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04-12-2004 CC MIN MEETING OF THE ELK RIVER CITY COUNCIL HELD AT THE ELK RIVER HIGH SCHOOL LITTLE THEATER MONDAY, APRIL 12, 2004 Members Present: Members Absent: Staff Present: Mayor Klinzing, Councilmembers Dietz, Kuester, Tveite, and Motin None City Administrator Pat Klaers, Director of Economic Development Catherine Mehelich, Police Chief Jeff Beahan, Finance Director Lori Johnson, Building & Environmental Administrator Stephen Rolf, Fire Chief Bruce West, and City Clerk Joan Schmidt Call Meeting To Order Pursuant to due call and notice thereof, the meedng of the Elk River City Council was called to order at 6:30 p.m. by Mayor Iadinzing. Consider 4/12/04 Agenda Mayor I~inzing added consideration of two resolutions before Item 5.13. MOVED BY COUNCILMEMBER TVEIVE AND SECONDED BY COUNCILMEMBER MOTIN TO APPROVE THE AGENDA AS AMENDED. MOTION CARRIED 5-0. Consider Consent Agenda MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY COUNCILEMBER TVEITE TO APPROVE THE FOLLOWING CONSENT AGENDA: 3.1. 3.2. 3.3. 3.4. 3.5. COUNCIL MINUTES · 3/15/04 Regular · 3/17/04 Joint with HRA · 3/22/04 Regular · 4/5/04 Special CHECK REGISTER CONSIDER MASSAGE THERAPIST LICENSE FOR JENNIFER GREENWALDT AUTHORIZE THE PURCHASE OF TRUCK EQUIPMENT FOR THE PUBLIC WORKS DEPARTMENT CONSIDER TOBACCO LICENSE FOR JACKSON'S SHOP. MOTION CARRIED 5-0. Open Mike No one appeared for Open Mike. City Council Minutes April 12, 2004 Page 2 5.2 Administration Administrative Hearing for George Larson o f Elk River Bowl Regarding Alcohol Compliance Check. City Clerk Joan Schmidt explained to the Council that the Elk Kiver Police Department in conjunction with the Sherburne CounW Health Department had conducted an alcohol compliance check of all Licensed liquor establishments within the City of Elk River on January 28. During the compliance check at the Elk River Bowl, 13161 Highway 10, an employee of the store sold alcohol to a person under the age of 21 years. A letter by certified mail was sent on February, 13 informing the licensee of this incident and of the opportunity to request an administrative hearing by March 13. On March 12, a letter was received from Mr. Larson stating that he has chosen to not request an administrative hearing and to not pay the $500 fine. A letter was sent on March 31 informing Mr. Larson that the penalty amount was due by April 7. On April 5, b/ir. Larson appeared before Council to discuss this situation. Since the meeting of Apr/1 5 was a Special Meeting, this item could not be added to the agenda. Mr. Larson is present tonight to discuss this issue. Council was in agreement even though Mr. Larson had ~vaived his rights to an admimstrative hearing to hear what Mr. Larson had to say. Also present and speaking on Mr. Larson's behalf was Kenn Rockier, Executive Director of Wine, Beer & Spirits Federation of Minnesota. Both Mr. Rockier and Mr. Larson stated that they did not oppose compliance tests, that the individual involved has been f'u:ed, that the establishment had been in compliance for the last 19 years, that training is offered, daat a minor had never been served intentionally, and that it was felt a warning would be more appropriate. Mayor Klinzing stated that Nix. Larson's reputation is very good, that he is a leader in the hosting of training, and that an incident of this nature can happen. She felt that in some cases there needs to be a warning. She is concerned in not giving a second chance. Councilmember Tveite stated that in essence Mr. Larson is being given a second chance and that he is comfortable with the way the violation grid is set up. MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY MAYOR ' KLINZING TO REDUCE THE FINE TO $250.00. ROLL CALL VOTE: AYE: DIETZ, KLINZING; NAY: KUESTER, MOTIN, TVEITE. MOTION FAILED 3-2. Councilmember Motto stated that he felt this penalty needed to be enforced. Mr. Larson has been in business for 19 years. Since training is provided his staff should know better. He felt that the city needs to be tough on alcohol abuse. MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY COUNCILMEMBER TVEIVE TO IMPOSE THE $500.00 PENALTY. ROLL CALL VOTE: AYE: KIJESTER, MOTIN, TVEITE; NAY: DIETZ, KLINZING. MOTION CARRIED 3-2. City Administrator Pat I~daers stated that Mr. Larson could have until the end of the month to pay this p~nalty amount. Consideration of an Ordinance Amending Section 