City of Bigfork

City Council Regular Meeting December 8, 2009 6:00 p.m. City Council Chambers

Members Present: Mayor Roger Logdahl, Linda Koppelmann, Amy Pifher, Mike Stevens, and Bob Zimmer

Members Absent: None

Also Present: Gene Collins, Chet Cook, Water and Sewer Commissioner Jim Manske, Carol Pifher, Julie Kennedy, City Engineer Mathew Pellinen, John VanNyhuis, Al LaTrace, Julie Aakhus, Dan Odegaard, Public Works Superintendent Chuck Almhjeld, Dianne Bakke, Mike Bakke, Leo Kern, Vance Koppelmann, Howard McKinney, City Attorney John Licke, Airport Commissioner Richard Salmi, Police Chief Jon Babcock, and City Clerk/Treasurer Mike McKinney

Public Hearing

Mayor Logdahl opened the public hearing at 6:00 p.m. and encouraged attendees to speak regarding the proposed 2010 water system project.

Julie Kennedy noted that a public hearing is required as part of the Rural Development funding process. City Clerk/Treasurer McKinney noted that the item was published in the Western Itasca Review on November 26, 2009 and was posted for viewing at City Hall beginning on November 25, 2009.

Kennedy noted that the improvement project would cost $1,100,000 and would involve four components, including supply, storage, and distribution, which would be combined into one project.

Logdahl asked if the development proposed by the hospital could be included in this project. Kennedy noted that any work done by the hospital would not be covered under the existing Rural Development funding scenario.

Howard McKinney asked if this project would include the creation of looped lines to eliminate dead-ends in water lines. Kennedy confirmed that the project would do this.

Kennedy noted that the alignment of water lines near the river might need to be changed due to wetland mitigation concerns.

Richard Salmi asked about project funding. Kennedy noted that Rural Development funding would likely be 35-40% grant and 60-65% low-interest loan but that Rural Development funding sources would cover 100% of the project cost. Kennedy noted that the debt service would be covered by the utility rates since the operating budget would remain low.

Richard Salmi asked what the interest rates would be for the RDA loan. Kennedy noted that the interest rate would be between 3-4%.

Richard Salmi asked if the City could use IRR grant funding to leverage some of the RDA funding. Kennedy noted that this was the case.

Howard McKinney asked if the map was up to date. Kennedy noted that it was about a year and a half old. McKinney noted that one loop did not appear on the map provided by SEH.

Howard McKinney asked if there were any plans to connect to an existing unused well in the City. Kennedy noted that connection to that well would require treatment and that SEH advises against using that well for the City’s water supply. She also noted that SEH advises against establishing a secondary water treatment plant.

Stevens asked how many people currently use City water. City Clerk/Treasurer McKinney noted that there currently are 155 connections to City water service. Stevens estimated that this project would cost approximately $5,000 per connection.

Kennedy noted that the objective of this project in 2007 was to set rates set in such a way that they would pay for the debt service on the loan for this project.

Richard Salmi asked if the rehab of the water treatment plant would include pressure filters. Kennedy confirmed that this would occur.

Howard McKinney asked what the current pressure of the water system was. Public Works Superintendent Almhjeld noted that the pressure was dependent upon the amount of water in the water tower.

Stevens asked how long the debt service would be. Kennedy stated that debt service was generally 40 years.

Logdahl asked Kennedy to summarize the upcoming steps of the project. Kennedy noted that the next step would be to complete an environmental review in the next few weeks. Kennedy noted that the objective would be to get a letter of obligation in January. Kennedy stated that work on the well could be done early in 2010 and work on the treatment plant could wrap up in 2010.

Logdahl asked if the City would incur interruptions in water service. Kennedy noted that the City could use temporary pumping equipment to combat this issue. Kennedy encouraged the City to discuss comprehensive planning before moving ahead with this project.

Zimmer asked if this project could include the proposed development by the hospital. Kennedy noted that it would not be included. City Engineer Pellinen noted that Rural Development is very strict regarding the projects that they will fund.

As no other individuals wished to speak, Mayor Logdahl closed the public hearing at 6:25 p.m.

Mayor Logdahl called the meeting to order at 6:25 p.m.

