City Council Meeting 8-26-15: Breaking into Budget Season

The City Council met for another meeting last night at 6:30pm at City Hall to discuss a number of very important topics for the City.


Everyone was present for the meeting except for Councilor Kennedy, who had informed us of his absence.


For the open forum, where members of the public are invited to speak for up to 5 minutes on a topic, we had two community members come forward:

1. Kathy Sullivan came forward to request that the City Council acknowledge September 21st as an International Day of Peace. She mentioned that this was done last year and that she is coordinating activities to celebrate this day across our North Shore communities.  The Council spoke about this later in the meeting and we decided that I would issue a Mayoral Proclamation declaring September 21st as an International Day of Peace.  Let's all do our part to bring peace into our communities. If you would like to help out with the coordination of International Day of Peace activities, please call Kathy at (218)370-9799.

2. Bev Greene of the Senior Center and Arrowhead Animal Rescue came before the Council to remind/invite the Council of/to the positive partnership that the two entities have shared over the years and asked to be involved in the conversation or moving the City Garages away from the area in the Rec. Park so that it could include the animal pound as well. She said that Arrowhead Animal Rescue has some funds it could contribute to the project to get the facility that they would like and that they are committed to operating whatever facility they have, be it in the Rec. Park or at a new garage facility.  The Council thanked her for her work and for coming to extend those offers.


On to the Consent Agenda!  The Consent Agenda is a list of general business that needs to be accomplished and that can be done in one motion instead of individually.  The Consent Agenda only included the minutes of our previous meeting, our agenda for the 8-26-15 meeting, and the bills that needed to be paid since the last meeting.  This passed unanimously.


Following the consent agenda we had a brief presentation from Bradley Peterson, a representative of the Council of Greater Minnesota Cities, a non-profit organization that promotes issues faced by Minnesota Cities outside of the Metro area. We have been a member of CGMC for several years and feel that it has been a good partnership.

The CGMC basically works in five different areas relevant to smaller/rural cities:
1. Local Government Aid (State monies that come to cities to assist in operations and capital projects) and Property Tax management
2. Transportation (they are working on getting some additional funds to help cities with street projects etc)
3. Economic Development (This includes workforce housing and business development programs)
4. Annexation and Land Use (basically works on state zoning standards to make things easier for smaller cities to function)
5. Environmental Regulations (Such as our standards for the wastewater plant and the water treatment plant)

We asked Mr. Peterson several questions about the things that CGMC have been working on and were satisfied that they are working on issues that are directly beneficial to Grand Marais as well as some ideas for ways that we could pay for some of the projects we see coming in the future. Overall it feels like a good connection to what is happening on the state level and to give us opportunities to take advantage of funding streams that are lesser known or in the works.


Next the City was asked to consider and approve a contract with the Cook County Soil and Water Conservation District for the construction of a rain garden (and some improved landscaping around the area) in between the library and the Coldwell Banker Building as well as some stormwater management solutions for 2nd and 3rd Avenues East above 4th street. These projects are a very good deal for the City as they provide improved stormwater management at a very low cost compared to building a complete stormwater system (which would be almost impossible in our geography).  The City is agreeing to pay for 25% of the installation cost of the projects and to maintain them for 10 years. The Soil and Water Conservation District will oversee the construction and will assist us in maintaining these two projects.  After these are implemented we will hopefully not have any more flooding happening in the library (it has only happened a few times) and no more erosion up between 2nd and 3rd Avenues East.


As part of the agreement with the County to manage the bond payments for the Cedar Grove Business Park, the City began the process of reassessing the remaining unsold lots in the business park to make them more sale-able.  This first step basically initiates the process.  There are four or five more steps as we get closer to the formal reassessment of the lots.

Why are we doing this you may ask?  Well, we are reassessing the lots because the City made a deal with the EDA when the park was built that the sale price of each of the lots would include an amount of money that would come back to the City to help pay for the infrastructure put into each of those lots, i.e. road, electric, water, sewer. The assessments done at that time assumed a particular value of the lots and now the value of those lots has decreased, so the assessment should be re-done to reflect that. From what I understand in this situation, the reassessment is a very good thing as it will make the management and sale of those lots more regular and thus easier to perform, which is another good step toward increasing the impact of the business park for our community.  More to come on this in the future!


We took a few minutes to put into the formal minutes of the meeting that the Council has in fact dived into the City budget so that we can get a preliminary levy (the amount of money we raise from residents through property taxes to provide the City's services) by September, as we are required.  The Council has already spent several hours over two meetings to get the basics of the City budget down and to go through a rough draft of the 2016 City budget line by line to see where we stand.  Currently, with cost of living increases for our City staff (which is our biggest expense... and they are worth every penny!), insurance increases, and other expected expense increases, the City is looking at a 12.2% increase over last year.

Now, you may balk at that percentage, the City Council did, but there are a few things to consider that go into this number:

1. We have made agreements with our employees to provide certain benefits for them and they will take care of us.  These expenses are things that we try our best to minimize, but that we have agreed to offer and thus we aren't about to back out on that.

2. We save money each year for capital projects such as rebuilding roads, improving the water and sewer systems, replacing valuable equipment, etc.  These are huge expenses and we have the option to levy and save the money ahead of time or pay interest on the borrowed money later.  As a financial tool, planning ahead and saving up the money gets us better deals on projects and saves us a LOT of money on debt service.  We could cut these numbers to get the levy down, and we probably will do that, but we will agree to increase the amount a little every year for the next few years so we can be in a good place when it comes time to do some projects.

