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11-07-2005 CC MIN MEETING OF THE ELK RIVER CITY COUNCIL HELD AT THE ELK RIVER CITY HALL MONDAY, NOVEMBER 7, 2005 Members Present: Mayor Klinzing, Councilmembers Dietz, Farber, Gumphrey, and Motin Members Absent: None Staff Present: Finance and Administrative Services Director/Interim City Administrator Lori Johnson, City Engineer Terry Maurer, Community Development Director Scott Clark, Street Superintendent Phil Hals, Assistant Street Superintendent Mark Thompson, Parks and Recreation Director Bill Maertz, Ice Arena Manager Rich Czech, Ice Arena Maintenance Supervisor Jerry Davis, Utilities General Manager Bryan Adams, and Recording Secretary Jessica Miller 1. Call Meeting To Order Pursuant to due call and notice thereof, the meeting of the Elk River City Council was called to order at 6:30 p.m. by Mayor Klinzing. 2. Consider 11/07/2005 Agenda MOVED BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER MOTIN TO APPROVE THE AGENDA. MOTION CARRIED 5-0. 3. Consider Consent Agenda MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY COUNCILMEMBER FARBER TO APPROVE THE FOLLOWING CONSENT AGENDA: 3.1. OCTOBER 17, 2005 CITY COUNCIL MINUTES 3.2. CHECK REGISTER 3.3. ELK RIVER ICE ARENA PRO HOCKEY PROFILE BANNER INSTALLATION AND FUNDING MOTION CARRIED 5-0. 4. Open Mike No one appeared for Open Mike. City Council Minutes Page 2 November 7, 2005 ----------------------------- 5.1. Resolution 05-120 Granting Easement Vacation to Vacate a Portion of the Right-of-Way of Parrish Avenue at its Intersection with Main Street in the Downtown as Requested by the City of Elk River, Public Hearing, Case No. EV 05-10 Community Development Director Scott Clark explained that the City of Elk River is proposing to vacate a portion of Parrish Avenue right-of-way at the intersection of Main Street. Mr. Clark indicated that this will allow for MetroPlains to construct the underground parking lot for the Bluff Block building as proposed. Mayor Klinzing opened the public hearing. There being no one to speak to this issue, Mayor Klinzing closed the public hearing. MOVED BY COUNCILMEMBER GUMPHREY AND SECONDED BY COUNCILMEMBER DIETZ TO ADOPT RESOLUTION 05-120 VACATING A PORTION OF STREET EASEMENT ON PARRISH AVENUE, CASE NO. EV 05-10. MOTION CARRIED 5-0. 6.1. Street Department Update 6.1.A. 2005-2006 Snowplow Policy Street Superintendent Phil Hals stated that each fall the City Council is asked to review and adopt the city’s snow and ice control policy which sets the general guidelines as to how the city deals with snow and ice on city streets, sidewalks, and parking lots. Mr. Hals explained that there are 9 truck routes for streets, one loader for parking lots, one loader for cul-de- sacs, one pickup for trails, one sidewalk plow, and a contractor for cul-de-sacs. Mr. Hals indicated that plowing operations will begin at 3:00 a.m. and each unit will have a designated priority route that will take about 2 hours to complete before beginning their designated route. He noted that a 4” to 6” snowfall will take about 10 hours to plow. MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY COUNCILMEMBER FARBER TO ADOPT THE 2005-2006 SNOW AND ICE CONTROL POLICY. MOTION CARRIED 5-0. 6.1.B. Update on Brush Pile Project Street Superintendent Phil Hals stated that the volume of brush that has been collected since the September wind storm is equal to what is normally collected in six months. Mr Hals stated that the Street Department picked up tree limbs and brush from over 120 residences and additional brush was hauled to the compost site by residents. Mr. Hals complimented his staff for their response the night of the wind storm and also for their hard work picking up the brush and tree limbs from residences. Councilmember Dietz indicated that he has received many compliments as to how thorough the Street Department was in picking up the brush. 6.1.C. Building and Site Improvements Street Superintendent Phil Hals and Assistant Street Superintendent Mark Thompson presented photographs and reviewed the progress of the public works building construction and site improvements. City Council Minutes Page 3 November 7, 2005 ----------------------------- 6.2. Resolution 05-121 Ordering the Preparation of Plans and Specifications for Waco Street and Utility Improvement City Engineer Terry Maurer explained that with the start of the Target Technology Center and the recent approval of Pinewood Estates Second Addition, there is a need to extend city utilities and reconstruct the southern portion of Waco Street from approximately 1,000 feet north of County