6.58 (.Alcoholic Beverages; Liability, Insurance) of the City, Code City Council Minutes April 12, 2004 Page 3 5.3 5.4 5.5 City Clerk Joan Schmidt explained that through the codification process the word "or" was omitted in this section of the codebook. Consequently if the code were not amended, liquor establishments would have to submit both a certificate of liability insurance and a bond to renew their liquor license. MOVED BY COUNCILMEMBER TVEITE AND SECONDED BY COUNCILMEMBER KUESTER TO ADOPT ORDINANCE 04-05 AMENDING SECTION 6-58 OF THE CITY CODE OF ORDINANCES. MOTION CARRIED 5-0. Consideration of Heritage Preservation Commission Appointment The Council interviewed applicant Linde Pouti for the one open seat on the Heritage Preservation Commission with term expiration of February 28, 2007. Ms. Pouti explained that she has always been interested in the heritage of Elk River as well as Elk River's future. She has worked at the old bank building in Historic Downtown Elk River and has watched the City change over the years. She wishes to be part of preserving the heritage of the City. MOVED BY COUNCILMEMBER TVEITE AND SECONDED BY MAYOR KLINZING TO APPOINT LINDE POUTI TO THE HERITAGE PRESERVATION COMMISSION FOR A THREE-YEAR TERM WITH TERM EXPIRATION OF FEBRUARY 28, 2007. MOTION CARRIED 5-0. Consider Tax Rebate Financing Request for Badger Ventures, LLC (Gradient Technology., Inc. Director of Economic Development Catherine Mehelich explained that Badger Ventures, LLC proposes to construct a 13,000 square foot light industrial/business park building for lease to Gradient Technology's office, research/development, and equipment fabrication operation. Badger Ventures proposes to purchase 2.05 acres within the Elk River Business Park and has requested that the city and county consider a write down of the land cost to $0 through a pay-as- you-go note to the limited liability company. Staff has been working with Gradient Technology through the due diligence process for the financial analysis and the City's Tax Rebate Financing process. At this time staff could not provide a recommendation to the EDA or Council regarding the tax abatement request for the project. The City Council may continue to hold a public hearing and receive comment on the tax abatement request. There are several issues that remain unresolved, including identification of a bank lender and proposed project f'mancing terms; possibility of a City Nlicro Loan; identification of the amount and source of eligible equity; and completion and review of a but- for analysis. CEO Eric Haehn of Badger Ventures is waiting to hear back from two banks. Mayor Klinzing opened the public hearing. There being no one to speak to this issue, Mayor Klinzing closed the public hearing. Ms. Mehelich stated that Council does not need to do anything at this time and that this item will be brought back for further consideration. Building Construction Project Update from Kraus Anderson Don Stutesman and Jim Beclc,vith from Kraus-Anderson gave council an update on the building construction project. Mr. Stutesman explained that at the last construction meeting it was City Council Minutes Page 4 April 12, 2004 decided to get the masonry work completed by the end of the month and to take possible action against The Saint Paul Companies to recover any city expenses. Councilmember Dietz asked if The Saint Paul Companies had chosen someone that was higher priced than the amount allowed within the bid. Mr. Stutesman stated that when the masonry contractor that was on the site went out of business, everything stopped and Kraus-Anderson needed to keep everything going. Kraus- Anderson went out on their own and solicited three bids and then sent those onto the representative of the bonding company. The bonding company did not select one of these firms and hired a different consulting fm-n to get the project completed. There were approximately 12 other projects around the metro area that also were left uncompleted by this contractor, and that is why the bonding company hired this outside f'u'm to complete the projects. Councilmember Dietz felt that since The Saint Paul Companies is a bonding company it is their obligation to take care of this or to pick up the extra cost. Finance Director LoriJohnson stated that The Saint Paul Company does have the right to choose and our attorney will look at this further. Unfortunately this issue may end up in a