Budget Worksession and City Council Meeting

Mayor Hakes, Councilors Costello, Kennedy, Lenz and Sivertson were all present for today's Budget Worksession and City Council Meeting. Also in attendance were Finance Director Kim Dunsmoor and Attorney Chris Hood (via telephone). City Administrator Mike Roth was absent.

Budget Worksession

Kim Dunsmoor provided the Council with an overview of Governor Pawlenty's supplemental budget bill which was signed into law on April 1, 2010. The State of MN has an immediate $1 Billion deficit which the State Legislature plans to address with $700 Million in cuts to Health & Human Services and K-12 Education. The Legislature also anticipates $400 Million increase in Federal funding for Medicaid. If these plans do not materialize as anticipated, further cuts to local governments could be made.

The impact of the State's Budget problems have already resulted in a $73,647 cut to the City of Grand Marais' Local Government Aid (LGA) funding for 2010. This month, the City learned that an additional unallotment has been made in the amount of $33,352, this time from the Market Value Homestead Credit (MVHC). The State Legislature has not finalized the entire $1 Billion Supplemental Budget Plan, so the exact amount of the City's unallotment won't be known until June 2010, but the situation certainly isn't likely to improve.

Council, led by Dunsmoor, reviewed the 2010 planned projects, equipment needs, expenditures, and fixed assets depreciation. It became clear very quickly that Council is not in position to approve new spending without a clear understanding of what will be given up to do it.

City Council Meeting

Open Forum
No member of the Public opted to speak at the Open Forum.

Consent Agenda
The Consent Agenda was approved with no changes.

Sheriff's Fire Order
Council voted unanimously to approve Resolution Approving Fire Ban (Resolution 2010-02) as recommended by City Attorney Chris Hood and Cook County Sheriff Mark Falk. On April 22, 2010 Falk issued an Order prohibiting all campfires and recreational fires within Cook County, MN. Because Sheriff Falk's Order was more restrictive than the DNR Commissioner's and Superior National Forest Supervisor's Order, Hood recommended that the Council adopt this Resolution to be 100% consistent with the County. Hood said he believes the Sheriff has the authority to issue fire permits for businesses and organizations on a case by case basis.

North House Folks School Building Permit
Council approved a building permit for North House Folk School to move and expand their Blacksmith Shop. The proposed building complies with City zoning requirements. Council approval is required to approve this permit as a condition of the lease between NHFS and the City of Grand Marais. Greg Wright has met with the Park Board about the project. Council approved this building permit by a vote of 4 - 0. Councilor Kay Costello recused herself from this vote as she is employed by North House.

Personnel
Council unanimously approved hiring Lee Hall as a part time liquor store clerk to replace Buffy Butz who has resigned her position.

Council & Staff Reports
Jan Sivertson reported that several downtown business owners have expressed safety concerns about the old Theatre Building on Wisconsin Avenue. Council will review current Ordinances regarding dilapidated buildings and consider options for this building and others.

Sue Hakes publicly thanked Grand Marais resident and business owner Jim Shinners for coordinating the downtown clean up in celebration of the 40th Annual Earth Day. Shinners reported that over 75 people participated in the clean-up activities (see photo above). Supporting the project were the Cook County News Herald and WTIP Community Radio, US Border Patrol, Forest Service, Church Groups, Girl Scouts, Chamber of Commerce, North House Folk School, Harbor Friends, the Grand Marais Business Council and motivated individuals!

Hakes reported that Commissioner Bob Fenwick asked her to confirm with the Council that they still support including the Pool and Softball Field in the proposed Community/Rec Center. Council confirmed.

Mark Your Calendars
Wednesday, May 12 at 4:30 pm, City Council Meeting
Wednesday, May 26 at 3:30 pm, Budget Meeting
Wednesday, May 26 at 4:30 pm, City Council Meeting
Thursday, May 27 at 4:00 pm, Joint City/County/School/Tribal Council Meeting at Location TBD

Another Budget Worksession and City Council Meeting

Mayor Hakes and Councilors Costello, Lenz, Kennedy and Sivertson were all present for the Budget Worksession and City Council Meeting held Monday, November 9. Also present were Mike Roth, Kim Dunsmoor and Attorney Chris Hood. Present for the Worksession were Pat Hennessy, Mike Kunshier and Dave Tersteeg.

