DRAFT – These minutes are not official until approved at the next regular City Council meeting.
City of Bigfork
Regular Meeting July 12, 2005
Members Present: Mayor Amy Tendrup, Jean Lexvold, Bob Zimmer, Amy Pifher and Richard Salmi
Absent: None
Also Present: Julie Kennedy, Dick Grabko, Gus David, Marvin Richards, Robin Custer, Nathan Hale, Gene Rajala, Connie Maki, Blessing Rahier, Andrea Erdmann, Chris Miller, Dave Zins, Aaron Lusky
Virginia Hale, Gene Madsen, Mike Kocian, Bill Loosbrock, Gene Madsen, Julie MacAdams, Jef Fisher and Mike Larson
Mayor Tendrup called the regular meeting to order at 7:00 p.m. and announced the results of the June 14, 2005 closed meeting. At the meeting, a performance evaluation of Public Works/Maintenance Worker Dave Waters was conducted. Waters received 31 out of 45 points on his review.
Consent Agenda Motion by Zimmer, seconded by Lexvold to approve the consent agenda as follows:
#1- approval of the minutes of the June 14th regular and June 27th special meetings
#2- approval of the minutes of the May 23rd regular liquor store commission minutes
#3- approval of the Police Report for May 2005, report is attached to the minutes as Appendix A
#4- approval of the June 2005 budget report, copies of report are available at the City Clerk’s Office
#5- approval of the Public Works Department report for June 2005, report is attached to the minutes as Appendix B
#6- approval of the City Clerk’s Office report for June 2005, copies of report are available at the City Clerk’s Office
#7- approval of Resolution 07-12-2005 (1): Authorizing Signing of Police School Liaison Officer Contract
#8- approval of Resolution 07-12-2005 (2): Discontinuing Municipal Liquor Operations
#9- approval of land use permit for Kocian’s IGA for an addition
#10- approval of the claims for payment in the amount of $56,240.76 including the June 15th, 28th and 30th payrolls
Motion Carried Unanimously (MCU).
OLD BUSINESS:
At this time in the meeting, Mayor Tendrup moved Public Works Superintendent Mark Maki to the top of the agenda. Maki addressed the Council regarding the condition of the city lawn mowers. The Public Works Department is down to one mower They have received a quote from The Shop for $881.71 to repair/rebuild the second one. Motion was made by Zimmer and seconded by Lexvold to allow for the repair of the mower as quoted at $881.71, MCU.
Maki reported that no bids were received on the swim raft. The bid closing date was published incorrectly so it was determined that it should be advertised again.
Maki reported that he would be heading to Argyle on July 13th to see their ponds and attend water school. They are using enzymes in their ponds so we will be able to compare their experience to what we might expect to see in our own ponds.
Dick Grabko: Dick Grabko of SEH was present to review the results of community development survey. He reminded the Council that the purpose of doing the survey was to satisfy funding source requirements, but that it also provides the Council with input from citizens as to what they view as priorities. Grabko congratulated the community on their participation level. 214 surveys went out 154 were returned. 150 were needed in order for it to be accepted as valid by the funding sources. 77% of households surveyed met low-moderate income (LMI) guidelines for Itasca County. 73.15% of respondents and their households were LMI persons and funding sources require a minimum of 51% in that category before a community is eligible for funding programs. After gathering income information, the survey asked citizens to rank the top five needs in the community. The top four items reported were all housing related with new housing development being first on the list, followed by single family and rental housing development and homeownership. Sanitary sewer treatment was ranked fifth on the list and was followed closely by water tower and tank and water treatment issues. The next section of questions asked for information on current housing conditions. Citizens rated their conditions as fair for the most part, showing a high need for housing rehab. Most homes are 11-30 years old. Citizens are extremely interested in rehab of current housing. Special housing needs such as accessibility were high compared to other Minnesota communities. The final pages of the survey report contained other comments from residents. Grabko reviewed that we have now completed one required task in the process of accessing funding programs. The survey is good for a two year period. Grabko reviewed that there is a $2500.00 cost from the company that conducted the survey. SEH also has some time into it but they will hold off on billing until we actually apply for a grant. At that time, we can apply to IRR for reimbursement of ½ of the survey-related costs. City Engineer Julie Kennedy added that part of our Minnesota Governmental Agency Finance loan is to pay for the $2500.00 so if we proceed with that tonight, we will be reimbursed for that cost. Kennedy stated that copies of the survey results will be available at the clerk’s office.
Kennedy introduced resolution 07-12-2005 (6) and explained that it approves a joint powers agreement with other Minnesota cities to issue bonds. This is what we have been working toward and referring to as our “short-term loan”. By combining our funding request with other cities, we are able to get more favorable financing terms. Kennedy reviewed that we will be bonding for $62,000 over a 12-15 year period. The interest rate is variable from 2.88% to 4.27%. The exact number of years will be negotiated at time of bond pricing on July 18, 2005. The annual debt service payment will be $6,000.00 which we are already budgeting for in our current water and sewer rates.
