City Council Agenda Packet 02-22-2010AGENDA
REGULAR MEETING – MONTICELLO CITY COUNCIL
Monday, February 22, 2010 – 7 p.m.
Mayor: Clint Herbst
Council Members: Tom Perrault, Glen Posusta, Brian Stumpf, Susie Wojchouski
1. Call to Order and Pledge of Allegiance
2A. Approval of Minutes – February 8, 2010 Regular Meeting
3. Consideration of adding items to the agenda
4. Citizen comments, public service announcements and Council updates
a. Citizen Comments:
b. Public Service Announcements:
1) Donations
2) MCC 10 year anniversary
3) New River Hospital Board – Legal Status Education Committee
b. Council Updates:
1) Citizen Service Desk
5. Consent Agenda:
A. Consideration of adopting Resolution #2010-09 accepting iprovements and
authorizing final payment to Knife River for the School Boulevard Street,
Sidewalk and Median Improvements, City Project No. 04C031 (2004-31C)
B. Consideration of adopting Resolution #2010-06 accepting contributions from Tom
Perrault to go into the General Fund; from Jerome & Corrine Lindenfelser for the
MCC 10th Anniversary; and from the Monticello Lions to the Fire Department
C. Consideration of waiving statutory liability limits for City insurance renewals
D. Consideration of approving 2010 annual appointment of City insurance agent
E. Consideration of adopting Resolution #2010-07 of Intent to Reimburse from Bond
Proceeds for 2010 Street Reconstruction, City Project No. 10C001
F. Consideration of approving temporary construction permit for PCI Concrete
G. Consideration of approving amendment to Ordinance 1-5-11 by adding clause
stating that compensation rates shall be as approved by the City Council
H. Consideration of accepting preliminary Quarter 4, 2009 financial report
6. Consideration of items removed from the consent agenda for discussion
7. Public Hearing – Consideration of adopting Resolution #2010-08 ordering Improvements
and authorizing preparation of final Plans and Specifications for 2010 Street
Reconstruction of Area 4A and Prairie Road, City Project No. 10C001
8. Consideration of freezing employee step increases for 2010
9. Approve payment of bills for February 22nd
10. Adjournment
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5A. Consideration of adopting Resolution No. 2010-09 accepting improvements and
authorizing final payment to Knife River for the School Boulevard Street, Sidewalk
and Median Improvements, City Project No. 04C031 (2004-31C) (WSB)
A. REFERENCE AND BACKGROUND:
The School Boulevard Street, Sidewalk and Median Improvement project included:
widening the existing roadway to accommodate right turn lanes into the Wal-Mart
development access driveways and driveways into the future development on the
north side of School Boulevard;
construction of a median between Cedar Street to just east of the second Wal-
Mart access;
milling and overlaying the roadway;
concrete sidewalk adjacent to the proposed Wal-Mart development on Cedar
Street and on the south side of School Boulevard between Deegan Avenue and the
Autumn Ridge development;
replacing the 8-foot bituminous pathway along the north side of School Boulevard
to accommodate turn lane construction.
The project was substantially completed in 2006 with the final lift of pavement placed on
School Boulevard. There were, however several issues regarding the construction of the
raised median along School Boulevard between TH 25 and Edmondson Avenue that
needed to be addressed. This median was poured in place and was specified to have a B6
curb face. Unfortunately, this median was not constructed with that B6 curb face. The
City requested that solutions be explored, including saw cutting the curb to provide a B6
curb face or other options. Several options have been considered and tested, none of
which solved the issue to the satisfaction of the City. In June, 2009, a final meeting was
held with Knife River and Creative Curb to reach a final resolution. It was agreed upon
at the meeting that removing the entire median island curb was not an option and that
Creative Curb would warranty the median island curb for an additional 5 years. In
addition, Creative Curb would refund the City an amount of $20,000 for the deficient
median island curb construction. It should be noted that Creative Curb has been working
with City Staff on maintenance repairs through the original warranty over the last 3 years.
In addition to the curb face issue there were several punch-list items that needed to be
addressed including, lowering all valve boxes in the boulevards, grouting all catch basins,
and repairing cracks in the curb and driveways. These items have all been completed.
The Council is being requested to accept the project as complete and approve final
payment to Knife River in the amount of $37,660.66. The following paperwork was
requested from the contractor and all items have been received. The $20,000 check has
been cashed and the check has cleared the bank.
1. Satisfactory showing that the contractor has complied with the provisions of
Minnesota Statutes 290.92 requiring withholding state income tax (IC134 forms).
Council Agenda: 2/22/10
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2. Evidence in the form of an affidavit that all claims against the contractor by
reasons of the contract have been fully paid or satisfactorily secured (lien
waivers).
3. Consent of Surety to Final Payment certification from the contractor’s surety.
4. Two-year maintenance bond. It should be noted that the maintenance bond will
start and extend two years from the date of final acceptance of the project by the
City Council.
5. Five-year maintenance warranty on the concrete center median with Creative
Curb beginning on February 1, 2010.
The final payment request represents the final quantities completed on the contract and
the release of the retainage on the contract.
All punch list items assembled for this project have been completed, and WSB &
Associates, Inc. is indicating the project is complete and ready for final payment in
accordance with the contract and City of Monticello Engineering and Construction
Standards.
All paper work has been received and upon Council approval final payment can be
released and the warranty period started.
B. ALTERNATIVE ACTIONS:
1. Accept the improvements and approve the final payment of $37,660.12 to Knife
River subject to receipt of final paperwork.
2. Do not accept the improvements and approve final payment.
C. STAFF RECOMMENDATION:
Staff recommends selecting Alternative No. 1.
D. SUPPORTING DATA:
Resolution #2010-09
Letter of Recommendation from WSB & Associates, Inc.
Copy of Construction Pay Voucher No. 4 (Final)
Warranty Letter from Creative Curb
CITY OF MONTICELLO
RESOLUTION NO. 2010-09
APPROVING FINAL PAYMENT AND ACCEPTING IMPROVEMENTS
SCHOOL BOULEVARD STREET, SIDEWALK AND MEDIAN IMPROVEMENTS
FROM EDMONSON AVENUE TO STATE HIGHWAY 25
CITY PROJECT NO. 04C031 (2004-31C)
WHEREAS, pursuant to a written contract with the City of Monticello awarded to Knife River
Corporation of Sauk Rapids, Minnesota, the contractor has satisfactorily completed the work for the
improvements to School Boulevard and other appurtenant work in accordance with the contract;
NOW THEREFORE, BE IT RESOLVED BY THE CITY OF MONTICELLO, MINNESOTA that
the work completed under said contract is hereby accepted and approved and that the Mayor and City
Clerk are hereby directed to issue a proper order for the final payment on such contract subject to
receipt of the following:
1) Satisfactory showing that the contractor has complied with the provisions of Minnesota Statutes
290.92 requiring withholding state income tax (IC134);
2) Evidence in the form of an affidavit that all claims against the contractor by reasons of the
contract have been fully paid or satisfactorily secured;
3) Consent of Surety to Final Payment certification from the contractor’s surety; and
4) Two year maintenance bond to extend two years from the date of acceptance of the project by the
City Council.
5) Five-year maintenance warranty on the concrete center median with Creative Curb beginning on
February 1, 2010.
Adopted by the Monticello City Council this 22nd day of February, 2010.
___________________________
Clint Herbst, Mayor
ATTEST:
___________________________
Jeff O’Neill, City Administrator
Council Agenda: 02/22/10
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5B. Consideration of adopting Resolution #2010-06 to accept contributions of $250 from
Tom Perrault to go into the General Fund, $200 from Jerome & Corrine Lindenfelser
for the MCC 10th Anniversary celebration, and $300 from the Monticello Lions to go
to the Fire Department (CS)
A. REFERENCE AND BACKGROUND:
The City has received three donations: $250 from Tom Perrault to go to the General Fund;
$200 from Jerome and Corrine Lindenfelser to go toward the MCC 10th Anniversary
celebration; and $300 from the Monticello Lions to go to the Fire Department to be used
for a Lifesaver Awards program. As required by state statute, if the City accepts the
donation of funds, the City Council needs to adopt a resolution specifying the amount of
the donation and its use.
