TWO HARBORS CITY COUNCIL MEETING MINUTES NOVEMBER 28, 2022

Regular meeting of the City Council of the City of Two Harbors, Minnesota, held on Monday, November 28, 2022, at 6:00 p.m. The meeting was called to order by President Redden.

Members present, Councilors:
Woodruff, Glaser,
Rennwald, Passe,
Redden. 5.

Members absent, Councilors:
Erickson. 1.

Others present:
Interim Administrator,
Dhein Finance Director, Pietila
City Clerk, Nordean
City Attorney, Costley

Clerk Nordean requested the addition of the following communications for the public hearing: letters of objection from Thomas Koehler and Mary McGilligan, 814 Fifth Avenue, Susan Williams, owner of 325 and 319 Seventh Street; Nathan Trump, owner of 812 Fourth Avenue; M. Eugene Gangestad, Two Harbors, Lumber, 822 Fourth Avenue and and Donna Gangestad, 902 Fifth Avenue, Darbie Eischenbacher, 823 Fifth Avenue; Tim Hedin, 835 Sixth Avenue; Cecilia Barrett Twiest, 802 Sixth Avenue, Donna Gangestad, Two Harbors Lumber, 822 Fourth Avenue and Alan Nelson RBI Group LLC, Julie Peer, 817 Fifth Avenue; Tina Voce, re: 822 Fifth Avenue; Alan Peters, 801 Fifth Avenue. She also requested the addition of Laura Goutermont for reappointment to the Recreation Board for a term to expire in March of 2024 to New Business Item 2.

Motion by Passe and Woodruff approving the agenda with the changes recommended by City Clerk Nordean. Carried.

Motion by Glaser and Rennwald Adjourning the regular meeting and calling to order a public hearing for the purpose of receiving public input regarding the proposed assessments for the 2021 – 2022 Street & Alley Improvement Project pursuant to Minn. Stat. 429.011 to 429.111. Carried.

Appearances:
Joe Rhein, Bolton & Menk, was present and addressed the hearing, providing a presentation on the Proposed Assessments for the 2021 – 2022 Street Improvement Project. Mr. Rhein outlined the process of the public hearing including a background of the project, a recap and cost review of the project and property owner rights.

President Redden inquired what the actual cost of a 5 x 5’ square of sidewalk is. Rhein responded that this price was bid at $4.75 per square foot, so a 5 x 5’ square would be about $118.50, plus the indirect costs, for a total cost to the City of about $150 – $160 per square.

Councilor Woodruff inquired about the deferral and how it worked, if the total amount would be due at the end of the deferral, or if that is when payments would start. Rhein responded that the payments would just pick up where they left off if the full 15 years of the assessment period had not yet passed. Woodruff clarified question and asked if the deferral was for a number of years that was less than the 15-year assessment period, would the total assessment be due, or would just the portion of the assessment that would normally have been paid by that time be due. Finance Director Pietila responded that she believes that only that portion of the assessment that would normally have been paid would be due at the end of the deferral.

Woodruff also asked with the December 28 deadline to appeal, how long does the City have to adopt the assessment. Rhein responded that the recommendation would be that the Council adopt the assessment tonight. He went on to say that the property owners can’t appeal until the City adopts the assessment. Woodruff inquired if the December 28 deadline could be pushed back. Rhein replied that the Council could choose to table this action so they could have more time to think about it, yes, it’s 30 days from whenever the City Council acts on the assessment roll. Once you adopt the assessment roll, that’s when the property owner has thirty days to appeal it.

Councilor Passe inquired if there is a warranty period after the contract closes. Rhein reported that there is a two-year warranty.

Carol Klinker, 731 Fifth Avenue and 512 Eighth Street, was present and addressed the Council inquiring about the due date for payment, if the assessment isn’t adopted today, will the due date still be the end of the year. Mrs. Pietila reported that payments must be received by December 31, 2022 in order to avoid interest charges because the City has to certify to Lake County that first week in January. Rhein added that if the Council delayed action on the assessment until after the first of January, they would be into the next tax year, so they would have until December 31 of 2023 and it wouldn’t go onto the tax rolls until 2024.