Road 30 to County Road 30 (Mississippi Road). Mr. Maurer stated that the developer’s agreement for the Target project allows the city to assess Target for one-half of the cost of these improvements, not to exceed $250,000. He noted that because of this condition to the developer’s agreement, the city can skip completing the feasibility study and begin with preparation of plans and specifications. Mr. Maurer added that one of the conditions of the Pinewood Estates Second Addition requires the developer to pay $1,500 per lot towards the reconstruction of Waco Street. Mr. Maurer noted that Elk River Municipal Utilities may want to include watermain to the east of the Target site to complete their water loop. Staff would recommend this be added to the project if requested by Elk River Municipal Utilities and if they agree to pay the cost as they have on recent reconstruction projects. Mayor Klinzing questioned if the city purchases Pinewood and it is not developed, would the city have to pay for these improvements. Mr. Maurer indicated that the city would end up paying a portion of the improvements regardless of what happens with the Pinewood development. MOVED BY COUNCILMEMBER GUMPHREY AND SECONDED BY COUNCILMEMBER MOTIN TO ADOPT RESOLUTION 05-121 ORDERING THE PREPARATION OF PLANS AND SPECIFICATIONS IN THE MATTER OF THE WACO STREET AND UTILITY IMPROVEMENT OF 2005. MOTION CARRIED 5-0. 6.3. HRA Update Councilmember Motin provided an update of the HRA meeting held earlier this evening. He stated that the HRA reviewed and approved a workplan for the area north of Highway 10. He stated that the workplan will come before the Council for input and is expected to take six to nine months to complete. 6.4. Parks and Recreation Update Parks and Recreation Director Bill Maertz provided an update on recent Parks and Recreation activities. He noted that staff is proposing a 5% increase in the park dedication fees for next year due to the rising costs of fuel and steel. Mr. Maertz indicated that the Ice Arena Manager’s office is on schedule, the Ice Arena roof repair is almost complete, and improvements are being made to the interior and exterior of the Emporium. 6.5. Library Board Update City Council Minutes Page 4 November 7, 2005 ----------------------------- Parks and Recreation Director Bill Maertz stated that on October 4, 2005, the Library Board interviewed three architectural firms: KKE Architects, Kodet Architects, and Tushie- Montgomery Architects. He stated that the Library Board unanimously selected KKE Architects which submitted a contract to provide the identified site analysis and recommendation for a fixed fee of $7,800. Mr. Maertz noted that Librarian Mick Stoffers and Library Board Chair Anne Schroeder were in attendance to answer questions. Councilmember Dietz questioned if the $7,800 quote was in line with the other architectural firms. Mr. Maertz indicated that the prices are consistent with the other firms’ fee schedules. Councilmember Dietz questioned where the Library Board is at with evaluating the surveys. Librarian Mick Stoffers indicated that two Library Board members will be compiling the survey results into one document. MOVED BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER DIETZ TO APPROVE THE CONTRACT WITH KKE ARCHITECTS FOR $7,800.00 TO PROVIDE THE IDENTIFIED SITE ANALYSIS AND RECOMMENDATION FOR THE LIBRARY EXPANSION. MOTION CARRIED 5-0. 6.6. Appointment to ISD 728 Selection Committee Finance and Administrative Services Director/Interim City Administrator Lori Johnson indicated that Independent School District 728 is requesting that the City Council select someone from the city to serve on a Selection Committee that has been established to recommend a person to fill the School Board position recently vacated by Daryl Thompson. Mayor Klinzing indicated that she would like to see the appointment first open to Councilmembers. Councilmember Farber expressed interest but didn’t feel it would be appropriate as his wife is a School Board member. Councilmember Gumphrey indicated that he would act as the city representative to the Committee. MOVED BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER DIETZ TO APPOINT COUNCILMEMBER GUMPHREY TO THE INDEPENDENT SCHOOL DISTRICT 728 SCHOOL BOARD SELECTION COMMITTEE. MOTION CARRIED 5-0. 7. Other Business Finance and Administrative Services Director/Interim City Administrator Lori Johnson reviewed the draft joint City Council/County Board worksession agenda. Ms. Johnson indicated that staff would like the topic of household hazardous waste added to the agenda. The Council also indicated that it may be appropriate for the potential Elk River Landfill expansion to be added for discussion and for the future plans for the Wilson property to be discussed and the Government Center expansion plans. 