October Agenda Meeting Minutes
October 2, 2017
The meeting was called to order by Mayor John Werner at 6:00 p.m. Present for the meeting; Mayor John Werner, Councilors Greg Andrews, John Goman, Suzanne Herstad, and Bob Quade; Clerk Joan Jauss, Treasurer Holly Herstad; and attached list of public.
Bob made a motion to approve the September 5, 2017 Agenda Meeting Minutes with a second by Suzanne. All vote in favor. Motion passed.
Charitable gambling Ducks Unlimited: Joan shared a copy of an application for a charitable gambling permit for Ducks Unlimited at the Other Place Bar and Grille on October 20, 2017. Joan will bring to the next Council meeting for action.
Public works bond payment: Joan shared a payoff statement for the public works bond. If paid by October 31, 2017, there would be a savings of $780 otherwise there is only one payment left, payable in 2018. Joan stated we do not have the funds at this time to pay the bond off early, Council agreed.
Ordinance #8 – dangerous weapons: Joan stated this will be on the consent agenda at the next Council meeting. The draft ordinance has been posted for 10 days.
Checking balance sheet accounts: Holly stated for many years there has been a discrepancy of what we have totally on hand and what is in Banyon, due to recording to the incorrect accounts, total cash is correct. Holly is asking that transfers be done on book only, not doing anything at the bank, then the balances will be the same. John W. asked we are not moving money just doing entries. Holly stated we are doing on the book corrections, if you look at the $6,998.44 entry, Banyon is showing we have this much more than we actually have in checking, the next entry for $4,370 shows we are less than what we have in checking and then finally the last entry for $2,628.12 is less than actual. Holly stated, if we make the transfers as requested this will correct the accounts. John W. asked if this is new, Holly stated she has been aware of this issue for a while. John W. asked what does our auditor say on this, Holly and Joan stated the auditor is in agreement with this entry. Joan reiterated cash is actually not changing, this is a correcting entry to Banyon. John G. asked if this is going to be a problem in the future. Joan stated this is a correction that will fix this issue but there are still more adjusting entries that will need to be made to other accounts to get the correct balances in Banyon. Holly stated once this journal entry is done the utility checking account can be moved to general checking as approved by Council in February 2017. Suzanne stated there is still a nine-cent difference in the balances. Holly stated this is due to PERA rounding when paying online versus what was withheld from paychecks. John W. stated the Treasurer, Clerk, and Auditor are recommending this transaction. Suzanne made a motion to support the transaction to start cleaning up the accounts with a second by Greg. All vote in favor. Motion passed.
West Calvary bond payment: Holly stated when Mary was here in August she created journal entries to combine funds 240, 243, and 247, in which all transactions were lumped together. Holly stated Mary asked that we handle these transactions as they occur as they are difficult for her to do as a lump sum. Holly stated when the transactions were done, the principal payment that was made in January for W. Calvary ended up being removed and it needs to be put back. Holly is suggesting the attached journal entries be done. Holly stated, Mary made a comment that the correcting entry was $3.4 million and it should have been $3.2 million which is what erased the $200,000. We can either leave it for Mary or do the transaction now, Holly would prefer to do it now as per Mary’s suggestion. Also, our books do not correctly reflect the W. Calvary fund for expenses and profit and loss statements. Joan stated to the Council that she does not support this journal entry as we have documentation showing the payment was made, the entry was not removed, it was combined, Mary did one transaction instead of individual transactions. We have proof the payment was made. John W. asked what does the auditor say. Joan stated the auditor’s position is, it’s done. Holly stated in the attached email, in which she was questioning some items, Mary did this as a principal payment on the $200,000 not the debt, so our debt was not eliminated, so we still showed $6 million plus on our books, and we had a principal expense that should not have been done due to the fact that this was a cross over bond. When Holly emailed the auditor, her response was instead of removing the debt, she debited the expense account. If you want to remove the debt, the auditor gave Holly a journal entry to do, which was done. Holly stated after the entry was done she reviewed it, and it showed the $200,000 was overwritten by this entry and she would like the books to reflect correctly. There are some other issues, there was a double entry done on a payment, that had to be reversed and the investment account was not reflected correctly. The requested entry the Council has, has been submitted to the auditor. Suzanne asked what does this impact in the future, Holly stated she cannot give the Council correct information. Suzanne asked what will be incorrect, Holly stated the Profit and Loss Statements. Holly stated if you look at the June Profit and Loss Statement the payment is reflected, in July it is not. Joan stated the auditor did the entries at the general ledger level not the revenue and expense level so it will not show up. Holly says her internal reconciliation is also off. Suzanne asked if we are breaking any accounting laws with the entries, Holly stated she feels the auditor does not understand, she has not looked at everything as she is not here, the cash dispersements are $311,000 and now are $150,000 as expenses. Holly stated there is a big deviation and we are overstated on our interest expense and need to make that adjustment and the $200,000 principal payment. Holly does not like that the profit and loss and expenditures do not reflect the $200,000 payment. Joan stated it is reflected in the general ledger. Suzanne asked when would Council need to see this, Joan stated they wouldn’t, Holly stated when we go to transfer money from our investments, expenditures less assessments it will be missing when we go to make our end of the year transfer for W. Calvary, we will be off the $200,000. Joan stated when the auditor comes, if she feels the entry needs to be made, she can make it at that time as she is not a fan of undoing transactions the auditor has done. Joan stated we closed two of the old bond accounts and combined into the new one, that was the reason for the transaction and when we made the payment, we made it on the old bond, that is why it doesn’t show. Holly stated she sent an email to the auditor that says our debt is still at 6 million who emailed back she did the entry incorrectly and if we want to correct we need to make the transaction was for 3.4 million. Holly stated it should have been 3.2 million, as we are off the $200,000 principal payment. John G. asked if the principle payment is reflected in the general ledger. Joan said yes. John G. stated he does not feel the need for the change. John W. stated the Treasurer has requested this entry. Greg made a motion to go with Mary’s entry and if a change is needed she can fix it at the time of the audit. John W. second the motion as he is uncomfortable changing something the auditor did and because there is a disagreement between the Clerk and the Treasurer, he doesn’t want to change anything. Suzanne stated she is unsure if the auditor understood the question, and she agrees if any changes are needed she should fix them. Bob agreed with Suzanne and is all for simplifying things but keeping it transparent so he thinks we should clarify things with the auditor. All vote in favor. Motion passed.
