Present were Finance Officer Monna Van Lint, Council Members Shirley Chin, Monte Palecek, Tom Struble, John Kangas, Greg Arthur and Michael Vetter. Also present were Deputy Finance Officer Brittany Smith, Public Works Director Matt Reckling, Harlan Quenzer with SPN & Assoc., Nick Robbins and Brandon Lester with Lester-Robbins Construction, Chief of Police Kit Graham, Police Officer David Butler, Utility Coord. Carol Schofield, Marty and Coddy Gartner with G & G Excavation, Del Bartels of the Pioneer Review, Ray Smith, Glenn Parsons, LeeAnn Knutson, Gayle Rush, Milo Zeeb, Kim Pinney, David and Mary Burnett, Larry Hanes, Aaron Fitzgerald, Kay Ainslie, Crystal Martinez, Aaron and LaDona Johnson, Heidi Burns, Colt Terkildson, RaeAnn Snyder, Brad and Jackie Heltzel, Sharon Hemmingson, Tonya Kramer, Bart and Marcy Ramsey; and later, Mayor John F. Hart, Marlene Knutson with Central S.D. Enhancement District, Trisha Larson, Marion and Darlene Matt, Brian and Codi Mills, Beau Ravellette and Tom Lesselyoung.

Absent: None

Council President Vetter called the meeting to order stating that the Council will be reviewing building permits in addition to the swimming pool emergency and the 2010 budget appropriation concerns.

Council reviewed the following building permits: Golden West Telecom - concrete retaining wall; Emily Kroetch - excavate sewer line repairs; and, Casey Seager - excavate water line repairs.

Motion was made by Kangas, seconded by Palecek to approve the above permits as presented. Motion carried.

Vetter then requested PWD Reckling review the swimming pool emergency that occurred on Friday, Sept. 11, 2009, during the swimming pool deck replacement. He also suggested that Mr. Quenzer and the representatives from Lester-Robbins Construction provide their input.

PWD Reckling stated that during the concrete deck removal, the City did not drain the pool down as is customary during the off-season, but instead kept it full of water in order to assess the pool's plumbing. On Thursday, Sept. 10, 2009, a plumbing leak was located and in order to repair the leak, City personnel began emptying the pool of water to just below the leak. On Friday, Sept. 11, 2009, when the City personnel arrived at the pool to begin repair of the located leak, they found the upper stainless steel portion of the east side wall of the pool caving in. It is his understanding that with the rain on Thursday evening, the sand around that side of the pool expanded and pushed onto the wall. Further, he noted that the wall was already weak due to the rusting of the seams and rusted out braces. In other words, the rain in his opinion did not help the situation.

The Council and those in attendance reviewed the photographs taken of the pool during the emergency.

The City personnel worked with G & G Excavation, LLC in order to remove the expanded sand away from the pool walls and secure the walls in the upright position. This was recommended by Bob with The Pool and Spa Center. Once they secured the walls, they were able to finish emptying the pool in order to assess the situation and determine if the pool could be repaired. It was noted that the only repair option would be to weld the seams that are rusted out and leaking. There are also creases in the pool wall and a crack in the concrete floor.

Mr. Quenzer proceeded to expand on the condition of the stainless steel portion of the pool wall. He noted that during his review today, the stiffener vertical joints and braces are completely rusted out and broken off. These were in place to secure the pool walls. In other words, the deterioration of the pool wall braces did not help the situation.

Vetter questioned if this did not happen now, would it have in the near future? Both Mr. Quenzer and Nick Robbins with Lester Robbins Construction stated that the potential problem was there.

Mayor Hart joined the meeting at this time and expressed his apologies for his tardiness.

He stressed that if the public fears the closing of the pool, this is not an option for the City to consider as it is the main summer recreation for our community. He explained that the City has already committed over $60,000 to replace the concrete decking. We need to consider our options and available funding sources in order to get this repaired. He expressed his concern for repairing the existing wall that in his opinion will be in the same situation in a few years. He would recommend the Council replace at minimum, the pool liner, or replace the entire pool depending on the final assessment.

