The Melrose City Council met in a Regular Meeting on Thursday, October 20, 2016 at 6:00 p.m. at the Melrose City Center pursuant to due notice being given thereof. Present were Council Members Jenny Mayers, Josh Thieschafer, Mayor Joe Finken, City Administrator Mike Brethorst, Finance Director Tessa Beuning, and City Clerk Patti Haase. Council Members Dick Christenson and Tony Klasen were absent. Mayor Finken presided thereat. The Council then recited the Pledge of Allegiance.
A motion was made by Ms. Mayers, seconded by Mr. Thieschafer and unanimously carried to approve the agenda as amended.
Mayor Finken then opened the floor to public comment. There were no comments.
The following items were considered for approval under the Consent Agenda:
a. the minutes from the Council’s September 15 Regular Meeting and the September 22 Special Meeting.
b. list of bills in the amount of $441,473.86
c. list of investments for the month of September
d. Ambulance Department uncollectible accounts in the amount of $3,412.80 have been submitted to Revenue Recapture, collections, or written off. A complete list of accounts is on file at the City Office. There was also a total of $2,022.25 collected from account holders during this quarter.
e. Fire Department uncollectible accounts in the amount of $600.00 have been submitted to Revenue, collections, or written off. A complete list of accounts is on file at the City Office. There was a total of $131.25 collected from account holders during this quarter.
f. EMT Natascha Hennen has requested a leave of absence from the Ambulance Department effective September 18, 2016.
g. The Melrose Police Department is requesting the Council’s consideration for the hiring of Devin Kemper to the Melrose Police Reserve. Police Chief Craig Maus is requesting the permission to hire Mr. Kemper contingent on passing a physical and drug test and background check.
The Council to give consideration approving the hiring of Devin Kemper contingent on passing physical and drug screening test and background check.
h. Donation Resolution 2016-44, donation in the amount of $1,000 from Arvig towards the Melrose Fire Department.
Council Member Thieschafer requested that the September 15 Regular Meeting Minutes be removed from the consent agenda for clarification.
A motion was made by Ms. Mayers, seconded by Mr. Thieschafer and unanimously carried to approve the Consent Agenda items less the September 15 Regular Meeting Minutes.
Mr. Thieschafer commented that during the September 15 Council Meeting, Mr. Hickman Vice President for Community and Workforce Development with the Initiative Foundation gave a presentation whereby it was stated that all donations to the Melrose Area Relief Fund would go to the families and businesses affected by the fire. However Mr. Thieschafer has learned that for those that have made an online donation, the Online Processing Company does retain 8% of the donation amount. City Administrator Brethorst noted that he has spoken with Mr. Hickman and he apologized for the oversite.
1) A video showcasing the City of Melrose and rural area put together by Arvig was shown. Mark Birkholz Director of Southern Markets with Arvig Communications presented the City with two road signs commemorating the City as a Smart Rural Community.
2) Police Chief Craig Maus conducted the Swearing-in Ceremony with an Oath of Office and pinning of badge for Police Officer Stephanie Robak.
Police Chief Craig Maus presented the Police Department’s September monthly report. He noted there were 356 calls for service during that month compared to 264 for September 2015. A total of twenty-five citations were written for the month of September. The year-to-date number of calls is 3105 compared to 2279 in 2015. For the month of September 2016, the Department received 40 agency assist calls. Chief Maus noted that the Red Cross will be conducting smoke alarm installations in the City of Melrose. Police Chief Craig Maus and Fire Chief Jeremy Kraemer will be coordinating the efforts. The Red Cross is donating 300 smoke detectors. There will be a sign-up sheet for residents who wish to participate in the program.
City Attorney Scott Dymoke reported on projects he has been working on for the City.
• Community Development, JOTS Project: Reviewed survey and preliminary development plans with City Staff, to identify potential zoning, subdivision, shoreland and utility issues.
