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City Council Minutes 07-08-2013MINUTES REGULAR MEETING — MONTICELLO CITY COUNCIL Monday, July 8, 2013 — 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 7:02 p.m. and declared a quorum present. The Pledge of Allegiance was recited. 2A. Approval of Minutes — June 24, 2013 Regular Meeting LLOYD HILGART MOVED TO ACCEPT THE JUNE 24, 2013 REGULAR MEETING MINUTES AS PRESENTED. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED 5 -0. 3. Consideration of adding items to the agenda • Tree preservation fund (Glen Posusta) • Rental ordinance (Clint Herbst) 4. Citizen comments, public service announcements, and updates a. Citizen Comments: None b. Public Service Announcements: 1) Beyond the Yellow Ribbon armouncement — Roseanne Duran (6040 Bakken Street), Michelle Hertwig (PO Box 681), and Courtney Bellefeuille (2760 Meadow Lane) reported that the City has been named as a "Beyond the Yellow Ribbon" city and received a proclamation from the Governor's office. They are members of the committee that organized and created an action plan required for recognition as a BTYR city. The proclamation was presented to Mayor Herbst along with a copy of the action plan. 2) Downtown Block Party (7/10) — Angela Schumann reported that this event takes place on Wednesday, July 10th from 4:30 to 9 p.m. on Walnut Street in downtown Monticello. 3) City Block Party (7/11) — Angela Schumann reported that this event is sponsored by the Monticello Community Center, National Guard, City Hall, Monticello Senior Center, FiberNet, and Monticello Times, and takes place over lunch on Thursday, July 11th. Free hot dogs, chips, dessert and beverages will be given away to the public. City Council Minutes —July 8, 2013 Page 1 4) Riverfest (7/11 -14) — Angela Schumann reviewed on the Riverfest activities taking place on Thursday evening, July 11 at Pioneer Park (food, kids games, car show, community band); Friday evening talent contest and fireworks; Saturday, July 13 (Art in the Park, Taste of Monticello, kids activities, bean bag contest, 5K run, street dance); and Sunday, July 14 (parade, Ellison park food and games, duck drop, royalty coronation,music). 5) Movie in the Park (7/20) — Angela Schumann noted that the next Movie in the Park takes place on July 20t" at dusk in Pioneer Park. The featured movie will be Wreck it Ralph. C. Updates: 1) Sheriff's Dept — noise ordinance (moved to July 22'd meeting) 2) FiberNet - Mark Pultusker gave an update on the status of FiberNet and changes that have taken place in the past year, since he was hired as manager. Mark Pultusker talked about where he started from and the main goals that he was tasked with: improving revenues to offset expenditures and determining the viability of continuing FiberNet. Mark Pultusker pointed out that they reduced the number of staff and cross - trained the employees that stayed on with the focus on keeping a high level of customer service. A lot of time was spent on reconciling the FiberNet bonds and reporting to the bond attorneys. A settlement has been negotiated and hopefully will be completed in the near fature. Marls Pultusker has also renegotiated a number of contracts including the X -O contract for broadband and many of the programming contracts. Mark Pultusker commented that he has concentrated on reducing operating expenses to be in line with the revenues generated from the current customer base. He has also looked at customer charges that could generate additional revenues, such as late fees, service charges for certain technical call responses, and service plans. Mark Pultusker is also looking at projects that could generate revenues outside of the city of Monticello. He is currently investigating a potential tower location and contract with Verizon Wireless. He would like to increase the use of the Head End building as a data center and noted that the city servers are in the process of being moved there at this time to utilize the features at the head -end such as generator, UPS, power, and broadband security. He anticipates this offering to serve needs of businesses inside and outside of the city. Mark Pultusker talked briefly about marketing of FiberNet and noted that he has been waiting to promote until he had improved the business and residential offerings. A new marketing program is being initiated with the assistance of city staff and will be implemented before too long. Mark Pultusker talked about the $200,000 allocation from City Council and what he has been doing to utilize those funds. FiberNet has been and will continue to be the leading provider of telecommunication services in City Council Minutes —July 8, 2013 Page 2 the city. They are now positioned to offer 1GB of broadband service which will be far greater than what is available from its competitors. Mark Pultusker commented on the competition and the advantage that the community has gained from FiberNet's presence. Mark Pultusker noted that he is in the process of putting together another business plan to take FiberNet to the next phase. He invited Council members to submit questions to him and he will include those in his next update. Clint Herbst asked Mark Pultusker about a $2500 request and Mark Pultusker explained that is related to an enviromnental review assessment that needs to be conducted as part of locating a tower in the city. Mark Pultusker summarized some of the discussion he has had with Verizon and some of the plans for the tower. (See Added Items at the end.) Glen Posusta added a comment that FiberNet is here to stay and thanked Mark Pultusker and others for their work on creating a good system. 