RUGBY CITY COUNCIL

REGULAR MEETING

TUESDAY JULY 5th, 2016 – 7:30PM

COUNCIL CHAMBERS

Council Members present: Rheault, Lotvedt, Kraft, Bartsch, Berg, Longie, and Steinke. Also present was Mayor Geislzer, City Attorney Hartl, and City Auditor Heisey. Ward 2 seat was vacant.

Mayor Geiszler called the meeting to order at 7:30 pm. Council members recited the Pledge of Allegiance. Roll call of council members was taken by Geiszler.

Mayor Geiszler appointed Randy Fossum as Council Member to fill the Ward 2 seat previously held by Bednarz.

The Oath of Office for appointed Council Member Randy Fossum was removed from the Agenda as Fossum was absent. Fossum will be sworn in at a later date. There were no other additions, amendments, or deletions to the agenda.

Motion by Rheault to approve the Minutes of the June 6th, 2016 Regular Council Meeting and the June 28th Reorganization meeting. Second by Steinke, all voting yes, motion carried.

Bills Paid Since Last Meeting of 06/06/16: B & M Laundry Service $124.06, Convention & Visitors Bureau $7848.62, Envision $2709.69, Heart of America Library $6430.50, Hi-Way Tesoro $689.81, ND Dept. of Health $75, ND Telephone Company $756.62, Otter Tail Power Company $9693.38, Pierce County Tribune $805.82, Rugby Job Authority $24460.13, Rugby Park District $8082.87, Shopko Stores $28.75, Turtle Mt. Babe Ruth League $250, Valli Information Systems $571.85, Wells Fargo Bank $1150, Rugby Sanitation, Inc. $24178.71, Verizon Wireless $80.02. Total Bills Paid: $87935.83. Payroll Checks $79334.73, Social Security $12518.46, Medicare Taxes $2927.72, Payroll Taxes $8859.13, AFLAC $318.94, ND Child Support Division $384 NDPERS $540, NDPERS $8289.20, Sanford Health / NDPERS $11917.92, State Tax Commissioner $1768.58. Total Bills For Payroll: $126858.68. Grand Total All Bills Paid Since Last Meeting of 06/06/16: $214794.51.

Bills To Be Approved at 07/05/16 Meeting: Advanced Engineering, Inc. $328, American Builders $28000, Aqua-Pure, Inc. $2715.54, Atco International $512, Bartsch Electric, LLC $483.40, Bechtold Paving, Inc. $697.13, Bonnie Berginski $96.33, Brad's Auto Service $103.94, Candy Munyer $193.73, Community Service Program $6000, D & S Motors, Inc. $271.57, Dakota Supply Group $420.36, Environmental Equip. & Serv. $570.08, Ethanol Products, LLC $1786.08, First District Health Unit $174, Gerrell's & Company $1053.98, H.E. Everson Company $118.48, Hawkins, Inc. $1142.91, Heseb Unlimited $99.90, Interstate Engineering, Inc. $7055.34, Johnson's Plumbing, Inc. $222.65, JS Wholesale &Vending $1215.06, Kadrmas, Lee & Jackson $11500, Kristin Kersten $35, Leevers Foods $297.75, Michael Todd & Co. $356.04, Napa Auto Parts $92.45, ND One Call Concepts, Inc. $45.10, ND Telephone Company $831.33, Northern Plains Elec. Coop. $3185.66, Otter Tail Power Company $86.12, Pete Salwey $1707, Petty Cash $191.84, Pierce County Auditor $3067.74, Productivity Plus Account $224.02, Quill Corporation $152.44, Rebecca Jordan $247.50, Rick Larson $3000, Rockin' Relics $329.29, Rugby Broadcasters, Inc. $79, Rugby Farmers Union Elevator $147, Rugby Fire Dept. $881.86, Rugby Greenhouse $48.50, Rugby Hardware Hank $917.05, Rugby Lumber, Inc. $953.69, Rugby Sanitation, Inc. $214, Rugby Service Center $681.19, Shopko Stores $117.41, Souris Basin Planning Council $138.24, SRT Communications, Inc. $35.51, Staples Credit Plan $124.97, Streicher's, Inc. $167.92, Team Laboratory Chem. Corp. $1628.50, Verizon Wireless $1567.49, Zimmerman Contracting, Inc. $112010.46. Total Bills Submitted For Approval: $198322.55.

Bills were reviewed by Bartsch and Berg. Motion by Berg to approve payment of the bills and financials. Second by Bartsch, roll call vote, all voting yes, motion carried.

