DRAFT – These minutes are not official until approved at the next regular City Council meeting.

City of Bigfork

Regular Meeting April 10, 2007

Members Present: Mayor Amy Tendrup, Richard Salmi, Linda Koppelmann, Jean Lexvold and Eugene Rajala

Absent: None

Also Present: Gene Collins, Tim & Anne Collins, Alan LaTrace, Robert Johnson, City Engineer Julie Kennedy, Don Zierke, Police Chief Jon Babcock, Police Officer Clint Sova, Lonnie Kacon, Public Works Superintendent Chuck Almhjeld and Jim Manske

Mayor Tendrup called the meeting to order at 6:00 p.m.

Public Forum: Tendrup asked anyone wishing to address the Council to do so at this time. As no one wished to do so, the public forum was closed.

Tendrup asked for additions to the agenda. Rajala wanted to add the need for some equipment for the Public Works Department and a possible increase in water and sewer rates. Salmi wanted to add reimbursement to Dave Waters to the agenda. Use of the squad car was added. The agenda was approved as amended in a motion by Koppelmann, seconded by Lexvold, motion carried unanimously (MCU).

Consent Agenda #1- approval of the minutes of the March 13th regular City Council meeting

#2- approval of the Police Report for March 2007

#3- approval of the City Clerk’s Office Report for March 2007

#4- approval of the Budget Report for March 2007

#5- approval of the Public Works Department report for March 2007

#6- approval of the Claims Paid in the amount of $25,231.72, including the March 15th and 30th payrolls, and approval of the Claims for Payment in the amount of $31,243.88

Motion by Rajala to approve the Consent Agenda, seconded by Lexvold, MCU

Copies of documentation relating to any consent agenda item are available at the City Clerk’s office.

Commissioner's Reports: Water/Sewer/Street Commissioner Lonnie Kacon stepped to the podium and reported that he, Public Works Superintendent Chuck Almhjeld and Rajala have been discussing a number of issues that need attention. He suggested a planning meeting to begin strategizing for some of these items such as well #4 and street maintenance. Kacon noted Itasca County has historically been interested in partnering with the City on street/utility projects such as the one that was done in 2005 on CSAH 77. He questioned if the Council would like him to pursue another joint project. City Engineer Julie Kennedy noted that the Council had received a copy of Itasca County's Five-Year Plan for highway improvements. She explained that the County receives state aid money through the Minnesota Department of Transportation (MnDOT) to be used for municipal projects. Kennedy has been informed that the County has penciled in CSAH 78 as a possible project in 2010. She stated that the City would need to send a letter requesting that this project be put into the plan and expressing commitment to do any of the utility work. She added that it could be a good opportunity to complete relocation of the sanitary sewer forcemain in that area and possibly construct a new access road to the sewer ponds. Salmi felt that CSAH 78 was in excellent shape and that a different road should be chosen for improvement. Almhjeld restated Kennedy's point that the City could tie in the sanitary sewer forcemain relocation and pond access road projects if CSAH 78 were to be done. Motion by Salmi to work with the County but to change CSAH 78 to a different road. Tendrup asked if Salmi had another road in mind and pointed out that only County roads within City limits are eligible for the municipal state aid money. Kacon pointed out that one of the main criteria for updating roads is the traffic count. Due to it's proximity to the hospital and golf course, CASH 78 is more than likely the most-traveled County road in the City. Tendrup suggested that the Council members take some time to inspect the County roads in City limits and report to the Planning & Zoning Commission with their suggestions. The Planning & Zoning Commission will then present a recommendation to the Council on which roads to request the County include in their plans.

Cemetery Commissioner Eugene Rajala stated that he has talked to Itasca County regarding the land the City requested for expansion of the cemetery. He was told that the appraisal should be done within a month or two. He had suggested to the County that the City did not require the entire forty acres, but the County is not interested in dividing it.