Salmi stated that the hospital has expressed interest in contributing to the reduction of inflow & infiltration (I&I) and asked if we still need this loan if they will do so. Kennedy explained that $37,000 of the short-term loan is for I&I, however the loan is delegated for sewer improvement projects so we can use it for any type of improvements, not just I&I reduction. Kennedy recommends still moving forward with this and if the hospital does contribute to I&I, the loan money can be used for whatever sewer project is needed next. Kennedy next introduced Resolution 07-12-2005 (5) which authorizes issuance of the bond. Kennedy reviewed that $37,000 of the total amount asked for is for I&I (or any other sewer improvements), $6,100 is for lift station repairs, $5,400 is for the purchase of safety equip, and $9,500 is for the financing and survey costs. Zimmer reiterated that we already have the repayment plan in place. Salmi still had concerns that the loan was unneeded due to the hospital helping with I&I and enzymes. Bill Loosbrock clarified that there is a hospital board meeting on Monday, July 18th and the hospital’s involvement will be determined at that time. Kennedy added that she would stay in touch with both the hospital and the Catholic Church on the issue. Salmi wanted to know if we were overlapping funds and Kennedy explained again that we are not because the loan funds can be used for other necessary sewer projects if the hospital does decide to contribute. Salmi stated that he felt it was overlapping and was concerned that the hospital would decided not to contribute if the City spent money where it shouldn’t be spent. Tendrup explained that the hospital had expressed interested in assisting with I&I reduction. If they decided not to do so, we will have the money to complete the projects on our own. If they decide to assist us, we can use the loan money for any of our other necessary sewer improvement projects. Salmi asked if another project would be added if the hospital helps. Kennedy stated that the cost of all the needs of our sewer system far exceeds both this loan and the amount the hospital may be willing to contribute. Any “left-over” money will be applied to the next project needed such as repair of leaking pipes and manholes, or it could be applied to new road and forcemain relocation project.
Zimmer moved to approve resolutions 07-12-2005 (5) and 07-12-2005 (6), Pifher seconded, motion carried with Salmi opposing. Kennedy will have Storlie sign and execute the agreements and resolutions.
Kennedy reported that a meeting had taken place between the city, hospital and Catholic Church earlier in the day. The Church informally agreed to the potential for an easement for a new road and relocation of the forcemain. The hospital may assist with the funding for the road, but not necessarily the forcemain relocation. Kennedy stated that the road is a must and the forcemain should be done at the same time. She felt that the City should try to come up with the funds to complete both projects. She clarified that this issue would also be discussed at the hospital’s July 18th board meeting and she would report back to the Council on July 26th.
Kennedy recommended delaying our applications for funding through Rural Development and Public Facilities Authority for one year in order to get organized with our short-term loan projects and with any contributions the hospital may offer.
Resolution 07-12-2005 (3): Kennedy stated that the Council needs to hold a public hearing on the proposed zoning ordinance before it is passed. The hearing was set for August 9, 2005 at 6:00 p.m. A motion was made by Zimmer to pass resolution 07-12-2005 (3): calling for a public hearing on proposed zoning ordinance for Tuesday, August 9, 2006 at 6:00 p.m. at City Hall, seconded by Lexvold, MCU.
Planning Commission Recommendations: Gus David, Planning Commission Chairman, stated that the Commission had received a request for a conditional use permit for the Sweet & Sassy Shoppe to relocate their retail store to their personal residence located on Division Avenue. They plan to move in a trailer house with access from County Road 14. Our current zoning ordinance requires that a conditional use permit be obtained for retail use in an agricultural zone. The Planning Commission is recommending approval of this conditional use permit. Motion by Zimmer to grant the permit, seconded by Lexvold, MCU.
David stated that Maki had expressed interest in applying for a grant from the DNR for recreational funds to be used for upgrades on the footbridge, trestle, City Park, canoe landing, etc. Motion to allow Maki to apply for grant by Zimmer second by Pifher, MCU.
