VILLAGE OF KALKASKA
MINUTES OF A REGULAR COUNCIL MEETING HELD ON MONDAY, OCTOBER 9, 2017 IN THE VILLAGE COUNCIL CHAMBERS, 200 HYDE STREET, KALKASKA, MICHIGAN, 49646.
CALL TO ORDER/ROLL CALL
President Sieting called the meeting to order at 6:00 p.m.
PRESENT: President Sieting and Trustees Dupuie, Ellis, Kelly, Needham, Sanborn and White.
STAFF PRESENT: Scott Yost, Village Manager; Angie Koon, Village Clerk; Helen Artress, Department of Public Safety Administrative Assistant; Glenn Artress, Police Lieutenant; Blake Huff, Police Sergeant; Mark Baars, Cleanwater Plant Supervisor; Nick Blasko, DPW Supervisor; Jennifer Standerfer, Village Treasurer.
PUBLIC PRESENT: George Konvinski, Pat Konvinski, Chris Helberg, Mark Johnson, Annette Goodyear, Ann Kirtley, Mickey Miller, Kelly Hall, Kevin Rogols, Clyde Johnson, Darren Graham, Terry Roote, Diana Shafer, Doug Hicks, Dawn Uranis, Amy Sieting, Ken Berry, Jonathon Dupuie, Crystal Spencer, Daryl Dimon, Dan Johnson, Lon Husbands, Elizabeth Dunham, Joe Verlin and Dennis Mansfield.
Dan Johnson started with a prayer and President Sieting led with the Pledge of Allegiance.
APPROVAL OF REGULAR AGENDA
Motion by White, second by Needham, to approve the agenda as presented. Motion carried on a voice vote.
Motion by Sanborn, second by Ellis, to approve as presented. Motion carried on a voice vote.
Crystal Spencer asked whether the public would be given the opportunity to comment on the Audit Presentation after it takes place. President Sieting stated that he would allow this at some point during the meeting.
Audit Presentation from Gabridge and Company (Fiscal Year Ending 02/28/2017) – Joe Verlin introduced himself as the principle in charge of auditing services with Gabridge and Company. Verlin thanked staff for their assistance and professionalism during the course of the audit. Verlin stated that they were able to give an Unmodified Opinion, the highest level of opinion available, meaning that they were able to verify all numbers presented to them.
Verlin reviewed the audit’s financial highlights and comparative statements, stating that the Village of Kalkaska is in line with other villages its size. Verlin pointed out that the General Fund is the only fund with an unassigned fund balance, and explained that there is no need for the Village to file a Deficit Elimination Plan as it is adequately funded with a strong financial condition. Verlin commented that none of the departments were over budget, and commended department heads. Verlin also stated that no material weaknesses were found in the Village’s internal control procedures.
Verlin reviewed Village funds’ revenues, expenditures and changes in net position. Verlin also reviewed the net pension liability, and discussed the Village’s OPEB (Other Post-Employment Benefits) obligation. Verlin recommended that the Village develop a strategy to increase its pension (MERS) funding, stating that it has 23 years to fully fund MERS.
Verlin stated that there was nothing unusual or suspicious found in the Village’s revenues and expenditures, but noted concerns with transparency in financial reporting. Verlin recommended that the Village develop strategies to increase transparency. Verlin suggested that revenue and expenditure reports be provided to Council each month, and that public information be made available to the citizens.
Verlin stated that concerns were brought up regarding related-party transactions. Verlin recommended that the Village review its Ethics and Purchasing Policies, and consider amending them for clarity. Verlin emphasized that these are comments only, not findings, and no corrective actions are needed as nothing illegal was found. Verlin further stated that this matter should be resolved now before it becomes a bigger issue.
Trustee Dupuie asked whether employees are contributing to the pension plan. Verlin stated that contributions are being made by the employer only.
Trustee Needham expressed concern over the issues discussed above, as Council members did not learn of these issues until after the audit was released. Needham stated she feels that Council should have been made aware of these issues earlier. Verlin advised that these comments were brought to the auditors’ attention toward the end of the process, and they did not have time to present the issues to Council beforehand. Trustee Dupuie stated she believes that Council knew the 2017-2018 budget was beginning in a deficit.
Manager Yost pointed out that healthcare liability has been the Village’s main focus for some time. Yost stated that the Village will need to look at increasing MERS liability in the next couple of years.
