NOV 10, 2003

A regular meeting of the Council for the City of Crystal Falls was held in the Council Chambers of the City Hall on Monday, November 10, 2003, at 4:30 P.M. Central Time.

Roll call: Mayor Sabo, Councilors Hendrickson, Koszyk, Thrasher, and Benda.

Also Present: City Manager, City Attorney, City Clerk and various citizens of the community.

Mayor Sabo led all present in reciting the Pledge of Allegiance.

The minutes of the regular meeting of October 13, 2003 were approved as written.

Mayor Sabo gave a brief report on the DDA meeting held earlier in the day.

Mark Agnessi, Iron County Economic Developer, presented the Council with an update on the Downtown Market Study. He noted that the survey results are now compiled and that Karl Freed will be at the January 12^th meeting of the Council to give a presentation.

Jeff Sjoquist of Coleman Engineering gave an update on the water project.

Councilor Thrasher seconded by Councilor Hendrickson moved to set December 8, 2003 at 4:30 p.m. as the date for the Public Hearing for proposed Ordinance 2.21, an ordinance to regulate the use and operation of off-road vehicles within the City of Crystal Falls, Iron County, State of Michigan, and further instructed Clerk Olson to publish notice of the hearing and make copies of the proposed ordinance available to the public.

Motion carried.

Councilor Thrasher seconded by Councilor Hendrickson moved to add MTV (Music Television), CMT (Country Music Television), GAC (Great American Country), and Lifetime channels to the City’s cable TV system.

Motion carried.

Manager Nordeman noted he would return to the next Council meeting with a cable TV rate increase proposal to cover the cost of these additions.

Councilor Benda seconded by Councilor Hendrickson moved to amend the 2002-2003 fiscal year budget to meet the actual expenditures.

Motion carried.

Councilor Benda requested that the City not change the date for Trick-or-Treating from October 31^st in the future.

Councilor Koszyk seconded by Councilor Benda moved to approve change order #1 and the final pay request from Lakeland Enterprises in the amount of $8,375.77 for the North 6^th Street Culvert project.

Motion carried.

Councilor Koszyk seconded by Councilor Hendrickson moved to direct City Manager Nordeman and Attorney Lawrence to draft the necessary paperwork to transfer the ownership of Lot 7 at the City’s industrial park to Terry Alexa to allow for the construction of a snowmobile and ATV repair shop.

Motion carried.

Jay Bada, Forest Park High School Principal, addressed the Council with a request for an additional crossing guard location where North 6^th Street intersects U.S.2/141. Councilor Thrasher seconded by Councilor Benda moved to direct City Manager Nordeman to petition the Michigan Department of Transportation to conduct a study in regards to moving the school crossing back to the Iron Street intersection.

Motion carried.

Councilor Hendrickson seconded by Mayor Sabo moved to donate $25.00 to the Community Thanksgiving Day Dinner Committee.

Ayes: Councilors Koszyk and Hendrickson, and Mayor Sabo.

Nays: Councilors Thrasher and Benda.

Motion carried.

Councilor Koszyk seconded by Councilor Benda moved to direct Manager Nordeman to research the replacement of the garage heater boiler with radiant heaters at the most advantageous cost to the City.

Motion carried.

Councilor Thrasher seconded by Councilor Benda moved to set the Ski Hill rates for the 2003-2004 ski season as follows: $25.00 Season Pass per individual and to eliminate the daily and family pass.

Motion carried.

Councilor Hendrickson seconded by Councilor Koszyk moved to adopt the following resolution:

RESOLUTION DECLARING INTENT TO REIMBURSE FOR EXPENDITURES

WHEREAS, the City Council of the City of Crystal Falls, County of Iron, State of Michigan (the "City"), expects to issue revenue bonds for the purpose of acquiring, constructing, furnishing, and equipping improvements to the City’s existing hydroelectric facility (the "Project"); and

WHEREAS, the City Council of the City desires to affirm its intent to be in compliance with the "reimbursement rules" of the Internal Revenue Service (the "IRS") and therefore makes the declarations contained in this resolution for the purpose of complying with the "reimbursement rules";

NOW, THEREFORE, BE IT RESOLVED THAT:

1. 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 be reimbursed 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 the Project which were paid or will be paid subsequent to sixty (60) days prior to the date hereof from the general funds of the City.

(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 and are in addition to (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, and (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).

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

Resolution Adopted.

Councilor Koszyk seconded by Councilor Benda moved to amend the City’s Investment Policy by adding the following paragraph: "In addition, the City Treasurer may invest in common stock of a multi-state regional electrical transmission system organization as part of a joint agency agreement per Act 448 of 1976 and Public Act 513 of 2002."

Motion carried.

Councilor Thrasher seconded by Councilor Koszyk moved that the payrolls and disbursements in the amount of $458,932.07 for the month of October 2003 be approved, with the exception of check #9879 to STS pending clarification by the City Manager, and the City Clerk be instructed to draw checks on the City Treasury in payment of same.

Motion carried.

Councilor Hendrickson seconded by Councilor Benda, moved to accept the following reports for the month of October 2003:

Police Chief’s report indicating 113 complaints, 11 of which were closed by arrest and 2,933 patrolled miles.

Joint Fire Authority report submitted by Fire Chief John Ahola indicating answering 1 fire call; spending approximately 25 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.

Motion carried.

Councilor Koszyk extended a "Welcome Back" to City Police Officer Marcel Fraser who was in attendance at this meeting while on leave from active duty in Iraq. Mr. Fraser received handshakes and hugs from the entire Council and updated them on the details of his tour of duty.

Councilor Benda seconded by Councilor Hendrickson moved to meet in executive session to discuss strategy for the pending litigation, re: Barbara A. Benda, et al. V City of Crystal Falls, Case No. 03-2529-CZ.

Motion carried.

Meeting temporarily adjourned to executive session at 6:30 p.m.

Meeting reconvened at 6:50 p.m.

Councilor Thrasher seconded by Councilor Koszyk moved to extend the meeting beyond the 6:30 adjournment time.

Motion carried.

Councilor Thrasher seconded by Councilor Koszyk moved to instruct Attorney Geoffrey Lawrence to respond to the complaint filed by the City Retirees, re: Barbara A. Benda, et al. V City of Crystal Falls, Case No. 03-2529-CZ.

Motion carried.

There being no further business to come before the Council, meeting adjourned at 7:55 p.m.