Working Session

Mayor and City Council Work Session
April 20, 2005 – 5:00 p.m.
A101

Council Members Present: Bob Brooks, Doug Christensen, Gerald Hamerlik, Dorette Kerian, Curt Kreun.
Council Members Absent: Hal Gershman, Eliot Glassheim.
Others Present: Mayor Brown, John Packett, Mike Flermoen, Maureen Storstad, Candi Stjern, Daryl Hovland, Roxanne Fiala, Greg Hoover, Don Shields, Dennis Potter, Al Morken, Al Grasser Hazel Fetters-Sletten.

Mayor Brown called the meeting to order at 5:00 p.m.

1) Waterworks Department Update: Work in Progress, 2006 Budget Goals.
2) Waterworks Capital Needs.

Hazel Fetters-Sletten, Waterworks Superintendent, distributed a handout which summarized the 2004 water plant operations and lists goals that have been set for 2006. She noted the plant has been functioning very well and that some of the preventive measures that they have been taking are showing to be effective. She observed that there have been fewer water breaks and a 2% decrease in annual water loss from 2003 to 2004.

Christensen asked why there was such a large increase in the amount of usage by Simplot. Fetters-Sletten stated that they had very little downtime in 2004 due to bringing in potatoes from other sites for processing here. She added that first quarter 2005 is down slightly from the same period in 2004 and they have used an overall average as a prediction of usage for the 2006 budget.

Fetters-Sletten reviewed with the group the Waterworks related CIP items. She noted that the planned area for 2006 watermain replacement is the Clover Drive area which has experienced breaks in recent years. She noted that they are currently in the process of rerunning the rate model and Todd Feland has not had a chance to review the draft that they have completed so some of the projects that are listed currently may be moved further out. She noted that in particular there is a filter study that should be completed, but due to some other factors may not need to be completed as scheduled, but will most likely be moved forward. She commented on the need for the roof repairs on the water plant, as the leaks have begun to “travel” and the exact point of the leak can not be pinpointed. Also, she added that the security improvements that were previously scheduled were removed from the budget.

Christensen inquired why the capital increased. Fetters-Sletten stated that they had projected cash of $1.7 million, and ended with $3.1 million, and of that $300,000 is encumbered for projects. Christensen inquired whether, based on this increase in cash, the rates could be decreased. Candi Stjern, Senior Accountant, stated that the cash accumulation has been kept in this fund to build toward the funds that will be necessary to construct a new water plant and that was a policy decision that Council had made and could be changed at the Council’s discretion. The group discussed that this is an issue that they may want to revisit and decide how much they want to build and at what point they want to stop.

Fetters-Sletten stated the capacity forecasts that are currently being used for the water plant are a .9% population growth each year and incremental industrial growth each 10 years. She continued that in 2010 new federal regulations will be released and that will be when we see the largest cost coming with meeting these new requirements.

Christensen stated that the group may want to consider whether it is appropriate to extract revenue from those that are current users now to cover these future costs that may be able to be borne by the users that will be here then. He added that other options would also be to just bond for those improvements and then the users at that time would pay rates appropriate for the changes in that time. Kerian commented that we already have current citizens paying for improvements that will benefit future residents, for example with the flood protection project.

Al Grasser, City Engineer, stated that another area to continue to monitor in Water Treatment Planning is the work of the Lake Agassiz Water Authority and what we will end up using as our backup source for water. Grasser continued that he sees it highly unlikely that we will see a pipeline from the Missouri to serve this area and that most likely we will see our plant developing into a regional center, serving surrounding communities in times of drought. The group discussed whether our citizens should bear the cost of providing a plant with capacity that could serve these additional needs. Kreun stated that typically in that situation the rates that get charged to non-residents are higher than those charged to residents so you try to make up for some of those costs. Grasser stated that another item to keep in mind in regards to the regulation changes, smaller users will also have to comply or need to look to another source for their water and they will need to also decide very soon whether they are in or out of the Lake Agassiz Water Authority.

Christensen stated that they have received charts from John Schmisek in the past on the overall CIP needs, but may need to see them again. He continued that he still feels that the group may want to consider using the enterprise funds to fund 83% of salaries and benefits in the general fund and if we won’t consider this then what other options there may be.

Kreun inquired whether there appears to be any glaring problems looming in the waterworks area for the near future. Fetters-Sletten replied that the main area of study right now is looking at the rate model and deciding whether any assumption changes are relevant and that they will be working with Feland on this. Kerian noted that one of the projects to be moved out is the construction of the new water plant and inquired why we would want to look at moving the construction of the new plant further into the future. Fetters-Sletten stated that there are a number of factors that we have to keep in mind, Lake Agassiz Water Authority work is one. She continued that moving it forward will also give us time to study how new technology that is being implemented in other cities now is functioning so that we have good information on it prior to putting it in our plant.


The group conducted a general discussion in the area of mill rates and levies and what power the City may have to control the value of the mill. The group discussed that the power of the City is limited to the number of mills that it sets and can influence the amount of taxes on the city side by increasing of decreasing this. They also discussed that perhaps another way to influence the amount of tax affect that the valuation increase may have on a homeowner would be to direct the City Assessor to use 95.5% instead of the current policy of 97%. Roxanne Fiala, IS Director, stated that the policy to use 97% was set in 1997 by the City Council and, as with any policy decision, could be changed at any time by action of the Council. The group discussed that the State of ND requires that the rate be set at a minimum of 95% and that at that level or below the State can come in and force an adjustment of the values so we should keep above that minimum. Hamerlik commented that another way to improve this would be for, at the state level, legislation be passed that mandated what a maximum per year valuation increase could be as has been done in Minnesota. He continued that under that scenario, if your value increased more than the maximum, you would receive the maximum that year and then make up the difference in future years when your value did not increase as much. The group discussed that for some areas of the City people may be in a situation where they are always at the maximum due to demand and location, but that this may help some areas of town smooth out the impact of a large increase.

The group discussed in general the housing need for mid-range homes. It was noted that many of the homes that were lost in 1997 were below or narrowly above the $100,000 range and that while developers are building new housing, a large portion of it is still a higher price home on a smaller lot using townhomes in the zero lot line areas, versus keeping the actual price of the home in the more moderate to low range on the smaller lots, which was not the initial hope for the affordable housing developments. They discussed ways to address the need with the developers and potential ways that could be steered through the planning and zoning portion of the development process to get the results that we would want in future new development areas.

3) Adjourn.

Meeting adjourned at 6:00 p.m.

Respectfully submitted,

Sherie Lundmark
Admin Spec Sr.