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City Council Minutes 07-14-2014MINUTES REGULAR MEETING — MONTICELLO CITY COUNCIL Monday, July 14, 2014 — 7 p.m. Mississippi Room, Monticello Community Center Present: Clint Herbst, Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf Absent: None 1. Call to Order and Pledge of Allegiance Mayor Herbst called the meeting to order at 7 p.m. and declared a quorum present. The Pledge of Allegiance was recited. 2A. Approval of Minutes — June 23, 2014 Special Meeting BRIAN STUMPF MOVED TO ACCEPT THE JUNE 23, 2014 SPECIAL MEETING MINUTES AS PRESENTED. GLEN POSUSTA SECONDED THE MOTION. MOTION CARRIED 5 -0. 2B. Approval of Minutes — June 23, 2014 Regular Meeting GLEN POSUSTA MOVED TO ACCEPT THE JUNE 23, 2014 REGULAR MEETING MINUTES AS PRESENTED. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED 5 -0. 3. Consideration of adding items to the agenda • Otter Creek park parking (Glen Posusta) • Mowing compliance (Glen Posusta) • FNM update (Jeff O'Neill) 4. Citizen comments, public service announcements A. Citizen Comments: None. B. Public Service Announcements: 1) Movie in the Park (7/26 & 8/1) — Rachel Leonard announced there are two upcoming shows for Movie in the Park. "Lego Movie" will be shown on Saturday, July 26th and "Gravity" is rescheduled to Friday, August 1 st. The Lego Movie is sponsored by Omni Vision and Gravity is sponsored by the Monticello Times. Rachel answered questions about the costs for the movies. 2) Fishing Clinics (7/19 & 8/2) — Rachel Leonard announced that the DNR MinnAqua Fishing Clinics will be offered at Bertram Chain of Lakes Regional Park from 9 to 11:30 a.m. on July 19th and on August 2nd for City Council Minutes —July 14, 2014 Page 1 children of all ages. The community center is looking for adult volunteers with fishing licenses to help. 5. Consent Agenda: A. Consideration of .approving payment of bills for July 14th. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA. B. Consideration of approving new hires and departures for City departments. Recommendation: Ratify new hires and terminations for MCC, DMV, FiberNet, Finance, and Water Department. C. Consideration of adopting Resolution #2014 -068 approving an Assessment Agreement and certifying special assessments for 503 Maple Street (PID 155- 010- 010060) to the Wright County Auditor for tax year payable 2015. Applicant: BRCS Building Company, o/b /o Swan River Montessori. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA. D. Consideration of appointing additional election judges to serve for the 2014 elections. Recommendation: Appoint the following election judges for the 2014 elections. Richard Borque Linda Buchmann Rodney Byholm Charlotte Ludwig Rose Peters Marilyn Stickfort Sandy Suchy Carrie Theisen E. Consideration of approving a license for on -sale intoxicating liquor and Sunday liquor for the Monticello VFW at 713 Cedar Street. Applicant: USS Dorchester VFW Post 8731. Recommendation: Approve the application for an on -sale liquor license and Sunday liquor for the USS Dorchester VFW Post 8731 at 713 Cedar Street, contingent on receiving a signed application and revised certificate of insurance. F. Consideration of adopting Resolution #2014 -069 calling for a public hearing regarding the issuance of a revenue obligation for the benefit of the Monticello Youth Hockey Program, Inc. and providing preliminary approval of the issuance. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA. G. Consideration of authorizing secondary digester cover cleaning, condition inspection, and time - sensitive repair and primary digester mixer repair. Recommendation: Authorize the following improvements to the WWTF digester: secondary digester cover cleaning, condition inspection, time - sensitive repair, and primary digester mixer repair. H. Consideration of adopting Resolution #2014 -031 A rescinding the previously - adopted legal description for Pine View Addition and replacing with an amended City Council Minutes —July 14, 2014 Page 2 legal description for vacated street right-of-way. Recommendation: Adopt Resolution #2014 -031A rescinding the previously- adopted legal description for Pine View Addition and replacing with an amended legal description for vacated street right -of -way as identified in the resolution. I. Consideration of approving a contract with WSB for Market Matching economic development services. Recommendation: Approve a contract with WSB & Associates for Market Matching Economic Development Services for July 2014 through June 2015. LLOYD HILGART MOVED TO APPROVE THE CONSENT AGENDA WITH THE REMOVAL OF ITEMS A, C, AND F. TOM PERRAULT SECONDED THE MOTION. MOTION CARRIED 5 -0. 