MINUTES REGULAR CITY COUNCIL MEETING

DECEMBER 26, 2002

Mayor Jeff Thompson called the meeting to order at 6:00 p.m. Council members present were Harlan Beek, Dave Peschong, Dennis Zimmerman, and Jean Soine. Others present were Steve Helget, City Administrator; Pete Carlson, SEH; Chris Lundgren, Accounting/Payroll Clerk; Ron Mergen, Public Works Director; Bonnie Jo Hanson, Paynesville Press; Todd Lemke; and Steve Moberg, Paynesville Area Health Care System.

The Pledge of Allegiance was recited.

Thompson reviewed the consent agenda items that included a motion to approve the minutes from the following meetings: December 11, 2002 Regular Council Meeting, November 13, 2002 Airport Commission, November 19, 2002 EDAP Board, and November 20, 2002 Aquatic Park Committee.

Motion to approve vouchers #60969 - #60970; #60998 - #61000; and #61001 -#61042 totaling $281,632.64; less investment of $200,000.00 equaling $81,632,64. Payroll vouchers #60971 - #60997 in the amount of $20,282.44, void #60989 - #60992. ACH on 12/12/02 for Federal Withholding in the amount of $4,880.24 and on 12/12/02 for State Withholding totaling $950.63.

Motion to approve 2002 Year End Budget Transfers as follows: Designate any unexpended money under the Park Budget to future park improvements; designate any unexpended money under the Airport Budget to future airport expenses; designate any unexpended money under the Liquor Fund Budget to the Liquor Capital Improvement Fund; designate any unexpended money under the Street and Alley Budget, Snow and Ice Removal Budget, Street Lighting Budget and Tree Inspection-Compost Site Budget to future street construction.

Motion to approve step increases for Judy Cummings, Liquor Store Clerk, from Grade 2, Step 3 ($10.77) to Grade 2, Step 4 ($11.50) retroactive to reaching 2080 hours; and for Steve Helget, City Administrator from Grade 18, Step 4 ($25.10) to Grade 18, Step 5 ($27.89) effective 1/1/03.

Motion was made by Zimmerman to approve the Consent Agenda. Seconded by Soine and unanimously carried.

EDAP – MINNESOTA COMMUNITY CAPITAL FUND

Helget presented information in reference to joining the Minnesota Community Capital Fund (MCCF) as a Class C member. The membership fee of $25,000 is proposed to be shared with Paynesville Township. The fee of $25,000 allows the City and Township to loan out ten times or $250,000 for business and/or low-income housing loans. Discussion was held on the possible liabilities to the City in reference to a loan defaulting. The City would share 5% of the risk in every loan. The 5% would be deposited with MCCF at the closing of the loan and remain in a escrow account until the loan is retired at which time the 5% plus interest would be returned to the City and Township. The buyer of the loan on the secondary market would be responsible for the other 95% of the loan risk. The initial fee of $12,500 would come from the City’s revolving loan fund. Peschong asked what influence the City would have in awarding loans to businesses that the City deems qualified? The MCCF has a board that will make those decisions. The EDAP Board would still have the ability to recommend the loan and submitting it to MCCF for approval.

Motion was made by Beek to approve Resolution 2002-65 Approving Contribution for Class C Membership in the Minnesota Community Capital Fund. Seconded by Soine and unanimously carried.

ENFORCEMENT OF COMMITTEE, COMMISSION AND BOARD TERMS

Helget explained that many of the City’s boards and committees were originally established by Ordinance and in those ordinances language exists requiring term limits be set for their respective members. Currently the City is not enforcing this requirement. Discussion was held that we wouldn’t want to have a complete turnover in one year. Each committee should be looked at so that we “stager” the terms. It was the consensus that we want to have terms, but that “limits” is something that needs to be defined.

In accordance to City ordinance, the Council consented to have each respective Board and Committee appoint terms for its current members and present them to the City Council for final approval.

LMC STATE OF THE CITIES LEGISLATIVE CONFERENCE

The LMC Legislative Conference will be held on Wednesday, January 15, 2003. All council members are invited to attend.

Motion was made by Peschong to approve the attendance of the City Administrator and any City Council member for the League of Minnesota Cities State of the Cities Legislative Conference. Seconded by Zimmerman and unanimously carried.