FO Van Lint presented the Council with various funding options to repair or replace the pool. She noted that the repairs are estimated at $100,000 with replacement estimated at $250,000 for a fiberglass pool liner. The replacement does not take into consideration the engineering, plumbing or decking. She then suggested the Council hire an engineer to compile the bid specifications, which is estimated at $3,000 to $5,000. This would ensure that all legalities are met with the project.

She also reviewed information from Deene Dayton with the SD Legislative Audit. It was noted that the City is in a situation that, though not impossible to define as such, is dealing with something that is not a vital part of the City's infrastructure and in fact is currently dormant. Declaring it an emergency to the City would be a stretch as it relates to current state bidding laws. The City will be required to bid the project repairs and/or replacement. Mr. Dayton has recommended the City approve a supplemental budget to cover the expenditures. The Council will need to determine the estimated revenue sources to cover the required expenditure.

Also, will the City proceed with the project this fall or wait until spring? As for funding sources, the City is able to utilize existing reserves, private funding or donations, grants, loans or a bond.

Utility Coord. Schofield advised the Council that the total project costs to replace the pool will be considerably lower since we already have a bathhouse and the needed pumps to run the pool.

FO Van Lint provided the Council with an option to utilize the City's reserve funds. This being undesignated retained earnings or other reserve dollars such as those set aside for the administrative building. Currently the City has $125,000 available that could be utilized for the pool. In turn, the Council could save for this improvement again in future years.

Marlene Knutson with the Central S.D. Enhancement District (CSDED) informed the Council that she and Monna have researched all funding sources that were mentioned by Mr. Dayton. Accordingly, the only potential grant dollars would be through the SD Game, Fish and Parks Land and Water Conservation Fund as recreation is not a high priority for grant funding. It was noted that the City had applied and been denied these grant funds on three previous occasions.

She also mentioned a promissory note that would entail the City pledging revenue funds to pay off the note. This as well as lease purchase agreements might be available through the local bank. The concern with a lease purchase agreement is that the bank would own the structure until the note is paid in full. As for obtaining a bond, there are numerous regulations that must be met. For instance, hiring a bond counsel and holding an election for those that are general obligation bonds. Haakon County does have $155,000 available in recovery zone bonds that they could allocate to the City if they do not utilize them. This would have to be researched further. The City's constitutional debt limit will also be affected with a bond.

She went on to recommend the City review their options as to when they would like to proceed with the project. If the Council determines to start immediately following the bid process, she would suggest utilizing reserve funds and/or obtaining a loan from the local bank. She also reminded the Council that they can accept donations and pledges to offset the project costs.

It was also mentioned as to the current construction of the decking replacement and the contract the City has entered into with Lester-Robbins Construction.

Vetter mentioned that we will still need the decking replacement once the pool has been repaired or replaced. He then questioned Nick Robbins regarding their position on the construction and what the City will need to do with regard to our contract.

Mr. Robbins stated that they bid the project in February and have been counting on the funds they would receive from this project. They have not bid anything else this big so they do not have the means to make the money they would here. He reiterated that they are a smaller company and need the money to support their company and families.

Mr. Quenzer stated that in this instance, the City will need to consult their attorney in order to enter into negotiations with Lester-Robbins Construction. Payment for the work completed will need to be made as well as determining the profit margin loss. This will all be done through negotiations as we will be terminating or extending the contract.

It was then questioned when the City will begin the process to repair or replace the pool. Can it wait until spring?

Mr. Quenzer stated that he would recommend the replacement of a stainless steel liner, not a fiberglass liner. As for the construction, work could start immediately if the City personnel are able to demolish the existing structure and remove the existing backfill to prepare it for new construction. If needed and the weather permits, the concrete could be poured this winter. Otherwise, the replacement portion of the pool could start early in the spring with hopes of it being completed by the 2010 pool season. In order for this to happen, the City will need to proceed immediately with bid process to secure a contractor for this time period.

