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11-06-2006 CC MIN . . . MEETING OF THE ELK RIVER CITY COUNCIL HELD AT THE ELK RIVER CITY HALL MONDAY, NOVEMBER 6, 2006 Members Present: Mayor Klinzing, Councilmembers Dietz, Farber, Gumphrey, and Motin Members Absent: None Staff Present: City Administrator Lori Johnson, Parks and Recreation Director Bill Maertz, City Attorney Peter Beck and Recording Secretary Debbie Huebner 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 11/06/2006 Agenda MOVED BY COUNCILMEMBER GUMPHREY AND SECONDED BY COUNCILMEMBER FARBER TO APPROVE THE AGENDA WITH THE FOLLOWING CHANGE: CONSIDER CONSENT AGENDA ITEM 3.5 BEFORE ITEM 5.1. MOTION CARRIED 5-0. 3. Consider Consent Agenda MOVED BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER MOTIN TO APPROVE THE FOLLOWING CONSENT AGENDA: 3.1. 10/1606 COUNCIL MINUTES 3.2. CHECK REGISTER 3.3. SUPPLEMENTAL AGREEMENT #1 FOR COUNTY ROAD 40 CONSTRUCTION 3.4. ACCEPT RESIGNATION OF BUILDING MAINTENANCE CUSTODIAN MOTION CARRIED 5-0. 3.5. Agreement for 1H 169 Study Commissioner Motin stated it was his understanding the cost of the study would be up to $1 million dollars, not exactly $1 million dollars. He suggested the language in the agreement be revised to reflect that the second payment be stated as "up to $500,000". City Administrator Lori Johnson stated that the payment will be adjusted based on the cost of the study but will not exceed $1 million. City Council Minutes Page 2 November 6, 2006 ----------------------------- MOTION BY COUNCILMEMBER MOTIN AND SECONDED BY COUNCILMEMBER FARBER TO APPROVE THE TH 169 STUDY AGREEMENT AND AUTHORIZE THE MAYOR AND CITY ADMINISTRATOR TO EXECUTE THE AGREEMENT, WITH THE FOLLOWING CHANGE: THAT THE LANGUAGE REGARDING THE SECOND PAYMENT OF $500,000 BE REVISED TO READ, “UP TO $500,000”. MOTION CARRIED 5-0. 4. Open Mike No one appeared for Open Mike. 5.1. Insurance Renewal Presentation by Mary Eberly Mary Eberly of First National Insurance Agency provided an update on the July 1, 2006 League of Minnesota Cities Insurance Trust (LMCIT) renewal, which includes the workers’ compensation insurance. Ms. Eberly explained that the workers’ compensation experience modification factor dropped from its already excellent rate of .81 to .68, resulting in a significant savings in premium for the upcoming year. She commended the City for its excellent safety and risk management efforts. Ms. Eberly stated that although the increase in premium is impacted by the Builder’s Associations lawsuit, 35 percent of the increase is due to additional equipment and property, such as the addition of the golf course and Westbound Liquor. She noted that an inflationary factor is added to keep pace with the value of the assets. Ms. Eberly noted that the rate for golf courses is higher, since these are generally open, less secure sites. Also, she pointed out that the future library and YMCA will be added to the City’s inventory next year. Mayor Klinzing asked how much the premium would be reduced by going with a $5,000 deductible. Ms. Eberly stated that the reduction is based on a 3-year claim history, so the result with be a net savings of approximately $10,000. Councilmember Motin asked for clarification on the Accident Equipment Breakdown noted on the deductible options. Ms. Eberly explained that this would be some type of mechanical equipment breakdown or failure at one of the facilities, such as the ice arena, and would include heating or air conditioning systems. Councilmember Farber asked which part of the insurance would pay for a new roof. Ms. Eberly stated that would be the property insurance component. Councilmember Dietz asked how the League is able to recoup the loss from the Builder’s lawsuit. Ms. Eberly explained that that the defense cost was $140,000 and that the participant pays the deductible. This means the City’s expense was around $18,000 - $19,000. She explained that this matter counts for about $25,000 in this year’s Municipal and Auto Liability premium increases, and will impact the City’s premium costs for the next two years, as well. Ms. Eberly noted that the lawsuit counts as two claims. Councilmember Dietz stated he felt the deductible should be increased. Councilmember Farber stated that he was not comfortable with a $10,000 deductible. . . . aty Council Minutes November 6, 2006 Page 3 MOTION BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER GUMPHREY TO APPROVE