A1. Budget Impact: None
A2. Staff Workload Impact: Staff accounts for and reconciles donations contributed
through the City.
B. ALTERNATIVE ACTIONS:
1. Approve the contributions and authorize use of funds as specified.
2. Do not approve the contributions and return the funds to the donors.
C. STAFF RECOMMENDATION:
Staff recommends Alternative #1.
D. SUPPORTING DATA:
Resolution No. 2010-06
City of Monticello
RESOLUTION NO. 2010-06
APPROVING CONTRIBUTIONS
WHEREAS, the City of Monticello is generally authorized to accept
contributions of real and personal property pursuant to Minnesota Statutes Sections
465.03 and 465.04 for the benefit of its citizens and is specifically authorized to maintain
such property for the benefit of its citizens in accordance with the terms prescribed by the
donor. Said gifts may be limited under provisions of MN Statutes Section 471.895.
WHEREAS, the following persons and or entities have offered to contribute
contributions or gifts to the City as listed:
DONOR/ENTITY DESCRIPTION VALUE
Tom Perrault Cash (Feb) $250
Jerome & Corrine Lindenfelser Cash $200
Monticello Lions Cash $300
WHEREAS, all said contributions are intended to aid the City in establishing
facilities, operations or programs within the city’s jurisdiction either alone or in
cooperation with others, as allowed by law; and
WHEREAS, the City Council hereby finds that it is appropriate to accept the
contributions offered.
NOW THEREFORE BE IT RESOLVED by the City Council of Monticello as
follows:
1. The contributions described above are hereby accepted by the City of
Monticello.
2. The contributions described above will be used as designated by the
donor. This may entail reimbursing or allocating the money to another
entity that will utilize the funds for the following stated purpose:
DONOR/ENTITY RECIPIENT PURPOSE
Tom Perrault City of Monticello General fund
Jerome & Corrine Lindenfelser Monticello Community Center 10th Anniversary celebration
Monticello Lions Monticello Fire Dept Lifesaver Awards program
Adopted by the City Council of Monticello this 22nd day of February, 2010.
______________________________
Mayor Clint Herbst
ATTEST:
______________________________________
Jeff O’Neill, City Administrator
Council Agenda: 2/22/2010
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5C. Consideration of waiving statutory liability limits for City insurance renewals. (TK)
A. REFERENCE AND BACKGROUND:
The purpose of this item is to have the Council formally adopt whether it wants to waive
or not waive its monetary limits on tort liability as part of their insurance coverage.
Our annual insurance coverages are renewable in March of each year, and as part of the
renewal process, the City Council must formally indicate whether they want to waive
monetary limits established by state statute. By state statute, statutory tort limits in place
limit the City’s liability to $500,000 on any claim per individual and $1,500,000 from all
claimants for one incident. In addition to the basic $1,500,000 coverage limit, the City
has, in the past, purchased an umbrella policy adding another $1,500,000 worth of
coverage. Even though the City carries in effect, $3,000,000 worth of liability coverage,
it has been the past decision of the City Council to not waive its monetary limits on tort
liability thus still normally limiting our liability to $500,000 per person. If the Council
did not take this position, an individual could seek damages above the $500,000 limit in
any lawsuit.
B. ALTERNATIVE ACTIONS:
1. Motion to approve not waiving the monetary limits on tort liability established by
Minnesota Statute 466.04.
2. Motion to approving waiving the monetary limits on tort liability established by
Minnesota Statute 466.04.
C. STAFF RECOMMENDATION:
It is the recommendation of the City Staff for Alternative #1. Under this option, the City
Council would utilize the tort limits established by state statute and not waive the
monetary limits. This ensures a limit on the amount of damages that an individual could
seek in a lawsuit involving the City.
D. SUPPORTING DATA:
Copy of liability insurance application form
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5D. Consideration of approving 2010 annual appointment of City insurance agent (TK)
A. REFERENCE AND BACKGROUND:
At the first Council meeting each year, the City Council appoints the various consultants
for the City for the year. The City’s insurance agent has never been included in this list,
but to belong to the League of Minnesota Insurance Trust, they require the City to
appoint its insurance agent. The City has used the Foster, Carlson, & White Agency
(FCW), here in Monticello for many years prior to me starting at the City. The City’s
insurance agent at FCW was Dan Carlson. However, Mr. Carlson retired in 2009 and
was replaced by Anthony Velishek.
Mr. Velishek has done a very good job working with staff to identify areas where the
City is lacking insurance coverage and updating the City records for insurance purposes.
Staff is pleased with the service Mr. Velishek has provided and would recommend the
City Council appoint FCW and Anthony Velishek as its insurance agent.
A1. Budget Impact: This appointment has no budget impact as the League Insurance
Trust pays the insurance agent their compensation at 10% of the premium.
A2. Staff Workload Impact: There is no staff workload impact with this
appointment.
B. ALTERNATIVE ACTIONS:
1. Motion to approve appointing Foster, Carlson, & White Agency and Anthony
Velishek as the City’s insurance agent for 2010.
2. Motion to deny appointment of Foster, Carlson, & White Agency and Anthony
Velishek as the City’s insurance agent.
C. STAFF RECOMMENDATION:
It is the recommendation of the City Staff for Alternative #1, for the City Council to
appoint Foster, Carlson, & White Agency and Anthony Velishek as the City’s insurance
agent. In the future, the approval of an insurance agent will be included on the annual list
of appointments.
D. SUPPORTING DATA:
None
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5E. Consideration of adopting Resolution #2010-07 of Intent to Reimburse from bond
proceeds for 2010 Street Reconstruction, City Project No. 10C001 (TK)
A. REFERENCE AND BACKGROUND:
The Internal Revenue Service requires the City to adopt a resolution declaring the official
intent to reimburse certain project expenditures from bond proceeds, if the City plans or
would issue bonds to finance project costs. By passing this resolution it would allow the
City to include the 2010 Street Reconstruction – Area 4 and Prairie Road (10C001)
project in a future bond issue. Without the resolution, the project could not be funded by
bonds. At this time the City is planning on issuing bonds to finance this project.
A1. Budget Impact: By adopting the resolution, the City would have the ability to
include the 2010 Street Reconstruction Project #10C001 in a future bond issue.
A2. Staff Workload Impact: There would be no impact on the staff by this action.
When the City issues bonds there would be staff time and consultant costs related
to the bond issue.
B. ALTERNATIVE ACTIONS:
1. Adopt Resolution #2010-07 declaring the official intent to reimburse expenditures
from the proceeds of bonds for City Project 10C001 – 2010 Street Reconstruction.
2. Do not adopt the resolution declaring the official intent to reimburse expenditures
from the proceeds of bonds.
C. STAFF RECOMMENDATION:
City staff supports Alternative 1.
D. SUPPORTING DATA:
Resolution #2010-07
1
CITY OF MONTICELLO
RESOLUTION 2010-07
DECLARING THE OFFICIAL INTENT OF THE CITY OF MONTICELLO
TO REIMBURSE CERTAIN EXPENDITURES FROM THE PROCEEDS
OF BONDS TO BE ISSUED BY THE CITY FOR
2010 STREET RECONSTRUCTION, CITY PROJECT 10C001
WHEREAS, the Internal Revenue Service has issued Treas. Reg. §1.150-2 providing that
proceeds of tax-exempt bonds used to reimburse prior expenditures will not be deemed spent
unless certain requirements are met; and
WHEREAS, the City expects to incur certain expenditures which may be financed temporarily
from sources other than bonds, and reimbursed from the proceeds of a bond;
WHEREAS, the City has determined to make this declaration of official intent (“Declaration”) to
reimburse certain costs from proceeds of bonds in accordance with the Reimbursement
Regulations.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
MONTICELLO (THE “CITY”) AS FOLLOWS:
1. The City reasonably intends to make expenditures for the projects described in Ex hibit A
(the “Projects”), and reasonably intends to reimburse itself for such expenditures from the
proceeds of debt to be issued by the City in the maximum principal amount described in
Exhibit A. All reimbursed expenditures will be capital expenditures, costs of issuance of
the bonds, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3)
of the Reimbursement Regulations.
