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10-28-2014 CCMMINUTES REGULAR MEETING — HUTCHINSON CITY COUNCIL TUESDAY, OCTOBER 28, 2014 1. CALL TO ORDER — 5:30 P.M. Mayor Steve Cook called the meeting to order. Members present were Gary Forcier, Mary Christensen, Bill Arndt and Chad Czmowski. Others present were Marc Sebora, Interim City Administrator, Kent Exner, City Engineer and Jody Winters, Attorney 2. INVOCATION — Pastor Scott Grorud, Faith Lutheran Church, delivered the invocation. 3. PLEDGE OF ALLEGIANCE 4. RECOGNITION OF GIFTS, DONATIONS AND COMMUNITY SERVICE TO THE CITY 5. PUBLIC COMMENTS Robert Hantge, 1210 Lewis Avenue, presented before the Council. Mr. Hantge asked if the item under 11(a), Review of Hutchinson Utilities Commission Industrial Rates Revisions, would be a question and answer time for the public or if that would be presented by HUC only. Mayor Cook responded that it would not be a public hearing opportunity so that this would be the time for any comments. Mr. Hantge also noted that at the last meeting Marc Sebora, Interim City Administrator, was explaining conflicts of interest however he was cut off during his explanation. Mr. Sebora clarified that what he has consistently stated is that a council member would need to have a direct financial benefit from a decision made in order for there to be a true conflict of interest. Mr. Hantge recognized that a council member does not have a conflict of interest by merely holding employment, but rather if they own stock in a company. Mr. Sebora stated that wasn't necessarily true and again stated that a council member would need to have a direct financial benefit gain from a decision made. Marlin Torgerson, 1245 Rolling Oaks Lane, presented before the Council. Mr. Torgerson noted that he is a member of the Charter Commission. Mr. Torgerson spoke about the annual transfer made from HUC to the City. Mr. Torgerson cited Section 11.05 of the City Charter which he said stated that the HUC and the City should mutually agree on transfers to the general fund. Mr. Torgerson noted that the mayor stated at the last meeting that not all funds from the transfer go to the general fund. Mr. Torgerson stated that Mayor Cook also stated that the transfers have decreased over the years, however Mr. Torgerson stated that in 2005 the transfer was around $900,000 and this year it was over $1 million. Mr. Torgerson spoke about the Hutchinson Leader being pleased that the industrial rates would be reduced as it may invite more industries to move into the city. Mr. Torgerson noted that only 3M and HTI fit into the industrial rate class that is being proposed to be revised. 6. MINUTES a) SPECIAL MEETING OF OCTOBER 10, 2014 b) REGULAR MEETING OF OCTOBER 14, 2014 (c) SPECIAL MEETING OF OCTOBER 22, 2014 Motion by Arndt, second by Christensen, to approve minutes of the regular and special meetings of October 10, 14, and 22, 2014. Motion carried unanimously. 7. CONSENT AGENDA (Purpose: only for items requiring Council approval by external entities that would otherwise have been delegated to the City Administrator. Traditionally, items are not discussed.) (a) RESOLUTIONS AND ORDINANCES 1. RESOLUTION NO. 14341 - RESOLUTION AUTHORIZING EXECUTION OF GRANT AGREEMENT WITH THE MINNESOTA DEPARTMENT OF PUBLIC SAFETY FOR CITY COUNCIL MINUTES OCTOBER 28, 2014 TRAFFIC SAFETY ENFORCEMENT PROJECTS 2. RESOLUTION NO. 14342 — RESOLUTION CERTIFYING SPECIAL ASSESSMENTS TO MCLEOD COUNTY 3. ORDINANCE NO. 14-734 — AN ORDINANCE AMENDING SECTION 112.056 OF THE HUTCHINSON CITY CODE PERTAINING TO RESTRICTIONS OF OPEN CONTAINERS (SECOND READING AND ADOPTION) 4. ORDINANCE NO. 14-735 — AN ORDINANCE AMENDING SECTION 112.025 OF THE HUTCHINSON CITY CODE PERTAINING TO LICENSED PREMISES (SECOND READING AND ADOPTION) (b) PLANNING COMMISSION ITEM CONSIDERATION OF PRELIMINARY AND FINAL PLAT OF MENARD THIRD ADDITION AND SITE PLAN APPROVAL FOR 1450 MONTREAL STREET SE, SUBMITTED BY VINCENT DRIESSEN, APPLICANT, WITH FAVORABLE PLANNING COMMISSION RECOMMENDATION (ADOPT RESOLUTION NO. 14336) (c) AMENDMENT TO SUBDIVISION AGREEMENT OF FAIRWAY ESTATES SECOND ADDITION (d) CLAIMS, APPROPRIATIONS AND CONTRACT PAYMENTS — REGISTER A Item 7(b) l and 7(c) were pulled for separate discussion. Motion by Czmowski, second by Arndt, to approve those items contained under the consent agenda except for the items noted above. Motion carried unanimously. Item 7(b)1 had further discussion. Dan Jochum, Planning Director, presented before the Council. Mr. Jochum