Council Minutes - October 2, 2018 Regular Meeting Ely City Council – City Hall, Council Chambers

Council Minutes - October 2, 2018
Regular Meeting Ely City Council – City Hall, Council Chambers

CALL TO ORDER – Mayor Novak called the Regular Council Meeting to order at 5:30pm.

PRESENT: Council members A.Forsman, Kess, Debeltz, Omerza, Callen, D.Forsman and Mayor Novak
ABSENT: None

APPROVAL OF MINUTES
Debeltz/D.Forsman moved to approve minutes from the September 18, 2018 Regular Council Meeting and September 25, 2018 Public Hearing/Study Session. Motion Carried Unanimously.

ADDITIONS OR OMISSIONS TO AGENDA
Addition 8.A. Park and Recreation Board Minutes
Addition 13.A. Resolution 2018-031 Updated Exhibit A
Addition 13.K. Change order No. 2 for the Rural Living Environment Utility Extensions Project which increases the contract amount by $8,696.65.
Addition 13. L. Final Payment Estimate No. 3 for the Rural Living Environment Utility Extensions Project for $15,191.22 to Low Impact Excavators, Inc
Addition 6. C. Send a letter of appreciation to Governor Dayton for the Hwy 169 and the 17th Avenue project and a letter of appreciation to MN Dot and Hoffman the construction company on the Hwy 169 project.
Items A-E added without objection.

MAYOR’S REPORT
Thanks to Gerry and Nan Snyder for donating the new pavilion to the City down on the Trezona Trail by the Veterans Memorial.

CONSENT AGENDA
Motion to waive readings in entirety of all ordinances and resolutions on tonight’s agenda
Approve Council and staff to attend the Coalition of Greater Minnesota Cities Annual Fall Conference in Alexandria, MN on November 15-16, 2018.
Debeltz/D.Forsman moved to approve the Consent Agenda items A and B. Motion Carried Unanimously.

REQUESTS TO APPEAR
Ely High School Student Council – Homecoming Parade
Maarja Faltesek from the Ely High School Student Council asked the council to approve having the Homecoming Parade on October 12, 2018 at 4pm. The parade route would begin at the school bus garages on 7th Avenue, taking a left on Harvey Street, taking a right on 2nd Avenue then taking a right on to Sheridan Street then taking a right on to 7th Avenue and ending at the school bus garages.
Debeltz/D.Forsman moved to approve the Homecoming Parade on October 12, 2018 at 4pm and to work with Langowski and Chief Lahtonen. Motion Carried Unanimously.

Greg Knutson, CPA with Walker, Giroux & Hahne presented a review of the 2017 Audit. The only deficiencies noted was the Segregation of Duties which occurs due to the limited number of personnel within the City’s administration office, the segregation of accounting functions necessary to ensure adequate internal accounting control is not possible. It was recommended that officials and management should constantly be aware of this condition, attempt to segregate duties as much as possible and provide oversight to partially compensate for this deficiency.
Management Points included:
1) The Ely Housing and Redevelopment Authority (HRA) is a component unit of the City and is required to be presented in the City’s financial statements as a discretely presented component unit. The HRA receives federal funding from the US Department of Housing and Urban Development, which is audited by other auditors and that audit information is reported in the City’s audit. For the years ended December 31, 2016 and 2015, the HRA audit was not complete by June 30th, requiring the City to request an extension for the City’s audit. We did not receive the December 31, 2017 HRA audit until the last week in August of 2018, making it impossible to complete the City audit by the June 30th date. We strongly recommend that the HRA audit be completed by June 1st to allow sufficient time to complete the City’s audit by the June 30th due date.
2) With regards to the Ely Utility Commission enterprise funds:
Banyon (utility billing software) billings and receipts are summarized at month-end and year-end, but not reconciled to accounts receivable. We recommend the billings and receipts be reconciled to accounts receivable monthly in Banyon prior to forwarding the billings, receipts, and reconciled accounts receivable to the City Clerk-Treasurer and Assistant Treasurer to ensure that month-end and year-end balances reconcile.
Customer utility accounts overdue by ninety days or greater increased significantly compared to the prior year. We recommend that these old accounts, beginning with the “00” account numbers, be reviewed to determine the status of future collections and then either be written off as a bad debt expense and removed from the accounts receivable, or, that the allowance for doubtful accounts be increased to more accurately offset the delinquent account balances, which represent 35-40 percent of the total accounts receivable balances.
With the installation and implementation of advanced metering infrastructure, we recommend analysis be performed on the efficiency of daily utility billing(current procedures) versus a billing cycle.
Debeltz/D.Forsman moved to accept the audit as presented. Motion Carried Unanimously.

