A special meeting of the Council for the City of Crystal Falls was held in the Council Chamber of the City Hall on Thursday, November 2, 2006 at 5:00 p.m. Central Time.

Present: Mayor Hendrickson, Councilors Heikkinen, Stachowicz, Valesano, and Thrasher

Absent: None

Also present were City Manager Nordeman, City Attorney Lawrence, and City Clerk/Treasurer Olson.

Visitors in attendance included: Jeff Sjoquist and Scott McNeilis of Coleman Engineering, Mark Simeoni, Tom Stachowicz, Robert Fabbri, Dan Graff, David Graff, Larry Bicigo, Gerard Valesano, John Moon, Marilyn Moon, Gerri Trzeciak, Walter Trzeciak, Julius Simbob, Mike Koszyk, Richard Hendrickson, Eric Moon, Earl Gigstead, Mike Smokevitch, Jim Ponchaud, and Lynn Perry.

The purpose of this special meeting was to consider the following items:

Public Hearing for CDBG Grant Application

Pending lawsuit – Wendy Thrasher V. City of Crystal Falls

Replacement of Truck #7 (Electric Dept bucket truck)

Electric Dept issues

Electric Rate review

Purchase of TV Tower land

Crystal Manor update

MML Wage and Compensation Study – Workshop of Council

Mayor Hendrickson led the reciting of the Pledge of Allegiance.

Mayor Hendrickson temporarily adjourned the meeting to conduct the scheduled Public Hearing on the Community Development Block Grant for proposed water system improvements at 5:01 p.m.

Jeff Sjoquist of Coleman Engineering reviewed the application draft for the CDBG for proposed water system improvements. The project will include the purchase of water meters, meter reading equipment, installation of meters in the residential units, permits and fees, and administrative costs.

Mr. Sjoquist reviewed the time table of the project indicating the following: Engineering Start – December 1, 2006; Engineering Completion – January 2, 2007; Bid Solicitation – January 2, 2007; Bids Awarded – February 2, 2007; Rural Development Loan Closing – March 1, 2007; Construction Start – April 1, 2007; and Construction Completion – December 31, 2007.

Sjoquist reviewed the application documents including the Application, the Local Participation Documentation, Authorizing Resolution, Certification by Applicant, and the Statement of Assurances.

Public Comment:

Julius Simbob asked for an explanation of the term CDBG – Mr. Sjoquist answered: Community Development Block Grant.

John Moon asked how the meters would be connected to the water lines – Mr. Sjoquist answered: The meter will be installed in the homes with an outside (remote) reader.

Council Comment:

Councilor Valesano asked what happens if we don’t use the entire amount of the grant for the meters and installation-can that money be used elsewhere in the project. - Mr. Sjoquist replied that the money could be applied to the township connection charges, in particular, the meter pit area.

Councilor Thrasher asked what happens if the bids are over the grant amount. – Mr. Sjoquist said the contingency funds in the Rural Development loan would then be used.

Councilor Thrasher asked if the grant was 100% or are there matching fund requirements. – Mr. Sjoquist said that the Rural Development loan is pledged as the matching funds.

Councilor Thrasher asked if the homeowners can expect their homes to be restored to original condition following the meter installation. – Mr. Sjoquist said that the City will work with the contractor on this issue.

Councilor Thrasher asked if any leftover grant funds could be used to supply grants to homeowners for water service line replacement. – Mr. Sjoquist was doubtful this could be done as the grant dollars were to be used community wide and not to give any one homeowner more than another.

Mayor Hendrickson asked how the installations would be coordinated with the homeowners. – Mr. Sjoquist noted that will need to be worked out.

Special meeting reconvened at 5:30 p.m.

Councilor Thrasher seconded by Councilor Heikkinen moved to approve the Community Development Plan portion of the CDBG application as presented in the Draft for the water system improvements.

Ayes: Mayor Hendrickson, Councilors Heikkinen, Thrasher, Valesano, and Stachowicz. Nays: None

Motion carried.

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

AUTHORIZATION RESOLUTION

This Resolution authorizes the City of Crystal Falls to apply for and accept the conditions of a Community Development Block Grant to be used for water system improvements.

