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!

And I'm Back! Council Meeting 8/12/15

Last night the City Council met yet again for a meeting and discussed a wide variety of topics that I feel are of pretty great significance!

Before I get too carried away I wanted to let you all know that I will be getting the last two meeting summaries out in the next few days. I fell behind in my summaries due to summer busyness. I hope you understand (I know some of you do!)!

All right: The meeting was called to order right at 6:30pm, every Councilor was in attendance.


For the public comment period two community members came forward to speak.

The first, Tod Sylvester spoke in favor of allowing vacation rentals to operate in the R-1 Residential Zone and cited a number of perceived inconsistencies between the actions of the city and its own policies. He mentioned that if vacation rentals were not to be allowed in the residential zone that other commercial entities should not be allowed as well, identifying the Bowen Studio as an example. He went on to say that there are three ways to change these policies, by public request, by Council request, or by Planning Commission request.

The second, David Beckwith, spoke concerning allowing vacation rentals in the R-1 Residential Zone as well. He stated that it is the Planning Commission and City Council's responsibility to serve the people of Grand Marais and he feels that may not be happening. He sees conflicts of interest and favoritism in the decisions made by the Council and Commission and feels that the Commission, on which he serves, did not succeed in its latest charge from the City Council to help find ways for those residents out of compliance with the R-1 zoning ordinance to get back into compliance. He cited the example of the EDA's business park as an example of when the Council has changed zoning for a specific reason and questioned whether the Bowen Studio has the appropriate permits/permissions to operate as it does.

*After Mr. Beckwith, no other community members spoke.

We moved directly into the consent agenda, the standard business of each meeting, with the addition of a temporary beer permit for North House Folk School to sell beer on its premises for 4 days during its annual Unplugged Festival. Because there was no change in the application or situation from previous years and everything has been in compliance, this was added to the consent agenda and passed unanimously.

Next the Planning Commission update was up.  There were two items: 1. Ravenwood Final Plat approval and 2. Further discussion on the Vacation Rentals in Residential zone.

1. Ravenwood Final Plat-- This request harkens back a few years to a proposed development on the west side of Grand Marais (on top of the hill) for 6 lots to be developed.  Since these lots are within the city limits, but are not going to be connected to city sewer and water, the lots needed to be larger than 1.5 acres, which they are. The plat included the renaming of an already existing, but undeveloped road to Ravenwood Road. Allegedly the existing road was platted about 90 years ago, but was never developed. Seeing no inconsistencies and having all of the paperwork in good order, the Council approved the final plat unanimously.

2. Vacation Rentals in the Residential Zone-- The conversation continues... Councilor Kennedy explained that at the last Planning Commission meeting City Administrator Roth provided the Commission with numerous (roughly 30) potential actions that the Commission could take to rectify the current situation. They varied from adopting a licensing procedure for vacation rentals to limiting the number per block to having a community approval process for all vacation rentals, etc. These suggestions each had very specific precedents and consequences, which were valuable to see. Despite significant disagreement on the Planning Commission the Commission voted to not change the current zoning ordinance until there has been more time for public comment and research.

The Council asked many questions of Councilor Kennedy and sought to learn more about the history of the R-1 Residential Zone, which was originally created in 1971 and which has been updated several times. It appeared in this conversation that there was indeed some inconsistencies in the R-1 zoning description and what is currently happening in the zone. There are some grandfathered activities, there are a few ordinance approved activities, exceptions, etc. After hearing all of this, the Council came to the conclusion that although the R-1 zone has been operating for over 40 years and has successfully created our neighborhoods, it is likely time to revisit it and see if we can do some overhaul work on it. This work could go several ways and there will be many items of consideration.

Some of these items are:
What does the community feel about specific activities other than residential in the residential zone?
What is the desired "feel" of the residential zone we are looking for?
What are the current conditional uses?
What are the historic conditional uses?
Why were they changed?
What activities are currently happening in the R-1 zone?
What are the exceptions/grandfatherings/special ordinance uses?
Why are they allowed/are they still appropriate?

*The Council is looking deeply into this so that we can make sure that our residents feel comfortable living in Grand Marais and so that we can make sure that our already limited housing stock does not become more stressed. This doesn't necessarily mean that there will not be any conditional uses in the R-1 Zone, but we need to turn the ordinance over and make sure that we are consistent in the application of those conditional uses so the residential zone remains a residential zone.

The Council is scheduling a work session to focus on the R-1 Zone along with the Planning Commission. Our hope is that the joint work session will get us to a point of agreement on the nature of the residential zone compared to conditional uses and to see what remains consistent.

**I would like to know what YOU think about this. What are your feelings about activities other than residential activities in the R-1 zone? We are looking for feedback beyond vacation rentals.