Budget Worksession

Pat Hennessy, Liquor Store Manager, gave an overview of Liquor Store Revenues and Expenses to date and the 2010 Budget. Liquor Store sales are up 3.8% through October. The Liquor Store is an important enterprise fund for the City of Grand Marais.

Mike Kunshier, Manager of Gunflint Hills Golf Courses, gave an overview of Revenues and Expenses to date and the 2010 Golf Course Budget. Also discussed were options for 2010 Course Rates. The Golf Course is an important asset to the City of Grand Marais drawing customers to the Rec Park Campground, as well as locals and tourists. Due to a nationwide decline over the past few years in golfing, the Golf Course has struggled and has shown losses. There was some discussion about whether to account for the Golf Course as an Enterprise Fund or change it to the General Fund.

City Council Meeting

Open Forum
Eric Humphrey and Jane Shinners, representing the Grand Marais Area Tourism Association (GMATA), reported several items of interest to the Council including 1) A major effort is underway to consolidate tourism marketing efforts throughout Cook County. GMATA, Gunflint Trail Association, Lutsen-Tofte Tourism Association, Grand Portage and the Cook County Events and Visitors Bureau are working together to form a 501(c)(3) umbrella organization. There will be (1) Director for the newly formed organization. GMATA will remain in its current location. The Chamber of Commerce will remain an independent entity. 2) A special Customer Service Training will be offered through Cook County Higher Ed on 12/16 or 12/17. 3) Local business owners raised nearly $6K for the North Shore Holiday downtown decorations. This will be matched with $5K from the City of Grand Marais.

Planning Commission Report
The Council unanimously approved Dale Speck's request for a variance from the requirement of a lot to have frontage on a public street. Council supported the Planning Commission's unanimous recommendation.

Liability Insurance Renewal
Paul Coe updated Council on the City's Liability Insurance renewal.

One Percent Sales Tax Recap and Next Steps
Grand Marais residents voted heavily in favor of the One Percent Sales Tax Referendum. GM East voted 61.8% YES and GM West voted 70% YES for an overall 66% in favor within the City of Grand Marais.

The Council acknowledged its pleasure in the success of the Referendum, which they had identified as its most important priority for 2009. Together and individually, the Council worked diligently with community members to pass this important tax. Jan Sivertson led the Committee to Pass the Referendum (thanks Jan!); Sue Hakes was also a member of that Committee. Councilors Costello and Kennedy were on the One Percent Committee that worked for nearly a year to to identify potential projects for Sales Tax Funding. All (5) City Councilors advocated for the Referendum publicly and particpated in the public process held throughout 2009.

Also in March 2009, Council identified building a swimming pool within the proposed Cook Community Center as a top priority. Council is ready to begin work in earnest to make this long-awaited dream become a reality. It is important to remember that a Community Center garnered the most support from residents of Cook County during the Public Process Phase of the Referendum Project. Hakes volunteered to participate as a member of the Community Center Committee which will meet this month.

Council discussed the next steps in working with the County to discuss the funding process and when funds will be available for the Community Center/Recreation Area and Library projects. Mayor Hakes drafted a letter to be presented by the full Council to the County Board asking for specific Community Center/Recreation Area funding. Councilor Costello requested the Library Project also be included in this request. Hakes will redraft the letter to include the Library.

Business Park Financing Update
Council voted to move forward in selling General Obligation bonds as planned to pay off the $1.6M debt incurred 3 years ago (January 2007) to pay for Business Park Infrastructure. If the EDA is successful in receiving any grant assistance fro the IRR as requested from Senator Tom Bakk, that money will be used to make the first bond payment.

