May 1
CITY OF HIAWATHA
CITY COMMISSION MINUTES
MONDAY, MAY 1, 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 Monday, May 1, 2006 at 5:35 p.m. at City Hall with Mayor Trant, Mayor-elect Gernon, Commissioner Collins, Commissioner Shamburg, Commissioner Gamble and Commissioner Schmidt present.
2. Installation of Mayor-elect Crosby Gernon.
Hiawatha City Clerk Vivian Constable administered the Oath of Office to Mayor-elect Crosby Gernon. Mayor Trant stepped down and turned the meeting over to Mayor Gernon.
3. Approval of minutes of the April 24, 2006 City Commission Meeting
Commissioner Collins made a motion, seconded by Commissioner Gamble to approve the minutes of the April 24, 2006 City Commission Meeting. Motion carried, 5 ayes.
4. Presentation of petitions, public comments, memorials
a. Hiawatha Sesquicentennial Committee Request for Support and Funding.
Catherine Newland presented a list of sponsored events scheduled for the celebration of the Sesquicentennial of Hiawatha. The committee, consisting of Catherine Newland, Anne Arnesen, Peggy LaCounte, Kay Demel, Jere Bruning, Beverly Sunderman, Lori Christian, and Lora Brobst, requested some ideas for the sesquicentennial celebration. They wanted to see what the city commissioners would do for the celebration in terms of time and funding. They need someone to take charge of the project.
Mayor Gernon agreed that the city should do something, and asked what their budget was for the event.
Newland said that they didn’t know how much it would take. They need guidance on what they would be able to fund, depending on how much funding was received. She said that they would need money for posters, advertising, and purchasing items for resale as souvenirs.
Beverly Sunderman talked about the maple leaf quilt they were creating for the sesquicentennial to raise money. Leslie Idol presented some of the activities that went on for the centennial, such as square dances, pageant, beard contest, and free movies.
Commissioner Collins asked if an amount of $5,000 would be workable. He asked Interim City Administrator where the money would come from. The committee agreed that it would be very generous.
Interim City Administrator Armour replied that there was no money available in the 2006 budget for something of that sort, that it could be put into the budget for 2007.
Lora Brobst, Chamber of Commerce, said that there were some deadlines in June.
Commissioner Schmidt asked if they could get back with them in 3 weeks, to give them time to look at the budget.
Newland said they really needed a chairperson to get things organized. She felt that it needed to be a city event. It would be easier to get someone to take charge if they knew they had the backing of the city.
Mayor Gernon said that if the chamber could designate three people to be on the committee, they could get something going. He asked Jon Daeschner if perhaps they could get someone from HFED who could help. He told the committee to check to see what Marysville did for their celebration last year.
Anne Arneson said that they had no more meetings scheduled, that they really needed some help from the city at this point.
Mayor Gernon asked that Tom look over the budget to see if there was anything available.
Old Business
5. KDOT Aviation Division Airport Safety Inspection of Hiawatha Municipal Airport Report.
Interim City Administrator Tom Armour said that the safety inspection had been completed. The State only listed two items that need the city’s attention. One item was that we need to replace the windsock. The other item was that we need to remove some trees, some of which are not on city property. Interim Administrator Armour stated that the trees would be the main problem, getting the property owners to agree. He will get back with the commission on the problem.
6. Hemisphere Bond Issue
It was decided to discuss item 7 concerning the Knouse well generator and to return to item 8 to allow Kevin Cowan with Gilmore & Bell time to arrive at the meeting.
Mayor Gernon introduced Kevin Cowan.
Interim City Administrator Tom Armour discussed the bond issue necessary to support the Hemisphere project of purchasing the old Wal-Mart building. The project is being channeled through the HFED organization. The issue would be between $750,000 and $1,000,000, depending on Mr. Cowen’s advise about earlier thinking to piggyback some $225,000 to $250,000 to pay back reserves used to fund overages on the Crosswind Project.
Assistant City Attorney Kevin Hill suggested that the commissioners go into executive session to discuss the purchase of the real estate for a period 20 minutes.
Commissioner Schmitt made a motion, seconded by Commissioner Shamburg, to go to executive session for the purpose of preliminary discussion the purchase of the real estate, to include bond council, [ Kevin Cowan from Gilmore & Bell], Assistant City Attorney Kevin Hill, and Interim City Administrator Tom Armour for a period of 20 minutes, and to return to open session at 6:27 p.m. Motion carried, 5 ayes.
