[0:00] I agree call this meeting to order this is a breezy point City Council April

[0:05] fourth seven o'clock first order businesses pledge allegiance to the play

[0:10] I pledge allegiance to the flag of the United States of America and whose

[0:17] Republic for which it stands one nation under God indivisible with liberty to

[0:24] justice rural

[0:32] the first item on the agenda is the consent calendar you have before you the

[0:38] 90 minutes from March 7th meeting and we have the check register for claims

[0:45] totalling 113 thousand three hundred twenty seven dollars and 42 cents which

[0:50] is checks electronic checks 1472 1480 e through 14 84 e 132 and paper checks 132

[1:03] 616 132 260 through 132 664 does anybody want to consider anything on the consent

[1:12] calendar separately sure councilman brownie no no sir all those in favor of

[1:22] the consent calendar hey I as opposed consent calendar is proved next order of

[1:28] business is open forum anybody which includes before City Council on any

[1:33] topic whatsoever you can do so now please come to the microphone state your

[1:38] name and address and the top you wish to speak up don't everybody rush at once he

[1:48] didn't say down Maury Wohlers 8871 birch lane Breezy Point Minnesota going

[2:03] through the agenda for tonight's meeting there is shown there as far as

[2:09] insurance for sewer problems I guess we could assume a Cathar back yeah and soul

[2:22] in essence this probably could affect the whole a city the Breezy Point not

[2:29] just sewer hookup people well if in fact something happened and the city had to

[2:38] pay out some money it would come from the whole of the city not just the sewer

[2:42] people so it would it's a bigger picture than just the sewer hookup possibly

[2:55] yeah which people from the whole cruzi point pay into no only the people only

[3:03] the people that are on super people start to it I'm not answer amore okay

[3:07] alright so it's one of the people that are on the sewer that actually pay into

[3:11] the sewer fund and it's a sewer fund that pays for insurance misunderstood

[3:15] that okay Oh is there any public input for this I don't um as the people on the

[3:25] sewer system do they have been have they been notified about this no no okay you

[3:39] can go on record yeah I'm probably one of a few of the 753 so there's 752 other

[3:45] people okay they need to be notified and looking at the rates it says a manual

[3:58] rate what is a manual rate

[4:02] there is at an annual rate or a manual

[4:09] so I got I got to interpret that that way uh okay yeah we'll be talking about

[4:14] that you know later on it may be that a sorcerer so it's an annual rate that

[4:20] we're going to say not per quarter per year per month ok so my input on that is

[4:29] said if you're going to have any coverage at all I wouldn't have to shoot

[4:34] for the max on that what you're looking at because you can't do much for

[4:39] anything less than that nowadays you never know what you're going to get into

[4:44] ok and I suppose

[4:51] not to pick on Neil but I will is he one or five sewer hookup sir cause he those

[4:59] are individual hookups it's not the number okay so he's won he's won okay

[5:06] long bristow ok

[5:12] no no

[5:16] uh

[5:19] seems like there's a lot of people right now that aren't around faucet hill

[5:24] there's nobody around their summer people are not back yet so they really

[5:29] don't know what's going on here hopefully you'll keep your eyes open on

[5:32] this and get them informed as to what's going on before you vote thank you

[5:44] anybody else for open forum video securing an open forum is closed our

[5:51] next order of business is the 2015 audit report we've had our audit completed you

[5:57] have the size of the pot report before you and the memo from Joe to the council

[6:05] members I'm not going to go into detail on them Joe I'll let you if you want to

[6:10] get started on that bill look John Archer jump right into it ok John Archer

[6:15] from ashlynnwinter ok you will have all the details and that's this handout that

[6:21] you have here correct yeah okay so what I've done is I've taken all the

[6:24] information in the financial statements I've kind of summarized them to get the

[6:28] high points for East we're not getting all day long good so let's flip in we're

[6:35] going to talk a little bit about the auditor's report itself well every year

[6:41] along with the financial statements we issue an independent auditors report and

[6:45] what that talks about is I talked about a few things what not it is what it

[6:50] isn't and then the end result of all that is that we give an opinion on your

[6:55] financial statements on whether we think they're correct or not the open yin

[6:59] we're giving is called an unmodified opinion you could think of it like a

[7:03] clean opinion so this is the one that you want to have one thing that you want

[7:07] to keep in mind is the opinion we're giving is on what we call the regulatory

[7:12] basis so not not the basis of accounting that large cities use generally accepted

[7:17] accounting principles but the the basis of accounting that the state auditor has

[7:21] prepared for small cities to use there's quite a few differences between the two