Yost stated he feels that, while the comments reviewed above are different than findings, they still exist in writing and seem to have the same gravity as findings. Verlin stated that these concerns were voiced by multiple sources.
Trustee Dupuie stated she believes that issues of non-transparency are not unfounded. President Sieting questioned Dupuie as to where she sees a lack of transparency. Dupuie stated she believes the public should be aware when the Village President’s services are being utilized, and when the Village is paying an invoice to a Council member. Manager Yost stated that Joe Verlin provided a sample Ethics Policy, which may be clearer than the Village’s current Ordinance on Ethical Standards of Conduct. Yost stated that President Sieting may propose that this be reviewed in the near future.
President Sieting stated that he has owned his garage door company for 22 years, and has provided services to the Municipality at a great discount.
Trustee Kelly stated she recalls, early on in her term, seeing a bill from President Sieting’s company on the invoice register. Kelly advised she asked for transparency at that time as she felt there was a lack of transparency, and stated she has brought this up multiple times since her term began in November of 2016. Kelly stated she has previously voted “no” on the bills due to a lack of transparency.
Elizabeth Dunham questioned the Village’s asset deficit, as pointed out during the Audit presentation, and asked whether this was normal. Joe Verlin stated this is not atypical of municipalities with Defined Benefit pension plans due to new pension reporting standards.
Crystal Spencer asked whether it appears that Village water and sewer rates are projected to increase. Verlin stated that an auditor’s role is to look backwards at an organization’s finances, whereas looking ahead at potential water and sewer rate increases is more an engineer’s role. Spencer referred to a comment in the Village audit regarding the use of Village assets by employees. This comment stated that law enforcement personnel were unable to substantiate the claims made. Spencer asked which police agency investigated, and was not able to substantiate, these claims. Verlin stated the claims were not investigated by the Village Police Department.
Lon Husbands asked whether the State would have a say in whether the water and sewer rates were increased. Manager Yost stated that a rate study would be needed, but the Village is not in a position with its water and sewer funds where it cannot fund its loans.
Elizabeth Dunham asked whether loans were taken out on the current water and sewer projects. Manager Yost responded that they were funded by loans within the Village’s budget.
Motion by Sanborn, second by Needham, to pay the bills as presented in the amount of $833,626.66. A roll call vote was then taken: Ayes – President Sieting and Trustees Ellis, Kelly, Needham, Sanborn and White; Nays –Trustee Dupuie; Absent – None. Motion carried.
REPORTS FROM COMMITTEES
Parks and Recreation Committee – Trustee White stated the committee met on September 28, 2017 to discuss the Re-Leaf Program, which will provide 50 new trees to the Village, and the allocation of trees at Chalker Park and the Mill Pond. White stated the committee also discussed the types of trees proposed for each location, and the reason behind the species selected. White announced that volunteers are needed for the tree-planting event, which will be held on October 21, 2017. White requested that DPW be directed to leave a buffer zone at the Mill Pond.
Personnel Committee – Terry Roote of Great Northern Benefits, the Village’s insurance agent, reviewed renewal information for active employees’ health insurance benefits. Roote stated that the Village currently takes part in a Defined Contribution benefit plan where the employer defines how much they will contribute toward benefits, with the employee selecting the plans and products that best meet their needs. Roote reviewed renewal rates, and explained the components involved.
Trustee Needham stated that the committee met with Roote on October 2, 2017 to determine the Village’s contribution to health insurance. Needham reminded Council that, when transitioning to the Defined Contribution Plan last year, the Village allotted a hard cap amount which covered the plan closest to what employees already had. Needham explained that employees have eight different plans from which to choose. Trustee Dupuie questioned the monthly cap. Roote explained the Hard Cap method, which the Village adopted the previous year, and stated that the hard cap budgeted by the Village has been below the maximum allowance as defined by the State.
Lon Husbands asked whether the Village’s contribution toward insurance was the same for both union and non-union employees. Manager Yost explained that current union contracts are now drafted based on the “Cafeteria Plan” described above.
Kalkaska Memorial Health Center Administrator Kevin Rogols asked how many insurance administrators existed for the eight plans from which employees may choose. Roote advised there is only one administrator for all plans.
