The Melrose City Council met in a Regular Meeting on Thursday, June 16, 2016 at 6:00 p.m. at the Melrose City Center pursuant to due notice being given thereof. Present were Council Members Tony Klasen, Jenny Mayers, Dick Christenson, and Josh Thieschafer, Mayor Joe Finken, City Administrator Michael Brethorst, and City Clerk Patti Haase. Mayor Finken presided thereat. The Council then recited the Pledge of Allegiance.
A motion was made by Mr. Klasen, seconded by Ms. Mayers and unanimously carried to approve the agenda as amended.
Council Member Mayers reminded everyone of the upcoming Riverfest Celebration being held on Friday, June 24 and Saturday, June 25.
Approval of the following:
• the minutes from the Councils May 12 Special Joint Meeting with the Public Utilities Commission, and the Council’s May 17 Regular Meeting.
• list of bills in the amount of $332,524.50. (See attached list)
• list of investments for the month of May. (See attached list)
• Resolution No. 2016-18, Resolution Appointing Election Judges. The election judge appointments are for the Primary Election that will be held on Tuesday, August 9, 2016.
1) Donation Resolution No. 2016-19, donation in the amount of $300 from the Melrose Lions towards the Chamber of Commerce Beautification Project.; 2) Donation Resolution No. 2016-20, donation in the amount of $1,000 from the Melrose Lions to the Melrose Chamber of Commerce as a Silver Sponsor of Riverfest.; 3) Donation Resolution No. 2016-21, donation in the amount of $1,000 from Melrose VFW Post 7050 to the Melrose Chamber of Commerce as a Silver Sponsor of Riverfest.
On July 9, Finance Director Tessa Beuning will complete two years of FTE service with the City. City Administrator Brethorst has conducted a review and it is favorable; therefore, recommends approval of a step increase from Step 6 ($77,156.35/year) to Step 7 ($80,371.20/year).
The Council to take action concurring with the Commission approving Ms. Beuning’s increase.
On July 28, Accounting Clerk Stacy Funk will complete two years of service with the City. Finance Director Beuning has conducted a review and it is favorable; therefore, recommends approval of a step increase from Step 5 ($21.95/hour) to Step 6 ($22.78/hour).
The Council to take action concurring with the Commission approving Ms. Funk’s increase.
On July 20, Police Officer Aaron Baros will complete one year of service with the City. Police Chief Craig Maus has conducted a review and it is favorable; therefore, recommends approval of a step increase from Step 1 ($21.89/hour) to Step 2 ($22.98/hour).
The Council to take action approving Mr. Baros’s increase.
A motion was made by Mr. Christenson, seconded by Mr. Klasen and unanimously carried to approve the Consent Agenda items.
Police Chief Craig Maus presented the Police Department’s May report. He noted there were 382 calls for service during that month. This is compared to 289 calls for request in May of 2015. The year-to-date number of calls is 1,765 compared to 1,318 in 2015. A total of 30 citations were written for the month of May. For the month of May 2016, the Department received 27 agency assist calls.
City Administrator Brethorst reported on the Planning and Zoning Commission’s June 6 Regular Meeting. The Commission reviewed and commented on the Boomerang Marine and Power Sports Tax Increment and its compliance with the City’s Comprehensive Plan. This will be discussed later on at this evening’s meeting.
City Attorney Scott Dymoke reported on projects he has been working on for the City:
• Community Development, Zoning Ordinance: Reviewed zoning ordinance and provided opinion to city staff regarding its application to proposed relocation of Shaggy Towing.
• Community Development, Subdivision Ordinance: Reviewed subdivision ordinance and provided opinion to city staff regarding its application to proposed development Meadowlark Acres
• Community Development, JOTS: Attended meeting with JOTS representatives to discuss status of project and review development agreement options.
Mayor Finken reported that the City received their annual quote for general liability, errors and omissions, auto, equipment, and property insurance through the League of Minnesota Cities Insurance Trust (LMCIT) for the period of May 15, 2016 – May 15, 2017. The total quote is $70,992 from $76,097 for the 2015-2016 coverage, resulting in a 6.7% reduction in premium cost. The cost for the premium is shared between the General at 39% and Utility Funds at 61%. The decreased premium is due to several factors: most importantly, it reflects a strong safety and claim rating. Over the past year we added new vehicles, removed old ones (including the damaged fire truck), and the Utilities added coverage for its new substation and WWTP improvements.
The City’s insurance coverage has a $5,000 deductible, $15,000 aggregate. The City needs to decide whether or not to waive the statutory tort liability limits. The decision to waive or not to waive the statutory limits has the following effects:
1. If the City does not waive the statutory limits, an individual claimant would be able to recover no more than $500,000 on any claim to which the statutory limits apply. The total which all claimants would be able to recover for a single occurrence to which the statutory tort limits apply would be limited to $1,500,000. These statutory tort limits would apply regardless of whether or not the City purchases the optional excess liability coverage.