Commissioner Collins made a motion, seconded by Commissioner Shamburg, to return to open session at 6:27 p.m. Motion carried, 5 ayes.
Mayor Gernon introduced Kevin Cowan with Gilmore & Bell, who briefed the commission on the bond information. He discussed Ordinance #961, which authorizes the city to execute general obligation bonds for the Hemisphere Project.
Commissioner Schmitt made a motion, seconded by Commissioner Shamburg, to approve Ordinance #961, a Home Rule Ordinance for the City of Hiawatha, Kansas, authorizing the issuance of general obligation bonds of the city to provide funds to finance the building for economic development purposes in the city and authorize the mayor and the city clerk to sign. Motion carried, 5 ayes.
Cowan said that they did not need additional authority through ordinance for Crosswinds because a year ago their ordinance [Ordinance #940] authorized $2,600,00 for that project and they issued only $2,000,000.
Cowan explained that under Kansas Law they have to publicly sell those bonds and set a date for the public sale of those bonds. That date, under this resolution draft, is May 22, 2006. With that sale date, they anticipate a closing date on the bonds of about June 8, 2006. They could do that a little earlier or a little later, depending on the real estate questions. The resolution principally approves the attached Notice of Bond Sale and authorizes it’s use in the sale of $1,025,000 in general obligation bonds.
Cowan said that the Notice of Bond Sale document gives all the details of the maturity schedule, the 20 year maturity schedule beginning in 2007 and running through 2026. It does provide for early redemption of the bond in 2014 at the option of the city.
Cowan said that May 22, 2006 would be the sale date. Cowan passed out some information on the interest rates of the bond. The anticipated debt service schedule is at an interest rate of 4.5%, with approximately $80,000 due each year. The tax rate levy, using last year’s figures, would be between 2.5 and 3.9 mills if you had to levy mills for the debt service and didn’t have any additional sources to get tax revenues.
Cowen explained that the home owner impact, in cost of increased taxes on a $50,000 house would be initially $22 per year, decreasing each year down to $14.82 in the last year. On an $80,000 house it would be $35 decreasing down to $20. For a $100,000 house would cost $44 down to $30 in the last year. A $125,000 house ranges from $56 down to $37 in the last year.
Mayor Gernon asked if the new Wal-Mart appraisal was included in the tax assessment. Cowan indicated that it was not. The new Wal-Mart building was assessed at $4,000,000 per Marian Tubach, of HFED.
Mayor Gernon asked about sales tax revenue. Tubach explained that from March of 2005 to March of 2006, there was in increase of 3.3%, but that Wal-Mart had only been open for two weeks at that time.
Cory Shue gave an update on the building alteration costs. He said that they had engaged an architect from the Kansas City area. They have a general contractor engaged as well. They will start as soon as they get confirmation. Right now they are at the $2,000.000 mark.
Kevin Cowan reminded the commission that there is a ten year abatement on the property tax on the building that will come back on. They could push some debt service back to the later years which would make it a little more affordable.
Cowan said that they could wait to approve the resolution until next week, if they wanted to take time to look at the numbers, or if they wanted to pass the resolution tonight subject to looking at the debt service schedule.
Mayor Gernon queried that the resolution itself would not affect how they structured the bond. Cowan said that was correct.
Cowan said that it would approve the Notice of Bond Sale which does have the bond structure in it, plus the resolution to change the term, with the approval of the mayor and the city clerk.
Cowan said that concerning the required publication of the Notice of Sale in the Kansas Register, which only publishes on Thursday, to not publish the notice until May 11, which would announce the sale date not on the 22nd but the week of the 29th.
Commissioner Schmitt asked for clarification on whether or not it was imperative that the resolution be passed this week.
Cowan said that if they want the bond sale on May 22nd it would need to be approved this week.
Commissioner Gamble said that he would like to see the numbers, that if they could wait a week it would be better.
Cowan said that the reason the used the level debt service was because that was how they had done the Crosswinds schedule last year. We have some different circumstances from what we had last year and in previous years with Wal-Mart coming aboard and maybe in later years adding valuation.
Commissioner Schmitt asked how much variation there would be as far as new numbers, if it would be significant.
Cowan replied that currently they have about one third paid back in the first 10 years, and approximately two thirds in the second 10 years. It could be a higher interest in those years.