PAYNESVILLE COMMUNITY CLUB – FISHING CONTEST

Todd Lemke, Paynesville Community Club is requesting the use of Veterans Park water access for a fishing contest to be held on February 1st or 15th. The Club is making sure the dates won’t conflict with other local contests. Mr. Lemke is waiting for the Application for Permit to Hold Water Exhibitions or Placement of Structures on Water from Stearns County. A permit is needed because it’s on the lake in front of the City Park. Due to time constraints, Mr. Lemke would like the City’s approval so when he receives the application he would just need the appropriate signatures. The contest will be held on the lake, and Veteran’s Park will not be needed at all this year. Motion by Zimmerman to approve the Application For Permit To Hold Water Exhibitions Or Placement Of Structures On Water and authorize the Mayor and/or City Administrator to sign the document. Seconded by Beek and unanimously carried.

AMPE MORNINGSIDE DEVELOPMENT

No report at this time.

VROLSON LOT SPLIT & RE-ZONING – PERMIT EXTENSION

The Council has approved the Vrolson Lot Split and Re-Zoning contingent upon the state’s approval. However, due to the 60-day rule the final action deadline needs to be extended. According to State Statute the City may extend the time for final action up to an additional 60 days upon written notice to the applicant or petitioner, given within the initial 60-day period, stating the basis for the extension. Proposed is to extend the Vrolson lot split and rezoning for 60 days (February 28, 2003).

Motion by Peschong to extend the Vrolson Lot Split and Re-Zoning permit deadline an additional 60 days for the purpose of obtaining the Minnesota Pollution Control Agency’s decision on the proposed land exchange. Seconded by Soine and unanimously carried.

LAKE AVE./MICHAELIS OLMSCHEID/FIRST ST. STORM WATER IMPROVEMENT PROJECT

Mr. Steve Moberg from Paynesville Area Health Care System (PAHCS) was present to discuss the Hospital’s proposal to help pay for the First Street storm sewer improvements. Carlson estimated the cost for constructing a holding pond on the PAHCS’s property at about $47,000. Rather than developing a pond, proposed is PAHCS participate in the cost of the First Street storm sewer improvements. The estimated cost for the First Street storm sewer improvements is approximately $111,000. Mr. Moberg stated that the PAHCS would be willing to pay $25,000 towards the storm sewer improvements. Peschong asked how long the storm water problem on First Street has existed? Mergen stated 5-10 years. Peschong stated he believes the Public Works Committee intention’s was for the PAHCS to participate more than $25,000 in the First Street project. Peschong suggested the item be referred back to the Public Works Committee and asked Mr. Moberg to attend the meeting on January 22, 2003. Mr. Moberg stated he would be able to attend the meeting.

The City Council consented to refer this item back to the Public Works Committee for further discussion. 2003 BUDGET

Discussion was held on the 2003 City Budget.

Motion made by Beek to approve Resolution 2002-63 Adopting the 2003 City Budget of $1,374,208.00. Seconded by Zimmerman and unanimously carried.

2003 LEVY

The proposed final property tax levy for 2003 is $437,291.00.

Motion by Peschong to approve Resolution 2002-62 Adopting the Final 2003 Tax Levy Collectible in 2003 in the amount of $437,291.00. Seconded by Soine and unanimously carried.

WATER & SEWER RATES FOR 2003

For 2003, proposed is to raise water rates $.05 per 1,000 gallons and sewer rates $.02 per 1,000 gallons.

Motion by Zimmerman to approve the Resolution 2002-64 Regarding Chapter 3 of Ordinance No. 1 2nd Series (setting the water and sewer rates for 2003). Seconded by Beek and unanimously carried.

XCEL ENERGY LEASE AGREEMENT

Presented was a Lease Agreement with Xcel Energy to allow the storage of utility poles on City property. The property in question is located next to the airport. The primary change from the past agreement is the rental fee. Proposed is to set the fee at $150.00 per month versus $150.00 per year.

Motion by Beek to approve the Xcel Energy Lease Agreement. Seconded by Peschong and unanimously carried.

INFORMATIONAL

Thompson reviewed the informational items which included January Meeting Schedule, December West Central Garbage Customer Report, EDAP Revolving Loan Fund Report, and November Fund Balances.

There being no further business the meeting was adjourned at 7:17 p.m.