I'm outside.>> Good evening and welcome to the Newport City Council meeting. Today is Thursday,July 16th, 2026. We'll begin the meeting with the pledge of allegiance. I pledge algiance to the flag of theUnited States of America and to the republic for which it stands, one nationunder God, indivisible, with liberty and justice for all.>> Will staff please call the role. >> Uh, Council Member Schmidt is absent.Council member Sumar >> here.>> Council member Ingramman >> here.>> Council member Taylor >> here.>> Mayor Elliott >> here. Next on our agenda is to adopt theagenda this evening. Do we have any changes?>> Hearing none, I'll move to adopt the agenda as printed.>> I'll second. >> I have a motion from council memberSumar and a second from council member Ingamman. All those in favor say I. I.Those opposed. The agenda is adopted. Um, next we have the 2025 auditpresentation. We have Jim Iikton here from LB Carlson to share this year'sresults. Thanks, Mayor, members of council,administration. My name is Jim Iikden with Elby Carlson here this evening toprovide a presentation of the audit results for the year ended December31st, 2025. I think Joe, I think you're running theshow over there with my PowerPoint. So, um the role of the auditor um with thecity is to provide uh um information and an opinion on the city's financialreport. It is a requirement of the city to prepare an annual financial reportand have that financial report submitted to various uh governmental agencies ummost specifically the office of the state auditor as well as the f federalgovernment as needed. Um, as part of the role of the auditor, we do audit your uhinternal controls over financial reporting. Um, those financial reportingactivities as well as your compliance with Minnesota legal uh complianceareas, specifically statutes that are provided by the office of the stateauditor. >> So on the next slide, um, in my auditreport, we do provide what's also called a management report. The managementreport provides a a summary of the findings for the audit for the year aswell as providing some additional information um on the financial resultswhich I'll cover. We just lost everything. Oh, there wego. >> They're they're toying they're toyingwith me. Uh so in that uh in that document we did provide uh um thefinancial results, the out results for the year. So, um, we did issue anunmodified opinion on the city's financial statements. An unmodifiedopinion was a clean opinion. Opinion you were looking for, a positive opinion.Uh, we did report two matters that I don't classify as findings, butreportable items. Um, the city is does have limited segregation of duties andrelies on a limited staff to prepare and complete the controls of the city. Thecity council should be aware of those controls. We do uh find compensatingcontrols in place uh related to that process that allows for the city tooperate effectively and efficiently. U we also help and assist with thepreparation of the city's annual financial statement. Anytime an auditorhas that sort of role, I'm required to report that to the council. Again, noaction really uh in the in related to correcting any of those items. Just anawareness factor. On the next slide, we did have one finding this year relatedto uh your compliance with Minnesota laws and regulations. Uh the the city isrequired on an annual basis to prepare and submit an unclaimed property reportto the state of Minnesota that lists out any unclaimed property. Mostly mostlythe unclaimed property would be things like outstanding checks that uh areoutstanding. Nobody really claimed the those proceeds. uh that particularreport uh uh was was not filed on a timely basis uh this year um and wasfiled after the deadline. It was filed um you know uh after the fact but it isit is does have a deadline in place for submission of that particular um item.We did not have any issues with compliance. The city did comply with thereport in terms of what it was intended to to uh to do and and really reportingthe unclaimed property. It was really just the timeliness of submission.So, moving on then to the financial results for the year. Um, we do in mymanagement report provide information on the fund balances uh and the financialactivities both of your governmental funds uh as well as your enterprisefunds. And you can see on the PowerPoint we do provide some very small detail onthe fund balances but but I'll cover a couple of the highlights. the uh thegeneral fund of the city did experience a decline in fund balance of about350,000. That was very close to what wasanticipated in the budget uh for the year. You did anticipate a deficit in inthe budget for the year. Uh the financial results really reflected umyour revenues were uh in excess of budget. Uh your expenditures were lowerthan budget, which is exactly what you would hope for. uh um there was atransfer that was made out of the general fund to the economic developmentauthority for the purchases of land that that ultimately uh was the majority ofthe decline in in uh that fund balance category. Uh you can see throughout theuh um presentation on the fund balances there was a significant uh activityrelated to sewer lining projects. U the decline in the overall