August 5, 2013 Council Meeting

CALL TO ORDER – Mayor Reinhardt called the meeting to order at 7 p.m.
ROLL CALL – Sippel, Williamson, Bren, Hughes, Reinhardt
INTRODUCTIONS – Reinhardt introduces the council and staff to the public. Administrator Tolsma, Clerk Lewin, Attorney Beck, Engineer Pearson
PLEDGE OF ALLEGIANCE -
ADOPT AGENDA – Williamson makes a motion and Hughes seconds to adopt the agenda. All votes ayes, motion carries.
ADOPT CONSENT AGENDA – Hughes makes a motion and Sippel seconds to adopt the consent agenda. All votes ayes, motion carries.

Special Meeting Minutes from July 11, 2013
City Council Regular Meeting Minutes from July 15, 2013
City Council Work Session Minutes from July 22, 2013

PUBLIC FORUM - No one.
PRESENTATIONS & GUEST SPEAKERS –

Mark Vyvyan – Legal Consultant

Reinhardt explains Vyvyan is a legal consultant and Beck will explain. Beck said she is recommending closing the meeting for this agenda item under the attorney client privilege exception to open meeting law. Beck said this exception does not automatically apply. In deciding whether or not to close the meeting we must balance the purposes of the open meeting law (allowing the public to be informed regarding public officials’ decision making and providing the public a forum for making their views known to their public officials) against the purposes of the attorney-client privilege – the right to confidential legal counsel and advice.

Beck stated that the meeting cannot be closed for general legal advice (this is why most of the times Beck provides the Council with legal advice during a meeting, the meeting is open); however, when the discussion is about legal strategy related to pending or threatened litigation, it is appropriate to close the meeting.

Beck said the purpose for closing the meeting in this situation is to permit the council to consult with its attorney in private without the significant negative impact to its legal position that could result from a public discussion in which the opposing side in the matter could obtain the city’s legal strategy (this could result in a substantial private benefit to opposing parties to the detriment of the public interest).

Beck said there is a 2005 Court of Appeals case which addresses this issue. This was a case where a local newspaper sued the city when it closed a portion of its open meeting to discuss litigation strategy with its attorney. The Court held that where there was a need to have absolutely confidential discussions with specially appointed counsel to discuss litigation strategy, it was appropriate to close the meeting. In this case, the meeting was not automatically closed because litigation was the topic; but a balancing test was used to determine whether or not to close the meeting; the exception to the Open Meeting Law was used cautiously and seldom in situations other than in relation to pending or threatened litigation; and there was a need for absolute confidentiality.

Beck stated that when the balancing of interests indicates a need for absolute confidentiality with respect to pending or threatened litigation, the meeting can be closed. That is the case here. Here, an independent contractor has inspected the water tower and provided the city with a report stating its opinion that paint coatings were defectively applied. A demand letter has been sent to the contractor and the contractor has not agreed to perform the requested work. The purpose of closing the meeting is not to make a decision behind closed doors, but to discuss potential litigation strategies without providing the opposing side access to these strategies. The need for confidential communication is essential to ensure the best result for the city and its taxpayers.

Beck said that no other business will be discussed in the closed session. It’s her job as city attorney to ensure that this is the case – she has a legal obligation to ensure it.

Beck said that when the factors in favor of closing the meeting are weighed against the public’s interest in an open meeting, it is her opinion that the need for confidential communication in this matter is essential and the attorney-client exception to the open meeting law is properly applied in closing the meeting.

She asked for a motion that the meeting be closed to discuss litigation strategy with Mark Vyvyan. Williamson moves that the Spring Park City Council close the meeting to go into executive session and states a record will be kept and will be available at some time in the future, Hughes seconds. All votes ayes, motion carries.

COUNCIL MEETS IN CLOSED SESSION.

The meeting is reopened at 8:17 p.m. Attorney Beck reads a proposed motion:

A motion to authorize retaining Mark Vyvyan of Fredrikson & Byron for purposes of representing the city with respect to possible water tower construction defects and to authorize Mark VyVyan to prepare and serve a lawsuit in the event negotiations with the contractor are not successfully concluded. Hughes asks whether a date should be added and it’s decided not to do so. Williamson moves the motion suggested by Attorney Beck and Hughes seconds. All votes ayes, motion carries.

PETITIONS, REQUESTS & APPLICATIONS – None.
ORDINANCES & RESOLUTIONS – None.
REPORTS OF OFFICERS & COMMITTEES -

Mayor and Council
City Administrator

i. Streetlight Insurance Coverage – Tolsma said the options set out in the memo in the packet came from July’s work session. He said the first option is to just increase the deductible and it would save some annual premium costs. The second option is to add the street lights and change the deductible and there would be a slight increase to the premium. Option three is to cover the streetlights and keep the deductible the same thereby that would show the most increase in premium. He said there is a spreadsheet attached. Williamson said there is the return from the League as a dividend based on the performance of the fund and the claim record. He said therefore these numbers could be offset. He said it could be as much as $5,000 returned. Reinhardt thought more like $3500. Tolsma said it’s dependent upon the city’s claims and the performance. He said it’s hard to estimate this. Williamson said for 19 years he has paid insurance and had no claims and 19 years and three months later he could have a total loss. So he said averaging is a tool to understand the process but a key component is understanding disasters. He said he’s concerned about self insuring and assuming to great of risk and pursuing a large deductible to save on the annual premium. He said the deductible selected will apply to everything. He likes option three but option two is acceptable.

