Detroit Lakes, Minnesota

                                                                        February 1, 2008

            A special meeting of the City Council was called to order in the Council Chambers of the City Administration Building at 7:30 A.M., Friday, February 1, 2008; all members of the Council having been duly notified of the meeting and the business to be transacted.

            Present:            Mayor Larry G. Buboltz; City Administrator Robert Louiseau; Finance Officer Louis Guzek; Public Utilities Superintendent Curt Punt; Public Works Director Brad Green and City Engineer Gary Nansen.     

                                    Aldermen:         Anderson, Aune, Brenk, Heltemes, Imholte, Tucker and Zeman.

            Absent:             Aldermen Hannon and Tollefson; City Attorney William Briggs; Assistant City Administrator Lynne Krieger; Community Development Director Larry Remmen; Building Official Calvin Mayfield; Liquor Store Manager Bradley MacMaster and Fire Chief Jeffrey Swanson.

            Mayor Buboltz noted the purpose of the meeting was to discuss construction and financing of improvements planned for Tower Road.  Separate motions would be considered for the construction and the financing.

            Mayor Buboltz then asked City Engineer Gary Nansen to review and explain the purposed improvements.

            Mr. Nansen explained the project would involve the installation of water and sewer on Tower Road, from Richwood Road to the site of the Public Utility Electrical Department Service Center Building.  The building is under construction at this time.  The road base would be widened and constructed to enable widening and increased load capacity in the future.  This is a modification to a project considered in January to extend just water service to the site.  The modification was being recommended by staff, as it is estimated it would save in excess of $125,000 when compared to installing the water line now and then reconstructing the road and installing sewer at a later date.

            The overall cost of the project is estimated to cost $840,885.  Of this amount $474,476 could be recovered through special assessments; $82,400 would be paid from City funds for hydrants and over sizing, $186,497 would be paid from the Liquor Fund to cover wetland areas which are not assessable; and the balance would be paid with MSA Funds.

            Finance Officer Guzek explained the deferred assessments would be financed with an interest only loan from the Electric Utility Fund. As the deferred assessments became payable, the monies would be used to repay the loan.  Public Utility Superintendent Punt noted this is important in order for the Public Utilities Commission to maintain its bond rating.

            It was noted the Public Utilities Commission had approved making the loan at a special meeting on Tuesday.

            Upon further discussion, a motion was made by Alderman Anderson, seconded by Alderman Brenk and carried, without a dissenting vote, to proceed with sewer, water and street improvements as recommended by City Engineer Nansen.

            Alderman Anderson moved to approve financing for the project as recommended by City Staff in the report to the Council.  Alderman Brenk seconded the motion.

            Alderman Imholte moved to amend the motion to set the interest paid to the Public Utility Fund at 4%.  Alderman Brenk seconded the motion.

            It was noted in discussions at the Public Utilities Commission Meeting, the interest would be paid at a rate similar to that being received on other investments.

            Alderman Anderson then moved to amend the amendment to set the interest rate at 2% below prime to be reviewed annually.  Alderman Brenk seconded the motion.

            There being no further discussion, Mayor Buboltz noted he would be calling a vote first on Alderman Anderson’s motion to set the interest rate at 2% below prime to be reviewed annually.  Upon calling for the vote, the motion carried with four ayes and three nays.

            Mayor Buboltz noted as the motion had passed setting the interest, no further action would be taken on Alderman Imholte’s amendment to set the interest rate at 4%.

            Mayor Buboltz called for consideration of Alderman Anderson’s original motion, as amended, to approve the financing as proposed, with the interest paid to the Public Utility Fund at 2% below prime; with the rate to be reviewed annually.  Motion carried unanimously.

            There being no further business to discuss and without objection, Mayor Buboltz closed the meeting.  (8:15 A.M.)

                                                                        Respectfully submitted,

                                                                        Bob Louiseau

                                                                        City Administrator