2. This Declaration has been made not later than 60 days after payment of any original
expenditure to be subject to a reimbursement allocation with respect to the proceeds of
bonds, except for the following expenditures: (a) costs of issuance of bonds; (b) costs in
an amount not in excess of $100,000 or 5 percent of the proceeds of an issue; or (c)
“preliminary expenditures” up to an amount not in excess of 20 percent of the aggregate
issue price of the issue or issues that finance or are reasonably expected by the City to
finance the project for which the preliminary expenditures were incurred. The term
“preliminary expenditures” includes architectural, engineering, surveying, bond issuance,
and similar costs that are incurred prior to commencement of acquisition, construction or
rehabilitation of a project, other than land acquisition, site preparation, and similar costs
incident to commencement of construction.
3. This Declaration is an expression of the reasonable expectation of the City based on the
facts and circumstances known to the City as of the date hereof. The anticipated original
Resolution #2010-07
expenditures for the Project and the principal amount of the bonds described in paragraph
1 are consistent with the City’s budgetary and financial circumstances. No sources other
than proceeds of bonds to be issued by the City are, or are reasonably expected to be,
reserved, allocated on a long-term basis, or otherwise set aside pursuant to the City’s
budget or financial policies to pay such project expenditures.
4. The City Administrator is authorized to designate appropriate additions to Exhibit A in
circumstances where time is of the essence, and any such designation shall be reported to
the Council at the earliest practicable date and shall be filed with the official books and
records of the City as provided in Section 3.
5. This resolution is intended to constitute a declaration of official intent for purposes of
Treas. Reg. § 1.150-2 and any successor law, regulation, or ruling.
Adopted by the City Council this 22nd day of February, 2010.
__________________________________
Clint Herbst, Mayor
ATTEST:
__________________________________
Jeff O’Neill, City Administrator
3
EXHIBIT A
TO OFFICIAL INTENT RESOLUTION #2010-07
ADOPTED February 22, 2010
DATE OF
DECLARATION
DESCRIPTION OF PROJECT
MAXIMUM
PRINCIPAL
AMOUNT OF DEBT
FOR PROJECT
2/22/2010 2010 STREET RECONSTRUCTION –
AREA 4A & PRAIRIE ROAD, CITY
PROJECT NO 10C001
$4,050,000.00
City Council Agenda: 02/22/10
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5F. Consideration of approving temporary construction permit for PCI Concrete (AS)
A. REFERENCE AND BACKGROUND:
The City Council is asked to consider approval of a temporary construction permit for PCI
Concrete as related to the construction and operation of a temporary concrete batch plant. The
temporary plant will be used to support construction of the twin bridge project on Interstate
I-94. PCI has indicated that they are a designated subcontractor for the Mn/DOT project.
To follow are key considerations in considering approval of this permit.
Permit/Land Use
The Schluender property has been annexed in its entirety. Upon annexation, the property is
automatically zoned as A-O (Agriculture/Open Space). Although the A-O district does not
permit a concrete plant as a principal or accessory use, the City may consider authorizing a
temporary construction permit for this type of use given the current use of the site for
construction activity and the fact that the use proposed serves a public infrastructure
improvement. It is noted that beyond these factors, any intensification of construction activity
or mining on the Schluender site would not be permitted. Currently, the existing activity at
the site is allowed as an existing, lawful non-conforming use.
Site
The plant is proposed to be located on the Schluender property, in the vicinity of the current
office site along 90th Street. Illustration of the layout and site location are provided as
supporting data. The batch tower will be deconstructed in the interim period between May
and September. The batch tower will not be lit.
The applicant has indicated that they will meet specifications for construction entrances and
will use best management practices for erosion and dust control.
It is recommended by staff that residents immediately abutting the Schluender site be notified
of the permit and its authorized activity, if approved.
Operation/Noise
PCI Concrete has indicated that they will operate the plant twice in 2010, during May and
September, for a period not to exceed two weeks for each term. They will be hauling
material into the site and as such expansion of mining uses at Schluender’s will not intensify.
The facility is proposed to operate between the hours of 6 AM – 6 PM, Monday through
Friday. However, both the City Code for General Offenses and the Zoning Code require that
construction activity must be restricted to a 7:00 AM start time. The City code calls for a
City Council Agenda: 02/22/10
2
10:00 end time, while the Zoning Code requires ceasing activity at 9:00 PM. Any approval of
this construction permit must restrict activity in accordance with these code requirements.
Circulation
PCI’s plan for operation indicates that up to 155 trips per day will be generated. As a
condition of approval, the applicant should specify whether this number includes trips for the
purposes of hauling material into the site for concrete production.
PCI proposes to run their vehicles down 90th Street, along Chelsea Road to CSAH 18 and then
to the construction site, or directly from Chelsea to I-94 via Highway 25.
As noted in the supplemental information, the applicant intends to sweep the streets as
necessary. A condition of approval will require an escrow deposit to secure this activity.
In consideration of this permit, it will be required that the subcontractor abide by requirements
related to Spring Load Restrictions.
A1. Budget Impact: None.
A2. Staff Workload Impact: None.
B. ALTERNATIVE ACTIONS:
1. Motion to approve a temporary construction permit for PCI Roads, Inc. based on the
following conditions:
a. The approval is limited to the activity as described in the letter dated February 22,
2010 as modified below.
i. The hours of operation shall be 7 AM – 6 PM, Monday through Saturday.
ii. The permittee is required to adhere to Spring Load Restrictions as
mandated by Wright County.
b. The approval is granted only for those services supporting the public infrastructure
project at I-94 and CSAH 75
c. The permittee shall specify whether number of trips includes materials hauling to
the site.
d. The applicant is required to supply an escrow deposit in the amount of $5,000 to
ensure street sweeping.
e. A letter of notice regarding the permit will be provided to all residents within 1000
feet of the use.
2. Motion to deny a temporary construction permit for PCI Roads, Inc. based on a finding to
be made by the City Council.
3. Motion of other.
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C. STAFF RECOMMENDATION:
City staff recommends approval of the temporary permit with the conditions noted above,
based on the finding that the proposed use in temporary in nature, generally consistent with
the existing use and supports a public infrastructure project.
D. SUPPORTING DATA:
A. GIS –Generated Aerial Image of the Proposed Site
B. Applicant Letter of Request
C. Site Plan and Routing
D. Supplemental Information
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5G. Consideration of adopting an amendment to Ordinance 1-5-11 by adding clause stating that
compensation rates shall be as approved by the City Council (JO, CS)
A. REFERENCE AND BACKGROUND:
City Council is asked to adopt the proposed amendment to Ordinance 1-5-11 which
relates to compensation for Mayor and Council. Currently, the ordinance lists the
amounts received by Mayor and Council prior to 2009 (shown below), which does not
match the amounts approved by Council effective at the beginning of 2009.
1-5-11: COMPENSATION: The monthly salary for offices of Mayor and Council
members shall be as follows:
Mayor: $450.00 per month
Council Members: $350.00 per month
It is proposed to amend the ordinance by not listing the specific amounts and instead
modify the code by inserting a clause referencing that compensation rates shall be as
approved by the City Council. The proposed amendment is included with supporting
data.
A1. Budget Impact: Publication cost for the ordinance amendment, which is
required by law.
