City Council Meeting Minutes of April 27, 2015

Date: 
April 27, 2015
MINUTES OF THE CITY COUNCIL MEETING
APRIL 27, 2015

 

Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Saint Peter was conducted in the Governors' Room of the Community Center on April 27, 2015.

A quorum present, Mayor pro tem Zieman called the meeting to order at 7:00 p.m.  The following members were present:  Councilmembers Zieman, Parras, Carlin, Grams, Brand and Kvamme.  Absent was Mayor Strand.  The following officials were present: City Administrator Prafke, City Attorney Brandt, and City Engineer Loose.

Approval of Agenda – A motion was made by Kvamme, seconded by Parras, to approve the agenda.  With all in favor, the motion carried.

Approval of Minutes – A motion was made by Carlin, seconded by Parras, to approve the minutes of the April 13, 2015 regular City Council meeting.  With all in favor, the motion carried and the minutes were approved.  A complete copy of the minutes of the April 13, 2015 regular City Council meeting is contained in the City Administrator’s book entitled Council Proceedings 19.

Consent Agenda – In motion by Kvamme, seconded by Grams, Resolution No. 2015-53 entitled “Resolution Approving Consent Agenda“ was introduced.  With all in favor, the Resolution was declared passed and adopted as modified.  A complete copy of Resolution No. 2015-53 is contained in the City Administrator’s book entitled Council Resolutions 20.

Refunding Of Electric Revenue Bonds –  Shannon Sweeney from David Drown Associates presented a recommendation for refinancing of the 2006 and 2010C Electric Revenue bonds.  Sweeney estimated the City could see a reduction in interest rates on the bond of between 1-1.25% which would equate to a $492,000 net savings.  Sweeney noted that the term of the issuances would not change and recommended a competitive sale with a bond rating purchased from Moody’s.  Sweeney also pointed out that the City’s bond counsel at Briggs and Morgan felt there may be some risk involved in refinancing the 2010C issuance which was issued as “Building America” bonds with a reimbursement of 35% of the interest costs from the Federal government.  Sweeney informed the Council the reimbursement had been less than promised and many local governments were seeking to refinance the bonds even with the risk that the bond holders would seek damages for calling the bonds.  Sweeney and City Administrator Prafke stated staff felt the risk outweighed the savings that would be achieved with refinancing and that the risks were manageable, and staff was recommending proceeding with refinancing of both bonds.  In motion by Grams, seconded by Kvamme, Resolution No. 2015-54 entitled “Resolution Providing For The Competitive Negotiated Sale Of $7,660,000 Electric Revenue Refunding Bonds, Series 2015A”, was introduced.  Upon roll call, with all in favor, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2015-54 is contained in the City Administrator’s book entitled Council Resolutions 20. 

2015 Water Fund Budget/Rate Increase – Finance Director O'Connell presented the proposed 2015 Water Fund budget in the amount of $3,681,100 and a recommendation for an increase in water rates which included a $5.00 increase in the monthly base rate for 1” meters effective June 1, 2015; a $0.50/1,000 gallons increase in irrigation meters effective June 1, 2015; and increases in the flow rate of $0.25/1,000 gallons of domestic use and $0.35/1,000 gallons of irrigation use both being effective December 1, 2015.  O’Connell provided analysis of the impact the rate increases would have on the Water Fund reserves and the need to increase the reserves prior to considering future debt issuances which would help ensure a strong bond rating for those issuances. O’Connell also pointed out that increasing the base rate versus just increasing flow rates would provide more stability for the fund.  

Mayor pro tem Zieman questioned why the level of reserves was so important.  O’Connell reiterated the need to have cash on hand to ensure a good bond rating and City Administrator Prafke pointed out the need to have cash on hand in the event of an equipment failure and to ensure bills are paid on time.

In motion by Carlin, seconded by Kvamme, Resolution No. 2015-55 entitled “Resolution Adopting The 2015 Water Fund Budget”, was introduced.  Upon roll call, with all in favor, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2015-55 is contained in the City Administrator’s book entitled Council Resolutions 20. 

Councilmember Kvamme suggested the Council has had a past history of providing for incremental increases in rates which allows customers to have gradual budget adjustments and suggested the base rate should be implemented in two $2.50 increases to allow customers to adjust their budgets and finances accordingly.  City Administrator Prafke indicated that any of the proposals being considered by the Council would provide for an increase in reserves which would put the fund in a better position. 