Reinhardt said she was surprised that the higher deductible doesn’t save that much. She does want to cover the streetlights. She said she learns toward option three but is comfortable with two as well. Sippel said in the 25 years of previous streetlights, he wonders how often did they fail until the bases failed. He feels it’s more likely that they be hit by a car. He said $2500 extra a year to insure the light poles, he thinks they can be self-insured to coverage due to storms. He said if it’s catastrophic, there could be federal disaster relief. Williamson said tornadoes can be spotty. So a Federally backed claim, might not cover. Bren asked if this is revisited every year. Tolsma said it can be changed at any time. Hughes asked if we’re currently at $250 for everything and Tolsma confirmed. He said the decision is not so much on the streetlights but on the other things in the city. Hughes said they are always adding stuff. Williamson said park equipment will probably be replaced. Williamson said this is a small amount in comparison to the city’s budget. Bren makes a motion to go with option three to cover street lights and $250 deductible. Williamson seconds. Votes four to one ayes, Sippel Nay. Motion carries.

ii.Presbyterian Homes Conduit Financing Discussion – Tolsma said some on the council have been through this process before. He said right now they are waiting to hear back. He said last week’s query was to see if the council would be interested in this. There are two other entities interested in this so there might be a split three ways. Tolsma wondered about a bare minimum fee. Sippel asked about the reference to no city taking this alone and splitting it three ways. Reinhardt said there were some federal stimulus allowances. She said $28 mil was allowed at that time and now it has adjusted back to $10 mil. Reinhardt asked if this was 2013 and Tolsma confirmed. Williamson said this is a pass through function because tax free financing has to be done by government entities and it’s health care related so the city can be used. He said there is no recourse to the city, only providing an administrative function. He said he doesn’t think the city’s ability to bond is affected in any way. Tolsma said he spoke to Kimmel that it is affected. He said whatever the city is thinking could be subtracted from the $10 mil and January 1^st is a start over so the city could wait to bond. Williamson said whatever the city is thinking about probably wouldn’t happen soon. He said the city could collect about $8300 to provide this conduit financing. Reinhardt said she thinks it’s a smart fiscal move. She said 1/8^th of 1 percent was what was given last time. She said she thinks there should be a written policy for this or it should be on the fee schedule. Reinhardt said she also believes it should be the same fee for all three cities. Beck said in a previous conduit financing, a 2007 request for housing revenue bonds from Presbyterian Homes, Bruce Kimmel requested a policy be adopted at that time. Beck said there was an agreement from the entity that they would pay the City’s expenses in addition to the administrative fee and the City should consider requesting that here. Williamson said a public hearing needs to be held and action to approve bonds are steps that need to be followed. Hughes makes a motion to continue discussion and direct staff to proceed with the issuance of conduit revenue bonds for Pres Homes. Bren seconds. Sippel said he is not opposed but he’s concerned about the perception. He asked why this project is in Chanhassen and they aren’t asking Chanhassen to provide conduit financing. He said there is no legal ramification from this but he’d like to be clear. Reinhardt said the previous conduit financing was for rolling together several projects in different cities. She said she thinks smaller cities don’t bond as much. Williamson said he too at one time shared reluctance but the structure is designed by the IRS and instead of setting up another agency to do this, they use government entities as a flow through. All votes ayes, motion carries.

c. City Engineer – nothing.

d. City Attorney – nothing.

e. Utility Superintendent – nothing.

UPCOMING MEETINGS & TRAINING

August 8, 2013 – Spring Park Police Commission – 10:00 AM – Reinhardt is hoping for some updated budget numbers.
August 14, 2013 – Administration Committee – 1:00 PM
August 14, 2013 – Planning Commission – 7:00 PM
August 14, 2013 – LMCD – 7:00 PM
August 19, 2013 – City Council – 7:30 PM
August 20, 2013 – LMCC – 5:00 PM

UNFINISHED BUSINESS -
NEW BUSINESS & COMMUNICATION

Bills & Payroll – Sippel makes a motion to pay the bills. Williamson seconds. All votes ayes, motion carries.

MISCELLANEOUS (Information Only) –

· Hughes said he gets updates from the Westonka Historical Society and there have been positive response and many visits. He said they are very excited about the growth and interest. Reinhardt said the Historical Society has been informed that the requested donation is being factored into the budget and it’s not been approved yet but it will be voted on.

· Hughes said the LMCD is planning on moving into the old Mound City Hall. He said Mound council member Gillespie recommended the LMCD look at the space as a cost savings measure.

ADJOURNMENT – Sippel makes a motion and Bren seconds to adjourn the meeting at 8:52 p.m. All votes ayes, motion carries.