6. Consideration of items removed from the consent a enda for discussion 5A. Consideration of approving payment of bills for July 14th Glen Posusta expressed concern about paying FiberNet General Manager Brian Estrem in advance for his work. Jeff O'Neill explained that it is common with consultant contracts to pay them before the month is completed. Glen Posusta asked about payment for a fence repair for the MCC. Kitty Baltos explained that this was a repair to the existing fence that was put back in place following the MCC Natatorium Improvements. Glen Posusta asked if he could remove the invoice to NAC to vote on it separately since it included an item for AMAX Storage which is his business. It was decided that was not necessary for approval of the bills. LLOYD HILGART MOVED TO APPROVE THE BILL AND PURCHASE CARD REGISTERS FOR A TOTAL AMOUNT OF $821,193.16. TOM PERRAULT SECONDED THE MOTION. MOTION CARRIED 5 -0. 5C. Consideration of adopting Resolution #2014 -068 approving an Assessment Agreement and certifying special assessments for 503 Maple Street (PID 155 -010- 010060) to the Wright County Auditor for tax year payable 2015. Applicant. BRCS Building Company, o/b /o Swan River Montessori Glen Posusta asked for an explanation on what is allowed to be included in an assessment agreement. He was concerned about the amount of the sewer fees. Angela Schumann noted that the majority of the cost is sewer access with a smaller amount for water access and some miscellaneous charges. Swan River is aware of the charges and asked for consideration of having this placed as a special assessment against the property. GLEN POSUSTA MOVED TO ADOPT RESOLUTION #2014 -068 APPROVING AN ASSESSMENT AGREEMENT FOR SRCS BUILDING COMPANY FOR PID 155- 010- 010060 AND CERTIFYING THE SPECIAL ASSESSMENTS IN THE AMOUNT City Council Minutes —July 14, 2014 Page 3 OF $29,001.35 TO THE WRIGHT COUNTY AUDITOR FOR TAX YEAR PAYABLE 2015. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED 5 -0. 5F. Consideration of adopting Resolution #2014 -069 calling for a public hearing regarding the issuance of a revenue obligation for the benefit of the Monticello Youth Hockey Program, Inc. and providing preliminary approval of the issuance Glen Posusta asked Wayne Oberg to explain the purpose behind the public hearing for another entity. Wayne Oberg explained that the law allows for the city to serve as a conduit for bond issuance for a non - profit entity. He verified that the city is at no risk for this type of bonding and it does not affect the city's bond rating. Wayne Oberg noted that the bonding does count against the total bonding limit for the city this year, but the city does not intend to issue a large bond this year that would affect this. BRIAN STUMPF MOVED TO ADOPT RESOLUTION #2014 -069 CALLING FOR A PUBLIC HEARING ON AUGUST 11, 2014 AT 7 P.M. REGARDING THE ISSUANCE OF A REVENUE OBLIGATION FOR THE BENEFIT OF THE MONTICELLO YOUTH HOCKEY PROGRAM, INC. AND PROVIDING TEMPORARY APPROVAL TO THE ISSUANCE; STAFF IS DIRECTED TO PUBLISH NOTICE ACCORDINGLY. LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED 5 -0. 7. Regular Agenda: A. Consideration of accepting 2013 Audit Report Jim Eichten of Malloy, Montague, Karnowski, Radosevich & Co. (MMKR) introduced himself and provided a presentation for Council regarding the 2013 Audit. He noted that three documents were provided to Council with their council packets: Special Purpose Audit Reports, Management Report, and Comprehensive Annual Financial Report (CAFR). In the Management Report, the. audit firm gives their opinion on the financial statements, comments on testing of internal controls and compliance, and addresses any single audits of federal grants (there were none in 2013), and provides an audit summary. MMKR found that the financial statements were fairly presented in accordance with U.S. accounting standards and gave an unmodified (or clean) opinion. GASB Statement No. 65 on Items Previously Reported as Assets and Liabilities was implemented this year. An internal control finding was related to a prior period adjustment regarding accounting for special assessments. Since Wright County serves as the paying agent, it made sense for the city to align their records with Wright County's records, resulting in a prior period adjustment of $3,282,241. There