November 4, 2009 Albert Lea Post Authority Minutes

November 4, 2009

ALBERT LEA PORT AUTHORITY 

MINUTES

Wednesday, November 4, 2009

7:30 a.m.

Albert Lea Business Development Center/Conference Room

 

1. The Regular Meeting of the Albert Lea Port Authority was called to order on Wednesday, November 4, 2009 at 7:30 a.m. by President Ellen Kehr and notation of roll was made.

COMMISSIONERS PRESENT:  President, Ellen Kehr; Commissioners:  Al Brooks, Paul Field, Keith Fligge, Mike Moore, Vern Rasmussen Jr. and Nancy Skophammer.

COMMISSIONERS ABSENT:  None.

EX-OFFICIO MEMBERS PRESENT:  Randy Kehr, Business Community representative, Victoria Simonsen, City of Albert Lea representative (arrived at 8:20 a.m.)

EX-OFFICIO MEMBERS ABSENT:  Christopher Shoff, Freeborn County representative.

STAFF MEMBERS PRESENT:  Dan Dorman, Executive Director; Ryan Nolander, Assistant Director; Nanciana Jensen, Board Secretary.

STAFF MEMBERS ABSENT:  None.

GUESTS:  John Kluever, Freeborn County Administrator; Ed Tschida, Advance Resources.

2)      APPROVAL OF MINUTES OF THE OCTOBER 7, 2009 REGULAR MEETING.

The minutes of the October 7, 2009 meeting were reviewed.  Commissioner Fligge made a motion to accept the minutes as presented, seconded by Commissioner Moore.  The motion carried with 7 in favor and 0 opposed.

3)       RESOLUTION PA-09-23  –  AUTHORIZING PAYMENT OF CLAIMS.

The claims were presented for review by Assistant Director Nolander and discussion followed.  Commissioner Moore made a motion to approve Resolution PA-09-23 authorizing Payment of Claims in the amount of $434,679.73, noting that $400,000 of this was 2 checks for CD’s at Wells Federal and Farmer’s State Bank, seconded by Commissioner Field.  The motion carried with 7 in favor and 0 opposed.  

4)       RESOLUTION PA-09-17  –  CARPENTER LEASE.

Executive Director Dorman reviewed the new 2 year Carpenter lease with the Board.  After discussion, Commissioner Fligge made a motion to accept Resolution PA-09-17 – the Carpenter Lease – as presented, seconded by President Kehr.  The resolution was approved with a vote of 7 to approve and 0 opposed.

5)       RESOLUTION PA-09-24  –  ALAMCO JOBZ PROJECT.

Ed Tschida, of Advance Resources of Mankato, discussed the proposal for the Alamco JOBZ project with Board members.  The JOBZ program still exists, and the Alamco project would qualify for JOBZ benefits for the next 6 years.  The State of Minnesota has given tentative approval of the Alamco JOBZ proposal.

In May, Alamco was sold to Bell Lumber and Pole Company, who already has had a long history with Alamco.  Bell Lumber will be putting in new equipment in the MF Technology building.  The company will need to create 12 new jobs for new hires according to JOBZ guidelines.  These jobs would include 2 supervisory and 10 labor positions.

Tschida informed the Board that the Albert Lea Port Authority needs to pass a resolution for the Alamco JOBZ project, and then it would be taken to the City Council for approval.  Once it is approved by the City, the paperwork would then be filed with the State.  Discussion followed.

Commissioner Rasmussen made a motion to approve Resolution PA-09-24 – the Alamco JOBZ Project as presented, seconded by Commissioner Fligge.  The resolution was approved with a vote of 7 to approve and 0 opposed.

6)       RESOLUTION PA-09-25  –  TRANSFER OF $150,000 FROM THE PORT AUTHORITY REAL ESTATE FUND TO THE PORT AUTHORITY GENERAL FUND.

Executive Director Dan Dorman informed the Board of the details of the proposed resolution.  Discussion followed.  Commissioner Field made a motion to accept Resolution PA-09-25 which was to approve the transfer of $150,000, noting that $50,000 was moved in October and that $100,000 will be moved in November from the Port Authority real estate fund to the Port Authority general fund, seconded by Commissioner Brooks.  The resolution was approved by a vote of 7 to approve and 0 opposed.

7)       RESOLUTION PA-09-26  –  ESTABLISHING FLEXIBLE BENEFIT HEALTH INSURANCE PLAN FOR PORT AUTHORITY EMPLOYEES.

Executive Director Dan Dorman reviewed this proposed resolution with Board members reminding them that the establishment of a flexible benefit health insurance plan was first suggested by the Board in December of 2008.  The intent of this resolution was to formalize the effective date of the adoption of the plan.  Port staff has worked with ABG in setting up such a plan.  The establishment of this plan would benefit both the staff and the Port Authority as the Port will not have to pay the employers’ share of payroll taxes.  The 2009 approximate savings to the Port was estimated to be $250.00, and over $500.00 each year thereafter.  This plan would be in place for those employees on contract with the Port.

