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01-11-2005 CCM MINUTES REGULAR MEETING - HUTCHINSON CITY COUNCIL TUESDAY, JANUARY 11,2005 1. CALL TO ORDER - 5:30 P.M. Mayor Steve Cook called the meeting to order. Members present were Bill Arndt, Kay Peterson, Jim Haugen and Casey Stotts. Others present were Gary Plotz, City Administrator, Marc Sebora, City Attorney and Kent Exner, City Engineer. 2. INVOCATION - Rev. Gerhard Bode, Peace Lutheran Church, delivered the invocation. 3. PLEDGE OF ALLEGIANCE 4. MINUTES (a) REGULAR MEETING OF DECEMBER 28,2004 (b) ORGANIZATIONAL MEETING OF JANUARY 3,2005 Motion by Arndt, second by Peterson to approve minutes. Motion carried unanimously. 5. CONSENT AGENDA (a) REPORTS OF OFFICERS, BOARDS AND COMMISSIONS 1. FIRE DEPARTMENT MONTHLY REPORT FOR DECEMBER 2004 2. HUTCHINSON AREA HEALTH CARE FINANCIAL STATEMENT FOR NOVEMBER 2004 3. BUILDING DEPARTMENT MONTHLY REPORT FOR DECEMBER 2004 4. BUILDING DEPARTMENT ANNUAL REPORT FOR 2004 5. PIONEERLAND LIBRARY SYSTEM FINANCIAL REPORT FOR NOVEMBER 2004 6. HUTCHINSON UTILITIES COMMISSION FINANCIAL REPORT FOR NOVEMBER 2004 (b) RESOLUTIONS AND ORDINANCES 1. ORDINANCE NO. 04-0398 - AN ORDINANCE SETTING CITY OF HUTCHINSON FEE SCHEDULE~ECONDREADINGANDADOPTIOM 2. ORDINANCE NO. 04-0399 - AN ORDINANCE ADOPTING SALARIES OF MAYOR AND COUNCIL MEMBERS (SECOND READING AND ADOPTIOM 3. RESOLUTION NO. 12603 - RESOLUTION FOR PURCHASE ( c) DOWNTOWN STREETSCAPE AND WASHINGTON AVENUE WEST - LETTING NO.4, PROJECT NOS. 05-04 & 05-05 (ORDERING PREPARATION OF REPORT ON IMPROVEMENT AND RECEIVING REPORT AND CALLING HEARING ON IMPROVEMENT) ( d) CONSIDERATION FOR APPROVAL OF 2005 TOBACCO LICENSE FOR FLYER'S BAR & GRILL (e) CONSIDERATION FOR APPROVAL OF 2005 HAULING LICENSE FOR WASTE MANAGEMENT (f) CONSIDERATION FOR APPROVAL OF UPDATED INFORMATION TECHNOLOGY POLICY CITY COUNCIL MINUTES - JANUARY 11, 2005 (g) CONSIDERATION FOR APPROVAL OF 2005 COMMUNITY DEVELOPMENT PLAN (h) CONSIDERATION FOR APPROVAL OF REVISED FINAL PLAT FOR SOUTHFORK RIDGE, 2ND ADDITION (i) CONSIDERATION FOR APPROVAL OF OUT-OF-STATE TRAVEL FOR JULIE WISCHNACK TO ATTEND THE NATIONAL AMERICAN PLANNING ASSOCIATION CONFERENCE IN SAN FRANCISCO, CA FROM MARCH 19 - 23,2005 (j) APPOINTMENT OF BETH HEPOLA TO PARKS, RECREATION, COMMUNITY EDUCATION BOARD TO AUGUST 2007 Item 5( c) was pulled for further discussion Motion by Haugen, second by Stotts, to approve consent agenda with the exception ofItem 5( c). Motion carried unanimously. Item 5( c). Councilmember Arndt clarified what this action item is. Miles Seppelt, EDA Director, explained that this item is setting a public hearing for January 25,2005, with a presentatiOn being made to the Council. Motion by Arndt, second by Haugen, to approve Item 5( c). Motion carried unanimously. 6. PUBLIC HEARINGS - 6:00 P.M. - NONE 7. COMMUNICATIONS, REQUESTS AND PETITIONS (a) UPDATE ON WATER TREATMENT PLANT PROJECT BY SCOTT YOUNG OF EARTH TECH Scott Young, Earth Tech, presented before the Council. Mr. Young gave an overview on the water treatment plan preliminary design, beginning with a project history. The design concept began in 2001 and the project has currently gone through a Value Engineering Review which was completed in December 2004. Mr. Young further explained that the existing facilities were constructed in the 1950s and were designed primarily to remove iron. The existing facilities have insufficient capacity for future needs and can't meet evolving regulations. The facilities need significant repairs and upgrades and do not meet current codes. Mr. Young went on to review the project objectives, which include providing capacity to 2025 and beyond, improve water quality, improve system security and improve community safety. The treatment objectives include decreasmg the levels of various chemicals used in the water treatment process. The project and sizing features were described as holding capacity through 2025, higher supply, treatment and storage capacities, high lift pumps and a total cost of $14-15 million. Mr. Young showed a pictorial view of the neighborhood and where the new plant is proposed to be placed and reviewed the new building features. Mr. Young reviewed safety precautions that have been put in place on the existing property and precautions that will be designed into the new facility. Mr. Young further reviewed the proj ect schedule which illustrates the treatment plant being operable by the end of2006. Gary Plotz asked Mr. Young about the number of employees at the new water treatment plant. Mr. Young replied that staff levels are intended to remain the same as today, but their duties may change. Gary Plotz also asked Mr. Young if the treatment objectives are low enough to meet tightened treatment regulations. Mr. Young replied that these objectives will comply with EP A regulations. Mr. Plotz asked that these objectives be incorporated into the contract as a performance guarantee. Mr. Young stated that the EP A parameters can be placed into the contract or a design services agreement. 