Planning and Development Director Mike Creelman noted that the Federal Department of Commerce has funded the Federal Economic Development Administration to pass funds to the Minnesota Extension Service to provide Impact Studies at no cost to Emergency Situations. The City has requested this free assessment to be completed in relation to the 400 Block fire. The Extension Service will develop an assessment of what the Fire Impact has on Melrose which will provide us an understanding of how the fire impacted our local economy and how our economy would look if the businesses were not to rebuild in the City. We will then be able to use this on future applications for state / federal assistance.
Neil Linscheid presented the Economic Impact Report to the Council. Mr. Linscheid noted that the businesses affected by the fire employ 32 people. If the businesses were to close permanently as a result of the fire, an estimated 52 jobs across all businesses in the region would be affected. The direct impact is equivalent to the initial change in the economy. The indirect impact is the summation of changes in the local economy that occur due to spending for inputs (goods and services) by the industry or industries directly impacted. The induced impact is the summation of changes in the local economy that occur die to spending by labor—employees in the industry or industries directly impacted. The total impact is the summation of the direct, indirect and induced impacts.
Mayor Finken stated that the City Council, Melrose Public Utilities, and Melrose Area Development Authority have met on the topic of providing assistance for the Jennie-O Turkey Expansion. At the December 12, 2015 joint meeting between the City Council, Melrose Public Utilities and Melrose Area Development Authority agreed to partner with Jennie-O Turkey to assist with the purchase of land, sign a land option, provide Tax Increment Assistance, and apply for State Assistance packages and other incentives to assist with their development. It was further decided that the funds to offset the local land purchase share would come from monies from the loan repayment of CentraCare.
Due to this direction, final negations have taken place with Jennie-O to develop a preliminary Development agreement. The development agreement outlines roles and expectations for all parties. Upon signing this agreement, the City has agreed to initiate all administrative and engineering requirements.
Upon execution of this agreement, the City will hold various public hearing and start the public process to formally consider this matter. These action items include but not limited to: Conditional Use Permit, Land Annexation, Tax Increment Hearing, Platting, Rezoning and formal acceptance of a Development Agreement.
The Melrose Public Utilities Commission, and Melrose Area Development Authorities have both reviewed the document and recommend the City Council sign the agreement and continue with all appropriate processes.
A motion was made by Mr. Thieschafer, seconded by Ms. Mayers and unanimously carried approving the Preliminary Development Agreement with Jennie-O-Turkey Store as presented.
Mayor Finken noted that Elmer Muellner has requested to purchase the undeveloped excess City property south of his current home. He is requesting free and clear access to his homestead. He has used said access and property for many years therefore would like to retain formal control of property. He offers to pay $1.00 for property and City to cover all legal and recording fees for the transaction. City Administrator Brethorst estimated these costs to be approximately $250.
Staff has reviewed this request and has determined the property excess and is of no value to the City or Utilities. The MADA Board at their July 6, 2016 meeting reviewed the sale and recommends the sale. The Planning and Zoning Board at its August 1, 2016 meeting, has reviewed the Petition and confirms the use is consistent with the Comprehensive Plan. Therefore, it is the recommendation to sell the land as outlined in Mr. Muellner’s request.
A motion was made by Mr. Thieschafer, seconded by Ms. Mayers and unanimously carried authorizing the sale of land as outlined in Mr. Muellner’s request.
Mayor Finken stated that the City of Melrose, Melrose Public Utility has contracted with our independent auditors Abdo, Eick & Meyers for a number of years. During that time, we have maintained a positive working relationship. We have reached the end of our three year contract. At the September 15, 2016 Council meeting, the City Council directed staff to obtain additional quotes for audit services due to the size of the annual fees.