Council & Staff Reports
Tim Kennedy reported that the Biomass Project proposal submitted in partnership with Ely did not receive Department of Energy grant funding.
Jan Sivertson gave a recap on the One Percent Sales Tax committee.
Bill Lenz prefers the Golf Course not be continued as an Enterprise Fund.
Sue Hakes reported that the DNR and City Staff are working together to find a resolution to the problems with City's Burn Pile. Hakes also reported that the DNR has renewed their effort to provide the City with a draft Joint Powers Agreement to be used as a roadmap for a Grand Marais Safe Harbor/Marina.

Mark Your Calendars
Wednesday Nov 18 at 4:30 PM City Council Meeting
Wednesday Nov 18 at 5:00 PM Noise Ordinance Public Hearing
Thursday Nov 19 a 4:00 PM Joint CCST Meeting at Courthouse
Wednesday Dec 9 3:30 PM Budget Worksession
Wednesday Dec 9 at 4:30 City Council Meeting
Wednesday Dec 30 4:30 City Council Meeting

City Council Meeting

The Mayor and all members of the City Council were present for today's City Council Meeting. Also present were Mike Roth, Kim Dunsmoor, Dave Tersteeg and City Attorney Chris Hood.

Open Forum
Mark Sandbo, representing Grand Marais Hotel Company, informed the Council that in response to the letter received from the City Council, a new Shoreline sign would be in place within a month.

Consent Agenda
Council approved the Consent Agenda with no changes.

Christmas Parade Permit
Council approved the Christmas Parade Permit requested by the Chamber of Commerce. Bev Wolke infromed the Council that the Parade will start at 6 PM on Tuesday, November 24, downtown Grand Marais.

Lion's Club Request for Public Restrooms
Ken Walenski and Max Bichel of the Grand Marais Lion's Club expressed concern for the lack of enough public restrooms in downtown Grand Marais. Their request was supported by several business owners in the audience. Walenski and Bichel explained that the Lion's Club is a service organization with the motto "We Serve". In the spirit of community service, the Lion's Club has offered to take this project on as a Community Service Project. The Lion's Club has asked the Council to endorse the Lion's willingness to form a committee to work toward solving the problem of identifying an appropriate location and funding sources for public restrooms. Council acknowledged and agreed there is a need and fully supported the Lion's request. Council will add Public Restrooms to their Capital Improvement Planning.

Harbor Park/Downtown Holiday Decorating
Diane Brostrom, Director Grand Marais Area Tourism and Committee Member for "A North Shore Holiday" requested assistance from the City to decorate Harbor Park and the Downtown Area for the Holiday Season. Brostrom's request was supported by several business owners in the audience. Time is of the essence as the holiday season will be kicked off in just a few short weeks. After some discussion, including members of the Business Community, Council agreed to provide a match up to $5000 to purchase lighting and holiday decorations that might be used for several years. Council also agreed to provide labor for hanging lights & banners, putting up a tree, etc.

Led by the Cook County Events and Visitors Bureau, local retailers and marketers throughout the County are taking full advantage of a one-time $15,000 grant from Explore Minnesota Tourism to promote shopping and activities on the North Shore this holiday season. This promotion includes a direct mailing of 10,000 pieces.

The investment in decorating Grand Marais's Harbor Park/downtown area, combined with this significant CCEVB marketing effort are part of a unified effort to make Cook County and Grand Marais a holiday shopping and vacation destination.

PAC-13
PAC-13 broadcasting equipment has been relocated to City Hall, allowing City Staff to update and broadcast PAC 13. Council decided to video tape Council Meetings in the simplest manner and at the lowest cost. A process for broadcasting Public Service Announcements is being determined.

Cairn Sign Maintenance Agreement
Modifications to the Cairn Sign Maintenance Agreement were recommended by City Attorney Chris Hood and accepted by Council.

Other Items
Mike Roth reported that the City's brush pile is being burned. Complaints of smoke in the school and in the hospital have been reported. Wind conditions, combined with the amount of green brush from the last storm, have caused more smoke than is typical. Council discussed options, but there is no clear solution to this problem.