A2. Staff Workload Impact: None
B. ALTERNATIVE ACTIONS:
1. Motion to adopt the amendment to Ordinance 1-5-11 as proposed.
2. Motion to adopt a variance to the proposed amendment.
C. STAFF RECOMMENDATION:
City staff recommends Alternative #1. The ordinance needs to be changed so that
Council has the latitude of changing the salary of officials without an ordinance
amendment. This formal change reflects the actual practice. If the ordinance does not
state actual amounts of compensation, it would not be necessary to amend the ordinance
if the amounts are changed by Council. The amounts are public information and would
be printed in the minutes and provided upon inquiry.
D. SUPPORTING DATA:
Proposed Ordinance 1-5-11
MN Statutes Section 415.11
ORDINANCE NO. 510
CITY OF MONTICELLO
WRIGHT COUNTY, MINNESOTA
AN ORDINANCE AMENDING TITLE 1, CHAPTER 5 OF THE
MONTICELLO CITY ORDINANCE RELATING TO COUNCIL COMPENSATION
THE MONTICELLO CITY COUNCIL ORDAINS AS FOLLOWS:
Section 1. The following provisions of Title 1, Chapter 5 of the Monticello City Ordinance
shall be amended to read as follows:
1-5-11: COMPENSATION: The monthly salary for offices of Mayor and
Council members shall be set as prescribed in Minnesota Statutes,
Section 415.11. The compensation rates shall be approved by
majority vote of the City Council and shall remain at that amount
until changed by Council action.
Section 2. This Ordinance shall become effective immediately upon its passage and
publication according to law.
Adopted by the City Council of the City of Monticello this 22nd day of February, 2010.
________________________________
ATTEST: Clint Herbst, Mayor
___________________________________
Jeff O’Neill, City Administrator
City Council Agenda: 02/22/10
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5H. Consideration of accepting preliminary Quarter 4, 2009 financial report (TK)
A. REFERENCE AND BACKGROUND:
Attached is the preliminary 2009 4th quarter financial status report. The finance staff is
still working on closing out the 2009 fiscal year with some revenue and expenditures yet
to be recorded. Also, the City’s audit firm will be here reviewing the City records and
making any possible adjustments in late March, which is why this report is preliminary.
As you can read in the report, permit revenues were, as expected, well below budget as
were some other revenues. Expenditures would have been under budget in many funds,
but the City transferred funds to other City funds to better track reserves for future
expenditures. Even with the economic situation and the State budget issues, the City
finished the 2009 fiscal year in good financial condition.
A1. Budget Impact: The quarterly reports have very little budget impact other than
staff time to prepare the report.
A2. Staff Workload Impact: The report takes staff a couple of hours to prepare, but
the hope is the new software system will reduce this time in the future.
B. ALTERNATIVE ACTIONS:
1. Accept the preliminary 2009 4th quarter financial status report.
2. Do not accept the preliminary 2009 4th quarter financial status report.
C. STAFF RECOMMENDATION:
The City staff supports Alternative 1.
D. SUPPORTING DATA:
Preliminary 2009 4th Quarter Financial Status Report
December 31st Investment Schedule
1
2009 Preliminary 4th Quarter Financial Status Report
The finance staff is still processing financial records and balancing accounts for 2009.
The City’s audit firm was on site in February to perform preliminary audit work and then
will return at the end of March to complete field work for the 2009 audit report. Since
staff is still processing some 2009 records and the audit is not complete, this report of the
City’s 2009 financial status is preliminary and some of the figures will be different when
the City’s auditors present the Annual Financial Report in early June. With that, here is
the City’s 2009 4th Quarter Preliminary Financial Report.
Overall
In spite of the economy the City’s revenues and expenditures are in line with past
revenue and expenditure levels and their budget amounts. The chart below shows each
fund type compared to budget for years 2008 and 2009 through the end of the 4th quarter.
The biggest difference between 2008 and 2009 revenues and expenditures is the amount
of operating transfers between City Funds. In 2008, the City transferred $16,807,286
compared to $6,929,222 in 2009. The large amount of transfers in 2008 was for bond
refinancing and bond retirements. In 2009, the transfers were for bond payments and to
move funds to better track funds collected for specific purposes such as equipment.
The rest of this document will describe the financial activity of each fund type.
General Fund
The City was able to collect 99% of the revenues budgeted, this in spite of permit
revenues dropping off dramatically. The City budgeted $525,000 for building permits
2008 2008 % 2009 2009 %
Budget 4th QTR YTD Received Budget 4th QTR YTD Received
General Fund 7,479,449 7,543,793 100.86% 7,157,601 7,091,117 99.07%
Special Revenue Funds 6,719,308 7,399,190 110.12% 6,632,144 9,783,520 147.52%
Debt Service Funds 5,575,499 31,037,912 556.68% 6,192,140 4,436,673 71.65%
Capital Improvement Funds 0 309,236 100.00% 4,495,643 75,275 1.67%
Enterprise Funds 6,029,868 6,327,470 104.94% 6,257,325 6,377,635 101.92%
Total Revenues 25,804,124 52,617,601 203.91% 30,734,853 27,764,220 90.33%
2008 2008 % 2009 2009 %
Budget 4th QTR YTD Received Budget 4th QTR YTD Spent
General Fund 7,421,909 6,730,211 90.68% 7,157,601 8,410,917 117.51%
Special Revenue Funds 7,039,100 6,730,348 95.61% 9,065,958 9,310,677 102.70%
Debt Service Funds 5,962,793 33,857,711 567.82% 9,134,080 9,103,840 99.67%
Capital Improvement Funds 0 1,626,109 100.00% 4,715,000 228,515 4.85%
Enterprise Funds 7,174,908 9,232,090 128.67% 7,960,546 13,897,260 174.58%
Total Expenditures 27,598,710 58,176,469 210.79% 38,033,185 40,951,209 107.67%
2
and collected only $205,508. Another sign of the economy is that the City typically
collects 98% of its property tax levy after the January settlement has been distributed. For
2009, this appears to be down to around 96%. In 2009, the City was reimbursed $97,861
from the City’s insurance company for hail storm damages. The table below compares
2008 and 2009 budgets and 4th quarter revenues for the General Fund.
2008 2008 % 2009 2009 %
Budget 4th QTR YTD Received Budget 4th QTR YTD Received
Property Taxes 5,743,929 5,439,980 94.71% 5,272,397 4,912,384 93.17%
Licenses & Permits 592,295 917,214 154.86% 591,900 266,297 44.99%
Intergovernmental Revenues 259,790 391,121 150.55% 498,056 482,334 96.84%
Charges for Services 469,700 306,257 65.20% 383,950 571,213 148.77%
Fines & Forfeits 150 2,216 1477.33% 750 1,220 162.67%
Miscellaneous 367,195 440,615 119.99% 291,452 388,555 133.32%
Transfers from Other Funds 46,390 46,390 100.00% 119,114 469,114 393.84%
Total General Fund Revenues 7,479,449 7,543,793 100.86% 7,157,619 7,091,117 99.07%
On the expenditure side the City has spent 117.5% of its budget and there are still some
bills for consulting services and some other small bills that will be charged to 2009. The
table below compares 2008 and 2009 budget to actual expenditures by department.
2008 2008 % 2009 2009 %
Budget 4th QTR YTD Received Budget 4th QTR YTD Spent
General Government 1,531,524 1,459,089 95.27% 1,441,244 2,173,003 150.77%
Public Safety 1,960,553 1,714,236 87.44% 1,977,997 2,433,275 123.02%
Public Works 2,685,593 2,580,364 96.08% 2,524,089 2,644,250 104.76%
Miscellaneous 384,665 311,886 81.08% 345,601 342,288 99.04%
Parks 816,113 590,568 72.36% 793,974 739,528 93.14%
Economic Development 43,461 74,068 170.42% 74,714 78,573 105.17%
Total General Fd Expenditures 7,421,909 6,730,211 90.68% 7,157,619 8,410,917 117.51%
The general government department is over budget due to the purchase and operating
cost of the Prairie Center building ($617,242) and an operating transfer ($80,000) from
the city hall budget to the Capital Revolving Fund for the DMV building improvements
that were budgeted in 2007 and reserved in the General Fund, but partially spent from the
Capital Revolving Fund, both of which were not budgeted for in 2009. Also not
budgeted was the severance pay out for the deputy clerk, who retired earlier in the year.