City House: The second appraisal done on the City House came back at $74,000. Tendrup reviewed that we have discussed what should be done now that the contract with the realtor has expired. Pifher felt that some things were not mentioned in appraisal, such as condition of pipes and sewer upgrade that will be needed. She also thought the appraiser may have appraised the entire lot instead of just that portion that was surveyed out. Zimmer asked Shaw if the City can be held liable if the building is sold “as-is” and someone gets sick because of the mold present. Shaw stated that the disclosures used during sale of the property will clear the City of any liability. Zimmer felt that the land could be used by the city for development of the well, possible water tower, etc. and that we may be sorry later if it is sold now. Tendrup stated that we already surveyed out the area needed for the municipal well. Salmi moved to set a minimum bid and sell it on sealed bids. Zimmer seconded for the sake of discussion and asked what the minimum bid should be. Tendrup stated that the most we were offered when it was listed with the realtor was $22,000. David felt that $50 per square foot is a typical price. The appraised value of property alone, not considering the structures, was $15,000. Tendrup felt that it didn’t make sense to start lower than the $22,000 that we’ve already been offered. Gene Rajala stated that it doesn’t matter what our current minimum bid is, we can set any minimum amount and then sell for the high bid. Shaw stated that it could be put out without a minimum bid. If you advertise a minimum bid, all your bids are right around that amount and it doesn’t get much higher. Tendrup clarified that just because we are entertaining bids doesn’t mean we have to accept one of them. Tendrup reviewed that the motion and second as amended by the discussion was to advertise it for sale on bids listing the two appraisal amounts and accepting bids for 45 days, motion carried with Zimmer opposing. Storlie is to check costs of advertising in Duluth News Tribune, Minneapolis Tribune, St. Paul Pioneer Press, Deerpath, Herald Review, Western Itasca Review, Mesabi Range, Manney’s Shopper, Northome Record, and International Falls papers and report back at the next meeting. Tendrup called for a vote on the motion and it was carried unanimously.
Health Insurance Coverage for City Officials: After reviewing information provided by City Personnel Attorney and representatives from the League of Minnesota Cities, no one was interested in pursuing this issue any further.
NEW BUSINESS:
AFLAC Insurance Representatives: Julie MacAdams was present representing AFLAC Insurance Company. She pointed out that AFLAC is supplemental in nature, however in her personal experience, they offer fantastic benefits and coverage. They do offer a stand alone dental plan in addition to all of their supplemental plans. MacAdams had previously provided the employees and council members with packets of information. Individuals can choose to sign up for these plans on their own. If the City wishes to contribute to the premium cost, it can be set up as an employer-sponsored plan. She invited council and employees to contact her for further information.
Chris Miller and Dave Zins – Picaroon Lease Proposal: Tendrup asked Shaw if it was appropriate for the Council to review a lease proposal considering that they had passed a motion at the last meeting to sell the building. Shaw responded that they could rescind the motion to sell and discuss the lease proposal. Shaw informed the Council that they will need to pass a new liquor ordinance before they will be able to grant any liquor licenses in the City. He and Storlie have drafted a new ordinance and he provided copies to the Council to be reviewed and adopted at the July 26, 2005 meeting.
Pifher questioned if Gus David was still interested in obtaining an off-sale license and David stated that he would like to withdraw his previous application for the license.
Dave Zins and Chris Miller were present to address their lease proposal with the Council. Gene Rajala didn’t think a lease proposal should be entertained until the Council had tried to sell the property. He didn’t see any benefit to leasing because the City would still be paying the property taxes. Shaw stated that it depends on what the terms of the lease might be. Zins explained that they would like to include an option to buy within the lease agreement. Any value they put into the building through remodeling, etc, will belong to the City if they end up not purchasing it. Shaw wanted clarification on what they are proposing the City’s responsibility would be. Zins stated that they would be responsible for their own utilities and maintenance and would only require City assistance for major structural repairs that might be needed. David expressed concern that they could start a remodeling project and then leave it unfinished. Shaw explained that would also be spelled out in the lease. The City will want to require that all plans for remodeling and improvements be approved by them and a surety bond filed before any work is done. Rajala asked why they wanted to lease rather than buy. Zins explained that they had reviewed the numbers that the operation put forth in the past and they wanted to make sure they could make it work before they invested the money to purchase it. Shaw added that they are not proposing a long-term lease, only a one-year lease so it is a good proposal for the City to consider. The proposal is for $1,500 a month lease amount. Gene Madsen felt it was a good idea to lease it. A lease brings in money month after month rather than getting one lump sum for the sale of it. He urged the Council to strongly consider the proposal. Shaw stated that it would be difficult to for anyone to borrow the money to buy the building based on its past track record. Zins stated that is exactly the reason they wish to lease for a year first. David asked what will be done with the inventory left in the building. Tendrup