Maggie Williams was present speaking on behalf of her mother, Susan Williams, owner of 325 and 319 Seventh Street. She requested a break-down of the charges which were proposed for her mother’s assessment. Rhein provided this information for her. She reported that the construction work disturbed her tenants and that there is a crack in the basement which she believes could be a result of this work. She stated that she feels that the property value may have actually been lowered because they took down a gorgeous tree. She inquired about the installation of sewer service lines on her property. Mr. Rhein showed her a copy of the plans for the project and where the service lines were located on the parcels in question.

Tim Hedin, 835 Sixth Avenue, was present and addressed the Council expressing his objection to the proposed assessment. He stated that the project had removed space for parking in from his home and the new street doesn’t abut his parcel. He also reported that the sidewalk did not extend along the entire frontage of his property. He inquired if he has to pay for a street that doesn’t even come in front of his house. He explained that the project took away parking in front of his house and that he only got six new pieces of sidewalk. Rhein noted that the distance for Hedin’s sewer connections was quite lengthy, therefore the sewer line made up the majority of the charges to be assessed against his property. He noted that they did take into consideration that the street does not extend to his property. He asked the City Clerk if the letter he brought in today was good enough. Nordean expressed that it was sufficient.

Carol Klinker requested that the Council delay action on the assessment so that she had more time to review the information.

Gene Gangestad, Two Harbors Lumberyard, was present and addressed the hearing expressing his objection to the proposed assessment. He claimed that he doesn’t believe the process is legal, he feels that the assessment is against the state constitution and that many of the statutes which the City uses for the assessment process are antiquated. Gangestad indicated his belief that he should not be charged for streets, sidewalks and water lines if he didn’t get them. He asked Mr. Rhein to explain why his property was used for the construction process. He explained that he doesn’t abut Fifth Avenue, however, he was charged for it. Mr. Gangestad expressed his displeasure that the DM&IR was not charged. He also expressed disagreement with charging by the square foot. Mr. Rhein provided Gangestad with a 2022 copy of the Statutory language used and indicated that he believes the statutes provided are currently in effect. Gangestad explained that he believes that the project didn’t increase his property value, therefore he believes that the City cannot assess the charges against his property. Rhein provided Gangestad with information regarding the process of objecting to the assessment and also the process of filing an appeal in district court. He explained that Gangestad has the right to use these processes if he feels it is necessary.

Donna Gangestad, 822 Fourth Avenue, was present and addressed the Council expressing her opinion that the proposed assessment doesn’t pass “The Common Sense Test.” She showed on the map used in Mr. Rhein’s presentation where her property is located.

Mr. Rhein explained that properties were assessed for street and sidewalk in the project area, whether or not they had a sidewalk in front of their property, or whether or not they got a street in front of their property, noting that if they were benefitted by the project, they are being assessed.

Darbie Eischenbacher, 823 Fifth Avenue, was present and addressed the Council via Zoom regarding the notice which was sent to property owners regarding the public hearing. She inquired about the fees charged by the City for administration of the assessment. She indicated that the notice was difficult for her to understand with regard to how to submit an objection. She expressed her opinion that the notification did not provide adequate time for her to prepare for opposition to the proposed assessment. She requested that the Council consider delaying a decision on the proposed assessment in case there were other individuals who didn’t understand the notice provided.

Pietila responded to the 1% over the bond rate charged is for work that is done by City staff prior and after the work that is done by Lake County. Rhein explained that this practice is typical with other cities doing assessments.

President Redden asked if there was anyone else who was present who wished to speak in favor of or against the proposed assessment. There was no one else present who indicated their desire to address the hearing.

Communications:

