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Edition:
September 02, 2010
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NEWS
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Tuesday, December 02, 2008
Vergas Council agrees to shop nationally for best CD rates
Council increases water rates by $2
• by Barbie Porter
The Vergas City Council approved removing two Certificate of Deposits (CDs) from the Vergas State Bank at its monthly meeting Monday, Dec. 1.
The city has two of several CDs due Friday, Dec. 5, at which time the city can withdraw its CDs from the bank without a penalty.
While the council approved removing its CDs from the local bank to deposit them into a financial institution which offers a better interest rate, the council was adamant about giving Vergas State Bank an opportunity to match any interest rate offered by other institutions.
Councilman Myles Flateland said the current rate offered by Vergas State Bank is 3 percent, whereas other institutions are offering up to 4.16 percent, which could account for an additional $5,000 to $7,000 in interest, which could be allocated to the city's general or enterprise funds.
Flateland reported the past four years the local bank has matched other bank rates, but recently informed him they would not continue the practice after Jan. 1.
Councilwoman Kari Dahlgren recommended the council be careful when dealing with other banks because some institutions are unstable, whereas Vergas State Bank is not.
Flateland agreed security is of utmost importance and noted all banks the city considers doing business with will be FDIC insured, which guarantees funds up to $100,000 by the federal government.
Flateland added the city currently has all of its CDs in one bank because the Vergas State Bank pledges securities to insure funds past the $100,000 cut-off.
However, if the city deposits CDs in other institutions, it may need to utilize multiple banks to ensure its funds remain under the FDIC insured amount of $100,000.
Dahlgren also expressed concern over complications of withdrawing funds from banks that aren't local.
Flateland noted wire transfers make withdrawals easy, quick and convenient.
"Accessibility is not an issue," Flateland said. "The money is for long term use not for operating expenses."
City Clerk Pat Ehlke noted in the past the Vergas State Bank hasn't penalized the city for early withdrawals, whereas other banks may.
Ehlke also noted it's been a few years since the city needed an early withdrawal of funds.
Vergas resident Tracey Buhl suggested the council do all it can to keep the business local, even if the city loses a little money on the deal.
Flateland agreed and reiterated the council will offer the local bank an opportunity to match other rates.
"I don't want to go out of town with the city's business," Flateland stated. "And the local bank will have a chance to match it."
Councilmen Scott Goodman, Bruce Sonnenberg and Flateland approved doing business with other banks.
Councilwoman Kari Dahlgren, who is married to an officer of the Vergas State Bank, opted not to abstain from the vote and voted against doing business with other banks.
Besides Vergas State Bank, the council agreed to do business with:
• GMAC Bank of Utah that offers a rate of 4.16 percent.
• Flagstar Bank of Michigan that offers a rate of 4.14 percent.
• State Bank of India in New York that offers a rate of 4.10 percent.
• Western Bank of Fargo that offers a rate of 3.65 percent.
Water rates increased by $2
The council voted to increase its base water rates from $21 to $23, effective immediately.
Flateland noted while past increases to the water rates have generated extra funds, it is not enough to cover operating costs and foreseeable maintenance.
Don Christianson, a technical advisor for Minnesota Rural Water Association, said he is continually prodding cities to make sure their enterprise funds are self-sufficient.
"Everyone likes low rates, but it's only possible for the city to have rates that are as low as the city can afford and still pay its bills," Christianson said.
He also recommended the city implement small rate increases over a period of time, opposed to one large increase every so often.
Christianson also noted grants are very rare when it comes to water and sewer upkeep, as are loans unless certain stipulations are met, such as water and sewer rates ranging between $40 and $50.
"If the city isn't charging a minimum of $40 to $50 for water and sewer then it's likely the city won't be given a loan for maintenance projects (by the Minnesota Rural Water Association)," Christianson said.
The increase in rates is expected to raise an additional $5,000 annually for the water fund.