[7:26] the one that you're using is almost like the cash basis so it's cash in cash out

[7:33] the threshold for that is cities under 2500 can use the small basis of

[7:39] accounting and I know you've been thinking about moving to the accrual

[7:43] basis it's something that we've kind of still got in the back of our heads we

[7:47] haven't really pulled the trigger on anything yet we're kind of waiting out a

[7:50] few things here and there but that's kind of what the auditor's report

[7:54] basically says let's look at some numbers we're going to go to the next

[7:58] page so this page is a budget to actual for the general fund so the general fund

[8:08] is worth the bulk of your day to day operations happen the way I've got it

[8:12] laid out is we've got our revenues on top expenditure is kind of on the bottom

[8:16] so if we look at total revenues for the year they came in at 2 million 54,000

[8:21] you budgeted for 1 million 977 so you're actually about 76,000 dollars above

[8:27] budget on revenues and if we look at what's going on in the detail there to

[8:31] kind of pinpoint where it's off special assessments are up a little bit from

[8:36] what you planned on the biggest change is the line us as intergovernmental so

[8:41] if you look at that intergovernmental revenues are 73,000 over budget and what

[8:47] that is is small cities assistance grants that most cities have got this

[8:52] year from the stage on the expense side of things expenses

[8:57] came in at 1.8 million you plan for just about two million 1 million 977 so

[9:04] you're about 114,000 below budget on expenses and if we look at the lines

[9:10] that maybe stand out there general government's quite a bit below budget at

[9:16] below at 283,000 transfers oh it's actually quite a bit above budget you

[9:23] did a large transfer to the capital revolving capital market overall your

[9:29] cash balance in this fund increased 191,000 you plan you actually plan for

[9:36] breakeven ending cash is a little over a million dollars at 1 million 98,000 had

[9:43] a nice increases here you actually have a policy on what you want that target

[9:47] number to be your policy is forty to forty-five percent of your budget

[9:50] expenditures you're a little above that okay let's move on we're going to look

[9:57] at debt service and revolve in capital here debt service is one of those funds

[10:02] were there's really not a whole lot to say about it because it's all pretty

[10:05] much set up ahead of time when you issue your debt so you've got your property

[10:09] taxes and your special assessment revenue coming in you've made your debt

[10:13] principal and interest payments as you should have that fun ends the year of

[10:17] the cash balance of 221,000 it's not on this page but you have one bond left at

[10:23] one point nine million dollars revolving capital the biggest activity

[10:29] here is that you have that large transferring from the general fund

[10:32] otherwise we got fifty three thousand dollars of other revenues we spend sixty

[10:37] seven thousand there this fund increased cash by 339 thousand ending cash is

[10:44] about a million in half okay

[10:51] the next page is going to be the remainder of what we call your

[10:55] governmental funds and so we've got the cemetery fund we've got the ED cemetery

[11:00] fund you had receipts of 35 thousand dollars about half of that was charges

[11:05] you have expenditures of fourteen thousand dollars so this fund increase

[11:12] cash by 20,000 ending cash in this fund is ninety-five thousand dollars EDA fund

[11:19] really minimal activity this year in the EDA fund ending cash is five thousand

[11:24] seven hundred dollars okay this next page is a snapshot of your sewer fund so

[11:33] the sewer fund gets a little bit different format than the governmental

[11:36] funds because it's almost run like a like a small business within the city

[11:40] you can think about it it's got more of a focus on operating profitability let's

[11:47] focus on just making sure your your budget zeroes out at the end so if we

[11:53] look at the sewer fund receipts came in at three hundred seventy three thousand

[11:58] dollars that's your service charges operating expenses so this would be envy

[12:03] your payroll chemicals whatever else you need we're two hundred twenty two

[12:08] thousand dollars you've got operating income of one hundred fifty one thousand

[12:12] dollars that's good because you want that number to be positive and you're

[12:14] you're well into the positive there you've got some non operating items

[12:19] mostly hook up fees some special assessments that totals 125,000 from

[12:27] there we spent a little bit of money on capital outlay or some capital assets

[12:30] this fund at the end of everything cash balance increased $250,000

[12:37] at the end of the year this fund has three million 184,000 so this fund also

[12:45] has a pretty nice fund balance that was really corrected are there any questions

[12:53] on the numbers that I went through it all okay let's talk a little bit about

[13:01] how the city is doing in terms of compliance so every year as a part of

[13:06] the audit we look at your internal controls and you've heard this probably

[13:10] every year that you've been getting it out of her probably quite a while I like