Finance Committee – Trustee Sanborn stated that, in addition to bills, the committee reviewed monthly payroll reconciliations, monthly payroll, bank reconciliations and budget amendment numbers 1 and 2.
REPORTS ON SINGLE MEMBER ASSIGNMENTS
Manager Yost reported that the Medical Marijuana Advisory Team met with the Manager and Village Staff, and media was invited as well. Yost stated that five Provisioning Center licenses will be approved by the Village this week. Trustee White clarified that the licenses are being approved at the Village level only, and may not be available if licenses are not issued by the State. Trustee Dupuie asked how the deadline for application submissions was communicated. Yost classified this as a ‘soft’ deadline, and stated that applications may still be submitted.
Trustee Dupuie inquired about the reimbursement request from the Cornell building owner of unused deposit money from the Brownfield Plan. Brownfield Redevelopment Authority member Kevin Rogols stated the board did not take action on this item. Treasurer Standerfer advised that this request was tabled until next month, and will ultimately have to go before Village Council for approval.
Trustee Sanborn reported that the Village’s Blight Ordinance must be updated, requiring a meeting of the Ordinance Review Committee.
Trustee Dupuie advised she is still corresponding on the utilities insurance program.
REPORTS FROM VILLAGE OFFICERS
The September 2017 report was provided by Lieutenant Artress.
CLEAN WATER REPORT
The September 2017 report was provided by CWP Supervisor Mark Baars. Trustee Kelly inquired about the Process Control issues. This will be addressed by Village Engineer Clyde Johnson later in the meeting.
Manager Yost advised that a Personnel Committee meeting is needed to discuss renewal of Craig Wood’s work agreement as Water Plant Operator.
PRESIDENT’S REPORT – None
UNFINISHED BUSINESS – None
Consider Approval of Pay Draw Number 9 Rural Development Water and Sewer Project – Clyde Johnson of Gosling Czubak explained the work involved in this pay draw. Johnson stated that work at the Lift Station was delayed and has just begun. Johnson also stated that punch list items will be completed at the Wastewater Treatment Plant. Wastewater Treatment Plant Supervisor Mark Baars reminded Council that the report he submitted was for the previous month, which may be causing confusion. Manager Yost stated that it is not unusual to have a punch list at the end of a project this size.
Motion by White, second by Sanborn, to approve Part 1 (Water) of Pay Draw #9 in the amount of $207,262.56 contingent upon Rural Development approval. A roll call vote was then taken: Ayes – President Sieting and Trustees Dupuie, Ellis, Kelly, Needham, Sanborn and White; Nays – None; Absent – None. Motion carried.
Motion by Needham, second by White, to approve Part 2 (Sewer) of Pay Draw #9 in the amount of $41,487.09 contingent upon Rural Development approval. A roll call vote was then taken: Ayes – President Sieting and Trustees Dupuie, Ellis, Kelly, Needham, Sanborn and White; Nays – None; Absent – None. Motion carried.
Consider Approval of Change Order No. 4 (Rural Development Water and Sewer Project) and Authorize Village Manager to Sign – Clyde Johnson of Gosling Czubak stated that this change order is associated with the SAW project. Johnson explained that there is a need to raise manhole covers, which was determined by SAW to be a physical improvement. The Village’s current grant does not allow for physical improvements. Johnson stated Rural Development agreed that, if Council approves the change order, Rural Development funds may be used. Johnson stated that the lowest bid was submitted by Sterling.
Motion by Sanborn, second by Ellis, to approve Change Order No. 4 in the amount of $9,000.00. A roll call vote was then taken: Ayes – President Sieting and Trustees Dupuie, Ellis, Kelly, Needham, Sanborn and White; Nays – None; Absent – None. Motion carried.
Consider Recommendation from the Kalkaska Brownfield Redevelopment Authority to Appoint Dawn Uranis to a Vacancy on the Board – Motion by Needham, second by Ellis, to appoint Uranis to the vacancy on the Kalkaska Brownfield Redevelopment Authority for term expiring in 2018. Motion carried on a voice vote.
Consider Adoption of Resolution 2017-029 Budget Amendment Number 1 – Motion by Needham, second by White, to adopt Resolution 2017-029. A roll call vote was then taken: Ayes – President Sieting and Trustees Dupuie, Ellis, Kelly, Needham, Sanborn and White; Nays – None; Absent – None. Motion carried.
