City's Finances In Relatively Good Shape

IRONWOOD, MI - Tuesday, November 23, 2010 - The City Commission held their second regular meeting of the month last night.

A. Regular Meeting Called to Order. Opening Prayer. Pledge of Allegiance - Mayor Bob Burchell called the meeting to order at 5:30 PM. He then read the Opening Prayer and lead those in attendance through the Pledge of Allegiance.

B. Recording of the Roll - Karen Gullan, Ironwood's City Clerk, reported that all of the Commission members, including the new Student Liaison, Ashleigh Niemi, were present for the meeting. (Kim Corcoran; Gemma Lamb; Mayor Burchell; Will Lucius; and Rick Semo) Mayor Burchell welcomed Ms. Niemi to the Commission and he encouraged the Commissioners to include her in the proceedings. Likewise he encouraged her to speak up if she had any concerns or ideas she believes would be helpful. Ashleigh is a student at the Ironwood High School and her parents are Nathan and Michelle Niemi.

City staff present at last night's meeting included: City Clerk Karen Gullan; City Manager Scott Erickson; City Attorney Dennis Cossi; Financial Director Julie Frederickson; Utilities Director Bob Tervonen; Building Inspector/City Assessor Dennis Hewitt; Community Development Director Merritt Bussiere; Ironwood Public Safety Officer Andrew DiGorgio; and City Mechanic Jim Kolesar.

Covering the meeting for the media were Margaret Levra, reporter for the Daily Globe and yours truly for the Superior Chronicle.

C. Approval of the Consent Agenda. 1) Approval of Minutes – November 8th Regular City Commission Meeting. 2) Review and Place on File. a) Ironwood Planning Commission Meeting Minutes of October 6th and b) Downtown Ironwood Development Authority Meeting Minutes of October 28th - Commissioner Lamb made a motion to approve the consent agenda as presented. Commissioner Lucius seconded Lamb's motion. The Commission voted unanimously to approve the Consent Agenda.

D. Receive and Place on File from the Finance Director. 1. Statement of Revenue & Expenditures and 2. Monthly Cash Reports - Financial Director Julie Frederickson explained to the Commission that a Statement of Revenue & Expenditures and the Monthly Cash Reports were included in their packets. According to Frederickson as of the end of October the fiscal year is 33% complete.

"We're looking pretty good!" Frederickson reported. She explained that the audit is complete, and the fund balance from last year is $730,383. Frederickson reminded the Commission that $400,000 of the fund balance is reserved for operations as per a recommendation of the Commission. She went on to say that the City came out "in the black" to the tune of over $330,000.

"It was a good year," Frederickson said, "It was a mild winter, and we didn't have much to do with it, but that's what the impact of snow or no snow has on the City's budget. So, it was a good year!"

Frederickson told the Commission that the budget is also doing well. She said there currently is a positive balance, but she added that the City recently received a tax revenue check from the State which helps greatly. According to the paperwork she provided, revenues were 35% and expenditures were 29%.

Frederickson reported that the street funds are currently under-budget due to the lack of snow thus far. She said that the funds are in good position for the upcoming winter.

The equipment fund has a negative balance due to the recent purchase of new equipment. She noted that revenues generated from the use of the equipment will help build up the balance in that fund. (NOTE: The City pays itself "rent" whenever equipment is needed. This "rent" becomes revenue. Essentially, the "rent" paid is a savings plan that allows for purchase of new equipment and maintenance of existing equipment.)

According to Frederickson, the water and sewer account was currently under-budget. Revenues are down a little bit in the water fund. Frederickson explained that the loss of the Township water revenues is partly responsible for the lower revenues. She said that the City has been anticipating for the lost revenue, "... and we should be okay" Frederickson said. The sewer fund, on the other hand, is "right on" according to Frederickson.

The Library is at 50% of their budgeted expenditures. Frederickson cautioned Elaine Erickson about spending, and Erickson has been keeping an on eye on expenses.

The Civic Center is doing well, according to Frederickson. They have just made their ice, so skating season has begun. And the Cemetery is now closed for the season with just over 1/3 of their budget expended.

