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02-13-2006 CC MIN . . . MEETING OF THE ELK RIVER CITY COUNCIL HELD AT THE CITY OF ELK RIVER (UPPER TOWN CONFERENCE ROOM) MONDAY, FEBRUARY 13,2006 Members Present: Mayor Klinzing, Councilmembers Dietz, Motin, Farber, and Gumphrey Members Absent: None Staff Present: City Administrator Lori Johnson, City Attorney Peter Beck, Street Superintendent Phil Hals, Assistant Street Superintendent Mark Thompson, Parks and Recreation Director Bill Maertz, Police Chief Jeff Beahen, Prosecuting Attorney Chris Johnson, City Engineer Terry Maurer, Human Resources Clerk Lauren Wipper, and City Clerk Joan Schmidt 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 7:10 p.m. by Mayor Klinzing. 2. Consider Council Agenda MOVED BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER GUMPHREY TO APPROVE THE AGENDA. MOTION CARRIED 5-0. 3. Consider Consent Agenda MOVED BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER MOTIN TO APPROVE THE FOLLOWING CONSENT AGENDA ITEMS: 3.1. FEBRUARY 6, 2006 REGULAR CITY COUNCIL MINUTES 3.2. RENEWAL OF GARBAGE HAULER LICENSES 3.3. TRANSIENT MERCHANT LICENSE FOR SHIRLEY MADLAND 3.4. AUTHORIZATION TO ADVERTISE FOR THE ENVIRONMENTAL ASSISTANT POSITION - ITEM POSTPONED 3.5. MASSAGE THERAPIST LICENSE FOR TONI PETERSON AT SALINA SALONS 3.6. AUTHORIZATION TO PURCHASE A GRAPPLE BUCKET FOR LOADER FOR STREET DEPARTMENT 3.7. ADOPT RESOLUTION 06-16 ACKNOWLEDGING CONTRIBUTION FROM WAL-MART TO BE USED BY THE ELK RIVER POLICE DEPARTMENT 3.8. AUTHORIZATION TO ADVERTISE FOR THE PART-TIME CABLE ASSISTANT POSITION MOTION CARRIED 5-0. 4. Open Mike There was no one present for Open Mike. City Council Minutes February 13, 2006 Page 2 5. Worksession . 5.1. Council Open Forum Nothing discussed. 5.2. Street Department Office Expansion Through a PowerPoint presentation, Phil Hals illustrated a floor plan to add office space to the street department through the conversion of bay one of the garage area into a receptionist area, sign making shop, four offices and an expansion area with a mezzanine above for additional break room space and storage. He explained that the existing office could be converted into locker rooms and conference room. He explained that he estimated the cost to be $250,000 - $350,000. Council directed staff to study the office space issue, keeping the garage bay for use as originally intended, and to consider ways to get the most for the net dollar amount. 5.3. Authorization to Contract with Sherburne County to Include Pedestrian Tunnel for Great Northern Trail Under CR 33 Bill Maertz explained that the plans for the Great Northern Trail are to pave from Elk River to Princeton making it a premier regional trail with anticipated heavy use. The opportunity exists to contract with Sherburne County Public Works to include a pedestrian tunnel under CR 33 during reconstruction this summer. To wait and add this tunnel in the future after road reconstruction could potentially double the cost. He suggested amending the 2006 Parks Budget to do this project. . Councihnember Motin inquired if Sherburne County has been asked to pay a portion for the tunnel. Mr. Maertz stated that the county is willing to do the engineering but since this is not part of their mission the county has said no to financial help. He stated that if the city doesn't fund this project, the tunnel will not be built. \ Councilmember Farber stated that he feels this is a necessary project and is disappointed with the county. MOVED BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER GUMPHREY TO APPROVE THIS PROJECT. MOTION CARRIED 5-0. 5.4. Staff Direction Regarding Funding a Trail Along CR 33 and Pedestrian Tunnel Under CR 1 Bill Maertz explained that CR 1 and CR 33 are scheduled for reconstruction this year. He stated that there is a potential to include a trail along CR 33 at an estimated cost of $40,000. However, it is believed that constructing this trail without constructing a pedestrian tunnel at the CR 1 crossing would create a serious safety hazard since the CR 33 trail would route people to a high-speed roadway with an uncontrolled crossing. He stated that without the pedestrian tunnel and CR 33 crossing, residents of northwest Elk River would not have a safe pedestrian access to the Great Northern Trail which provides access to Woodland Trails Park, the schools, and downtown Elk River. Preliminary cost estimates for the pedestrian tunnel are $425,000 which includes the land acquisition. . . . . City Council Minutes February 13, 2006 Page 3 Discussion followed on the possibility of installation of a signal light. ChiefBeahen felt that signalization wouldn't happen because of low activity. Mr. Maurer stated the city could build a four-way signal system if the county would allow. Mayor Klinzing stated that she felt the public would look at this pedestrian tunnel as not necessary at this time. She felt it would be better to look into a signal light intersection. Councilmember Motin asked if we would still have the land to add the trail in the future. Mr. Maertz stated that yes, we can add the trail later. It was the consensuses of the council to have staff explore signal options. 5.