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HomeMy WebLinkAboutCC MINUTES 05222007I CITY OF ST. ANTHONY 2 CITY COUNCIL REGULAR MEETING MINUTES 3 May 22, 2007 CALL TO ORDER Mayor Faust called the meeting to order at 7:00 p.m. 9 PLEDGE OF ALLEGIANCE 10 Mayor Faust invited the Council and audience to join him in the Pledge of Allegiance. 11 12 ROLL CALL 13 Present: Mayor Faust, Council Members: Gray, Stille, and Thuesen 14 Absent: Councilmember Horst 15 Also Present: City Manager Mike Mornson, Finance Director Roger Larson 16 17 18 CONSIDERATION, DISCUSSION, AND POSSIBLE ACTION ON ALL OF THE FOLLOWING 19 ITEMS 20 21 I. APPROVAL OF THE MAY 22, 2007 CITY COUNCIL MEETING AGENDA. 22 23 Motion by Councilmember Thuesen, seconded by Councilmember Gray, to approve the City 24 Council meeting agenda of May 22, 2007. 25 26 Motion carried unanimously 4/0. 27 28 I1. PROCLAMATIONS AND RECOGNITIONS 29 30 A. Recognition of the St. Anthony High School Knowledge Bowl 2A State Champions. 31 32 Mr. Tom Keith, St. Anthony High School Principle, reported the Mr. Pristish has done a brilliant 33 job and the team members have performed superbly. He stated the team has won three State 34 Knowledge Bowl championships in the last four years. He commented the students compete 35 against schools that are four and five times larger than St. Anthony Village High School. 36 37 Mr. Pristish stated it was a privilege to be honored and a treat to be the Knowledge Team coach. 38 He thanked the local community and the school administration for their support. He commented 39 that the success is emblematic of the education the students receive during their tenure at the St. 40 Anthony School District and the motivation and support received from their parents. 41 42 Mayor Faust presented the awards to James Benhardus, Eli Wilken - Resman, and Madeline 43 Severtson. Team members missing were Joe Hartmann and Antonio Backman. 44 45 Mayor Faust presented Mr. Pristish with a certificate of appreciation and Mr. Keith with a plaque 46 to display at St. Anthony Village High School. He stated he found it gratifying to have made 47 several awards to District 282 including athletic awards to the baseball and softball teams and the 48 Math and Science Five Star Program Award. He commented St. Anthony Village has created a 49 well- rounded school, both scholastically and athletically. He informed Council and the audience City Council Regular Meeting Minutes May 22, 2007 Page 2 that Newsweek Magazine would be publishing a list of the best schools in the nation. He stated St. Anthony Village High School ranks number 429 out of the best 1200 schools in the nation. Mayor Faust thanked Mr. Keith, school administration, students, and parents and stated the community and Council would continue to support the efforts of each student as they take the reins of the future. III. CONSENT AGENDA 9 A. Consider Approval of the May 8, 2007 Council Meeting Minutes. 10 B. Consider Licenses and Permits. 11 C. Consider payment of claims. 12 13 Motion by Councilmember Stille, seconded by Councilmember Thuesen, to approve the Consent 14 Agenda. 15 16 Motion carried unanimously 4/0. 17 18 IV. PUBLIC HEARINGS. 19 20 None 21 22 V. REPORTS FROM COMMISSION AND STAFF. 23 24 None 25 26 VI. GENERAL POLICY BUSINESS OF THE COUNCIL. 27 28 A. Resolution 07 -041: Approving the 2006 Audit 29 30 Ms. Peggy Moeller, HLB Tautges Redpath Ltd, presented the results of the 2006 Audit Review. 31 She stated the reports issued include the Comprehensive Annual Financial Report, the Audit 32 Management Letter, the Report on Internal Controls, and the State Legal Compliance Report. 33 34 Ms. Moeller reported the Comprehensive Annual Financial Report contains the financial 35 statements and footnotes. She explained that financial reports are the responsibility of 36 management, whereas the independent auditor reports on the fair presentation of the financial 37 statements. She reported the City received a "Clean Opinion" on the 2006 financial statements. 38 39 Ms. Moeller reported the State Legal Compliance Report is required by Minnesota Statute. She 40 explained the Office of the State Auditor (OSA) established a task force to develop audit 41 guidelines for legal compliance. She stated the audit guide covers seven categories: contracting 42 and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and 43 disbursement, other miscellaneous provisions and tax increment financing. 