No Video

The broadcast of our council meeting of June 3^rd didn’t go as planned. Somewhere along the line the video part of the board cast was lost and bringing it back wasn’t successful. There was a bit of a scramble dealing with it but to no avail. We were able to provide the audio portion however. This got me to thinking that the equipment was installed when the building addition was done and most of the equipment is 14 years old.

I know I discussed this issue briefly when another component failed not to long ago. Not only is the equipment we use getting to the point of failure but technology has changed drastically since 1994. The video equipment costs we experienced then were about $70,000. Over time we have added to this and replaced some equipment but we’re rapidly getting to the point of looking at the future to determine where we’re going with all of this. Replacing all the equipment at once isn’t in the budget and may not be cost effective. However waiting for everything to die, a piece at a time is also not a prudent approach.

We will hopefully have the situation resolved for the June 17^th meeting providing we can replace the component that failed. Our consultant thinks he knows what happened and is trying to get a replacement to install when he comes to check it out. During that meeting we’re also going to have the other discussion about the future and what changes need to be made.

In terms of revenues we have some options that aren’t property tax dollars. When Connections established their franchise for video services we required them to provide some capital financing for equipment needs to operate the local access cable broadcast channel. Some resources still exist from these funds. In addition there is a cable tax that is applied to users’ monthly bills. These funds are paid to the city on an annual basis. These funds have been used to pay for the existing equipment and some routine maintenance and operations expenses but need to be dedicated to replacement.

For now we’re going to hobble along but dealing with this larger issue needs to become a priority. I’m sorry for any inconvenience this may cause and thank you for your patience. If anyone would like a copy of the minutes please give city hall a call and we’ll send out a copy to you.

Utility Host Community Aid

High on my list of concerns for the city has been the issue of lost property tax values of the Sherco power plant in the city. The State of Minnesota, through the Department of Revenue, determines the values of power plants within the state. The way they determined value was a product of an outdated formula that was being challenged by utility companies. To address this concern the state hired a consultant to help the state develop a better way to value power plants and utility properties. The process of review and recommendation took about 2 years. Upon the conclusion of the study a draft rule was made, hearings held and an administrative law judge ruled in favor of the change. The governor signed the revised rule it into law.

The result of revised rule is a devaluation of utility property in Becker by 21.8%. The rule had provided for a phase in of the rule over a period of three years. The city had already seen a 20% reduction (of the 21.8%) for 2008. The next two years we were to see the value drop to 50% and then 100% in 2010. The net tax capacity that was being lost is $3,598,675, the largest loss in the state. Putting that in perspective the loss is in excess of that created by the new Medtronics campus in Mounds View.

Dealing with the resulting loss of taxes has been an ongoing concern for us and one year of cuts have already taken place for 2008. Looking forward we had developed a contingency plan to address the loss however we felt it nearly impossible to assume cost cutting measures that would be deep enough to make up the difference without raising taxes. More than $1 million is needed. This is particularly true when you factor in the amount of debt service we have as a percentage of the budget. Our overall levy is about $5.15 million where 31.6% of that involves debt service where no adjustment can be made.

During the past two legislative sessions the legislature has provided in the tax bill a provision to adjust the tax rate paid by utilities to make up for the change in value. Last year the governor vetoed the bill which included the change. This year it was again included in tax bill and through negotiations of the legislature and the governor in the final hours of the session a compromise was obtained which addresses the issue. The compromise provides the city with State Aid in an amount equal to replace the lost tax revenues formally paid by the utility companies. This aid is considered permanent aid and reduces over time until a threshold is met.

The budget issues as a result of lost value from utility property have been addressed with adequate aid payments from the State of Minnesota. Our hard work and those of legislators who assisted us in this effort have provided a solution. I thank everyone who played a part in getting this accomplish. I’m sure there will be other battles concerning utility taxation in the future but for now we have the resources to move forward.

More Water

Water for the domestic use is and has been a concern for some time now. I’ve written about the failing well and the new well and wellhouse in Rivers Edge Park. I haven’t however discussed one of our existing wells, number 3.

Well number 3 is located in the golf course behind the golf maintenance building. The well house there supported both well number 3 and number 5. Well number 5 was the well that failed this past year. Using these two wells at the same time posed some problems as they were too close together. Pumping both of them produced less than each rated capacity so we would alternate their use. Upon further analysis it was noted that well number 3 had a larger pumping capacity than the pump was sized for. This pump was originally sized to pump 350 gallons per minute. When this well was installed the city didn’t need the larger capacity that could be achieved from a larger pump so a smaller more efficient motor was installed.

Up until well number 5 failed it didn’t make sense to upgrade the motor as the interference between the two wells wouldn’t have given us any more water. Now with well number 5 out of the picture, the interference problem isn’t there and the full capacity of the well number 3 can be utilized. Recognizing that the city has been in the process of swapping out the 30 hp motor and installing a 40 hp pump motor in well number 3. This change out will give us significantly more gallons per minute. We’re hoping to get 600 gpm but it may be 550 gpm.

In making this change over a good deal of existing equipment is being used in the well house. The piping for the larger well number 5 is being used now for the upgraded well number 3. The VFD (variable frequency drive) controller from well number 5 is being reused to better control the system with slower startups of the pump and use to match the needs for water demand. This not only saves energy but it also reduces wear on the pump motor extending its life. All the disinfection equipment continues to be used as well.

Making these changes is accomplishing more with the resources we have. With these upgrades we benefit with the potential for 60 to 70% increase in the production of the well with limited additional costs. This additional capacity in production doesn’t quite get us to the point of what was lost with the well number 5 failure but it does get us close. With well number 6 coming on board we should be ahead of the game for the summer season.