Director Dorman has also met with the City Attorney, and the attorney informed him that for the benefit plan to be in place, the Port Authority Board must pass a resolution, and that a written statement by the person benefitting from such plan should be attached to the resolution.  Discussion followed.

The Board acknowledged that the effective adoption date of the ABG flexible health insurance plan for covered Port Authority employees is January 1, 2009.

Commissioner Nancy Skophammer made a motion to approve Resolution PA-09-26 – Establishing Flexible Benefit Health Insurance Plan for Port Authority Employees, seconded by Commissioner Fligge.  The resolution was approved by a vote of 7 to approve and 0 opposed.

8)     SPEC BUILDING UPDATE.

Executive Director Dorman informed the Board that the construction of the new spec building project is coming along really well, although AB Systems has needed to add some ‘rain days’ to the original completion date.  The building should be completed in early December.  There are a couple of interested parties for the use of the building.

Executive Director Dorman spoke with the president of AB Systems regarding the problem of AB Systems using the incorrect color schematics on the building, and according to Tim Reisnour of Zenk, Read and Trygstad, AB Systems will give the Port Authority a $15,000 credit.

Executive Director Dorman informed the Board that two businesses could share the building.

9)     BUSINESS SUBSIDY PLAN CHANGES.

Executive Director Dorman would like to work more closely with the City on the business subsidy plan.  In the past 60 days, the Port Authority has worked with Interstate Packaging and City staff on a revolving fund loan package for Interstate Packaging.  It was discovered at that time, that the existing policy in the City of Albert Lea Business Subsidy Plan had not been followed for the past several loans.  In the case of Interstate Packaging, City staff originally recommended that the existing Subsidy Plan be followed, which would have required a rate of 2% over prime interest rate.  Director Dorman felt it would be difficult to justify the higher rate as this would have been the first above prime rate loan in many years.  Executive Director Dorman has submitted suggested changes to the City for review.  In the case of IPI, Director Dorman suggested, and the Council adopted, a 3% rate which is the current rate being used by the State of Minnesota for similar loans.  Director Dorman also informed the Board that ALEDA (Albert Lea Economic Development Agency) offered to do the credit analysis, although the City Planner chose to do the review.  Discussion followed.

Director Dorman said that there is merit in ALEDA being the first contact when a new business is interested in Albert Lea.  Director Dorman also suggested that the loan applications should start with ALEDA for review and credit analysis.  Dorman noted the need to work in a cooperative partnership on the projects with the City.  Director Dorman said that he could visit with the City within the next couple of weeks to ‘tweek’ the policy, and he also asked for input from Board members.  Discussion followed.  Executive Director Dorman will work on the revolving loan policy/business subsidy plan and come back with suggestions for the Board at the December meeting.

10)   EX-OFFICIO UPDATES.

John Kluever – Freeborn County representative.

• Freeborn County Commissioners have had a couple of workshops which will lead into the final budget and proposed levy.
• Union negotiations at the County level went through mediation with four union groups.
• Albert Lea Lake Dam – The Albert Lea Lake dam is a leaking dam, and needs repair.  Kluever informed the Board that the DNR is under the impression that the County owns the dam.  The land owner would need to give up interest in the bridge and the dam before any repair can be made.
• ICE Update – Continues to expand with population increases.  They may need to expand the transportation unit in the future.
• Wind Farm – The Bent Tree Wind Farm project continues to move forward.  A transportation contract has been awarded to a firm in Texas.  The number of truckloads necessary for the project would be 18,000 truckloads of parts, pieces, etc.   I-35,  I-90 & Hwy 13 will be the primary route, although Hwy 13 is scheduled for repair in 2010.  An alternate route would have to be made at that time.   On November 18^th, Kluever and others will begin doing a two-day environmental tour, i.e. going over access roads for the wind farm, wetland areas, etc.

Victoria Simonsen – City of Albert Lea representative.