8. Staff Updates There were no staff updates. City Council Minutes Page 5 November 7, 2005 ----------------------------- The City Council recessed at 7:14 p.m. into the Upper Town Conference Room. The City Council reconvened at 7:20 p.m. 9.1. Boys & Girls Club Presentation Duane Howard, Executive Director of the Boys and Girls Club, reviewed the mission of the Boys and Girls Club and what purpose donations serve. Mr. Howard indicated that he would like to see the city’s contributions continue and that the Club could work with staff to find an arrangement that works for both the Club and for the city. Mr. Howard stated that the Club appreciates the support the city has given the Club in the past and appreciates any future support. Mayor Klinzing questioned if the city were to continue the $15,000 contribution through a pay for services agreement if that would be enough to continue some of the programming. Mr. Howard stated that it would be great if the city could contribute $15,000 and that he could work with Parks and Recreation Director Bill Maertz to ensure that programming is not duplicated between the Boys and Girls Club and City Recreation. Councilmember Dietz indicated that if money is contributed outside the Landfill funds, he would like to see the money used towards the Teen Coordinator position rather than for gym rental. Finance and Administrative Services Director/Interim City Administrator Lori Johnson noted that there is currently no money in the budget for the Boys and Girls Club and that the Council would have to review the budget or take the money from a different fund if they wish to contribute to the Club. It was the consensus of the Council for Mr. Howard to prioritize the Club’s needs and come before the Council with specific programming requests like he did last year. Ms. Johnson indicated that she will review some funding options and this issue can be added to the December 5, 2005 budget discussion. 9.2. YMCA City Contribution Discussion Finance and Administrative Services Director/Interim City Administrator Lori Johnson stated that at the August 8, 2005 Council meeting, the Council requested that staff prepare estimates of the tax impact of a $3,000,000 30-year lease purchase agreement for construction of a YMCA. Ms. Johnson reviewed the tax impact of the potential YMCA project. Mayor Klinzing explained that the topic of the city funding programs through an endowment has been brought up by the YMCA. She indicated that the city cannot do this as they must pay for the construction of the YMCA building and that any services paid for would have to be done through a pay for services agreement much like previous arrangements between the city and the Boys and Girls Club. Councilmember Farber indicated that he would like to see the funding provided through a referendum if the project moves forward. He stated that if the referendum passes then the City Council Minutes Page 6 November 7, 2005 ----------------------------- residents want and will use a YMCA and if the referendum does not pass then the message is clear that the community will not support a YMCA. Councilmember Motin concurred. Mayor Klinzing stated that the YMCA has indicated they are not in favor of the city obtaining funding through a referendum as that is not normally how YMCA funding is obtained. She stated that a referendum would leave it up to the residents and that if the city were to fund without a referendum then other items would have to be cut from the budget. Councilmember Dietz questioned what would happen if the city passes a referendum and the county does not provide their portion of the funding. Mayor Klinzing indicated that the referendum question could be written to include a contingency of the county providing their portion of the funding. Councilmember Dietz indicated that he would like to discuss this issue with the county at the joint city/county worksession and see where the county stands on this issue. 