All of these were one time expenditures that took place in 2009.
The public safety department is 23% over budget, which is largely due to the $527,370
spent for the new fire truck, of which $386,370 was budgeted in previous years. Also the
once a year payment to the fire relief association was made in October and was $20,873
below budget based on State Aid payments being less than anticipated.
3
The building inspections activity is also over budget due to $120,000 being transferred to
the Capital Revolving Fund for the storage garage remodel project that was budgeted in
2007 and never spent, and for equipment purchases that were budgeted and never spent.
The public works department has spent 104% of their budget so far. Reasons for this
are once again a transferring $142,000 from various activities for future equipment
purchases and improvement projects.
The streets and alleys expenditures are 98% spent so far, even though the City purchased
$180,094 of heavy machinery for the street sweeper and some of the transfers above.
The area of biggest concern for 2009 was the refuse activity which has the City over
spending its budgets for refuse collection, recycling services and landfill services. These
three line items over spent their budget by $41,310 in 2009. These charges are based on
volume and so staff is working with the vendors to increase recycling, which should
lower cost for refuse collection and landfill services in the future.
The budget for the miscellaneous department should finish the year a little below
budget very close to where it is now. The City has yet to pay the MCC for the room
rentals for the Senior Center. The contribution to the ice area and community education
has been made, as have the insurance payments.
The parks department is under budget even with transferring $150,000 for future
equipment purchases and park improvements. Finally, the economic development
department exceeded its budget by $3,859 which was due to not allocating as much
personnel cost to the EDA Fund as was budgeted based on the time spent on EDA
activities in 2009.
In summary I believe the General Fund revenues would have exceed expenditures if it
were not for the transfers to other funds, but even with the expenditures exceeding
revenues there is adequate fund balances in the General Fund to sustain operations in
2010 and into the future.
Special Revenue Funds
Special Revenue Funds are funds which the uses of their revenues are restricted for
specific purposes by a governing body. The City currently operates 16 special revenue
funds, each with their own budget. Funds such as the Library, Shade Tree, Street
Reconstruction and Community Center all depend on a property tax levy to support their
activities. The chart on the next page compares each Special Revenue Fund’s revenue
budget to actual revenues for 2009.
4
Budget to Actuals - Revenues
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The total revenue budget for all Special Revenue Funds is $6,632,144 and the City has
collected 148% of these so far. The Street Reconstruction Fund, EDA Fund, Capital
Revolving Fund, Street Light Improvement Fund, and Park Dedication Fund, all received
operating transfers which were not budgeted. These transfers were made to reserve funds
for the purposes of why these funds exist, that is park or street improvement, equipment
purchases etc. Also the Library Fund, Street Reconstruction Fund, Shade Tree Fund, and
Community Center Fund all have a tax levy as a revenue source. All of these have
received around 93% of their tax levy, but finance is still working on allocating the
January tax settlement which should bring collections up to 96% of what was levied.
The DMV surpassed their sale projections as their budget was $280,000 and they
collected $299,201 for the year. Also the Community Center Fund had a budget of
$1,090,600 for charges for services (memberships, concessions, etc.) but only took in
$1,043,850 for the year.
On the Expenditure side, all fund have spent 103% of their budgeted expenditures, but
again this is due largely to the operating transfers to Debt Service Fund for their share of
debt payment and other City funds as was the cause in the General Fund. The Street
Reconstruction Fund, Street Light Improvement Fund, Park/Pathway Dedication Fund,
Sanitary Sewer Access, Storm Sewer Access Fund, and Water Access Fund are all below
budget due to the fact the City did not have any construction project in 2009 as was
originally budgeted for.
5
Budget to Actuals - Expenditures
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Debt Service Funds
The City has made its debt payment for the year, so expenditures would normally be
complete for the year. The City redeemed the 2003A improvement bonds, thus reducing
future property tax levies for debt service. Also, in December, the City made its last
payment on the contract for deed on the Otter Creek Industrial Park. On the revenue side,
most of the transfers of City funds for the City share of debt payment have been made
and the special assessments have been collected.
Overall, the City has outstanding debt of $67,665,000 at year-end, which included the
FiberNet revenue bond. This number is a little high for a City of our size, but it has a lot
to due with the financing of the interchange project, which still has bonds outstanding of
$20,415,000 as of 12/31/09. I say this because the common tool for comparing debt from
one City to another is debt per capita and I often see these ranging from $700 to $1,500,
but if we used a population of 12,000 for Monticello, our debt per capita would be over
$5,600. But again you can point to the interchange, waste water treatment plant,
telecommunications revenue bond, and community center projects as good reasons to be
high and does not mean the City is in bad financial health.
The City’s next debt payment was due and made February 1st, 2010 in the amount of
$5,151,083.75 and includes both principal and interest.
6
Capital Project Funds
In 2009, the City, for the first time, budgeted revenues or expenditures for the City’s
capital projects. The budget was based on the City doing a reconstruction project in
2009. However no project was constructed, so most expenditures were for past projects.
For the year, the Capital Project Funds have revenues of $75,275, which are interest
earnings and operating transfers from the various funds which were funding sources for
the projects. The City has spent $228,515 on the various projects. These funds,
depending on the timing of revenue sources and their expenditures, will or can have
periods such as this when expenditure exceed revenue by large amounts or if a large
funding source (for example, bond proceeds) are received revenues will exceed
expenditures. So this is nothing to be concerned with.
Enterprise Funds
The City has five Enterprise Funds that it operates. These are operations that the City
runs like a business activity. The Water and Sewer Funds through December have billed
and recorded revenues for the first three quarters of the year and will bill for the fourth
quarter in January. The Liquor and Cemetery Funds receive their revenues on a pretty
consistent basis throughout the year, with December for the Liquor Fund being its busiest
period. Finally the FiberNet Monticello Fund is still in the start up phases and no
revenue to really speak of as of yet. Below is the table of budget to actual for the
Enterprise Fund revenues for the past two years:
The revenues for 2009 include 4th quarter utility billings, which are not yet recorded for
2009, which is why revenues for 2009 for the Water and Sewer fund are below 2008
revenues.
On the expenditure side, there are no big surprises either. The Liquor Fund is over 110%
spent due to increased sales, which requires increased merchandise purchases. The
FiberNet Monticello Fund budget is over spent, but that is because we budgeted as if we
would be finishing construction of the system instead of starting construction.
2008 2008 % 2009 2009 %
Budget 4th QTR YTD Received Budget 4th QTR YTD Received
Water Fund 932,558 928,501 99.56% 973,375 804,006 82.60%
Sewer Fund 1,395,140 1,116,834 80.05% 1,485,950 1,086,007 73.09%
Liquor Fund 3,665,570 4,174,255 113.88% 3,742,000 4,427,999 118.33%
Cemetery Fund 36,600 26,622 72.74% 31,000 21,286 68.66%
FiberNet Monticello Fund 0 81,258 0.00% 25,000 38,337 100.00%
Total 6,029,868 6,327,470 104.94% 6,257,325 6,377,635 101.92%
7
Below are the expenses for the Enterprise Funds:
2008 2008 % 2009 2009 %
Budget 4th QTR YTD Spent Budget 4th QTR YTD Spent
Water Fund 1,195,843 1,199,369 100.29% 1,165,368 569,377 48.86%
Sewer Fund 2,249,437 2,708,740 120.42% 2,402,754 1,242,568 51.71%
Liquor Fund 3,694,016 3,733,906 101.08% 3,714,926 4,072,125 109.62%
Cemetery Fund 35,612 28,404 79.76% 35,498 24,092 67.87%
FiberNet Monticello Fund 0 1,561,670 0.00% 642,000 7,989,098 1244.41%
Total 7,174,908 9,232,089 128.67% 7,960,546 13,897,260 174.58%
While it appears revenues will exceed expenditures, staff still needs to record
depreciation of system assets for all funds, which will make these funds look like they are
losing money as revenues are set at a level to cover operations and only part of the
depreciation.