THE 2006 LEAGUE OF MINNESOTA CITIES INSURANCE TRUST PROPOSAL AT A COST OF $333,628, WITH NO CHANGE TO THE $2,500 DEDUCTIBLE. MOTION CARRIED 4-1. Councilmember Dietz opposed. Councilmember Farber asked if the $25,000 cost was anticipated in the 2007 budget. Ms. Johnson stated that the fee will be charged to the Building Division budget and will be covered by Building Permit fees. 5.2. Request from Habitat for Humanity Vance Zehringer, President of the Sherburne County Chapter Habitat for Humanity, presented a request to the Council to consider an offer to purchase the city-owned vacant lot at 1217 5th Street NW. He explained that a $112,000 grant has been offered by Thrivant Financial, with a condition that they secure a lot by January 15, 2006. Mr. Zehringer stated that the Sherburne Chapter proposes to pay up to $30,000 for the lot. Councilmember Gumphrey asked how they normally obtain lots. Mr. Zehringer stated that the first lot was donated by Jerry Minor and the second one was donated by the Northwest Builder's Association. Councilmember Motin stated that he was not inclined to accept an offer of 40 percent less than market value for the lot. Mr. Zehringer stated that the lot is relatively small and a buyer would be limited as to the size and type of house that could be built on it. He noted that if they do not secure a lot by January 15th, the grant will go to St. Cloud. Councilmember Dietz stated that its was his understanding that the Libr.uy Board was counting on obtaining full price for the lot, and he felt that the offer needs to be closer to the $50,000 price. Councilmember Gumphrey stated that he felt Habitat for Humanity was a good organization and he will be willing to donate the lot. Mayor Klinzing concurred, stating that the homes that have been built by them fit well in the neighborhoods where they are located. She stated she would support a reduction in the price of the lot. Councilmember Farber stated he supported the $30,000 offer for the lot, and that he felt the $20,000 difference would have little impact on the new libr.uy construction budget. Mayor Klinzing agreed that the $20,000 was not a "make or break" issue with the libr.uy. She stated that it is a small lot and may be on the market a long time. MOTION BY COUNCILMEMBER GUMPHREY AND SECONDED BY COUNCILMEMBER FARBER TO ACCEPT THE OFFER OF $30,000 FOR THE PROPERTY LOCATED AT 1217 5nI STREET NW BY HABITAT FOR HUMANITY. MOTION CARRIED 3-2. Councilmembers Dietz and Motin opposed. 5.3. ECONAR Acceptance of Conditions City Council Minutes November 6, 2006 Page 4 Parks and Recreation Director Bill Maertz stated that ECONAR has agreed to the conditions for acceptance of the donation. Staff recommends that the City Council accept the contribution from ECONAR. . Counci1member Dietz asked if the cost reduction has been negotiated. Mr. Maertz stated that it has not, but that staff will ensure the cost will be fair market value. Councilmember Dietz asked if he knew what the fair market value was. Mr. Maertz stated he was not sure, but that fair market value would be much greater than what the City will be paying. Counci1member Dietz asked if there would be any additional costs, such as installation. Mr. Maertz stated that KKE felt the additional piping cost would be minimal, and there would be no additional design cost. Mr. Maertz noted Mr. Overholser's concern regarding use of the meeting room for training sessions. It was the consensus of the Council that the room could be used for training purposes in accordance with City policy, as long as no sale of products occurred. MOTION BY COUNCILMEMBER MOTION AND SECONDED BY COUNCILMEMBER FARBER TO ACCEPT THE CONTRIBUTION FROM ECONAR BASED ON MR. OVERHOLSER'S LETTER RESPONDING TO THE CONDITIONS DATED OCTOBER 31, 2006, AND TIlAT THE WARRANTY BE THE SAME AS SPECIFIED IN THE BID DOCUMENTS. MOTION CARRIED 5-0. 