[13:14] you've got a lack of segregation of duties in your accounting function so

[13:17] what that means is that you've you've only got a couple staff members the

[13:23] accounting functions are handled by a few different staff members so the risk

[13:26] there is that one person is handling multiple functions but you do a pretty

[13:30] good job of mitigating that you look at bills that kind of thing material audit

[13:36] adjustments is another thing we did so if you think back to that opinion that I

[13:40] talked about that clean opinion when we go into an audit we tip you typically

[13:45] don't see a lot of bad opinions because if we see something that needs to be

[13:51] fixed we're going to fix it for you this is where we're saying that we've made

[13:55] some fixes for you okay third thing we have here is that we've

[14:00] written your financials for you other thing that we report on during the audit

[14:05] is we do some tests for compliance with Minnesota Statutes no findings there

[14:10] everything looked good okay the next two pages talk maybe a little bit more about

[14:18] how did the audit itself goal vs of how is the city doing financially so these

[14:24] this these are some communications that are required we have to go through every

[14:27] year it talks about things like do we have any issues with your accounting

[14:32] policies do we have any issues with adopting new accounting standards do we

[14:38] have any disagreements with management did we come across any weird

[14:42] transactions for unusual transactions nothing with that everything looked

[14:46] really good there it talks about uncorrect admit statements so what that

[14:50] would mean is if we're going through the audit we see something wrong it's pretty

[14:54] small we can still give that clean opinion and not correct it we actually

[14:58] don't have anything like that no disagreements with management don't

[15:04] really know significant issues or difficulties everything went really well

[15:13] any questions questions for the auditor yeah

[15:18] councilman Maroni I do not have an image map well just an observation and I found

[15:24] so for Moses my Ethier and every year we kind of talked about moving into the

[15:32] modified accrual when is that going to happen job

[15:45] there's some issues

[15:55] we're busy and so make it back to us after the only reason I keep bringing it

[16:01] up is personally I think it gives a clear picture as to where we're at at

[16:06] any given time during the fiscal year and you know I would really encourage

[16:14] the council to pursue that and you know I'd like to think that perhaps next year

[16:20] the report would indicate that one's being implemented in that process is

[16:25] being implemented so the only other thing I'd say is it's always nice to see

[16:30] that kind of a audit report I think it indicates that this city is being

[16:36] fiscally managed very well I think the use of the taxpayers you know the funds

[16:43] that we derive in the taxpayers are being spent appropriately people may

[16:52] think well how come you got such a big fund balance for example in that sewer

[16:56] fund and the thing that we have to keep reminding folks is is that one of these

[17:03] days we're going to be on the hook for some major expenditures and that fund is

[17:09] going to be there in order to cover that infrastructure so you know that's good I

[17:14] think it's again the the staff is to be commended for their work jining

[17:21] especially as I noted in Joe's right up it is a great asset to this community I

[17:30] am no on your comment comes my way of the Bakken I would just echo councilman

[17:39] Schmitz I do have one question in the letter you talked about during the

[17:46] course of the engagement we propose material otter adjustments I think you

[17:49] alluded to it what in specific things that you make or was it just several

[17:56] real small things they're rigid itemize them yeah there was a few small just

[18:00] kind of tweaks moving things between accounts probably the biggest was

[18:05] recording your investment income so their investment the investment and

[18:09] comments on your books hadn't changed from last year and so what we've what we

[18:12] did was we went in we adjust them to you the market value that was probably the

[18:17] biggest okay

[18:25] right okay okay and again I would echo a lot of foam but Otto had said I will

[18:36] have to say that the last several years that we've been working with the slender

[18:41] winner as has been absolutely marvelous and it's getting now to be when the

[18:46] audit comes in things go very smoothly they're in there out all the questions

[18:51] are answered so I applaud not only janay and the entire staff you know for

[18:59] preparing for it but for working with your auditors and your people so so well

[19:05] so thank you very much Thank You mayor I would move that we accept a 2015 audit

[19:11] their second to that motion all those in favor of steps know any more discussion

[19:16] I'm sorry Ronie no holes in favor of accepting the 2015 audit thank you very

[19:31] much

[19:37] next order of business is ngpa NJ PA representative the National joint powers

[19:47] Association as seems like they put everybody on the board and we have an

[19:55] opening where we can have a member and in the past we've looked for

[20:03] representatives and nobody wants to volunteer I guess this time is as

[20:08] anybody else would like to volunteer to be on the NJ PA board if nobody else

[20:16] wants I'll take that position as I am working with the region 5 and region