44 45 Ms. Moeller reported the City received two compliance findings based on tests performed. She 46 indicated Staff is in the process of implementing corrections. City Council Regular Meeting Minutes May 22, 2007 Page 3 2 Ms. Moeller explained that the 2006 Internal Control Report is based on new standards (SAS 3 112), which lowered the threshold for reporting internal control matters and re- defined internal 4 control deficiencies. She stated a significant deficiency is much broader than a reportable 5 condition. She explained that many more findings would be in the Internal Control Report as 6 opposed to the Management Letter. 8 Ms. Moeller stated nine deficiencies were reported in the Internal Control Report. She 9 commented Staff is in the process of reviewing the findings and taking corrective actions. 10 I 1 Ms. Moeller reported the 2005 findings were resolved in 2006. She stated these included two 12 items under legal compliance and seven items under internal control. 13 14 Ms. Moeller discussed the Management Letter. She reported the combined fund balances and 15 net assets on December 31, 2006 were $17,230,146. She indicated there was an increase of 16 $94,506 in the general fund balance during 2006. She pointed out the fund balance on December 17 31, 2006 was $1,282,225. 18 19 Ms. Moeller stated funds were designated appropriately in 2006 and no funds were undesignated 20 as of December 31, 2006. She pointed out the fund balance available at the end of 2006 was 21 sufficient to meet the City's policy for minimum fund balances. She commented the City has a 22 minimum fund balance policy of 30 — 35% for minimum fund balances. 23 24 Ms. Moeller discussed the Water and Sewer Enterprise Fund stating this is the operating revenue 25 and expenses for the past three years. She pointed out the 2006 operating expenses exceeded the 26 operating revenues; however, the City increased water rates effective January 1, 2007. 27 28 Ms. Moeller reported the Sewer Fund operational revenues exceeded operating expenses for the 29 past three years. She stated no changes to sewer rates were made in 2006 or 2007. 30 31 Ms. Moeller reported the Liquor Fund 2006 net income before transfers was $406,477. She 32 explained the analysis of the 2006 activity. She summarized the operating expenses for the past 33 three years were lower than state averages. 34 35 Ms. Moeller reported the HRA Fund balance as of December 31, 2007 was $4,002,192. She 36 pointed out that three HRA funds are inactive and recommend the account balances be 37 transferred into the HRA general fund. 38 39 Ms. Moeller explained professional standards require audit firms to provide specific information 40 to the audit committee at the conclusion of the audit. She stated these items are part of the 41 Management Letter. 42 43 Ms. Moeller stated the new 2007 auditing standards (SAS 104 -111) would be implemented for 44 the next audit. She commented the major change would be in how an audit is conducted. She 45 explained auditors would be required to assess risk and then develop procedures designed around City Council Regular Meeting Minutes May 22, 2007 Page 4 1 any risk found. She recommended the City document its internal control policies and procedures 2 into a written manual. 3 4 Ms. Moeller stated the Annual Financial Report included a statistical table section with 17 tables 5 of trend information, which is now a complete comprehensive report. 6 7 Ms. Moeller stated the City submitted their report to the Government Finance Officers 8 Association for consideration to receive a Certificate of Excellence in Financial Reporting. She 9 explained the review process and informed Council the results would be known by the end of the 10 year. 11 12 Councilmember Stille stated the new audit standards sound quite detailed and asked Ms. Moeller 13 for further clarification. 14 15 Ms. Moeller replied the auditor must look at internal controls, evaluate them, determine if they 16 are reliable, and then do a substandard test; there are more steps involved. She stated that if good 17 internal controls are in place, they can be tested. She stressed that internal controls must be in 18 writing. 19 20 Mayor Faust asked Ms. Moeller if the nine deficiencies would have been reported under the old 21 standards. He asked if the City should be concerned that nine deficiencies were found. 