explained that Item (g) on the Resolution had a typographical error and should read "developed" as opposed to "development". Motion by Czmowski, second by Christensen, to approve Item 7(b)1 as amended. Motion carried unanimously. Item 7(c) had further discussion. Kent Exner, City Engineer, explained that a minor revision had been made to the subdivision agreement. These revisions include language that was inadvertently removed from the agreement that was in the original subdivision agreement which states that sanitary sewer or water mains and sewer lines are the subdivision's responsibility. In addition, language was struck regarding gas utilities. Motion by Arndt, second by Cook, to approve Item 7(c) with the amended agreement. Motion carried unanimously. 7A. CONSENT AGENDA (a) CLAIMS, APPROPRIATIONS AND CONTRACT PAYMENTS — REGISTER B Motion by Czmowski, second by Arndt, with Forcier abstaining, to approve Council Check Register B. Motion carried unanimously. 8. PUBLIC HEARINGS — 6:00 P.M. - NONE 2 CITY COUNCIL MINUTES OCTOBER 28, 2014 9. COMMUNICATIONS, REQUESTS AND PETITIONS (Purpose: to provide Council with information necessary to craft wise policy. Always looking toward the future, not monitoring past) (a) RECOGNITION OF M.I.T.G.I. FOR RECEIVING IMAGE AWARD Lee Miller, EDA Director, presented before the Council. Mr. Miller came before the Council to officially recognize Midwest Industrial Tool and Grinding, Inc. (M.I.T.G.I.) for being awarded the 2014 Image Award. This was one of eleven Manufacturing awards presented by Minnesota Business Magazine. This award recognizes the company for their efforts to improve the industry's image and the appeal of careers in manufacturing. Eric Lipke, Vice President of M.I.T.G.I., presented before the Council and spoke of the company's commitment to community and education and encouraging and supporting young people to enter manufacturing -related programs. (b) UPDATE BY LEE MILLER, EDA DIRECTOR — DEPOT MARKETPLACE PROJECT SELECTED AS FINALIST FOR REDEVELOPMENT AWARD Lee Miller, EDA Director, presented before the Council. Mr. Miller explained that the depot marketplace project was one of three finalists for a ReScape award under the small city category. The award categories include environmental, economic, community and small city impact. Judges selecting the finalists are comprised of leaders in government, environmental, business and academic professions. Applications were evaluated by the judges based on measurable results of beneficial impact, use of innovative solutions and incorporation of sustainability. The winner of the award was a Habitat for Humanity project out of Hibbing. 10. UNFINISHED BUSINESS 11. NEW BUSINESS (a) REVIEW OF HUTCHINSON UTILITIES COMMISSION INDUSTRIAL RATES REVISIONS Jeremy Carter, Hutchinson Utilities Commission General Manager, presented before the Council. Mr. Carter provided a presentation on the Utilities proposal to reduce industrial rates. These proposed revisions are being driven by rising costs for generation. Mr. Carter explained that this topic has been discussed since the Spring of 2013 and even earlier to a certain degree. The topic of decreasing industrial rates is being pushed by not only customers in Hutchinson but in other cities as well. Mr. Carter also explained that co-generation/distributed distribution is allowed by state law and is favorable at the Public Utilities Commission. Mr. Carter also explained that there is currently a customer in the community, 3M, that has a viable option alternative to co -generate and needs to be taken seriously by the Hutchinson Utilities Commission. Mr. Carter explained that the HUC Commission voted in favor of a financial scenario which is a phased approach. Mr. Carter further explained that the HUC Commissioners reviewed the following when considering self -generation: 1) adding in a back-up charge; 2) unbundling rates to better align rates with fixed versus variable costs of providing service; 3) potential impact on the gas division; 4) standby power (customer is not required to purchase standby power, however if standby power is not purchased it may not be available). Mr. Carter noted that 3M has the following rates at their various plants throughout the United States. Their average U.S. blended plant rate is 6.9 cents per kwh with HUC's current blended plant rate at 8.2 cents per kwh. Mr. Carter also shared other data concerning rates at the customer's plants across the country: average of top 10 plants is 6.1 