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

City of Bigfork

Regular Meeting January 10, 2006

Members Present: Mayor Amy Tendrup, Jean Lexvold, Amy Pifher, Lonnie Kacon and Dick Salmi

Absent: none

Also Present: City Engineer Julie Kennedy, Public Works Superintendent Mark & Connie Maki, Ann McGarry, Marilyn Salmi, Warren & Caroline Welch, Police Chief Jon Babcock, Jim Manske, Robin Custer, Gene Rajala, Dave Waters, Robert Johnson, Nathan & Virginia Hale, Howard McKinney, Julie Aakhus, and Dan Infanti

Mayor Tendrup called the meeting to order at 7:00 p.m. and announced the results of the closed meeting held on December 13, 2005. At the meeting, a motion was made, seconded and carried with a four to one vote to impose a 15 day suspension on Dave Waters for disciplinary reasons.

Response to Bigfork Concerned Citizens Committee for Tax Relief: Tendrup read a notice that was posted around the city by this committee. Tendrup noted that many of the statements made in the notice were not accurate based on what actually happened at the December 13th meeting. Tendrup clarified that the Council did raise the property tax levy nine percent in order to balance the budget. She stated that the budget committee started meeting in August at public meetings, giving ample opportunity for citizens to be involved in the budget process and to offer input. She reviewed a list of the items that were cut from the 2006 budget in order to help balance it. These items include cuts to maintenance, police, clerk, wages, engineering and legal service budgets. Tendrup noted revenue items that were added to help balance the budget. These items include pledging the liquor store lease and city house sale funds to the general fund, as well as raising water and sewer rates three percent. Tendrup stated that the statements made in the notice that the Council does not care about fiscal responsibility are completely untrue and that the public is welcome to assist with the budget process during the months of August through December.

Salmi was concerned about the plans to purchase public works equipment. Tendrup stated that Public Works Superintendent Mark Maki will explain the plans for funding of this equipment.

Salmi was also concerned about the costs of the mound system at the airport. City Engineer Julie Kennedy explained that numbers that she had discussed previously were estimates of what it could possibly cost to fix the system. She noted that any work on the system would be funded completely by the US Army Corps of Engineers and The Bergquist Company just as the original project was. Salmi has talked with Bob Schwartz who is willing to come in and review the system, fix it and will guarantee the work. Kennedy stated that would be a decision the Army Corps would need to make. Kennedy noted that the goal is to get the system back to a subsurface drainage so that we eliminate the need to chlorinate and test the system. With the two meters that have been installed, Kennedy and Maki are narrowing down what the issues are with the system. Later this spring we will know what action needs to be taken to fix it. Kennedy reiterated that the project should at no time be a cost to the City. Salmi was concerned about possible pollution of Connors Lake and lawsuits against the City if that were to happen. Kennedy noted that is why we are working on this issue, to fix the system so that it properly functions as a mound system. Once this is accomplished, there will be no need to test the system any longer and it won’t be tied to our City wastewater system permit. Salmi stated that Schwartz would be willing to fix the system and guarantee it. Tendrup stated that any project that the City decides to go ahead with would have to be publicly bid and Schwartz would have the opportunity to bid on the project just like any other contractor would at that time. Kacon felt that Salmi was overly concerned about the cost of the issues until such time as the full picture is known. He stated that we do not yet know the best way to fix the system so there is no way to know the costs involved. Furthermore, the US Army Corps and The Bergquist Company will again be funding this and the City will have no costs associated with it. Kennedy reviewed that the only thing the Council has authorized her to do is to collect data and conduct an investigation on what was designed and installed and then make a report on what is the best route to fix the system. Salmi felt that the contractor that installed the system should be held liable. Kennedy stated that we are unsure of whether or not it is a construction-related issue.

