December 4

CITY OF HIAWATHA

CITY COMMISSION MEETING

MONDAY, DECEMBER 4, 2006

5:35 P.M.

HIAWATHA CITY HALL

723 OREGON ST.

1.      Pledge of Allegiance/ Call to Order

The Hiawatha City Commission met in regular session at 5:35 p.m. on Monday, December 4, 2006, at City Hall with Mayor Gernon, Commissioner Schmitt, Commissioner Collins, Commissioner Gamble, and Commissioner Shamburg present.

2.      Approval of minutes of the November 20, 2006 City Commission meeting.

Commissioner Shamburg made a motion, seconded by Commissioner Gamble, to approve the minutes of the November 20, 2006 City Commission meeting as presented. Motion carried, 4 ayes. Commissioner Schmitt abstained.

3.      Presentation of petitions, public comments, memorials.

4.      Public Hearing – Koch & Co. IRB

Mayor Gernon stated that the public hearing was being held to comply with the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended. He stated that the notice for this public hearing was published in the Hiawatha World on Friday, November 17, 2006. He said that the purpose of this public hearing was to allow the public to voice their approval for or against the issuance by the City of Hiawatha, Kansas, of $800,000 private activity revenue bonds for Koch & Co., Inc. project, to finance the acquisition of a manufacturing facility located at 100 Industrial Drive within the City, including real estate, buildings, and improvements as more specifically described in the notice of publication.

Mayor Gernon stated that he would be the hearing officer for the public hearing, and requested that anyone who speaks to first state and spell their name, give the company or organization name that they represent, if any, and leave a business card if they have one, with the City Clerk. He then invited any member of the public to comment on the proposed plan of financing for the issuance of the leasehold revenue improvement bonds for the Koch & Co. manufacturing facility, and also asked that they use the microphone at the podium for purposes of clarification and recording.

Mayor Gernon then opened the public hearing at 5:35 p.m.

Janet Garms of Kutac Rock, bond counsel, said that a public hearing was held earlier. She then explained why they needed to conduct a second public hearing. She said that the state requires only seven days notice of publication for a hearing, while the federal regulations require fourteen days notice.

She said that since the company has changed the scope of the project, it now qualifies under federal law for a tax exempt bond.

Jon Daeschner, Hiawatha Foundation for Economic Development, commented on how great it was to have Koch & Co. come to Hiawatha. He said it will be a big improvement to our workforce, and our city. He said that right now Hiawatha is on the tip of expansion and it is very nice to have companies like Koch & Co. want to come to Hiawatha.

Rance Hixson also said that it was a long awaited opportunity to get the old Flairfold building back up and running as a new business.

There being no other public comments, Mayor Gernon closed the public hearing at 5:44 p.m.

Old Business

5.      Approve Change Order for Bottorff Construction for Traffic Light Installation.

City Administrator Lynne Ladner explained that the traffic signal lights were not an approved portion of the streetscape project. As such, the purchase of signal lights, installation of the lights and the boring and installation of conduit for the lights was not included in the price of the project. She said that the Commission had already approved the purchase of the signal lights and had approved the installation bid for the signal lights. Change order #3 would approve the boring and installation of conduit for these signal lights. It would also approve the installation of two outlet boxes in front of the courthouse for use with holiday decorations and during downtown events around the Courthouse square.

Administrator Ladner recommended approving the change order minus line item #1. She said they are still seeking additional information on that line item. The new amount of the change order without line item #1 would be $5,604. Line item #1 will come back before the Commission at a later date with additional information.

Commissioner Schmitt made a motion, seconded by Commissioner Shamburg, to approve Change Order #3, with a deduct for line item #1 of $2,838, for a net of $5,604, for installation of the traffic signal light conduit and the outlets in front of the Courthouse. Motion carried. 5 ayes.

New Business

The Commission agreed to move to item #13 for Koch & Co. IRB, so that the Koch & Co. group could go ahead with the discussion of the ordinance and then be allowed to leave.