Public Forum:

Gene Collins expressed concern over the rate at which taxes would increase between 2009 and 2010 and encouraged the City Council to find items to cut from the budget. He noted that his taxes were increasing even though his property assessment had dropped for 2010.

Howard McKinney expressed concern over the rate at which taxes would increase between 2009 and 2010 and encouraged the City Council to find items to cut from the budget. He also noted that some properties’ taxes seemed to be increasing at a higher rate than others.

Richard Salmi asked that the City Council place a cap on local property taxes and expressed concerns over the ability of local businesses to withstand property tax increases. He also noted that the City Council had intended to implement a 0% tax levy increase.

Roger Logdahl noted that his property taxes were increasing over last year’s levy.

Carol Pifher noted that these tax increases had a higher impact on one-income households.

Mike Bakke noted that the property taxes on an empty lot he currently owns are going up more than he feels they should.

Mike Stevens noted that the City Council’s intent was to implement a 0% tax levy increase and that the only thing that prevented that from happening was an error in the 2009 tax levy. He noted that the Budget Committee did not intend to increase taxes at all.

As no other individuals wished to address the Council, Logdahl closed the public forum at 6:42 p.m.

Agenda

City Clerk/Treasurer McKinney noted that the Public Works Superintendent wished to add several items to the agenda regarding snow removal at the airport, the purchase of a new mixing chamber at the water treatment plant, and installation of Christmas lights along Main Street. McKinney also noted that Resolution 2009-12 Adopting Updated Water and Sewer Fees on the agenda should be renamed as Ordinance #158 Adopting Updated Water and Sewer Fees. He also noted that Resolution 2009-13 Transferring Gambling Fund Revenue into the General Fund on the agenda should be renamed as Resolution 2009-12 Transferring Gambling Fund Revenue into the General Fund. Logdahl also noted that the agenda should include a discussion of appointments to the Budget Committee and consideration of an alternative final tax levy.

Stevens motioned to approve the updated agenda as amended, seconded by Koppelmann, motion carried unanimously (MCU).

Consent Agenda

City Clerk/Treasurer McKinney noted that he included a Claim for Payment in the amount of $2,935.00 for Lano, Nelson, O’Toole, and Bengtson which included legal services rendered as a result of a correction made to the property description of one of the properties acquired at the airport. He stated that SEH was reviewing that invoice to determine which costs would be the responsibility of the City and which costs would be covered by SEH.

Zimmer motioned to approve the Consent Agenda as follows:

Item #1 approval of the minutes of the November 10, 2009 regular City Council meeting Item #2 approval of the City Clerk’s Office Report for November 2009 Item #3 approval of the Financial Report for November 2009 Item #4 approval of the Public Works Department Report for November 2009 Item #5 approval of the Claims Paid in the amount of $12,177.55 including the November 15th and 30th payrolls and approval of the Claims for Payment in the amount of $66,785.20, less the Claim for Payment in the amount of $2,935.00 for Lano, Nelson, O’Toole, and Bengtson.

Motion seconded by Stevens, MCU.

Commissioner’s Reports:

Airport Commissioner Dick Salmi provided his report. He noted that the light on the pilot building needs to be replaced. He also noted that brush removal at the north end of the airport has begun. He also noted that the runway remained closed. He thanked Bob Zimmer and Amy Pifher for their work on the upcoming airport dedication next June. Stevens asked when the airport was scheduled to open. City Engineer Pellinen noted that the intent was to open the airport at the end of this week.

Water and Sewer Commissioner James Manske provided his report. He noted that Public Works staff used CLR to clean out the mixing chamber in the water treatment plant. He noted that this needs to be done every day to maintain acceptable water pressure and recommended that the City purchase a new mixing chamber until the plant is upgraded in the future.

Police Commissioner Mike Bakke provided his report. He noted that there have not been a lot of major crimes in the city. He also stated that it was unfortunate that the Police Officer resigned. He also felt that it was unfortunate that there was such a level of tension within the Police Department and between the Police Department and the City Council. Logdahl read the letter of resignation submitted by the former Police Officer.

Streets Commissioner Gene Rajala did not provide a report.

Cemetery Commissioner Mike Stevens did not provide a report.

Parks and Recreation Commissioner Amy Pifher did not provide a report.