Rick Semo asked Frederickson why the water transmission costs were considerably higher this year than last year. Frederickson explained that there were some major expenditures this year compared to last year. She noted that largest and most prominent expense was street patches. She noted that there was a back-log of patches that needed to be done. Frederickson assured the Commission that the expenditures for patches were a "one time shot" and nothing to be overly concerned about.

Will Lucius asked if the $700,000+ surplus was forecasted in the last budget. Frederickson said she knew expenses were under-budget but she waited until after the audit to make an official announcement. She said the surplus from last year will be between $200,000 and $300,000. Lucius asked if those funds were added to this year's budget and Frederickson indicated that those funds are not yet added.

Frederickson indicated that the City currently has about $2,000,000 in its general fund. She said that the revenues will start decreasing now since most of the City's property tax revenues have now been collected. She said most of the smaller accounts are in good shape

She noted that eight new accounts were added to the City's bookkeeping. She explained that the accounts were added to keep track of Rural Development Bonds, construction, expenses and other activity.

Rick Semo asked if the $63,000 paid to the Wastewater Authority was a typical monthly payment. Frederickson told Semo that it was the standard monthly charge.

Commissioner Lamb made a motion to place the financials on file. Commissioner Corcoran seconded Lamb's motion. The Commission unanimously voted to place the financial documents on file.

E. Approval of the Agenda - Mayor Burchell noted that one item on the Agenda will probably be tabled until the next meeting -- Bob Erspamer was not in attendance to give his report to the Commission.

Scott Erickson told the Commission that an additional item needed to be added. The organizers of the Vintage Snowmobile Race were seeking permission to allow the City Manager to authorize use of City equipment, if needed, in preparation for the event.

Item H1 was added under "New Business" to the Agenda to discuss the matter.

Commissioner Lamb made a motion to approve the amended Agenda. Commissioner Lucius seconded the motion. The Commission voted unanimously to approve the agenda as amended.

F. Citizens wishing to address the Commission on Items on the Agenda. (Three Minute Limit) - No citizens asked to speak on Agenda items.

G. Department Supervisor Updates. 1. Dennis Hewitt, Assessor/ Building Inspector and 2. Bob Erspamer, Director of Public Safety - City Assessor/Building Inspector gave a brief report on the activities in his department. He explained that this summer was very busy due to the NSP Grant for the demolition of blighted properties. He said that fifty-five structures were razed in the effort to control blight. Fifteen of the buildings were brought before the Commission to be condemned. Forty of the structures were razed with the permission of the property owners.

Hewitt explained the process for determining which buildings would be torn down. He said in the spring of the year a survey was taken. Letters were sent to property owners to see if they would allow the City to raze the buildings. He said letters that were returned or received no response went before the Commission for condemnation. Hewitt said as fall approached, funds were still available for the demolition of additional buildings. He said those buildings were identified; owners were contacted; and the procedure continued as it did previously.

According to Hewitt, approximately $300,000 was spent on demolition this summer. Hewitt indicated that 14 times the normal number of houses were razed this year due to the NSP Grant.

Hewitt indicated that all asbestos was abated from the existing buildings before they were demolished. He said the cost of asbestos abatement was considerable lower they originally anticipated.

217 building permits were issued so far this year by Hewitt's department. 55 of the permits were for the demolition of the blighted buildings. 162 building permits were issued for other purposes. According to Hewitt, the number of building permits issued is up slightly from last year. He said 155 permits were issued for all of last year. Hewitt said it is a good sign that people are maintaining and upgrading their homes.

"There were no real big projects this year." Hewitt said.

Hewitt told the Commission that he and Jason Alonen (Code Enforcement Officer) do much of the computer work for the City. He indicated that a grant is available through Jim Loeper at Gogebic County. A new firewall; a new switch; and a new external hard drive will be added to the City's computer system. The external drive will be used to back up programs on the City's server.  The cost of the new equipment will be approximately $3,000. 100% of the costs will be covered by the County.

Hewitt explained that the City would like to have Ironwood Public Safety connected to the City's server so that all of their records can be integrated in their system.

According to Hewitt, he is currently working with CD Merritt Bussiere establishing square footage of existing buildings (occupied and vacant) in the downtown business district. These numbers are required by MSHDA for the annual report ("benchmark") on the progress of the Blueprint Plan. He said there are about 200 buildings that need to be examined and the paperwork should be completed sometime in the next week.