Review of 2006 Audit: Don Zierke of Miller, McDonald, Inc. was present to review the audit for the year ended December 31, 2006. Zierke explained that the City maintains its books on the cash basis of accounting and so the audit was prepared on that basis as well. He reviewed the beginning cash balances, receipts, sales of investments, transfers in, disbursements, purchases of investments, transfers out and ending cash balances for 2006. He reported that the investment funds began 2006 with a balance of $209,149. Throughout the year, $107,593 in investments was sold and $56,127 was purchased leaving an ending balance of $157,683 in investment funds at the end of 2006. The City began 2006 with $276,696 in indebtedness, both bonded and other long-term. During the year, $45,000 in certificates of indebtedness was issued (for the purchase of a new fire truck) and $15,674 in principal was paid leaving the City with a outstanding indebtedness balance of $306,022 at the end of 2006. Zierke noted that the City's General Fund is the most important and reviewed activity in it. Many items were over budget for 2006 and Zierke noted that, while excess revenues had been received to compensate, the City should review their budget process a little more closely to try to eliminate the excessive overages. He concluded that there is not an excessive amount of extra funds available for emergencies or unexpected situations. The Liquor Fund was closed out in 2006. The remaining dollars from the sale of the building were transferred to the General Fund to help cover shortfalls from previous years.

Zierke moved on to the enterprise funds and explained that the reports on them included balance sheets due to the fact that the State Auditor requires enterprise funds to be presented on the accrual basis of accounting. It was notable that water and sewer revenues were both down in 2006 compared to 2005. Zierke concluded that usage must have decreased. While revenue decreased in the Water and Sewer Funds, costs increased which resulted in less operating income in 2006 than in 2005. Zierke noted that there is not a lot of cash built up in either fund to cover emergencies or unexpected situations.

Zierke's final item was a review of a reportable condition in internal control. He stated that, as has been reported in prior years, the size of the City's accounting and administrative staff does not allow for preferred internal controls. This will always be the case as long as the City has only one employee in this capacity. Zierke noted that the City Council is required to provide more oversight due to this situation. Salmi asked if it would be wise to go through the finances each quarter. Zierke noted that the City Council is provided a detailed budget report monthly by the City Clerk and it should be used to monitor the finances of the City.

UNFINISHED BUSINESS:

Engineering Updates: Kennedy was present with a number of updates for the Council. Her first item was the Itasca County Five-Year Highway Plan which was already covered.

Kennedy reported that the City had received the $636,800 housing rehabilitation grant from the Minnesota Department of Employment and Economic Development that was applied for jointly with the cities of Cohasset, Coleraine, Marble and Lawrence Township. This grant will provide funds for housing rehabilitation. Kennedy explained that there will be enough funds for four or five projects in each community with an approximate value of $25,000 per project. Based on federal guidelines and household income, properties will be eligible for grants to assist with correcting health, safety and/or structural issues in housing. Grants will not be awarded for additions, decks, etc. Kootasca Community Action is the agency sponsoring this process and they will be in contact with the City to provide education and outreach information. It is expected that all of the monies will be spent and that the five entities will be able to apply again for additional funds.

Kennedy has been asked to attend a meeting with Tom Glomsky and Greg Tweed at Bergquist regarding the Significant Industrial User (SIU) agreement that needs to be put in place between Bergquist and the City. Kennedy reviewed that the Minnesota Pollution Control Agency (MPCA) issued a Notice of Violation (NOV) to the City last summer and that this agreement was one of the requirements of that NOV. The agreement will spell out the type and amount of discharge that is allowable from Bergquist. Now that the source of the high phosphorus levels has been found and corrected, the City can draft an agreement that is acceptable to both parties. Salmi asked who would be paying for the work necessary to get the agreement in place and Kennedy responded that it is the City's responsibility. She explained that the SIU agreement has nothing to do with the mound rehabilitation project and so will not be reimbursable through the grants obtained for that. Such an agreement is necessary for any industrial facility discharging 5% or more of the loading and it is meant to protect the City and hold the facility accountable. Rajala asked why an agreement is not already in place. Kennedy answered that there should have been one executed at the time of the original mound project, however it was not done and the MPCA had not commented on it until now. Salmi felt that Bergquist should be asked to cover the cost of the necessary work. Rajala questioned what would happen if Bergquist were unable to meet the City's requirements and Kennedy answered that it would be handled like any other City ordinance violation. Kennedy requested permission to attend a meeting with representatives from Bergquist and Almhjeld to finalize the agreement. Motion by Rajala to authorize the meeting and to have Storlie invoice Bergquist for the costs associated with it, seconded by Salmi, MCU.

