A regular meeting of the Council for the City of Crystal Falls was held in the Council Chambers of the City Hall on Monday, February 13, 2006, at 5:00 P.M. Central Time.

Roll Call: Mayor Hendrickson, Councilors Heikkinen, Thrasher, Valesano, and Stachowicz.

Absent: None

Also Present: City Manager Nordeman, City Attorney Lawrence, City Clerk/Treasurer Olson, and various citizens.

Mayor Hendrickson led the reciting of the Pledge of Allegiance.

Councilor Heikkinen seconded by Councilor Stachowicz moved that the minutes of the regular meeting of January 9, 2006 be approved as written.

Motion carried.

Mayor Hendrickson amended the agenda to move the Contemporary Center Annual Report up and offered the podium to Contemporary Center Director Maureen Elson. Mrs. Elson advised the City Council on activities at the Contemporary Center including the implementation of a retail art gallery.

Mayor Hendrickson seconded by Councilor Valesano moved to accept the Crystal Falls Contemporary Center Annual Report and to release the City’s annual contribution of $1,100.00 to the center.

Motion carried.

Mayor Hendrickson reported on the DDA/Streetscape meeting held earlier in the day. It was noted that currently there are five (5) vacancies on the DDA and urged citizens to apply for appointments.

Councilor Valesano seconded by Councilor Heikkinen to approve payment of an invoice of $20.00 from MaryAnn Harrington, for secretarial services to the DDA.

Motion carried.

Donna Nelson addressed the Council noting her concern of a possible conflict of interest with City Attorney Lawrence who also is on the Board of Directors at the Crystal Theatre. It was the consensus of the City Council that this was not a matter that required action on their part.

At 5:25 p.m. Mayor Hendrickson temporarily adjourned the regular meeting to conduct the scheduled public hearing on the Police Patrol Vehicle Grant.

PUBLIC HEARING: Manager Nordeman explained the Police Patrol Vehicle Grant from USDA, Rural Development. He advised that the vehicle was initially intended to be a Chevrolet Tahoe, however, there are no longer any of those vehicles available. A bid from Florence Motor Sales for a Ford Explorer has been secured as that vehicle meets the needs of the police department and the requirements of the grant. The total cost of the vehicle is $37,000 including all attached police equipment. The City’s required contribution toward the cost is $10,825.33.

Mayor Hendrickson called for comments from the public regarding the Police Patrol Vehicle. There were no comments from the public.

Mayor Hendrickson then called for comments from the City Council. Councilor Valesano noted that this was a good deal for the City. All agreed and commended Manager Nordeman for his efforts in the securing of this grant.

Mayor Hendrickson closed the Public Hearing on the Police Patrol Vehicle Grant at 5:30 p.m.

Councilor Thrasher seconded by Councilor Heikkinen moved to accept the grant from USDA, Rural Development and approve the City’s contribution of $10,825.33 toward the purchase of a Police Patrol Vehicle as required by said grant.

Ayes: Mayor Hendrickson, Councilors Valesano, Stachowicz, Heikkinen, and Thrasher.

Nays: None

Motion carried.

Councilor Valesano seconded by Councilor Stachowicz moved to award the bid for the purchase of the Police Patrol Vehicle to Florence Motor Sales of Florence, Wisconsin, with said bid price for the vehicle set at $25,830.00 (includes towing package and spotlights, all other equipment will be purchased separately and installed by the City).

Ayes: Mayor Hendrickson, Councilors Stachowicz, Heikkinen, Thrasher, and Valesano.

Nays: None.

Motion carried.

Councilor Thrasher seconded by Councilor Valesano moved to advertise the 1999 Ford Explorer police patrol vehicle for sale on bids with the minimum bid to be set per the 2006 Kelly Blue Book.

Motion carried.

Jeff Sjoquist of Coleman Engineering updated the Council on matters concerning the water project.

Councilor Thrasher seconded by Mayor Hendrickson moved to adopt the following resolution:

AND DECLARATION OF INTENT TO REIMBURSE

WHEREAS, the City of Crystal Falls, County of Iron, State of Michigan (the "City") intends to issue and sell bonds, pursuant to Act 94, Public Acts of Michigan, 1933, as amended, in an amount not to exceed Five and One Half Million Dollars ($5,500,000) in one or two series for the purposes of paying all or part of the cost of improvements to the water supply system including replacement of existing transmission and distribution lines and the costs and fees for connection to the water supply system of the Township of Crystal Falls, together with related sites, structures, equipment and appurtenances (the "Project"); and

WHEREAS, a notice of intent to issue bonds must be published before the issuance of the aforesaid bonds in order to comply with the requirements of Section 33 of Act 94, Public Acts of Michigan, 1933, as amended; and

WHEREAS, the City intends at this time to state its intentions to be reimbursed from proceeds of the bonds for any expenditures undertaken by the City for the Project prior to issuance of the bonds.