[20:23] five works very closely with in jp-a so let's just go right on with what I'm

[20:29] already doing so put me down for the volunteer on that if anybody's really

[20:34] interested in reading through the bylaws I suppose I could read it line by line

[20:38] but since there's a basketball game tonight I think we'll pass do we need a

[20:45] motion Joel for if you'd like if you have why did you make one okay I'll both

[20:51] the two we appoint our merit observe on the NJ PA type of gun holes in paper any

[20:58] discussion all those in favor that's me okay next item is the no-fault sewer

[21:05] backup coverage the the memo basically states that we've had a couple backups

[21:12] in the past few years and they were not caused by anything that we did one was

[21:19] caused by towels got flushed down the drain

[21:26] clogging the impellers of the lift pump and the other one was caused by the

[21:33] sewer line freezing so what looked into is League of Minnesota cities has a

[21:39] no-fault sewer backup coverage the the cost of this is actually relatively

[21:48] minimal and we have more than enough money in the sewer fund to pay for this

[21:56] and it would give the city added protection we haven't had this insurance

[22:04] before and so I think it's probably a good thing to do if we want to do it we

[22:13] have the options here the various amounts for coverage and there's a

[22:19] formula that they go through with to how they come up with the the premium Sunnis

[22:28] so we have a resolution 1610 where we would set the insurance coverage that we

[22:41] would like to purchase at this point I'll just take some discussion as to do

[22:48] we think we should do this and do you think what would be the recommended

[22:52] amount start for you councilman I have some questions on it first off on

[22:59] an annual policy 7 or 53 connections if we add 5 throughout the year are we

[23:06] adjusting that as we go or to just come up on the next renewal comes up with an

[23:10] extra normal okay and it's time eluded you know this is to protect the city or

[23:17] the city users because correct me from wrong if something happens and we you

[23:25] know I toggles back up are we liable at that pointer is insurance going to be

[23:29] kicking in insane old that we're not liable we're covering insurance they're

[23:33] saying that there's no fault they will cover damages up to that amount and

[23:37] that's after the homeowners policy insurance has kicked in as well okay and

[23:44] my third question I had was in the resolution that it states that the

[23:49] maximum the city would reimburse as X dollar per building per year is it is it

[23:57] really per year or per instance per year yeah so something happened two times in

[24:05] a year wouldn't be going

[24:12] another question can have at this time questions cosmic now so as I understand

[24:19] it the for example that forty thousand dollars that's per incident or per year

[24:24] per year per building per year per building so if if let's say they had two

[24:34] incidents and it amounted to thirty-eight thousand dollars total and

[24:39] the insurance would cover it I believe so many of the portion dr. Lee

[24:51] just an observation yeah it's an indemnification for the city and

[24:55] empathize the city protects us protects the city and the money so with that I

[25:02] will prepare to make a motion move resolution 610 for the full amount forty

[25:08] thousand dollars okay is there a second to that motion further discussion the

[25:16] boggin in also

[25:20] it's on the first page of the resolution Joe that was comfortable and not a

[25:26] condition not from a condition in a private line yes where is the private

[25:32] the private language in your house or from your house to the main server it's

[25:37] from those to the main so that's privately that's correct probably under

[25:41] your front lawn yes

[25:47] any further discussion kassam intricate no problem No all those in favor of the

[25:53] suit and no fault sewer backup coverage say aye aye opposed romola so order the

[26:01] alcohol super coverage next item business he is roads feasibility study

[26:09] Oh other council members I'm sorry council Bakken I'm sorry thank you for I

[26:15] wanna definitely one of the only thing I have their down jeff preiss our resident

[26:25] metal sculpture and artist was recognized in the echo maybe most of you

[26:33] folks saw that but he's the one that did our for our cemetery and he's the master

[26:40] it's about choir and award and an achievement so i just wanted to make

[26:48] that aware it everybody that's all um as long as we're talking of the airport fly

[26:58] in sunday 7 says you are the liaison to that d anything more than that was

[27:02] affected not pirates know it's coming along well okay do we have any

[27:07] involvement by the city at this point or we're going to answer that yet okay may

[27:13] said with this coming up pretty quick so my birthday okay

[27:21] that's my ways I have anything report awesome Schmidt I am next item of

[27:29] business then is the feasibility study for the white bird 6th edition we're

[27:38] starting this is for the 2017 construction cycle so that we're

[27:43] starting a little bit early on this which is good so we can actually get

[27:47] some walk downs and some surveying done without having to traipse through snow

[27:51] so this will be a good The Rose committee has recommended the paving in

[27:59] the white birch 6 edition which include Navajo trail pima circle Zuni circle