Finance Director Beuning received a quote from Abdo, Eick & Meyers as well as two additional vendors. The low quote came in from Schlenner Wenner & Co. Staff recommends not going with the lowest quoted vendor due to their lack of clients that prepare the Comprehensive Annual Financial Report, and smaller sized and less complex city clients. In addition, Bergan KDV and Abdo, Eick & Meyers both have larger government audit departments in their firms, which is beneficial for the complex governmental accounting standards. The next lowest quote came from Bergan KDV at $23,875 for the fiscal year 2016 audit through $24,800 for the fiscal year 2018 audit, which is a total of $73,025 over three years. Abdo, Eick & Meyers is quoted at $26,000 for the each fiscal year 2016 audit through 2018 audit, for a three year total of $78,000. The split for audit fees is 50% General and 50% Utilities.
A motion was made by Ms. Mayers, seconded by Mr. Thieschafer and unanimously carried to contract with AEM for Auditing Services.
Mayor Finken noted that from the August 11th MADA Board meeting as well as with the recent fire, efforts have been made to explore the Small Cities Development Program opportunities to assist businesses located in the downtown commercial district as well as assist other businesses and home owners throughout the City. The program would be administered by a consulting firm that would help with preliminary applications, full applications, and managing the program if the city would be granted any funds. The program would encompass both Downtown Commercial funding as well as residential rehabilitation funding. The MADA Board did recommend that the Council approve moving forward with Phase I of the application process for the Small Cities Development Program. The cost for preparing the pre-application is approximately $1,250.00
A motion was made by Ms. Mayers, to approve moving forward with the application process for 2017 using a consulting firm. Council Member Thieschafer moved to amend the motion to approve moving forward with Phase I of the application process for 2017 using a consulting firm. The motion carried.
Finance Director Beuning stated that the Melrose Ambulance has contracted with Diane Tallackson with Star Claims as the ambulance biller for a number of years. We received notification on October 3rd that Diane will be retiring effective December 31, 2016. Melrose staff has partnered up with the City of Sauk Centre to review new ambulance billing providers.
Staff has obtained two quotes of services. One recommendation was a colleague of Diane’s, Vaughn Larson. Vaughn quoted that he would charge the same rate that we are currently paying, $26/run. He is based out of New Mexico and currently works remotely for a MN ambulance billing company. He does not yet have his own business started, but intended to by January 1st.
The other vendor was Advantage Billing/Expert T Billing. They currently provide services for 64 ambulance providers in MN. Their rate would be $27/run. They also will do the write off and collection agency process, that is currently done in house.
Staff is recommending contracting with Advantage Billing/Expert T Billing, in conjunction with the City of Sauk Centre.
A motion was made by Mr. Thieschafer, seconded by Ms. Mayers and unanimously carried approving Advantage Billing/Expert T Billing in conjunction with the City of Sauk Centre.
Mayor Finken stated that at the City Council’s September 15 Regular Meeting the Council adopted Resolution No. 2016-40 entitled “Resolution Making Certain Findings with Respect to a Substandard Building” (“Resolution No. 2016-40”). After a review of the site and damages of the buildings certain provisions of the Resolution No. 2016-40 need to be revised and therefore it is recommended that the Resolution No. 2016-40 be rescinded. Resolution No. 2016-42 accurately reflects the parcels and specifies the damage to the parcels.
Ms. Mayers introduced Resolution No. 2016-42 Resolution Rescinding No. 2016-40 Relating to Substandard Building and Resolution Making Certain Findings With Respect to Substandard Buildings and Authorizing Execution of Development Agreements Relating Thereto. The motion was seconded by Mr. Thieschafer with a roll call vote recorded as follows: For: Council Members Mayers, Thieschafer, and Mayor Finken; Against: None; Absent: Council Member Klasen, and Christenson.
In accordance with State Law, a Development Agreement must be entered into in order to allow for Development of a TIF project.
1) The Development Agreement between the City of Melrose and M & M Holdings outlines certain provisions that would allow for the Demolition of the site to be eligible for reimbursement. The Development Agreement does not formally create the TIF district nor formally enter into a Development Agreement. It allows the City and Developer to work jointly to determine if TIF is necessary in the future, even after the demolition would occur.
A motion was made by Mr. Thieschafer, seconded by Ms. Mayers and unanimously carried approving the Development Agreement with M & M Holdings.