Finance Director O'Connell pointed out that the $5.00 per month increase in the base rate was the only proposal that would eliminate a $14,000 or more fund deficit if a large unanticipated expense like replacement of the membrane was needed in 2015.  With that information Councilmember Kvamme indicated he was withdrawing his suggestion and would support the $5.00 base rate increase. 

Councilmember Brand indicated he had spoken with the Chamber Director and several professionals in the community regarding the proposed rate increases and no one had indicated a perception that the increases would cause an exodus from the community.  Brand also noted that several of the individuals he spoke to felt many were moving to Saint Peter from the metro area where the water rates were higher.  Brand indicated his belief that having incremental increases was a more thoughtful approach, but the Council’s duty to the community included maintaining the fund balance so he would support the $5.00 increase. 

In motion by Kvamme, seconded by Carlin, Resolution No. 2015-56 entitled “Resolution Adopting Water Rates”, was introduced.  Upon roll call, with all in favor, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2015-56 is contained in the City Administrator’s book entitled Council Resolutions 20. 

2015 Equipment Certificate Bid Authorization – Finance Director O'Connell requested authorization to receive bids for issuance of a $245,000 equipment certificate that would include purchase of two squad cars, an asphalt paver and replacement controllers for the pool.  O’Connell stated the five year issuance would have an estimated annual debt payment of $53,000.  In motion by Brand, seconded by Grams, Resolution No. 2015-57 entitled “Resolution Authorizing Solicitation Of Bids For $245,000 Equipment Certificate”, was introduced.  Upon roll call, with all in favor, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2015-57 is contained in the City Administrator’s book entitled Council Resolutions 20. 

Revolving Loan Request:  Generations Boutique – Community Development Director Wille provided the Economic Development Authority recommendation for approval of a $7,000 revolving loan to Chelsie Salonek for start-up costs associated with Generations Boutique at 326 South Minnesota Avenue.  Wille indicated the recommendation was for a five year straight amortization at three percent (3%) interest, and securities of a second position on the furniture, fixtures, equipment, accounts receivable and inventory with Nicollet County Bank holding a first position on a $9,000 loan and the applicant providing $2,000 in start-up costs and an additional $2,000 for operating expenses.   In motion by Carlin, seconded by Brand, Resolution No. 2015-58 entitled “Resolution Approving $7,000 Revolving Loan To Chelsie Salonek To Partially Finance The Start-Up Costs Of Generation Boutique At 326 South Minnesota Avenue”, was introduced.  Upon roll call, with all in favor, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2015-58 is contained in the City Administrator’s book entitled Council Resolutions 20.  Wille reported the business will offer women’s clothing and accessories in sizes for all generations.

Solar Initiative Project – City Administrator Prafke recommended authorization be provided for execution of an agreement with Ameresco for completion of a preliminary feasibility analysis of City facilities which would show possible energy and other cost reduction opportunities.  Prafke noted that although no project is anticipated at this time, the analysis could serve as a basis for future projects to develop energy savings and alternative energy projects and the analysis would be done at no cost to the City.   Councilmember Brand asked if such projects would have an impact on the City’s contract with Southern Minnesota Municipal Power Agency (SMMPA).  Prafke noted that any project would have to be carefully evaluated in relation to the SMMPA contract and production of power.  In motion by Brand, seconded by Parras, Resolution No. 2015-59 entitled “Resolution Authorizing Execution Of Feasibility Analysis Agreement With Ameresco”, was introduced.  Upon roll call, with all in favor, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2015-59 is contained in the City Administrator’s book entitled Council Resolutions 20. 

Electric Conduit Installation – Public Works Director Moulton requested acceptance of formal written proposals from Geldner Construction and Jordan Drilling for installation of electric distribution system conduit by boring on eight projects.  Moulton indicated that $36,350 of the work would be done by Jordan and $13,500 by Geldner.  In motion by Carlin, seconded by Grams, Resolution No. 2015-60 entitled “Resolution Authorizing Geldner Construction And Jordan Drilling To Install Electric Distribution System Conduit”, was introduced.  Upon roll call, with all in favor, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2015-60 is contained in the City Administrator’s book entitled Council Resolutions 20. 

Reports

Mayor pro tem Zieman reminded the Council of the invitation they received from the Senior Coordinator for a volunteer recognition event to be held on April 29th from 2-3:30 p.m. in recognition of the Senior volunteers and their programs. 

City Administrator Prafke reported the City’s parks were open for business and were looking very good.

There being no further business, a motion was made by Brand, seconded by Grams, to adjourn.  With all in favor, the motion carried and the meeting adjourned at 8:13 p.m.