After coming to an agreement to hold the work session in order to dig in deeper to the R-1 situation, the Council had to approve the second reading of the ordinance to allow limited residential activities in the far western lots in the EDA business park. There was no objections to the ordinance and thus it passed unanimously. It was said that there have already been inquiries into those lots, so hopefully we will see some more activity in the EDA business park!


Next came a conversation about renovating the City's website. I have had numerous conversations with residents and visitors alike that have stated the City's website is hard to use and navigate, and it lacks a lot of information that should be there.  These complaints have not been overwhelming, but I do get the sense that more people would access the information on the website if it was more user friendly.  Well, the process has begun. The City's Financial Director, Kim Dunsmoor, prepared a few bids from the current host and designer of our website, govoffice, for a renovation. It looked like a full renovation would cost around $5,000, with a basic home page overhaul being something in the neighborhood of $400. Questions were asked as to whether we could entertain another designer and the answer was, of course we can. So the Council was sent home with some homework. Look at other city websites, create a list of items that you like or feel we should have, and come back to share those. When we get an idea of the usability we are looking for, we can specifically request from local designers and govoffice to see how much that would cost.  This is not a high priority item, however we would like to see this happen in the next year to increase traffic and usability to our website.


The next, and very important piece of our meeting was renewing our contract with MMUA (Minnesota Municipal Utilities Association) for providing our safety oversight as a city. We have had a very strong relationship with MMUA for many years and have been very satisfied with the services they provide. What do they provide? They provide us with safety oversight so that we don't get fined by OSHA and so our municipal operations remain safe.  The amount of the contract is $14,200, which may seem like a lot of money, but when you look at the fact that we NEED to meet the OSHA standards and the only other options we would have to get this level of assistance with the OSHA criteria would be to either train one of our current employees to know everything there is to know about this topic on top of their current position or to hire a new person, $14,200 seems like a very good deal. For perspective, OSHA fines START at $5,000 and can go up to over $500,000 in the case of a death of an employee... Needless to say, this is a cheap insurance policy to make sure we are in compliance...


As one of the last items for the night we set a date to meet with department heads to discuss budget expectations as well as the Council's direction for potential budget instructions.  I will be writing more of a description of the City's budget process as an editorial for the paper, so stay tuned for that.  Right now the Council is digging in to how we can plan for the future projects that have been identified and keep the levy as low as we can.  That is not going to be an easy process, but I will be describing the process as best I can in the paper.


For Council Reports:

Councilor Moody reported on an exciting trip the EDA took to Duluth to meet with the organization called One Roof.  This organization works to renovate/build homes for workforce/affordable housing and has a proven track record for their model.  The EDA is excited about a potential partnership or some sort of assistance to get a similar model in the works in Grand Marais. Overall it sounded pretty positive!

Councilor Mills reported that it was a busy park board meeting with conversations taking place about vehicle noise, pets (and stray animals), concerns about how park revenues are distributed to the City (currently the park board sets a budget and the revenues for the park go straight to the City, and thus any profits go to the general fund to assist in keeping property taxes down), and Councilor Mills asked if there was/is a memorial policy for people donating memorials.  He also inquired about the Art Policy Committee that was being started by then Councilor Sivertson. There hasn't been much activity on either front.

Councilor Kennedy said that all of his updates were already made in the meeting, so he didn't have anything further to share.

I had a short list of things that I brought up. First off, I had a meeting with Erin Murphy, who is the majority leader of the MN House of Representatives. I spoke with her about some of the issues facing Grand Marais and the projects that the City would like to move forward with and sought her help in finding funding sources/solutions. It was a very helpful meeting in my understanding of the overall structure of how things are accomplished on the state level...

I also went to a meeting with local AEOA representative Anita Jeziah and a number of community members to discuss the possibility of putting together a Community Connect program.  This program is a venue for local service providers and other community groups to reach out to residents of an area and make a meaningful connection.  It was decided at this meeting that a relationship would be pursued with Ruby's Pantry because the venue already exists and would be an ideal compliment of that program.  More to come.

I attended a meeting at ISD 166 concerning the ground level conversations about building a cooperative ECFE/Special Ed/possible daycare/possible other services building at or near the school's campus.  This meeting was very early stage, there have been no decisions made concerning this, it is basically still exploratory. There were two state legislators there who were providing information concerning if facilities like this have been built before and where the money came from for them.

I have also heard from more residents that 5th Ave W and Hwy 61 is getting really bad for pedestrians and we will make sure that the flags get out there as soon as possible to help people cross.

I think that is about it! Whew!

As always, let me know if you have any questions or comments!