Hewitt explained that his department is in charge of producing most of the City's maps. Maps such as the ATV routes; deer-hunting areas, etc. are produced. He said he is currently working with the Department of Public Works (DPW) creating maps with the proper valve locations throughout the City.

The County is currently working with Hewitt on "sales studies." These studies compare the Assessment Values to the actual Sales Values. Hewitt told the Commission that the County tells the City if their Assessments are too high or too low.

"This year, we're going to be a little high!" Hewitt said. He said adjustments will be made to some of the assessments. According to Hewitt, Taxable Value (the amount we pay taxes on) will increase by 1.7% this year. He said that, even though the assessments may drop, the taxes will increase.

Mayor Burchell asked for a clarification. Hewitt explained that Taxable Values on recently assessed properties change after the sale of a property, based on the sale price of that property. He explained that the Assessed Values are at approximately $127 M currently, but the Taxable Values are at approximately $83 M.

Rick Semo asked if the tax increase was mandated by State Law. Hewitt indicated that it was and that the increase can be as high as 5% on any given year. Semo asked if increase such as this were typical. Hewitt said they were, and that the increase was based on the Consumer Price Index (CPI).

Hewitt said he is currently preparing for the December Board of Review. He said the December Review generally involves internal corrections to assessments, exemptions or values. He said the December Board of Review generally doesn't hear from taxpayers' regarding their assessments. Those hearings are generally done in March.

In closing, Hewitt told the Commission that he was working with the City Manager on seeking bids for the Theatre entrance remodel. The plan is to close of the concourse portion of the building from the rest of the building since that portion of the building will be sold to the Theatre.

Mayor Burchell asked if any new homes were built in Ironwood over the last year. Hewitt told the Commission that there were no permits issued for new homes.

Burchell asked for a current assessment of blight in the community. Hewitt said he hadn't met with the Blight Committee since the demolitions have been completed. He said he would have to meet with the Committee before spring to determine what other action needs to be taken. Burchell asked Hewitt if more funding for blight abatement was available.

Erickson indicated that another round of NSP funding is coming up and the City will aggressively seek more funding. He said the City typically budgets $30,000 for demolition of blighted buildings each year.

Burchell asked if any City-owned lots were now available for sale as a result of razing blighted structures. "There's a few." Hewitt told Burchell, "Most of the property, we didn't own.  It was all owned by private individuals." Hewitt told Burchell that liens were placed on properties that were demolished at the City's expense.

Gemma Lamb asked if the Blight Ordinance needed to be tweaked or if it was satisfactory. Hewitt said the fees that have been added in the past have helped with enforcement.

Burchell asked about the GIS system. Hewitt indicated that the hardware is installed; the software has been obtained; but training still needs to be done to learn the new system.

OLD BUSINESS

H. Discuss Speed Limit on Trail #2 - Scott Erickson explained that the City owns Trail #2, so they have the right to set speed limits on that trail.

Kim Corcoran asked what the current speed limit was along the trail. Erickson told the Commission that there is no established speed limit for snowmobiling, but there was a speed limit for ATVs. That limit was 15 mph along the trail and 5 mph near the Depot.

Rick Semo said "it wouldn't hurt" to have a snowmobile speed limit. He favored a "reasonable" limit. He suggested that the Parks and Recreation Committee or the Snowmobile Committee could give the Commission a recommendation.

The Committee decided to send the matter back to the Snowmobile Committe for a recommendation.

NEW BUSINESS

H1. Discuss use of track equipment for the Vintage Snowmobile Races planned for later this winter - Scott Erickson explained that the race will be held on January 1st and January 2nd, 2010. He said there was a lot of volunteer work required to get the track ready. It needs to be property iced and the volunteers may need the use of some City equipment to make it happen.

According to Erickson, the volunteers don't anticipate the need to use City equipment, but the would like the Commission to give the City Manager the authority to authorize use of any equipment the may be needed.

Erickson pointed out that events such as this race were very important to the community. He also said that new ventures such as this may need additional assistance to "get them on their feet."  He said often budgets are non-existent from new events, and the City's help in the early going can go a long way towards their long-term success.

Tom Auvinen explained that the last race on the track was bombarded with snow and a large snowblower or front end loader was needed.