The Council considered approval of the Progressive Estimate No. 1 for work completed by Zimmerman Construction on the City-wide Crack-Sealing project of $116,813.46. Interstate Engineering Representative, Wade Senger, addressed the council regarding cost overruns on the project. Senger informed the Council that they had underestimated the amount of materials needed to complete the project. He stated that they had used similar projects to estimate the project but found that Rugby’s streets were in much poorer condition than previously anticipated. The Council and Senger discussed the cost overruns. Senger estimated that the project will have cost overruns of approximately $40,000 to $50,000 over the bid amount of $96,060. Senger stated that the Progressive No. 2 was being finalized. According to Progressive Estimate No. 1, the net cost due for the estimate less the $4,803.00 retainage, is $112,010.46. Attorney Hartl questioned the warranty of the work performed. Motion by Lotvedt to approve the Zimmerman’s Contracting Progressive Estimate No. 1 for $116,813.46. Second by Bartsch, roll call vote, all voting yes, motion carried.

The Council considered approval of the Agreement for Engineering Services between the City of Rugby and Interstate Engineering for Phase II of the water treatment plant improvements. Senger briefed the Council on the Municipal, Rural, and Industrial Funding process and expected timeline of the project. Senger stated that EPA studies should take about 3 months to complete and that the engineering design could be completed during that time. He stated that construction of the Phase II is expected to begin the during the winter months when demand is slower. Motion by Lotvedt to approve the agreement for Engineering Services between the City of Rugby and Interstate Engineering for Phase II of the water treatment plant improvements. Second by Kraft, all voting yes, motion carried.

The Council considered approval of the filing of a petition to vacate a portion of an alleyway by Nathan Kunde, Leah Lehman, Amber Sattler, and Mark Simonson. The petition for the property to be vacated is described as follows: The portion of the alley adjacent to The West ½ of Lots 4, 5, & 6, Block 9, Serumgard’s First Addition to the City of Rugby and The East ½ of Lots 7, 8, & 9, Block 9, Serumgard’s First Addition to the City of Rugby, Pierce County, North Dakota. The Council reviewed the petition, concern over the water sewer lines was expressed by Lotvedt and Steinke. Discussion over the need for possible easements was held. Motion by Steinke to table the filing of the petition until the City’s utility lines were located and the need for a possible easement was thoroughly researched. Second by Lotvedt, all voting yes, motion carried.

The Council considered approval of the Municipal Judge’s Report for June 2016. Motion by Kraft to approve the Municipal Judges’ Report for June 2016. Second by Longie, all voting yes, motion carried.

Wade Senger with Interstate Engineering updated the Council on the upcoming Chip and Sealcoat Project. Senger reported that Astech Corp plans to start July 25th with a preconstruction meeting to be held the week of July 18th. The crews are expected to complete the project in about 3 weeks with weather permitting.

Doug Lee with Progress Solutions, addressed the City Council regarding the results of the Natural Gas Feasibility Study conducted by Kadrmas, Lee & Jackson, Inc. Lee stated that the research concluded that either a municipal distribution system utilizing a liquid natural gas source or an investor owned would be able to provide businesses and residences with a low-cost natural gas solution. A pipeline was determined not to feasible at this time and was ruled out. Liquid natural gas could be delivered at a reasonable price. The system would enable economic development advocates to market Rugby with a community that has natural gas, which in turn should spur growth. Lee stated that over the course of several years this type of system would most likely expand and grow to meet the increasing needs of the community. Existing investor owned utilities are a possibility that the City Council may want to discuss and choose to move forward with. If the City chooses to move forward with a municipal distribution, low-interest funding through the Bank of North Dakota may be available. The Bank of North Dakota Economic Development & Government Program may also be an option for funding of the investor owned utility. In order to facilitate economic viability, the buildout process would be structured so that the initial phases captured the majority of the industrial load and some of the commercial load. This is accomplished by building the primary trunk line first and connecting the sizeable loads on the first pass. Then, as it becomes economically viable in other areas, laterals will branch off of the main trunk line and extend to those customers desiring natural gas. It should be noted that there will be parts of the community where it never becomes economically viable to have natural gas service. In the near term, Rugby could join with the ND Public Service Commission in a request for new legislation, similar to Minnesota regulations, which would allow the community to work with a developer or investor owned utility to establish acceptable gas distribution rates as opposed to falling under the Public Service Commission’s jurisdiction. The bottom line is that it is feasible to install a natural gas distribution system in Rugby providing low-cost, clean-burning natural gas at prices competitive to propane, fuel oil and electricity. The study showed that the community as a whole wants natural gas.

