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06-22-1987 CC MIN e e e MEETING OF THE ELK RIVER CITY COUNCIL HELD AT THE ELK RIVER CITY HALL MONDAY. JUNE 22. 1987 MEMBERS PRESENT: Mayor Gunkel. Councilmembers Schuldt. Holmgren. Tralle (6:40 p.m.). and Dobel (8:10 p.m.) MEMBERS ABSENT: None STAFF PRESENT: Pat Klaers. City Administrator; and Lori Johnson. Financial Director 1. The meeting of the Elk River City Council was called to order at 6:30 p.m. by Mayor Gunkel. 2. Consideration of 6/22/87 City Council Agenda Mayor Gunkel stated that she wished to be added to the agenda. as Item #7.C and Pat Klaers added as Item #7.D. COUNCILMEMBER SCHULDT MOVED TO APPROVE THE 6/22/87 CITY COUNCIL AGENDA WITH ADDITIONS. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 3-0. 3. Consideration of 6/15/87 City Council Minutes Pat Klaers stated that the minutes from the 6/15/87 City Council meeting were not available at the time of the meeting. 4. 1987 Audit Presentation Mr. Gary Groen of Abdo. Abdo and Eick was present to review the 1986 audit with the City Council. Mr. Groen stated that through the audit he could see significant improvements over 1985. He explained that the Utilities Department audit was done by a different firm but those figures had been combined into the City's audit. Mr. Groen explained the various parts of the audit and how it all ties together. He went over the different funds and walked the City Council through the detailed information section of the audit. Discussion was carried on regarding the fund balance in the General Fund which. at the time of the audit. was $344.120 and Mr. Groen had suggested $500.000. Pat Klaers questioned why during the 1985 audit Groen suggested $400.000 to $450.000 and now had changed the figure to $500.000. Groen explained that it was simply because as the City's expenditures increase. so must the fund balance. Klaers explained that changes that have taken place in this fund balance because of separating out the Landfill. Lawcon and Park Dedication activity. Page 2 City Council Minutes June 22. 1987 e Discussion the City works on come out the City own. was held regarding police fines and citations and what share received. Lori Johnson. Finance Director. explained that it a percentage basis. Council also questioned how the city would if they were to do their own prosecuting. Staff explained that would probably come out with less cost by handling their Explainations were given regarding the following: Professional Services - Building and Zoning: Expense related to plats and developments that are billed back to the developers. Utilities - Streets: Includes street lights which is paid by the City to Utilities and then reimbursed by Utilities as revenue source. Capital Outlay Architect expenses expenses - Streets: fees for the public works building and some minor for construction of the building. The construction will be reimbursed by the escrow account. e Discussion was held on the Park Dedication Fund Accounts receivable. Lori Johnson explained that the park dedication fees from a 1980 development were recorded then decreased because of an error in the apprraisal. and the figures were not adjusted on City books at that time and were now being corrected. Also. the Hobbit Hills situation was discussed and it was stated that these are expenses the City must absorb. On page 35 of the audit. the 101 Bridge Fund was discussed. It was clarified that this money will come from the State once all the figures are collected from Wright County. There will be a fund balance left over in the Water Tower Project fund. After the Water Tower project is complete. this will be transferred to the Water Tower debt service fund. Discussion was held regarding 1977 Refunding and Improvement and 1982 Improvement bonds and whether they should be defeased or called as they have an excess cash balance. It was questioned whether to payoff bonds using securities or cash. By paying off bonds from 1977 and 1982. approximately $95.000 would be freed up. Mayor Gunkel questioned the cost of having such an option investigated and Groen stated that he would be willing to do an account verification on the cost to be incurred and would come back before the City Council to discuss figures. e COUNCILMEMBER TRALLE INVESTIGATE THE 1977 CALLING THE BONDS. MOTION CARRIED 4-0. MOVED THAT ABDO. ABDO. EICK BE AUTHORIZED TO AND 1982 BONDS FOR APPROPRIATE ACTION OF DEFEASING OR COUNCILMEMBER HOLMGREN SECONDED. THE MOTION. THE Page 3 City Council Minutes June 22. 