balances relateto those projects. Uh most of those projects going to be are going to befunded uh um in upcoming fiscal years through either special assessments orgrants or some other intergovernmental revenue. So, we'll see that uh fundbalance swing around uh in the in the near future.Uh I think the next graph goes into specifically the general fund. Thegeneral fund fund balance as I mentioned declined um roughly 300,000 thisparticular year uh related to the items I I mentioned. If you go to the nextgraph, uh you'll actually see a presentation that we put in there thisyear that represents the city's fund balance policy. The city's fund balancepolicy in the general fund uh uh strives to maintain a fund balance of of 40 to50% of operations 40 to 50% of expenditures. You can see thatparticular graph uh shows the green line is showing that percentage uh for thelast 5 years and the red line is really that percentage at 40% to show thecomparisons. Um so at the end of the fiscal year 2025um the city had does have a percentage of roughly 79.3%.It is uh lower than what it has been uh but that is related to that transferthat I re referenced earlier. Um so as you look at that there's no action to bemade other than to be aware of the percentages. uh your percentages fundbalance policies are very consistent with re what the recommendations wouldbe of both my firm as well as the office of the state auditor they use thosepercentages uh so those are very positive results uh in that particularpresentation so next graph shows the uh I believe u shows some data on revenuessome of the highlights in the general fund this year the general fund'srevenues were in higher than budgeted as I mentioned uh there were more activityrelated to building permits which is certainly a positive thing for the city.Uh you had additional revenues in investment earnings which is again aresult of the market but also a reflection of uh of the city's actionsbeing taken to invest uh in those um areas to gain those positive marketvalues. The graph also shows some trends over the the last five years. You cansee the the property taxes did increase in 2025 mostly related to an increase inthe levy that took place. Um and you also see that increases in thoselicenses and permits as you see on that particular graph.The next slide shows the exact same information on expenditure basis. As Imentioned um expenditures were lower than anticipated than than in thebudget. U um overall uh some of the areas that did u um um that wereactually higher in the budget was building permits. um you had someadditional revenues, however, that offset those permits. Anytime you havemore pimpits, you're going to have more costs. You outsource some of thoseinspections, but overall uh expenditures were less than budget by about 200,000,which is what you would anticipate or hope for as a city. Um on the graph, youcan do see uh some some trends there um um showing some of that information. Umoverall expenditures increase about 250,000.Uh, one area that continues to grow is in the area of public safety. Uh, um,public safety costs increase by about 130,000 this over year this overyear-over-year. Again, that's really a contracted service that continues toincrease. I will say that when I look at other cities of your size, thatparticular graph is also increasing at a very significant level. Uh, citygovernments um are making public safety a priority and the city of Newport is nodifferent. So moving to the next graph, the citydoes have four different enterprise funds. These are really business typeactivities including the water, the sewer, street light and storm seweractivities of the city. Uh you can see there that you had some very positiveoperating results in that particular fund. Uh increasing net position byalmost $3 million year-over-year. Um um the the city uh did receive a couple ofum if not more than a couple a number of one-time contributions to these funds bydevelopers uh related to development activity which is certainly a positiveuh for the city. Uh you're also seeing some sewer access fees and water accessfees coming into these funds uh which are are are showing up in in thatincreased equity position as you see there. So very positive results in thesefunds. Uh next slide shows individual uh funds activity. Uh this particular graphis intended to show uh um trend data over the last five years for this waterfund. Uh revenues, expenditures, really net uh income or or net loss if it ifpertains. Uh the line that I like to focus on is the red line. Uh the redline there really shows is a reflection of cash flow. Is this fund cash flowingitself? Are you are you charging enough revenues to cover your expenses? And youcan see that red line has kind of gone up and over down over the last fewyears. Um, but overall uh the the the fund does show a positive for 2025 ofalmost $200,000 in cash, which is certainly a positive. Uh the next graphis the same information for the sewer fund and you can see that red line againis always at is at a positive level. Uh this fund did show some increases inoverall revenues. You can see the blue line in 2025 increased um almost 124,000which was about 13%. There were some increased rates and increase