Logdahl asked the Police Chief if the matter regarding the incident at the liquor store has been resolved. The Police Chief noted that the matter has been resolved.

Engineering Updates

City Engineer Mathew Pellinen provided his report. Beyond his submitted report, he noted that final grading and turf work will take place at the airport in 2010. He noted that Tom Foster and Benita Crow would come to provide a project summary early in 2010. He stated that due to recent interest in economic development in Bigfork, the City should consider moving forward on some type of comprehensive plan to review their future infrastructure needs. He felt that a complete comprehensive plan would be the best alternative for the City. He added that this plan would be maintained and updated by the City Council and City staff. Stevens felt a comprehensive plan is important to development in the City but was concerned about the potential cost to the City. He felt that applying for a grant would be a step in the right direction. Logdahl noted that moving forward as quickly as possible was critical and that a full comprehensive plan would be the best alternative. Pellinen made a recommendation that SEH and the City Clerk be given permission to move forward on the grant application process.

Stevens motioned to instruct the City Clerk/Treasurer to begin the grant application process for the purposes of implementing a comprehensive plan, Pifher seconded, MCU.

Unfinished Business

Request for Bids – Airport Snow Removal

Public Works Superintendent Almhjeld noted that the rates charged by Itasca County would rise next year. He also noted that the City received a quote from R&K Construction for snow removal at the airport of $700 per event, which is $200 less per event than Itasca County’s rate. He noted that R&K also removes snow at the school and would be in town if the City needed services. Almhjeld also felt that R&K could do just as well at the airport as the County’s equipment. Almhjeld noted that the City’s equipment could handle snow removal during smaller snow events. Almhjeld also asked whether he and the City Clerk could pay for these costs with funding provided by the State for operation and maintenance at the airport. He felt that this would be valuable since the City could track the costs related to operation and maintenance at the airport.

Pifher motioned to contract with R&K Construction on an on-call, as-needed basis for snow removal at the airport, Zimmer seconded, MCU.

Nominations for ARDC Representative

Logdahl read a letter from the Arrowhead Regional Development Commission (ARDC) requesting nominations for Itasca County’s Cities Under 10,000 representative to the ARDC board. Zimmer asked if it was possible to nominate the City Clerk/Treasurer to this position.

No formal action was taken.

New Business

Resolution 2009-11 Adopting 2010 Final Budget and Levy

City Clerk/Treasurer McKinney presented two alternate versions of the 2010 final tax levy and budget to the Council. One version would adopt the preliminary budget and tax levy adopted by the City Council and certified to Itasca County in September. This version would provide for no changes to either the budget or the tax levy for 2010. The second version followed recent recommendations of the Personnel and Budget Committees. This version would cut both positions and all expenditures in the Police Department, while maintaining a portion of the Police Department budget for the purposes of contracting out police services if necessary. This version would reduce the levy to $113,545.84.

Stevens asked if the funding provided for the School Liaison Officer was included in the cost estimates. City Clerk/Treasurer McKinney noted that the numbers put together for the City Council did not reflect changes in funding for the Liaison position but rather only included the reductions in the expenditures for the Police Department budget. McKinney noted that adopting the budget proposed by the Budget Committee would create a deficit of $1,878. McKinney also noted that if the Police Chief position was eliminated that unemployment compensation would likely need to be paid out for that position. He noted that the unemployment compensation was not included in the expenditures the Council was considering.

Logdahl noted that the Budget Committee recommendations would allow for consideration of staffing alternatives for the Police Department. Stevens asked what the level of funding was that the City would lose if the School Liaison Officer position was cut. McKinney noted that the City would lose $9,210 in annual funding for this position.

City Attorney Licke noted that the Council has the authority to discontinue positions or to consolidate two positions into a new position. Licke noted that the Council has the right to organize a labor force. Licke stated that the City could determine if cutting the school liaison position or the department as a whole was a better alternative. He also noted that some communities do contract with a county sheriff for police services. Logdahl noted that the Personnel Committee had recommended looking at a part-time, developmental-style position to address police duties in the city.

Stevens asked if the City could eliminate the Police Department and hire someone for a similar position. Licke noted that the Council should decide if they intend to eliminate the department only to reestablish it or if they intend to contract out for police services. Logdahl believed that contracting out would be a better alternative and that the City would still have County coverage until the City could reevaluate its own situation. Pifher stated that contracting out to the County for law enforcement is a very expensive option.