• Negotiations with the Teamsters union will be going into mediation.
• The AFSME union came out with a list of things which were not acceptable to the City.
• The City Council held their third budget workshop this past week.  They are trying to balance the budget for 2010.
• The City Council has updated the Capital Improvement plan.  Large amounts of money will be needed for infrastructure within the next five years.
• The City purchased the Mexico Lindo property last week.  The City is planning to demolish the building over the coming winter months, and has submitted applications for two large grants to re-do the channel by the property.  The purchase was done as a charitable contribution from the Emil Olson family with the stipulation that the parcel forever remain park land.
• Art Space – Art-Space has been in touch with the City of Albert Lea staff.  They are still interested in the Freeborn Bank building, although they have asked for an additional $200,000 to continue with the project.  Ms. Simonsen informed the Port Authority Board that the City has another prospect for the Freeborn Bank building.
• An open house will be held at the historic Jacobsen building to see the ‘before’ product of the new Vitality Center on Thursday, November 12^th from 5-8 p.m..  Ms. Simonsen said that “businesses and people are being very generous” as the interior of the building has been demolished so that remodeling can soon begin for the new center.
• Ms. Simonsen informed the Board that the City of Albert Lea Blue Zones/Vitality Project has received national coverage on Nightline.  On November 13^th, Albert Lea’s Vitality Project will receive coverage on the television program “Doctors”; there will be a ‘live shot’ on that show.  Mankato and North Mankato are banding together and will bring about 25 people to talk to the City about our Vitality Project, as they want to learn how the community was brought together in this endeavor.
• The City received exciting news, informing them that Freeborn County is part of a nine county area who has been awarded a $2.7 million dollar SHIP grant.  Albert Lea hopes that, with County approval, they can use those dollars for the new Vitality Project.  Lois Ahern has appointed the Vitality Team as the new SHIP board to oversee the grant funds.  It is hoped that staff can be hired for the new Center with these funds.  The YMCA has also received a $50,000 grant which could also be utilized for the Vitality Project.  Ms. Simonsen said that “The whole community has come together to make this project a reality.”
• There is a party who has shown interest in the Blazing Star Landing property.  This party would like to build a Blue Zones community for ages 50 and above.  They would add walking trails, etc. and also add a small assisted living space.
• Information was requested on the Sunset street project.  Ms Simonsen responded by saying that currently the road has been graded for emergency access.  She also said that it is the plan of Fountain Center to begin construction of their new facility in the area in 2010 or 2011.  At that time, the final phase will be put in place for the Sunset Street project.  St. John’s Lutheran Home may also be interested in the other piece of the lot which is available and next to newly constructed Fountain Center.

Randy Kehr – Chamber of Commerce.

• The Chamber’s Annual Meeting was held at the Wedgewood Cove Golf Club on October 22^nd.   He noted that the guest speakers did a wonderful job.
• The planning commission committee met last night to formalize Design Standards in the B-2 District.  The City Council will hold a public hearing on November 23^rd as the Design Standards policies are an ordinance; it will then go to the City Council for review.
• Kehr informed the Board that he had heard on a news station last night that the Albert Lea Inn could open as early as this weekend, and has promised that 40 jobs would be available.  Ms. Simonsen informed Board members that the hotel could not open until back taxes are paid.

11)   EXECUTIVE DIRECTOR’S REPORT.

a)  Executive Director Dorman gave a synopsis of the final sewer rate report by TKDA which he had just received.  Inflow and infiltration (I & I) are those costs associated with treating rain or other clean water that enters the system due to such things as sub pumps hooked up to the sanitary sewer and aging sewer pipes that allow rain water into the sanitary system.  Both current City Ordinance and the analysis ALEDA commissioned allocate these costs to the fixed charges of the bill and not on flow.  The TKDA proposal would allocate these costs to flow which could result in one company paying a higher rate, even if both companies contribute about the same amount of I & I.  The question remains: What is the best way to pay for it and is it a community wide problem or do we expect 7 industries to pay for it, as most of the inflow comes from residential neighborhoods.  Discussion followed.

The proposed method of charging fixed sewer rate costs, especially for commercial customers, is based on the potential use of sewer service due to the size of the commercial company water meters, many of which are oversized, and not on a charge based on ‘hook up’ costs.  A problem could arise with the TKDA proposal as many commercial customers would likely reduce their meter size, which would then reduce the income projections.

Director Dorman suggested possible options to correct this problem to the Board: 1) Update and use the existing City Ordinance, which would result in industrial rates being very close to what is currently in place;  2) Adopt the ALEDA Rate Study; or 3) Increase the industrial flow rate to $2.42 (it was reduced by 25%), leaving the surcharges unchanged, use the existing fixed rate structure and increase it by whatever percentage is necessary to meet budgetary requirements.

Discussion followed.  Port Authority Commissioner and City Council member, Vern Rasmussen explained that the City Council is taking the matter very seriously, saying that the system has to ‘feed itself to keep the system going’.  A balance is needed; where is the equitable point as far as inflow and infiltration?”  City Manager Victoria Simonsen advised the Board that the City does a ‘leak’ survey every year, saying that “It comes back to philosophy and how to apply it to get a balance.”

A public hearing is needed as the sewer rate structure is an ordinance before the City council can make a decision.  Ms. Simonsen wanted the Board to understand that the City will give an incentive to any large wet industry business that may want to locate in Albert Lea.

b)      Carpenter Lot Update – The reconstruction work has begun on the parking lot.  The cost split is based on the low bid for bituminous.  This information has been provided to Carpenter.

12)   COMMISSIONER ITEMS.

• A thank you was given to Director’s Dorman and Nolander for the legislature meeting held at the Wedgewood Cove Golf Club.  Board members were encouraged to talk to our legislators about economic development, as tools are needed to make Minnesota a successful State.  Commissioner Moore had received a letter from a legislator with business ideas we could pass along to help the State.

13)   ADJOURNMENT.

Commissioner Moore made a motion to adjourn the meeting at 9:35 a.m., seconded by   Commissioner Rasmussen.  The motion carried with 7 to approve and 0 opposed.  .

Filed and attested November 4, 2009 Ellen Kehr, President                            Nanciana Jensen, Secretary