Kennedy commented on water and sewer rates which Rajala had asked be added to the agenda. It was Rajala's understanding that the City's rates needed to be at a certain level in order to be eligible for grants. Kennedy stated that is true for Rural Development (RD) grants and loans and explained that there is not necessarily one set number that your rates need to be at. RD evaluates rates based on the City's indebtedness as well as the costs of the project proposed. Rajala clarified that RD needs a specific project proposed before they can tell the City what the water and sewer rates need to be in order to be eligible for their financing programs and Kennedy verified that was correct. Rajala stated that, based on that information, the first thing to do was to determine what our project is and how much it will cost. He referred to a letter the City had received from the Minnesota Department of Health (MDH) stating that no work could be done on well #4 until plans and specifications signed by an engineer were submitted, reviewed and approved by their office. Rajala stated that his intention was to do the work first to see if the well was even usable before getting the engineer involved. Tendrup asked what the first step is in this process. Kennedy responded that testing needs to be completed to prove to MDH that the well can meet their requirements. She added that the necessary tests were listed on the City's Project Planning List to be completed in 2007 and that the estimated cost was $25,000. If the Council wanted to move forward with this testing, they would need to request Kennedy to prepare a proposal for the project. Rajala stated that it may be better to drill a new well rather than spend time and money trying to use this one. Tendrup asked if that would be investigated as part of the project should Kennedy be authorized to do it and Kennedy responded that it would be. Tendrup asked if the Council would like Kennedy to prepare a proposal for them on the work necessary for well #4. A motion was made by Salmi and seconded by Lexvold to direct Kennedy to prepare a proposal for the May Council meeting, MCU.

Rajala stated that there are still problems with freezing in the lift station located on CSAH 77 near the Rice River bridge. He questioned how this was possible when a street/water/sewer project was done there just two years ago. Kennedy stated that she had just recently been made aware that the lift station was still freezing. She explained that when the project was done in that area in 2005, the Public Works Superintendent at the time felt that the cause of the freezing was two ninety degree angles in the pipe and so it was redone with forty-five degree angles. Obviously this has not alleviated the problem. Rajala stated that the problem is because when the road was re-done, it was lowered two feet and now the pipes are closer to the surface and more subject to freezing. Kennedy asked if Rajala had seen the plans for the project as the road was not lowered two feet. Almhjeld noted that the issue could be resolved by making the lift station pump run more often. Only two houses are connected in that area but hoses could be hooked up to cause the pump to run more often and prevent freeze-ups. Rajala asked why the design was gravity for part of the way and pressure line for the rest. Kennedy responded that the project was a reconstruction of what was currently there. She stated that it could have been a forcemain all the way, however that would have been significantly more expensive and the thought was that the two ninety degree angles were causing the freezing problems so there was no reason to do more. Salmi suggested insulating it and Kennedy responded that it was insulated. Almhjeld reiterated that he could alleviate the problem by rigging the pump to run more often.

Airport Mound System: Salmi stated that he had talked to Bob Schwartz of Schwartz Excavating who stated that if the airport mound system were redesigned to be longer, it may freeze and he suggested the possibility of having two small systems that were covered with blankets in case there was no snow to insulate. Salmi reported that Schwartz also stated that if he were the winning bidder of the project, he would warranty the system for ten years. Salmi stated that the project should be done in the middle of summer and that Kennedy should be there to count the loads of gravel and crushed rock and make sure they are washed. Salmi reported that Schwartz would use one-piece piping and gravel pack it. Kennedy noted that any contractor awarded the project would be required to follow the plans and specifications for the system. Salmi stated that he and Schwartz would like to work with Kennedy on the plans and specifications for the system. Kennedy reported that the MPCA has not yet approved them. She asked if the Council would like to see a ten-year warranty required in the bid specifications, reminding them that the same specifications had to be proposed to everyone. Salmi felt that a ten-year warranty should be included in the specs. Tendrup noted that when it comes time to call for bids, the City can include that. Rajala asked if each one of these systems is designed independently or if there is a standard design for different amounts of capacity. Kennedy stated each is designed independently, adding that the MPCA is putting the design through much scrutiny before they will allow the same site to be reused.

Vacation of Rosy Street: Storlie reported that the City Council had received a petition requesting vacation of a portion of Rosy Street back in September of 2001. On September 18, 2001, the Council passed a resolution setting a public hearing on the vacation; however the hearing never took place. One of the original petitioners has now asked the City to complete the process of the vacation. Motion by Salmi to pass Resolution 2007-05, setting a public hearing on the vacation, seconded by Koppelmann, MCU.

