ICC/IPC Workshop Takes On Three Major Issues

IRONWOOD, MI - Tuesday, January 20, 2009 - A special joint workshop of the Ironwood City Commission (ICC) and the Ironwood Planning Commission (IPC) was held yesterday evening at 5:30 PM in the City Commission Chambers on the second floor of the Ironwood Memorial Building. The workshop was scheduled to discuss three basic topics: (1) a newly proposed Planning Commission Ordinance; (2) the 2007-2008 fiscal year audit; and (3) possible changes in solid residential waste pick-up service. City Commissioners attending the meeting included: Mayor Bruce Noren; Bob Burchell; Gemma Lamb; Suzanne Toth; and Tom Laabs. IPC members attending were: Chairman John Wyssling; Margaret Rayner; Deb Bowles; Eric Lytwyniuk; and John Kasieta. City staff members present last night were: City Manager Scott Erickson; City Clerk Karen Gullan; City Utilities Manager Bob Tervonen; Community Development Director Dan Petersen; and Financial Director Julie Frederickson. Mr. Dean Beaudoin, representing Joki, Makela & Pollack PLLC, was also seated at the workshop to answer any questions about the 2007-2008 fiscal year audit. In the audience were Jeff Wolfe, District Manager of Waste Management of Ashland, Wisconsin; Bob Raisanen; and Chris Ann Bressette, Gogebic Range Solid Waste Management Authority manager. Representing the media at last night's meeting were Ralph Ansami, Ironwood Daily Globe reporter; Steve Frank, editor and photographer for the Superior Chronicle; and yours truly. Steve Frank is also a member of the Downtown Ironwood Development Authority (DIDA).

PLANNING COMMISSION ORDINANCE

Dan Petersen launched last night's workshop by introducing a draft he prepared of the newly proposed Planning Commission Ordinance. Peterson told the workshop attendees that there were basically two main reasons for initiating a new ordinance: (1) the State of Michigan now requires special Enabling Act language in the ordinance; and (2) to allow for fewer members on the Commission. Recently there has been considerable discussion about possibly lowering the number of IPC members from the current nine to seven. At nine members, supporters of the lower number argue, you need five to have a quorum -- with seven members, four is a quorum.

Petersen explained his proposal as worded in his draft. He suggested having two non-voting ex officio members and seven voting members on the IPC. Nine members are allowed by State law. Petersen also suggested that attempts be made in the future to diversify the Commission so that representatives of several different segments of the population are seated. He made it clear that the number one priority of all members should be what's best for the community at large, but he demonstrated the value of having a "mixed commission" that has representatives with different values and interests. Petersen offered several different options when considering diversification. They include one member representing each of the following:

One Citizen at-large member.
Agriculture, forestry, and land use interests: Attend and/or be familiar with the desires and needs of the Farm Bureau, Soil Conservation District, Michigan Department of Natural Resources Forestry Division, United States Forest Service, and/or Resource Conservation and Development Council.
Education interests: Attend and/or be familiar with the desires and needs of the Ironwood Area School District, Gogebic/Ontonagon Intermediate School District, Gogebic Community College, MSU Extension, and/or other educational institutions.
Recreation and tourism interests: Attend and/or be familiar with the desires and needs of the Ironwood Area Chamber of Commerce, the Ironwood Area Historical Society, the Western Upper Peninsula Convention and Visitors Bureau, hotel/motel tourist business owners; recreation associations; civic and social organizations; the arts; snowmobile and other recreation clubs; Michigan Department of Natural Resources Parks Division, Recreation Division, and Waterways Division. e.
Industrial and economic interests: Attend and/or be familiar with the desires and needs of industrial associations, the Chamber of Commerce, economic development corporations, organized labor, and trade associations.
Transportation and communication interests: Attend and/or be familiar with the desires and needs of the Gogebic County County Road Commission, village and city road agencies, telephone companies, Internet providers, postal and other parcel delivery services, news media, mass/bus transportation systems, airports, and harbors.
Sanitation, environmental health, housing, and human services interests. Attend and/or be familiar with the desires and needs of public utility providers, water and sewer providers, the County Health Department, councils on aging, and human services collaborative bodies.

Petersen explained that bylaw changes would need to be made to develop a diversified Commission and he cautioned that the ideas he presented last night were merely suggestions of possible categories. Scott Erickson reinforced Petersen's suggestion of diversity. He said having people with specific knowledge and interest in a wide variety of areas will only make the Planning Commission better.

