Council Meeting Friday the 13th!

Due to the Veteran's Day holiday (all government offices are closed... Thank you to those who have served our country!) the City Council rescheduled our Wednesday the 11th meeting to Friday the 13th at 4:30pm.

*The next meeting will be Tuesday the 24th at 4:30 as well. The Council concluded that having a meeting the day before Thanksgiving wouldn't result in a quorum, so we found a date that worked.  That meeting will simply be to pay bills and attend to necessary business. It is expected that nothing of much substance will be handled at that meeting.

A little about rescheduling meetings:

It is in City Resolution that our meetings will be the second and last Wednesday of each month, commencing at 6:30pm. This is important so that the public both knows when business will be conducted and so that they have the opportunity to weigh in on it. When we have to change meetings a few things change with it:

1. It is considered a SPECIAL meeting. We HAVE to have a set agenda. This is so that the public knows what is being discussed at the meetings and so items can't be "slipped in."  All agendas have to be published before the date of the meeting. You can get a copy of the agenda for any of our meetings at City Hall right on the front counter.

2. The structure of the meeting can be different. We don't technically have to take public comment for a special meeting. We usually do. Largely this is to keep special meetings short and to the point because special meetings are usually to discuss special issues. For us, our rescheduled meetings will follow the same structure as regular meetings because that is how we conduct business...

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Ok, on to the meeting!

The meeting was called to order at 4:33pm with all members present except for Councilor Moody, who had told us he would be absent.

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We moved on to the Consent Agenda, which contained the usual 3 items: Approval of the Agenda, Approval of the previous meetings minutes, and payment of the City's bills.  Hearing no need for discussion, the Consent Agenda passed unanimously.

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We moved on to an exciting and new request for fireworks!  Our own Bob Spry, in conjunction with the Chamber of Commerce and the Lion's Club are going to put on a fireworks display to go along with Visit Cook County's Christmas kickoff on November 27th. Seeing that the request was in order, the Council quickly approved the request, so there will be fireworks in November!

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The next conversation was the bulk of the meeting. The Council re-visited the City Budget with some updated information from Administrator Roth. The previous number that the Council was presented with, a 12.2% increase in the tax levy, was revised downward due to a few changes in staffing and administrative costs as well as a revision upward in the revenues from the Rec. Park. The new number that was brought before the Council was 6.87%, roughly half of the previous amount.

*There was a motion at the END of this long conversation to use the 6.87% as our new number for consideration, which effectively lowers the maximum levy to that 6.87% number. I wanted to say this right off of the bat, but will get into the conversations now.

There were really two parts of the conversation: 1.) Revenues from the Rec. Park and 2.) How do we fund our capital improvements in the future?

Starting with #1.

Revenues from the Rec. Park have been on an upward trajectory for at least the last 8 years. Some years the growth is faster than others, but even in poor years we have managed to meet or exceed the previous year. This is good news for the City and shows that the Rec. Park is still performing very well. With that said, we have heard from users of the Rec. Park this year that there are many elements of the experience there that need to be improved or addressed. The City currently allocates $145,000 to improvements in the park every year and would be interested in increasing that number if the Park Board decided that it wanted it. Our current best estimate of the positive revenue the City gets off of the Rec. Park is somewhere in the neighborhood of $250,000 and $300,000, which goes directly to the general fund, which results in property tax relief for residents. If we increased the amount allocated for improvements at the park, that would increase the value of the park, but would decrease the amount of that money going to property tax relief, which would have to be accounted for by either increasing some other revenue source (taxes, or increased sales at one of the City Enterprises). It was the popular belief of the Council that investing more money in the Park would be a great idea, but it has to be asked for and planned for by the Park Board. Currently all of the identified projects in the Rec. Park can be paid for by the current allocation, so that conversation will have to continue!

For 2016 the Council is going to assume a conservative gain in the Rec. Park's revenues to continue with the 8 year trend we have observed. This protects us in the case that we have a bad year, we won't lose too much from the general fund and if we have a good year we will end up with a surplus that we can reinvest in either capital improvement accounts or the Rec. Park.

Good performance at the Park for 2015 caused us to raise our estimate for income for 2016 from what we thought we would get, which lowered the levy amount somewhat.


#2. Capital Campaigns:

The City has identified major projects for each of the next 5 years that will cost the City some money and thus we need to plan for. Here is a brief summary of those projects:

2015-- Electric Service Truck (Paid for by the Electric Utility)
2016-- Public Works Facility (Garage- shared expense)
2019-- Electric Digger/Derrick (for digging in power poles)
2019-- Highway 61 Project (Shared expense)
2020-- 1st St. Reconstruction (Shared Expense)
????-- 5th Ave. Reconstruction (Shared Expense)
????-- City Hall and Liquor Store (Paid for by Liquor Store Reserve)

These projects are funded by a combination of cash payments from the City's reserve accounts and borrowed money. Since the City has a "AA" credit rating and healthy reserves, which are very good, borrowing money isn't that expensive for us, but it will get more expensive as general interest rates increase, so it would be financially a pretty good idea to plan for higher payments in the future, which, again, can be paid from reserves or from taxes or rate increases on public utilities etc.

We sock away a pretty good amount every year for our reserves, partly because it is City policy to keep a certain balance in each of those accounts and to a certain extent it is mandated that we have money in reserve so we can pay for any emergencies we run into. The Council wanted to maintain these amounts and try to grow them modestly to keep up with the interest rate increases that we are expecting in the coming year as well as to accommodate future projects.

**A reminder: Our Public Utilities are non-profit. They are on a break-even budget with their reserve contributions. Their budgets are calculated off of known costs (labor, benefits, materials, reserve contributions) and anticipated costs (planned projects, etc).