~. City Organizational Structure Relating to Prosecuting Attorney Lori Johnson stated that Councilmember Farber wished to have discussion on this item. Prosecuting Attorney Chris Johnson and Police Chief Jeff Beahen were in attendance. She stated that Elk River is unique to have an in-house prosecuting attorney. She stated that mainly larger cities that have a legal department will have staff attorneys providing civil and prosecuting services. In this scenario, the prosecuting attorney reports to the city attorney. Most cities contract with a legal firm for their prosecuting services. In the cities with contracted prosecuting services, most report to the police chief. However, most in-house prosecuting attorneys report to the city attorney if there is one on staff or to the city administrator. She stated that the prosecuting attorney needs to be allowed to exercise independent judgment to decide whether or not to prosecute a case. To eliminate any perception of conflict, it is appropriate for the prosecuting attorney to report to the city administrator. Ms. Johnson stated that both short and long-range plans for this department need to be identified and considered before any decisions or changes made. She suggested a committee approach with one or two council members working with Chief Beahen, Attorney Johnson, Attorney Beck and herself to work through the issues. She stated these issues required more discussion than council may wish to get into this evening. Councilmember Farber stated he liked the committee idea and wished to be part of the committee. Councilmember Motin stated he would be part of the committee but that meetings would have to wait until after April 15. Councilmember Dietz stated that he would like to see this department moved back into d1e mainstream of city hall and that Attorney Johnson is to realize d1at he is to report to Ms. Johnson. Ms. Johnson stated that staff will work on the relocation but that this move won't happen immediately. 5.6. Prevailing Wage Ordinance Lori Johnson explained that Amy Bodnar in December at Open Mike had requested the city to adopt a prevailing wage ordinance. Ms. Johnson explained that the City of Elk River is City Council :Minutes February 13, 2006 Page 4 covered by prevailing wage laws through the Federal Davis-Bacon Act and the State of Minnesota's prevailing wage law for all projects funded in whole or in part by federal or state funds. Projects not covered by prevailing wage laws are building and improvement projects funded by the city. Therefore the adoption of a local prevailing wage ordinance would apply only to city funded projects. . Discussion followed that the city does not have issues with quality of work or timeliness of completion but that this would be a policy issue. Attorney Beck stated that this is something the city can do and there are no legal issues. The downside of adopting such an ordinance would be the issues of enforcement and hidden overhead costs. Councilmember Gumphrey stated that he doesn't feel this is a union or non union issue. He stated that he is concerned that we are taking the lowest bidder and the difference can't be all in wages when there's a difference of over $200,000 as in the Northstar Business Park project. He stated that when an employer wants a job, they get it, whether they are union or non union. If a company doesn't have any work and there's a project available and the contractor wants to keep his guys employed, he'll bid that project accordingly and it doesn't necessarily have anything to do with prevailing wage but on the margin of what he's going to make. Terry Maurer stated that he doesn't mean to make this a union or non union issue. He stated that this doesn't bring into account the competitive bidding environment, how much work each contractor has, and other issues that all factor into this process. He stated that staff has no way of knowing what adding this kind of ordinance mayor may not do to the overall bidding environment. Mayor Klinzing stated she liked the idea of placing a project cost threshold before such an ordinance would apply. . Councilmember Motin stated he doesn't feel it makes sense to have a prevailing wage at the city level. He stated that the Davis-Bacon Act was enacted because people from one state that were much less skilled with much lower wages were going into another state where there was higher pay and were able to undercut projects; and those people were not familiar with the code and regulations at that time and were giving a substandard product. He stated that the Davis-Bacon Act was encouraged not for prevailing wages but to avoid that undercutting. He stated that if someone is not being paid prevailing wage doesn't mean they are not being paid well or fairly. There are a lot of costs associated for the groups that are using the prevailing wage while for those who are not paying that same rate may not incur that same cost. He stated that one of the arguments used at the federal and state levels and that the labor unions have is that people have better training. He stated that contractors at the local level are not likely to train for the one project, that we don't have the massive projects that are going to encourage them to bring that extra skill and education into place. He stated such an ordinance wouldn't get the city a better project, that the same people doing construction now would