22 23 Ms Moeller replied that most of them would not have been reported under the old standards and 24 that the City should not be concerned. She commented Staff has already implemented corrective 25 actions. 26 27 Mayor Faust asked Ms Moeller to elaborate on the risks that would be assessed. 28 29 Ms. Moeller explained there are several types of risk to be assessed. She explained the auditors 30 are working towards the new standards. She stated the auditors must look at the five areas of 31 internal control for every area of the City and assertions and then assess the risks for each 32 assertion. 33 34 Mayor Faust stated citizens and tax payers should feel better that their money is being managed 35 properly and spent according to the design and in accordance with the law. 36 37 Ms. Moeller stated the goal is to reallocate audit efforts to where the risk exists to provide a more 38 efficient audit. 39 40 Mayor Faust asked if the City is implementing or looking at implementing the in -depth risk 41 analysis. 42 43 Ms. Moeller stated the City has implemented all the findings. She stated the risk assessment 44 would not be totally implemented until the end of 2007. 45 City Council Regular Meeting Minutes May 22, 2007 Page 5 1 Mayor Faust stated a budget of $3,000,000 and a favorable variance of $94,000, which is 2.3 2 percent, sounds pretty good. He asked Ms. Moeller if 2.3 percent is good based on her 3 professional opinion. 4 5 Ms. Moeller replied yes, and even better was that the City exceeded its revenue budget and were 6 under the expenditure budget. 7 8 Mayor Faust stated this must be due to good management practices throughout the departments 10 Councilmember Thuesen asked Ms. Moeller if she took ample time to discuss the future 11 standards. 12 13 Ms. Moeller replied they take the time to discuss them in exit conferences and planning 14 meetings. She stated they always inform the City when a change is in draft form and also when 15 it is approved. 16 17 Mayor Faust thanked Ms. Moeller for her in -depth analysis. He stated it is always nice to have 18 another set of eyes to confirm the money is being properly allocated and spent and used in a 19 comprehensive manner. He stated the effort is worth it. 20 21 Councilmember Stille stated the City has taken the audit process to the next level. He indicated 22 the City needs to promote an atmosphere of seeing audits as a way to ensure the City is the best it 23 could be. He expressed his appreciated for Ms. Moeller's work and commended Mr. Roger 24 Larson for developing higher standards. 25 26 Motion by Councilmember Gray, seconded by Councilmember Thuesen, to approve Resolution 27 07 -041, a Resolution approving the Audit of the City of St. Anthony for the year ended 28 December 31, 2006. 29 30 Motion approved unanimously 4/0. 31 32 B. Resolution 07 -042; Authorizing Extension of $3,350,000 Credit Facility from Fannie 33 Mae. 34 35 City Manager Mornson stated this is a request for an extension of the Fannie Mae loan. He 36 explained the City agreed to secure an interim loan in the amount of $3,350,000 from Fannie 37 Mae to assist in acquiring three commercial properties for the Phase IA and Phase IB for -sale 38 housing — the Hunt Pratt Housing Development. 39 40 City Manager Mornson reported that on June 8, 2004, the City approved entering into an 41 agreement with Fannie Mae to procure these funds and on August 27, 2004, the City and Fannie 42 Mae executed a Credit Facility Contract for the funds. He indicated this is for three years and is 43 due and payable on or before August 27, 2007. 44 45 City Manager Mornson stated that in April 2007, a prepayment was made on the loan in the 46 amount of $738, 903, which represented TIF revenue bond proceeds from the take -out financing City Council Regular Meeting Minutes May 22, 2007 Page 6 1 for the Phase IA housing development. He reported this leaves a balance of $2,611,097 to be 2 paid on the loan. 4 City Manager Morrison stated the developer intends to make an additional payment of 5 approximately $1.8 million on the loan fall 2007 when they begin construction on the first 6 building in the Phase IB for -sale housing development. He stated the Phase IB housing would 7 not commence until after August 27, 2007. He reported the developer requested that the City 8 request a two -year extension in the term of the loan from Fannie Mae. 9 10 City Manager Morrison reported the Fifth Amendment to the Development Agreement indicates 11 that construction on the first building in Phase IB would commence on September 1, 2007 and 12 construction on the second building would begin September 1, 2008. He explained that 2008 is 13 the earliest the remaining land sale proceeds of $800,000 would be available to pay off the 14 remaining principle on the loan. 15 16 City Manager Morrison stated the City, Ehlers and Associates, and the City Attorney agree with 17 this request. 