Tendrup returned to the original agenda item of the notice from the committee and asked if anyone had any additional comments. Kacon stated that he had an issue he would like to address. He stated that at the end of the December meeting, bids had been reviewed on the Cedar Street properties. Kacon stated that the bid received was for $36,000 for the two lots. Kacon contacted the Itasca County Assessor’s Office and learned that the value on the western parcel is $27,200, and the value on the eastern parcel is $31,800. This would generate about $720 in total property taxes. About 40-47 percent of this comes to the City of Bigfork which calculates out to $338 per year. Kacon noted that the principal payments on the bond for the Cedar Street water/sewer project are $8,000 and the interest is $6,991 in 2006. Kacon stated that a property tax income of $338 per year is obviously insufficient to cover the almost $14,000 debt service obligations. Kacon felt that Salmi’s argument from last meeting to sell the property for lower than appraised amount in order to get it on the tax roll was not reasonable due to our bond obligations. Gene Rajala asked if the project was a wise investment to make based on these facts. Kacon stated that was a good question and explained that the project came about because of a property owner’s plans to install a service line. It is not desirable to allow installation of lines that are not up to City standards, so the City stepped in and took over the project in order to ensure it was completed to City standards. Kacon’s hope was that the property would be purchased and homes built on it. At the time of the project, the housing shortage was high on the Council’s list of concerns and it was desirable to make buildable lots available. Tendrup also noted that the project benefited other properties besides the City’s. Kennedy also noted that the project reduced the City’s liability as far as service line set-ups. There is now individual accountability for all properties on the line. Salmi stated that on top of the $55,000 that we need to generate from the sale of the lots, the purchaser of the lots has to assume the assessments on the property. Tendrup felt that it was in the best interest of the City to get what the property is valued at. Salmi stated if we were to sell the lots for $25,000 each we would only take a $5,000 loss and we could pick up the difference in property taxes. Kacon stated that at $338 a year in property tax revenue, we would not be able to make it up quickly enough to pay the bond off and the taxpayers would end up having to pay the difference through increased taxes. McKinney asked if there was a covenant on the properties that the purchaser had to build a home. Tendrup explained that there had been that stipulation, however when the lots didn’t sell after a year, it was removed. Kacon returned to Rajala’s question about the validity of completing the project. He stated that one of the landowners was not in favor of the assessment that came with the project because he has bare land with no immediate plans to build, yet there are people in the City who want water and sewer. However, the City can’t pick and choose one property here and one property there to supply water and sewer to. If the project goes by your property, you are required to connect. Tendrup stated that the economy has certainly slowed since the project, though the need for property and housing in the City of Bigfork still exists. Tendrup feels it was a good decision to supply water and sewer to the lots. If they continue to not sell, we may be forced to consider selling for less than market value. As with the sale of the city house, it is the Council’s responsibility to try to sell for the best possible price.

Salmi asked if there is anyway we can cut the nine percent increase because Rajala Mill pays property taxes and water and sewer charges and if they go under, it will be bad for the City. Tendrup asked if Salmi had reviewed the list of things that had already been cut from the budget in order to balance it. She felt that every reasonable attempt had been made to keep the increase at a minimum. Salmi stated that it is very important to keep Rajala Mill going. Tendrup stated that every one had to do their fair share and the nine percent is spread amongst all the taxpayers. Furthermore, the levy was due to the Itasca County Auditor in December and it is too late to change it. Salmi stated if we don’t have a tax increase next year, it would work out to an average of 4.5% each year. He stated that Jack Rajala told him that if we can be more fruitful with how we spend our money, we won’t need a tax increase next year and he can survive. Tendrup asked where the money needed for the budget would come from if not from taxes, reiterating that the money from the sale of the city house and the lease of the liquor store won’t be available next budget year. Salmi stated that his property taxes had gone up about $150 over the last three years. Pifher noted that the City did not increase the tax levy last year and any increase in a person’s taxes would have come from individual property values and the City’s tax base as a whole. Tendrup was concerned about the affect that notices such as the one posted have on our City’s forward movement. Kacon noted that he saw people at the meeting who had never tried to talk to him outside of a Council meeting and ask questions. He felt that we need to be a little friendlier and more respectful of each other and educate everyone on what we are trying to do, the obstacles we are facing, and what the reasons behind our actions are. Kacon stated that though there are some partial truths in the notice, the general public does not understand how government works and the Council does not have time to conduct Government 101 class during council meetings. He felt that it would be nice if any of the folks would stop by and talk one on one to help understand the different goals and points of view.

Tendrup had one final comment that she was not in favor of another 9% tax increase in 2007 as stated in the notice. What was actually said was that we are already on borrowed time by getting $25,000 from the sale of the house and $12,000 from the liquor store lease. That money will not be available in 2007 and the funds will need to come from somewhere else. Salmi asked what Tendrup thought of passing a motion to not raise taxes next year. Due to the reasons just stated, Tendrup did not feel that in good conscience she could promise that taxes would not increase next year. Tendrup noted that the budget committee would start work again in August on the 2007 budget and the public was more than welcome to offer input. Salmi stated that the hospital made the first shot to help us and they will do that in the future but they are watching closely how we spend our money. Tendrup stated that the hospital needs us just like we need them. If we don’t have a functioning sewer pond, they will have problems. Tendrup feels that the Council and budget committee have been giving 110% to budget issues and will continue to do so.