consumptionoccurring in that fund. This fund is also showing some increases in overallcost the MC the Met Council uh charges did increasedsignificantly um this past year which is showing up in that particular fund. Butoverall you can see very positive cash flow uh in the sewer funds.Next graph. Yeah. So here we have the same information for the storm drainagefund or excuse me the storm sewer fund. And again that red line is uh jettingoff the page. So that's definitely a positive thing uh in in for the city. Uhand lastly we show show the storm. I think it's a street light fund. This onedoesn't have a red line because it does not have any depreciationuh which is the difference between the red and the green line. But overall youcan see the net income the operating income of that particular fund is that apositive really reflecting positive operations of the city. So before I moveon to the next graph, I did want to reflect on a few things uh you knowoverall uh at the city um the the in in talking with Joe in our exit conferencerelated to the audit. It was discussed um you know related to some of thefinancial activities of the city that there appears to be a significantly moreoperations happening, more state grants, more uh uh um more federal grants, morespecial assessments, a lot more development. very positive uh activitythis at the city from a financial perspective. Uh but one of the things Imentioned was hey that there's a lot more to it for city staff. Um uh Joe andhis staff uh have a limited staff and there's a lot a lot happening in this inin the city that's changed over the time at least I've been here which is quitesome time. Uh and and what I'm getting at really is this is all verycommendable. Uh this this audit result is very positive. these financialresults are very positive and really the the theum observation I may want to make is this increased activity is all beinghandled very appropriately and professionally from my perspective and Iwanted to just share that just uh at this presentation so it was heard by byuh the city council the mayor and Joe already heard it so he doesn't need tohear it again but uh that being said um >> you can say it again I can say it againI'll say it again thank Uh what you'll also reflect and whatstands out to me when you look at the there's a graph in here. I won't evenbring it up but um there's one graph in my reports that show entitywideum entitywide financial results and it really just comes to puts the wholepicture together as one versus individual results. Uh that particulargraph went from a equity position of about 30 million last year to about 35million this year. So about a $5 million uh increase in overall well-being at thecity from a financial perspective when you really were starting at 30. It allhappened in one year. Um and those are very positive things for the city andand really will vault you forward in a very positive uh manner. Um and itreally just jumps off the page for me uh when you stand and look at it. Uh so Ijust want to bring that that forth to you as well. That being said, uh thereare a lot of work that Joe has for his for going forward with the grants thathe's got working on and his team and and the the special assessments and all thatwork. There's a lot to it and and so be respectful, I guess, uh as an audit teamand as a as a group to to what they have to go through and some of the challengesthey have uh which aren't normal always in city government. So uh so movingforward, I think I have one a couple of graphs left. Yes, I do um as an auditorprovide accounting and auditing updates each year. Uh the governmentalaccounting standard report is always changing and we did implement a newstandard this year. Nothing to point out. We are going to be issuing and inum changing uh your financial report for some of the financial reporting modelthat's changing for next year. Um and all that's in your report and reallynothing to be uh too excited about other than we we got you covered. Uh so thelast graph shows uh a summary of the audit results. I did issue a complaintopinion on the financial statements. We had those two reportable conditions. Theone finding um which has already been corrected. Uh uh the slight decline inthe general fund financial position. Uh you are adhering to your general fundfund balance policy. And I did mention the improving financial results both inthe enterprise fund as well as the city as a whole. And lastly, the city is verycommitted to the audit process. Um, we really had a smooth process this year.You've had some change not only well, most notably in finance at the financedepartment level uh or the finance director level, whatever title thatmight be. And really things are very smooth um and the transition to thoseindividuals have gone quite well uh from an audit perspective. So with that, I'llturn it over to you uh for any questions you might have for me.>> Thank you, Council Member Sumar. Jim, in the past we've had the tworeportable conditions. I think they're the same ones that come up each year,and it's based almost entirely on the size of our staff.>> Correct. >> And it's not a it's not a concern. It'san observe. It's an observation that you have to share.>> Correct. >> Okay.