lawsuit. Status of Public Safety. gun range. Mr. Stutesman explained that there was an issue of ventilation at the gun range and how to operate the unit from within the room. He stated that he is expecting to get and have installed the inside unit this week. The range itself was ready by the end of January and the ventilation system should be ready in a week's time. Explanation of the City. Hall project dumpster bill. Jim Beckwith explained that when the project was bid there were some allowances for dumpsters but to get the best number and the best prices for the dumpsters these were bid as a separate entity pulling them out from all the subcontractors. The dumpster bill amount is a cumulative total. When going to contract they were working off of preliminary budgets and not comparing line items. I~aus-Anderson got the best price for the city by ordering the dumpsters cumulatively versus each subcontractor including it in their bid with everyone having their own dumpster on site. The amount was based on so much for each dumpster. This is not an unreasonable bill. If each individual subcontractor had a dumpster in their bid, the city would have paid more. Timetable for completion. Mr. Stutesman explained that the overall project was to be completed on May 1 with the Utilities moving into their portion of the building. This date still is the expected timetable. Blacktop is scheduled for May 7 and landscaping and seeding to be completed when sodding takes place. Councilmember Dietz explained that he felt the punch items need to be completed before the final payment is issued. Police Chief Jeff Beahen explained that currently the geo-thermal system in the Public Safety building does not appear to be working efficiently ~vith a recent invoice running over $2,000 a month for the gas bill. He felt the problem was that the system is in coolant mode most of the time and the makeup air unit, which is gas f'zred, is small with the heating open and that has to be resolved. Jim Beckwith stated that it is frustrating for the staff of Kraus-Anderson as well as city staff for these final items to not be handled in a timely manner, and yes, the city does have an avenue by withholding money. Council also has to remember that IQaus-Anderson is the city City Council Minutes Page 5 April 12, 2004 representative on site and functions as the general contractor and that they continue to call and try to get the subcontractors to respond. MOVED BY COUNCILMEMBER KUESTER AND SECONDED BY COUNCILMEMBER TVEITE TO APPROVE THE PAYMENT OF THE PAST DUE DUMPSTER BILL. MOTION CARRIED 5-0. 5.6 Consider 2003 General Fund Balance Allocation Finance Director Lot4 Johnson explained that the policy on the General Fund Balance is to have an unreserved balance of not less than 40 percent of the next year's budgeted expenditures with this calculation made at the end of each fiscal year. The council may allocate any amount over the minimum 40 percent to other purposes. The policy requires a 2003 fund balance of $3,150,160 to meet the 40 percent minimum leaving $581,889 available for allocation by the Council. However, the 2004 budget calls for use of reserves of $117,000 so the amount available for allocation is $464,889. If 2002's 41.50 percent balance is maintained, the balance available after reserving $117,000 is $346,758. Since there is no guarantee of an ongoing fund balance in excess of the minimum reserve requirement, it is appropriate to use the funds for specific uses and not to fund ongoing programs or new programs that will require additional funding above the amount currently available for allocation. Mayor Klinzing stated that she would like to be able to give relief to the taxpayers. Finance Director Johnson stated that the council could use this money for tax relief by setting it aside. Council wishes to have the discretion each year to do what it felt was the highest priority at the time. It was the consensus of the Council to maintain a fund balance of 41.50 percent of the next year's budget. The Council indicated its support to fund the request for a Building Department intern and the City share of the 2004 COPS grant program with the fund balance. The Council discussed the theatre payment, wage adjustments and equipment items. Staff will come back with a resolution for Council's approval. 