Licke also noted that if the City has an issue with a particular employee that the City should address that issue through disciplinary proceedings. He also noted that if a new position was created that it must be substantially different from the positions it replaced. Licke also noted that other alternatives did exist for law enforcement, including neighborhood watches and joint powers agreements.

Koppelmann stated that the City should not eliminate the Police Department. Stevens noted that the City must determine what level of service its’ residents desire. Logdahl stated that much of the work done by the Police Chief was in his role as a liaison officer. Koppelmann asked if the Police Department was the only area to be evaluated for cuts. Stevens stated that the City should not eliminate services as a method of correcting a budget problem and that eliminating the Police Department is not in the City’s best interests. Stevens felt that the liaison officer was an asset to the community. Koppelmann noted that the County is responsible for patrolling a large area and would take a long time to respond to service calls. Stevens felt that the Council should receive more information before moving forward on a decision. Zimmer recommended that the City could opt to have a part-time Police Chief and ask the current Police Chief if he was willing to accept this arrangement.

Pifher noted that the City could cut other items from the budget besides personnel. Stevens noted that the only reason there was a tax increase this year was because of a budget mistake made last year. City Attorney Licke noted that the City could have attached last year’s $30,000 levy shortfall to this year’s levy, raising the tax levy even more for 2010. Stevens recommended that the City maintain its preliminary levy and find places to cut expenditures for next year. He also felt that the City should not use the levy to recover the 2009 shortfall and that the City cannot recover such a shortfall by dropping the levy further. Stevens also expressed concerns over the hit City taxpayers might suffer if it cut police services entirely and tried to reestablish a Police Department later on. Logdahl asked if it was fair to pass this burden on to the taxpayers. Stevens noted that these are not new taxes but represented where the City thought it was before the budget crisis.

Stevens motioned to approve the preliminary levy and budget established in September as the final levy and budget without any changes, Koppelmann seconded, motion carried 3-2 with Logdahl and Zimmer opposing.

John VanNyhuis informed the Council of his intent to resign from the Personnel Committee.

Stevens noted a conversation he had with Logdahl where the mayor had suggested that the Police Chief was saying things behind Stevens’ back. Stevens noted that the mayor suggested this because the real issue with cutting the budget was not based on reducing the budget but was based on removing the Police Chief from his position.

2009 General Fund Budget Amendments

No formal action was taken.

Personnel Committee Recommendations for Police Department

No formal action was taken.

Liquor License Renewal Applications

City Clerk/Treasurer McKinney informed the Council that the applications from the two applicants are complete except that the background check has not been completed for the owner of the Wilderness Bar and that both the Wilderness Bar and Kocian’s currently maintain insurance that does not cover the entire 2010 license year. He noted that the State may not grant a license to the Wilderness Bar if it only has insurance for 6 months but the owner expressed her intent to carry insurance for the entire year. Stevens asked if City ordinances provide for the invalidation of a liquor license if the insurance of an applicant lapses. City Attorney Licke noted that the City should include provisions in their approval of these liquor license applications stating that the applicants must maintain current and appropriate insurance for the entire 2010 license year and that the applicants contact the City no less than 30 days before any changes are made to their insurance policies related to this license. He noted that if either applicant failed to take these steps, their licenses would be invalidated. Zimmer noted that changes have been made to ownership of the Wilderness Bar, which might require a new license to be filed. Licke noted that since one owner remained, it technically would not be considered new ownership.

Stevens motioned to approve the liquor licenses for Kocian’s and the Wilderness Bar, contingent upon (1) the results of the background check for the owner of the Wilderness Bar, (2) that both applicants maintain current and appropriate insurance for the entire 2010 license year, and (3) that both applicants contact the City no less than 30 days before any changes to the insurance policies related to these licenses are made, Pifher seconded, MCU.

Certification of Sewer and Water Late Fees

Stevens asked whether the remaining balance on each delinquent account was based on a certain dollar amount. City Clerk/Treasurer McKinney noted that the amounts remaining on each account were the charges that were less than 60 days past due and delinquent.