COMMITTEE REPORTS
Standing/Special
Budget Committee – Minutes included in packet

Planning & Zoning Commission
Callen/D.Forsman moved to approve the recommendation from Planning and Zoning to approve the Vacation of Right of Way by Michael Loe in Kapsch Garden First Rearrangement and to have Attorney Klun start the Ordinance process. Motion Carried Unanimously.

Library Board – Minutes included in the packet

Ely Utilities Commission – Minutes included in the packet

Telecommunications Advisory Board (TAB)
D.Forsman/Debeltz moved to approve the recommendation from TAB to film the event Thanksgathering at Ledgerock Community Church which is planned to be approximately 2 hours and no DVDs will be provided for sale. Motion Carried Unanimously.

D.Forsman/Omerza moved to approve the recommendation from TAB to purchase a JVC camera for $4029 with the funds coming from the TAB fund balance.
Langowski stated that the camera can be used for filming sporting events at ISD 696 and Vermilion Community College and used in the Council Chambers.
Motion Carried Unanimously.

Employee Relations Committee
Omerza/Debeltz moved to approve the recommendation from Employee Relations to approve the memorandum of understanding between the City of Ely and the Supervisors of Essential Employees to meet MSRS requirements concerning HCSP contributions. Motion Carried Unanimously.

Heritage Preservation Commission – Minutes included in packet

Donald G. Gardner Humanities Trust – Minutes included in packet

Park and Recreation Board
Omerza/Debeltz moved to approve the recommendation from the Park and Recreation Board to add a $25 fee for a half day (up to 4 hours) to the Non-Profit or Government Section of the Rec Center Application. Motion Carried Unanimously.

Omerza/Debletz moved to approve the recommendation from Park and Recreation Board to not issue the Farmers Market a refund for the Tuesdays in September that there was no market.
Langowski explained that the Farmers Market reserved the park at the beginning of the summer for $15 per day of use and they canceled the Farmers Market for the rest of September during the 1st week of September.
Motion Carried Unanimously.

Omerza stated that the League of Minnesota Cities policy committees are starting to meet, if anyone has anything to add to the policies let Heidi or the League know.

DEPARTMENTAL REPORTS:
Clerk-Treasurer
The following items of business were recommended for approval at the regular EUC meeting of Wednesday, September 26, 2018:
Approved investigating the costs for sewer connection at 353 E. Washington St.
Approved payment of the lighting rebate for Gerzin’s Woodwizards for $282.59.
Approved payment of the July EUC Bills for $299,950.72.
Debeltz/D.Forsman moved to approve the EUC Consent Agenda for September 26, 2018 items 1-3. Motion Carried Unanimously.

Fire Chief

Library Director
Library Director Heinrich gave an update of the upcoming events at the library which can be located on the Library Website.

Police Chief

City Attorney
Debeltz/D.Forsman moved to approve Note and Mortgage for Doug Scheibe for the Residential Rehab Loan for $7000.00. Motion Carried Unanimously.

City Engineer

COMMUNICATIONS: Matter of Information
Update from Heritage Preservation Commission and Commercial Downtown Reconnaissance Survey, Ely City Hall potential historic site.
RAMS Newsletter
Notice from St. Louis County Planning Commission on a Public Hearing on the proposed St. Louis County Comprehensive Land Use Plan

CLAIMS FOR PAYMENT:
Omerza/Callen moved to approve the City and EUC claims for October 2, 2018 for $569,229.59. Motion Carried Unanimously.

OLD BUSINESS:
Lookout Ridge – Landfill/Tax Forfeited Property – Proposed Annexation Agreement
Callen/D.Forsman moved to call a special council meeting with the Town of Morse and County Commissioner Rukavina to discuss the 60 acres of land by the old land fill. Motion Carried Unanimously.
The meeting will be posted once a time and date is scheduled with the Town of Morse and Rukavina.