submit bids for upcoming city projects whether or not prevailing wage is required on the project. He stated that there may be some benefits but feels that the burdens that get added to the city would not justify this ordinance. Councilmember Dietz agreed and stated that he doesn't feel the city has issues of timeliness or quality and that this would increase the cost of projects. He stated that there is no need for this city ordinance. . . . . City Council Minutes February 13, 2006 Page 5 Councilmember Farber agreed and stated that the city has turned down low bidders because of knowledge of their quality of work. He stated that he doesn't see the benefit to such an ordinance. Mayor Klinzing inquired if it would be possible to put into the bidding process the inclusion of wages being paid and how that compares to other projects that would have been paid prevailing wage. Attorney Beck stated that this could be a decision made on a project by project basis. A project could be one that would be bid on a prevailing wage and the city would not have to have an ordinance in place to specify that but it would be part of the specs. Councilmember Motin was concerned how the city would enforce this and the danger of someone interpreting an ordinance that we wouldn't have. Councilmember Farber stated that if we want the quality of the wages then we can't ask for a lesser bid because what was originally submitted was too high. In essence we encourage subcontractors to get cheaper and cheaper. Councilmember Gumphrey stated that a lot of companies pay a lesser benefit but competitive wage and as far as enforcement, nine out of ten times, he gets needed information from the general contractor and the entity is not involved. Enforcement is done by the general contractor. Attorney Beck and City Engineer Maurer will check to see if the provision of asking for the rate of wages paid to be included in a submitted bid is allowed and evaluate if the city will lose bidders as a result of this being part of the specs. Councilmember Gumphrey stated that this is a great idea but feels that contractors will be skeptical to include this information. Councilmember Motin questioned if this information would be helpful and if the city would be criticized for asking for another report. Mayor Klinzing stated that she appreciates any information staff can put together and will wait to hear from the council members for their direction if they wish to discuss this item again in the future. 5.7. Pinewood Golf Course Update Peter Beck reviewed the terms of the proposed purchase agreement for the Pinewood Golf Course. He stated that he has been working with Glen Nord, attorney for Paul Krause, on the terms of the agreement and that Mr. Nord was present. He stated that the council had approved an offer of $1.8 million and that Mr. Krause had requested a seven-year contract for deed, however, state law will only allow cities to enter into a five-year contract for deed. Attorney Beck proposes the city pay a non-refundable $300,000 down payment at the time the purchase agreement is entered into. The purchase agreement would provide for purchase of the property and a five-year contract for deed two years from the date of the purchase agreement. The contract for deed would be for interest only and $1.5 million City Council Minutes February 13, 2006 Page 6 would be payable in a balloon payment at the end of that five years which would begin two years from the date of the purchase agreement. . The city would enter into a separate lease agreement to lease the golf course for the next two years with this lease amount being the same amount as interest payments. He stated that there are some issues that need to be resolved in not having title to the property the first two years, to make sure that we have all the rights and conditions to ownership that we need in order to operate a golf course. It would clearly be stated that the city is not buying the business but leasing and buying the land and equipment. He also suggested to protect Mr. Krause against the possibility tl1at the council would fail to close the contract for deed to extend the final plat approval for an additional tl1ree years so if for any reason the council walked away from that $300,000 down payment and didn't close the sale in two years that there was still time left for a final plat approval. Councilmember Dietz stated that he is still very opposed to this project and with principal, interest, irrigation and equipment it is going to cost the city $2.7 million for this project. He doesn't believe the golf course is worth that amount of money and that paying 6 percent interest is exorbitant for these times. Councilmember Farber stated that he likes the project and that it is an important piece of property for the city. Councilmember Motin inquired if there would be the need for a majority vote in two years. Attorney Beck stated no, that tlus agreement would be self executing and that the city couldn't legally get out of the agreement; the city would have to default. The idea is not to leave a discretionary point. . Discussion followed on costs to open this spring, daily operation costs, and ways of funding. The Council reviewed handouts of projected estimated revenue from park dedication fees. The projection