National Joint Powers Alliance

The city under law must accomplish competitive bids when the expense exceeds $50,000.  That being said we also have an obligation to receive the best price possible by shopping around. This is done on most purchases.   There are units of government and organizations that assist in this effort realizing that volume sales help us get better pricing.  Governments in general, have tried to cooperate in this manner with joint purchasing, state bidding and with the use of Cooperatives. 

The State of Minnesota does state bidding on all types of products and items to secure the best price.  They also need to meet competitive bid requirements but they to want to achieve the best price possible.  They allow other governmental units to benefit from state bidding.  Through the state’s bidding effort cities and counties can purchase things like police cars at a substantial discount.  There are other organizations called Cooperatives that group entities together to achieve discounted prices for items that are competitively bid to meet statutory requirements.  The city uses a cooperative to acquire health insurance for its employees as an example.  This saves governmental units money not only with the price but also saves time in the soliciting of bids or quotes for various products or services. 

Recently the city was approached by the National Joint Powers Alliance (NJPA).  This organization is a Cooperative that does competitive bidding on some supplies and services.  They primarily provide competitive bidding on equipment.  They work with 17 states, providing their competitive bid requirements for them, and have a host of members who use their services. 

The city has approved the membership with the NJPA as another option for purchasing.  This membership is free so there is no financial obligation.  They are located in Staples, MN and provide additional benefits to those jurisdictions located in the Region 5 development area, of which the city is part of.  They additionally provide a 1% rebate credit to be used on future purchases from previous purchases made.  This also adds to the possible savings that can be achieved with this type of arrangement. 

Whether we purchase through them or not, they are another competitive vehicle to compare pricing, helping the city get the best price available.  Hopefully this arrangement will reap some savings for the city in the future.      

Replacement Equipment in WWTF Building

The wastewater treatment plant for the City of Breezy Point has been in action for a little over 30 years.  During this time the plant and ponds have been expanded to provide for additional capacity and some small changes made. As time progresses we see the need to fix, replace, or retrofit equipment as it wears out.  This is primarily seen in the irrigation fields with sprinkler heads failing or irrigation lines generating leaks.  The issues don’t end there as time takes its toll on all sorts of items.  

This year the sewer department budgeted for replacement of the ventilation system in the plant building.  The system has had some of its components replaced in the past but having poor ventilation has increased the decline of this system as well as portions of the electrical system within the building.  The damp and corrosive environment has done its work on electrical fixture where bulbs can’t be replaced as the fixtures are corroded shut.  Conduit lines have also been showing wear with rust and corrosion to the extent that they have worn through in a few areas.  These systems don’t provide the utility they were designed for and need to be replaced. 

Quotes were received for electrical and the ventilation work.  The low quote was from Evergreen Electric in the amount of $3,243.  The low quote for the ventilation work was received from Gilman Heating and Air in the amount of $2,570.  The quotes were approved for the replacement of these components at the June Council meeting.  Replacement of these items will occur as soon as possible. 

Safety a Concern on Co. Rd. 11

For those who drive between Pequot Lakes and Breezy Point, we all know and appreciate the improvements that were made by Crow Wing County Highway Department to Co. Rd. 11 this past summer.  Several areas were improved to provide better traffic flow and safety in use of this roadway.  One area that saw particular changes and improvements was the area near Eagleview Elementary School.  They created left turn lanes to access the school from the east.  Right turn lanes were installed for most turns and the right turn lane entering the school property from the west was lengthened and somewhat detached from the driving lanes for better visibility and additional stacking of vehicles making this turn. 

Finding room for all of this was accomplished within the right-of-way of the highway and the design reflected community concerns with safety for school traffic.  With the expansion of turn lanes and the widening of the roadway also comes the down side of not enough right-of-way to handle all concerns.  Working with what was available and making the best of it became the goal however not all wants were met.

 

Recently, with increased summer traffic it became more apparent that the lack of a left turn lane for east bound traffic was problematic.  Those going eastbound wanting to turn left to access the Pine River State Bank, Breezy Point Storage Park and Narveson Management Incorporated were feeling like the change created problems for them.  The issue is, if a left turn is needed to be made to access these properties, traffic in the eastbound driving lane comes to a halt, if waiting for westbound traffic to clear.  This is the same situation that existed prior to the improvements.  The perception however was all needs were met and some drivers don’t understand or anticipate there is still a bottleneck in the design.  What happens then with some drivers is an illegal pass on the right around this stopped vehicle.  The other thing that happens is some left turning drivers compound the situation by moving into the taper or turning lane for the other direction to get out of the way.  This really encourages the passing on the right as eastbound drivers see a half lane or more to do it.  Passing on the right is not only illegal it can be very dangerous.  