Rick Semo said the concept of assisting the event is consistent with the help that was given to the SISU event last year. He said he would like to support the concept, but he would prefer if there were limitations set. Semo said he had faith in Erickson, however, and he would support the idea anyway.

Bob Burchell reminded the Commission that Erickson, by Charter, is limited to spend no more than $5,000 without City Commission approval.

"I would hope we never get anywhere near that number." Semo responded.

Erickson said he didn't think a large amount would be spent, if any.

Commissioner Semo made a motion to give Erickson the authority to authorize use of City equipment at his discretion for the Vintage Snowmobile Race. Commissioner Lucius seconded the motion. The Commission voted unanimously to approve the motion.

Before the Commission moved on to other business, Bob Burchell wished the organizers luck and asked if the rumor he heard was true -- over three hundred racers were expected to compete.

Auvinen confirmed the rumor. Erickson asked the Commission if Mr. Auvinen could explain a little about the parade that is being planned in conjunction with the race.

Auvinen explained that the parade is expected to start down by the Gogebic County Fairgrounds, lining up at 4:00 PM. The parade will continue up Broadway Street and on to Hemlock, ending up by Pizza King Joe. The parade will then march through Hurley and the torch will be lit. And at 6:15 PM a big fireworks display is being planned. Auvinen said that the Hurley Chamber was responsible for organizing the parade.

I. Discuss and consider scheduling a Public Hearing for Monday, December 13, 2010 for 5:20 P.M. to hear comment on the abatement of blighted property at 240 East Michigan Avenue - Scott Erickson told the Commission that a notice was placed in the paper and the property owner was contacted several times about the blight on the property. He said the bulk of the "blight" was on the porch of the house. Rick Semo made a motion to schedule a hearing as presented. Will Lucius seconded Semo's motion. The Commission unanimously approved the motion.

J. Discuss and consider awarding bid for Security System Improvements for the Memorial Building and Carnegie Library - Scott Erickson explained that a 50% matching grant through Risk Management (the City's insurance carrier) for the purchase and installation of security devices in the Memorial Building and the Library.

Cameras will be installed around the water window in the Memorial Building. Emergency buttons that will call IPSD for assistance will also be installed. In addition electronic door locks will be added in the "financial" area of the building.

In the Library, cameras will be installed in the Childrens' Room in the basement. This will make it more secure because staff members are not always in that room. Another camera will be added on the back ramp of the building.

According to Erickson, the entire bid he is recommending was from Lindquist Electric in Ironwood in the amount of $25,050. The other bidder was Systems Technology (near Wausau) with a bid of $28,112. The Memorial Building portion of the system (based on Lindquist's bid) will cost $19,494, the remainder is the Library portion. The 50% match from the City would equal approximately $12,525 (roughly $10,000 of which is the City's share), and that money has been budgeted.

Bob Burchell asked if the system had recording capabilities. Erickson indicated that it did.

Kim Corcoran asked if both companies were security systems experts. Erickson explained that Systems Technology routinely deals with such systems, but he said installing the system is more of an electrical job than a technical one. Corcoran asked if both companies offered maintenance on the equipment. Erickson indicated that the factory warranteed the equipment and that faulty or damaged equipment could be easily replaced.

Burchell asked if the system was monitored like the home systems featured on television.

Corcoran asked about the bid process and the timeframe for the grant. Erickson explained that ads were placed in the paper seeking bids.  Erickson told Corcoran that the last grant of similar nature required the funds be expended within 2 to 3 months. He said he believed this grant is much the same, but he didn't have the paperwork with him to give a definitive answer.

Will Lucius made a motion to award the bid to Lindquist Electric. Rick Semo supported the motion. A role call vote was taken and the motion was approved 4-1. Corcoran voted "NO."

K. Discuss and consider Resolution #10-051 reserving $300,000 of the General Fund Balance for the City match for Hemlock Street Phase I ($200,000) and for local street mill/overlay ($100,000) - According to Erickson a $375,000 MDOT Small Urban Grant is being applied to the Hemlock Street Phase I Project. The $200,000 would be for the City's match of that grant. Erickson said, if necessary, the City could examine the possibility of "borrowing" the money from the Cemetary fund. He said, considering the fund balance from last year, it may not be necessary, but "borrowing" the money is an option.