Mayor Gernon said that he thought the big question was what the best solution was.
Commissioner Schmitt asked if they passed the resolution tonight and then decided to change the schedule, would they need to make a motion to do that, or would the mayor have the authority to do that.
Cowan said that the mayor would have the authority to do that. He also reiterated that if they want the sale of the bonds to be May 22, it would need to be passed tonight, or the sale would have to be postponed until May 29, because of the publication of the Notice of Bond Sale in the Kansas Register. It would take a week to get the publication in and the sale could not be held until approximately a week after publication. The major terms would be included in that publication.
Commissioner Schmitt asked that if they went from paying one third of the principal in the first ten years to one fourth, does that have to be included in the publication?
Cowan replied that it did.
Commissioner Schmitt said that in other words, that would actually give them only until this Thursday [May 4] to make any changes to the numbers, if the resolution was passed tonight.
Mayor Gernon asked what the closing date for the purchase was.
Sheila Schwalm of Heartland Realty stated that June 13, 2006, was the closing date. She would need to have everything ready a few days prior.
Cowan said if they wait a week, he could provide three or four different sets of numbers. They could get the numbers together by tomorrow. If the mayor would have time to review them by Thursday, it would be sufficient.
Mayor Gernon expressed concern about the closing date being right down to the wire, but if he didn’t think it would make that much difference to wait and be able to look over the numbers, then maybe that is what they should do.
Commissioner Schmitt reminded them that there would be one less day due to the Memorial Day holiday. She felt that if they could get the numbers by Wednesday, then it shouldn’t be any problem to go ahead and make a decision.
Commissioner Collins thought they should go ahead and get the numbers and then make a decision.
Cowan said the other thing that they could do is to send the Notice of Sale in before the resolution is passed and then pass the resolution after to stay on the same schedule.
Mayor Gernon suggested that they look at the numbers first and then pass the resolution.
Commissioner Shamburg thought that it would be a good idea to wait on passing the resolution until they look at the numbers.
Cowan asked if there would be meeting Tuesday after Memorial Day, which the reply was that they would be.
Commissioner Shamburg said that if the numbers changed significantly and they had the information by Thursday of this week, they could go ahead and send the Notice of Sale for publication and then pass the resolution the next week and stay on schedule.
Commissioner Collins left the meeting at 6:59 p.m. and returned at 7:03 p.m.
Commissioner Schmitt told the commission that she would not be at the meeting on May 8, 2006.
Mayor Gernon suggested that they table it and make some decisions a week from tonight. He asked Kevin Cowan if he would be here next week, to which he replied that he could be.
Commissioner Schmitt decided that if Cowan could get the information to them by Tuesday evening [May 3], they would have all day Wednesday to look it over. She thought they should go ahead with approving the resolution tonight.
Commissioner Schmitt made a motion, seconded by Commissioner Collins, to approve Resolution 2006-03 authorizing the offering for sale of general obligation bonds series 2006 for the city of Hiawatha, Kansas and authorize the mayor to sign; motion amended to approve Resolution 2006-03 with the mayor’s authorization to approve a change in the notice of bond sale based on the new numbers. Motion carried, 4 ayes. Commissioner Gamble voted nay.
Assistant City Attorney Kevin Hill presented the information on the Hemisphere lease terms. Since that time the conditions have been met by both parties. The lease agreement was presented to the commissioners for their review. Commencement date of the lease would be basically the closing date of July 1, 2006.
Commissioner Shamburg made a motion, seconded by Commissioner Gamble, to approve the lease agreement presented by Kevin Hill for the Wal-Mart building to Hemisphere GPS with the insertion of the Resolution #2006-03 on page three and four. Motion carried, 5 ayes.
7. Knouse Well Generator
Interim City Administrator Tom Armour presented the facts on the bids on the generators. He said that Rick Koenig, Water Department Supervisor, was comfortable with the low bidder, which was from a company who had placed three other units with the city of Hiawatha in the last two years.
Commissioner Gamble asked Koenig if all the bidders had been presented with the same information. He replied that they had been. The difference in the KW sizes was because not all of the companies offered the same size unit.
Koenig said that a 44 KW is the minimum we could use, that the 55 KW would be very sufficient.
Commissioner Schmitt asked Koenig if he was satisfied with the work the company had done in the past. He replied that he was. She asked for verification that the city staff would be laying the concrete pad, and that an electrician would be hired to do the electrical work. Koenig replied that that was correct.