were several minor legal compliance findings: signed declarations were missing on community City Council Minutes —July 14, 2014 Page 4 center payroll transactions and there was one invoice that was not paid within the required 35 day period after receipt of invoice. Jim Eichten discussed some of the findings from 2012 that were not an issue during 2013 such as required contract language for subcontractors. MMKR had two recommendations for best practices: provide written contingency planning for IT and develop written policies and cross - training for segregation of duties related to finances in community center duties. Jim Eichten then reviewed the financial statements addressed in the audit. He noted that taxable market values had been decreasing since 2010; however, the total market value increased in 2013. He correlated this to tax rates across the state which showed the city's tax rate was slightly higher than average in 2012 but lower than average in 2013. Next he compared average revenues statewide to Monticello's. The city generates much higher property taxes than other cities; however intergovernmental revenues, which includes Local Government Aid (LGA) received by other cities, is much lower. On the expense side, the city spends more per capita than the statewide average in several areas including debt service. Jim Eichten discussed individual fund balances and showed a graph of the general fund showing balances at 61 % of the General Fund annual expenditures, which is within the required levels. Jim Eichten also compared general fund revenues and expenditures by function. Jim Eichten went on to review the enterprise funds: water, sewer, liquor, fiber optics, and deputy registrar. The fiber optics fund continues to display unpaid interest on the bonds until that is fully resolved. Jim Eichten showed operating income with and without depreciation in water, sewer and liquor funds. The fiber optic fund continues to show an operating loss of over $1.5 million. The city's financial position is impacted negatively by that operating loss and again shows a decline for 2013. Jim Eichten commented on the investment return which shows as a loss. This is related to the increase in interest rates and most cities are seeing this same thing. Jim Eichten noted that the City will again apply for the CAFR award. Glen Posusta asked if all cities are required to have an outside audit, why do some cities, such as Detroit, run into huge financial problems. Jim Eichten explained that some other states have different requirements for auditing and reporting, and may run into issues due to unfunded liabilities. For example, Detroit's pension plans became a large part of their financial problems, when they were required to include those values as unfunded liabilities. Wayne Oberg pointed out that some of the cities that have run into problems, did not have good accounting policies in City Council Minutes —July 14, 2014 Page 5 place years ago that contributed to their problems later. Many cities now have standards in place that help prevent those problems. LLOYD HILGART MOVED FOR ALTERNATIVE #1 ACCEPTING THE 2013 AUDIT REPORT AS PRESENTED. GLEN POSUSTA SECONDED THE MOTION. MOTION CARRIED 5 -0. B. Consideration of providing direction to staff relating to public auction of tax - forfeited lots in the City of Monticello and letter of recommendation to Wright County Angela Schumann gave a presentation to Council related to the public auction of tax forfeit lots in Hillside Farm 3rd and 4d' Additions. The County is holding a valuation meeting tomorrow, July 15'', to determine valuations on all lots that will go to public auction this year. Angela Schumann reviewed the staff recommendations that Council is asked to approve as part of a letter to go to Wright County officials relative to the public auction. These recommendations include a request to auction Lots 1 through 6, Block 1 of Hillside Farm 3rd Addition as a block. These are the lots that will require a retaining wall due to the slope of the hill at the back of these lots. Clint Herbst noted that the city intends to reassess any unpaid cancelled assessments on lots that are purchased at auction. Council indicated that they hope buyers will be alerted that there may be additional future assessments if the lots are not valued to adequately cover all new and cancelled assessments. Glen Posusta asked about the sale of lots in blocks rather than individually. Angela Schumann explained that there is one group of lots that