City Council Minutes

Pursuant to due call and posted notice thereof, the regular meeting of the Victoria City Council was called to order at 6:30 p.m. by Mayor Hershberger Thun in the Council Chambers at 7951 Rose.

Members Present: Mayor: Mary Hershberger Thun; Councilmembers: Tim Amundsen, Jim Paulsen and Kim Roden.

Absent: Councilmember Tom O’Connor.

Staff Present: Don Uram, City Administrator; Jylan Johnson, Finance Director; Cara Geheren, City Engineer; and Mike Norton, City Attorney.

Others Present: Sue Orsen, The Victoria Gazette, and others.

Mayor Hershberger Thun noted that Planning Commissioner Bud Hiivala passed away. She said he was a member of the Planning Commission for about 15 years. The Planning Commission is discussing a way to memorialize his work. A moment of silence was taken in memory of Bud Hiivala.
 

Mr. Uram added 10-B, to approve the name of the Field House to Victoria Recreation Center.

A motion was made by Councilmember Roden, to adopt the Agenda as amended. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.
 

(3) OPEN FORUM:

None.

(4) VISITORS PRESENTATION:
 

Firefighter Jeff Nordeen, Acting Secretary for the Victoria Fire Department Relief Association, reviewed the audit. He said the auditor had two notable items to report. The first was segregation of duties. In response to the segregation of duties a separate P.O. Box was established, a limit has been put on checks so that one person cannot write out more than $1,000 at a time and all of the responsibilities for receiving bank statements are going to both the president and the treasurer of the Relief Association. Firefighter Nordeen stated the second auditor note was the preparation of financial statements, that there should be a type of audit function to make sure what is prepared is correct.

Firefighter Nordeen said there were a couple updates from the State with respect to language. He stated the survival spouse language has changed this year and the differed interest language changed. He said a copy of the amended bylaws with the new language has been sent in.

Firefighter Nordeen talked about the performance and said the net performance was down 20% and overall with contributions down about 26.5%. He noted the contributions decreased 50% in 2008. He stated they performed better than they thought being down 20%.

Fire Chief Tim Walsh provided some history on the 2008 Fire Department Annual Report. He said this is the first time they have done anything like this. He explained the report provides history of the administration, talks about the years of service, provides an organizational chart and looks at calls. He said it also talks about equipment, budgets, grants and fire department events and training.

Councilmember Paulsen asked what the metrics are of the major fire departments that measure efficiency and if that can be applied. Chief Walsh stated that the report for 2009 can be created to include metrics.

Fire Chief Walsh said they will also be working on a monthly or quarterly report to provide updates.

Councilmember Amundsen commented on meeting the needs of the rescue and medical emergencies in the community.

Mr. Uram noted credit needs to be given to Jennifer Kretsch who worked with Fire Chief Walsh and the group to put this document together.
 

A motion was made by Councilmember Paulsen, to adopt the Consent Agenda. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.
 

-A- Approve the August 24, 2009 Claims Roster in the amount of $368,669.44

Councilmember Paulsen pointed out there are two entries in this claims roster that total $73,000 of out bound money from the City of Victoria to the Metropolitan Council. He noted that $36,000 is the monthly outgoing amount for sewer.

A motion was made by Councilmember Paulsen, to Approve the Claims Roster in the amount of $368,669.44. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.

Ms. Johnson stated the monthly financial report was presented for information use only.

Ms. Johnson clarified the request is for an approval to go out for bids for the 2009 Street Improvement Projects. She noted cash reserves would be used for the water and sewer utility improvements and that bids would be obtained for both a tax-exempt and a taxable issue.

Paul Donna, Northland Securities, explained the bond sale would occur the morning of the second meeting in September.

Mr. Donna explained the Build America Bonds is a taxable bond or a tax credit bond. He said the first option is a tax credit bond where the buyer is given a tax credit equal to 35% of the tax liability. The second option is the direct pay option where the municipality would issue taxable bonds and would receive an interest credit of 35% of the interest cost. Mr. Donna stated that right now there is not a market for the tax credit option. The direct pay option has been a tremendous success since it started. He said there are additional administrative type procedures that the City would have to follow.

Mr. Uram said the intent is to bid both options and the one that makes the most sense from a City standpoint will be recommended.

Councilmember Paulsen commented on a meeting of the Finance Committee and said he thought they came to a conclusion that going back to the government to get the credit and doing the paperwork would be a risk. Mayor Hershberger Thun said she didn’t get that sense.

Mr. Uram clarified that an option is not being selected tonight; the bids are just being authorized.

Mr. Donna stated that they will likely just get Build America Bond proposals.

Mayor Hershberger Thun commented on the Build America Bonds and clarified that net benefit to the City of Victoria is $100,000. She said she questioned how much it would cost to file the reports. Ms. Johnson stated the costs would range between $8,000 to $16,000.