Commissioner Schmitt made a motion, seconded by Commissioner Gamble, to accept the Mid America Power Company bid for $15,675 for the Knouse well generator. Motion carried, 5 ayes.
Commissioner Collins asked if the money was in the budget for this generator. Koenig replied that it was.
New Business
8. Consideration of Appointment to the Offices of the City: Clerk, Treasurer, Attorney, Municipal Judge, Fire Chief, and Police Chief.
Mayor Gernon asked for a motion for an executive session to discuss these appointments.
Commissioner Schmitt asked that she be excused from the discussion concerning the City Attorney appointment due to conflict of interest.
Commissioner Shamburg made a motion, seconded by Commissioner Gamble, to adjourn to executive session for the purpose of discussing the non-elective personnel [appointed offices] for a period of 15 minutes until 7:30 p.m. Motion was corrected to include Interim City Administrator Tom Armour. Motion carried, 5 ayes.
Commissioner Collins made a motion at 7:20 p.m., seconded by Commissioner Schmitt, to return to regular session. Motion carried, 5 ayes.
Commissioner Collins made a motion, seconded by Commissioner Shamburg, to re-appoint the City Clerk, the City Treasurer, the Municipal Judge, the Fire Chief and the Police Chief, exempting the City Attorney. Motion carried, 5 ayes.
Commissioner Collins made a motion, seconded by Commissioner Shamburg to re-appoint Don Cashman as City Attorney. Motion carried, 4 ayes. Commissioner Schmitt abstained.
a. Payroll Appropriation Ordinance #1057 in the amount of $33,483.21.
b. Utility Billing Deposit Refunds in the amount of $385.31.
c. Applications for License for Construction Contractor (3).
Commissioner Schmitt made a motion, seconded by Commissioner Gamble, to approve the consent agenda as presented. Motion carried, 5 ayes.
10. Interim City Administrator Tom Armour.
Tuesday morning at 10:00 am, the Downtown Committee will meet with Brian Kingsley with BG Consultants.
Interim Administrator Armour asked the commissioners if they wanted budget reports submitted monthly or quarterly.
Commissioner Schmitt suggested that a line item report should be submitted quarterly, and a summary report could be submitted monthly.
May 18 & 19 there will be a Mayor’s Conference. It would be a good chance to meet with other colleagues from around the state.
He stated that the RDA has requested to be on next week’s agenda.
11. Mayor Crosby Gernon
Mayor Gernon thanked Leon Trant for his last three years of service and said he looked forward to working very hard the next three years as the Mayor of the City of Hiawatha.
He mentioned that Jerry Aller would like to be appointed to the Tree Board. They should put in on the agenda for the May 8 meeting.
Betty Griebat and Dr. Delbert Larson are eligible for a second term on the Board of Trustees for the Morrill Public Library, and have agreed to serve. This could also be done at the May 8 meeting.
Mayor Gernon expressed his interest in attending the Mayor’s Leadership Conference, and wondered if there was a deadline to register for this. Interim Administrator Armour said that he could register on site if he discovered that he had time to go at the last minute. Mayor Gernon said that he had the time off so would plan on attending.
Discussed
11. Com. William Collins
Commissioner Collins commented that Mayor Gernon had done well for his first night.
12. Com. Curtis Gamble
13. Com. Marianne Schmitt
14. Com. Steffen Shamburg
Commissioner Shamburg welcomed Police Chief Evans Woehlecke back, and said that he felt he was doing a good job.
Commissioner Shamburg made a motion, seconded by Commissioner Collins, to go into executive session for 30 minutes until 8:05 p.m. to discuss non-elective personnel and to include Interim Administrator Tom Armour. Motion carried, 5 ayes.
Commissioner Shamburg made a motion at 8:00 p.m., seconded by Commissioner Schmitt, to extend the executive session for 10 more minutes. Motion carried, 5 ayes.
Commissioner Collins made a motion at 8:10 p.m., seconded by Commissioner Schmitt, to return to regular session. Motion carried, 5 ayes.
Commissioner Gamble made a motion, seconded by Commissioner Shamburg, to withdraw the previous offer for the city administrator. Motion carried, 5 ayes.
15. Adjourn
Commissioner Collins made a motion, seconded by Commissioner Gamble, to adjourn. Motion carried, 5 ayes. Meeting adjourned at 8:15 p.m.