NEW BUSINESS:
Debeltz/D.Forsman moved to approve Resolution 2018-031 Resolution Making Levy and Assessment Against Taxable Properties for Delinquent Water, Sewer, and Electric Accounts. Roll Called: A.Forsman-Yes, Kess- Yes, Debeltz-Yes, Omerza-Yes, Callen-Yes, D.Forsman-Yes, Mayor Novak- Yes Motion Carried Unanimously.

Debeltz/D.Forsman moved to approve the Partial Payment Estimate #5 for the 17th Avenue East, 7th Avenue East and the Water Tower Supply Line Project for $601,603.72 to Casper Construction Inc. Motion Carried Unanimously

Debeltz/A.Forsman moved to have the Community Meeting with Ely ABC on October 30, 2018 from 4pm-7pm at Amici’s Event Center, 10 W Pattison St an informal study session. Motion Carried Unanimously.

Omerza/D.Forsman moved to approve the FY19 Snowmobile Maintenance Grant Agreement for the Ely Lakes to Vermilion Lake Snowmobile Trail for $24,020.44. Motion Carried Unanimously.

Debeltz/D.Forsman moved to approve the Commercial Renovation Loan for E Sheridan Properties, LLC to repair the roof and insulation at Insula Restaurant at 145 E Sheridan St, pending proper paperwork and fees and to direct Attorney Klun to work with the applicant and to proceed with the loan processing. Motion Carried Unanimously.

A.Forsman/Callen moved to approve the 1st Reading of Ordinance No. 326 2nd Series: An Ordinance of the City of Ely, Minnesota, adding to the Ely City Code, Chapter 20, Section 20.1.22, Entitled Zoning Map Amendment.
Attorney Klun stated that the Public Hearing for this Ordinance Change is tomorrow October 3, 2018 at 5:30pm.
Roll Called: A.Forsman-Yes, Kess- Yes, Debeltz-Yes, Omerza-Yes, Callen-Yes, D.Forsman-Yes, Mayor Novak- Yes Motion Carried Unanimously.

Omerza/Callen moved to approve the 1st Reading of Ordinance No. 327 2nd Series: An Ordinance of the City of Ely, Minnesota, Amending Chapter 20, Section 20.2 Sales of Land City Code of the City of Ely
Kess stated that he is opposed because he feels that it does not show enough financial strength and he would like more financial assurance.
Debeltz was worried about the costs for the City, hopefully the people will get funding. Debeltz doesn’t want to see the building sit and use the City and taxpayer’s money.
Mayor Novak stated that we should to go forward with this agreement, if the building sits for any more years is it going to deteriorate.
Langowski stated that the city could get a commercial demolition grant from the IRRRB for the removal of the fuel oil tank. There is approximately 7000 gallons of fuel oil in the tank that we can sell that the City already paid for.
A.Forsman indicated that the K-America business plan is the first viable business plan that we have seen for the building. It is in the Councils best interest to see a way for the property and building to be used.

Omerza mentioned a quote from Albert Einstein, “We cannot solve our problems with the same level of thinking that created them.” Omerza stated that the community center always brings her back to that quote, who would have thought a year ago we would have been talking about having a camp in the community center. Omerza is appreciative that there is an amazing couple that is willing to think out of the box and come to Ely to do put their plan in place. We have such a love for the building that we have a strict right of reentry for the building.
D.Forsman indicated that the Community Center has sat idle since he has been on the Council and he probably had the last big festivity at the Community Center with his wedding. D.Forsman said he is hopeful of what they can do.
Callen said it is unfair to the city taxpayers to be putting money into this building anymore, we can spend the taxpayers money a lot more wisely.
Attorney Klun stated that if the city needs to reenter the building, the cost would be the initial outlay of the purchase agreement; it would not include the improvements that were made on the building.
A.Forsman indicated that pertaining to the right of reentry there are several steps that K-America has to do for improvements to the building and building permits will be required to see the progress of those improvements.
Roll Called: A.Forsman-Yes, Kess- No, Debeltz-Yes, Omerza-Yes, Callen-Yes, D.Forsman-Yes, Mayor Novak- Yes Motion Carried 6-1.