2) The Development Agreement between the City of Melrose and Balu Renovations outlines certain provisions that would allow for the Demolition of the site to be eligible for reimbursement. The Development agreement does not formally create the TIF district nor formally enter into a Development Agreement. It allows the City and Developer to work jointly to determine if TIF is necessary in the future, even after the Demolition would occur.
A motion was made by Ms. Mayers seconded by Mr. Thieschafer and unanimously carried approving the Development Agreement with Balu Renovations.
Mayor Finken stated that the Melrose Multi-Family project continues moving forward. MADA at its October 13 meeting reviewed the proposed Preliminary Terms and is recommending the Council approve the Preliminary Terms and that City staff assist Melrose Multifamily with the Workforce Housing Grant Application.
1) Efforts are underway to coordinate the land option for the Melrose Multi-Family Project. Coordination efforts and incentives have been discussed with the developer. They have presented an ask for help to offset the development costs. This includes assistance with land price, State Grant Application and Tax Increment Financing. However, much of this assistance is dependent on the State Grant program.
City Attorney Dymoke stated that the Council may wish to close the meeting to discuss the terms of the agreement.
According to City Attorney Dymoke’s review of State Statutes, there are certain exceptions to the Open Meeting Law, which allow councils to close meetings. The City Council may, by majority vote in a public meeting, decide to hold a closed meeting to determine the asking price for real property to be sold by the public body, review confidential or non-public appraisal data, and develop or consider offers or counteroffers for the purchase or sale of real or personal property when closing a meeting under any of the preceding exceptions:
• the public body must state, on the record, the specific grounds that permit the meeting to be closed, describe the subject to be discussed, and identify the particular property that is the subject of the meeting.
• the meeting must be tape-recorded and the property must be identified on the tape. The recording must be preserved for eight years and must be available to the public after all property discussed at the meeting has been purchased or sold or after the public body has abandoned the purchase or sale.
• a list of council members and all other person present at the closed meeting must be made available to the public after the closed meeting.
• the actual purchase or sale of the property must be approved at an open meeting, and the purchase or sale price becomes public data.
A motion was made by Mr. Thieschafer, seconded by Ms. Mayers and unanimously carried to close the meeting at 6:25 p.m. in accordance with the protocol for doing so as presented by City Attorney Dymoke.
City Administrator Brethorst stated for the record the October 20 Regular Meeting has been closed to discuss the terms and conditions of the potential Melrose Multi-Family Preliminary Terms Agreement.
Present were Council Members Jenny Mayers, Josh Thieschafer, and Mayor Joe Finken, along with Community Development Director Mike Creelman, City Attorney Scott Dymoke, City Administrator Michael Brethorst, and Traci Ryan with Ryan Consulting.
Upon completion of the discussion pertaining to the Melrose Multi-Family Preliminary Terms Agreement, a motion was made by Ms. Mayers, seconded by Mr. Thieschafer and unanimously carried to re-open the meeting at 6:44 p.m.
A motion was made by Ms. Mayers to approve the Preliminary Terms Agreement with Melrose Multi-Family as amended in the closed session. The motion was seconded by Mr. Finken with a roll call vote recorded as follows: For: Council Members Mayers, and Mayor Finken; Against: Council Member Thieschafer; Absent: Council Member Klasen, and Christenson.
2) MADA at the October 13th meeting recommended that the City staff assist Melrose Multi-Family with the Workforce Housing Grant Application. This assistance would provide Melrose Multi-Family with additional information and details that the City has in regards to the local economy and businesses. There is no money being requested for the assistance. Resolution No. 2016 -43 Local Government Resolution Workforce Housing Development Program.
A motion was made by Mr. Thieschafer, seconded by Ms. Mayers and unanimously carried to adopt Resolution No. 2016-43 Local Government Resolution Workforce Housing Development Program.
Mayor Finken stated that in an effort to coordinate development efforts and incentive programs Traci Ryan with Ryan Consulting has provided a quote for services to assist with the coordination.