WHEW! You still following??? There was conversation about whether or not we should raise the levy at all since the Rec. Park and Liquor Store have been performing well, but taking a look at the historical levy information versus spending the Council seemed to lean toward a raise of some sort to offset rising costs that the City incurs (benefits, union negotiations, rising cost of materials, etc). If we don't do that then we risk eroding our reserves, thus shooting ourselves in the foot in the future when we want to get some projects done and need to borrow more money at a higher rate... So that is the general direction that the Council is moving for the tax levy: an increase of some kind, but likely between the 4.08% increase in general fund spending and the 6.87% estimated levy increase we were presented at the meeting.

One last piece to be discussed with the budget: Tennis Courts. There was a conversation about how much, if any, the City should put toward the rebuilding of the 2 tennis courts up by the school and YMCA. It was made clear that the courts are owned by the County and that the County has pledged money to their rebuilding and also has allotted $7,000/year for the maintenance of the courts. The Cook County Tennis Association heads up the efforts for rebuilding and has gathered over $100,000 for the job. After the previous conversation about the City's budget, the Council was ready to discuss how much we could put toward this project. Councilor Mills made a motion to allocate up to $20,000 for the project, as their needs for the project required. There was some lively conversation about what that meant with the statement being said that if we pass that motion we should expect to be paying $20,000 toward the project. Councilor Benson expressed her feelings that she was uneasy about allocating funds without creating some kind of structure for entities seeking funding from the City, suggesting that if all entities have to do is come and ask, then the allocation is pretty arbitrary. Administrator Roth suggested that if we had a process to do this we would probably have more requests for funding because then there would be a set process for it... Either way, the message that the Council needs to sit down and plan this out was pretty clear.

That motion, to allocate $20,000 to the reconstruction of the tennis courts, ultimately failed with a 2-2 vote. I was the swing vote on that one and embarrassingly took a long time to weigh in. When the motion failed, however, I proposed a counter motion to allocate up to the $17,000 that the CCTA identified was the money they would be short when all of their grants came in. This means that the City could not pay any more than that amount, but potentially could pay less... but we should be prepared to pay the whole amount. This amount was the direct balance between the bid on the project and the money the CCTA has already rounded up. This motion passed 3-1 with Councilor Benson voting Nay because she feels it is premature to be allocating monies without a process.

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In another important conversation, the Council looked at proposals for increasing the benefit amount for the Grand Marais Volunteer Fire Department employees. Currently the fire department employees receive $1250 per year they have served in the fire department as retirement benefit. They get this money at the point of their retirement in a payment from the firefighter retirement plan through PERA (Public Employees Retirement Account). A few months ago the Council requested to see what an increase of that benefit to $1500 per year of service would cost the City. We were pleased to see that at the current rate of growth and interest in the PERA account we would be able to increase the benefit for the firefighters to $1500 without seeing an increase in the expense to the City. Increasing the benefit amount DOES increase the risk that the City would have to pay into the account in some amount at some point in the future, but the Council saw that risk as acceptable for the services that we get from the employees of our fire department. This increase puts the Grand Marais Fire Department on par with the benefits that the Lutsen Fire Department gets.

*We chose to do this so that we could continue to attract young people to apply as employees of the Fire Department. We are currently well staffed in the department, but have a handful of firefighters nearing retirement so need to start planning for replacing them! The Fire Department meets on the first and third Wednesdays of the month for training. If you are interested in applying to become a part of the department, talk to Chief Ben Silence or stop by City Hall to complete an application!

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The final item on the agenda was a housekeeping item to remove a signatory from the City accounts. The Council moved to do so, and that was all done!

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On to Council Reports!

Councilor Moody was absent, so no report from him.

Councilor Benson had no meetings in the past weeks.

I reported on a very productive Library Board meeting where we discussed the writer's conference (done by the Art Colony) which was a HUGE success, continuing education for members of the Library Board to learn what it means to be a board member, new work to begin a tribal library up at Grand Portage (This is really exciting actually. There is a lot of funding available for this and it would be a great resource for the community!), updated usage numbers (we got a door counter for the library that has shown usage is WAY higher than we thought!), upcoming Film Nights at the library (starting November!), efforts to make the library more welcoming to gay, lesbian, and transgender people, as well as the success of the borrowed 3D printer. A few of the Council members also went to a joint meeting of the County, City, Hospital Board, School Board on Thursday the 12th where updates were given from the different entities and the School Board spoke about their upcoming challenges due to the referendum failure. The group scheduled another meeting on February 29th to discuss future options for daycare, early childhood education, special education, etc.

Councilor Mills reported on a YMCA meeting where they appointed Hillary Freeman as the next Chairperson of that group and that the YMCA is experiencing delays in getting their daycare licensed to the level that they are seeking.
The Park Board is working on revising the naming of some of the site descriptions as well as finalizing rate changes for the 2016 season. He spoke about how the rate structure is complicated because it is based on the length of stay, storage, site location, etc.
The Northwoods Food Project is preparing some information for a presentation to the Council of the Green Dollar Survey... so stay tuned for that!

Councilor Kennedy reported on continuing work by the Planning and Zoning Commission to revise the definitions for properties in the zoning ordinance, such as hotel/motel/B&B/boarding house/vacation rental. He also reported that the County Task Force on Vacation Rentals has met and will continue to meet to create a plan for the County. Safe Routes to School is going to focus on assisting with the City Comprehensive Plan, Workers on Wheels Program, and the Healthy Food Project. These are all exciting projects for the community.

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Well folks, that is about it. The meeting was almost exactly 2 hours long and we felt like we got through a lot of good information.

As always, give me a call or send me a message if you have any questions or concerns!