Council Member Arthur questioned the condition of the concrete floor and walls of the pool. Mr. Quenzer stated that the condition is unknown at this time with the exception of a crack on the north and west side. It will have to be assessed in more detail once the pool is completely drained.

Mayor Hart went on to poll the Council as to their views as to whether they would prefer to repair or replace the pool as well as when they would like to have this done.

By general consensus of the Council, the pool will be replaced starting this fall with hopes of being completed by the 2010 pool season. Furthermore, they will be utilizing the administrative office building reserve funds to cover the 2009 expenditures. The remaining project costs will be accounted for in the 2010 appropriations utilizing undesignated retained earnings as well as possible loan funds.

Motion was then made by Vetter, seconded by Chin to approve the first reading of Ord. #2009-13, 2009 Supplemental Appropriations Ordinance for Unanticipated Swimming Pool Improvements. Motion carried with all members voting aye.

ORDINANCE #2009-13

2009 SUPPLEMENTAL APPROPRIATIONS ORDINANCE

FOR UNANTICIPATED SWIMMING POOL IMPROVEMENTS

WHEREAS, the City of Philip, South Dakota, during the process of replacing the Municipal Swimming Pool decking experienced an unanticipated failure of the east Swimming Pool liner wall; and,

WHEREAS, during the process of attempting to salvage the east Swimming Pool wall from a total catastrophic failure, it was discovered that the Swimming Pool liner is in a state of deterioration that, if allowed to remain will more than likely result in failure to the structure possibly, within the very near future; and,

WHEREAS, the City of Philip has determined that it is in the City's best interest to repair the Swimming Pool liner and/or the entire structure as quickly as possible and by any means possible to insure that this popular recreational facility remains available to the local citizenry, who strongly value the quality of life that this facility provides to them for their summer time recreational activities;

NOW, THEREFORE, BE IT ORDAINED, that the following Supplemental Appropriations Ordinance be and hereby is adopted to enable the City of Philip to financially support the required and necessary repairs to the Municipal Swimming Pool and to facilitate these repairs as quickly as possible.

                                                                                          GENERAL FUND

45100 SWIMMING POOL

            45100 Swimming Pool                                                $  125,000.00

TOTAL SWIMMING POOL                                              $  125,000.00

TOTAL APPROP. & ACCUM.                                         $  125,000.00

MEANS OF FINANCE

The following designates the fund or funds that money derived from the following sources is applied to.

                                                                                          GENERAL FUND

10450 RESERVE FOR CAP. IMPROV.

            10450 Reserve for Cap. Improv.                           $  125,000.00

TOTAL RESERVE FOR CAP. IMPROV.                       $  125,000.00

TOTAL MEANS OF FINANCE                                         $  125,000.00

Dated this ____ day of _____________ 2009.

                                                                                      /s/ John F. Hart, Mayor

ATTEST:

/s/ Monna Van Lint, Finance Officer

Passed First Reading: September 15, 2009

Passed Second Reading:

Yeas: 06  Nays: 00

(Published: Sept. 24, 2009)

Mayor Hart also reminded the Council of all the budget cuts that were made to the 2010 appropriations and suggested they consider what services they are willing to sacrifice. For instance, the City personnel are currently busy patching holes and will be repairing Walden Ave. once that is completed. Following that, they will then be demolishing the pool. He recommended their action as to the length of time they would like to keep their seasonal/part-time street employee?

By general consensus, the part-time/seasonal employee will continue employment until the demolishing of the pool is completed.

Vetter then questioned any comments from the floor on the City's proposal of the pool replacement and repair.