NEW BUSINESS:

Planning & Zoning Commission Recommendation - Ordinance #134: The Planning & Zoning Commission presented Ordinance #134 for Council approval. The ordinance amends Title V of the City of Bigfork Code of Ordinances as it relates to water meters and repairs of private water and sewer lines. It requires those facilities calling for larger than standard, five-eighths (5/8) inch meters to pay the cost of the meter. It states that persons desiring to work on public water or sewer lines must be licensed by the City to do so. Any person desiring to work on their own private line is not required to be licensed; however they do need to get a permit from the City for any work done. Motion to pass Ordinance #134 by Rajala, seconded by Koppelmann, MCU.

Approval of Tax-Forfeited Land Classification: Notice was received from Itasca County that tax-forfeit parcel 85-430-0320 has been classified as non-conservation which means it can be sold. The City was asked to indicate approval or disapproval of this classification. Motion to approve by Rajala, seconded by Salmi, MCU.

Gambling Permit - Our Lady of the Snows: An application was received from Our Lady of the Snows Catholic Church requesting a gambling permit for a raffle to be held August 5, 2007. Motion to approve by Koppelmann, seconded by Lexvold, MCU.

Training Opportunities: The League of Minnesota Cities has two upcoming training opportunities, the LMC Annual Conference and LMCIT Loss Control Workshop. Motion by Lexvold, seconded by Rajala, to send Storlie to the Loss Control Workshop, MCU.

Public Works Equipment: Rajala noted that we have been hiring someone to come in and jet out our sewer lines when there are problems. The City owns a steamer that is not sufficient for clearing lines. Almhjeld stated that a four to five gallon per minute jetter would cost between $2,000 and $2,800. Motion to authorize Almhjeld to purchase the necessary equipment by Lexvold, seconded by Rajala, MCU.

Water and Sewer Rates: Rajala noted that we need to keep doing incremental increases so we get where we need to be. He mentioned that he had suggested to the Planning & Zoning Commission that a letter be sent to users of the water/sewer system asking them to use more environmentally favorable detergents and soaps. Almhjeld and Storlie are working on this letter.

The Council received a letter from Corky Hastings and, as he wasn't present, Rajala asked Tendrup to read it. The letter expressed disapproval of the quality of the brushing work done at the airport as well as the Council's decision to allow Dave Waters to assist with the City water system and then paying him for it. Tendrup stated that she has heard other comments about the appearance of the airport as well.

Tim Collins asked who in the City checks on private mound systems. Storlie stated that anyone putting in a new system is required to show proof of compliance to the City. Collins stated that the City is supposed to have someone who checks for compliant sewers and accused the mayor of having a non-compliant system.

Police Vehicle Use: Storlie relayed to the Council that Police Chief Jon Babcock had been using his personal vehicle to report to the school for his liaison officer duties and he had requested that the Council pass a motion authorizing him to continue using his personal vehicle. Babcock is not asking for mileage reimbursement or for the City to contribute to his insurance costs. He has talked with Storlie about the fact that the City's insurance does not cover his vehicle, even when he is using it in the capacity of a police officer, and this is not an issue for him. Motion to approve use of personal vehicles by police department members at their discretion by Lexvold, seconded by Koppelmann, MCU.

Salmi stated that Dave Waters had helped the Public Works Department locate a turn-on valve and Salmi felt that he should be reimbursed for his time. Motion by Salmi to pay Waters $24 for his time. Motion died for lack of a second.

OTHER BUSINESS:

Almhjeld noted that the City emergency siren would be activated on Thursday, April 12 at 1:45 p.m. for participation in the County-wide tornado drill.

Storlie provided a copy of an email from Mary Frances Skala of Fryberger, Buchanan, Smith & Frederick, P.A. stating that no fee would be charged to the City of Bigfork for work done on the $16,000 loan. This was the loan that was authorized to repay the Division Avenue assessments but was later cancelled due to a decision to use money from an investment fund to repay the assessments. The Council expressed thanks to Fryberger, Buchanan, Smith & Frederick.

Kacon volunteered to work with Salmi on reviewing the condition of roads in the City.

Mayor Tendrup adjourned the meeting at 7:52 p.m.

Angie Storlie

City Clerk/Treasurer