cents; average of top 25 plants is 6.5 cents; average of top 72 plants is 6.8 cents. HUC's overall customer blended rate after the proposed 3 -year phase-in is 7.4 cents. Mr. Carter clarified that HUC is also looking at ways to reduce costs and not just revise industrial rates, such as reducing the PILOT for the short-term. Other areas include operational cost CITY COUNCIL MINUTES OCTOBER 28, 2014 reductions and efficiencies and looking at additional revenue opportunities and sources. Mr. Carter stated that all options will be explored before customer rate increases will be considered. Mr. Carter noted that no rate changes will be made in 2015 for residential and commercial customers. Mr. Carter spoke to the budgeting cycle for 2015 and beyond. Other strategies include a cost of service study and redefining HUC's capital improvement plan. Mr. Carter provided several data graphs on various rates compared to other utilities. This data shows how fair the HUC rates have been in comparison to other communities. Mr. Carter spoke to various items that have been reviewed and considered before the HUC making the decision to reduce industrial rates. Mr. Carter noted that the last rate increases were in 1988 and 2006, with the 2006 increase being 8%. Council Member Czmowski asked if 3M could replicate as good of reliability as HUC can provide. Mr. Carter stated that with generation alone, they could probably match reliability, however the customer most likely could not match infrastructure reliability that HUC can provide. Council Member Forcier asked if the HUC has specific plans on how to reduce their budget even more for 2015. Mr. Carter explained that staff will continue to look for ways to do things more efficiently but not effect operations. Staff is also continuing to look at additional contract energy sales as additional sources of revenue. Mr. Carter stated the major concerns are those things out of the HUC's control, such as costs of gas and generation due to industry changes. Council Member Forcier stated another question he has received from the public is that is there a guarantee that 3M won't generate their own power anyway, even if the industrial rates are reduced. Mr. Carter stated there is no guarantee that that won't happen, however there is also no guarantee that the industrial rates won't be raised to account for such. Council Member Czmowski asked how many plants 3M self generates at. Mayor Cook had conducted research on this matter and found that there are two facilities that currently self - generate and at least one other has been permitted and one is actively considering it. Mayor Cook spoke of sustainability projects that 3M has taken part in. Mayor Cook noted that it is 3M's corporate effort to manage energy as efficiently as possible, so the project they are proposing in Hutchinson is in line with other efforts they have been part of. (b) CONSIDERATION FOR APPROVAL OF SMALL CITIES DEVELOPMENT PROGRAM PRELIMINARY PROPOSAL AND SUBMITTAL TO THE MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT Jean Ward, HRA Director, presented before the Council. Ms. Ward explained that the Hutchinson HRA has prepared a Small Cities Development Program rental rehab pre -application for the downtown area on behalf of the City of Hutchinson. The HRA sent out letters to rental property owners in the downtown area to determine interest in a rental rehab program, finalized the target area and worked with Southwest Minnesota Housing Partnership to prepare the pre -application. The estimated total project cost is $755,901 with the amount being requested from the SCDP to be $548,044. 35 rental units in the downtown area are expected to be rehabilitated with these funds. The rental units in the target area run from both sides of Main Street from the Crow River to Oakland Avenue SE and both sides of Franklin Street to both sides of Monroe Street and the Crow River to both sides of 4th Avenue. Ms. Ward explained the deferred loan structure and the income limits associated with this program. 