Pursuant to notice and call the Waverly City Council met in regular session at 7pm on Tuesday, March 9, 2010 in the council chambers of Waverly City Hall.  Those in attendance were Mayor Ken Antil, Clerk Deb Ryks, and Council Members: Keith Harris, and Connie Holmes.  Council Member Gary Olson arrived at 7:10 p.m.  Council Member John Konrath was absent due to a work conflict.

Agenda

Motion by Harris, seconded by Holmes to adopt the agenda as presented. Carried 3-0.

Judd Meyer, David DeLude-Uptown Streetdance

            Judd Meyer, Uptown Bar and Grill was present at the meeting to discuss conducting a Streetdance event on June 19, 2010.  The event would be similar to last year’s event.  Meyer would like to entice business involvement in giving out business coupons/information to the public.  It was suggested that advertising of the event be spread to other communities.  Meyer suggested that Civic leaders be present at the event to greet community members.  The Waverly Fire Department will be the beneficiary of the event proceeds.  The city will need a copy of the insurance for the special event and the fire department will apply for the beer license. 

Motion by Holmes, seconded by Harris to give the Uptown Bar permission to proceed with the streetdance event.  Carried 3-0. 

Matt Mayer-KDV, 2009 Audit Report

            Matt Mayer, Kern, DeWenter, Viere, ltd. was present at the meeting to give the 2009 audit report. 

He reported that the City is under 2,500 population and is on the cash basis regulatory form of accounting.  The Municipal Liquor Store is on accrual accounting basis. 

            The city revenue was short compared to budgeted revenue by $70,000 due to delinquent property tax collections.    Delinquencies increased in 2009 due to the state of the economy.  Licenses/permits decreased from previous years. This is due to the lack of building permits compared to previous years.  Local government aid was cut by $22,000 by the State of Minnesota.

            Expenditures were under budget by $60,000.  The Public Works Department was under budget due to a seal coating project that cost less than anticipated.  The general fund balance increased from (413,000) to (132,000).  It is anticipated that the general fund balance will be positive in late 2010.  There was a $300,000 improvement in the general fund balance in 2009.

            Building activity has decreased.  The property tax base has kept the city stable.  Disbursements have gone down in the general fund in the last five years.  Public safety and public works have remained consistent in expenses. General administration has gone down in the last several years.  There has been $600,000 of progress in the last three years in the general fund cash balance. 

            The water fund has $175,000 available for debt service.  There was $266,000 in revenue, $91,000 in operating costs.  There was a $30,000 profit for the year without the bond escrow that was used to make the final payment on a refunded bond.  This was shown as an expense in the audit. The water system is now self sufficient and it is recommended that the rates remain unchanged for 2010.

            The sewer fund had expenditures of $266,000.  $184,000 accounts for the sewer contract payments to Montrose.  $83,000 is available for debt service.  Debt payments exceeded the available funds.  The user fees are high but the fund is still struggling for self sufficiency.  There was $100,000 lost in the sewer fund in 2009.  The public facilities authority loan accounted for in the sewer fund will be paid in 2011 and alleviate some of the debt service burden.  It is recommended that the sewer rates continue to be reviewed to attain self sufficiency in the fund.

            The Liquor Store fund resulted in $876,000 in sales for 2009.  There was a  gross profit of $262,000.  There were $247,000 in operating costs.  There was a $27,000 operating income at year end.  A $16,000 net income was realized after city payments and bond payments were made. 

            The average gross profit in Minnesota for municipal liquor store operations is 35%.  The Waverly Municipal Liquor Store had a 29.9% gross profit in 2009. The bond debt for liquor revenue bonds will be retired in 2014.  At that point, cash will be available to transfer to the general fund of the city.

            There was a lack of segregation of accounting duties finding.  This is customary for a small city and is due to a small office staff. 

Shelly Eldridge-Ehlers

            Shelly Eldridge, Ehlers & Associates was presented documents for a $460,000 tax anticipation certificate.  The bond issue amount includes the payoff of the 2009 certificate with cash flow proceeds. The payment schedule includes a $150,000 payment in October.  A 2.25% interest rate was proposed by Citizens State Bank.  By 2013, the city will be where it needs to be financially.  Annual cash flow is needed through tax anticipation certificates until 2012.  The 2009 certificate was borrowed at 3% interest.  A Resolution was prepared by bond counsel, Dorsey Whitney to approve the certificate.  Clerk Ryks offered a Resolution number of 2010-3.

Motion by Holmes, seconded by Olson to authorize the issuance of a tax anticipation certificate in the amount of $460,000.  Carried 4-0.

Rhonda Pagel-City Attorney

            City Attorney Rhonda Pagel was present at the meeting to review the Xcel Energy Natural Gas and Electric Franchise agreements.  She noted that the revisions were done in redline and clean copies were also provided.  Pagel informed the council that a Right of Way ordinance needs to be adopted. A short form model ordinance was provided from the League of Minnesota Cities. There have been no franchise fees imposed in the past.  There is no requirement for a franchise agreement without the imposition of fees.  A Right of Way Ordinance would protect the city’s interests.  The model ordinance is scheduled to be reviewed by the Planning Commission.  Pagel informed the council that typical franchise fees range from flat fees of $1.25-$2.50 or 2-3%. 