1. A memorandum from Joe Rhein, Bolton & Menk, regarding the assessments for the 2021 – 2022 Street Improvement Project.
2. A letter from Donna Gangestad, Two Harbors Lumber 822 Fourth Avenue, objecting to any assessment for the 2021 – 2022 Street Improvement Project.
3. A letter from Susan Williams, owner of 325 and 319 Seventh Street expressing her objection to the assessment for the 2021 – 2022 Street Improvement Project.
4. A letter from Nathan J. Trump, 812 Fourth Avenue, expressing his objection to the assessment for the 2021 – 2022 Street Improvement Project.
5. A letter from M. Eugene Gangestad of Two Harbors Lumber, 822 Fourth Avenue and Donna Gangestad, 902 Fifth Avenue, expressing their objection to the assessment for the 2021 – 2022 Street Improvement Project.
6. A letter from Thomas Koehler and Mary McGillingan 814 Fifth Avenue, expressing their objection to the assessment for the 2021 – 2022 Street Improvement Project.
7. A letter from Darbie Eischenbacher, 823 Fifth Avenue, expressing objection to the proposed assessment.
8. A letter from Tim Hedin, 835 6th Avenue, expressing opposition to the proposed assessment.
9. A letter from Cecilia Barrett Twiest, 802 Sixth Avenue, expressing opposition to the proposed assessment.
10. A letter from Alan Nelson, RBI Group LLC, expressing opposition to the proposed assessment.
11. A third letter from Donna Gangestad, Two Harbors Lumber, 822 Fourth Avenue, expressing opposition to the proposed assessment.
12. A letter from Julie Peer, 817 Fifth Avenue, expressing opposition to the proposed assessment.
13. A letter from Tina Voce, 822 Fifth Avenue, expressing opposition to the proposed assessment.
14. A letter from Alan Peters, 801 Fifth Avenue, expressing opposition to the proposed assessment.
15. Two letters from Carol Klinker, 731 Fifth Avenue and 512 Eight Street, expressing objection to the proposed assessment.

Motion by Woodruff and Rennwald adjourning public hearing and reconvening regular City Council meeting. Carried.

Trees & Trails Commission:
Councilor Passe reported that at their November 17 meeting, they discussed tunnels under Highway 61, snowshoe and ski trails, they welcomed new members and discussed a proposal to update the trail plan.

Personnel Committee:
Vice President Glaser reported on the most recent meeting of the Personnel Committee where they discussed position changes and the administrator hiring process.

Planning Commission:
Vice President Glaser reported on the most recent meeting of the Planning Commission where they received a presentation by Planner Otsea on the Seventh avenue Corridor Project.

Motion by Glaser and Woodruff that the following consent agenda items:

1. RESOLUTION NO. 11-327-22 ALLOWING CLAIMS AGAINST THE CITY OF T W O HARBORS, IN THE AMOUNT OF $1,895,748.22.
   
   
2. Approving payroll for the first half of November, 2022, in the amount of $235,893.24.
   
   
3. RESOLUTION NO. 11-328-22 AUTHORIZING PAYMENT TO BOLTON & MENK IN THE AMOUNT OF $2,932.50 FOR PROFESSIONAL SERVICES FOR THE 2021 & 2022 STREET & ALLEY IMPROVEMENT PROJECT.
   
   
4. RESOLUTION NO. 11-329-22 AUTHORIZING PAYMENT TO BOLTON & MENK IN THE AMOUNT OF $787.00 FOR GENERAL ENGINEERING SERVICES.
   
   
5. RESOLUTION NO. 11-330-22 AUTHORIZING PAYMENT TO BOLTON & MENK IN THE AMOUNT OF $5,671.50 FOR CONSTRUCTION ENGINEERING SERVICES THROUGH SEPTEMBER 30, 2022 FOR RESEARCH AND DATA COLLECTION FOR THE FORMER ANKRUM PROPERTY NECESSARY FOR A TOPOGRAPHIC SURVEY ON THE PARCEL FOR THE WASTEWATER AND WATER TREATMENT PLANT PROJECT.
   
   
6. RESOLUTION NO. 11-331-22 AUTHORIZING PAYMENT TO BOLTON & MENK IN THE AMOUNT OF $31,149 FOR PROFESSIONAL SERVICES FOR THE 2023 – 2024 STREET & ALLEY IMPROVEMENT PROJECT.
   
   
7. RESOLUTION NO. 11-332-22 AUTHORIZING PAYMENT TO BOLTON & MENK IN THE AMOUNT OF $5,467.50 FOR PROFESSIONAL SERVICES FOR THE PRELIMINARY DESIGN CONCEPTS FOR TWO TUNNELS.
   
   
8. RESOLUTION NO. 11-333-22 AUTHORIZING AN INCREASE IN WATER AND SEWER FEES EFFECTIVE JANUARY 1, 2023.
   
   
9. RESOLUTION NO. 11-334-22 APPROVING THE AGREEMENT WITH PITNEY BOWES FOR THE LEASE OF A POSTAGE METER FOR CITY HALL AND AUTHORIZING THE ACTING MAYOR AND CITY CLERK TO EXECUTE SAID AGREEMENT ON BEHALF OF THE CITY.
   
