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06-25-2001 CHCMHutchinson Charter Commission Meeting Minutes June 25, 2001 Members Present: Chuck Carlson, Chair, Jean Peterson, Linda Remucal, Don Glas, Steve Auger, Walt Clay, Phil Graves, Mike Cannon, Ron McGraw, and Virgil Voigt Members Absent: Carl Bretzke and Roger Peterson Others Present: Gary Plotz, City Administrator; Dick Schieffer, City Attorney; Ken Merrill, Finance Director; Brenda Ewing, Recorder; and Melissa Starke, observer Chair Carlson called the meeting to order at 4:10 p.m. Move by Clay, second by Auger to approve the minutes as presented. Motion passed unanimously. Attorney Schieffer presented a draft update to the Charter and suggested that the Commission take the draft under consideration for discussion at the next meeting. Mr. Graves commented on the Charter language and how the City, HAHC and Hutchinson Utilities are currently operating and how this compares to the charter language. He proposed that the current operations be documented and then cross - referenced with state law /statutes for accuracy and what practices are required by law. It was proposed that a sub - committee of Mr. Graves, Gary Plotz, City Administrator and legal counsel meet separately to discuss this issue and to make recommendations to the full commission. Mr. Graves will act as the HAHC representative to this group and not as a member of the Charter Commission during these discussion. Mr. Schieffer commented that this is an acceptable committee make -up and would not violate any open meeting laws. It was the consensus of the Commission to direct the committee of Mr. Graves, Mr. Plotz, and legal counsel to diagram how the City is currently operating and to report back to the commission with their findings. There was also discussion regarding the Hutchinson Utilities operation and how it relates to the Charter. The commission discussed the appropriateness of inviting the Utilities Commission representatives and the City Council representatives to a meeting to discuss issues relevant to each group. It was reiterated that the Mayor has requested that the Charter review process be completed by August 2001. Chair Carlson asked for volunteers to serve on a sub - committee to meet with representatives of the Hutchinson Utilities Commission. Chair Carlson asked Mr. McGraw and Mr. Voigt to serve on the committee. Mr. Auger also volunteered to serve. The three were directed to meet with representative of the Utilities Commission and to discuss the Charter and how it relates to the Utilities Operation. Mr. Schieffer noted that these meetings are required to be public and be on the City calendar for posting. The sub - committee will notify City Staff of meeting dates, times and locations. The Commission set the next meeting for Monday, July 16, 2001, 4:00 p.m. at City Center. The Commission resumed their review of the Charter with Chapter 7, Taxation and Finance. CHAPTER 7 7.01 - Mr. Clay inquired how often the City solicits bids for audit services. Mr. Plotz noted this was last reviewed approximately 5 years ago. Mr. Plotz stated that local firms are eligible to submit a proposal for audit services. Ken Merrill, Finance Director, joined the meeting at 4:40 p.m. The Commission discussed the timing of the submission of the Hutchinson Area Health Care (HAHC) and Hutchinson Utilities budgets to the City Council for review. It is not the understanding that the City Council "approves" these budgets. It is perceived as more of an "awareness issue" for the City Council. The City has deadlines for budget approval that are tied to the taxation requirements. Mr. Plotz suggested that the Utilities be required to submit a budget to the City Council for review by a certain date on an annual basis. This relates to the financial transfers from the Utilities to the City. Mr. Clay inquired if there is a formula in place to determine the amount of the transfer. Mr. Plotz responded that other municipalities do this, but the City does not have a designated formula in place at this time. This issue has been considered by the Council, but no decision has been made to date on how to determine the transfer amount. Mr. Clay inquired if this could be an issue the Charter subcommittee could approach with the Utilities' representatives. It was also discussed if this is an appropriate issue to be included in a charter document. Mr. Plotz noted that it is addressed in a number of City charters of which he is aware. It was questioned if the City would be liable in the event something catastrophic would happen to the Utilities. Mr. Schieffer answered that they would not as the City owns the utility. There was discussion as to what would happen if another electric utility would seek to do business in the City and would request franchises. 7.05 - It was discussed if the Capital Improvements Plan (CIP) should be submitted to the Council prior to the June 1 deadline that is noted. Mr. Merrill updated the Commission on the City efforts to have the revised CIP in place and submitted by June 1. The City is currently not meeting this deadline. The Commission unanimously voted to retain the June 1 deadline in the Charter language. 