Erickson explained that Hemlock would be a complete reconstruction rather than simply an overlay. He said, however, the other $100,000 would be used for mill/overlays of other City streets.

Lucius asked if it might be wise for the City to consider doing more overlay projects instead of focusing on a complete reconstruct of Hemlock. He suggested that the City might get "more bang for the buck" by doing 10 streets of overlay instead of one street for total reconstruct.

He also suggested that some of the money could be used for the Theatre entrance project.

Rick Semo asked how many blocks of Hemlock would be done in the reconstruct. Erickson said the project would tackle an area from Norrie Street to Arch Street (roughly four blocks). Erickson reminded the Commission, however, that Hemlock would be a total reconstruct and Hemlock Street would be brought up to a higher standard. Semo said at $50,000/block for a full reconstruct, the Hemlock project is a real bargain.

Erickson said additional funding has been set aside for more local streets. Julie Frederickson confirmed that $100,000 was earmarked last year.  She reminded the Commission that many of the Jessieville and Norrie will be replaced through the water/sewer project.

Semo asked what the advantages were in a full reconstruct. Erickson indicated that an overlay may last between 5 to 10 years. A reconstruct could last as many as 40 years.

Gemma Lamb pointed out that other parallel streets have been done and it makes sense to fix Hemlock. She told the Commission that Hemlock was in terrible shape.

Corcoran expressed concern that the City might go into "grant overload" by paying so many matching funds.

Rick Semo made a motion to approve the Resolution as presented. Gemma Lamb supported Semo's motion. A roll call vote was taken and the motion carried. The vote was 3 to 2 with Corcoran and Lucius voting "NO."

L. Discuss and consider awarding lowest bid for a Regular Cab ¾ Ton Four Wheel Drive Truck to be used at the Pump Station - Nine bids were received  with the high bid being over $24,000 and the lowest bid being $20,398 from Ashland Ford/Chrysler. Will Lucius made a motion to award the lowest bid to Ashland Ford/Chrysler. Kim Corcoran supported the motion. The Commission unanimously voted to award the lowest bid to Ashland Ford/Chrysler.

M. Discuss and consider authorizing purchase of downtown vacant lot on Aurora Street (Old Sharon’s Place) - Erickson explained that the now vacant lot in the "core block" of the downtown (between Mattson's and Book World) once housed the Sharon's Place building that the City paid to have demolished. The property was sold at public tax-sale auction. The new owner of the property expressed an interest in selling the land to the City at a cost of $6,000. Erickson explained that the DIDA recommended the purchase of the property which could be used for community activities. He said the Community Development fund had enough funds to cover the costs.

Will Lucius questioned the wisdom of tearing down a building the City doesn't own only to purchase it at a later date at a loss.

Community Development Director Merritt Bussiere said he would hope, if the puchase of the property were to take place, that the property could be maintained in an attractive manner.

Gemma Lamb made a motion to authorize the purchase of the lot. Rick Semo supported Lamb's motion. A role call vote was taken. The Commission carried the motion unanimously.

N. Discuss and consider appointment of Merritt Bussiere as the Planning Director/Zoning Administrator for the City of Ironwood - Gemma Lamb made a motion to the support the appointment of Merritt Bussiere as the Planning Director/Zoning Administrator for the City of Ironwood. Rick Semo supported the motion. The Commission unanimously voted to appoint Bussiere.

O. Discuss and consider authorization of a Request for Proposals (RFP) for consulting engineering services for the Hemlock Street Phase I (Norrie Street to Arch) design and inspection - Commissioner Lamb made a motion to authorize the RFP as presented. Commissioner Semo supported Lamb's motion. The Commission voted authorize the RFP.

P. Discuss and consider authorizing advertisement for bids for Diesel and Unleaded fuel for the Department of Public Works Fleet - Currently, the City has a fuel station. There are three 10,000 gallon tanks. They are single-wall, and they may need to be replaced due to their age, according to the DEQ. Erickson explained that it would be worthwile to examine the possibility of buying gas from local gas stations. The bids would show if it would be cost effective to shop out the purchase of gas and diesel. Lamb made a motion to approve. Corcoran seconded the motion and the Commission unanimously voted to approve the motion.