2 CITY COUNCIL MINUTES - JANUARY 11, 2005 Councilmember Haugen asked if unnecessary excessive equipment is planned to be purchased. Mr. Young stated that that issue has been discussed and will ultimately be up to the Council and staff to decide the amount of "extra" equipment that should be part of the project. 8. UNFINISHED BUSINESS (a) CONSIDERATION FOR APPROV AL OF SALES AGREEMENT WITH JEFF MEEHAN SALES, INC. Marc Sebora, City Attorney, reminded the Council that this item had been deferred from the last City Council meeting. Mr. Sebora stated that language has been added to the agreement requiring that JMSI has its own workers' compensation and automobile liability insurance. Mr. Meehan was agreeable to this. Motion by Peterson, second by Arndt, to approve sales agreement with Jeff Meehan Sales, Inc. to provide marketing services for Creekside Soils. Motion carried unanimously. (b) CONSIDERATION FOR APPROVAL OF STORM WATER UTILITY RATE CHANGES John Olson, Public Works Superintendent, presented before the Council. Mr. Olson explained that part of the storm water utility fees included covenng mosquito control. Initially, $66,000 was budgeted for this control procedure, but through research, staff learned that only one briquette application will be needed, reducing the cost to $32 - 33,000. More concrete numbers will be attained after February 10, at which time Mr. Olson is meeting with a representative from a mosquito control company. A different funding source will need to be obtained for mosquito spraying, as opposed to briquette application only. Motion by Stotts, second by Haugen, to approve 2005 storm water utility rate changes. The residential areas will see the heightened storm water utility rates, whereas the commercial and industrial areas will receive the inflationary increase. Motion carried unanimously. 9. NEW BUSINESS (a) CONSIDERATION FOR APPROVAL OF PROCEEDING WITH DEVELOPMENT OF NEW MUNICIPAL LIQUOR STORE Miles Seppelt, EDA Director, presented before the Council. Mr. Seppelt explained the project background, which dated back to 1999, at which time it was determined that an expanSiOn of the liquor store facilities needed to occur to encaJ?ture growing sales and maintain market share. In 2003 a project team was formed, and in 2004, the Council approved developing one large store in the downtown area. Mr. Seppelt highlighted several items, they being that approximately $100,000 has been spent on this project thus far, sales & revenues have been lost over the last 19 months and interest rates are rising. Currently the liquor store has topped out and has seen no increase in sales in 2004. Customer counts are declining and the store is proj ected to lose 1.44% of its current market share this year. There is currently insufficient storage and display space which negatively impacts profitability and the ability to competitively price products. The project team is recommending that the current store be expanded approximately 5600 square feet and acqmre the adjoining retail space of 3950 square feet. The existing liquor store square footage is recommended to be remodeled and a dedicated liquor store parking area will be created. The estimated cost of the project is proposed at $1.9 million. Approximately $500,000 would come from the liquor store enterprise fund, and $1.4 million would be obtained through an intra-fund loan from the water and sewer fund. No tax dollars would be spent on this project. Ifthis project receives authorization, the design phase would begin immediately with projections of the new store opening in mid-November 2005. Todd Malenke, owner of Tae Kwon Do, presented before the Council. Mr. Malenke explained that he received a very good rental rate with Nash Finch when he obtained this floor space. He has concerns over relocating and paying a much higher rent, which will then in turn raise the tuition to his students. He is afraid that that may in turn turn away