7.06 - Mr. Plotz noted that the budget is not adopted until December per the Truth -in- Taxation legislation. The hearings are held in early December and the budget is not adopted until after the meetings are held. Mr. Merrill noted also that the City has to set a preliminary tax levy and have a preliminary budget in place by September. This amount cannot be increased. In November, tax information is published per the levy amounts set in September. The Truth -in- Taxation hearing then must be held and the budget has to be adopted afterward at a separate meeting, and this brings the completion of the process to mid to late December. This time frame can be changed by the State. Mr. Graves inquired if the Charter language can be amended to take this situation into account. Mr. Schieffer also commented that the City could consider stating a date on which the budget process must begin but leave the final approval date deadline open ended to take into account budget deadline changes by the State. Section 7.07 - This language is very strict in regards to expenditures. Mr. Plotz will propose amended language to address this issue. Mr. Graves exited the meeting at 5:00 p.m. Section 7.09 - It is unclear if emergency debt certificates are authorized under state law for cities. Mr. Merrill noted that there are other methods for cities to deal with emergency financial situations that do not require voter approval. Mr. Schieffer also stated that tax anticipation certificates are a method and are used by other Cities. This is a very secure form of financing and short-term in nature. The Commission should decide if this is an issue that should be left in the charter. It was decided to leave the language at this time and legal counsel will research if this is legally appropriate. 7.10 - It was discussed how the State mandates what types of investments can be made and the City also has guidelines for investments. 7.11 - Mr. Merrill explained to the Commission what equipment certificates are and that they are generally used for the purchase of items such as a fire truck. The certificates must be paid back within a five -year period. The certificates can be purchased publicly or sold privately. The title for the equipment is retained by the City if the certificates are used. Mr. Schieffer questioned if the language in section 7.11 prohibits the City from using equipment certificates or tax anticipation certificates. Mr. Clay inquired if the term "current expenses" should be further clarified in the Charter language or in a City policy so that the current interpretation is maintained for future use. Mr. Schieffer commented that a clarification probably does not belong in the charter due to its length. Mr. Clay proposed that a City policy address this issue and clarify the definition. CHAPTER 8 — No changes recommended. CHAPTER 9 — No changes recommended. CHAPTER IO 10.01 - Mr. Schieffer addressed the issue of obtaining a franchise for a simple, short-term use of City property. Examples of this would be summer sidewalk cafes. It is the opinion of many that the process to obtain a franchise or approval for these uses is too cumbersome. He suggested that the language be changed to deal with the very simple uses easier. Mr. Plotz added that the City Council has discussed these types of simple uses and agree that the language should be "lightened up" for these uses. Staff and legal counsel can review this section and propose revised language for the Commission to review. Mr. Clay proposed that the City create simple use guidelines and consider dealing with these requests on a permit issuance basis. It was clarified by legal counsel that Hutchinson Utilities does not need a franchise to operate as the City is not required to grant itself a franchise. The language allows a private or other utility provider, such as electric, to seek a franchise from the City to operate in the City limits. There was discussion as to how electric deregulation could affect franchises. 10.03 - This section speaks to the City adopting any "rates, fares or prices to be charged by a public utility ". It was questioned if the City has the authority to set rates for public utilities such as a telephone company or cable TV company. Mr. Schieffer clarified that this sentence means that " if' the City were in the business to set rates, they could. Since they do not, this sentence may be left as it reads. 10.04 - This section language specifically states that the City may set rates if they legally may do so by law. Mr. Schieffer will review this section to determine what the law allows in regards to the City actually setting rates for local utilities. Mr. Carlson informed the Commission that he received a telephone message from Mr. Steve Cook inquiring about submitting charter questions to the Commission. Mr. Carlson responded to Mr. Cook also by telephone message and asked Mr. Cook to present any questions or issues he has to the Commission in writing. Mr. Clay asked that Mr. Carlson respond to Mr. Cook's request in writing. Motion by Auger, second by Peterson to adjourn the meeting at 5:40 p.m. The Commission will resume its review of the Charter at the meeting scheduled for Monday, July 16.