Q. Mayor’s Appointments - According to Mayor Burchell, there was one application for two openings on the Ironwood Economic Development Corporation (IEDC) Board. Mr. Ruppe chose to re-apply. Burchell recommended that Ruppe be re-appointed. Burchell asked that the opening be re-posted to fill the other vacant seat. Commission Lamb moved to appoint Ruppe. Lucius seconded Lamb's motion. The Commission unanimously approved the re-appointment of Ruppe to the IEDC.

Burchell told the Commission that two seats were also available on the Civic Center Board. John Grotberg re-applied for his current seat and Jim Collins applied for an open seat. Commission Lamb moved to appoint both gentlemen to the Board. Rick Semo seconded Lamb's motion, and the Commission voted unanimously to approve both appointments.

R. Manager’s Report - City Manager Scott Erickson gave a brief two-item report to the Commission:

• Representatives from the Environmental Protection Agency (EPA) and the Department of Natural Resources (DNR) have been testing the former City gas works site. Tests are not yet complete. Erickson said the EPA will, more than likely, be responsible for the clean-up of the site. A remediation plan will be forthcoming.
• Tunnel Vision is supposed to arrive in Ironwood Monday or Tuesday to examine sewers in the Norrie area.

S. Other Matters (Five Minute Limit) - Rick Semo explained that he spoke with Sam Davey. Davey said it would be nice to have a Commissioner on the Parks and Recreation Committee. None of the Commissioners seemed overly anxious to volunteer for yet another committee meeting. Mayor Burchell said that Commissioners can always attend any City meeting on their own, and he encouraged those who would be interest to do so.

Scott Erickson told the new Student Liason that "Other Matters" was a time allotted for Commissioners to bring up new issues. He welcomed the liason speak up if she had anything she wanted to say.

Commissioner Corcoran asked if it would be possible to look into the purchase of "compliant software" that was previously mentioned a City Commission meeting. Erickson said he would gather prices and more information.

Corcoran also mentioned that the warehouse next to the Memorial Building used to be part of the proposed Blueprint Plan. The original plan was to purchase the building, raze it, and expand the parking lot Municipal Parking Lot. Erickson reported to the Commission that the owners of the building -- Gogebic Mechanical -- decided to repair the roof and fix building. Another option, Erickson told the Commission, was the purchase of the old Paulsen Tire Company and raze it to expand parking across the street.

Commissioner Corcoran asked the Commission if they would be interested in each pitching in to sponsor a Wright Way poster. The cost of the character education posters for the Ironwood High School is $150 each, and she suggested that each of the Commissioners pay $30 to help sponsor one. The Commissioners agreed that Corcoran's idea was a good one and they agreed to each pitch in. Gemma Lamb pointed out that "Citizenship" was scheduled for May.

She also mentioned the "Caves" and asked if Merritt Bussiere was going to be involved in planning for the area. Bussiere said a Master Plan needs to be developed to make sure that the best use of the land is utilized.

Mayor Burchell told the Commission that he received a letter from MSHDA saying that they had done an onsite monitoring of their various grants. According to Burchell, MSHDA did an "audit" in Jane Bowman's office. He said the letter said there were "no negative findings" and they highlighted that "they were very impressed with the work that has been completed." The letter went on to say that Jane Bowman has been working with community development grants for many years netting over $4 M dollars for affordable housing for the City of Ironwood since 1996. Gemma Lamb suggested that the Commission send a letter of commendation to Ms. Bowman. The Commission agreed. 

T. Citizens wishing to address the Commission on Items not on the Agenda (Five Minute Limit) - Julie Frederickson thanked people for bring cans of food for the Can-A-Thon. She said that people could donate either food or money to the St. Vincent DePaul Society.

This reporter addressed the Commission with the following comments:

• I welcomed Ms. Niemi to the Commission and I asked how she liked her first day as a Student Liaison. She said she liked it.
• I thanked the Commission for hearing my complaints and acting on my issues regarding media coverage.
• I congratulated Jane Bowman for the outstanding work that she's done and continues to do for the City.
• I asked if the Depot building was every legally transferred from the DIDA to the City. Erickson told me that it was and it was recorded. I explained that George Goerig asked me to find out for him.

U. Adjournment.