his students and shut down his business. Mr. Seppelt explained that the City and the EDA by no means wants Mr. Malenke's school to go out of 3 CITY COUNCIL MINUTES - JANUARY 11, 2005 business and will work with him, in accordance with the law, to keep his school progressing. As a matter of fact, $15,000 has been budgeted to help with relocation expenses, which includes aiding Mr. Malenke in finding a new location and covering any difference in rental rates up to a maximum amount of$10,000 or for two years, whichever comes first. Council Member Haugen stated that the Council has voted twice to keep the liquor store in the downtown area and have looked at about six different locations. It appears that this might be one of the last opportunities to proceed with this project. Mayor Cook stated that he feels costs may be able to shaved through the process, but expressed that he feels this is a good way to go. Mr. Malenke asked why the City doesn't have private liquor stores in the market and charge a flat tax to the stores. Mr. Plotz stated that the main issues are related to liquor licenses and financial issues. Also, the City cannot simply add additional taxes, this process would need to be done legislatively. Councilmember Peterson asked that the relocation amount for the Tae Kwon Do facility be as abundant as possible. Councilmember Stotts stated that someone asked him how much it was to build on the south end. Mr. Seppelt stated that the total price tag to build on the south end would probably be about the same as the remodeling and expansion to the current store. Motion by Peterson, second by Haugen, to approve proceeding with development of new municipal liquor store, adopting Resolution No. 12604. Motion carned unanimously. (b) CONSIDERATION FOR APPROVAL OF RESETTING JANUARY 20,2005, VISIONING WORKSHOP TO JANUARY 21,2005 Gary Plotz stated that there is no need for this meeting to be moved any longer. No action necessary. 10. MISCELLANEOUS (a) COMMUNICATIONS 1. PRESENTATION FROM HOSPITAL RESTRUCTURING TASK FORCE MEETING - A FINANCIAL OVERVIEW AND THE MARKET OF HUTCHINSON AREA HEALTH CARE (PHIL GRAVES AND PAM LARSON) Steve Snapp, HAHC Board Chair, presented before the Council. Mr. Snapp reminded the Council that last fall, the HAHC Board came before the Council asking them to consider the hospital converting from public, to private, non-profit. Since that time, a task force has been created and have held about six meetings. One of the presentations that the task force had heard was from Phil Graves and Pam Larson regarding the financial overview and market of Hutchinson Area Health Care. Mayor Cook asked that this presentation be given to the Council and the public. Phil Graves, President Hutchinson Area Health Care, explained the service area of the hospital, 90% coming from the City of Hutchinson and surrounding townships. The total service area that the hospital serves is projected to grow over 3% within the next five years. Mr. Graves continued to share several other statistics which showed geographical and demo graphical growths, as well as the market share that the hospital currently has (31.8%). The market share has shifted to neighboring hospitals and Abbott No~hwestem. Glencoe Hospital has the next highest share of the market after Hutchmson in the same service area. Mr. Graves further explained the product lines of the hospital. The top five lines include general medicine, obstetrics, psychiatry, cardiology and general surgery. The primary competitors are 4 CITY COUNCIL MINUTES - JANUARY 11, 2005 Glencoe, Meeker County Hospital, Ridgeview and Abbott Northwestern. Hutchinson Hospital is gaining market share in the obstetrics, gynecology and psychiatry product lines. Hutchinson Hospital is losing market share mainly in cardiology and orthopedics. Share improvements will be focused on the urology, orhopedics, general surgery, neurology and oncology product lines. Mr. Graves shared more information on market share trends. Pam Larson, Financial Division Director, presented before the Council. Ms. Larson explained the components of Hutchinson Area Health Care. These include Hutchinson Hospital, Bums Manor Nursing Home, Dassel Clinic, and joint ventures operating ConnectCare and Hutchinson Diagnostic Center, LLC. Approximately 70,000 outpatient admissions were budgeted in 2004. Ms. Larson explained how HAHC receives payment. Some rates received are fixed and non-negotiable (Medicare and Medicaid). 