With these concerns the council was approached about the situation asking if something could be done.  A meeting was held with a county highway department representative to discuss possibilities.  Building a bypass lane seems to be about the best option however other options may be available.  A bypass lane in this area will cost about $16,000 and will only address the area for access to the bank and storage park.  It doesn’t address the private access for Narveson Management as there are concerns with a day care facility and the next bypass lane at Wildwood Lane. 

This is a safety concern but it is a management issue when it comes to priorities.  The expense needs to be dealt with if it is to occur.  Neither the county nor the city has budgeted for this expense and the best solution may not have been found yet to solve the problem.  The discussion will continue at the July Council meeting. 

Fire Service Savings

Last month I wrote about the Fire Service Contracts we have with Ideal Township Fire Service and also Pequot Lakes Fire Service.  Both departments provide service to the city on a contract basis.  The contract with Ideal Fire Department was renewed for 2013 but notice was given to us that increases in costs would be coming.  These increases would result in a doubling of the fire service contract in a couple of years. 

The city requested a review of the fire service contract situation from Pequot Lakes Fire Department.  Currently the city houses a fire pumper truck at the Breezy Point Public Safety Building.  This truck is dispatched on fire calls from the Pequot Lakes Fire Department.  We currently have 5-7 individuals who respond to this station.  Considering this, the option to have Pequot Lakes Fire Department provide fire service to the entire city was factored.  Assuming 2013 figures for the formula the cost to the city would be an increase of about $2600.  The fire service contract with Ideal Township is currently $7900.  The city could see a significant savings with the change in service.  

The other issue of concern was that of response time.  Distances were calculated and with response out of the Breezy Point station the majority of the area served is closer than the Ideal Fire Station; however there are some areas that would be a mile distant.  With the location and type of roadways it was felt that these areas would likely see the same or better response time.  With that consideration it was felt response time was not an issue.  

Ideal Township Fire Department has served the city well for a great number of years and we are grateful for their past and current service.  Breezy Point made an investment in a public safety building which has the ability to house a fire station.  This station is served by a small portion of the Pequot Lakes Fire Department and a fire pumper truck.  Recognizing that value the city is able to work with Pequot Lakes Fire Department to provide service to residents of the city while also saving costs of service.  Starting with the 2014 fire service contract the city will be completely served by the Pequot Lakes Fire Department. 

Undesignated Reserves

The words “Fund Transfers” don’t generally conjure up enthusiasm or excitement as many would consider this to be the opposite.  A fund transfer is needed to shore up an account that is near or in a deficit.  Contrary to that thought, fund transfers can be a good thing, believe it or not!

Each year after the audit the city looks at its fund balances.  The city manages its finances with a few funds.  If you are not familiar with fund accounting it is similar to the bank keeping an account for each individual.  The city has an account for the various functions it accomplishes.  So the city has a general fund for most activities.  There is a cemetery fund to manage the activities in cemetery operations.  A debt service fund collects payments and taxes for bond payments.  An EDA account for Economic Development activity (very limited funds here) is available.  We have a Sewer Operating and Capital Improvement Fund.  We also established a Revolving Capital Fund.   This last fund is used to manage cash flow for expenditures over time to minimize budgetary swings and to address long term needs and their expenses. 

This past year the city saw some improvement in collection of taxes with a number of delinquent and past due accounts being paid.  We assume that a number of properties changed hands and as such taxes are required to be current for transfer in ownership to occur. That and a concerted effort to manage our finances under budget resulted in a good deal of undesignated reserves.  

The level of undesignated reserves is important in that the majority of the funds received by the city are received in the second half of the year.  This means at year end the city needs to manage finances for about 6 months before getting property taxes for the current year.  The city established a fund balance policy to manage the amount of undesignated reserves.  This policy provides that the city maintain 45% of the current year’s budget in undesignated reserves and after the audit is completed funds are considered for transfer.  In most years, with prudent fiscal management, that means funds can be transferred to the “Future Improvement” designation in the Revolving Capital Fund.  This means the funds are no longer part of general cash flow requirements of the city and are designated for a future use. 

The sewer operating fund doesn’t have a policy concerning undesignated funds as all funds are designated for sewer in some form.  In establishing a Sewer Capital Fund the city wanted to create a designation for improvements to be made to the sewer system, keeping them separate from operating funds.  With no specific policy regarding the operating funds, funds have been transferred periodically to the capital fund as wanted.  This year consideration was made to reduce the operating funds to 45% of the budget as well.  This level of cash flow will need to be monitored as sewer funds are received quarterly. 

At the May City Council meeting a fund transfer was recommended and approved to move funds to the Future Improvement Fund in the amount of $232,301.  Funds were also recommended to move from the sewer operating fund to the Sewer Capital Improvement Fund in the amount of $834,961.  Making these changes moves funds from operating cash flow accounts to designated accounts to be used by the city when the time comes for improvements, thereby limiting the amount of budgetary swings or need for debt service.