Investments
Finally, the City’s investment activity has been relatively minor. At the end of the year
the City had $29,495,024 invested at an average interest rate of 3.56% and an average
yi eld of 3.61%. This compares to $35,523,612 at an average interest rate of 4.37% and
average yield of 4.48% at the end of June. The City has not lost any of its investments
due to the troubles of the financial markets however the City has had a number of
Government Securities called early. All of the City’s CD’s are covered by FDIC and
should not be at risk. Below is the breakdown of the City’s investments:
Investments by Type
Money MarketsFHL
FHLMC
FFCB
FNMA
CD's
FHL = Federal Home Loan; Money Markets = Government Security Money Market Funds; CD’s =
Certificate of Deposits; FNMA = Federal National Mortgage Association; FFCB = Federal Farm Credit
Bank; FHLMC = Federal Home Loan Mortgage Corporation.
8
All of these investments meet State and City investment requirements. Attached is a list
of the investment holdings of the City as of December 31st.
Conclusion
Overall, considering the state of the economy and the State’s budget crisis, the City will
end the 2009 fiscal year in good shape with solid fund balances. Revenues will finish the
year near or slightly below budget and because of the various transfers expenditures will
be over 2009 budget amounts. The transfers should help the City maintain funds for their
intended use in the future and help keep the City in good financial position.
Council Agenda: 2/22/10
1
7. Public Hearing - Consideration of adopting Resolution #2010-08 ordering
improvements and authorizing preparation of final Plans and Specifications for
2010 Street Reconstruction of Area 4A ad Prairie Road, City Project No. 10C001
(BW)
A. REFERENCE AND BACKGROUND:
On February 8th, Council accepted Feasibility Reports for Area 4A and Prairie Road, both
of which are proposed to be reconstructed as part of the 2010 Street Reconstruction
Project. Because the proposed improvements differ significantly for Area 4A and Prairie
Road, staff prepared separate Feasibility Reports for each. If approved, this project will
be a continuation of the City’s Overall Street Reconstruction Program as approved by
Council on February 9, 2004.
The streets proposed to be reconstructed with the 2010 reconstruction project include:
Area 4A (West River Street area)
West River Street – Chestnut Street to Pine Street (TH 25)
Front Street – Linn Street to Locust Street
Chestnut Street – Broadway (CSAH 75) to West River Street
Elm Street – Broadway (CSAH 75) to West River Street
Vine Street – Broadway (CSAH 75) to West River Street
Minnesota Street – Broadway (CSAH 75) to West River Street
Maple Street – Broadway (CSAH 75) to West River Street
Linn Street – Broadway (CSAH 75) to Front Street
Locust Street – Broadway (CSAH 75) to Front Street
Walnut Street – Broadway (CSAH 75) to West River Street
Prairie Road
Prairie Road – Nicholas Circle to Broadway (CSAH 75)
The proposed reconstruction work includes improvements related to pavement, curb and
gutter, sidewalk, storm sewer, sanitary sewer, watermain, and other appurtenant work.
Several optional improvements were also addressed in the Feasibility Reports and, should
Council approve the preparation of plans and specifications, staff will require further
Council direction regarding which of the improvements to include in the plans and
specifications for bidding purposes. A summary of the improvements proposed for each
of the two project areas follows.
Area 4A (West River Street area)
Sidewalk Improvements –
The Feasibility Report for Area 4A proposes a design including an off-street sidewalk
along the north side of West River Street from Otter Creek Road to State Highway 25, as
well as on several connecting streets. While it was proposed to extend sidewalk along
West River Street from Otter Creek Road to Chestnut Street in 2005 along with that street
reconstruction project, area residents were not in favor of a sidewalk extension at that
time so the sidewalk was not constructed.
Council Agenda: 2/22/10
2
It should be noted that the Feasibility Report did not include the fact that the City’s
pathway plan shows West River Street as an on-road bicycle facility. Staff therefore
recommends that the proposed improvements be designed to accommodate bicycle traffic
along West River Street.
If any off-street pedestrian facilities are constructed along West River Street they would
be considered a “River Trail” per the City’s pathway plan since they would provide off-
street pedestrian connections between the river parks and trail segments. As such it
might make sense for Council to direct the use of City equipment to maintain these
pedestrian facilities.
Street Improvements –
The proposed improvements also call for a reduction in the street width for West River
Street from 36-feet to 32-feet, which is the minimum width required by our design
standards for streets with low traffic volumes and separate pedestrian facilities. This
street width allows for on-street parking on one side of the street while accommodating
emergency vehicle access. In addition, since the construction of off-street sidewalks was
proposed, staff felt that the reduction in street width would help reduce the amount of
stormwater runoff being directed to the Mississippi River from the streets, of which none
is currently being treated.
It should also be noted that West River Street from Elm Street to TH 25, and Elm Street
from West Broadway to West River Street, are both on the City’s Municipal State Aid
System. As such these streets are eligible to receive State Aid funds if designed to State
Aid standards which allow on-street parking on one side of the street if the street is at
least 32-foot wide, and only allows parking on both sides of a street if the street is at least
38-feet wide. However, a variance could likely be obtained since the street is an existing
street with on-street parking on both sides.
Various utilities will also be repaired or replaced with this project as outlined in the
Feasibility Report.
Optional Improvements –
Optional improvements addressed within the Feasibility Report include:
Chestnut Street sanitary sewer lift station wet well improvements
West Bridge Park pathway lighting improvements
TH 25 pedestrian underpass improvements
Walnut Street parking lot reconstruction
Sidewalk extension along West River Street between Locust Street and TH 25
On February 8th the City Council also directed staff to add the reconstruction of the City-
owned third street parking lot as an optional improvement to the project. The Council
directed that a meeting be held with the downtown businesses to obtain their input before
determining the scope of the parking lot improvements. A meeting was therefore held on
the morning of Monday, February 15th, and was attended by numerous business owners,
Mayor Herbst, Councilmember Wojchouski and Jeff O’Neill. At that meeting it was
determined that the proposed improvements should include reconstruction of the parking
lot, including a provision for constructing two enclosed, common-use dumpsters, to be
Council Agenda: 2/22/10
3
located in the islands between the parking lot and the concrete alley. The draft Feasibility
Report for Block 35 Alley Improvements dated June 22, 2004, contained drawings that
are to be used as the guide for developing plans for the two common-use dumpsters and
their enclosure structures.
Attached as supporting data are copies of unofficial meeting minutes taken by Jeff
O’Neill and Councilmember Wojchouski. Also attached is a drawing from the draft 2004
Feasibility Report for the proposed Block 35 Alley Improvement project which includes
proposed locations for two enclosed, common-use dumpsters. It should be noted that the
businesses would prefer that the dumpsters be located in the outer two islands, not the
inner two islands as shown.
Public Input/Petitions -
Two public input meetings were held on January 21st for property owners in Area 4A,
with one meeting held with the residential property owners and the other held with non-
residential property owners. Approximately 35 people attended the two meetings and
those in attendance generally understood that the streets have deteriorated to the point
that they require reconstruction. However, several people questioned why the width of
West River Street was being proposed to be reduced from 36-feet to 32-feet. Staff
informed them that this reduction in width was being proposed to match the existing
width or West River Street west of Chestnut Street, and also because a 6-foot wide off-
street concrete sidewalk was being proposed along West River Street and City design
standards only require a 32-foot wide street to accommodate traffic on low-volume roads
where off-street pedestrian facilities are provided.