Consent Agenda Motion by Lexvold, seconded by Kacon to approve the consent agenda as follows:

#1- approval of the minutes of the December 13th regular City Council meeting

#2- approval of the Police Report for December 2005

#3- approval of the City Clerk’s Office Report for December 2005

#4- approval of the Budget Report for December 2005

#5- approval of the 2006 Summary Budget Statement for publishing

#6- approval of the hiring of Clinton Sova as a volunteer police officer beginning January 1, 2006

#7- approval of the claims for payment in the amount of $88,739.28 including the December 15th, 31st, Vacation and Annual payrolls

MCU. (copies of documentation relating to any consent agenda item are available at the City Clerk’s office)

Public Works Department Report: Maki reported that he has been working on grant applications for public works equipment and recreational projects. Work has been done on the City Hall furnace and the chemical feed pumps at the water treatment plant. Maki met with Mike from Minnesota Rural Water on water system issues. A snow pile barricade was plowed up at the City beach. Locates were completed for the WilderNest housing project. Dumping of snow at the WilderNest site will not be possible in the future. The Lutheran Church has been approached about the possibility of dumping snow on their property on the north end of the City. Monthly meter readings were completed. Maki moved the Public Works office from the garage to the lower level of the hall. Samples were taken to Grand Rapids. Maki assisted with water main flushing for Legacy Development. Kacon, Kennedy and Maki met with representatives from Bergquist on the airport mound system. A water meter was installed at the airport bathroom. Maki met with the snowmobile club about the trails through town. This ties in with the DNR grant we will be applying for. The club is willing to supply labor if the grant is accepted. The garage was cleaned out to make room for the State’s snow blower. Three bids were received for public works equipment. Bergquist pilots will be landing in Grand Rapids until the ice is gone from our runway. Oil was changed in the white public works truck. Maki completed the yearly DNR water inventory.

Work will continue on the water treatment plant. The Public Works department is one man short and Maki requested permission to call in some casual laborers to assist with public works tasks. The Council granted permission to advertise for casual laborers in a motion by Pifher, seconded by Kacon and carried with Salmi abstaining for the reason that he wanted to discuss it further with Maki. Kacon asked if Maki had applied for grant funding for the public works equipment. Maki has done so and Tendrup added that some of the funds for it will come from the water and sewer and airport funds when the equipment is used in those areas. Maki reported that Aitkin Implement came in with the lowest bid. He likes the machine and they have a good service contract. Salmi was concerned that this was not the right piece of equipment for the City. He felt that a tractor such as Itasca County has would be better. Maki felt that a machine that big would limit us. The equipment that he has quoted could be used to do more of our own digging, snow removal, brushing, and work on water and sewer lines. Rajala felt that the backhoe on a piece of equipment this size was not big enough for the City’s needs. Tendrup stated that the budget committee crunched the numbers and discovered it was cheaper to purchase equipment than to contract with other entities for snow removal. Salmi and Rajala did not believe this. Kacon suggested that the item be tabled and the Council members do some homework on costs of contracting versus purchasing and using our own equipment. A motion was made by Salmi, seconded by Kacon to table the item for one month so that more figures could be obtained on costs, MCU.

OLD BUSINESS:

Approval of 2006 meeting schedules: This item was removed from last month’s consent agenda and never revisited. Tendrup would like to start the Council meetings at 6pm rather than 7pm. Those in attendance were in favor. Motion to approve the meeting schedule with a 6pm start time by Kacon, seconded by Lexvold, MCU.