1987 e The City debt limit is currently at a little over $3.000.000. The City has approximately $1.000.000 falling under the debt limit. Hobbit Hills Subdivision was again discussed and it was suggested to look at refinancing a bond to reduce the assessments which are causing a deficit balance in the bond fund. The city can cancel the current assessment and have the property reassessed. but how is this made equitable when some properties are paid and some are not? A question was also raised regarding whether or not reassessment would prevent tax forfeiture. COUNCILMEMBER TRALLE MOVED THAT A $375.000 IMPROVEMENT BOND BE INVESTIGATED BY A BOND CONSULTANT TO SEE WHAT IS THE BEST ACTION TO BE TAKEN. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 4- O. There is $228.000 in the Sewer Fund which pays for repairs and maintenance. Mr. Groen stated that he feels that as the size of the plant continues to grow and age. so should the amount of cash on reserve. Groen pointed out a dramatic improvement from 1985 to 1986 in the water utilities operation. In 1985. profit was $19.537. and in 1986 it grew to $72.821. The question was asked. "Would it be to the City's advantage to have the e Utilities audit done by the same firm as the City?" Councilmember Tralle questioned the cost of the audit and why the Utilities audit was so much more than the City's audit. The Utilities is established under State Statutes. It is a split entity but it ultimately reports to the Council. Municipal liquor stores were briefly discussed and it was stated that they can sometimes be detrimental to cities because of such things as management. on/off sales and insurance. Municipal liquor stores need sales volume and Elk River has both the volume as well as the location. Councilmember Holmgren questioned how a person running a profit liquor operation is rewarded as manager for a good year. Klaers addressed this question by stating that department heads are hired to do a good job. Councilmember Schuldt suggested looking at the improvements in the liquor store facility as a "reward" the same way the City views the equipment of other departments. Pat Klaers stated that some transferring of funds needed to be done and the following motions were made: e cOUNCILMEMBER SCHULDT MOVED TO APPROVE RESOLUTION 87-29 AUTHORING TRANSFER OF FUNDS FROM THE SEWAGE DISPOSAL FUND TO THE SEWAGE DISPOSAL CAPITAL RESERVE FUND. COUNCILMEMBER DOBEL SECONDED THE MOTION. THE MOTION CARRIED 5-0. e e e Page 4 City Council Minutes June 22. 1987 COUNCILMEMBER TRALLE MOVED TRANSFER OF FUNDS FROM THE EQUIPMENT CERTIFICATE FUND. THE MOTION CARRIED 5-0. TO APPROVE RESOLUTION 87-30 AUTHORIZING CAPITAL OUTLAY RESERVE FUND TO THE 1984 COUNCILMEMBER HOLMGREN SECONDED THE MOTION. COUNCILMEMBER HOLMGREN MOVED TO APPROVE RESOLUTION 87-31 AUTHORIZING TRANSFER OF FUNDS FROM THE CAPITAL PROJECT FUND TO THE PARK DEDICATION FUND. COUNCILMEMBER TRALLE SECONDED THE MOTION. THE MOTION CARRIED 5-0. COUNCILMEMBER DOBEL MOVED TO APPROVE THE 1986 AUDIT AS PRESENTED. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. The City Council recessed from 8:45 p.m. to 9:00 p.m. 5. Presentation from Economic Development Consultant - Mike Mulrooney from BDS Mike Mulrooney representing B.D.S. was present to make a presentation to the City Council regarding services offered and recommendations of staffing needs. Mr. Mulrooney stated that he was also there to more clearly understand the needs of Elk River. Mr. Mulrooney began his presentation by going through a list of tasks which he had received. Pat Klaers stated to Mr. Mulrooney that the list was supplied by the Economic Development Committee and not necessarily agreed upon by the City Council. Klaers stated that the group function was to obtain Star City and qualify year after year. It is a feeling that this group is taking on some responsibilities beyond what is required of them. Suggestions were made for tasks of a staff person: - Bylaws be drawn up for the Economic Development Committee - Applying for grants and pursuing various funding opportunities - Do a tax analysis in the community - Work with existing businesses to retain them Mr. Mulrooney stated that there is a lack of factual community data and a format. Mulrooney stated that the period of July 1. 1987. to December 1. 1987. would be used as a preparatory period. Mr. Mulrooney works on a retainer basis and he stated he is trying to address things on a monthly basis format. His fee is $550 per month. which would include six hours of staffing time. Beyond this time. the finances would be paid by businesses to whom the presentation is being done. Page 5 City Council Minutes June 22. 1987 4It It is needed to get a full scope of what the responsioilities of the Economic Development Commission are and what direction they should be taking and receiving. Mulrooney stated that it is advisable to establish a job description and a Coordinator. A work program was discussed and the following suggestions made: 1. Go through decision making process. 2. Data Collection and fact gathering. 3. Explore Economic Development financing tools. 