Stevens motioned to approve certification of the listed water and sewer late fees to Itasca County for addition to the corresponding customers’ property tax bills, Koppelmann seconded, MCU.

Ordinance #158 Adopting Updated Water and Sewer Fees

City Clerk/Treasurer McKinney noted that the updated water and sewer fees came from estimates from SEH regarding what the City should charge to recover expenses related to the water and sewer system, while the updated streetlight fees came from City budgetary estimates of how much the streetlight system would cost to operate. He noted that the proposed increased in streetlight fees would be approximately 25% over last year’s amount. Logdahl noted that the increase in sewer and water fees would be less than 5% over those of last year.

Zimmer motioned to approve Ordinance #158 for adoption of updated water and sewer fees, Stevens seconded, MCU.

Appointment of Airport Manager

City Clerk/Treasurer McKinney noted that the current airport manager did not intend to retain his position into 2010. Stevens noted that it would be a good idea to share this position between different individuals. Logdahl offered to contact Gene Ward regarding the open airport manager position.

No formal action was taken.

Appointment of Police Officer

Logdahl noted that this issue would be put on hold while the City looks at its budget and makes recommendations as to what areas in the budget will be reduced.

No formal action was taken.

City Attorney Contract

Pifher noted that the City received quotes last year from several different attorneys for this position. City Attorney Licke noted that the two best alternatives for this contract would be either John Dimich or to contact the County regarding prosecution services. City Clerk/Treasurer McKinney noted that Dimich’s quote is currently $120 per hour. Stevens noted that there was no reason to change the current arrangement. Pifher felt that the current rate for this service was very reasonable.

Pifher motioned to approve the contract between the City and John Dimich for legal services related to prosecution for 2010, seconded by Zimmer, MCU.

Resolution 2009-13 Transferring Gambling Fund Revenue into the General Fund

City Attorney Licke noted that these funds must be spent on a lawful purpose and suggested that the City should contact the State Auditor’s Office regarding whether the Auditor would require the City to maintain this fund balance in a separate fund. City Attorney Licke noted that there was no harm would come with waiting to act on this issue until the Clerk could contact the State Auditor’s Office.

No formal action was taken.

League of Minnesota Cities Insurance Trust Liability Coverage Waiver Form

Stevens asked why the City would want to waive the statutory limits on insurance claims. City Attorney Licke stated that waiving the statutory limits would provide more leeway for the insurance company or the League of Minnesota Cities to negotiate a claim made against the City without taking an issue to court. Licke noted that the City would be insured above and beyond the statutory limits.

Stevens motioned to direct the City Clerk/Treasurer to follow the recommendation of the City’s insurance agent regarding the liability coverage waiver form, Zimmer seconded, MCU.

Other Business

2010 City Council, Personnel Committee, and Planning & Zoning Commission Calendars

No formal action was taken.

Adding New Member to Budget Committee

Public Works Superintendent Almhjeld noted that the Council should consider adding the Public Works Superintendent and the Police Chief to the Budget Committee.

No formal action was taken.

Purchase of Mixing Chamber for Water Treatment Plant

Zimmer asked if it was possible to continue using the current mixing chamber until the water treatment plant upgrades planned for next year took place. Public Works Superintendent Almhjeld noted that the current chamber would require daily maintenance in order to keep it working, which might reduce the water supply in the City’s water tower. Leo Kern noted that the Hospital purchased a booster pump in order to maintain a minimum 45-48 psi that their equipment required to operate. Stevens asked how much a new mixing chamber would cost. Public Works Superintendent Almhjeld noted that the cost was $7,700. Stevens asked if the budget could be adjusted to accommodate this purchase. Almhjeld noted that this purchase would come from the 2010 budget.

Pifher motioned to allow the Public Works Superintendent to purchase a new mixing chamber for the water treatment plant, seconded by Zimmer, motion carried 4-1 with Logdahl opposing.

Installation of Christmas Lights along Main Street

Public Works Superintendent Almhjeld noted that Minnesota Power would not hang Christmas lights along Main Street this year.

Pifher motioned to adjourn, seconded by Zimmer, MCU. The meeting was adjourned at 9:25 p.m. The next City Council meeting is scheduled for Tuesday, January 12, 2010 at 6:00 p.m.

Michael J. McKinney City Clerk/Treasurer