 13. Consider Approval of the Koch & Co. IRB Ordinance.

Administrator Ladner presented the ordinance authorizing the City of Hiawatha, Kansas, to issue private activity revenue bonds, series 2006 (Koch & Co., Inc., Project), in the principal amount of $800,000, for the purpose of financing the acquisition of a manufacturing facility and paying certain costs relating thereto; authorizing the City to enter into a trust indenture with Morrill & Janes Bank and Trust Co., as trustee; authorizing the City to enter into a lease agreement and a payment in lieu of tax agreement with Koch & Co., Inc.; and authorizing and approving the execution of certain other documents and the taking of other actions in connection with the issuance of said bonds.

The ordinance, if approved, would become Ordinance 974.

Commissioner Schmitt questioned the removal of the sentence “including health insurance” from the lease agreement.

Jeff Conner, Koch & Co., explained that they agreed to provide the same benefits for the Hiawatha employees as they do for their Seneca employees. He said they declined to specify a health insurance plan because if Koch & Co. changes their benefit package in the next ten years, there may be an expectation that the Hiawatha employees would continue to receive health insurance benefits even if the other company employees do not.

Commissioner Schmitt argued that in June when they first presented the project they were told the health insurance would be provided.

Commissioner Shamburg thought that it would be satisfactory so long as the Hiawatha employees receive the same benefit package as the Seneca employees.

A citizen in the audience questioned what the PILOT agreement was.

Mayor Gernon explained that if Koch & Co. does not meet the requirement for the number of employees to be added each year, then they would be required to pay a percentage of the ad valorem taxes assessed. Basically, if they do not employ anybody, they would be fully taxed.

Commissioner Schmitt asked what the reason was for going from the federally taxed to the private activity bonds. Ms. Garms explained that the bonds were still private activity bonds and would have been state exempt anyway. The change was to make them federally exempt as well.

Janet Garms, Kutac Rock, bond counsel, explained that originally Koch & Co. was going to lease part of the building to another party. However, under Federal Law, in order to be eligible for the tax exempt bonds, they would be required to use the entire facility as manufacturing, as well as some other requirements. After their negotiations with the City of Hiawatha concerning the employee issues, it was decided that with more employees coming to the Hiawatha plant, they would be able to use the entire building for manufacturing purposes. This qualified them for the tax exempt bonds.

Commissioner Collins made a motion, seconded by Commissioner Gamble, to approve Ordinance 974. Motion carried. 4 ayes. 1 nay. Commissioner Schmitt voted nay.

6.      Consider Approval of Payment to BG Consultants for October Services.

Administrator Ladner explained that the City had received an invoice for Downtown Streetscape Administration expense from BG Consultants for the month of October in the amount of $11,060.49. Of this, the 80% KDOT portion was calculated to be $8,848.39. The remaining 20%, $2,212.10 would be submitted to Hiawatha Redevelopment, Inc. for reimbursement.

Commissioner Gamble made a motion, seconded by Commissioner Shamburg, to approve the payment to BG Consultants in the amount of $11,060.49 for Downtown Streetscape Construction administration. Motion carried, 5 ayes.

7.      Consider Approval of Payment of First Half of Property Tax on the Longfellow Property.

Administrator Ladner explained that the City has received the property tax bills for the Longfellow properties, the first half which is due by December 20, 2006, is $20,460.20. The funds are available from the ¼% sales tax revenues which were set up for this purpose.

Commissioner Gamble made a motion, seconded by Commissioner Shamburg, to approve payment for the first half of the Longfellow property tax in the amount of $20,460.20. Motion carried, 5 ayes.

8.      Consider Approval of Payment to Lowenthal, Singleton, Webb & Wilson for Consultation Regarding Accounting and Assistance with Amendments to 2006 Budget.

Administrator Ladner explained that the City has received a bill from Lowenthal, Singleton, Webb & Wilson for the preparation of Budget Amendments to the 2006 Budget, as well as other consultations with the Clerk and Administrator in clarifying fund transfers and general ledger entries in order to close out the 2006 fiscal year. She explained that we are trying to make sure that we end this year with all funds in balance with the State Budget. The budget hearing has been set for December 18, 2006.

