A special meeting of the Council for the City of Crystal Falls was held in the Council Chamber of the City Hall on Tuesday, October 2 2007 at 5:00 pm Central Time.

Present: Mayor Hendrickson, Councilors Heikkinen, Valesano, Smokevitch, and Bicigo.

Absent: None

Also present were City Manager Nordeman, City Attorney Lawrence, City Clerk/Treasurer Olson, Jeff Sjoquist, Ron Basso, and Julie Melchiori.

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

Special Water Project Pay Package

Architect Agreement with Hovey Co.

Labor Negotiations Strategy (IBEW) – Closed Session

Mayor Hendrickson led all in reciting the Pledge of Allegiance.

Jeff Sjoquist explained the increased cost of rock excavation responsible for the increase in the Township connection fee for the water project. He advised that the billing has been examined carefully and he is now satisfied that it is correct and recommended approval for payment.

Mayor Hendrickson seconded by Councilor Valesano moved to approve the "Estimate of Funds Needed" for the water project Township connection fee in the amount of $121,750.55.

Motion carried.

Ron Basso updated the Council on the Architect Agreement with Hovey Companies.

Mayor Hendrickson seconded by Councilor Heikkinen moved to enter into an Architect Agreement with Hovey Companies as follows:

The City of Crystal Falls (City) enters into this agreement with Hovey Companies (Hovey) to detail the method of payment out of the grant established under the Development Agreement with Hovey effective December 19, 2006.

1. It is agreed that:

a) the parties shall abide by the terms of the Grant Agreement entered into between the Iron County Economic Development Corporation and the City;

b) the parties are also bound by the terms of the Development Agreement referenced above;

c) the above described grant consists of an amount of money totaling $100,000;

d) the grant shall be used for the payment of architect’s fees for the project and the parties anticipate that the architect’s fees may exceed the amount available under the grant and that any excess fees shall be the responsibility of Hovey;

e) all monies will be paid pursuant to the terms of the grant agreement from a separate bank account established for this purpose;

f) the City shall have a right to review with Hovey all proposed plans and proposed change orders initiated by the project architect prior to their taking effect;

g) Hovey will submit invoices for payment for architectural work performed on the project known as "Crystal View Apartments," formerly the Crystal Manor, to the grant administrator, as detailed in paragraph 4 of the grant agreement; and

2. The grant administrator shall not unreasonably withhold payment but may request additional information in order to determine if the invoiced amount is reasonable.

3. All approved amounts shall be paid within 14 days of submission.

4. This agreement may be terminated with seven days written notice by either party.

5. If the project is terminated for any reason, all of the work product paid for under this agreement and support material shall immediately be turned over to the City without any charges being incurred. The Developer also agrees not to release any work product produced as a result of monies expended under this section and shall keep such information confidential.

Motion carried.

Mayor Hendrickson seconded by Councilor Heikkinen moved to meet in closed session pursuant to the Open Meetings Act, P.A. 1976, No. 267, Section 15.278 (c), to conduct a discussion regarding strategy for negotiations with the IBEW for the electric department employees.

Ayes: Mayor Hendrickson, Councilors Heikkinen, Smokevitch, Valesano, and Bicigo. Nays: None

Motion carried.

Meeting temporarily adjourned at 6:10 p.m.

Meeting reconvened at 6:55 p.m.

Councilor Heikkinen seconded by Councilor Valesano moved to adjourn this special meeting of the City Council.

Motion carried.

Meeting adjourned at 6:57 p.m.