stated that is a different issue. Rajala asked if there was an appraisal on the building and was answered that the appraisal will be completed by the July 26, 2005 meeting. Zins was willing to look into purchasing the remaining inventory. Tendrup explained that inventory had been taken, however we had not completed pricing of it. Shaw asked if Zins and Miller had bought liquor businesses before and Zins answered that they have. Rajala asked how they had heard about Bigfork’s liquor store and Zins answered that Miller had graduated from BHS in 1994. Shaw asked if it was necessary for them to have the inventory and Zins answered that it was not, but that they were willing to purchase it if the price was right. Madsen wanted an agreement that they buy it along with the lease of the building. Shaw stated that a typical amount is 30 cents on the dollar for inventory. Rajala felt that it should be advertised to see if others are also interested in it. Mike Kocian stated that he has visited with almost every other business owner in the City and they feel that the City should do something as soon as possible to get a viable business into the community. Local businesses are suffering because of the loss of the liquor store and he asked that the Council take that into consideration and try to get something going as soon as possible. The longer a decision is put off, the harder it will be on our other area businesses. Jon Babcock asked if the Council felt it was in the best interest of the community to have a private liquor facility in the City. He did not see that to be true and expressed concern about the issue. He would like to see something other than a liquor business. He wanted to the Council to look into the long-term effects and benefits of what type of business would be most beneficial to the community. Mike Larson stated that we would create many problems by trying to go to a dry town. Larson also sees a decrease in his restaurant business since the closing of the liquor store. He also urged the Council to make a decision tonight. Madsen stated that we have an offer ready to go in front of us and should take action. Salmi asked how long before the appraisal was done and thought the decision should be put off until then. Tendrup did not feel that was necessary since the appraisal amount has no affect on the lease amount. Shaw reminded everyone that all terms are negotiable at this point. Shaw stated that the Council needs to determine if they are interested in going forward and if they are a lease agreement should be drawn up for approval at the next meeting. Lexvold made a motion to enter into negotiations with Dave Zins and Chris Miller for the lease and potential sale of the building, seconded by Pifher, MCU. Motion to rescind the motion to sell passed at the previous meeting by Pifher, seconded by Lexvold, MCU. Shaw requested that Zins and Miller draft a lease and forward it to him to be reviewed at the August 9, 2005 meeting.
Requests for Funding: Donation requests were received from the Gordon Campbell Memorial Track Fund and the Bigfork River Board. Tendrup stated that there is $50.00 left in the donation budget. Motion by Lexvold to donate $25.00 to each entity, seconded by Salmi, MCU.
Resolution 07-12-2005 (4): The Council received correspondence requesting signing of a contract with Itasca County for providing prosecution services to the City. Motion by Zimmer seconded by Lexvold to pass resolution 07-12-2005 (4): Transferring Prosecution to Itasca County, MCU.
Gus David: Gus David was present representing Joyce Holsman. Holsman was requesting additional pay of five vacation days that were unused by her and not eligible to be repaid according to City policy. David stated that Holsman worked many hours per week due to lack of help during the last few months of operation and he felt it was fair to pay her for the five days of vacation. Tendrup stated that the Council had already provided a severance package to Holsman and had followed the city’s personnel policy. She did not feel that it should be paid as that could cause an issue with the severance agreement already in place. Lexvold made a motion to pay five days of vacation pay to Holsman, seconded by Tendrup, motion failed with unanimous opposition. David stated that he has heard that people have been coming in and claiming pictures and tools that have been displayed on the wall. Holsman has stated that if the items are not marked on the back with a name, they belong to the City. Lexvold reported that she, Storlie and another Council member were there at all times the items were being taken down and claimed and that everything taken did have names on it. David’s last item was the bandwagon that is used for street dances. This is owned by Holsman and she is offering the City first choice to purchase it. There was no interest in purchasing it.
OTHER BUSINESS:
Tendrup brought in a land use permit application for Erin Johnson and Travis Mount for a new home. Zimmer moved to approve the permit, seconded by Pifher, MCU.
Salmi asked if the appraisal on the Picaroon Saloon was going to be cancelled. Tendrup stated that we will still need the appraisal because we will have an option to sell in the lease agreement and will need the appraisal amount for that.
There being no other business, Mayor Tendrup adjourned the meeting at 8:41 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
Bigfork Police Department
Police Report
June
2005
11 21:00 bar tavern disturbance
15 20:19 intrusion alarm/business/night
17 09:30 assist ambulance
17 11:44 suicidal adult male/assist medical
25 14”33 felony drug possession/drug paraphernalia/small amount marijuana
Appendix B
Public Works Department Report
June 2005
Wastewater 2,958,000
Water 1,298,000
I&I 1,660,000
Snow/Rain 6.2”
Chemical Usage
Pot. Perm 9.5 @ $2.1536 $20.46
Flouride
7.2 @ $.4396 $3.17
Caustic Soda
10 @ $4.18 $41.80
Chlorine
15 @ $1.2569 18.85
Total: $84.28
Chemical cost to treat per gal $.0000649/gal
Trucks
Gallons Cost Miles
White 43.4 $89.00 472
Green 54.7 $136.00 613