3. Revenues: The City may spend a lot of money, but we also make a fair amount of it.  As we start the budget process we practice a "liberal on spending, conservative on receiving" mindset.  This sets us up for a worst-case scenario of the most expensive possible year (that we would allow) and a very modest year for income (the City gets considerable income from the liquor store and the Rec. Park, which we assume, for budgeting reasons, will stay modest even though it has been doing very well). What happens in most cases is that the City doesn't spend all of the money it budgets and the liquor store/Rec. Park make more money than we expected them to, which puts us in a good place, but all it takes is another cold summer like last summer and revenues could be WAY down, so we have to assume the worst.

If you have any more questions on the budget process, I would be glad to answer them.  I will also hopefully be doing an editorial for the paper on the budget process to explain elements of it a bit more.


We then moved on to Council and staff updates:
-Councilor Moody had no update to give

-Councilor Benson didn't have a specific update, but asked about the website progress, which will be addressed in Financial Director Dunsmoor's update!

-Councilor Mills reported on the Broadband Commission meeting, where they reported that nearly all of the first round of connections to the system have been completed, but that there is a growing log of new connections that they are starting to plan for, so this process will be ongoing.  He also reported on a meeting that he (and I) attended with the DNR concerning improvements to the boat launch on the west side of the harbor. The DNR put out potential plans last year for improvements to the boat launch and surrounding areas and this was a meeting to look at those plans critically and to try to select the plan that would best fit our needs and harbor space.

City Administrator Roth reported that there was, indeed, a joint meeting at 4:00pm on the 27th with the County, Tribe, Hospital Board, School Board, and the City. There will be much good conversation there about our various partnerships and relationships.

As mentioned before, Financial Director Dunsmoor reported other options for re-doing our website and debuted a new look for the City of Grand Marais website.  I think that it looks much better and that is beginning to be more usable.  Please send me ideas or suggestions of things that you would like to see on the website understanding that we have not starting conversations about online payments of utility bills or permits. www.ci.grand-marais.mn.us

My update went all over the place:

1. I attended a meeting with the Violence Prevention Center speaking about the great work they are doing behind the scenes in our community. They are also planning a dance party event to raise funds for their work on September 12th in conjunction with Radio Waves!  You should check it out!
2. I also met with members of the snowmobile club to discuss how we can work together better this winter to make the experience of snowmobilers and non-snomobilers as good as we can. Better signage, designated parking, advertising snowmobiling friendly establishments, etc were all discussed.  We will definitely continue the conversation and see how we can work together.
3. I shared a correspondence with the Council of a city resident who is in favor of vacation rentals and gave their reasons for it. There have been many comments made to me about it and I encourage you all to keep telling me what your feelings are about it.  We need to get a good sense of what the issues are and how we can best address it.
4. The Integrated Emergency Management Conference is coming up soon!  It begins on September 14th and runs through the 17th up in Grand Portage with about 100 participants across numerous agencies and governmental institutions.  This is a training that will teach us what our particular responsibilities are in the case of an emergency.  I am excited to attend and am glad to have some proactive training on this sort of thing.  I hope that we never, ever need to use it though!
5. The League of MN Cities is having a regional meeting in Mountain Iron on October 8th to discuss regional concerns.  I encouraged the Council to attend this meeting if they could. Also the LMC Annual Conference is in Bloomington next April, which would be a great opportunity to see the work the League has been doing.
6. Speaking of the work the League has been doing, I participated in 2 policy committee meetings covering housing and rural economic development through the League.  I was very impressed with the scope of work the League is trying to do and the smart ways they are going about it.  We have a great partnership with them and I hope to make it stronger by participating in these meetings.
7. I agreed to write the proclamation designating September 21st as International Day of Peace for Grand marais.

After the reports we closed the meeting in order to discuss and consider offers to purchase a piece of property located at 1800 W Hwy 61.  Some of you know this as the Tomteboda property, some know it as the Gateway Motel property. The reason we closed the meeting to discuss this is that the City needed to create a plan for if and how much we wanted to purchase that property.  Such negotiations are not considered public until a purchase agreement is signed to protect the City from counter offers or from other people swooping in to purchase. Think of it like you were buying a house.  You wouldn't want your realtor to know what your strategy is when you go in to negotiate... That is what this is about. Like I said before, when a purchase agreement is signed, the information about purchase price becomes public.  The City isn't trying to pull a fast one, just following protocol.

If you are interested in more about this, check out the state's description here:
https://www.revisor.mn.gov/statutes/?id=13d.05

So, on to your question about the property itself: Why would the City buy that property???
In another, different worksession, the Council brainstormed different opportunities for relocating our municipal garages out of the Rec. Park for obvious reasons... a.) they are not attractive, b.) they occupy prime space, c.) they are not the safest structures to have campers wandering around, and d.) the environmental integrity of that space would be better without them.

Three locations were identified as possible locations that would have a.) enough space, b.) possibility of having/building the right facilities, and c.) affordable.

Those three locations were:
1. The Business Park--This idea was the most developed.  The City would buy several of the lots and landscape them to include our buildings, storage, and flat parking/outside storage space.  This was attractive, but expensive due to wetland considerations and the amount of landscaping necessary to get the lots flat.
2. The County Garage--In the instance that the County were to sell their garage, the City would be interested in the facility.  It is large enough, in a decent location, and in decent repair. The problem here is that the County garage is not for sale at present, so this option is not really viable.
3. 1800 W Hwy 61-- This property is mostly flat, has some of the necessary infrastructure already, is big enough to build what we need, has decent accessibility, is close to our power plant, and is available.  Thus we are entertaining what it would take to use this as a potential location.

*For the record, nothing has been purchased. The listing on the agenda says it all: "to develop or consider offers or counteroffers."

On that note we adjourned to an open meeting and then adjourned the meeting for the night.

As always, please let me know if you have any questions or comments and I would be glad to chat with you about them.  We are starting to get into some serious business for the City and it is important to hear what you all are thinking!