The most controversial topic of discussion at both meetings centered on the need for off-
street sidewalks. Staff informed the meeting attendees that we were proposing sidewalk
because several West River Street residents recently told the City Council that they
wanted a sidewalk. In addition, the downtown business owners recently voiced their
support for more pedestrian facilities in the downtown area to better connect the
businesses to area parks and the river. Staff also noted that it is much safer for
pedestrians to use off-street sidewalks or pathways, especially for children.
The residential property owners seemed to be about evenly split as to whether sidewalks
provided enough benefit to outweigh the cost. A few people said they often walk in the
street and that they are rarely bothered or passed by cars so they felt the sidewalk was not
needed. Others said they do not feel safe walking on West River Street and have seen
some narrow misses so they do not go for walks as often as they might if a sidewalk was
available. One resident was initially against the sidewalk because he did not want to
maintain it, but when it was discussed that the City Council may direct staff to maintain
the sidewalk he changed his mind and said he would support a sidewalk if the City
maintained it.
Of the business property owners who commented on the need for sidewalks, all but one
felt that off-street sidewalks were not needed and would not be worth the cost citing that
times have changed and people no longer want to walk from store to store to shop so
additional sidewalk would provide no benefit to businesses in the area.
Council Agenda: 2/22/10
4
On Friday, February 5th, the City received two petitions signed by residents in Area 4A
that are opposed to constructing sidewalks with the 2010 Street Reconstruction project.
Petition #1 includes 24 signatures of people living at 22 different properties between
Otter Creek Road and Chestnut Street. Petition #2 includes 46 signatures of people living
at 32 different properties between Chestnut Street and TH 25. Attached as supporting
data are copies of the petitions and a map of the petitioner’s property locations.
Prairie Road
Sidewalk Improvements –
The Feasibility Report for Prairie Road proposes a design including a sidewalk along the
south side of Prairie Road, which would be an extension of the existing sidewalk that
terminates west of Hedman Lane. This sidewalk would connect all the local residential
developments to the pathway along the south side of CSAH 75.
Since the City owns several parcels of land along this sidewalk segment it might make
sense for Council to consider directing the use of City equipment to clear all or part of
this sidewalk segment also.
Street Improvements –
The proposed design calls for Prairie Road to be converted from a 24-foot wide rural
section with drainage ditches to a 32-foot wide urban section with curb and gutter and
storm sewer.
Optional Improvements –
The parking lot at Par West Park needs to be reconstructed so the Parks Department
asked to bid the work with this project in hopes of getting lower bids due to economies of
scale. On February 8th Council asked if this parking lot truly needed to be reconstructed.
Staff checked with the Parks Department and was informed that the pavement is in very
bad shape and definitely needs to be reconstructed, and that if the work is not bid with
this project they will still bid it as a stand-alone project this year.
Another optional improvement includes potential improvements to the BNSF railroad
crossing on Prairie Road south of CSAH 75, although it is not known at this time if
further improvements will be required, and what those improvements might include.
Public Input/Petitions –
A public input meeting was held on January 25th for the residential property owners listed
in the preliminary assessment roll. Approximately 15 property owners attended the
meeting. Those in attendance generally understood that Prairie Road has deteriorated to
the point that it needs to be reconstructed. Several people questioned the need for an off-
street sidewalk, but most in attendance supported the idea. As in the meetings for Area
4A, it was discussed whether residents would be required to maintain the walk or whether
the City would maintain it, and the overall feeling was that if the City maintained the
sidewalk more people would support it.
Council Agenda: 2/22/10
5
Proposed Assessments
The proposed assessment strategies applied to this project mirror those applied to
previous street reconstruction projects. The proposed street reconstruction assessment
rate for residential properties was calculated by increasing the residential rate applied to
the 2007 Street Reconstruction Project ($3,300 per lot) by 5% per year. The proposed
sidewalk construction assessment rate for residential properties was determined by
following the City policy of assessing 25% of new sidewalk construction costs, with the
City paying the remaining 75% of the costs. The 25% assessable costs were then
distributed among the properties that would benefit from the sidewalk by allowing them
to access the City-wide pedestrian facility system by using the new sidewalk. The
proposed non-residential assessment rate was determined by applying the City’s standard
non-residential assessment rate of $80 per front foot, then adding $12 per front foot for
sidewalk construction, which is based on estimated sidewalk construction costs.
The proposed assessment rates are as follows:
Residential Street Assessment –
Area 4A and Prairie Road = $3,800 per lot
Residential Sidewalk Assessment –
Area 4A = $260 per lot
Prairie Road = $153 per lot
Non-Residential Assessment –
Area 4A and Prairie Road = $92 per front foot*
* Includes $12 per front foot for sidewalk construction.
All residential lots are proposed to be assessed one residential unit, regardless of whether
they are a corner or an interior lot, or whether they have more than one access. Interior
non-residential lots abutting a street being reconstructed are proposed to be assessed by
multiplying 100% of the total front footage of the lot abutting the street by the non-
residential rate. Corner non-residential lots are proposed to be assessed by multiplying
100% of the footage of the front lot line abutting any reconstructed street by the non-
residential rate, and adding to that the amount calculated by multiplying 50% of the
remaining footage of side lot lines abutting any reconstructed streets by the non-
residential rate. Front lot lines are considered to be the side of the lot acting as the front
of the lot, typically containing the street access, and all other lot lines are considered to be
side lot lines.
A1. Budget Impact: The estimated costs for the two proposed project areas are as
follows:
Area 4A –
Base project (street, sidewalk and utilities) = $2,898,450
Optional improvements;
o Chestnut St. lift station wet well improvements = $137,600
o West Bridge Park pathway lighting improvements = $35,600 - $45,200
o TH 25 pedestrian underpass improvements = $20,000
o Walnut St parking lot reconstruction = $135,600
Council Agenda: 2/22/10
6
o Sidewalk extensions:
Locust St. to TH 25 = $115,500
Locust St. to Walnut St. = $54,100
o Third St. parking lot improvements = $160,000 (not in Feas. Report)
Prairie Road –
Base project (street, sidewalk and storm sewer) = $652,400
Additional and/or optional improvements;
o Par West parking lot reconstruction = $16,000
o RR crossing improvements (if required by BNSF) = $10,000 - $15,000
Due to the existing low bond rates staff recommends using bonds to fund the
entire project. Bond payments would then be made using the appropriate funds.
As Council is aware, the bidding environment for street improvement projects has
been favorable over the last couple of years due to the economy and bid prices
have been coming in around 20% less than similar projects constructed several
years ago. All indications are that this favorable bidding environment will
continue in 2010 which will likely result in significant savings for the City if we
move ahead with this project in 2010.
A2. Staff Workload Impact: Engineering and Public Works Department staff will
spend a considerable amount of time working on the project, during both the
design and construction phases. WSB and Associates will prepare the plans and
specifications and provide overall project management services, while City staff
will inspect construction and administer the project.
B. ALTERNATIVE ACTIONS:
1. Motion to adopt Resolution No. 2010-08 ordering improvements and authorizing
preparation of final Plans and Specifications for 2010 Street Reconstruction of Area
4A and Prairie Road, City Project No. 10C001.
2. Motion to deny adoption of Resolution No. 2010-08 at this time.
C. STAFF RECOMMENDATION:
City staff recommends approving Alternative #1.
D. SUPPORTING DATA:
Resolution #2010-08
Area 4A sidewalk opposition petition #1 and letters
Area 4A sidewalk opposition petition #2
Area 4A petitioner’s properties location map
February 15th unofficial meeting minutes (Jeff O’Neill, Councilmember Wojchouski)
Figure 1D from Block 35 Alley Improvements Feasibility Report
CITY OF MONTICELLO
RESOLUTION NO. 2010-08
ORDERING IMPROVEMENTS AND AUTHORIZING PREPARATION
OF PLANS AND SPECIFICATIONS
2010 STREET RECONSTRUCTION – AREA 4A AND PRAIRIE ROAD
CITY PROJECT NO. 10C001
WHEREAS, a resolution was adopted by the City Council on February 8, 2010, accepting the
Feasibility Reports for the 2010 Street Reconstruction of Area 4A and Prairie Road, and calling for a
Public Hearing on February 22, 2010 on said proposed improvements; and
WHEREAS, after due Notice of Public Hearing was provided on the construction of said proposed
improvements for the 2010 Street Construction Project: Area 4A – West River Street between Chestnut
Street and Pine Street/State Highway 25 and adjoining streets between West Broadway and West River
Street or Front Street; and Prairie Road between Nicholas Circle and Wright County Highway 75.