Councilmember Paulsen reiterated that he thought the sense from the Finance Committee meeting was they didn’t want to take the risk of doing the paperwork. He said the government may or may not give the money back on a timely basis. Mr. Donna said the first interest recipient will be December of this year with the Build America Bonds. He explained the Build America Bond payments are more secure than grants and subsidies under other federal initiatives because they are not subject to congressional appropriation but are treated like tax refunds for which there is a standing appropriation. He noted it would take an act of congress to change the Build America Bond program.

Councilmember Amundsen asked if an act of congress can enact something that says they don’t have to pay on the bonds. Mr. Norton said as he understands, the intent is to assure people that this program will happen. He explained that the money has already been appropriated by the federal government. He said it is a new program and the City needs to be confident that the paperwork will be in order.

Mr. Donna said that currently there is a 30 point basis spread and bidders aren’t going to waste their time submitting an exempt bid. Mr. Uram asked why there are seeing a 30 point spread between Build America Bonds and tax-exempt bonds. Mr. Donna said the taxable bond market is substantially larger than the tax-exempt market.

Mr. Uram said he would recommend saving money. He noted the size of the Build America Bonds market has increased dramatically since it started so there is an expectation that the program will continue. He stated before he would recommend doing the Build America Bonds he would like to understand the paperwork requirements. He commented on delaying the bond sale for a couple of weeks to better understand it.

Ms. Johnson stated the online form is a single page form with clear instructions. She estimated the form to take an average of six hours per year to complete. Mayor Hershberger Thun said an operating process would need to be set up to get the paperwork done every year.

Mr. Uram stated his recommendation is to move forward soliciting bids for the Build America Bonds.

Councilmember Paulsen asked what the interest rate is. Mr. Donna said the estimated interest rate on the taxable bonds is 4.96 and after the 35% is factored in it is about 3.22% compared to the tax-exempt bonds of 3.48%.

Ms. Johnson asked if the assessments would be calculated on the average interest rate or the effective rate. Mr. Donna said typically the assessments would be set off the effective rate.

Mayor Hershberger Thun asked if there is a downside to getting bids on both. Mr. Donna said no, there would still be flexibility.

There was no second. The motion failed.

Councilmember Paulsen asked how many cities are using their core funds. Mr. Donna said every city has different uses for those dollars. He noted that the highest tax-exempt rate was 7% in 1989.

The City Council called for a recess at 7:18 p.m.

The City Council reconvened at 7:23 p.m.

Mr. Donna said the market is very accepting of the Build America Bond program. He noted that this program is for 2009 and 2010.

Councilmember Amundsen said this is a political issue. He commented on the difference in rates which are estimated at 3.48% versus 3.22%. He said he believes the net benefit would be $100,000 because the six hours will become part of the job.

A motion was made by Councilmember Paulsen, to engage Northland Securities to seek bids for traditional tax-exempt bonds in the amount of $3,475,000 with the right to reduce that amount by $547,000 once the bids are received. The motion was seconded.

Mayor Hershberger Thun clarified that the reduced amount would be from the core funds.

Mr. Donna stated that in the past a negotiated sale process has been used. In that process a tax-exempt bid would be guaranteed and a taxable bid. He said there would be one proposal. Ms. Johnson said with the competitive bids there would be a number of firms.

Mr. Uram said it would be to the City’s advantage to do a competitive sale and get as many bids as possible. Councilmember Paulsen and Councilmember Roden said they are okay with that as part of the motion.

With the majority of the members voting in favor, the motion carried. Vote: 3 Ayes, 1 Nay (Mayor Hershberger Thun).
 

Mayor Hershberger Thun said there is one donation from Residential Mortgage Group and noted that it was recommended that they donate $200 to the Victoria Fire Department. She said Mount Olivet Lutheran Church also donated $500.

A motion was made by Mayor Hershberger Thun, to approve Resolution No. 09-90; A Resolution Accepting the donations. The motion was seconded.

Councilmember Paulsen asked if Residential Mortgage Group has an office in town. Mayor Hershberger Thun said they are not located in town.

With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.
 

None.
 

None.
 

Ms. Geheren showed a schedule of the 2010 Street, Drainage and Utility Improvements. She said they start with an April bid date. She stated they are looking for authorization to prepare feasibility reports.

Ms. Geheren noted the Hartwood Neighborhood was moved up a year so that change has been reflected.

Ms. Geheren showed a map and said the first improvement is 80^th Street off of Bavaria Road. She noted the neighbors paved this street with their own money. She said the street doesn’t meet City standards and will need to be improved. The second area is the Rose and Sunflower area. She said the streets in those areas are in really rough shape. The Zinnia area is an existing gravel area that has an old sanitary sewer system that the City inherited from Laketown Township. The next area is Rolling Bluff which is a small cul-de-sac off of Rolling Acres road. She said this area also does not have city sewer and water. Ms. Geheren noted that leaves Aster Trail for 2011.

Ms. Geheren said she is recommending waiting on Kochia and 78^th Street. She noted there is not a lot of assessable property for this project. She stated both of these streets are designated as state aid streets and they would be eligible for state aid funds, so delaying this would allow more funds to build up. She said the construction cost associated with Kochia is $350,000 and 78^th Street is approximately $1,000,000.00.