5. Consent Aeenda: A. Consideration of approving payment of bills for July 8th. Recommendation: Approved payment of bill and purchase registers in the total amount of $634,349.05. B. Consideration of approving new hires and departures for City departments. Recommendation: Ratify new hires for the MCC and Liquor Store. C. Consideration of adopting Resolution #2013 -053 accepting a contribution from Wright County United Way for the Fire Department. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA. D. Consideration of adopting Resolution #2013 -054 accepting a contribution from the Monticello VFW for new flags that were placed in the downtown area. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA. E. Consideration of approving an application for a charitable gambling permit for a raffle to be conducted by Wright County /West Metro Whitetails on September 8, 2013. Recommendation: Approve the application for a charitable gambling permit for a raffle to be conducted by the Wright County /West Metro Whitetails on September 8, 2013 at River City Extreme. F. Consideration of approving purchase of "Beyond the Yellow Ribbon" community signs to be placed at city entrances. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA. G. Consideration of adopting Resolution #2013 -055 requesting Mn/DOT to include the I -94 West Corridor expansion in the 2033 Minnesota State Highway City Council Minutes —July 8, 2013 Page 3 Investment Plan.. Recommendation: Adopt Resolution #2013 -055 requesting Mn/DOT to include the I -94 West Corridor expansion in the 2033 Minnesota State Highway Investment Plan. BRIAN STUMPF MOVED TO APPROVE THE CONSENT AGENDA WITH THE REMOVAL OF ITEMS C, D, AND F. LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED 5 -0. 6. Consideration of items removed from the consent aeenda for discussion 5C Consideration of adopting Resolution #2013 -053 accepting a contribution front Wright County United Way for the Fire Department Glen Posusta pulled this off to acknowledge the generous $6000 grant from the United Way for the fire department. GLEN POSUSTA MOVED TO ADOPT RESOLUTION #2013 -053 ACCEPTING A DONATION OF $6000 FROM WRIGHT COUNTY UNITED WAY FOR THE MONTICELLO FIRE DEPARTMENT FOR A HIGHWAY RESCUE SUPPORT SYSTEM. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED 5 -0. 5D. Consideration of adopting Resolution #2013 -054 accepting a contribution front the Monticello VFW for new flags that were placed in the downtown area Glen Posusta pulled this to recognize the contribution by the VFW for the flags valued at almost $300 that have been placed in the downtown area. GLEN POSUSTA MOVED TO ADOPT RESOLUTION #2013 -054 ACCEPTING A DONATION OF AMERICAN FLAGS VALUED AT $283.75 FOR THE CITY. TOM PERRAULT SECONDED THE MOTION. MOTION CARRIED 5 -0. 5F. Consideration of approving purchase of "Beyond the Yellow Ribbon" community signs to be placed at city entrances Glen Posusta pulled this off after hearing from the representatives of the Beyond the Yellow Ribbon committee and wondered if the city should hold off until we find out if the American Legion or the VFW wants to contribute for the signs. Clint Herbst felt that the city should move ahead and then can accept any contributions after the fact. It was noted that there are two entrance signs that currently have signage for the Girls Cross Country Team state tournament champions in 2011. Angela Schumann explained that those signs can be raised to accommodate the additional BTYR sign at a cost of $200 per sign or a total of $400. GLEN POSUSTA MOVED TO APPROVE THE PURCHASE OF "BEYOND THE YELLOW RIBBON" SIGNS AT A COST OF APPROXIMATELY $475 AND THE City Council Minutes —July 8, 2013 Page 4 CITY WILL COVER ANY SHORTAGE NOT COVERED BY DONATIONS. LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED 5 -0. 7. Consideration of accepting 2012 Audit Report Jim Eichten from MMKR introduced himself and explained that his firm was responsible for conducting the annual financial audit for 2012. Some of the highlights of the audit were discussed in a workshop prior to the regular meeting. Jim Eichten presented information about the auditor's role in an audit; they give an opinion on the financial statements, they test internal controls and compliance, and provide a single audit of any federal awards (which was not required this year). As part of the audit surnmary, the auditors provide a Management Report, which was prepared by Jim Eichten. In the report, he includes his audit opinion on the financial statements and basic findings. The auditor's opinion was unqualified, which means that the financial statements were in order and met the requirements. Jim Eichten provided a detailed explanation of the FiberNet fund due to the circumstances surrounding that fund. Jim Eichten noted that the city showed an improvement in their overall fund balance. However, there was a finding of a prior period adjustment for misstating the 2011 fund balances in regard to developer escrows. Jim Eichten noted that the other findings were minor and the city is developing actions to overcome those findings. Jim Eichten explained that there were several other items noted in the Management Report regarding implementation of GASB Statement #63 and some communication objectives. Jim Eichten talked about the financial statements and displayed some