5.7 Consider 2004 Local 271 Union Contract-Police Sergeants City Administrator Pat Kdaers explained that City representatives and the Police Sergeants Union Local 271 representatives have reached tentative agreement to changes in the contract and the union has accepted these changes. MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY COUNCILMEMBER TVEITE TO APPROVE THE UNION CONTRACT BETWEEN THE CITY OF ELK RIVER AND POLICE SRGEANTS UNION LOCAL 271 WITH CHANGES AS OUTLINED IN THE MEMO OF APRIL 12, 2004. MOTION CARRIED 5-0. 5.8 Consider Building Inspection Intern MOVED BY COUNCILMEMBER TVEITE AND SECONDED BY COUNCILMEMBER DIETZ TO APPROVE A SIX-MONTH INTERN POSITION TO ASSIST WITH BUILDING INSPECTIONS. MOTION CARRIED 5-0. City Council Minutes April 12, 2004 5.9 Page 6 Authorization of Bids for a 1250 GPM Fire Department Pumper Fire Chief Brace West explained that the Fire Department is hoping to purchase a new Class A pumper which will include a 1250 gpm pump, equipment, ladders, hydraulic generator, and other National Fire Protection Association required f~refighting items. The pumper is scheduled for early 2005 delivery and is part of the City's 20-year capital improvement plan as a replacement of Engine 2. The budgeted project price is $375,000. Councilmember Dietz asked what would happen to the old truck. Fire Chief Bruce West stated that the city is not trading but staff can put it out on the market and see if the city gets any bids for it. MOVED BY COUNCILMEMBER MOTION AND SECONDED BY COUNCILMEMBER KUESTER TO AUTHORIZE STAFF TO ADVERTISE FOR BIDS FOR A FIREFIGHTING PUMPER APPARATUS. MOTION CARRIED. 5-0. 5.10 COPS Grant Police Chief Jeff Beahen explained that an approval letter was received from the U.S. Department of Justice under the COPS Universal Hiring Program for a grant for two additional officer positions. The estimated amount of funds to be awarded over the three-year grant period is $150,00.00 with a grant start date of March 1, 2004. This is a matching grant with participation on the city's level requiring increasing matches of wage and benefits over the three- year period. This is a commitment on the city's part of an additional $17,687 in wages for the year 2004 that was not budgeted. The Police Department will be responsible for monitoring and managing the budget constrains needed to fund these two new officers. MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY COUNCILMEMBER KUESTER TO AUTHORIZE STAFF TO START THE HIRING PROCESS FOR TWO FULL-TIME ADDITIONAL OFFICER POSITIONS WITH THE USE OF THE COPS GRANT. MOTION CARRIED 5-0. 5.11 Update on Stares of Bailey Proper .ty City Administrator Pat Klaers updated the Council that the city is planning on assuming ownership of the Bailey house sometime in mid to late April with the city allowing the Bailey family to continue to have access to the garage until mid year 2004. The city attorney has prepared a deed to transfer the property to the city and a storage lease agreement. The city has a number of work items to accomplish prior to the house being leased out to Love Elk River. Meantime, the street crew can do items as proposed with replacement of furnace added to the list. Street Superintendent Phil Hals will be in charge of ensuring the items get accomplished. It is reasonable to think that the house will be available for rent to Love Elk River by July 1, 2004. Councilmember Dietz stated that according to the building department the two rooms in the basement couldn't be considered bedrooms. No action is necessary with this "project update" agenda item. 5.12 Consideration of an Ordinance Amending Section 2.52 ,(Regular Meetings) of the City. Code City, Council Minutes Page 7 April 12, 2004 The Council wishes to establish regular meetings on the £zrst, second, and third Mondays of each Monday. City Clerk Joan Schmidt explained that in order to do so, a change to the city code has to be approved. MOVED BY COUNCILMEMBER TVEITE AND SECONDED BY COUNCILMEMBER MOTIN TO ADOPT ORDINANCE 04-06 AMENDING SECTION 2-52 OF THE CITY CODE OF ORDINANCES. MOTION CARRIED 5-0. 