Ms. Geheren stated the costs associated with the feasibility report are outlined in the report. The total cost for all four areas is approximately $39,000. She noted that they will be using their graduate engineer to keep the costs down.

Ms. Geheren commented on after the street reconstruction in 2011 is done there are other streets are approaching a 20 year life. She said they also need to look at getting an overlay program in place.

Councilmember Roden commented on the projects that would include water: Zinnia, Rolling Bluff and 80^th Street. She asked what portion of the feasibility reports would be assigned to water. She said she doesn’t think the likelihood is very strong that these areas will want to pay for water. Ms. Geheren said a layout was already done for the water on 80^th Street layout so that will take only approximately two hours. She said Rolling Bluffs would be about six hours to figure out where the pipe would go. Zinnia would be about 16 hours. She stated that it will be cheaper to do the water when the streets are ripped up.

Councilmember Paulsen commented on the developable parcels around 80^th Street, 78^th Street and Kochia. He asked how those roads are going to be sized and assessed when the access isn’t known for future development. Ms. Geheren said that would be something they would look at in the project.

Mayor Hershberger Thun asked if Zinnia would be eligible for state aid. Ms. Geheren said no, the streets eligible for state aid are streets that the City has designated as municipal state aid streets.

Mayor Hershberger Thun asked if it is possible to do 78^th Street to the left of "T". Ms. Geheren said they could look at that and bring it back.

Mayor Hershberger Thun commented on delaying Aster until they have more development.

Ms. Geheren said with regard to 78^th Street and Kochia she needs to do a calculation on how fast state aid dollars can be accumulated. Mayor Hershberger Thun said it is hard to justify not doing 78^th Street just because of state aid.

Mayor Hershberger Thun stated she would like to know the situation with the wells before they order the feasibility study. She said they need more information before she moves forward.

Ms. Geheren said the first question she is usually asked is how much the water will cost.

Councilmember Amundsen said the Lions Park Neighborhood had functioning wells and had water and sewer put in.

Mayor Hershberger Thun expressed concern with how the roads are picked and said they need to talk about Aster. She said whatever is done on Kochia needs to apply to Aster because they are similar.

Ms. Geheren said if the City Council is comfortable with the neighborhoods that don’t have sewer and water it would help with the schedule to start those reports.

Mayor Hershberger Thun said she is comfortable with doing the feasibility studies but not comfortable with Kochia and Aster until there is further discussion as well as 78^th Street and that section west.

Councilmember Paulsen commented on Zinnia being expensive and asked what was said to the neighborhood. Ms. Geheren said the neighbors know they are planned for 2010.

Mayor Hershberger Thun withdrew the motion. The second was also withdrawn.

A motion was made by Mayor Hershberger Thun, to Approve Resolution No. 09-91; A Resolution Ordering Preparation of Reports on Street, Drainage, and Utility Improvements for 80^th Street, Rolling Bluff, the Zinnia Street Neighborhood, and the Rose Street Neighborhood, and take a second look at the Kochia area and the Aster area to see if they are comparable and can be done together. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.

-B- Approve the Name of the Field House to Victoria Recreation Center

Ms. Mahnke stated that as part of the Joint Powers Agreement with the ISD 112, an item states specifically to the name of the facility, "Victoria Ice Arena" or as selected by the City. Ms. Mahnke said in discussions with the Park and Recreation Committee they were in favor of changing the name of the Field House to Victoria Recreation Center. She said the school district is also in agreement with the naming of the facility. Ms. Mahnke noted there would be entry signs at Kochia and 86^th Street that would identify the City and the school partnership.

Councilmember Paulsen said he thinks it is a good choice and he supports it.

The City Council discussed the name Rec Center versus Recreation Center.

A motion was made by Councilmember Paulsen, to Approve changing the name of the Field House to the Victoria Recreation Center. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.
 

The City Administrator had no reports.
 

Councilmember Paulsen commented on the ACCEL meeting and said he found the conversation good. He said they talked about the sharing of equipment. Councilmember Amundsen questioned the sharing of equipment when one city needs equipment but another city is using it.

Mayor Hershberger Thun reported that tomorrow the Chamber of the Southwest Metro Chamber of Commerce is hosting a discussion with Congressman Kline at the School of the Wise II in Chanhassen at 4:30 p.m.

Mayor Hershberger Thun reported that on Wednesday, September 2^nd there is a picnic at the Chanhassen High School.

Mayor Hershberger Thun said there is a meeting on September 3^rd from 7:00 p.m. to 9:00 p.m. discussing the second phase of the sewer interceptor project with the Metropolitan Council.

Mayor Hershberger Thun said the Parks and Recreation Fall Program booklet is out.

Mayor Hershberger Thun stated this Saturday is Volksfest.

Councilmember Amundsen commented on the community related involvement events Fresh Seasons has participated in.
 

None.
 

None.
 

A motion was made by Councilmember Paulsen, to adjourn the meeting at 8:26 p.m. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.
 

Respectfully submitted,

Tanya Schmieg
TimeSaver Off Site Secretarial, Inc.