A Safety Culture

I was struck with the celebration that occurred at LPI this past week as it isn’t often that an organization takes the task of safety to the heights they have. They have achieved almost a million man hours with no lost time due to an injury. That’s not on the heals of luck but rather on a continued hard focused effort to have and maintain an safe environment. They have enrolled in the state sponsored Volunteer Prevention Program which is type of partnership with the state and OSHA to self direct their safety program. They have a very active safety committee which directs their safety effort. These actions have netted them the Mn Star Worksite designation.

As Mike Fiterman, CEO of Liberty Diversified Industries, the parent company to LPI stated they have an obligation to each employee to operate a safe environment. Each employee needs to return home at the end of the day with all the parts he came to work with. The celebration was one of honoring each employee for their commitments towards a safe environment. The celebration included representatives from Minnesota Department Labor and Industry. Commissioner Steve Swiggin congratulated them stating that LPI has a better safety record than 87% of all industries in Minnesota.

I believe we all have something to learn from these efforts. Being safe is something we can get excited about. Having a safe employment situation is possible with hard work and dedicated effort. The lack of lost work days due to injury at the job is worth celebrating and TRULY is a worthy goal. Accomplishing that goal requires a work ethic to operate in a safe manner and as such LPI has been successful in accomplishing that culture. Congratulations to the employees at LPI for your success!

Extenting Utilities

Sherburne County has a schedule for upgrades and replacements of the county highway infrastructure. They have a long range plan and also a 5 year plan. They budget on an annual basis and schedule projects throughout the county based on needs. Next year they have scheduled two projects for Becker. One is a mil and overlay of asphalt on Sherburne Avenue from Highway 10 to Co. Rd. 16. The other is a reconstruction of Co. Rd. 67 starting at Co. Rd. 24.

With a reconstruction of a roadway the city has an opportunity to install utilities of water and sewer while the roadway is dug up. This saves the costs of rebuilding the road at a future time, if utilities were installed later. Doing so is important not only from the standpoint of costs savings but also in the context of this area being our growth corridor. Making the installation of utilities at this time gets us ahead of the curve providing a proactive approach.

In working through this the county has been great to deal with. We have good cooperation and through our joint efforts will see a project that works for both parties. The process includes the county setting grades and designing the roadway and drainage. The city designs the water and sewer installation and makes that information available to the county for a joint bid, which will probably take place in February of 2009. The city provides for inspection of the pipe work and the county provides for inspection of the roadwork. We pay our costs associated with the contract to the county who administrates the contract.

In addition to the pipe work the city will also be looking at an additional well and well house to be located towards the north end of the project. Installing another well should get the city positioned ahead of the needs of the residents and their demands for water. This will reduce our heavy dependence on just a couple of wells. Addressing the water issue should give us breathing room to meet present and future needs.

Looking at all this from a financial perspective is where we start to grown a bit. Having the utilities installed in our growth corridor gets us ahead of the game but the needs for growth have certainly cooled in the last couple of years. The city is fortunate that we have adequate resources to accomplish these tasks due to planning and anticipating these needs. Opportunities now exist to work together and accomplish the right thing, a joint project. However it may not seem apparent to accomplish them at this time as the times of change are moving slowly.

In looking at this two things come to mind. With the timing of the roadway project we would be considered foolish to not take advantage of the opportunity to install utilities. The well as an additional water supply is also hugely important to the residents of the city. Yes, doing all of this is costly but planning for our future from an infrastructure and fiscal standpoint addresses the responsibility of managing the affairs of the city and continues services to our residents.

Hope for Another Time

A good number of years ago the city and NSP had started discussions about the possibility of a trail through NSP’s buffer property south of Sherco and north of the Mississippi River. The idea was pursued and floundered and raised again and met a number of setbacks, mostly due to funding. A couple of years ago Senator Wergin championed the cause and got a portion of the funding approved from the State on Minnesota in the bonding bill. That funding was too provide 50% of the costs and the city and county were also to kick in 25% each to fund the project.

With funding in hand we had high hopes to be able to accomplish the project providing for a trail in almost untouched property owned by Xcel to be available to hikers and bikers. The trail consisted of 2 parking areas and with both paved and dirt trails. This all provided an opportunity for all types of users to enjoy nature and the vistas available on the trail that was to be created. We had, along the way, also assembled a number of supportive groups. Habitat restoration was worked on as well as the elimination of invasive plant species. The National Park Service was also helpful in coordinating efforts along the way.

The final step before construction was the need to negotiate an easement that was acceptable the city, county, the State of Minnesota and Xcel. Working through the easement agreement was difficult for the city and county but became very difficult for Xcel and the State of Minnesota. The use of “Bonding” funds from the state requires a higher standard of ownership than perhaps a DNR trail grants program would require. Xcel also wanted a higher standard of ownership with a reverter clause which would allow them to get the easement back if there was a “business” concern that prompted the need for the property.

It is with great sadness I state that the parties could not agree on a solution that was workable and the project has now been declared off the table and essentially dead. The state has withdrawn the funds from this project to be applied to another worthily cause.

Working through these issues was a good deal of talented people who all need recognition but three stand out in my mind. These include Dave Heberling of NSP who started with the idea. Kelli Neu, of my staff, worked diligently on the project with countless meetings and activity. She really took the lion’s share of the project under her wing. Finally, Randy Thoreson, from the National Park Service, who was able to leverage interested parties as well as enthusiasm in making the final push a reality towards funding. In the end we had many, many people who participated, perhaps numbering in the mid 20’s, all interested in the project. All of them deserve credit for the contributions.

Perhaps at another time this could be raised again as I believe those that contributed had a great deal of hope for what was to come. I also feel that this hope continues.