5.12A Consider a Resolution to Appoint a Contact Department and Assigning Duties in regards to HIPAA and Consider a Resolution to Appoint a Privacy Official Finance Director Lori Johnson informed the Council of the need to appoint a contact department and assign duties in regards to regulations of the Health Insurance Portability and Accountability Act of 1996 (HIPPA). This department would receive complaints about any failure to comply with either the policies and procedures or the privacy roles in general regarding HIPPA. Ms. Johnson also explained that a Privacv Official needs to be appointed to coordinate the employees' policies and procedures under HIPPA's privacy roles and to monitor and decide any issues that occur under the rules. MOVED BY COUNCILMEMBER TVEITE AND SECONDED BY COUNCILMEMBER MOTIN TO APPROVE RESOLUTION 04-20 APPOINTING THE FINANCE DEPARTMENT AS A CONTACT DEPARTMENT WITH ASSIGNMENT OF DUTIES AND TO APPROVE RESOLUTION 04-21 APPOINTING THE FINANCE DIRECTOR AS THE PRIVACY OFFICIAL WITH ASSIGNMENT OF DUTIES. MOTION CARRIED 5-0. 5.13 Discussion on City Organization Structure City Administrator Pat Kdaers explained that Council had directed him, with staff assistance and council input, to propose options for preferred organizational structure, staffing levels, reporting relationships, and a timetable for ultimate implementation over a two-three year period. The first goal is to improve the services the city offers to the public. The second goal is to reduce the number of department heads that report directly to the City Administrator. Mr. Klaers reviewed with Council his plan: the hiring of a Parks and Recreation Director; establishment of a Public Works Director with establishment of a City Engineering Department; consolidate a number of current departments within a Community Development Department; not to establish and hire a Public Safety Director; and future changes to be discussed for the Administration and Finance areas (General Government). Councilmember Tveite asked if we establish a City Engineering Department, would we get away from a consulting engineer. Mr. Kdaers stated that he felt it would significandy reduce the need for a consulting engineer but that he didn't feel the city could get away from this service one hundred percent. Staffwould be able to do the routine projects, mapping, and GIS but we will still need some consulting services for bigger projects and specialized projects. Mayor Fdinzing stated she was interested in seeing us adopt a specific structure that will be a goal we will be working towards. She feels that we will be looldng at serious areas to work on. She's disappointed that the Administration/Finance area is not completed. She stated that setting up a structure now with still nine department heads reporting to the City Administrator is too many; the goal would be to have six. City Council Minutes April 12, 2004 Page 8 Mr. Kdaers stated that he could finalize that piece of the puzzle but that he didn't see any immediate urgency. He stated that from this General Government area, there would be no more than two additional staff reporting to him, and maybe it's one. Councilmember Tveite agrees that the next important consolidation area is the Community Development area, and then the Administration/Finance area. Council_member Dietz stated that council has talked about city vision and reorganization, but the main point of this exercise and the way that it started was the relationship between the city administrator and the department heads, how they communicate and what needs to be done, and he doesn't want the council to lose focus that that was the point of this whole mission. He stated that he had heard from several staff members regarding the memo in the packet. His response to people is that this is just the administrator's opinion and, in his view, the council wouldn't do anything until council has done the three sessions with the consultant Brimeyer. He also stated that council would be receiving input from all the department heads. Mr. IClaers stated that he compiled the information as he was asked to do and gave the council his professional opinion, not the opinion from all 16-department heads. Mr. Klaers stated that this was his assignment. Yes, it will cost money to go through organizational changes and to add upper level positions. He feels in the hiring of a Community, Development Director that if the city promotes internally, you would have to replace that person. The Public Works Director and the Engineering Department will be expensive and we will have to decide when it is the right time and whether we can afford it. Nix. I<laers stated that ~vith the assignment to eliminate the number of direct reports by half, it ~vas going to impact people. Councilmember Dietz stated that his idea with the exception of the Park & Recreation Director position was that