Maple Lake could not negotiate an agreement with Xcel Energy.  If Waverly were to impose franchise fees, it is suggested that a flat fee be used.  The franchise fees are a revenue generation for the city.  The franchise fees can be imposed at any time during the franchise agreement, however it is better to impose at renewal.  There are 480 -500 households that would be affected by the implementation of franchise fees.  After further discussion, the council decided not to impose franchise fees at this time. 

Pagel does not anticipate any disagreement with Xcel on the proposed revisions to the franchise agreements.  Clerk Ryks should forward the proposed changes to Xcel Energy.  Ryks will review the original ordinances for the timeline in the renewal of the franchise agreements.  The city should inform Wright Hennepin Electric of the pending franchise renewals with Xcel Energy.  A portion of the city receives electric service from Wright Hennepin.  Clerk Ryks does not believe that a franchise agreement is in effect with Wright Hennepin.  Clerk Ryks will forward comments received from Xcel Energy to City Attorney Pagel.  This matter will be discussed further with the council at the April council meeting.

Wright County Sheriff’s Report

            There was no report received from the Wright County Sheriff’s Department.

Waverly Fire Department

            There was no report received from the Waverly Fire Department.

Building Inspection Report

There was limited building activity in February.  Four permits were issued for miscellaneous work performed. 

MLS-Wanda Tussing

            The February Financial Report was reviewed.  There was a loss of $2,105 for the month based on slow activity. 

            The vacation leave maximum has been exceeded by employee Wanda Tussing.  Currently there are 60 days of vacation on the books.  The council instructed Wanda Tussing to utilize vacation each week to return the booked vacation time within the guidelines in the personnel policy.

Requests from the public

            There were no requests from the public made to the council.

Parks

            There has been no activity or meetings of the Park Commission.

Planning Commission Report

            Mayor Ken Antil reviewed the February 18, 2010 Planning Commission minutes.  New business included the 2010 Election of Officers.  Adrian Duske will continue as Chairman.  Roger Kloss will continue as Vice Chairman, and Clerk Deb Ryks will serve as Secretary to the Planning Commission. 

EDA-Connie Holmes

            The February 2010 meeting was cancelled.  The March meeting agenda includes a guest speaker from Ehlers to discuss business incentives.  Planning for a booth at the May 1, 2010 Community fair will also be discussed at the March meeting.

Maintenance Report

            Maintenance Supervisor John Rassat reported that he received several quotations for repair of the roof of the City office/Maintenance/Fire Station building. 

Pricing from RAM Buildings included the replacement of steel on the south side of the building and the removal of the existing roof material.  The cost estimate is $9,311.  Lyman Post & Beam submitted a cost estimate of $12,750 for replacement of the roof on the south side of the building.  Morton Buildings recommended a repair including the installation of sealant tape on all seams with no removal for the entire building.  The cost estimate is $3,086.  The city could proceed with removal of the gutters if this plan does not work.

            Motion by Olson, seconded by Holmes to proceed with the roof work as quoted by Morton Buildings.  Carried 4-0.

            Citywide Clean up Day is scheduled for Saturday, April 24, 2010 during the hours of 7am-11:30 am.   Appliance/electronic items may be accepted for no cost to the city.  The city will charge $2.00 per item to cover labor costs.  Furniture, mattresses, and carpeting will be at the same fee rates as last year.  Miscellaneous items will be accepted for $10 per load.  This is necessary to cover the dumpster costs.

            Rassat reported that the 1991 Ford Truck is cleaned up and in working condition to sell.  A pair of batteries were installed in the truck to prepare for the sale of the vehicle.  The truck will be placed at a Highway 12 location for visibility.  Steve Vacura is looking for a truck on the city’s behalf.  Lawnmowers are currently being looked at.

            Senior Maintenance Worker Jim Woitalla reported that the quotations for seal coating work are pending to obtain street measurements once the snow is melted for accuracy.  Pricing will be available next month.  CW Houle removed silt from the retention pond in the Summerfields addition due to washing out of debris on Waverland Lane. 

            Tom Ogle contacted city employee John Rassat to inquire about the Waverly Lions commencing with a a painting project at the Waverly Village Hall.    The Waverly Lions will split the cost on materials with city for this painting project.  They plan to paint all of the walls upstairs in the building as well as the ceiling.  There will be no cost for labor.  The city cost will be $700-$800.  If approved, the Lions could start as early as next week.

            Motion by Harris, seconded by Holmes to accept the offer from the Waverly Lions for painting of the Village Hall and the sharing of costs as stated.  Carried 4-0.