Omerza/Debeltz moved to approve the Minnesota Department of Natural Resources: Amendment to Miscellaneous Lease #LMIS000687
Langowski stated that this is for the existing foot print of the lease allowing the city to build a bike trail on the land. Langowksi stated that we will continue to push the DNR to give us a lease on the other school trust land.
Motion Carried Unanimously

Debeltz/D.Forsman moved to approve Resolution 2018-032 Resolution Appointing Election Judges for the 2018 General Elections. Roll Called: A.Forsman-Yes, Kess- No, Debeltz-Yes, Omerza-Yes, Callen-Yes, D.Forsman-Yes, Mayor Novak- Yes Motion Carried 6-1.

Omerza/Callen moved to schedule a Public Hearing on November 27, 2018 at 6pm in the Council Chambers at Ely City Hall for Truth in Taxation. Motion Carried Unanimously.

Debeltz/Callen moved to approve the Change order No. 2 for the Rural Living Environment Utility Extensions Project which increases the contract amount by $8,696.65. Motion Carried Unanimously.

Debeltz/D.Forsman moved to approve the Final Payment Estimate No. 3 for the Rural Living Environment Utility Extensions Project for $15,191.22 to Low Impact Excavators, Inc. Motion Carried Unanimously.

OPEN FORUM

ADJOURN
Mayor Novak adjourned the meeting at 6:48pm without objection.

Casey Velcheff
Deputy Clerk

Council Minutes - October 9th, 2018
Special Council Meeting – Council Chambers, Ely City Hall

CALL TO ORDER
Mayor Novak called the Special Council Meeting to order at 6:30pm.

PRESENT: Council members A.Forsman, Kess, Debeltz, Omerza, Callen, D.Forsman and Mayor Novak
ALSO PRESENT: Town of Morse Supervisors Terry Soderberg, Leonard Cersine, and Robert Berrini, Town of Morse Clerk Nick Wognum, County Commissioner Tom Rukavina, City of Ely Clerk/Treasurer Harold R Langowski, City of Ely Attorney Kelly Klun

ADDITIONS OR OMISSIONS: None

OLD BUSINESS: None

NEW BUSINESS:
Lookout Ridge – Landfill/Tax Forfeited Property-Proposed Annexation Agreement

Commissioner Rukavina indicated he had a couple of meetings with the Town of Morse and the City of Ely to discuss the land South of Ely. Rukavina stated that he tabled the resolution that was on the County board agenda to sell the land to the Town of Morse.

Mayor Novak indicated that at the projects meeting last night there was a recommendation from the projects committee.

D.Forsman/Kess moved to approve the recommendation from the Projects committee to proceed with the acquisition of the tax forfeited 60 acres from the County and to proceed with the annexation of the area. Motion Carried Unanimously.

Soderberg stated that the Town of Morse made a proposal to the City of Ely a couple of weeks ago, and they would like to know what the city’s response is to the proposal.

Mayor Novak read the proposal from the Town of Morse:
The township would allow the city to acquire the 60 acres and annex a total of 140 acres, in return the township would require no heavy industrial use in the 140 acres, the township would acquire a 40 east of Highway 1 owned by the city, and shared tax revenues in the 140 acres with the township getting 25 percent of the city tax revenues once a lot is sold for a 10 year period and no further annexation allowed on city boundaries without mutual agreement of both government entities. The 1973 annexation agreement would remain in place. The entire agreement would be filed with the state.

A.Forsman/Kess moved to reject the proposal that the Township has put forward as it stands and to utilize it as a discussion point to move forward with this issue. Motion Carried Unanimously.

A.Forsman stated that he has issues with the statement that no further annexation is allowed without mutual agreement of both government entities in the proposal from Morse.