Improvements include reconstruction of urban and rural section roadways, curb and gutter
replacement, sidewalk and storm sewer construction, utility improvements and other appurtenant work.
Optional improvements include Chestnut Street Lift Station wet well improvements, West Bridge Park
pathway lighting, Highway 25 pedestrian underpass improvements, Walnut Street parking lot
reconstruction, sidewalk extensions from Locust Street to Highway 25, Third Street parking lot
improvements, and Par West Park parking lot reconstruction. A hearing was duly held on February 22,
2010 on said improvements and the City Council heard all persons desiring to be heard on the matter
and fully considered the same; and
WHEREAS, at said hearing there was available a reasonable estimate of the amount to be assessed and
a description of the methodology was presented;
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Monticello, Minnesota
as follows:
1. Said improvements are necessary, cost-effective, and feasible as detailed in the Feasibility
Reports.
2. It is advisable, expedient and necessary that said improvements as described in the Notice of
Hearing thereon be constructed, and the same are hereby ordered made.
3. The improvements described in said Notice of Hearing are hereby designated and shall be
known as the 2010 Street Reconstruction, City Project No. 10C001.
4. The City Engineer along with consulting engineers, WSB & Associates, Inc. is hereby directed
to prepare final plans and specifications for said improvements.
5. The City Council shall let the contract for all or part of the work for said improvements or order
all or part of the work done by day labor or otherwise as authorized by Minnesota Statutes,
Section 429.041, Subdivision 2 within one year of the date of this resolution ordering said
improvements.
Adopted by the Monticello City Council this 22nd day of February, 2010.
___________________________________
ATTEST: Clint Herbst, Mayor
____________________________________
Jeff O’Neill, City Administrator
City Council Agenda: 02/22/10
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8. Consideration of adjusting employee step increases for 2010 (JO)
A. REFERENCE AND BACKGROUND:
Current economic times have required us to look closely at all aspects of the City’s
spending for ways to reduce costs. In light of reductions in revenue sources and property
values, early in the year, the Personnel Committee began to look at options for reducing
the growth of payroll expenses. Imposing a one year hold on step increases is being
suggested as a method to contain costs during this economic downturn. Other options
were examined for tightening payroll, including imposing mandatory furlough days for
all employees and staff level reductions. After reviewing the options, it is being
recommended that the best option for slowing the growth of payroll expense to reflect the
economic conditions would be to impose a one year hold on step increases.
The City’s pay equity plan is composed of 25 pay grades each of which contain 8 steps.
City employees are reviewed annually with the potential for an increase of 0, ½ or a full
step based on performance criteria (0%, 1.75% and 3.5% retrospectively). Part-time
liquor store employees and employees of the Monticello Community Center who are not
part of the City’s pay equity plan are granted performance based increases of 5-6% when
they reach specified hour requirements.
Step increases are not automatic and granted only if the employee is advancing in his/her
ability to do the job. It has been successfully used as a tool for reinforcing productivity
and goal accomplishment on the job. Please note that the proposed one year hold on step
increases should not be construed as a criticism of the step system program or the manner
in which is it maintained. It is merely intended to slow the growth of payroll expenses
during this economic downturn.
According to the City Attorney, the current labor contract with Local No. 49 does provide
for a step increase so withholding the increase would result in a violation of the contract.
This contract is valid through 2011. It is therefore possible that the step increase for the
union staff would be reinstated with back pay. Please note that the existing contract
does not limit the ability of the City to utilize other measures to control payroll expenses
including and not limited to lay-offs or privatization of service. The City Council at its
discretion can take other steps to manage salary expenses through evaluation of services
and staffing across all departments. If Council elects to freeze step increases and they
are later reinstated for union staff, then Council latitude remains to look at all
departments for service and staffing reductions.
It should be noted that a few weeks ago, the Personnel Committee requested that the
union consider accepting a half step increase instead of a full step for 2010. The union
voted against accepting a freeze for 2010.
City Council Agenda: 02/22/10
2
Staff opinions outside of the union have not been formally collected but some have noted
that a freeze on step increase is preferred over lay-offs. It is also a form of shared
sacrifice.
There are probably a variety of options to consider when it comes to reducing payroll
expenses. Below are the basic options. It is up to Council to review these alternatives,
discuss, then mix and match.
Grant Full Step or Half Step
Pros:
Consistent with current contract with union (half step would not be
consistent with contract)
$40,000 has been budgeted. Transition aid has not been removed via
unallotment so funds are available to pay for step increases in 2010
Although a half step increase was voted down by the Union, it is not
known if a grievance would actually be filed if Council voted for a half
step increase
Cons:
This results in a delay in making adjustments to staff salary levels
commensurate with downturn in economy and associated reduction in
wages in the private sector
Just because funds are budgeted does not mean they should be spent given
economic times. Thus this option could drive the City toward service and
staff reductions or privatization of service
Freeze Step Increases for 2010
Pros:
Establishes compensation trends consistent with private sector today
Reduces need to examine service and staff reductions
Can be reinstated in 2011 thus remaining a motivating factor for staff
eligible for step increases in the future.
Cons:
Tool for motivating staff on hold for one year
Hits staffers unevenly
Not consistent with Union contract
B. ALTERNATIVE ACTIONS:
1. Motion to grant a full or half step increase to staff that qualify and direct staff /
Personnel Committee to examine modifications to Union contract for next
contract period. Provide alternative direction to continue to examine other
City Council Agenda: 02/22/10
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options for reducing payroll expenses such as lay-offs or mandatory furloughs,
privatization and the like.
2. Motion to freeze step increases on all employee pay increases for 2010.
If grievance filed and decision overturned, the City would be more motivated to
seek other cost saving measures including across the board review of departments
for cost savings measures including lay-offs, service reductions, furloughs,
benefits etc.
3. Motion to table matter for further review.
C. RECOMMENDATION:
The Personnel Committee including the City Administrator, Finance Director and Human
Resources Manager have discussed this issue in depth and unanimously support
Alternative #2 or other alternatives that might be found that would result in a pay
program that shifts to better reflect what is happening in the economy at large. Reduction
in payroll expense would help reduce the need for imposing other cost saving measures
over time such as privatization or lay-offs. It should be noted that this alternative could
be reversed via a grievance process which would then require that Council look at other
options for reducing personnel expenses.
In discussing this matter with other staff there is a mixed bag of responses on whether or
not to freeze the step increase. Everyone understands that decisions made by Council are
based on a wide variety of factors and staff input is but one factor. I also think all
members of staff appreciate the jobs they have and have empathy for those out of work
and facing economic stress. However, there certainly is not universal agreement on how
salary cost cutting should occur if it is a priority for Council. Each person would have a
different opinion likely based on their own personal circumstance. I think the main hope
for most would be that Council do its best to establish pay program modifications that are
fair based on Council’s best judgment. I have had the great fortune to work with a
fantastic group of service oriented, highly motivated, and intelligent co-workers over the
years, although removal of step increases for 2010 would be a disappointment for many
deserving staffers that have worked hard to become great employees and serve the
community well. I do not think that freezing step increases for 2010 would be a factor
that would reduce morale to the point of hurting productivity… our staff is too good to go
there.
D. SUPPORTING DATA:
Copy of Union Contract Relating to Salary
Proposal to Union
Memo included with payroll on 2/18/10