Council & Staff Reports
Mike Roth reported on the October 27 meeting with Senator Tom Bakk to request funding assistance for the repayment of the Business Park Infrastructure debt. Meeting attendees included Roth, Matt Geretschlaeger (EDA Director), Hal Greenwood, Dick Grabko (SEH), and Mike Larson (IRRB). Specifically, the EDA asked if a previously awarded grant for Housing Development ($135,000) might be transferred to pay for Business Development Infrastructure. The Housing Development project is not proceeding as planned. A loan with favorable terms was also requested. Roth reported that Senator Bakk would take our requests under consideration at the IRRB.
Tim Kennedy reported that the Biomass District Heating Project Group is still meeting. No word regarding the Federal Grant submitted with the City of Ely has been heard.
Jan Sivertson reported that 1 proposal was received in response to the EDA's Request for Proposals for Real Estate Brokers to list, sell and market lots in the Business Park. The proposal received was from Gunflint Realty. City Attorney Chris Hood will review to be sure there is no conflict of interest.
Sue Hakes gave notice that the Northeastern Entrepreneur Fund's Women's Business Luncheon will be held at City Hall on November 18. Hakes will be speaking on the topic "Know Your City Government".

Mark Your Calendars
Mon November 9 at 3:30 PM Worksession--Budget (Liquor Store & Golf Course)
Mon November 9 at 4:30 PM City Council Meeting
Wed November 18 at 4:30 PM City Council Meeting
Wed November 18 at 5:00 PM Noise Ordinance Public Hearing
Thur November 19 at 4:00 PM Joint C/C/S/T at Courthouse
Wed December 9 at 3:30 PM Worksession-Budget
Wed December 9 at 4:30 PM City Council Meeting
Wed December 30 at 4:30 PM City Countil Meeting

Bonding Worksession and City Council Meeting

Sue Hakes and all City Councilors were present for today's Worksession and City Council Meeting. Also in attendance were Mike Roth, Kim Dunsmoor and Carolyn Drude, Senior Financial Advisor/Executive VP of Ehlers & Associates.

Worksession to Re-finance EDA Infrastructure Debt
Just about 3 years ago (January 2007) the City of Grand Marais issued $1,630,000 General Obligation (G.O.) Temporary Improvements Bonds to provide financing for the Sewer, Water & Street infrastructure improvements in the EDA Business Park. The plan at that time was for the EDA to sell lots in the Business Park and repay the City $60,000 for each lot sold until the debt was repaid. Lot sales have not occurred as planned and the EDA is unable to repay this debt. This 3-year G.O. Temporary Improvement Bond is now due in January 2010 and the City is responsible for this payment.

The City Council once again met with Ehlers & Associates to discuss options for refinancing this Temporary Bond including the sale of 10, 15 or 20-year G.O. Improvement Bonds . Carolyn Drude of Ehers & Associates also offered for consideration a 20-year Build America Bond which the Council is considering. In general, Build America Bonds bear a higher interest rate, but the Federal government will pay 35% of the interest payment through an annual rebate reducing the cost to the City. Council requested time to consider more fully the Build America Bond and will meet again at 12:00 Noon on Friday to decide.

City Council Meeting

Open Forum
Nobody from the Public opted to address the Council at the Open Forum.

Variance Request
Council unanimously approved the request from Alyssa and Jonathan Hedstrom for a variance from the setback from residentially zoned property to construct an addition to the South and West side of their commercial building located in the H61 District.

EDA Business Park Discussion
Even though Council is working to refinance the $1.63M debt owed by the EDA on the Cedar Grove Business Park, they will continue to hold the EDA accountable for repayment. As agreed by the Council previously, Mayor Hakes wrote to the EDA on behalf of the City asking them to explore all options for this debt repayment. The City has also asked for a comprehensive marketing plan to sell lots in the Business Park. Jan Sivertson reported that the EDA has published a Request for Proposals soliciting bids from licensed real estate brokers to list, sell and market 31 lots in the Business Development Park.