9.3. Pinewood Golf Course Update Mayor Klinzing explained that residents of the Pinewood area have expressed interest in having the Council purchase the golf course rather than having it become a residential development. Mayor Klinzing stated that she has had two meetings with Mr. Krause and he has indicated that he would like a purchase price of $2.9 million for the course but would be willing to accept $2.4 plus interest. She indicated that Mr. Krause stated that he would like $500,000 up front to cover development expenses and that he is willing to take payments for the remainder. Parks and Recreation Director Bill Maertz reviewed budget figures and summaries he prepared if the city were to purchase and run the Pinewood Golf Course. Councilmember Farber stated that he believes that if advertising and marketing were increased for Pinewood that the revenues would go up substantially. Mr. Maertz noted that currently Pinewood has no website and is not marketed. He stated that if the city were to purchase it could be marketed both on the city’s website and through City Recreation marketing materials. Councilmember Dietz indicated that residents have expressed concerns over spending this type of money on a golf course because 25 residents are upset about a potential residential development near them. He stated that he believes the purchase should be brought before the voters on a referendum much like the YMCA proposal as discussed earlier. Councilmember Farber stated that he believes Pinewood is an investment and that the city can sell it for development after a couple years if the golf course if not profitable. Mr. Maertz indicated that the city should hold an informational neighborhood meeting if they purchase it to explain to the residents that if the course if not profitable, the city reserves the right to sell the property for development at any time. Councilmember Gumphrey questioned how the golf course purchase would be funded. Ms. Johnson explained that some possible funding sources would be reserve funds that are not designated for other purposes such as funds from the RDF payment in lieu of taxes, the government building reserve, the undesignated portion of the capital outlay reserve, and the park dedication fund. Councilmember Gumphrey indicated that he is skeptical about depleting a majority of the city’s reserves. City Council Minutes Page 7 November 7, 2005 ----------------------------- Councilmember Dietz stated that there are many golf courses within a 15-mile radius and that Mr. Maertz told him that golf courses are down as an investment. Mr. Maertz indicated that is true and that the golf course may not be the best investment but will be a great recreational amenity. Councilmember Farber noted that the residents brought this issue to the Council’s attention but that he is not in favor of buying it for their sake but rather because it is a great recreational amenity for the city. MOVED BY MAYOR KLINZING AND SECONDED BY COUNCILMEMBER FARBER TO DRAFT A LETTER OF INTENT TO MR. KRAUSE FOR THE PURCHASE OF PINEWOOD GOLF COURSE ON A FIVE-YEAR CONTRACT FOR DEED WITH THE FOLLOWING ITEMS NOTED: ? PURCHASE PRICE $2.4 MILLION AT FIVE PERCENT INTEREST WITH $500,000 DOWN AND $200,000/YEAR PAYMENTS WITH A BALLOON PAYMENT IN THE FIFTH YEAR. ? IF PURCHASED, THE COUNCIL WILL HOLD AN INFORMATIONAL NEIGHBORHOOD MEETING EXPLAINING THAT THE CITY HAS THE OPTION TO SELL THE GOLF COURSE AT ANYTIME IF IT BECOMES A FINANCIAL DRAIN FOR THE CITY. ? THE APPRAISAL MUST COME BACK WITH VALUE OF AT LEAST $2.4 MILLION AS GOLF COURSE. MOTION CARRIED 3-2. Councilmembers Dietz and Gumphrey opposed. Ms. Johnson indicated that she will work with City Attorney Peter Beck to get appraisal on the golf course and a letter of intent written to Mr. Krause. 9.4. Presentation from Steve McDonald – Abdo, Eick, and Meyers Finance and Administrative Services Director/Interim City Administrator Lori Johnson introduced Steve McDonald of Abdo, Eick, and Meyers, the company that audits both the city and Elk River Municipal Utilities (ERMU). Mr. McDonald stated that his goal is to update the Council on the recent embezzlement from ERMU and answer any questions the City Council may have. (Councilmember Motin stepped out as this may be a conflict for him) Mr. McDonald explained how Ms. Patricia Hemza committed the embezzlement and how it was discovered. Mr. McDonald indicated that the two key factors that allowed this to happen were that the payroll system was not integrated with the financial system and that one employee had control of all aspects of the financial operations. Mr. McDonald indicated that in response to this embezzlement, ERMU immediately made changes to internal controls. He explained that the payroll system and general ledger are now integrated and other checks and balances have been put in place to ensure this type of thing City Council Minutes Page 8 November 7, 2005 ----------------------------- does not happen again. Mr. McDonald also reviewed what Abdo, Eick, and Meyers is doing differently as a firm to prevent this from happening