In other action Monday night, the Vergas Council:
• Approved 2009 off-sale non-intoxicating malt liquor licenses for Vergas 66 and Goodman's SuperMarket.
• Approved 2009 cigarette licenses for Vergas Hardware, Goodman's SuperMarket, Vergas 66 and the Vergas City Liquor Store.
The council noted Billy's Corner Bar and the Vergas Country Store did not turn in applications to sell cigarettes. If an application is not submitted before Dec. 17, the businesses will not be able to sell cigarettes as of Jan. 1.
• Approved a resolution to certify sewer and water arrears (overdue debts) to the county auditor.
• Reported the Vergas Liquor Store was $12,000 ahead of last year in sales and is expected to net $70,000 before transfers by year's end.
• Accepted table donations from the Vergas Lions. Lions representative Tracey Buhl asked the council if it wanted round or rectangular tables, as the organization is willing to purchase new ones for the community center.
While the 8 foot rectangular tables cost $85 each, the six foot round tables cost $136.
Goodman noted renters have expressed interest in round tables and asked the Lions to donate those. The council agreed.
Buhl said the Lions would donate four round tables.
The council stated if there was remodeling money left over it would purchase another four round tables.
• Received a proposed community center rental agreement. The council will review it and address it during the Jan. 5 meeting.
Updates to the agreement include:
• Ensuring deposits and rental costs are paid when agreement is signed.
• City clerk is responsible for keeping track of events and deposits made.
• Giving the renter the right to inspect interior and exterior of the building, and count equipment they expect to use prior to the event.
If renters choose not to take inventory they must sign a waiver.
• Noted the community center is open for walking and all are welcome to exercise in the building, which generally opens at 8 a.m.
• Received a draft for an agreement with the Candor-Dora-Hobart Vergas Fire department.
Flateland noted it hasn't been updated in 15 years and suggested the agreement be reviewed and rewritten by the city attorney.
Sonnenberg, who is the current council member on the CDH-Vergas board, said when his term is up Jan. 1 another council member will need to take his place and ensure the agreement is updated.
• Approved a resolution to de-certify tax increment financing as of Dec. 31 for Vergas Assisted Living, which would place it on the tax roll.
Flateland explained the business was given an incentive tax break when it came to town, but the time period granted is coming to an end.
Ehlke noted the Assisted Living is aware it will be put back on the tax roll.
• Approved the final plat of Sunny Oak Addition by owners Kevin and Sheri Zitzow, 33061 Sybil Lake Road.
• Directed Aaron Lauinger of Ulteig Engineers to formulate a record of water and sewer lines in the city.
While previous cost estimates were in the $10,000 ballpark, Lauinger said the price was dropped to $6,000 as the company would also utilize the maps and gain from the mapping.
The council noted the information will be placed on CD and in a book binder format which would allow the city's utilities superintendent to have a copy in his vehicle for easy access.
• Reviewed codification of the sewer ordinance and code with city attorney Nathaniel Welte of Peloquin and Minge law firm.
The council recommended various changes to the rough draft presented at the last council meeting.
Welte will make the suggested changes and present it to the city for review in January.
He suggested when the changes are made the council and residents can review the sewer ordinance once again prior to final approval of the policy and ordinances.
• Reviewed a letter written by Flateland asking the Minnesota Department of Natural Resources for a pier replacement at the city beach due to its dilapidated condition.
Problems cited included protruding slivers on the walking surface and handrails and warped boards that prevent wheelchairs from utilizing the pier.
• Recognized J&K Marine for its assistance in moving the pier from the shore to prevent damage when the lake freezes.
• Suggested a bidding process during the next meeting for hiring a back-up snowplow operator. It was noted state law requires a bidding process and Mayor Dean Haarstick will be asked for a bid.
• Set a special meeting at 6:30 p.m., Wednesday, Dec. 17 at the Vergas Community Center to approve bills.
The council will hold its next monthly meeting at 6:30 p.m., Monday, Jan. 5.
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