Commissioner Schmitt made a motion, seconded by Commissioner Gamble, to approve the payment to Lowenthal, Singleton, Webb & Wilson for consultation regarding accounting and assistance with the amendments for the 2006 Budget in the amount of $1900. Motion carried. 5 ayes.

9.      Consider Approval of 2007 Summit License Fee, Support Fee and Internet Support Fee with Data Technologies, Inc.

Administrator Ladner explained that the City had received the invoice for our Summit Software License, support and Internet Support Fees for 2007. This is the A/P, A/R, and utility billing software used by the city. She said that since she did not foresee the City changing software any time soon, we need to renew this license. It expires at the end of December 2006.

She indicated that the software is working satisfactorily for the City.

Commissioner Gamble made a motion, seconded by Commissioner Schmitt, to approve the payment for  the 2007 Summit License Fee, Support Fee and Internet Support Fee in the amount of $4,891.24. Motion carried. 5 ayes.

10.  Consider Approval of Payment to Emergency Apparatus Maintenance, Inc., for Repairs to Snorkel Truck.

Administrator Ladner explained that in September the Commission approved the repairs to Engine #4 in the amount of $1,702.05. The repairs have been completed and the final bill comes to $2,254.59. The reason for the increase in cost is that the original estimate did not include travel costs for the repair nor did it include other miscellaneous expenses such as the truck fee and accessories such as shop rags, cleaning solvents, etc.

The extra costs were questioned. Administrator Ladner said that they had expressed their displeasure to the company about the travel costs and other extra costs.

Commissioner Collins questioned why the bid was not a clean bid, and went over that much in costs.

Administrator Ladner indicated that they would work on their bidding process.

Administrator Ladner explained that the original amount was an estimate only, and not an actual bid. Also, the final amount of $2,254.59 was still under the other quote.

Commissioner Collins made a motion, seconded by Commissioner Gamble, to approve the payment to Emergency Apparatus Maintenance, Inc. for repairs to Engine #4 in the amount of $2,254.59. Motion carried, 5 ayes.

11.  Consider Approval of Final Payment to Bartlett & West on the Wastewater Project.

Administrator Ladner said that the payment should actually be to AHRS. She said that the City had received and the City Attorney had reviewed the documents for the final payment to AHRS for Phase I and Phase II of the Waste Water Treatment Plant. In March, the Commission had voted to assess liquidated damages to the contractor.

It was the City Attorney’s opinion that we can deduct the amount of engineering and inspection fees because AHRS did go over the contract days of work and caused an additional charge to be made for inspection fees.

Dan Fisher from RDA recommended that we pay the entire amount because we are still under the grant amount.

As there was some confusion about whether the grant money was actually only an 80% grant or if it was a complete grant, the decision was made to table the approval until next week. Dave Grimm is to find out more information on the issue and present it to the Commission at that time.

12.  Consider Approval of Payment #4 to Bottorff Construction.

Administrator Ladner explained that the City has received an invoice for the Downtown Streetscape construction from Bottorff for the work completed through November 30 in the amount of $149,607.90. The streetscape portion of this invoice is $137,574.00 and the water main portion is $12,033.90. Of the streetscape amount, the 80% portion to be reimbursed by the KDOT grant is calculated to be $110,059.20.

Commissioner Schmitt made a motion, seconded by Commissioner Gamble, to approve payment #4 to Bottorff Construction in the amount of $149,670.90, which $137,574 is for the streetscape project with 80% to be submitted to KDOT for reimbursement at $110,059.20, with the remaining $12,607.90 on the water main project. Motion carried, 5 ayes.

     14.  CONSENT AGENDA

1. Appropriation Ordinance #1107 in the amount of $44,364.65.
2. Approve Utility Refunds in the amount of $124.96.
3. Approve Contractor License Renewal (2), Electrician License Renewals (3), Plumber License Renewals (5), Tree Trimmer License Renewal (1), and Cereal Malt Beverage Renewal (1).