Bart Ramsey noted that we live in a generous community and the City may be surprised as to the donations it receives to replace the pool

Trisha Larson then questioned the funding sources that will be utilized for the pool repair/replacement. Will this depreciate the reserve monies and if so, what will happen if another emergency occurs? She also suggested the possibility of utilizing local option sales tax to cover these expenses instead of increasing property taxes.

FO Van Lint stated that she is not aware of a local option sales tax. Currently, we collect the maximum allowed of two percent sales tax and reserve the second penny for street and road improvements.

She also noted that the City's reserve account is there to cover budget shortfalls and improvement projects that require local funding or matching revenues. Should the City utilize reserves to cover the remaining estimated expenditures of the pool improvement, the reserves will be decreased by about half. As for raising property taxes, the City is only able to raise taxes based on the Consumer Pricing Index (CPI) with a maximum of three percent unless an Opt-out is approved by the voters. For example, the 2009 CPI is 3% which accounts for approximately $10,000 in additional property tax the City can collect. This is equal to $1.16 per $1,000 taxable property valuation. This CPI is based on last year's economy and in her opinion; the CPI for next year will be much less due to our current economic state.

Marlene Knutson with the CSDED reiterated that the City is currently receiving the maximum of sales tax that is allowed with the exception of the third penny bed, board and booze tax. This tax is collected on motels and liquor sales and is designated for promoting the economy of the City. The State of S.D. does not have the local option sales tax that Ms. Larson was inquiring about.

Glenn Parson advised the Council that he would prefer the City not seek donations for the pool improvements. In his opinion, the other recreational activities in our community are being funded solely by donations, and do not foresee that the City will have the ability to raise sufficient funds through donations to cover the improvements.

Vetter reiterated that whether the City receives donations or not, the community will be paying for it through their tax dollars.

Mayor Hart further noted that the City would be happy to take any donations, but will not be soliciting for them.

Following a lengthy discussion, motion was made by Vetter, seconded by Chin to authorize the pool repair and/or replacement to commence immediately with City personnel demolishing the existing pool and SPN & Assoc. preparing bid specifications for a replacement pool liner or new pool dependent on the condition of the concrete floor and walls of the pool. Motion carried with all members voting aye.

Motion was then made by Vetter, seconded by Chin to authorize City Attorney Tollefson, Mayor Hart, FO Van Lint and Mr. Quenzer to enter into negotiations with Lester-Robbins Construction. Motion carried.

Mayor and Council thanked those attending on behalf of the swimming pool as they left at this time.

Council went on to review the proposed 2010 budget appropriation concerns voiced during the September 8, 2009, Council meeting.

Vetter requested that the budget for one additional full-time employee be removed from the budget. Currently, we do not need it so we should remove it.

Council Member Struble questioned what will happen this winter if we get a big snow storm and are short on staff? He mentioned that if this occurs, we may be back tracking on our decision.

It was then questioned if an additional full-time employee is not budgeted, does the Council plan on hiring a part-time/seasonal employee again next year?

Motion was then made by Arthur, seconded by Struble to budget for a part-time/seasonal employee for six months in 2010. Motion carried.

PWD Reckling then questioned the Council as to their recommendation for the proposed water and sewer line extension on Walden Ave. in 2010. He noted that with the street repairs planned for this year, he would recommend that the water and sewer line extension be on hold until Walden Ave. is redone in the future. It was noted that this extension is not an emergency.

By general consensus of the Council, the City will take the allotted property tax increase and add the pool improvement to the 2010 budget. Furthermore, the Walden Ave. water and sewer line extension and full-time employee will be removed from the 2010 budget. All of these items noted will be reflected in the second reading of the 2010 Appropriations Ordinance on Oct. 5, 2009.

 With nothing further, the Council adjourned at 6:55 p.m.

                                                                        /s/John F. Hart, Mayor

ATTEST:

/s/Brittany Smith, Deputy Finance Officer

(Publish: September 24, 2009 at an approximate cost of $_______)