A motion was made by Mr. Thieschafer, seconded by Ms. Mayers and unanimously carried approving the Agreement with Ryan Consulting for TIF and Workforce Housing Grant Services.
Mayor Finken noted that at the Council’s first meeting in January 2017, consideration will be given to making appointments to the various boards and commissions. A notice regarding same was published informing residents that those interested in seeking appointment should submit their application to the City Clerk by no later than Monday, November 14. Applications are available at the Melrose City Center. Terms are expiring on the following boards and commissions:
• Housing and Redevelopment Authority: one member (five-year term) Term expiring: Karen Thostenson.
• Planning and Zoning Commission: one member (four-year term) Terms expiring: Randy Dufner.
• Melrose Area Development Authority: one member (six-year term) Term expiring: Jerome Duevel.
• Melrose Public Utilities Commission: one member (three-year term) Term expiring: Eric Seanger.
• Parks and Recreation Board: two members (three-year term) Terms expiring: Bob Mayers, MADA Representative and Adam Paulson, Planning & Zoning Representative.
Mayor Finken stated that the Melrose Area Ambulance Department is seeking approval to replace its 2001 Ford Ambulance. They are seeking to purchase a new ambulance at an estimated cost of $166,500
Historically, the Melrose Ambulance would be replaced once every ten (10) years. The 2001 currently has 150K miles and is in need of repairs more frequently. The City generally replaces an old ambulance with a new ambulance. The third vehicle will be used in the rotation with the three rigs which are rotated weekly. The times of all three ambulances being out is happening more and more. If Road Rescue is awarded the bid and the new ambulance is ordered in 2016 there a discount of $7,022 vs. $4,800 in 2017, we will not be able to trade in the 2001 ambulance.
Ambulance Coordinator Jenn Tschida noted that at the Councils November meeting she will be seeking a wage increase for department personnel.
A motion was made by Ms. Mayers seconded by Mr. Thieschafer and unanimously carried authorizing the Ambulance Department to begin the process of seeking a replacement of the 2001 Ford Ambulance.
Mayor Finken stated that the Melrose Area Development Authority, in conjunction with the Melrose City Council, has set aside two years’ worth of interest payments from the CentraCare sale to the MADA board to assist with Downtown / Commercial Development for the Bridge project in the amount of $49,533.01.
These monies have been given to MADA to coordinate a program. Staff has looked at various programs and found that the City of Albany Commercial Improvement Deferred Loan program has yielded some great success. The emphasis of this component of the program is to promote commercial building improvements addressing redevelopment and rehabilitation/renovation issues contributing to slum/blight as well as urgent community needs that are consistent with the adopted comprehensive plan. The intent of the fund is to aid property owners to improve the exterior of their building and to restore the store fronts. Exposed brick, returning windows to historic design and original design of the building is preferred. The MADA Board shall reserve to right to approve or deny all application
The proposed eligible expense would be: Commercial Rehabilitation Deferred Loans (CRDL) $5,000 maximum. CRDLs are deferred loans that will be forgiven after end of the seven years if the applicant maintains ownership of the building. The Owner covenants and agrees with the Melrose Economic Development Authority (MADA) that if the real estate hereinafter described is sold, transferred or otherwise conveyed prior the end of the (4) year from the final disbursement date, whether voluntarily or involuntarily, the full amount of the deferred loan must be repaid to the MADA.
Thereafter the amount of repayment is reduced by thirty-three point three percent (33.3%) per year until the end of the seventh (7th) calendar year of the final disbursement date. At the end the seventh (7th) calendar year the entire deferred loan is forgiven. No payments are required on this loan unless the real estate is sold prior to the end of the 7th calendar year of the final disbursement date. The CRDL will cover 50% of approved project costs not to exceed $5,000. CRDLs may be used for commercial rehabilitation projects that are zoned commercial and meet one or more of the following criteria:
1. Projects that contribute to the preservation of tax base.
2. Projects that improve the economic viability of commercial business in the City of Melrose;
Eligible improvements shall include:
1. Façade improvements
2. Exterior Energy efficiency improvements
a. Excluding flat roofs
3. Code improvements
4. Exterior site improvements
5. Exterior Signage
6. Return exterior windows to original design
7. Historic restoration
Applicant submits a Commercial Rehabilitation Application with cost estimates/bids – you must submit copies of actual bids or written estimates along with your application. Funding will be based upon the costs submitted with the application. The program will pay the amount approved or 50% of the actual costs, whichever is less.