Julie Kennedy: Kennedy noted that in December a proposed project planning schedule was presented. A few street rehabilitations have been added and a revised copy of the planning schedule was provided. Salmi asked about the date of 2010 on the refurbishment or new drilling of well #1. Kennedy stated that the item could certainly be moved up on the priority list. She explained that well #1 would be tested at the same time as well #4. There is money left in our agreement with the Army Corps for the well #4 pump house, however that money could possibly be used for the mound system fixes. Salmi asked what would happen if we lost our #1 well and where the money would come from to fix it. Tendrup noted that these are the kinds of items that should have been planned for progressively in the past. The money is not there to fix everything at once and that is why we are prioritizing at this point. Maki noted that if well #1 goes down, well #3 does have the capacity to keep up until such time as funding is obtained to fix #1. Kacon explained that several years ago, when the Council first looked at the Army Corps of Engineers, they were led to believe that they could simply tie into well #4 and use it on an emergency basis. The well was pumped and it was found there was radon gas. The City would not be allowed to use this well without treating with the water. The money that is still available from the Corps is not enough to construct a pump house and/or water treatment plant for the well. Salmi asked about another well location. Kennedy sated that she is not one hundred percent convinced that the well #4 site is the best site for another municipal well. She explained that the Corps will only supply funds for the pump house and that is it. Kennedy feels it would be a mistake to put a pump house there just because there are funds for it. This may not be the best long term decision. Kennedy felt that more research was in order to find out if the well is sufficient to run the City, otherwise a new site should be researched. Rajala asked if there was any reason why we can’t use Rice River water instead of having a well. Kennedy answered that the DNR would need to be contacted to see what their stipulations are when it comes to using surface water. Maki stated that the treatment costs for surface water as compared to well water are about triple. Rajala asked if radon gas dissipates after at time. Maki stated that it is naturally occurring in the ground and usually does not dissipate. Salmi asked if it would be worth testing the well again and Maki and Kennedy answered that is what they are looking at doing.

Motion to accept the 5-year project planning schedule by Pifher with revision of moving well #1 testing up to the same time as well #4, seconded by Kacon, MCU.

Kennedy recapped that the City’s airport capital improvement plan was completed by SEH for the City and could be viewed online.

Kennedy’s final item was that she and Maki would be working on our NPDES permit renewal for the MPCA.

Tendrup moved Resolution 2006-01: Appointments to this point in the agenda. Tendrup noted that there is an opening for a resident of the City to serve on the Budget Committee and an opening for a business owner to take a seat on the Personnel Committee. Motion to approve Resolution 2006-01 as presented, with the two vacancies noted, by Kacon, seconded by Lexvold, MCU. A copy of the resolution is attached to the minutes as Appendix A.

Dave Waters: Waters addressed the Council asking if he could attend school in order to keep up his water and wastewater licenses. He stated that the City needs two licensed personnel in order to maintain 24-hour coverage of our systems. Waters stated that if the City is going to hire somebody with a license already, they won’t come here for what the pay is and the only other option is to train them. Waters stated that he is thinking of the City and he needs to renew his license by 2007. Tendrup asked if Waters had a schedule of the training. He did not have one. Maki noted that there is a three day school in March of each year and since Waters’ license is not up until 2007, that is when he would attend. The budget committee did not include any training money for 2006 since Waters will not need the classes until 2007

Motion by Salmi to allow Waters to attend school. Tendrup wanted to know what the cost would be. Waters stated that some of the classes are free other than travel and meals. Tendrup felt the issue should be turned over to the Personnel Committee for review. Lexvold stated that the City had always allowed Waters to leave for training in the past. Kacon reviewed that both licenses expire in 2007. Waters noted that last time he renewed his licenses, he ran out of time to take the classes and had to borrow time from his water classes to renew his wastewater certificate. Motion by Salmi to allow Waters to leave work to attend the training, even if he has to pay for the classes himself, seconded by Lexvold, MCU.

NEW BUSINESS:

Chet Cook – City Real Estate Taxes: Cook had asked to be on the agenda but was not in attendance.

Request for City Volunteers: Tendrup stated that any person interested in volunteering to help out with City tasks should contact the Clerk’s office. Due to our budget constraints, any help would be greatly appreciated.

Liquor License Application – Kocian’s Family Market: This is a renewal application for 3.2 percent off sale and everything is in order. Motion by Pifher, seconded by Kacon to approve, MCU.

Right of First Refusal: Howard McKinney, purchaser of the city house, would like right of first refusal on the city property directly adjacent to the house property. Motion by Lexvold to grant this, seconded by Pifher, MCU.

Review of LMCIT Recommendations: A League of Minnesota Cities Insurance Trust Loss Control Consultant had visited with City staff on future plans for the city beach. A letter outlining the League’s recommendations had been received. Motion by Lexvold, seconded by Kacon to follow all recommendations given, MCU.

Review of Airport Hangar Lease and charges: The lease agreement for the airport hangar has expired and needs to be looked at for possible updates. Storlie checked with other municipal airports to see what they charge for hangar leases and there was no apparent average charge. It was suggested that Storlie check with Cook and Tower airports to see what they charge and how the hangars compare to ours, as well as what the term of their lease agreements is. The item was tabled until the next meeting in a motion by Lexvold, seconded by Salmi, MCU.