>> Well said. Y the the main concern that I have is whenI bring up items of this nature would be the corrective action plan. What what isthe corrective action plan? How are you going to correct this? Well, this onedoesn't have any. there is no correction. You're just it's anunderstanding that you have no corrective action could be taken. Forthe third finding, there really is a corrective action plan, which is well,let's get this filed timely next year and and that is notable and that will betaken care of. >> Do you see these two reportables assomething in in other small cities? >> Every small city has has it.>> I can't think of one that doesn't. >> Okay.>> Yeah. Good question, though. >> Yeah.>> Yeah. Thanks for asking that because I was going to make the comment that, youknow, small cities just do not have enough to separate duties, you know.>> Yeah. >> Yeah. And as I said earlier, we look forcompensating controls, controls that that would help you and support thelimited size. Frankly, you are part of that. You as council members are part ofthat control. Um we we see and as an auditor we see and observe you taking uinterest in the finances of the city and you'll note you would note if somethingwas odd or unusual hopefully uh and that's a compensating control or one ofthem >> and are all cities required to have anannual outside audit? >> They are. Um not every city is requiredto have an audit uh specifically if they're too small. There are thresholds.The the Seattle editor's office has thresholds. So if you become less than Idon't even know the number anymore, but >> like $750,000, which is not you're noteven near that, then they have a different type of process. They have todo an audit type process. It's just not called an audit.>> Okay. >> Yeah.>> Yeah. >> Fortunately, we're moving in the otherdirection. Yes.>> You made note of that, too. So that was a good finding.>> Yeah. >> Yes.>> Other questions? Okay. Well, thank you very much for thisreport. I think again it's very positive. We know we have a lot ofinfrastructure work to do. So, it's good to see those balances be in a placewhere we're going to be able to continue that work and um continue rebuildingsome of those things. That always means fewer water main breaks, fewer sewermain breaks, um storm water management, so it makes the systems last longer. Imean, all of those are very good things, but they're all very expensive. So, um>> I think this is this is we we're heading in the right direction to be able tocontinue that work. >> Okay. Well, thank you very much, Jim.>> Thank you. >> So, um next on our agenda is publiccomments. As we have no uh members of the public in the audience, we will moveon to the consent agenda. Are there any changes to the consent agenda?>> Hearing none, I'll move the consent agenda as printed.>> I'll second. I have a motion from council member Sumar and a second fromcouncil member Ingamman to adopt the consent agenda as presented. All thosein favor say I. I. Those opposed. The consent agenda is adopted. Next on ouragenda is the engineers report. We have our engineer John Herdigan with us thisevening. >> Good evening mayor, members of thecouncil. Uh two items for formal consideration, then a few updates onongoing projects. Uh first item is the 2025 street and utility improvementsproject. Uh Meyer Contracting has remobilized to the site to put in thestorm sewer uh from the river uh east through the unimproved rightaway of 17thStreet. That's along the south edge of the Circle K tank farm up to Cedar andapproximately about 100 110 ft uh east onto the improved part of 17th Street.So they they put in approximately four I know about 600 feet of pipe aswell as our large grit chamber uh working pretty carefully around CircleK's um uh containment area as well as their pipeline going into theirfacility. So they had staff on site to observe that construction. Uh and hasnow they have all of their buried infrastructure done up to the Mellanline that we are we're still working on. Uh the plan is now toward the end of uhnext week. They're going to be grading that road and hopefully we'll have curbin and around that Cedar Lane intersection by the end of next week uhand then paving the following week. We haven't got that one confirmed yet. Uhso once that paving work is complete that will um that will likely concludewhat Meyer Contracting is going to complete as part of that project. Uh wehave engaged uh Geisinger who is our contractor for the Third Avenueimprovements about completing the remainder of that storm sewer work. I'llget to that uh in the in the project updates. Uh but the item forconsideration on the 2025 street improvements is the partial paymentnumber nine. Uh the contractor has completed $2,817,000worth of work on that project. Uh less 5% retainage and the previously paidamount. Uh the uh partial payment number nine in the amount of $222,637.96 cents is requested by Meyer Contracting.