The MADA Board has reviewed the program and recommends adopting the program as presented.
A motion was made by Ms. Mayers seconded by Mr. Thieschafer and unanimously carried adopting the Commercial Rehabilitation Deferred Loans Program.
A motion was then made by Ms. Mayers, seconded by Mr. Thieschafer and unanimously carried granting authority to the MADA Board to approve the Commercial Rehabilitation Deferred Loan Applications and staff to manage the program and award program funds in the amount not to exceed $5,000.
Mayor Finken noted that the Melrose Business Improvement Subsidy Program was utilized in 1997, at the time Main Street was redone and prior to the City’s LGA and similar financial challenges. It utilized unused “seed-money” from a revolving loan fund and funding from the Public Utilities Commission along with donated funding from the community’s financial institutions, the Melrose Community Improvement Corporation and civic organizations to create a pool of funds to provide a financial incentive for downtown businesses, and eventually other businesses in the community, to improve their business façades. The function of the program was to buy down the interest rate on the loans up to a maximum of $25,000 that the commercial borrowers obtained from the local lenders.
The incentive amounted to a maximum of $3,500 over five years with a present value of $2,500. The 1997 and 1998 phases of this Melrose Business Improvement Loan Program provided nearly 50 indirect loans through the local financial institutions to about 40 different commercial borrowers. Total program funds of $84,000 generated approximately $517,567 in renovated and new commercial construction.
A third and much smaller phase called the Melrose Business Improvement Subsidy Program followed the original loan program. It differed in that this program gave to the business owner through his financial institution a 10% grant up to $2,500 for improvements made to his business facility.
MADA has reviewed this program and has determined that it is no longer viable and recommends closing the program formally and transferring the remaining $6,169.87 to the Commercial Rehabilitation Deferred Loans (CRDL) program.
A motion was made by Mr. Thieschafer, seconded by Ms. Mayers and unanimously carried to formally close the Business Improvement Subsidy Program (BISP).
A motion was then made by Ms. Mayers seconded by Mr. Thieschafer and unanimously carried authorizing the funds from the Business Improvement Subsidy Program (BISP) be transferred to the Commercial Rehabilitation Deferred Loan Program.
The following is a list of schools and/or conferences where registrations were made:
1. MNGFOA Annual Conference, September 28-30, 2016 at the Arrowwood Conference Center in Alexandria, MN. Attending: Finance Director Tessa Beuning.
2. MNCPA Audits of Local Government, October 25. Attending Finance Director Tessa Beuning.
3. League of Minnesota Cities Regional Meeting, October 13 in Paynesville. Attending: City Clerk Patti Haase.
Utilities Commission’s September 12 Regular Meeting
Charter Communications has sent notification that they are making changes to the channel lineup for customers in our community. Effective on or after October 13, 2016 Cable Noticias will be replaced by Cuba Play on channel 230 for customers who currently subscribe to Charter’s Latino View Tier. Visit www.spectrum.com for a complete channel lineup.
Charter Communication has sent notification that they are making changes to the channel lineup for customers in our community. Effective on or after October 31, 2016 Participant Channel, Inc. is discontinuing Pivot on Channels 147 and 707(HD) This service will no longer be offered for customers who currently subscribe to Charter’s Faith & Values View or DVP/Tier 2. View www.spectrum.com for a complete channel lineup.
A motion was made by Ms. Mayers, seconded by Mr. Thieschafer and unanimously carried that the meeting be adjourned at 7:40 p.m.
Patricia Haase, City Clerk