Petersen then asked the group if they had any questions regarding the proposal as drafted. The following issues were discussed:

Suzanne Toth asked how the expiration of terms would be affected with a lower number of IPC members. Petersen told Toth that the timing to reduce to seven right now would be perfect. Two new members could be appointed this year; two next year; and three the following year. It's best to evenly space the terms and a reduction at this time would pretty much allow for that.
Toth then asked about another change. According to the proposed draft, all but one IPC member must be a qualified elector (registered voter) in the State of Michigan. Petersen explained that this is the State law. One member can be a non-resident and still serve, but the remaining members must be registered voters and residents of Ironwood.
Gemma Lamb asked Petersen if the wording could be changed concerning removal of members that miss meetings. Lamb proposed wording the document to say, a member can be removed if he has had three unexcused and/or three consecutive absences from the regular meetings. The workshop attendees seemed to fully agree with Lamb's suggestion. Petersen made note of the change and said he will make the change to his next draft.
John Kasieta asked if there wasn't a quorum of voting members but two non-voting members were present, making up a quorum, could matters be voted upon. Petersen told Kasieta that a quorum needed to be made up of voting members only.
Several of the workshop participants discussed the merits of having a smaller Commission. Petersen told the group he didn't recall a time when a quorum wasn't met since he's held his office. Wyssling reminded him of one time when business couldn't be acted upon because a quorum wasn't met.
A clarification of what constituted a quorum -- 2/3 of the seven "voting" members must be present -- was added.
Steve Frank then asked the group if the wording could be changed regarding the advertisement for open positions on the Commission. He pointed out that the language referred to "newspapers." He explained that such announcements should be posted on the City's website since fewer and fewer people are reading newspapers these days. In addition, if the Commission wants to attract younger members, he reasoned, web presence is essential. The group discussed a possible change to include "other media." Karen Gullan suggested that the wording reflect the City Commission's "designated media" verbiage. Mayor Noren told the group that he believes that the City's website should become the primary source for information to the public regarding City affairs. Steve Frank noted that placing the language in the ordinance will direct and guide people in the future to take notice of media other than newsprint.
A brief discussion regarding the make-up of the IPC, that is having members of varied backgrounds was discussed.
Gemma Lamb asked that some language be incorporated into the Ordinance that stated that IPC members' first priority is the City as a whole. Lamb, Wyssling and others agreed that there is no place for "special interest groups" on the Planning Commission. It's healthy to have a diversity, Lamb pointed out, but she believe it was important not to fragment the Commission with special interests.
Dan Petersen briefly mentioned that he would like to see mention of such ethics in a Code of Conduct document that the Planning Commissioners would sign.

Dan Petersen reviewed the proposed changes for the work-group and the meeting went on to the next phase.

THE 2007-2008 FISCAL YEAR AUDIT

Julie Frederickson gave a brief introduction regarding the audit and she introduced Mr. Dean Beaudoin to the group. Beaudoin was there to answer any questions the Commission had on the audit.

Mayor Noren started off with a "big picture" question. He pointed out that an overpayment resulted in "found money" in the bond reserves during the last audit. He asked if the money had been used. Frederickson explained that the funds were placed into various City operations accounts and used as needed.
Tom Laabs then asked a question about deposits. The City's fund balance, according to the audit, is $2,582,000 and it is FDIC insured for only $250,000. Laabs expressed concern for the large gap between actual money and insured funds. Julie Frederickson explained that the City used to have several accounts in all of the area banks. They realized that service charges and fees were getting out of hand, so they consolidated all of the City's accounts into on central account at River Valley Bank. Frederickson told the group that she would contact Sue Murphy from River Valley to see if they have some kind of option that would properly protect the City's funds.
Bob Burchell expressed concern for the potential risk the City is taking by having their pension money invested in the market fund. He went on to confirm with Julie that losses are underwritten by the general fund (taxpayers' money). He said he noticed a huge decline since July alone. Julie confirmed that the investments were down, in general, about 28%. Burchell noted that a 28% loss on an $8,000,000 investment is nearly $3,000,000, and he pointed out that interest on that fund pays pensions for the City. He expressed concern that continued losses could put the City in very serious financial trouble. He asked how the actuaries felt about these declines. Frederickson explained that the actuaries will be in town shortly, and she will ask them if the City has a reason to be concerned. She explained that the actuaries will more than likely wish to meeting with the City's Pension Board and with the City Commission regarding the losses. Burchell asked Beaudoin how he viewed the situation as an auditor. Beaudoin explained that actuaries are specialists and auditors rely on their judgement. Burchell warned that during the Great Depression the market dropped only 25% -- but then another 25% and then the bottom fell out. Frederickson told the group that the actuaries have already cautioned her that the City's contributions to retirement will be going up. She said the general contribution -- based on payroll -- is currently 15.91% and the police and fire contribution is nearly 48%. Frederickson went on to say that the City will be well prepared for any changes in contributions by the time the budget gets adopted.
Laabs then asked a few questions about the Civic Center. He pointed out that the Center, according to "Expenses compared to Charges for Service" appeared upside down by almost $75,000. He went through other examples and he came to the conclusion that the Civic Center is operating at a huge loss. Laabs, who holds a seat on the Center Board, told Julie and Dean he would like someone to walk him through the process. Beaudoin told Laabs that the Center is pretty much breaking even greatly due to the assistance of the Center's taxpayer support. The Center has paid the City $30,000 last year and $15,000 this year towards their outstanding debt.
The total real income of the Civic Center last year was $1,300. With all things considered, the total income balance from last year was $3.600. The current debts to the Center is over $92,000. Noren cautioned that closing the Center must be done so that it doesn't cost any money to the City. He said the debt needs to be paid off before the millage runs out so that the debt can be reduced.
Noren brought up the Public Safety Retirement Fund and he pointed out that the millage increase to that fund has essentially funding most of the City's street repairs.
Laabs asked about Notes Receivable. One of the notes was for $100,000 and it was to Brownfield Development for Josephson's Nursing Home. He asked, "Notes Receivable is like cash in the bank, correct?" He then questioned why no repayment plan has been established on the money. He asked about another note for $320,000 where no money has ever been paid. That note was from Woodland Courts Apartments (across from the high school) and it represents a second mortgage due an payable in 2018. Beaudoin pointed out that the money Laabs referred to was really IEDC money and, if and when it gets paid back, it would go towards funding other businesses and projects. Noren suggested that the $320,000, if paid back in 2018 as required, be used to improve existing apartments throughout the City. He said the Hovey project has stirred up many issues that relate to current apartment owners, and it would be nice to help them improve their properties.