Cairn Signs Maintenance Agreement
The City has agreed to provide the maintenance for the Cairn signs at the entrance to the City of Grand Marais and the Gunflint Trail. Details are being worked out between the City and the Arrowhead Regional Development Commission.

Noise Ordinance Public Hearing
A Public Hearing was promised and has been scheduled to allow the Public to check in with the Council regarding the Noise Ordinance that was established in 2009. The Public is encouraged to attend this Public Hearing at 5:00 on Wednesday November 18.

Council & Staff Reports
Mike Roth asked for Council to approve replacement of the Liquor Store awning that blew down in the storm. Council approved the purchase.
Tim Kennedy reported that the PUC has agreed to extend their contract with SMMPA through 2050. A presentation will be provided to Council for review and support. Kennedy also raised the issue of the Shoreline sign and the danger it caused during the recent windstorm. Council agreed that the City should send correspondence to the owner asking that the sign be removed or restored to a safe condition.
Jan Sivertson gave an update of the on-going efforts to pass the One Percent Sales Tax. Ballots will be mailed to all registered voters in the County on Friday October 16. Jan also asked each member of the Council if they supported the One Percent Tax. Each member of the Council shared their support for this proposed tax without hesitation. Sivertson also raised the need for more public restrooms downtown. And, Sivertson shared the CCEVB plans to make Cook County a December holiday destination. Council agreed to explore ways to support this effort including the possibilities of providing a large holiday tree in Harbor Park, lights and electricity.
Bill Lenz reported on the revenues for the Park Department including an increase in Pool, Campground and Marina revenues and a decrease in Golf Course Revenues, mostly due to weather. Lenz also reported that the Park Board voted to de-ice the docks at the Marina by moving water around them as opposed to removing the docks in the Fall and putting them back in the Spring. De-icing is less expensive than taking the docks in and out.
Kay Costello reported that the Library has begun their strategic planning and has (2) full day sessions planned.
Sue Hakes reported that she has also heard requests from both the Lions Club and GMATA for more public restrooms downtown. Hakes has encouraged these groups to come before the Council with their requests; Mike Roth confirmed they have asked to be on the agenda for October 28. Hakes also shared that several community members have asked for Community Garden Space and Council discussed various possibilities including the Business Park.

Meeting was recessed and will resume at Noon on Friday October 16, 2009.

Mark Your Calendars
Please note that there are several changes to the usual meeting schedule:

FRI October 16 at Noon City Council will resume Council Meeting to discuss Bonding options
WED October 28 at 4:30 City Council Meeting
MON November 9 at 3:30 Council Worksession to discuss Liquor Store & Golf Course Budgets
MON November 9 at 4:30 City Council Meeting
WED November 18 at 4:30 City Council Meeting (will authorize Bond Sale)
WED November 18 at 5:00 Noise Ordinance Public Hearing
THUR November 19 4:00 Joint City/County/School/Tribal Council Meeting at Courthouse

The Liquor Store and the Library

The Liquor Store

Earlier in the week, Pat Hennessy, Liquor Store Manager, showed me around the Grand Marais Liquor Store, an extremely important City Asset. The Liquor Store shares the City Hall Municipal Building with City Offices, the Tourist Information Center and the EDA. The building is certainly large enough for each of these entities, but because the building is a former jail and former fire hall, much of the space just doesn't work. The Liquor Store could use more storage and work space. In addition, the Municipal Building has serious maintenance issues including electrical & HVAC systems, roof and plumbing. Solutions to the immediate storage needs for the Liquor Store are being explored.

The Library

This morning, Librarian Linda Chappell gave me the full tour of the Library. Like the Liquor Store, the Library is squeezed into its space. Every nook and cranny has a purpose and something in it. The Library's role to provide free access to information in a variety of formats is ever changing as technology evolves. Our Library is in good condition; we need to maintain it to keep it in good repair. It's also in a wonderful central location that makes a statement about what we value in this Community.