            Woitalla informed the council that at classes he attended, he was informed of a water conservation rate schedule being imposed by the Minnesota Department of Health in 2013.  Summer sewer rates will not be allowed.  It is an increasing rate structure by the amount of usage.  This is something that the city should prepare for, however, Woitalla is conversing with the Health Department regarding the number of water users versus the total population.    

            Council Member Holmes asked about the road condition under the Railroad bridge adjacent to Atlantic Avenue.  The Maintenance Department informed the council that this is a buildup of ice that is slow to melt because of the shelter provided by the bridge.  They will use ice melt treatment to improve this section of road.

Barry Glienke-City Engineer

            City Engineer Barry Glienke was present at the meeting to continue discussion on the utility rates. 

A rate increase has been imposed by the City of Montrose on rates for the wastewater treatment plant.  Usage rates are increased from $3.50/1000 gallons to $4.50/1000 gallons and the monthly base rate is increasing from $4.75 to $5.50. 

Council Member Holmes proposed that in order to keep sewer rates consistent that the city absorb $.75 per month on the base rate increase from the City of Montrose.  This will amount to $4,000 per year. 

City Attorney Pagel was asked to send a letter to the Montrose City Attorney regarding the request for the scheduling of annual committee meetings prior to the budgeting process and the submission of a monthly accounting of the plant expenses and revenues to the City of Waverly. 

City Engineer Glienke stated that Waverly will be receiving a letter from the City of Montrose requesting that a base charge be paid for every 5,000 gallons of usage.  That would mean that the higher users such as commercial accounts would pay several base fees.  It was decided that Waverly will break out items on utility bills for the Montrose Plant so that residents are aware of the fees paid for the Montrose Plant versus Waverly sewer.  Waverly does not assess for improvements so that is reflected in higher utility rates.  The council would like to keep rates the same and continue the policy to not assess for improvements.  City Attorney Pagel stated that after review of the Joint Sewer Agreement with Montrose, the EDU requirement is not addressed.  Recently, Montrose informed Waverly staff that base fees are to be charged on disconnected accounts.  Base charges apply to every account that has a water meter.  Once the connection is established, base fees apply to the accounts.

            Shelly Eldrige, Ehlers & Associates recommended that a meeting be held at Ehlers’ office with the utility rate specialist for suggestions and alternatives to improve the condition of the sewer fund.  The projected shortage will be discussed along with ways to fund it.  Clerk Ryks will be informed of the meeting date once it is scheduled. 

City Engineer Glienke previously advised the council that some cities are assessing outstanding development bill balances to unsold lots.  City Attorney Pagel stated that the development agreement language is dependent upon the collection measures acceptable. 

The council directed City Engineer Glienke and City Attorney Pagel to review the development agreements and provide a memo for recommendation of city collection action on outstanding development bills.

Minutes

            The minutes of the February 9, 2010 Regular Session were presented for approval.

 Motion by Harris, seconded by Holmes to adopt the February 9, 2010 Regular Session minutes as presented.  Carried 4-0.

            The minutes of the February 23, 2010 Special Session were presented for approval.

 Motion by Holmes, seconded by Harris to adopt the February 23, 2010 Special Session minutes as presented.  Carried 4-0.

Accounts Payable

The accounts payable was presented in the amount of $82,629.84.  Motion by Holmes, seconded by Harris to adopt the accounts payable in the amount of $82,629.84  Carried 4-0.

Welcome Packet Report

Council Member Connie Holmes reported that there are 20 welcome packets to be delivered to new residents.

Administration

            Clerk Ryks reported that the 2003 Compaq computer will be replaced by Wright Computer.  A dell computer was ordered and will be set up with software installation on March 16, 2010.  The computer replacement was included in the 2010 budget.

            Clerk Ryks reported that registration for the 2010 League of Minnesota Cities Loss Control Workshop is open to council and staff.  The meetings are being held at various locations in April.

            3.2 Malt Liquor License Renewal applications were received for Church of St. Mary and the Waverly Lions. 

Motion by Holmes, seconded by Olson to renew the 3.2 malt liquor licenses for the Church of St. Mary and the Waverly Lions as submitted. Carried 4-0.    

Web Design

            This item was tabled pending an update from Council member John Konrath.

Vacation Request

Clerk Ryks requested to take vacation on April 2-9, 2010.  Deputy Clerk Chris Kittock will cover the office with the exception of 2:30-3:30 pm each day.              The council stated that if limited hours will be worked that week that it be posted. 

Clerk Ryks informed the council that she received a summons to be on call for jury duty for a four month period beginning March 1, 2010.  A waiver was requested from the court. 

Acknowledgement/Recognition/Announcements

            Connie Holmes acknowledged the city staff for work connected with the success of the audit leading to a positive result in the general fund.  Mary Klingelhoets and Deb Ryks were also acknowledged for helping resolve an issue with the Municipal Liquor Store audit.

Adjournment

 Motion by Olson, seconded by Holmes to adjourn the meeting at 9:27 p.m..  Carried 4-0.

Deborah Ryks, Clerk                                                           

Ken Antil, Mayor