again. Councilmember Farber questioned if it had been recommended during audit that ERMU integrate their systems. Mr. McDonald indicated that the comment had been written on ERMU’s audit in previous years. Mr. McDonald noted that it is not uncommon for some companies to have separate systems for billing and payroll, although it is recommended for these systems to be integrated. Councilmember Dietz stated that he would like to see separate wage accounts set up for each division of work so total wages could be reconciled easily at the end of the month. Mr. McDonald stated that Utilities is unique in that they have a lot of job costing and are required to account for each aspect of their duties but that the system could be set up to have separate wage accounts. He noted that the system integration will help reconcile the payroll much easier than before. Councilmember Dietz indicated that he would like to see all checks accounted for and if a check is voided it should be kept with the bank statement and a written explanation should be included. Councilmember Dietz questioned if someone different from who does the payroll is reconciling the payroll accounts at the end of the month. Mr. McDonald indicated that yes, the duties have been segregated. Councilmember Dietz noted that in previous years, the auditors noted on the audit that the financial duties of ERMU needed to be segregated. Councilmember Dietz questioned if an insurance claim has been filed. Ms. Johnson indicated that it has and noted that the city and ERMU are covered for the entire $260,000 minus the $2,500 deductible. Ms. Johnson indicated that the city/ERMU will see an increase in premiums if this claim is reimbursed and that Councilmember Dietz has suggested that ERMU pay the difference in the cost. ERMU General Manager Bryan Adams indicated that restitution has been filed with the court including court fees and auditing fees and any insurance money received would be minus any restitution received. Mayor Klinzing questioned where the city is at with the financial process. Ms. Johnson indicated that financial duties are dispersed among all Finance Department employees, the city has two separate accounts – one for general ledger and one for payroll, no transactions are posted manually, and the financial systems have been integrated since 1986. The City Council thanked Mr. McDonald for sharing this information with them. (Councilmember Motin returned to the meeting) 9.5. Comparable Worth Appeal of Ice Arena Supervisor Jerry Davis Finance and Administrative Services Director/Interim City Administrator Lori Johnson reviewed background and history of the comparable worth appeal by Ice Arena Maintenance Supervisor Jerry Davis. Ms. Johnson also provided an overview of the role of the Personnel Committee. Ms. Johnson noted that Lauren Wipper and Joan Schmidt were present representing the Personnel Committee. She indicated that in February 2004, Mr. Davis filled out a Job Analysis Questionnaire that was returned with a point value of 58. Ms. Johnson stated that the Personnel Committee reviewed the JAQ and concurred with the point City Council Minutes Page 9 November 7, 2005 ----------------------------- ranking. She explained that Mr. Davis was not pleased with the results of the JAQ and appealed the Personnel Committee’s decision to the city administrator. She stated that at that time, Personnel Committee representative Bruce West spent many hours with Mr. Davis and Mr. Czech filling out a new JAQ to ensure that all job duties were reflected and the revised JAQ also came back with a point ranking of 58. Ms. Johnson stated that Mr. Klaers rejected the appeal by Mr. Davis and that is why Mr. Davis is appealing the comparable worth ranking to the City Council. Mr. Davis thanked the Council for taking the time to hear his appeal. He indicated that he doesn’t believe the JAQ he filled out correctly represents his position because it did not pertain to the ice arena. Ms. Johnson indicated that many times the position profiles do not deal exactly with one’s position but that job duties fall under different, more generic topics. Mr. Davis presented information on similar positions in metro cities and stated that he is much lower paid than those positions. He stated that he holds a very important position at the arena and believes he is underpaid for the work he does. Ms. Johnson noted that jobs across the board will pay more in metro cities and Elk River cannot be compared to those cities. Ice Arena Manager Rich Czech agreed that the JAQ was difficult to fill out because the exact job duties were not listed