2. If the City waives the statutory tort limits and does not purchase excess liability coverage, a single claimant could potentially recover up to $1,500,000 on a single occurrence. The total which all claimants would be able to recover for a single occurrence to which the statutory tort limits apply would also be limited to $1,500,000 regardless of the number of claimants.
3. If the City waives the statutory tort limits and purchases excess liability coverage ($1 million for $11,099), a single claimant could potentially recover an amount up to the limit of the coverage purchased. The total which all claimants would be able to recover for a single occurrence to which the statutory tort limits apply would also be limited to the amount of coverage purchased, regardless of the number of claimants. In the past the City has not purchased the excess liability coverage.
In the past, the City has chosen Option 2.
A motion was made by Mr. Christenson, seconded by Mr. Thieschafer and unanimously carried concurring with the Utilities Commission approving the insurance quote of $70,992, to waive the monetary limits on municipal tort liability, to keep the deductible at $5,000/$15,000, and not purchase excess liability coverage.
Mayor Finken stated that the Parks and Recreation Board has been directed to develop a real estimate costs for a Splash Pad in the Sauk River Park. Requests for proposals were sent out and two were received. A complete summary of the comparison are enclosed in the agenda. The cost of the Splash Pad was originally estimated to be approximately 180K. After receiving the quotes, there were still unknown costs associated to the quotes. However, through consultation with the Parks Board and City staff, assumptions were made to develop a realistic estimate.
This review showed results greater than the 180K initial estimates. Estimated bid 1: 327K / Estimated Bid 2: 272K. Al-a-cart options were provided from both vendors which push both projects over the $300K mark. Additionally, the annual operating costs have not been formalized as the project type has not been finalized. This is needed to determine the cost estimates for water and electric costs.
Therefore, due to the cost of the project and limited amount of financial resources to leverage against the project, the Parks Board has recommended not to pursue the construction of the Splash Pad.
By consensus the Council decided not to move forward with the splash pad project due to the limited amount of financial resources to leverage against the project.
Mayor Finken stated that the Council at its May 16 Regular Meeting directed staff to review the current penalties pertaining to dog citations and consider increasing the fines to encourage owners to be responsible pet owners. Chief Maus is recommending the following:
Dog at Large/Barking Dog Violation
Current Proposed
1st – 3rd Violation $50 1st & 2nd Violation $50
4th- 6th Violation $100 3rd & 4th Violation $100
7th: Revoke License 5th Violation $200 6th Violation Revoke License
The Council did not feel the current number of violations warranted an increase in fees. They encouraged pet owners to be responsible for their pets and keep them leashed or on their property to ensure the safety of their pet.
Finance Director Beuning noted that a useful measure to determine the health of the City’s General Fund is to compare it as a percentage of the next year’s budget. This figure has steadily been rising over the last five years. It is important to maintain a healthy fund balance, as the majority of our revenue sources are only received twice a year. This assists with cash flow through the off months.
While reviewing our fund balance, both prior to and during our annual audit, it was determined that there are excess funds to be reallocated. While the fund balance is strong in the General Fund, there are funds needed in our Capital Improvement Fund to cover planned equipment purchases and improvement projects.
As of December 31, 2015, the ending fund balance was $1,665,055. The 2016 expenditure budget was $2,313,066, resulting in a fund balance to budget ratio of 72%. Staff is proposing that the City transfer $275,000 out of the fund balance reserves and allocate it to our set aside balances. This would still keep our General Fund balance within a healthy and strong position, but allow us to continue to cash flow our capital needs. Suggestions of fund allocations are as follows:
$75,000 Land purchase per Business Development Prospect No. 08-08-2014A
$5,000 Office Equipment
$15,000 Police Equipment
$10,000 Sidewalks
$100,000 Kraft Retaining Wall
$70,000 Street Improvements
The Council reviewed the proposed fund allocations
After further discussion a motion was made by Mr. Klasen, seconded by Ms. Mayers and unanimously carried approving the transferring funds of $275,000 from the Fund 101 (General Fund) to Fund 203 (Capital Improvement Fund) to be allocated as detailed above.
Mayor Finken noted that six applications were received for the position of part-time Police Officer. Interviews were conducted on three of the applicants. Police Chief Craig Maus is recommending the hire of Stephanie Robak as a part-time police officer. Pay would be at start on the pay scale which is $21.89 per hour.
A motion was made by Mr. Thieschafer, seconded by Mr. Klasen and unanimously carried approving the hiring of Ms. Robak as a part-time police officer contingent on a successful psychological exam and pre-employment physical.
A motion was made by Mr. Christenson, seconded by Ms. Mayers and unanimously carried to recess the meeting at 6:50 p.m. and reconvene at 7:00 p.m. for the Public Hearing.
A motion was made by Ms. Mayers, seconded by Mr. Klasen and unanimously carried to reconvene the meeting at 7:00 p.m.