5.4. Implementation of Mobile Software Police Chief Beahen provided background information regarding the purchase and implementation of new mobile software and hardware for the department. He stated that the new court services system (MNOS) will be brought online December 1, 2006 and ready for their input at that time. Chief Beahen explained that with $64,987 available in existing 2006 budget funds, the department is well within their budget to implement the software at $46,480. He estimated that implementation will save full time equivalent hours somewhere between.5 and.75 full time equivalent, which equates approximately $31,200 savings. . MOTION BY GUMPHREY AND SECONDED BY FARBER TO APPROVAL THE 2006 MOBILE SOFTWARE PURCHASEAT A COST OF $46,480 AS DETAILED IN CIllEF BEAHEN'S REPORTS TO THE COUNCIL DATED AUGUST 14 AND NOVEMBER 6, 2006. MOTION CARRIED 5-0. Mayor Klinzing expressed her thanks of behalf of the City of Elk River to Chief Beahen for a job well done. She stated that his efforts will save the City a great deal of time and money, and will save time in the court system, as well. 5.5. Resolution Providing for the Sale of $3.200.000 General Obligation Capital Improvement Plan Bonds. Series 2006C City Administrator Lori Johnson provided background information regarding the sale of $3220,000 General Obligation Capital Improvement Plan Bonds to finance a portion of the construction of the new library. MOTION BY COUNCILMEMBER MOTIN AND SECONDED BY COUNCILMEMBER FARBER TO APPROVE RESOLUTION NO. 06-127, A RESOLUTION 06-127, PROVIDING FOR THE ISSUANCE AND SALE OF . aty Council Minutes November 6, 2006 Page 5 . $3,220,000 GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2006C AND LEVYING A TAX FOR THE PAYMENT THEROF. MOTION CARRIED 5-0. 5.6. Discussion of YMCA Memorandum of Understanding City Administrator Lori Johnson and Gty Attorney Peter Beck. reviewed the November 3, 2006 version of the Memorandum of Understanding (MOD) between the Gty, EDA, and the YMCA, with the latest changes. Councilmember Farber stated he felt that Elk River residents should get a reduced monthly fee. Mayor Klinzing stated that she agreed, and felt the information should have been made available before the referendum, but that the YMCA said no and felt it would be a "deal breaker". Councilmember Farber stated he felt that if a reduced fee was a deal breaker, maybe the whole project should not go forward. Councilmember Dietz asked if the ball players will be able to use the parking lot. Parks and Recreation Director Bill Maertz stated he did feel that would be a problem if the lot was not full. Gty Attorney Peter Beck. stated that it will be the Gty's parking lot, and that the issue could be addressed in the parking lease agreement. . Councilmember Morin concurred that there should be a reduction in the monthly fee for Elk River residents. He stated that even though the YMCA was approved in the referendum, he still has a hard time with it. He felt that the public does not know the terms and that there is a lot of misinformation "out there". He felt the Gtywas paying 2/3 of the cost of the YMCA with almost no benefit and that he would not vote in favor of the MOD. Councilmember Gumphrey asked what the membership fee is. Ms. Johnson stated that the sign-up fee is $79. Mayor Klinzing suggested that the YMCA address the Council to discuss the terms. Mr. Beck. stated that any discount.should be clarified in the Memorandum. Councilmember Farber did not feel it was fair for residents outside of Elk River to get the same benefits. He stated that if the budget is so tight that they cannot offer a reduced monthly rate to Elk River residents, maybe the project is not meant to go forward. . Mayor Klinzing stated that the YMCA has clearly stated it is not possible to give a break, and that the residents voted yes without any information regarding possible rate breaks. Councilmember Morin stated that they were also told it would be a community center, which is not the case. Mayor Klinzing stated that the public voted yes and they expect the Gty Council to go forward. Councilmember Morin asked if the lawn and landscaping will also be maintained by the YMCA. Ms. Johnson stated yes, and that the language will be revised to include grounds keeping. Ms. Johnson reviewed changes to Item L. regarding the use of the Gty's parks facilities. She stated that the YMCA is primarily interested in using Orono Park for day camps. She stated that Gty-operated programs will have first choice, since many local groups have helped pay for fields, etc. Mr. Beck. suggested that use of Orono Park for day camps could be specified. Ms. Johnson stated that they have indicated approximately 30 children will attend the day camps. Mr. Maertz stated that he did not feel they needed to be that specific. Mr. Beck stated that if the Council was comfortable with the YMCA going through the normal City Council Minutes November 6, 2006 Page 6 process of reserving park space, fees could