was with increases to fees for the next seven years. Councilmember Dietz stated that he is fine with the park dedication fees paying the $90,000 interest per year and the $300,000 down payment but doesn't feel the $1.5 million should come out of the park dedication funds. He stated that the city has seven years to decide how to pay the $1.5 million and didn't feel tl1at this burden should be with the park dedication funds. Councilmember Motin agreed. He stated that there must be some other type of reserves or alternatives and to leave this option open rather than to have the burden fall on the park dedication fees to pay the full amount. Councilmember Farber stated that he looks at this as a recreation not a business. We have trails and investments in parks that are costly and don't pay back a dime and he is not expecting to make money on this golf course but to have as another recreational activity. Attorney Nord stated that by structuring the payments this way Mr. Kraus has confidence that the city will pay him and this has enabled him to get the price down to a level tl1at works. Mr. Nord stated that everything he has heard tonight is what his client is expecting. Mayor Klinzing stated that discussion will occur again as to where the payment money will come from but that we need to look at the down payment money source. . City Council Minutes February 13, 2006 Page 7 . Ms. Johnson stated that the non-refundable down payment could come from the NSP Reserve or if the Council wanted the Park Dedication fund to pay, an inter-fund loan could be set up if there are not funds available in the 2006 Park Dedication fund. Staff will bring the fInal purchase agreement to council for approval along with options that are available for the funding. 5.8. Pay Plan Structure Review Proposal Lori Johnson stated that at the meeting of January 9 the Personnel Committee received permission from the Council to receive proposals from consulting services for the purpose of revising the city's pay plan structure to accommodate the city's new organizational structure. Proposals were received both from the Stanton Group and Riley, Dettmann, and Kelsey with the Personnel Committee recommending the proposal from Riley, Dettmann, and Kelsey which more accurately reflects what the committee feels needs to be accomplished. . She stated the recommended proposal includes reviewing the existing job descriptions and evaluating each using this company's evaluation methodology. She stated the Personnel Committee has encountered problems in evaluating environmental positions and the ice arena supervisor position. The new evaluation system includes weighing formal preparation and experience, decision making, thinking challenges and problem solving, interactions and communications, and work environment. Training for the Personnel Committee on how to evaluate positions using the RDK Evaluation Methodology is included in the proposal. The proposal also includes reviewing and modifying the pay plan as needed to accommodate the new positions created in the past few years. MOVED BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER GUMPHREY TO ENTER INTO A CONTRACT WITH RILEY, DETTMANN, AND KELSEY FOR A CLASSIFICATION STUDY RESULTING IN A REVISED PAY PLAN STRUCTURE IN AN AMOUNT NOT TO EXCEED $11,515.00 EXCEPT FOR ANY ADDITIONAL COST FOR EXTRA WORK FOR EVALUATING THE ENVIRONMENTAL POSITIONS AND THE ICE ARENA SUPERVISOR POSITION AND THAT FUNDING WOULD BE FROM THE COUNCIL CONTINGENCY BUDGET. MOTION CARRIED 5-0. 6. Council Updates Councilmember Motin stated that he will be coming back with a fInal job contract for the City Administrator position for council approval. Mayor Klinzing announced that a proposal has been sent to receive federal transportation funding for 193rd Avenue alignment. This proposal has been reviewed by the technical committee and is very high on their list. It would be in the amount of $950,000 with the appropriation year of 2010. Councilmember Gumphrey reported that he will be going to Washington with Elwyn Tinklenberg, meeting with federal representatives, and working towards getting additional funding. . City Council Minutes February 13, 2006 Page 8 7. Staff Updates . Ms. Johnson updated the council on open positions -- two applications received for the Planning Manager position with interviews held today; eleven applications received for the Finance Director position. She asked the council to let her know if any of the council members wished to be on the interviewing committee. She is hoping to interview next week or the week after. She stated that in regards to changes to the office structure there would be some costs involved and asked if she should proceed in figuring out what the costs would be. Council concurred. She stated in regards to the Builders Association lawsuit that the fInal signed consent decree was received today; she has received some inquires; she will make sure that reporting gets flied and thanked Councilmember Motin for his help. Attorney Beck stated that he has heard very high kudos from other city attorneys for our record keeping, the way it was handled, and accountability in this case. 8. Adjournment The meeting of the Elk River City Council adjourned at 9:07 p.m. \~ 4 /V ...._. /(./V~' J6m, ,bnlldt Mt1 Clerk . .