it would be best to sell in a block so that the developer is aware of the need for a retaining wall along the north side of those lots. Other than that group, city staff did not have a specific recommendation on auctioning lots in groups or individually. Glen Posusta thought that it might be better to sell all lots in Hillside Farms Yd and 4d' together so that the developer could spread the cost of the retaining wall over all lots. Clint Herbst asked if there was something that could be done to grade those lots differently to decrease the cost of a retaining wall. Shibani Bisson commented on some possible options that could be used to accommodate the slope; currently the developer contract calls for a 10 ft high retaining wall. Glen Posusta asked about Step #5 listed in the state's Tax Forfeit Rules which has to do with taking a portion of the sale proceeds for a park fund. Angela Schumann pointed out that those are the state rules and not the county's. Angela pointed out that according to the rules, the City would be reimbursed new assessments and cancelled assessments prior to Step #5 if the valuation is set high enough. City Council Minutes —July 14, 2014 Page 6 Glen Posusta feels that it would probably be better to sell these lots as an entire block. Brian Stumpf stated that he would prefer to let the lots go to auction individually with the exception of the group of lots that need a retaining wall. He wants all builders to have an opportunity on these lots. Council discussed possible scenarios for selling the lots and recovering the costs associated with special assessments. Jeff O'Neill commented that it is possible there may not be a need for a retaining wall if the developer finds another solution for addressing the drainage issues on those six lots. Jeff would recommend that the retaining wall lots be sold in a block. TOM PERRAULT MOVED FOR ALTERNATIVE #1 DIRECTING STAFF TO SUBMIT A LETTER OF RECOMMENDATION TO WRIGHT COUNTY REGARDING PREFERENCES FOR PUBLIC AUCTION OF TAX FORFEIT PARCELS WITHIN THE CITY, INCLUDING THE SALE OF LOTS 1 -6, BLOCK 1, HILLSIDE FARM 3RD ADDITION AS A BLOCK. CLINT HERBST SECONDED THE MOTION. MOTION CARRIED 5 -0. C. Consideration of selecting project area for 2014 Street Lighting improvements City Project No. 14CO01 Shibani Bisson presented several areas for potential street lighting improvements for 2014. She reviewed the city's street lighting program which was implemented in 2006. She showed several lighting styles along commercial and residential corridors. The areas evaluated for lighting this year are: • West 7t' Street between CR39 and Elm Street • Elm Street between 7a' Street and 6a' Street • Chelsea Road between CR 39 and 90'h Street • Oakwood Drive and Cedar Street (between Oakwood Drive and Chelsea Road) • Meadow Oak Avenue between CSAH 18 and Broadway • 6t' Street- mid -block lighting between TH 25 and Linn Street • Cul -de -sacs continue to the driven by resident petition City staff narrowed this to two areas: (a) 7h Street West from CR 39 to Elm St plus the Elm Street section from 70' to 6t' Street and (b) Chelsea Road West from CR 39 to 90th Street. Shibani Bisson talked about the lighting installations that are recommended. She noted that Xcel Energy would install the lights on Elm Street and then the City would be charged a monthly electric charge. Shibani Bisson explained that the light poles on West 7th Street would alternate on both sides of the road. Brian Stumpf stated that he prefers to go with 7h Street West lighting plus having Xcel add the lights on Elm Street. City Council Minutes —July 14, 2014 Page 7 BRIAN STUMPF MOVED FOR ALTERNATIVE #1 SELECTING WEST 7TH STREET BETWEEN CR 39 AND ELM STREET ALONG WITH ELM STREET BETWEEN 7TH AND 6TH STREETS FOR THE 2014 STREET LIGHTING IMPROVEMENTS, CITY PROJECT NO. 14C001; CITY STAFF IS DIRECTED TO PRESENT A PROJECT CONTRACT FOR APPROVAL AT AN UPCOMING COUNCIL MEETING. GLEN POSUSTA SECONDED THE MOTION. MOTION CARRIED 5 -0. D. Consideration of authorizing up to $30,000 for Pathway ystem Improvements along CSAH 75 (Chestnut Street to West River Street) Shibani Bisson introduced this item with an explanation of the city's pathway system. The City has about 17 miles of pathways and plows about 7 miles during the winter. The Parks Department has inspected the pathway system over the past 4 -5 years and rated the condition of the pathways. They have identified areas, which are recommended for maintenance at this time, along CSAH 75 between Chestnut Ave and West