Mayor Novak stated that he has spent time going through the 1973 Annexation agreement and in his research found the Chapter 17 of Boundary Adjustments: Annexation and Detachment from the 2017 Manual on Town Government from the Minnesota Association of Townships which talks about what would happen if the Town of Morse would object to the annexation. It states that the judge would only need to find one of the following criteria to approve an annexation; the land is now or is about to become urban or suburban, the city government is required to protect the public health, safety, and welfare, or annexation would be in the best interest of the land being annexed. Minn.Stat 414.031, subd 4(b). The City of Ely has been working on cleaning up the old dump site since 2005, which could be under protect public health and welfare. Mayor Novak stated that we have received a report from Northeast Technical Services (NTS) which the data shows that there is a significant release and that there is a human health risk associated with the former dump materials. This data has been used to report a release to the State of Minnesota Duty Officer and the City of Ely is listed as the responsible party. So far, the City of Ely via the Iron Range Brownsfields Coalition has expended over $80,000 to investigate the risk associated with the dump. It is not recommended that this process be interrupted as the funding is in place right now and future funding is based on what has been completed by the City of Ely using Coalition funds. Mayor Novak stated that this was a regional landfill not just the City of Ely and we need to clean it up as the adjoining property owner.

Rukavina took office in 2015 and immediately he had the City of Ely and the Town of Morse talking to him about this land. The land is in the Town of Morse and Rukavina feels that Morse made a good offer. Rukavina stated that the Town of Morse would be willing to allow annexation if needed in the future for economic development and he was hoping to come tonight to hear counter offers from both parties.

Cersine stated that per the proposal no further annexation would be allowed on the city boundaries without mutual agreement. Cersine said that the Town of Morse would be willing to work with the City with future annexations and would accept an annexation with mutual agreement between both parties. Cersine explained that in the past Morse worked with the city with annexing the land where the Dollar Store is and the land by the hospital where the new ambulance garage is going to go.

Omerza left the meeting at 6:51pm.

Discussion was had on other city owned property that is part of the golf course that could be offered to the Town of Morse instead of the 40 they listed.

A.Forsman indicated that the old dump is now a Brownsfield site and agrees that it is good for all of us to clean up the site. We need to keep in mind that is the reason the City wants the 60 acres. The fact that the Town of Morse came forward with a proposal shows that we all want to clean up the area. If the city has to pay the $75,000 for the 60 acres and then we give the Town of Morse another 40 acres somewhere else, it seems like the city is the only one putting any effort and money into cleaning up the site.

Langowski spoke with Mark Weber about the different ways the land could be deeded to City or Township. If the land was deeded for Public Use it could possibly be given or purchased but there would be restrictions on the land. If the township or the city purchased it for anything other than strictly public use we would have to pay the market rate.

Rukavina stated that he can look into seeing if cleaning up the old dump can be a public purpose and get back to Langowski and Soderberg.

A.Forsman stated he is open to other land swaps if it is not the city putting out cash to purchase this property, if we can find a way to get that property without a fee that’s another factor.

Discussion was had on possibly modifying the 1973 annexation agreement or making an additional amended agreement or a new agreement.

Attorney Klun stated that a new or amended agreement could be formed to include the boundaries of the City of Ely, with certain terms. The City is concerned about coming to the Town of Morse with an annexation in the future when the Town of Morse has new supervisors. The new supervisors might require larger tax apportionment to the Town of Morse, Attorney Klun stated that those are some of the terms that might have to be sorted out.

A.Forsman/Kess moved to accept for consideration the proposal from the Town of Morse as written with the basis that the 1973 annexation agreement would stay in place and any land outside the 1973 agreement would require a mutual agreement with both governments and to have Attorney Klun draft a proposal.
Attorney Klun stated that we need to delineate the lands, otherwise the statute takes over and it dictates how annexation occurs, we need to map out which parcels will be covered under this agreement. This is something that can be worked out in the agreement, along with the property tax issues and property owner requests.
Motion carried 6-0-1 with Omerza absent.

Kess stated that he is hopeful that progress was made tonight.

Rukavina said headway was made tonight and he will sit on the Resolution that was tabled at the county board meeting.

Mayor Novak stated that this is a better way to communicate with each other with the full council present. If it is just Mayor and Langowski sitting in with a couple Town of Morse Supervisors and Commissioner Rukavina, it is difficult to know what the other council members would like to do.

Soderberg stated that he would appreciate if the City would communicate with the Town of Morse.

ADJOURN
Mayor Novak adjourned the meeting at 7:42pm without objection.

Casey Velcheff
Deputy Clerk
Ely Echo 10/20/2018