Fund 300; 1986 Sewer Bond: Joan stated we still get assessments, randomly, for the 1986 Sewer Bond which has been paid off for some time. Joan is asking Council if it would be ok for any assessments we receive for this bond, that we apply them to fund 601 Sewer. Holly agreed this would be the proper place and there is $245.85 on the books currently in fund 300, which will need to be transferred to 601 Sewer. Greg made a motion to move fund 300 to 601 Sewer going forward, with a second by Suzanne. All vote in favor. Motion passed.
Toni Credit Card: Joan asked Council if they would approve a credit card for Deputy Clerk, Toni. John G. stated he would approve a card with a $1,000 limit. Suzanne made a motion for Toni to get a credit card with a second by Bob. All vote in favor. Motion passed
Ditch 14: Per John W. ditch 14 is a ditch that runs from Ridgeview Road to 3rd Ave. S. across E. Calvary and across Raymond Ave. The ditch has not been maintained and St. Louis County does recognize it is their ditch, but it is a contract ditch. In order to clean the ditch, the property owners along the ditch that will benefit from the cleaning will be assessed the cost. This ditch is what is causing 3rd Ave. S. to flood, it needs to be cleaned. The ditch cannot be changed in any way or moved. In order to start the process of getting the ditch cleaned, the City needs to petition St. Louis County for the cleaning, the estimated cost of the project would be $40,000. Rice Lake will need to pay a ditch viewer to review the ditch and a public hearing will need to be held. The process is Council petition to St. Louis County, St. Louis County talks to the DNR, a ditch authority is assembled, a ditch viewer is hired, a public hearing is held. If the project fails to pass the public hearing the City will to pay all costs that were incurred. Rice Lake is looking to only do E. Calvary south to Howard Gnesen road, this is approximately a half mile. John W. made a motion to start the process, Greg second the motion. Joan is to contract Brian Boder to start the process of a petition.
Assessment on tax forfeiture property: Joan stated when a tax forfeit property is sold the assessments on the property are removed. The City must hold a public hearing to re-assess the $30,793.29. Joan would like to set a date for the public hearing, Council agreed October 23rd @ 6:00 pm would be good.
Resolution 17-10-15: Resolution 17-10-15 is to call for a hearing on the proposed re-assessment of $30,793.29 on parcel 520-0019-0015. Joan will bring to the next Council meeting for action.
Howard Gnesen Road timber: Joan stated the logger who is doing St. Louis County’s timber harvest walked the City land found there is nothing worth harvesting on the City property.
City Hall updates: John W. stated staff is going to be moving on Friday Oct. 6th. The bathroom partitions will be finished, and the concrete sealed. The electrician is still working on finishing and the HVAC pad outside has been poured. There is paint that needs to be touched up and the cleaners are going to start cleaning on Wed. Oct. 4.
Hydrant and Valve repair list: Joan gave Council an updated list of repairs needed. Joan has not heard any update on the manhole rehab Hydro-Klean is going to do.
Chicago Avenue road improvement: John W. stated he had a meeting with MSA, City Engineers, in reference to the road repairs that are going to be needed on Chicago Ave. when the water loop project is being done. MSA is going to be applying for some grant money. We will need St. Louis County to sponsor us in our grant request. John W. stated he has talked with Commissioner Stauber and Brian Foldesi St. Louis County’s Director and they stated they would be willing to sponsor this project. The project would be from E. Calvary to Austin, the estimated cost for the roadwork with curb and gutter would be $220,000. Chicago Ave. is a connector road between Duluth and Rice Lake. MSA is working on an estimate for the engineering.
Family of God land: John W. stated the City is considering purchasing 1.5 acres from Family of God Church, before anything can be done, the City needs to survey the land and get an independent appraisal. Will need to work on this winter.
PUBLIC COMMENT: none
Having nothing further to discuss Greg made a motion to adjourn the meeting. John W. adjourned the meeting.