REFUSE COLLECTION CONTRACT

City Manager Scott Erickson began the discussion of refuse collection and the fact that the current 5-year contract with Waste Management is about to expire. Erickson pointed out that the winner of any new contract -- whether it be Waste Management or another contractor -- would be required to dump the collected refuse at the Gogebic Range Solid Waste Management Authority transfer station. He noted that the current contract allows each homeowner to have three 33 gallon bags of garbage picked up per week without additional charge. Anything over three bags requires a dollar sticker per bag. Erickson suggested that the call for bids asks each contractor to include a one-day City-wide clean-up and a two-day City-wide clean-up charge. Erickson also pointed out that Waste Management also includes three recycle stations throughout town with their bid. These stations have been added free of charge from the company.

Suzanne Toth asked if there would be a significant extra charge to have curbside pickup of recylcables. Jeff Wolfe of Waste Management said garbage pick-up costs would just about double due to the price of fuel.

Steve Frank made the suggestion -- no matter who gets the contract -- that a more equitable method of billing be established. He told the group that he pays the same for his tiny one bag of garbage as his neighbor pays for the massive amounts of garbage he disposes each week.

Tom Laabs asked Bob Tervonen how the number of garbage pick-ups was determined. Tervonen explained that it was based on water usage. Laabs asked if the bid included vacant homes that are for sale. Tervonen explained that regular reports are printed up on "active" water accounts and Waste Management is paid based on the active account list.

The group discussed several options and examined what other communities do in an effort to determine what the City would like to include in its next bid. Options suggested include:

Collection every other week rather than weekly.
Changing the "free" number of bags per household from three to two.
Offer recycling as part of the pick-up.
Establish drop-off points in each neighborhood. Place dumpsters in each neighborhood to reduce costs.
Flat per bag fee by selling special bags.
Go back to City-owned garbage pick-up to create local jobs and possibly reduce costs.
Having both garbage and recyclable pick-up using special waste receptacles like other cities do.
Going to a flat-rate city-wide fee instead of basing it on the number of active customers.
Increase the per bag charge on extra bags.
Encourage recycling.
Every bag is charged, but water customers get 52 free stickers per year.

The topic of "clean-up days" was briefly discussed with several of the group favoring more days, some wishing to keep it the same, and others -- like Mayor Noren -- suggesting alternate funding of the program. Currently each water customer pays $1.00/month just to fund the one-day clean up program. If the City opted to go to a twice a year clean-up, naturally that would add another dollar to current water customer's bills.

Steve Frank complimented Bruce Noren for suggesting an alternative funding arrangement. He told the group that the spring clean-up is billed as a "free" clean-up day in the City. In reality, Frank pointed out, it is a subsidized clean-up paid by water customers. Frank asked if it was fair that he subsidize large families that generate large amounts of waste and those people that let their properties accumulate junk for years at a time, when he has only a small single a bag of garbage each week.