Commissioner Schmitt made a motion, seconded by Commissioner Gamble, to approve the consent agenda as presented. Motion carried, 5 ayes.

   15.  Lynne Ladner, City Administrator.

Administrator Ladner reminded the Commission about City Hall Day at the Capital. She said that she is going to attend. They need to know as soon as possible who will be attending, but cancellations can be made up until January 23.

Concerning the credit application for Falls City Farm & Home, Administrator Ladner said that she had spoken to the new owners of Hiawatha Farm & Home. They indicated that they will continue to carry clothing, so the City will continue to use them for uniform purchases.

A private citizen has asked to rent the City firing range to be used to teach a concealed carry weapons course. Consultations with the Police Chief and the City Attorney  indicated that their opinion is that the facility should not be opened to the public. If the firing range was made available to the public, issues requiring rental rates, insurance and bonding, and an on-site City employee would need to be addressed.

The Commission agreed that the City firing range should not be open to the public.

Administrator Ladner reported that the Streetscape project sidewalks should be finished this week. A substantial number of streetlights should be in place by the end of this week.

Hiawatha has two new businesses. There has been a ribbon cutting for the new Alltel business, and Main Street Floral Shop is now open.

The City has also had someone express an interest in opening a pawn shop in Hiawatha. A question has arisen concerning whether a business license would be required. The state requires them to have a business license only if the City requires other businesses to be licensed. A licensing requirement could be created for that type of business specifically.

The Commission agreed that they should not be singled out.

Administrator Ladner said that we have been approached by other communities and individuals to purchase the old holiday decorations, and asked if we should set a price on them and do first come, first serve or take bids. She suggested setting a price. The Commission told her to do so. Dean Tollefson, citizen, reminded them that by state statute, the price must be under $100 or the items would need to be by sealed bid.

Christmas & New Year’s Day both fall on a Monday this year. Administrator Ladner asked when meeting should be set for those two weeks. The Commission suggested holding those meetings on Tuesdays, December 26 and January 2.

Administrator Ladner said that the City needs to establish a new Treasury Index bank account so that funds from the Streetlight bond and sales tax could be transferred to the higher interest bearing account. Also a Treasury Index bank account needs to be set up and funds transferred for the remaining swimming pool funds so that money can draw better interest as well. She also requested permission to transfer money from the waste water grant savings account to the checking to balance that fund as it currently indicates a negative balance.

Commissioner Collins requested that a resolution be drawn up to establish these transfers and be put on the agenda for next week.

   16.  Mayor Gernon.

Mayor Gernon asked for an update on the RFQ’s.

Administrator Ladner said that they have held the first interview today, and have one scheduled on Friday.

He also asked for an update on the sale of the property on First Street. Administrator Ladner said that she had met with a survey company today, and they are to be faxing over a quote as to what they would charge to do a survey to split the property.

He asked for input as to whether or not the City would require Tom Singleton to attend the Budget Amendment Hearing on December 18, 2006. Commissioner Collins and Commissioner Gamble said that he should be here to address any questions that may arise at that meeting.

   17.  Com. William Collins.

   18.  Com. Curtis Gamble.

   19.  Com. Marianne Schmitt.

Commissioner Schmitt said that she would like to revisit the walking and biking trail issue in 2007.

Administrator Ladner suggested combining this issue with a Federal Grant for safe routes to school. Mayor Gernon suggested putting that on the agenda and forming a committee to start working on that issue.

Commissioner Schmitt also asked about the status on the review of the Municipal Code. Administrator Ladner said that she would like to schedule a work session on January 8 and January 15, 2007.

   20.  Com. Steffen Shamburg.

   21.  Adjourn.

Commissioner Shamburg made a motion, seconded by Commissioner Gamble, to adjourn. Motion carried, 5 ayes.

Meeting adjourned at 6:46 pm.