River Street. This would include a micro- surfacing product to extend the life of the pathway beyond the current maintenance methods. The product that they are planning to use, called T -Mat, is used by the Three Rivers Park District and some other entities. T -Mat is a mixture of asphalt emulsion, aggregate and chemical additives in a liquid form, applied in two layers. Clint Herbst stated that this seems like a good product and at a reasonable cost. LLOYD HILGART MOVED FOR ALTERNATIVE #1 TO AUTHORIZE UP TO $30,000 FOR PATHWAY SYSTEM IMPROVMENTS ALONG CSAH 75 FROM CHESTNUT STREET TO WEST RIVER STREET AND ENTER INTO AN AGREEMENT WITH ASPHALT CONTRACTORS, INC. FOR THE ESTIMATED AMOUNT OF $27,478.68. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED 5 -0. E. Consideration of adopting Resolution #2014 -070 approving the Joint Powers Agreement for public transit service through the Wright Count Transportation (WCAT) Joint Powers Board Jeff O'Neill commented that the city is continuing to look at the costs that the city might pay as a partner on the Wright County Area Transportation Board. The city is also looking into the potential for contracting with Hoglund Transportation to provide a city transit system. Clint Herbst indicated that there may be a need to call a special meeting to address this as the city is not ready to consider this tonight. No action was taken. City Council Minutes —July 14, 2014 Page 8 8. Added items FNM update — Jeff O'Neill reported that Brian Estrem has put in a request to be relieved of his contract as he received an offer with another company. About the same time, Lance Addison contacted the city and is interested in negotiating a contract with the city to provide general management services. Dan Olsen of Windomnet will continue to provide services to FiberNet. BRIAN STUMPF MOVED TO AUTHORIZE CITY ADMINISTRATOR JEFF O'NEILL TO NEGOTIATE A CONTRACT WITH LANCE ADDISON TO PROVIDE GENERAL MANAGEMENT SERVICES FOR FIBERNET. LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED 5 -0. Glen Posusta expressed his concern about setting up a contract that allows someone to leave with no consequences. He also feels that the contract should be longer term and there should be some kind of penalty assessed if the manager would leave early. Clint Herbst suggested that the terms should specify the limited reasons that the contract could be terminated. He would expect Jeff to discuss all of these concerns with Mr. Addison. Otter Creek Parking — Glen Posusta stated that he would like to investigate the possibility of putting in a small parking area for Otter Creek Park. Glen Posusta suggested talking to Wright County to see if they would allow an entrance off CSAH 75. Brian Stumpf suggested looking at possible cul -de -sac parking in Par West Addition. Council directed Tom Pawelk to check into some options. Mowing blight compliance — Glen Posusta wanted a further explanation of the notification process used for mowing blights and wants to know how other cities handle this. Angela Schumann explained that this process was recommended by the City Attorney and they work with a number of other cities. Glen Posusta reiterated that he would like to know what area cities are doing and asked staff to check into that. • Glen Posusta asked if Council members could contact city staff directly about spelling or grammatical corrections to minutes rather than bring them to a council meeting. Jeff O'Neill said that was acceptable, but should be a council member's choice. • Mayor Herbst complimented streets and parks employees for the great job they did for Riverfest and commented positively on the new look of Pioneer Park. Light in Hillside Park - Tom Perrault mentioned that a resident living in this area has asked for the light in this park to be turned on again. Jeff explained that the City does not flood a rink in the parking lot anymore so they had Xcel discontinue lighting the area. Council directed staff that the light could be turned on if there is a good reason to justify the light. City Council Minutes —July 14, 2014 Page 9 Mayor Herbst also noted that the evergreen tree in Hillside cemetery that had served as a Christmas tree is no longer there. He would like to see another evergreen tree planted so that it can eventually be lighted for the Christmas season. 9. Adjournment Mayor Herbst adjourned the meeting at 9:05 p.m. Recorder: Catherine M. Shuman ) Approved: July 28, 2014 Attest: ItAministrator City Council Minutes —July 14, 2014 Page 10