18 19 Councilmember Stille asked if the plans are to start the third building in August of 2007. 20 21 City Manager Morrison replied that was the plan and if the developer could not meet that, 22 another extension would be required. 23 24 Councilmember Stille asked what the new maturity date would be. 25 26 City Manager Morrison replied August 27, 2009. 27 28 Councilmember Stille commented the developer needs to start the third building summer 2007. 29 30 Mayor Faust commented that when this was first started in 2003, the City thought this would be 31 a four to five year project. He stated it seems to be on track in spite of what is happening in the 32 market place. He clarified the developer receives a more favorable rate using this process. 33 34 Motion by Councilmember Stille, seconded by Councilmember Gray, to approve Resolution 07- 35 042, a Resolution authorizing extension of $3,350,000 Credit Facility from Fannie Mae. 36 37 Motion carried unanimously 4/0. 38 39 C. Ordinance 07 -002; Mayor and Council Member's Salaries; Section 200.12 (Final 40 Reading). 41 42 Mayor Faust explained this was the third and final reading of Ordinance 07 -002 increasing the 43 Mayor's salary to $625.00 per month, Mayor pro tem salary to $563.00 per month, and Council 44 Member's salaries to $500.00 per month. He stated the H.R.A. stipend would be eliminated. He 45 commented this ordinance would become effective January 1, 2008. 46 City Council Regular Meeting Minutes May 22, 2007 Page 7 Motion by Councilmember Thuesen, seconded by Councilmember Stille, to approve Ordinance 07 -002, an Ordinance Amending Chapter 2, Operations and Administration. Motion carried unanimously 4/0. VII. REPORTS FROM CITY MANAGER AND COUNCIL MEMBERS. 9 City Manager Morrison reported that Staff is interviewing for two full time Liquor Store 10 positions: a Store Manager and a full time clerk. He stated this would bring the City back to 11 back to the staffing level it was before the construction. He indicated a decision would be made 12 by the first week of June. He commented sales are doing well at both operations and additional 13 staff could be requested. 14 15 City Manager Morrison reported the budget indicates a second CSO could be hired. He 16 explained that in the process of meeting with the Police Chief, the decision was made to add 17 hours to the current CSO position and not hire a second CSO. 18 19 City Manager Morrison stated the bike patrol is now out in the public. 20 21 City Manager Morrison reported the employee recognition program would occur on May 23, 22 2007. 23 24 City Manager Morrison reported a joint meeting would be held with the School Board on May 25 29, 2007. 26 27 City Manager Morrison stated he attended the State City Manager's Conference where he 28 concentrated on Civic Engagement, Effective Management Tools, and Public Relations. 29 30 City Manager Morrison reported the Village Pub requested a change of Liquor License. He 31 stated the Public Hearing would occur on June 12, 2007. 32 33 City Manager Morrison reported that five of the seven Planning Commission members signed up 34 for Planning and Zoning Training. 35 36 City Manager Morrison reported City Staff department heads attended a variety of training May 37 15 -16, 2007. He commented the Police and Fire Chief attended the Snowball Three training, Jay 38 Hartman attended a PCA meeting, Kim Moore -Sykes attended the advanced Zoning 39 Administration training, and Roger Larson attended the NSCC Telecommunications meeting. 40 41 City Manager Morrison reported he attended a meeting with 16 other suburbs to discuss the 42 status of their respective comprehensive plans and the City of Minneapolis. 