to be addressed. Commissioner Crandall and Commissioner Soule agreed should come from the Commission, not City staff. Commissioner Walch agreed, but he also stated some of the language seemed amateurish and reads as though it comes from people who are not professionally capable of providing such direction. Commissioner Braam suggested they invite members who were involved in the original petition to attend the next meeting. Further discussion took place regarding how the Commission should move forward regarding Chapter 7. Draft CHARTER COMMISSION MEETING OF MARCH 6, 2017 PAGE 6 Mr. Wysopal said it is necessarily a good place to start from. He also asked if it would make sense to offer examples from other charters. Commissioner Reiland suggested the Commissioners take a look at this information and work on it with one another. Commissioner Walch stated he would like to see a hybrid approach that keeps the hard limit, but provides the ability for some flexibility and ability for Council to override the limit based on a unanimous decision for them to levy beyond the limit. Commissioner Reiland asked if there were any sections within Chapter 7 that were more said staff started by looking at the levy and fee restriction language, but quickly found there were other areas that were contradictory and insufficient in adhering to GAAP and State law. Mr. Foster offered to provide a summary of the areas where the finance department recommended making changes to Chapter 7, so the commissioners could work from that document. Commissioner Reiland agreed it would be helpful. Mr. Wysopal asked if there were any other items that the Commissioners would like for the next meeting. Commissioner Crandall said it sounded like the Commissioners were ready to approach making changes to Chapter 7, but it would likely be a long process. Chairperson Ostwald agreed and said they were likely going to put in a lot of extra work to properly address the chapter. Commissioner Braam mentioned Chairperson Ostwald could call an additional meeting if necessary. Mr. Wysopal asked if the Commissioners would be interested in a red-lined proposal of Chapter 7. Commissioner Crandall said it would be interesting to see the budget items that are absolutely necessity vs. the items that can be deferred. Further discussion took place regarding these items and other information that might be helpful Mr. Wysopal asked what the reluctance was to allow the Council to debate the budget in full, and that if they agreed, that the control to make these decisions was left in the hand of Council. Commissioner Soule said the recall provision in the Charter allows power, as well. Mr. Wysopal said Fridley is more reliant on their tax levy than other cities because they lack diversity in their revenue. The City doesnt receive fiscal disparities, doesnt have franchise fees in place, doesnt receive a lot of State aide, and doesnt have additional fund sources for revenue. Draft CHARTER COMMISSION MEETING OF MARCH 6, 2017 PAGE 7 Chairperson Ostwald said the fixed limits proposed by Commissioner Walch will likely leave the City running into the same problems they are experiencing now, but a complete -for- or either. - flexibility to override the limit. He said it is hard to advocate for a complete reversal and Commissioner Crandall agreed. Mr. Wysopal expressed his concern as the City has been left with little options to ensure their financial stability in the future. Commissioner Soule asked how the Commissioners wanted to move forward. Chairperson Ostwald said they would like the information that was previously requested, and asked if an additional meeting would be helpful. Both Commissioners Granroos and Braam thought it would be good to get the information ahead of time to have a chance to look through it before the next meeting in April. Mr. Foster recapped what materials were requested from staff and asked if there is any other information they would like. The Commissioners discussed these items and wanted to make sure they thought might be helpful for the next meeting. NEW BUSINESS A.There was no new business. FUTURE TOPCIS Administrative Matters Swearing in of new members -Update of Chapter 2 Amendment Old Business Discussion of Chapter 7 ADJOURNMENT: Commissioner Reiland MOVED and Commissioner Granroos seconded a motion to adjourn the meeting. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON OSTWALD DECLARED THE MOTION CARRIED AND THE MEETING WAS ADJOURNED AT 8:47 P.M. Respectfully submitted, Jake Foster Commissioner Donald Findell Management Inter/Staff Liaison Manuel Granroos Draft