and that it would have been nice to have something to fill out that related closer to the ice arena duties. Mr. Czech indicated that he compared Buffalo, Owatonna, and Hastings and found that Hastings compares the closest to Mr. Davis’ duties. Councilmember Faber questioned if anyone else would be able to take over Mr. Davis’ job duties in his absence. Mr. Czech indicated that staff would know which company to call to get the equipment repaired but with mainly part-time staff it is difficult to train people on equipment repair. Councilmember Dietz stated that if the pay is to be raised, a new position would have to be created because it would be a bad precedent to raise someone’s pay when their point ranking has been returned with the same value twice. Ms. Johnson noted that in order to get the point ranking to be raised, the new position would have to acquire additional duties. Mayor Klinzing indicated that she would like Mr. Czech and Mr. Maertz to review Hastings job description and analyze what additional job duties can be passed on to Mr. Davis and to work up a new job title and job description and have Mr. Davis go through the process of filling out a new JAQ. The Council concurred. 9.6. Discuss Staff Organization 9.6.A. Community Development Department Update Community Development Director Scott Clark indicated that he has spent the last two months meeting with staff to evaluate personnel issues, development process, and to talk about new projects. Mr. Clark indicated that Finance and Administrative Services Director/Interim City Administrator Lori Johnson met with each division in his department individually to help get honest feedback. Ms. Johnson stated that these meetings were mostly positive and she found that most employees are open to change. City Council Minutes Page 10 November 7, 2005 ----------------------------- Mr. Clark explained that staff is suggesting that the Planning Commission regular meeting and the Planning Commission workshop days be switched. He stated that this will provide staff with over a month to prepare and gather information from other groups to present to the Planning Commission. He noted that currently there are many times when the Planning Commission is asked to make decisions based on limited information due to time constraints. Mr. Clark reviewed some personnel issues. He stated that there are three internal applications for the building official position and interviews will take place next week. He also stated that the hiring of a lead planning position is under review and it is hoped that position will be filled by December or January 2006. He indicated that one more major issue under review is code enforcement which is proposed to be discussed as part of the 2006/2007 budget. He stated that he believes there are too many people currently dealing with code enforcement and issues remain unresolved because of this. Councilmember Farber indicated that there used to be one person dealing strictly with code enforcement but it is a high burn out position. Councilmember Farber stated that he would like to see monthly or bi-monthly updates given to the Council on development projects so they are able to answer resident’s questions. Mr. Clark indicated that bi-monthly updates would be the best and that gives staff time to contact developers for progress updates if needed. Mr. Clark noted that updates could also be given on complaints. 9.6.B. City Administrator Position Councilmember Dietz indicated that there have been many changes at City Hall in the last six months which has caused turmoil and he believes the way to help relieve some of that stress would be to appoint Finance and Administrative Services Director/Interim City Administrator Lori Johnson as City Administrator. MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY COUNCILMEMBER FARBER TO APPOINT LORI JOHNSON AS CITY ADMINISTRATOR AND FOR A CONTRACT TO BE NEGOTIATED WITH COUNCILMEMBER MOTIN WITH THE CONDITION THAT A 4/5 VOTE OF THE COUNCIL BE REQUIRED TO REMOVE ANY FUTURE CITY ADMINISTRATOR. Mayor Klinzing questioned if Ms. Johnson is comfortable with this appointment. Ms. Johnson indicated that she would like time to discuss the issue with her current staff and with Councilmember Motin prior to making her decision. She thanked the Council for their offer. MOTION CARRIED 5-0. 10. Adjournment There being no further business, Mayor Klinzing adjourned the meeting of the Elk River City Council at 10:25 p.m. Minutes prepared by Jessica Miller. City Council Minutes Page 11 November 7, 2005 ----------------------------- ___________________ Joan Schmidt City Clerk