   
10. RESOLUTION NO. 11-335-22 ELECTING NOT TO WAIVE THE MONETARY LIMITS ON MUNICIPAL TORT LIABILITY.
    
    
11. RESOLUTION NO. 11-336-22 HIRING ALICIA LANG FOR THE POSITION OF PART-TIME TEMPORARY LIQUOR STORE CLERK.
    
    
12. RESOLUTION NO. 11-337-22 AUTHORIZE A DAY OFF WITH PAY FOR A PRIZE FOR THE EMPLOYEE HOLIDAY PARTY.
    
    
13. RESOLUTION NO. 11-338-22 AUTHORIZE SIMULTANEOUS INTERNAL AND EXTERNAL POSTINGS FOR THE POSITION OF PERMANENT PART-TIME LIQUOR STORE CLERK.
    
    
14. RESOLUTION NO. 11-339-22 ACCEPTING, WITH REGRET, THE RESIGNATION OF JESSE HENNEN FROM HIS POSITION AS CEMETERY CARETAKER AND AUTHORIZING A LETTER OF APPRECIATION FOR HIS SERVICE.
    
    
15. Authorizing the internal and external posting for the position of Cemetery Caretaker.
    
    
16. Accepting, with regret, the resignation of Michelle Anderson, from her positions on the City Planning and Charter Commissions, effective immediately, and authorizing a letter of appreciation for her service.
    
    
17. Accepting, with regret, the resignation of Roger McDannold, from his position on the Recreation Board, and authorizing a letter of appreciation for his service.
    
    
18.  Declaring second reading of an ordinance Enacting and Adopting a Supplement to the Code of Ordinances for the City of Two Harbors.
    
    
19. RESOLUTION NO. 11-340-22 APPROVING THE PROPOSED AGREEMENT BETWEEN DAMBERG SCOTT GERZINA WAGNER ARCHITECTS, INC. AND THE CITY OF TWO HARBORS TO PROVIDE PROFESSIONAL ARCHITECTURAL SERVICES FOR THE TWO HARBORS MUNICIPAL LIQUOR STORE PROJECT AND AUTHORIZING THE ACTING MAYOR AND CITY CLERK TO EXECUTE THE AGREEMENT ON BEHALF OF THE CITY.
    
    
20. RESOLUTION NO. 11-341-22 SCHEDULING A PUBLIC HEARING FOR THE PURPOSE OF DISCUSSING THE CAPITAL IMPROVEMENT PLAN FOR 6 PM ON MONDAY, DECEMBER 12, 2022.

Be adopted as read. Carried by a unanimous vote of all members present on roll call.

New Business:
Motion by Woodruff and Passe that RESOLUTION NO. 11-342-22 ADOPTING THE ASSESSMENT ROLL FOR THE 2021 – 2022 STREET IMPROVEMENT PROJECT be adopted as read. Carried by a unanimous yea vote of all members present on roll call.

Motion by Glaser and Rennwald that RESOLUTION NO. 11-343-22 REAPPOINTING THE FOLLOWING INDIVIDUALS TO THE FOLLOWING BOARDS AND COMMISSIONS FOR A THREE-YEAR TERM: DAN MURPHY – AIRPORT COMMISSION; KATHY GLENN–– EDNA G. COMMISSION; BOB NORLEN – HRA; DAN JONES – RECREATION BOARD; MICK NELSON – RECREATION BOARD; HELEN HARTLEY–– PUBLIC ARTS & BEAUTIFICATION COMMISSION; AND KATHY GLENN – PUBLIC ARTS & BEAUTIFICATION COMMISSION AND THE FOLLOWING INDIVIDUALS FOR TERMS ENDING IN MARCH OF 2024 LAURA GOUTERMONT – RECREATION BOARD; AND SANDY CABLE – RECREATION BOARD–be adopted as read. Carried by a unanimous yea vote of all members present on roll call.

Motion by Rennwald and Woodruff that the meeting adjourn. Carried by a unanimous yea vote of all members present on roll call.

Ben Redden, President, City Council
Patricia D. Nordean, City Clerk