11 CITY COUNCIL MINUTES OCTOBER 28, 2014 Motion by Arndt, second by Christensen, to approve proposal and submittal of Small Cities Development Program to Minnesota Department of Employment and Economic Development. Motion carried unanimously. (c) CONSIDERATION FOR APPROVAL OF AMENDMENTS TO THE CITY OF HUTCHINSON SNOW & ICE REMOVAL POLICY John Olson, Public Works Manager, presented before the Council. Mr. Olson explained that the City has had a snow & ice removal policy for many years, however upon attending a workshop hosted by the American Public Works Association, Mr. Olson is recommending some language additions that are being recommended to the policy to clarify responsibilities. Areas that include recommended changes are clarifying drivers' responsibilities for operating vehicles, recognizing the entire department as being responsible as opposed to one individual, providing room in the policy for operational adjustments, addressing standards for cul-de-sac and bridge plowing procedures, identifying operating policies that the City may have, identifying repair of mailboxes and ensuring the governing body is the sole authority to amend the policy. In addition, two appendices have been added to the policy. Appendix A relates to the declaration of a snow emergency and prohibited parking and Appendix B relates to operation of road maintenance equipment. No additional costs are foreseen due to the changes recommended to the policy. Mayor Cook suggested putting the adoption date on the policy. He also asked if a reminder would be sent out to residents on the snow emergency policy. Mr. Olson explained that notification will go out in the November or December utility bills. Council Forcier asked about the possibility of cleaning up Main Street in a more efficient capacity and not have such high windrows at the edge of the road against the sidewalk. Mr. Olson spoke about staffing levels, equipment needs and timing issues, all that effect the clean-up of Main Street. Motion by Czmowski, second by Christensen, to approve amendments to City of Hutchinson snow and ice removal policy with the attached appendices. Motion carried unanimously. (d) CONSIDERATION FOR APPROVAL OF AMENDMENTS TO THE MN/DOT AIRPORT GRANT AGREEMENT John Olson, Public Works Manager, presented before the Council. Mr. Olson explained that the City had made a request to have some work done near hangars for drainage issues. These projects will include removing bituminous, installing drainage tile and restore the bituminous to grade. In addition, another project is being planned for parking between the former Life Link III hangar and the Civil Air Patrol building. This improvement will add 16 parking stalls. These projects will be funded 80% by the State and 20% locally, with the City's portion estimated at $7415 and is currently budgeted for in the 2015 general fund. Motion by Arndt, second by Cook, to approve amendments to MnDOT airport grant agreement. Motion carried unanimously. (e) CLOSED SESSION PURSUANT TO MINNESOTA STATUTE SECTION 13D.05 TO DISCUSS LITIGATION STRATEGY UNDER THE ATTORNEY-CLIENT PRIVILEGE RELATED TO STACIE ZIEMAN VS. CITY OF HUTCHINSON, MCLEOD COUNTY COURT FILE NO. CO - 14 -130 Motion by Arndt, second by Czmowski, to convene into closed session at 8:00 p.m. Motion carried unanimously. Motion by Czmowski, second by Christensen, to reconvene into open session at 8:15 p.m. Motion carried unanimously. Motion by Czmowski, second by Christensen, to authorize Marc Sebora, City Attorney, to resolve the court file of Stacie Zieman vs. City of Hutchinson in whatever fashion he sees fit. Motion carried CITY COUNCIL MINUTES OCTOBER 28, 2014 unanimously. 12. GOVERNANCE (Purpose: to assess past organizational performance, develop policy that guides the organization and Council and manage the logistics of the Council. May include monitoring reports, policy development and governance process items.) (a) CITY OF HUTCHINSON FINANCIAL REPORT AND INVESTMENT REPORT FOR SEPTEMBER 2014 (b) PLANNING, ZONING, BUILDING DEPARTMENT MONTHLY REPORT FOR SEPTEMBER 2014 (c) PLANNING COMMISSION MINUTES FROM SEPTEMBER 16, 2014 (d) HUTCHINSON HOUSING & REDEVELOPMENT AUTHORITY BOARD MINUTES FROM SEPTEMBER 16, 2014 13. MISCELLANEOUS Kent Exner — Mr. Exner provided a project update on Jefferson Street. Signage will be placed this week and will be striped next year. The pavement management program is nearing completion. The South Grade Road trail project crossing is complete, however the pedestrian activation system is not installed yet. All paving near Freemont Avenue and the Hwy 15 frontage road should all be completed by next week. John Olson — Mr. Olson provided an update of the leaf vacuuming project. It is going well with the last service pick-up being the Monday of the week of Thanksgiving. 14. ADJOURN Motion by Arndt, second by Czmowski, to adjourn at 8:15 p.m. Motion carried unanimously. Steven W. Cook Mayor 21 ATTEST: Marc A. Sebora Interim City Administrator