The City of Crystal Falls hereby resolves:

The City will seek funding in the amount of $510,000 in the form of a Community Development Block Grant (CDBG) through the Michigan Economic Development Corporation. The money will be used for water system improvements;

This project is consistent with the local Community Development Plan as described in the grant application;

At least 51% of the beneficiaries of the proposed project are low and moderate income persons;

No project costs (CDBG and non-CDBG) will be incurred prior to a formal grant award, completion of the environmental review procedures, and formal written authorization to incur costs is received from Community Development;

Authorization for the City to submit the Michigan CDBG application; and

Authorization for Charles Nordeman, City Manager, to sign the Application forms.

Ayes: Mayor Hendrickson, Councilors Heikkinen, Thrasher, Valesano, and Stachowicz. Nays: None

Resolution adopted.

Councilor Thrasher seconded by Councilor Valesano moved to authorize Charles Nordeman, City Manager, to sign all CDBG application forms as needed.

Ayes: Mayor Hendrickson, Councilors Heikkinen, Thrasher, Valesano, and Stachowicz. Nays: None

Motion carried.

Mayor Hendrickson seconded by Councilor Stachowicz moved to meet in closed session pursuant to Michigan Open Meetings Act, P.A. 1976, No. 267, 15.268, Section 8 (e), to consult with City Attorney regarding Summons and Complaint – Wendy Thrasher v. City of Crystal Falls, Case No. IO6-3545-CZ; and also Section 8 (d) to consider the purchase of real property, i.e., the cable TV tower site.

Ayes: Mayor Hendrickson, Councilors Heikkinen, Thrasher, Valesano, and Stachowicz. Nays: None.

Motion carried.

Meeting temporarily adjourned for closed session at 5:37 p.m. (City Council, Manager, Attorney, and Clerk moved closed session to the City Manager’s office.)

Meeting reconvened at 6:00 p.m.

Councilor Heikkinen seconded by Councilor Stachowicz moved to approve the purchase of a new 2007 bucket truck for use in the electric department as per a purchase agreement with Utility Sales & Service at a cost of $81,759.00.

Ayes: Mayor Hendrickson, Councilors Heikkinen, Thrasher, Valesano, and Stachowicz. Nays: None.

Motion carried.

Councilor Stachowicz seconded by Councilor Heikkinen moved to leave the electric rates the way they are.

Ayes: Mayor Hendrickson, Councilors Heikkinen, Thrasher, Valesano, and Stachowicz. Nays: None.

Motion carried.

Manager Nordeman reported that the Medicare staff is cleaning out the Crystal Manor building, the modified agreement has been signed by both the City and the County officials, a check for $50,000 has been received by the City in exchange for releasing the County from the lease agreement, and the City staff is in the process of winterizing the building. Mayor Hendrickson reported that a development agreement has been sent to Mr. Beauregard with a response expected by November 15, 2006. Councilor Thrasher inquired as to the status of the lien on the Crystal Manor personal property – Attorney Lawrence will report on this at the November 13, 2006 meeting of the Council.

Manager Nordeman presented the City Council with his recommendations (Proposal #1) regarding the implementation of the recently completed wage and compensation study. A lengthy discussion ensued. Manager Nordeman then presented the City Council with another proposal (Proposal #2) for the wage study implementation. Again, a lengthy discussion ensued.

Councilor Stachowicz seconded by Councilor Valesano moved to adopt the merit wages of Proposal #1 as recommended by the City Manager.

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

Motion failed.

Mayor Hendrickson seconded by Councilor Stachowicz moved to authorize Attorney Lawrence to defend the City of Crystal Falls regarding pending suit of Wendy Thrasher V. City of Crystal Falls, Case No. IO6-3545-CZ.

Ayes: Mayor Hendrickson, Councilors Heikkinen, Thrasher, Valesano, and Stachowicz. Nays: None.

Motion carried.

Councilor Stachowicz seconded by Councilor Thrasher moved to adjourn this special meeting of the City Council.

Motion carried.

Meeting adjourned at 7:42 p.m.