43 44 City Manager Morrison reported there was a gas leak on May 17, 2007 along Old Highway 8. 45 He stated several residents had to be evacuated. He commented this occurred during City Council Regular Meeting Minutes May 22, 2007 Page 8 reconstruction of the sidewalks along Old Highway 8 and the contractor would be the responsible for the repair at his cost. City Manager Morrison reported the newly redone alleys did not pass the test, so they will be redone at the expense of the contractor. 7 City Manager Morrison reported a portion of Old Highway 8 would receive new mill and overlay 8 at no increased cost to the City. He commented this would result in improved drainage. 9 City Manager Morrison displayed a copy of the water quality report that would be mailed out to 10 residents. 11 12 Councilmember Stille commented City Manager Momson's report on increasing staff for the 13 Liquor Stores fit in with the audit report given by Ms. Moeller. 14 15 Mayor Faust thanked City Manager Mornson for the bike patrol report. 16 17 Mayor Faust stated it is important for the public to know the Pollution Control Agency issues 18 have occurred well into the 1980's and water filtration plant was part of that. He commented the 19 City received money from the Federal government in 1990 for water quality. Mayor Faust 20 commented it is important that the City has staff with the institutional knowledge that can talk 21 about what happened in the past and apply it to the present and the future. 22 23 Councilmember Stille reported he attended the Salo Park Dedication and visited with the 24 students and the teacher from Salo, Finland. 25 26 Councilmember Stille reported he attended the Kiwanis Meetings where the Sister Cities 27 Committee met and recognized Mr. Dave Abramson for contribution to Sister Cities. 28 29 Councilmember Thuesen reported he attended the Salo Park Sculpture dedication 30 31 Councilmember Thuesen passed on his appreciation to the Police Department for the bike patrol. 32 33 Councilmember Gray reported on the NW Youth and Family Services first quarter services. He 34 stated the NW Youth and Family Services provide mental health counseling, diversion services, 35 youth run business services, senior chore youth, and senior chore seniors. He stated cost for the 36 contract is $3,500 per year and the total value for the first quarter services amounted to $6,600. 37 38 Mayor Faust reported he met with the school delegation from Salo, Finland and had a good 39 meeting. He stated he spoke to the people from the school who commented they enjoyed the 40 event. He stated Mr. Tom Keith discussed sending the band to Salo in a couple of years. 41 42 Mayor Faust reported that on May 16, 2007 he was a judge for the Project Citizen where junior 43 and senior high civics classes from 29 schools made up a story board on projects such as: water 44 contamination, park safety, graffiti, school bullying, tailgating, and buck thorn. He explained the 45 students reported who they talked to, what the laws were, and using a thought process, analyzed 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 City Council Regular Meeting Minutes May 22, 2007 Page 9 their findings and developed a conclusion. Mayor Faust stated the event took place under the rotunda at the Capital. He stated he would talk to the St. Anthony school about involvement. Mayor Faust reported that on May 17, 2007 he attended a Governance Committee meeting, followed by a Board Meeting with the League of Minnesota Cities. He commented that there are interesting issues coming up for the Annual Meeting. He stated they talked about the Sculpture Dedication. Mayor Faust displayed a photo of the "Weatherman" sculpture. He stated Mr. Dave Dahl, Channel 5, did his 6:00 and 6:30 weathercast from Salo Park. Mayor Faust stated he wrote a letter to Stanley Hubbard expressing his gratitude for their continuing community and civic involvement. Mayor Faust reported that on May 18, 2007 he and Councilmember Horst attended the first Road Task Force meeting. He commented he believes the Task Force will do a good amount of work over the next few months. VIII. COMMUNITY FORUM None IX. INFORMATION AND ANNOUNCEMENTS None X. MISCELLANEOUS INFORMATIONAL DOCUMENTS None XI. ADJOURNMENT. Mayor Faust adjourned the meeting at 7:57 p.m. Respectfully submitted, Dianna Wise Timesaver Off Site Secretarial, Inc. ATTEST: City Clerk ayor