Consider Adoption of Resolution 2017-030 Budget Amendment Number 2 – Motion by Sanborn, second by White, to adopt Resolution 2017-030. A roll call vote was then taken: Ayes – President Sieting and Trustees Ellis, Kelly, Needham, Sanborn and White; Nays – Trustee Dupuie; Absent – None. Motion carried.
Consider Adoption of Resolution 2017-031 Hard Cap Compliance with Public Act 152 of 2011 – Motion by Needham, second by White, to adopt Resolution 2017-031. A roll call vote was then taken: Ayes – President Sieting and Trusteed Dupuie, Ellis, Kelly, Needham, Sanborn and White; Nays – None; Absent – None. Motion carried.
Authorize Village Manager to Sign Benefits Funding Worksheet (Health Insurance Renewal) – Trustee Needham reviewed the proposed hard caps to be allotted for employee health insurance plans. Motion by Needham, second by Kelly, to authorize the Village Manager to sign the Benefits Funding Worksheet. A roll call vote was then taken: Ayes – President Sieting and Trustees Dupuie, Ellis, Kelly, Needham, Sanborn and White; Nays – None; Absent – None. Motion carried.
Elizabeth Dunham asked whether Village Council packet materials could be made available to the public for review prior to Council meetings. Manager Yost stated the Village may be able to accommodate this.
Dunham stated that she believe in supporting local businesses, and asked that proper procedures be followed by the Village to ensure that no conflict of interest exists. This comment was made regarding utilization of the Village President’s garage door company for services.
Dunham asked why the Village Police Department was being expanded at this time when, as pointed out by the auditor earlier, Village expenditures exceed revenues by $500,000 in the current year’s budget. President Sieting stated the expansion of the Police Department has always been hypothetical, but believes finances should be put into place if the time comes. Sieting further stated that, with safety being the top priority, it is important to consider an increase in law enforcement when looking at the growing Village. Dunham asked whether the expansion of the Police Department was in the works now. Sieting again responded that the Village is researching the issue but not taking any action at this time.
Dunham inquired about the LEIN area that is being built for the Village Officers, and asked why it was needed. Sieting stated this will be a self-sustaining and time-saving measure, as the Kalkaska County Sheriff’s Department only has one officer on at a time. Sieting stated that an existing room will be repurposed for the secure LEIN area. Lieutenant Artress cautioned against further discussion as this topic is getting into the day-to-day operations of the Department of Public Safety.
Crystal Spencer asked for identification of those who serve on the Medical Marijuana Advisory Board. Manager Yost explained that this is a loose, ad-hoc group comprised of both Village staff and members of the community. Yost further stated that this group does not have voting authority.
Spencer inquired about the status of the Village website. Trustee White stated he believes the updated site may be completed by the end of the month. Spencer asked whether public could sign up via the website for notifications of upcoming Council meeting topics. Treasurer Standerfer stated she is updating the current Village website, and will look into this possibility.
A 5-minute recess took place at this time.
CONSIDERATION OF TRIAL OR SETTLEMENT STRATEGY WITH COUNSEL REGARDING PENDING LITIGATION (POSSIBLE CLOSED SESSION PER SECTION 152.268E OF THE OPEN MEETINGS ACT
Motion by White, second by Kelly, to enter into closed session to consult with the Village of Kalkaska attorneys regarding trial and settlement strategy in connection with the pending healthcare lawsuits with the Hills, Ramseys, and Chew-Artress’s pursuant to MCL 15.283(e) because discussion in open session will have a detrimental financial effect on the litigating and settlement position of the Village. A roll call vote was then taken: Ayes – President Sieting and Trustees Dupuie, Ellis, Kelly, Needham, Sanborn and White; Nays – None; Absent – None. Motion carried. Closed Session began at 8:00 p.m.
RETURN TO OPEN SESSION
Motion by Dupuie, second by White, to return to Open Session. A roll call vote was then taken:
Ayes – President Sieting and Trustees Dupuie, Ellis, Kelly, Needham, Sanborn and White; Nays – None; Absent – None. Motion carried. Open Session resumed at 8:25 p.m.
With no further business coming before this Council, President Sieting adjourned the meeting at 8:25 p.m.
Recorded By: Angie Koon, Village Clerk