Mike Gorham with Northwest Gas addressed the Council as a possible investor in Rugby’s natural gas utility system. Gorham’s family owned company owns and operates systems in 14 small towns in Minnesota. The family has a trucked propane delivery operation, natural gas pipeline distribution systems, and several propane pipeline distribution systems. They also maintain natural gas distribution systems owned by the cities of Clarissa, Eagle Bend and Cohasset, the State of Minnesota-owned gas systems serving Fort Ripley (natural gas with a propane backup) and Thistledew Camp (a propane system) and provide limited support services to the City of Randall for their natural gas distribution system. Northwest Gas also operates and maintains a direct-connect natural gas pipeline for Minnesota Power at its Boswell generation facility in Cohasset. Gorham explained that there is low overhead for the types of systems and there are unique rates for every system. Gorham gave a brief history on his business and Minnesota legislature. He stated the he and other investors were working with the ND Department of Commerce and legislators to allow investor-owned utilities to serve small communities. Currently, the ND Public Service Commission cost regulations make investment in small communities cost prohibitive in ND. Representative Nelson was in attendance and expressed support of the legislation changes needed to support bringing natural gas to more communities.

Mayor Geiszler presented concerns and ordinance information on restricting flying drones. Geiszler stated he had been approached by Doug Mundahl with the Rugby Airport Authority. He noted that there had been broad concern over safety and privacy. Geiszler asked that the ordinance committee review the City of Bottineau’s ordinance on flying drones.

The Council discussed the new committee times. Committee Meeting times agreed upon were: 9:00am Recreation, 10:00am Finance, 11:00am Ordinance, 1:00pm Public Works, 2:00pm Public Safety, 3:00pm Personnel, and 4:00pm Buildings/Property.

City Auditor Heisey gave notice of her resignation citing employment and professional growth opportunities. Heisey and her family will be relocating to the Houston, Texas area. Her last day on the job will be August 5th. The Council thanked her for the work accomplished during her time in the position. Heisey thanked the Council for their service to the Citizens of Rugby and felt that it was a positive experience. She felt that they had accomplished a lot in the past year. She stated that she would do as much as possible to ensure a smooth transition. The Council accepted her resignation.

Committee Reports: Public Safety – No June meeting. Finance – No June Meeting. Ordinances/Rec – No June Meeting. Public Works - Lotvedt reported that the Committee had advertised for a budgeted commercial mower for the street department. The budget was for $15,000. The Committee reviewed and discussed the bids and the bid specifications. Larson wanted to point out that the reason they needed the rear discharge was because they did not want the cut grass or other objects being blow off to the side and into the street as they mow the ditches. Bids were as follows: Hardware Hank: Model 5000 Series Toro Professional Gas EFI Engine Rear Discharge $9,758.00;Model 7000 Series Toro Professional Diesel “Kubota” Eng Side Discharge $13,358. Gooseneck Implement John Deere Z950M Commercial Gas Side Discharge $9,400; John Deere 1550 TerrainCut Commercial 72in Rear Discharge $17,432.18. Motion by Lotvedt to accept the bid from Hardware Hank for the Model 5000 Series Gas mower with rear discharge for $9,758. Second by Rheault, roll call vote, all voting yes, motion carried. Lovedt noted that they had been in discussions with Aqua-Pure for maintenance agreement for the water treatment plant. Roof repairs on the well-sites was also discussed. Personnel – No June Meeting. Buildings/Property – No June Meeting. City Planning and Zoning – No June Meeting. Visitor Committee – No June Meeting. Tree Committee – No June Meeting.

Under Unfinished Business, Committee Member Rheault expressed concern over the severity and length of time it has taken to do something about some of the dilapidated housing in Rugby. Some of the properties had been referred to the State Public Health Unit over three years ago. Geiszler stated that it was a long process and that he would follow up. He stated that the process to have a house condemned takes a long time and that the state and city have to follow protocol including a complaint investigation, hearings, etc.. Rheault stated that something needs to be done about these houses because they are dangerous and bring the neighboring property values down.

Special Meetings and Reminders: NDLC Annual Conference – Sept. 15-17 – Bismarck and July Committee Meetings on the 20th.

There being no further business to transact or to come before the council at this time, Lotvedt made the motion to adjourn the meeting at 9:50pm. Second by Berg, all voting yes, motion carried.

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Elizabeth Heisey, City Auditor Date Submitted

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Arland Geiszler, Mayor Date Approved