not be waived, but "in kind" services could be utilized, such as cleaning up the space after use. . Ms. Johnson stated that they are working on an agreement to allow programming in the gymnasium (Item M.). Mr. Maertz stated that the gymnasium would be the YMCA's least- used space, and he would like to see it available for the City to use. He explained they are proposing 42,000 square feet of gymnasium, which is equivalent to a grade school size gym. He proposed that the gym be utilized as a field house, with a separate entrance, similar to one in Andover. He stated that it could be used for events and indoor walking. He felt it would be a very positive benefit to the City. Mr. Beck asked if the language should include a guaranteed right to use the gymnasium. Mr. Maertz suggested "the right to use" the gymnasium, and use would be scheduled with the YMCA. Councilmember Motin asked if there was anything to stop the YMCA from leasing facility use to other groups, such as senior high or middle school activities. Ms. Johnson stated that the language will include "no sub-leasing". Counci1member Gumphrey suggested that City could lease for events such as basketball, a fee. Mr. Maertz stated that would be a possibility if they had a guaranteed time. Ms. Johnson reviewed Item F. - Maintenance and Capital Improvements. Discussion followed regarding the terms. It was noted the last sentence of F. needs to be taken out. Counci1member Motin suggested that in the case of a large scale improvement that needed to be done near the latter part of the lease period, an agreement could be made that would allow the YMCA to stop making payments to repay the cost. Ms. Johnson noted that this type of an agreement would not be acceptable for expensive items they wanted for programming. She stated that the improvement would need to be approved by the EDA in advance, or they would not be reimbursed. . Discussion of Item III. Risk Management Principles followed. Councilmember Farber stated that he still had concerns. Mayor Klinzing stated she felt the YMCA representatives need to meet with the Council to discuss the terms of the MOD. Mr. Maertz asked if the Council was interested in expanding the YMCA with the County Landfill Abatement Legacy Grant. Mayor Klinzing stated that a field house could be built using "green" materials. Ms. Johnson stated that the grant must be used for a public building. She stated that she discussed the issue with Environmental Administrator Rebecca Haug and Dave Lucas from Sherburne Countyand that the City needs to be at the bidding process to apply for the grant. She stated that there ~ be $1 million in year one, and $1 million available the next year if the grant is awarded Only one grant is allowed per city, so if they wished to use the grant for the library, they could not reapply for a field house for the YMCA building. Ms. Johnson further explained the grant process. Discussion followed regarding the addition of a field house to the YMCA building. Ms. Johnson stated that the field house could be added to the bidding as an alternate. Councilmember Farber stated he would like to keep the field house suggestion open. Mayor Klinzing noted that at least 25 percent of the total project must be green materials in order to apply for LEED certification. . . . . City Council Minutes November 6, 2006 Page 7 Councilmember Motin stated he felt it was appropriate to hold off on applying for a LEED grant for the YMCA. He stated he could not support expanding the YMCA without knowing if a grant could be secured. It was the consensus of the Council to invite the YMCA representatives to meet regarding the terms of the MOU at a future date. 5.7. Discuss Council W orksession Agendas It was the consensus to accept the worksession agendas as presented. 6. Other Business - None 7. Council Updates - None 8. Staff Updates - None 9. Recess to Executive Session Meeting The Executive Session of the City Council was held at this time (8: 15 p.m.) 10. Reconvene - 8:58 p.m. The meeting of the City Council reconvened at this time (8:58 p.m.) Mayor Klinzing stated that the Council had conducted a performance review of City Administrator Lori Johnson at which time they discussed items of mutual interest. 11. Adjournment There being no further business, Mayor Klinzing adjourned the meeting of the Elk River City Council at 9:00 p.m. Minutes prepared by Debbie Huebner. i)Jk ~ Joan Schmidt City aerk