4. Look at funding for industrial park expansion improvements. 5. Develop budget for Economic Development Commission for 1988. Pat Klaers questioned the six hours of service per month. Mulrooney stated that in the winter months. less time will be needed so those months can be averaged out with summer months. Klaers said he foresees the retainer time being reduced once a staff person is on board and experienced. Mayor Gunkel suggested that a staff person have some experience in the Economic Development area so that this person does not have to be trained e from scratch. Mulrooney stated that he would like to return before the Council prioritizing their requests and suggestions. He stated that his services would include monthly recommendations for courses of action. Discussion was held regarding the need to clarify relationships with the Chamber. the Economic Development Commission. the City and Associated Investors. Mayor Gunkel voiced a negative feeling about receiving orders or duties from the Economic Development Commission. Boundaries need to be established regarding who is responsible for what. Mulrooney stated that he wishes to prioritize duties over a six month time frame and outline what should be done and when. He will develop a fee structure and a proposal to bring before the Council again at the June 29. 1987. meeting. He will be discussing staffing needs. recommendations and considerations. COUNCILMEMBER HOLMGREN MONTH TO BEGIN JULY THE MOTION CARRIED 5-0. MOVED TO RETAIN B.D. S. AT A RETAINER OF $550 PER 1. 1987. COUNCILMEMBER DOBEL SECONDED THE MOTION. A brief discussion was held on Data Card. a business looking at locating in Elk River. Mulrooney stated that he has had experience working with Data Card and feels that Elk River has good connections. e Page 6 City Council Minutes June 22. 1987 -- 6. Consideration of Industrial Park Improvement Bids COUNCILMEMBER TRALLE MOVED TO EXTEND CONSIDERATION OF ACCEPTING THE INDUSTRIAL PARK PROJECT LOW BIDDER'S OFFER TO TUESDAY. JULY 14. 1987. COUNCILMEMBER HOLMGREN SECONDED THE MOTION . THE MOTION CARRIED 5- O. 7. Other Business A. Discussion of 6/29/87 City Council Agenda The City Administrator informed the Council of agenda items to be placed on the 6/29/87 Council agenda. A brief discussion was held on the supposed parking space shortage in downtown Elk River. Pat Klaers will be directing the CSO to do counts on parking which will be included in the feasibility study. B. Mechanical Amusement License Request/Jerry Hagen Discussion was held on the hours of operation and Klaers recommended approval on Steve's recommendation. The operation would consist of four video games and three mechanical rides. e COUNCILMlMBER TRALLE MOVED TO APPROVE THE REQUEST FOR A MECHANICAL AMUSEMENT LICENSE BY JERRY HAGEN. COUNCILMEMBER DOBEL SECONDED THE MOTION. THE MOTION CARRIED 5-0. Councilmember Schuldt questioned stipulations on hours of operation. His question was addressed with the comment that if this does become a problem. other businesses will be directing their complaints to Mr. Hagan. C. Landscaping - West Side of Freeport Klaers distributed a letter from Barthel Construction regarding the landscaping work they have agreed to do at Presidential Estates and Elk River Manor Appartments. It was the consensus of the Council that they would like to see a time frame for the project. Pat Klaers will be sending a note to David Wolff requesting this time frame. D. Pat Klaers - General The Mayor will be milking cows Thursday. June 25. 1987 in connection with City-Farm day. A letter was sent to the railroad offering $17.800 for a right-of- way. No response has been received yet. -- Page 7 City Council Minutes June 22. 1987 e The oil spread on the Morrell Trucking lot can only be tested for PCB's. If it is properly mixed with soil. MPCA cannot stop usage as a dust controller. COUNCILMEMBER DOBEL MOVED TO APPROVE INSTALLATION OF CONCRETE CURB AND GU'l'TER AT ORONO PARK TO LOWEST BIDDER. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. Pat Klaers read the schedule of Orono Park project. The intersection of Proctor. Highway 10. and the service road was discussed by Council which had been brought to their attention at the June 18. 1987. Board of Review meeting. Klaers stated that the firm of Wuornos and Associates. the City Planning Consultants. are approaching their $5.000 maximum. COUNCILMEMBER TRALLE MOVED TO AUTHORIZE WUORNOS AND ASSOCIATES TO PROCEED UP TO AN ADDITIONAL $5.000. COUNCILMEMBER SCHULDT SECONDED THE MOTION. THE MOTION CARRIED 5-0. 8. Adjournment e COUNCILMEMBER HOLMGREN MOVED TO ADJOURN THE JUNE 22. 1987. MEETING OF THE ELK RIVER CITY COUNCIL. COUNCILMEMBER TRALLE SECONDED THE MOTION. THE MOTION CARRIED 5-0. There being no further business. the meeting adjourned at 11:20 p.m. Dani1le Mathison Recording Secretary e