all candidates could be internal for these department head positions. Mr. I~daers stated that that is what he is suggesting with Community Development, and that some of the other positions could also come from within. Councilmember Motion stated that we need the Assistant Administrator position in the organizational chart as well (for the General Government area). He feels that this position should be considered even before the Public Works position. Councilmember Dietz asked if the City Administrator, in regards to the Community Development position, is saying that anyone in that area would be eligible to apply. Mr. Klaers stated that this is a council decision but that he could give his recommendation regarding whom to promote if this is what the council desires. Councilmember Kuester feels that it should be open to internal and external candidates and to follow the same process that we would follow for external candidates. ' Mayor Klinzing stated that the council may be aware of issues from those applying and the council didn't want to put the Administrator in an awkward position. Councilmember Tveite asked about the city prosecuting attorney and when he was hired it was to have him with the police department, why is this not the situadon. Councilmember Motin stated that could be a problem with protocol; there should be separation of duty. He stated that he likes this overall proposal; that it is pretty close and that we just need to complete the Administration/Finance area. Ci~ Council Minutes April 12, 2004 Page 9 Councilrnember Kuester stated a concern with Human Resources, which deals directly with council, since council should be hiring and f'~ring, and she wonders how many levels we should have between the council and this position. Councilmember Kuester stated the person who is assigned that responsibility needs to be a designated policy person at a management or department head level. Lori Johnson agreed and stated that by default that has fallen under the Finance Department. She stated that this can be accomplished by moving the responsibility out of the Finance Department and can be under this one person. Councilmember Dietz asked if council was going to try to agree on a proposed organizational structure that would be shown to staff as council has the upcoming meetings with Brimeyer. Mr. I~daers stated that the meetings ~vith Brimeyer are to work on goal setting and the possibility of a governance model, and that he wasn't hired to work with organizational planning. Mayor I~dinzing stated that it was her understanding that council is going to do this organizational work. Once the council puts together a specific structure, this could create opportunities. Councilmember Kuester agrees with Councilmember Dietz that even though this may not be part of sessions xvith Brimeyer, she would like to go through those sessions and see this organizational structure come together after that. Jeff Beahen stated his concerns about what the council thinks in regards to the city prosecutor position and where it fits in this structure, currently under the city administrator. But the administrator is not the one that gets the calls from the county, sherifPs office, etc. He feels by moving the city prosecutor further away from the Police Department it may break down communication. Councilmember Motto stated that we might need to discuss the role of the city prosecutor, that this position should not be 95% working with police issues. Council felt that they need to know the reality of the work of this position and how is the flow of communication with the police. Mr. Klaers asked what Council's timetable is and he will work on the "bubble" (Finance/Administration or General Government) area. Councilmember Motin stated that we are moving forward on the Park & Recreation portion and doesn't like several months' delay between each new position. It was the consensus of the council to have this as a June Council Work Session topic. Other Business No additional business. Staff Updates Catherine Mehelich informed the council that a notice was received from the Minnesota Department of Employment and Economic Development that a portion of our grant application for commercial rehab ~vas awarded. City, Council Minutes April 12, 2004 8. Adjournment Page 10 There being no further business, Mayor Klinzmg adjourned the meeting of the Elk River City Council at 9:45 p.m. ,;,Joa~ Schmidt ~Clerk