NOW, THEREFORE, BE IT RESOLVED THAT:

1. The Clerk of the City is hereby authorized and directed to publish a notice of intent to issue bonds in the Reporter, Iron River, Michigan, a newspaper of general circulation in the City.

2. Said notice of intent shall be published as a one-quarter (1/4) page display advertisement in substantially the following form:

NOTICE TO TAXPAYERS AND ELECTORS OF THE CITY OF CRYSTAL FALLS, COUNTY OF IRON, MICHIGAN, AND THE USERS OF THE CITY’S

WATER SUPPLY SYSTEM OF INTENT TO ISSUE BONDS AND THE

THE PRINCIPAL OF AND INTEREST ON SAID REVENUE BONDS SHALL BE PAYABLE solely from the revenues received by the City from the operations of said water supply system. Said revenues will consist of rates and charges that may from time to time be revised to provide sufficient revenues to provide for the expenses of operating and maintaining the system, to pay the principal of and interest on said bonds and to pay other obligations of the system.

SAID BONDS will be payable in annual installments not to exceed forty (40) in number and will bear interest at the rate or rates to be determined at a private sale but in no event to exceed four and one-half percent (4.5%) per annum on the balance of the bonds from time to time remaining unpaid.

THE REVENUE BONDS WILL BE ISSUED WITHOUT A VOTE OF THE ELECTORS UNLESS A PETITION REQUESTING SUCH A VOTE SIGNED BY NOT LESS THAN 10% OF THE REGISTERED ELECTORS RESIDING WITHIN THE BOUNDARIES OF THE CITY IS FILED WITH THE CITY CLERK OF THE CITY, 401 SUPERIOR AVENUE, CRYSTAL FALLS, MICHIGAN 49920, WITHIN FORTY-FIVE (45) DAYS AFTER PUBLICATION OF THIS NOTICE. IF SUCH PETITION IS FILED, THE BONDS MAY NOT BE ISSUED WITHOUT AN APPROVING VOTE OF A MAJORITY OF THE QUALIFIED ELECTORS RESIDING WITHIN THE BOUNDARIES OF THE CITY VOTING THEREON.

THIS NOTICE is given pursuant to the requirements of Section 33, Act 94, Public Acts of Michigan, 1933, as amended.

___________________________________

City Clerk

CITY OF CRYSTAL FALLS

3. The City Council of the City does hereby determine that the foregoing form of Notice of Intent to Issue Bonds and the manner of publication directed is the method best calculated to give notice to the water supply system’s users and the electors residing in the boundaries of the City of this City’s intent to issue the bonds, the purpose of the bonds, the security for the bonds and the right of referendum relating thereto, and the newspaper named for publication is hereby determined to reach the largest number of persons to whom the notice is directed.

4. The City makes the following declarations for the purpose of complying with the reimbursement rules of Treas. Reg. § 1.150-2 pursuant to the Internal Revenue Code of 1986, as amended:

(a) As of the date hereof, the City reasonably expects to reimburse itself for the expenditures described in (b) below with proceeds of debt to be incurred by the City.

(b) The expenditures described in this paragraph (b) are for the costs of acquiring and constructing the Project which were paid subsequent to sixty (60) days prior to the date hereof or which will be paid prior to the issuance of the bonds from the water fund and/or the general fund of the City.

(c) The maximum principal amount of debt expected to be issued for the Project, including issuance costs, is $5,500,000.

(d) A reimbursement allocation of the expenditures described in (b) above with the proceeds of the borrowing described herein will occur not later than 18 months after the later of (i) the date on which the expenditure is paid, or (ii) the date the Project is placed in service or abandoned, but in no event more than three (3) years after the original expenditure is paid. A reimbursement allocation is an allocation in writing that evidences the City’s use of the proceeds of the debt to be issued for the Project to reimburse the City for a capital expenditure made pursuant to this resolution.

(e) The expenditures described in (b) above are "capital expenditures" as defined in Treas. Reg. § 1.150-1(b), which are any costs of a type which are properly chargeable to a capital account (or would be so chargeable with a proper election or with the application of the definition of placed in service under Treas. Reg. § 1.150-2(c)) under general Federal income tax principles (as determined at the time the expenditure is paid).

(f) No proceeds of the borrowing paid to the City in reimbursement pursuant to this resolution will be used in a manner described in Treas. Reg. § 1.150-2(h) with respect to abusive uses of such proceeds, including, but not limited to, using funds corresponding to the proceeds of the borrowing in a manner that results in the creation of replacement proceeds (within Treas. Reg. § 1.148-1) within one year of the reimbursement allocation described in (d) above.