85% of reimbursement HAHC receives for care given is fixed payments. 10% reimbursement is a percent of billed charges. Lastly, 5% is billed charges. Ms. Larson shared a statistic that for every $1.00 price increase ofHAHC, $.30 is collected. Ms. Larson also shared more statistics outlining financials. 2. CHANGE ORDER NO.4, LETTING NO.6, PROJECT NO. 04-06 Kent Exner, City Engineer, explained that this item is related to the Echo Drive project. The items included on the Change Order are for additional costs related to watermain construction. Motion by Peterson, second by Haugen, to approve Change Order No.4, Letting No.6, Project No. 04-06. Motion carried unanimously. Bill Arndt - Councilmember Arndt asked that an agenda item be put on for the next Council meeting. The item for consideration would be to reroute the Water Carnival parade onto Main Street in recognition of the Sesquicentennial Celebration. Casey Stotts - Councilmember Stotts urged citizens to contact council members with any issues. Gary Plotz - Mr. Plotz noted that on an annual basis, city staff and officials meet with Hutchinson's State Representative and State Senator. After efforts to schedule this meeting, it has been set for January 14th at 9:00 a.m. Mr. Plotz invited the Council to attend. Motion by Arndt, second by Haugen, to set this meeting with State Rep. Newman and State Senator Dille for January 14,2004, at 9:00 a.m. at the City Center. Gary Plotz noted that an agenda is being put together for this meeting and any issues should be submitted to him as soon as possible. Mr. Plotz also noted a meeting being held January 19th at 6: 15 p.m. with the township officials, joint planning board and planning commission to discuss orderly annexation agreements. Interesting legislation may be introduced during the 2005 session on this subject. Motion by Arndt, second by Peterson, to set this meeting as a public meeting. Motion carried unanimously. 5 CITY COUNCIL MINUTES - JANUARY 11, 2005 Mr. Plotz also mentioned that a League of Minnesota Cities representative was at the City Center today and met with him, Mayor Cook and a few other staff members. This representative meets with member cities and likes to discuss items of concern. Mr. Plotz also mentioned that he met with the facilitator that will be leading the visioning sessions of the Council and directors. Mr. Plotz will be sending out a memo outlining an agenda. Lastly, a meeting was held with the HCVN Board of Directors. Items discussed were increases in the amount of public meetings, more cable coverage of public meetings, coverage at the Event Center, and converting videotapes to discs. Discussion was also held regarding upgrading of the council chambers, technology-wise. A committee will be formed to brainstorm ideas for the upgrade. Councilmember Haugen recalled the school district offering to fund a portion of this project. John Olson, Public Works Superintendent, presented before the Council. Mr. Olson stated that Section 90 of the City Code requires snow and ice to be removed from the sidewalks and the responsibility of the abutting property owners to do so. Mr. Olson noted that the conditions that have occurred in the last ten days (extremely hard ice) have made it difficult for even City equipment to remove. The Code cites that staff may remove the snow and ice if the property owners do not and in turn bill the property owner. Due to the conditions and staff shortage, this procedure is becoming not advantageous. Mr. Olson is looking for Council direction as to how to handle this situation. Suggestions of the Council were to cut the homeowners a break due to the irregular conditions or to salt and sand the sidewalks. The main suggestion was to have City staff remove the snow and ice, charging $15.00 to the homeowners. Mr. Olson stated that it would take approximately two weeks to clean up the remaining sidewalks. Attorney Sebora suggested following practice by notifYing the property owner that the snow will be removed by City staff for a charge if the homeowner does not take care of it themselves. Direction can be given to the City Administrator who will in turn give direction to the public works group. General discussion was held regarding parked cars and the snow removal process. 11. CLAIMS. APPROPRIATIONS AND CONTRACT PAYMENTS Motion by Arndt, second by Stotts, to approve claims, appropriations and contract payments. Motion carried unanimously. 12. ADJOURN Motion by Arndt, second by Peterson to adjourn at 8:40 p.m. 6