[28:05] Aztec circle and Pawnee circle we have resolution 1609 to order feasibility

[28:12] study for the paving project and I'll entertain a motion for resolution 1609

[28:17] and then we'll have some discussion somo the second to that second discussion of

[28:25] councilman Schmidt ah as you mentioned the roads committee has reviewed the

[28:31] proposal and discussed it with the engineer and

[28:36] we you know we feel this is a logical project for the sitting in it in its

[28:42] question eventually pave all the streets in the city one thing Joe do we have an

[28:50] actual count as to how many Lots intuitive we have any lots that are tax

[28:56] forfeit that would I don't believe we have any tax forfeit lots Joe did an

[29:00] inventory about Alfie broaden it very one so I so these the assessment would

[29:07] be spread through all of the locks and that'd be spread through all the Lots

[29:10] that's correct okay just wanted okay just that clarification even with a tax

[29:15] barford live we assess that lot eventually weren't sold to get paid yeah

[29:22] it just that it gets to be kind of problematic if you have a whole bunch of

[29:26] them yes it does we currently have about ninety-five thousand dollars worth of

[29:31] assessments sitting at the tax for february's you know I don't think we

[29:34] need any more help trying to do something about that I have nothing

[29:38] further custom bakken anything no sir these are

[29:43] these once already Seward in here next 20 years no one on most really friendly

[29:56] to add you know they're all concentrated in one area for the feasibility study

[30:01] just to see where we're at we got a favorable bits out for the projects

[30:05] we've done this years since we got an early start so hopefully we're going to

[30:09] see that okay all those in favor of the resolution 1609 to order the feasibility

[30:16] say I was opposed the feasibility study is so ordered and oh we have a proposal

[30:24] from mom wincest Smith and nothing for the feasibility study for the

[30:28] improvements in white / 6 which is really nice you have before you the the

[30:39] proposal for the feasibility study so consider a motion to have a way of wood

[30:47] Seth Smith and melting up perform the feasibility study for five thousand

[30:52] dollars so hold second further discussion

[30:58] no wins bakken non follows in favor of would set Smith the nothing performing

[31:03] the feasibility study for the 2017 paving I suppose next item business is

[31:14] the audit transfer or out of the audit we have the usual shifting around of

[31:23] funds oh and if you're really interested we can go through them in detail but the

[31:31] their departed in the audit report as to what goes where so resolution 1608

[31:37] carries out those transfers of funds entertain a motion for approval of 69

[31:43] mobile second who's the second discussion any discussion not me

[31:51] discussion all in favor of resolution 1608 highness next item of business is

[31:59] the Pequot Lakes fire contract pequot has provided us the 2016-2017 fire

[32:08] contract it's for eighty three thousand seven hundred dollars and thirty cents

[32:12] couldn't round it off last year the contract was seventy six thousand twenty

[32:18] seven dollars and sixty-six cents which is an increase of 7670 to dot 64 cents

[32:25] there are obviously reasons for that and part of it has to do with the new

[32:32] equipment that's purchased by through slot lakes I'll consider a motion to

[32:39] approve the contract and then we'll have some discussion so I'll move the

[32:45] discussion start with you constable and I have known Counsell Williams

[32:50] calcinha fit the chief is here your Sochi for you I don't know if he has any

[32:59] comments or observations but before the meeting started I asked him about the

[33:05] change in our classification as far as insurance purposes and that that has

[33:10] changed it changed last year of him so we are now in a better classification as

[33:17] far as homeowners insurance in consequently if you have homeowners in

[33:23] church I assume just what everybody does you should be getting an indication that

[33:29] your rates are less or lower than what they were before that went into effect

[33:34] yeah that's something I'm sure the echo would be highlighting in the report

[33:40] ability the only other thing i have is i beg i think when you're still on the

[33:47] council I brought up the fact that I'd like to see on the side of all of the

[33:51] equipment including that brand new fancy a vehicle you got out there where it

[33:58] should say breezy point pequot lakes fire to get hurt

[34:06] well I always say that because it's based on the amount that's paid into the

[34:10] contract I think we'd be more than be quite correct oh they are wonderful just

[34:18] change your names every year forget we got to be on a basketball yeah

[34:24] councilman world oh nothing okay all those in favor of proving the Pequot

[34:29] Lakes fire contract say aye aye aye those opposed pecan lace come contract

[34:36] is accepted and we have completed the agenda for tonight meeting adjourned

City of Breezy Point Regular Council Meeting of 04/04/2016

Transcript