(g) Expenditures for the Project to be reimbursed from the proceeds of the borrowing for purposes of this resolution do not include (i) costs for the issuance of the debt, (ii) an amount not in excess of the lesser of $100,000 or five percent (5%) of the proceeds of the borrowing, or (iii) preliminary expenditures not exceeding twenty percent (20%) of the issue price of the borrowing, within the meaning of Treas. Reg. § 1.150-2(f) (such preliminary expenditures include architectural, engineering, surveying, soil testing and similar costs incurred prior to construction of the Project, but do not include land acquisition, site preparation, and similar costs incident to commencement of construction).

6. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution be and the same hereby are rescinded.

AYES: Mayor Hendrickson, Councilors Thrasher, Valesano, Stachowicz, and Heikkinen. NAYS: None

RESOLUTION DECLARED ADOPTED. 

Councilor Thrasher seconded by Mayor Hendrickson moved to authorize Manager Nordeman to sign an agreement with the Iron County Road Commission regarding Urban Avenue where it borders the Road Commission property located at 712 Urban Avenue.

Motion carried.

Mayor Hendrickson seconded by Councilor Stachowicz moved to conduct a Public Hearing during a special meeting of the City Council on Monday, February 27, 2006 at 5:00 p.m. to hear proposals from all parties interested in obtaining the Crystal Manor building, and further, said Public Hearing will be conducted pursuant to the requirements of City of Crystal Falls Ordinance No. 1.10 which dictates procedures for the conveyance of real property.

Motion carried.

Councilor Thrasher seconded by Councilor Heikkinen moved to extend the meeting beyond the 7:00 p.m. deadline for adjournment.

Motion carried.

Manager Nordeman reported that an extension to May 14, 2006 has been received from WE Energies for the finalization of a power service agreement.

Councilor Stachowicz seconded by Councilor Heikkinen moved to approve setting the compensation of Kelly Stankewicz at Step 5 of the Public Works Foreman position upon the retirement of Dennis Fabbri.

Motion carried.

Councilor Valesano supported by Mayor Hendrickson moved to approve proceeding with the marketing of timber in and around the City’s Runkle Lake property as proposed by Forester John Force.

Motion carried.

Councilor Heikkinen seconded by Councilor Stachowicz moved to increase the basic cable TV rates by $1.00/month effective on the bills that are mailed out at the end of February 2006. (New Rates: Basic cable in City = $19.00/month, Basic cable in Township = $19.50/month).

Motion carried.

Attorney Lawrence and Clerk/Treasurer Olson were directed to draft an Ethics Policy for the City and present it at a future meeting.

Manager Nordeman was directed to discuss the M-69 speed limit issue with the Police Department.

A proposal from the Crystal Falls Fire Authority to adopt an ordinance for Fire Call Fees was discussed.

Councilor Heikkinen seconded by Councilor Thrasher moved to lay the Fire Call Fee Ordinance on the table until the next meeting as there were many unanswered questions.

Ayes: Councilors Heikkinen and Thrasher.

Nays: Mayor Hendrickson, Councilors Valesano and Stachowicz.

Motion failed.

Further discussion regarding the Fire Call Fee Ordinance ensued and no action was taken pending the receipt of additional information.

Councilor Heikkinen seconded by Mayor Hendrickson moved to direct Clerk/Treasurer Olson and Manager Nordeman to draft a Travel Expense policy for the City.

Motion carried.

Clerk/Treasurer Olson was directed to draft a Cell Phone Use Policy for the City.

Mayor Hendrickson seconded by Councilor Heikkinen moved that the payrolls and disbursements in the amount of $489,766.91 for the month of January 2006 be approved, and the City Clerk is instructed to draw checks on the City Treasury in payment of same.

Motion carried.

Councilor Valesano seconded by Councilor Heikkinen moved to form an Electric Department Advisory Committee to meet and address various issues of the electric department as presented by Chief Electrician, David Graff, and further, that the committee members be Councilor Valesano, City Manager Nordeman, Chief Electrician Graff, and a citizen at large.

Motion carried. 

Councilor Thrasher seconded by Councilor Valesano moved to accept the following reports for the month of January 2006:

Police Chief’s report indicating 134 complaints, 0 of which were closed by arrest and 2,345 patrolled miles.

Joint Fire Authority report submitted by Fire Chief John Ahola indicating answering 2 fire calls; spending approximately 24 man-hours fighting fires; and holding 1 practice and training session.

Chief Electrician’s report of department activities.

Public Work foreman’s report on department activities.

City Treasurer’s report on the monthly revenues.

Motion carried.

Councilor Heikkinen seconded by Mayor Hendrickson moved to adjourn this meeting of the City Council.

Motion carried.

Meeting adjourned at 8:16 p.m.