graphs. The first graph showed a slight decline in taxable market value from 2011 to 2012. Jim Eichten discussed the effect on the tax rates, which increased with the decline in tax capacity. Jim Eichten showed the comparative revenues from property taxes per capita, which are higher than average than the state wide figures. Jim Eichten noted that when revenues are higher than average, generally the expenditures are higher than average. In the area of debt service expenditures, the city is quite a bit higher than the state average. Jim Eichten gave a review of the fund balances and noted that the general fund balance, special revenue funds, and capital funds all have positive balances. Jim Eichten pointed out the general fund balance has declined in the past few years, which was due to transfers to support other funds. However, the balance remains within the recommended range to manage expenditures. Jim Eichten talked about the five enterprise funds and reviewed the fund balance changes. The liquor fund showed a significant decrease while the water, sewer, and fiber optics funds increased their fund balances. Jim Eichten noted that the liquor fund is very profitable and continues to be used for operating transfers to support other city operations. The city is in the third year of tracking fiber optics fund operations and is in the second full year of operations. As of December 31, 2012 the fund had a cash balance of $2,993.788 which included interfund borrowing and a deficit net position balance of ($8,807,015). City Council Minutes —July 8, 2013 Page 5 In summary, Jim Eichten provided a list of conclusions: received clean opinion on basic financial statements, reported "emphasis of a matter ", earned Certificate of Achievement for Excellence in Financial Reporting (CAFR), reported four findings, continued ongoing assessment of financial projections and results, and declining overall financial position in the City in fiscal 2012. Wayne Oberg thanked his staff for all their hard work on the audit. BRIAN STUMPF MOVED FOR ALTERNATIVE #1 TO ACCEPT THE 2012 AUDIT REPORT. LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED 5 -0. 8. Added items Rental Housing Ordinance — Clint Herbst noted that council members had received a letter from a resident about concerns on a rental property. Clint Herbst mentioned that he had discussed a "3- strike rule" with City Attorney Joel Jamnik regarding rental violations. Ron Hackenmueller commented that he is working with the Sheriff s Department to create a better communication path when it comes to rental properties. Clint Herbst asked if there was some way that the city could use the GIS system to help track the problem properties. Angela Schumann stated that the city is looking at ways to improve their record keeping. Glen Posusta commented that residents should understand that they should contact the city as well as the police when there are ongoing problems with specific properties. Tree Preservation fund — Glen Posusta expressed concern about the city's tree preservation program and how the city utilizes fine money when people cut down trees on a property that should have been preserved. Angela Schumann noted that the only development that is affected by the tree preservation program is Carlisle Village. Each lot is addressed in the program and a plan must be presented when a lot is developed. The plan must provide for replacement of designated trees that are lost. In addition there is a cost that is paid into a tree fund for the benefit of the entire city. Clint Herbst commented that there is a concern about how the dollars in the tree fund are used and perhaps they should be used in that neighborhood. Glen Posusta would like to see some leniency for trees that are removed from the site where a building pad is placed. Clint Herbst suggested that several council members could sit down with city staff and look at the tree preservation program. Angela Schumann pointed out that any adjustments may require amending the Carlisle Village development agreement. Lloyd Hilgart stated that most people don't intentionally cut down trees. They try to work around them and sometimes they die. Lloyd Hilgart and Glen Posusta offered to sit down with city staff to discuss this matter. City Council Minutes —July 8, 2013 Page 6 Angela Schumann commented that the new zoning ordinance addresses tree preservation in a different manner than when Carlisle Village was developed. It might be helpful to look at the changes in the new ordinance. Environmental Review for a communications tower — Clint Herbst brought this up to decide whether an environmental review should be approved at this time for a site that could be used to locate a communications tower. He had asked Wayne Oberg to look at a return on investment if the city did construct a tower. Wayne Oberg reported that the city would likely recoup their costs in 15 years. GLEN POSUSTA MOVED TO APPROVE $2500 FOR A PHASE I ENVIRONMENTAL ASSESSMENT STUDY FOR A PROPOSED SITE FOR A COMMUNICATIONS TOWER. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED 4 -1 WITH LLOYD HILGART VOTING IN OPPOSITION. Lloyd Hilgart stated he would like more information on the costs before they engage in an environmental assessment. 9. Adjournment GLEN POSUSTA MOVED TO ADJOURN THE MEETING AT 8:41 P.M. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED 5 -0. Recorder: Catherine M. Shuman Approved: July 22, 2013 Attest: Ci A strator City Council Minutes —July 8, 2013 Page 7