Review of Big Fork River Plan: The Big Fork River Board has supplied the Council with copies of a revised plan. Tendrup noted that the Board was looking for Council approval of the revised plan. Motion to approve by Lexvold, seconded by Pifher, MCU.

Kiosk Property: The Council received a letter from the State of Minnesota informing us that one of the parcels requested is tax forfeit and the State is unable to convey it to the City. The State would be able to grant a limited use permit if the City had plans to use the area for trails, picnic tables, or other similar activities. It was determined that there were no plans for the property at this time and the other two parcels would be sufficient. Motion to request parcels 30 and 30A from the State of Minnesota by Pifher, seconded by Lexvold, MCU.

OTHER BUSINESS:

Storlie noted that it is time to renew our city insurance policy and the coverage limits. Salmi felt that we should carry more than $1,000,000 for the airport as anything that might happen there would be very expensive. Storlie will check with Cook and Tower on insurance limits they carry for their airports. In the meantime, the insurance policy must be renewed and a decision made on whether or not to waive or accept the statutory tort limits. Motion by Pifher, seconded by Kacon to accept the statutory tort limits, MCU.

Storlie reported that an application for a private wastewater system permit had been received. The system has been inspected and can be approved by the City at this time. Motion by Pifher, second by Kacon to approve the private wastewater system permit, MCU.

Storlie noted that the VFW had supplied copies of their remodeling plans for the City Hall kitchen. These are not the final plans and have been supplied to the Council for informational purposes only. The VFW has requested that the City draw up a lease agreement for their lease of the old library space at City Hall. Motion by Salmi seconded by Lexvold to have City Attorney Andy Shaw draw up the lease, MCU.

Kacon supplied Tendrup with information on weed classes provided by Itasca County.

Mayor Tendrup adjourned the meeting at 9:16 p.m.

Angie Storlie

City Clerk

These minutes are available on the City website at www.cityofbigfork.com.

To sign up to receive the minutes by email, send your email address to ctyclerk@bigfork.net.

Appendix A

RESOLUTION 2006-01

RESOLUTION APPROVING OFFICIAL APPOINTMENTS FOR 2006

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BIGFORK, MN that the following appointments for 2006 are hereby approved:

Official Publication Western Itasca Review

Official Depository First State Bank of Bigfork

Acting Mayor Amy Pifher

City Attorney Andrew M. Shaw

City Personnel Attorney W. John Licke

City Engineer Short-Elliott-Hendrickson

City Airport Engineer Short-Elliott-Hendrickson

Representatives to Engineering Firm Amy Tendrup

Angie Storlie

Mark Maki

Public Works Superintendent Mark Maki

City Clerk/Treasurer Angie Storlie

Police Chief Jon Babcock

Airport Manager Loren Hovila

Zoning Administrator Angie Storlie

Cemetery Sexton Jerry Pula

Cemetery Commissioner Richard Salmi

Water/Sewer/Street Commissioner Lonnie Kacon

Parks & Recreation Commissioner Jean Lexvold

Police Commissioner Lonnie Kacon

Emergency Management Organization Amy Tendrup

Ron Root

Jon Babcock

Board of Health Amy Pifher

Budget Committee Amy Tendrup

Amy Pifher

“open” 1 Bigfork resident

Jon Babcock

Mark Maki

Angie Storlie

Planning & Zoning Commission Lonnie Kacon

Amy Tendrup

Gus David

Ann McGarry

Renee Willett

Personnel Committee Amy Tendrup

Dave Schminkey

Jean Lexvold

“open” 1 Bigfork business owner

Safety Committee Amy Tendrup

Mark Maki

Appendix A cont.

Jon Babcock

Greg Bertram

Assistant Weed Inspector Jean Lexvold

Joint Powers Board Amy Tendrup

Alternate – Joint Powers Board Angie Storlie

Bigfork River Board Amy Tendrup

Hwy 38 Leadership Board Lonnie Kacon

Bigfork Wilderness Celebration Gwen Olson

Committee Gail Johnson

Angie Storlie

Nan Fisher

Kim Mann

Amy Pifher

Fire Chief Ron Root

1st Assistant Mark Maki

2nd Assistant Mike Larson

Secretary Scott Baker

Treasurer Vance Koppelmann

Maintenance Officer Curt Snyder

Communications Officer Stan Marthaler

Financial Officer Jef Fisher

Safety Officer Ken Porter

Training Officer Tyrone Hubbard

Passed this 10th day of January, 2006