Mayor Finken opened the Public Hearing at 7:00 for the purpose of gathering input and taking testimony relating to (a) the proposed establishment of Municipal Development District No. 9-1; (b) the proposed establishment of Economic Development Tax Increment Financing District No. 9-1 within Development District No. 9; (c) the proposed adoption of a Development Program for Municipal Development District No. 9; and (d) the proposed adoption of Tax Increment Financing Plan relating thereto; and (e) consideration of a business subsidy to Boomerang Marine & Power Sports, Inc, all pursuant to and in accordance with Minnesota Statutes, Sections 469.124 through 469.134, both inclusive, as amended and Minnesota Statutes, Sections 469.174 through 469.1799, both inclusive, as amended (collectively, the “Act”); and consideration of a Business Subsidy to Boomerang Marine & Power Sports, Inc. Copies of the respective plans, as proposed to be adopted, are on file and available for inspection at the office of the City Clerk of the City of Melrose at City Hall.
City Administrator Brethorst presented the Affidavit of Publication of the hearing notice which was published. Development Consultant Traci Ryan will be on hand to present the Development Program for Municipal Development District No. 9 and the Tax Increment Financing Plan for Tax Increment Financing District No. 9-1
There being no further comments the Public Hearing was closed at 7:08 p.m.
The Council gave consideration to Resolution No. 2016-22, Approving the Establishment of Municipal Development District No. 9, the Adoption of a Development Plan Relating Thereto the Creation of the Tax Increment Financing District No. 9-1, and the Adoption of the Tax Increment Financing Plan Relating Thereto. At its meeting on June 6, the Planning and Zoning Commission, as required by Minnesota Statutes, took action approving Resolution Recommending Approval of the Establishment of Municipal Development District No. 9 and the Tax Increment Financing Plan for Tax Increment Financing District No. 9- whereby it determined that the development program and finance plan for the proposed Boomerang Marine & Power Sports Project will serve to complement the City’s plans for creation of development opportunities in the City and serve to promote the City’s development objectives.
Ms. Mayers introduced Resolution No. 2016-22, Approving the Establishment of Municipal Development District No. 9, the Adoption of a Development Plan Relating Thereto the Creation of the Tax Increment Financing District No. 9-1, and the Adoption of the Tax Increment Financing Plan Relating Thereto. The motion was seconded by Mr. Thieschafer with a roll call vote recorded as follows: For: Council Members Mayers, Thieschafer, Klasen, Christenson, and Mayor Finken; Against: None.
Mayor Finken stated that in accordance with the City practices, a Development Agreement has been prepared that outlines expectation for the partnership between the City and Boomerang. Briggs and Morgan, LLC has been contracted to draft the Development Agreement.
A motion was made by Mr. Klasen seconded by Ms. Mayers and unanimously carried approving the Development Agreement.
Mayor Finken noted that in conjunction with the TIF District being created, Boomerang Marine & Powersports Inc. has requested additional assistance in the form of a Revolving Loan. Through a participation loan with Freeport State Bank terms have been set for the City to provide a $100,000 loan for a term of 10 years with a fixed 4% rate of return. The loan will be secured with personnel guarantees and the City will hold a 3rd position. It is the recommendation of the MADA Board to approve the Loan as presented. Freeport State bank will administer and process the loan on behalf of the City.
Mr. Christenson introduced Resolution No. 2016-23, Resolution by the City of Melrose Approving $100,000 in Revolving Loan Fund Assistance to Boomerang Marine & Power Sports Inc. The motion was seconded by Ms. Mayers with a roll call vote recorded as follows: For: Council Members Christenson, Mayers, Klasen, Thieschafer, and Mayor Finken; Against: None.
Streets/Parks Supervisor Gary Middendorf stated that a notice has been sent to the property owners at 1st Street South requesting that the grass be cut. As per City Code 95.38, all property owners shall be responsible for the removal, cutting, or disposal and elimination of weeds, grasses, and rank vegetation or other uncontrolled plant growth on their property that, at the time of notice, is in excess of eight inches in height.
It is recommended that the Council approve the destruction orders as it then becomes effective for the entire growing season, meaning that if at any time after the issuance of the notice a violation reoccurs, the City shall abate the weeds without further notification to the property owner. It should be noted that any unpaid grass cutting bills can, and will be certified against the property prior to year-end.
A motion was made by Ms. Mayers, seconded by Mr. Klasen and unanimously carried approving the destruction order for 1st Street South.
The following informational items were discussed:
The minutes from the Utilities Commission’s May 9 Regular Meeting .
The minutes from the MADA/COC’s May 12 Regular Meeting.
The following is a list of upcoming schools and conferences:
1) Excel Training: June 14, 2016 at Resource Training and Solution in Sartell, MN. Attending, Carla Van Heel, Mary Hollenkamp, and Doris Rieland
WSB has been retained to develop estimates for the 1st Street / Kraft Retaining Wall. As per the agreement, they have four weeks to complete the report after the site visit. This will be presented to the City on before, June 23. This will be placed on the regular July 2016 Council meeting.
A motion was made by Mr. Thieschafer seconded by Ms. Mayers and unanimously carried that the meeting be adjourned at 7:12 p.m.
Patricia Haase, City Clerk