Continued: Fridley officials seek ways to raise revenues

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Faced with drooping revenues, state aid cuts and levy limits, Fridley officials are trying to loosen city charter restrictions on increasing fees or property taxes.

"We are very restricted by our charter, and like most cities we are making tough adjustments to accommodate lost local government aid [LGA]," said City Manager Bill Burns. He said the matter is urgent because city reserve funds are being depleted even as the governor has used his unallotment power to cut LGA and also reneged on state guarantees to repay cities for homestead credits paid to homeowners.

The city charter allows the City Council to approve levy or broad-based fee increases to cover the annual rate of inflation, up to a 5 percent cap. Anything above that must win voter approval at a general election, the next one in 2010.

Fridley can't afford to wait that long, Mayor Scott Lund said.

The City Council will hold a July 13 public hearing on amending the charter to let the council seek a broad-based fee or levy increase above the cap at general or special elections. If the council approves the charter change this summer, it could hold a special election as soon as December to seek voter approval of a fee or levy increase, Lund said.

"This allows us to go to voters and portray our issue and ask them for some help if they want to keep services. Otherwise we will be scaling back services, and we have been making cuts since 2003, when we lost a lot of LGA," Burns said. Lund said the city lost a total of about $1 million in state aid last year and this year.

However, the council's plans could be derailed by opponents of the charter change if they collect petitions with 772 signatures, or 5 percent of registered Fridley voters, said City Clerk Debra Skogen.

A group is forming to do just that, said Pam Reynolds, a Charter Commission member. She and Commissioner Nancy Jorgenson cast the two dissenting votes last month when the commission voted 8-2 to endorse the charter change.

"Our biggest issue is that a special election reduces the number of people who go to the polls," Reynolds said. "As important as asking for more money or a charter change is, it should be given to the full electorate, not just the chosen few," Reynolds said.

Lund said it's true fewer people vote in special elections, but he believes those who do are concerned about city issues and deserve to be heard.

A special 2007 election drew 2,545 voters compared to 14,351 at last fall's general election, according to city records. In the 2007 election, voters passed a measure allowing the council to raise water and sewer fees, without voter approval, by whatever was needed to cover those utility costs.

The council has tried three times since 2000 to remove charter restrictions on levy or fee increases, but opponents initiated referendums and defeated all three attempts, Skogen said.

If Reynolds and others collect the required number of signatures, the City Council would need to hold a special election in December or later to seek voter approval for the charter change. If it passed, yet another election would be needed to ask voters to approve a yet-to-be-specified fee or levy increase, Skogen said.

Lund said the city's general fund has declined for years and daily expenses are being partly covered by an excess bond fund, which is expected to run dry by 2012. The bond fund in early July had about $6.3 million available, said assistant finance director Alan Folie.

"The fact is we are running out of money," Burns said. "We are [annually] spending about $1 million more for our costs than we are taking in in revenues."

Jim Adams • 612-673-7658

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