>> Thank you. Any questions? Again, this is uh kind of a standardrequest that these payments come through as the work gets done. I would mentionas our auditor said, we are bringing in a lot of money to help pay for thesethings to try to keep that off the property taxes. And um you know, as aresult, when you see these big dollar figures, it doesn't necessarily meanit's all um city of Newport money. I mean, it's ours as it comes in uhthrough the grant process, but um it's not necessarily property tax dollarsdoing it. So um I think that's helpful for everyone. And um basically all thiswork that's been done from the river to where we're at right now on third is hasall had a lot of supplemental funding to help pay for it. So um with that I guessI would Any questions on this? Any a motion to approve?>> I'll make that motion for partial payment number nine.>> I'll second. I >> have a motion from council member Sumarand a second from council member Ingamman. Any discussion? All those infavor say I. >> I. those opposed and the partial paymentis approved. >> The next item is our third avenueimprovements project. I mentioned Geisinger and Suns. They are thecontractor that the city has hired to do this work. Uh they're they'reprogressing very quickly and very efficiently. I think I mentioned at thelast council meeting that they had a pretty difficult excavation at theintersection of 17th and 17th Street and 3rd Avenue in and around a lot of ormultiple pipelines and some deep excavation. They got in and out of thatintersection pretty quickly and has kept up that uh momentum moving the water manand sewer mains both north and south from that intersection. Uh as of todayall of the sanitary sewer is mains are installed. uh they should be done withthe water man work uh by the end of this week and they have their second crewworking on connecting the uh individual home services to water and sewer. Uh inabout a week or so we will move into storm sewer construction. Up till thispoint we've almost exclusively just been replacing uh uh pipes in the ground.When we do the storm sewer this will be all new pipes. So, this will involve alot more uh bedrock excavation. So, we're uh we're we're bracing for alittle noisier um few weeks. I know that folks in the area are are likely growingtired of us already, but I I can assure you they're they're moving along uh asquickly as possible. Slightly shorter days over the last few weeks. They'reonly working till like 5:30 um and only putting in 10hour days with all theheat. Um but the the guys are are doing great work. We're getting a lot of greatfeedback from uh from our staff that's on site and uh with two crews working inthe area. They're doing they're doing a great job to get in and and get the workdone uh like like I mentioned pretty efficiently.Uh they have uh requested their first partial payment estimate. Uh as areminder, the total contract amount for this project is 3,85,000.Uh to date the contractor has completed uh just under $670,000worth of that uh contract and less that 5% retainage they are requesting$636,60.77. >> Okay, any questions on that?Do I have a motion? >> I'll move.>> Second. >> I have a motion from Council MemberIngamman and a second from Council Member Sumar. Any discussion? I have onequestion. >> Yes, Council Member Sumar.>> We've talked in in several different locations about expanded hours for thepeople to operate. You just mentioned that they're only down to 10 because ofthe extraordinary heat that these guys are facing and just to be out there thatnumber of hours is commendable. Have we had any concerns expressed from peoplewhen they are working these extra hours? Because we've been asked for otherlocations to have expanded hours. I'm just wondering what the what the localresidents are feeling and expressing to you about expanded hours. I have notbeen uh I've not heard of any uh complaints or any feedback. uh I cancheck with our staff on on site to see if you know a lot of times they'll havethat dialogue on site and and provide an explanation as to why they may be doingthis and then if they are starting early or going late we can usually correctthat in the field without being without it getting up to me or or staff but orat at city hall staff but nothing has crossed my uh line yet.>> That's enough for me to be happy with. Yeah.>> Thank you. Uh any other discussion? Uh with that I announce the motion. Uhall those in favor say I. I. Those opposed. The partial payment is uhapproved. >> So then a few updates continuing on withthe 17th Street improvements. Uh so as mentioned, we had provided somepreliminary information to Geisinger about the scope of work and thecomplexity of working in and around the pipeline. uh they were they were franklyI don't maybe not excited might not be the right word but very willing to takeon that work especially with their crews uh in town and with having the equipmentand the ability to procure the materials. Uh so MSA had preparedupdated plans to uh remove part of those or the the work from the original 2025uh plans and then incorporate them into the third avenue plans. So we providedthose to Gisinger this week and then so they are in the process of reviewing andthen providing unit prices for the different work items. Uh we also have ameeting scheduled for Wednesday of next week with the operations team from OneOak so that Gistlinger and One Oak can kind of understand what thoseexpectations will be and what the what the uh construction uh means and methodswill be to make sure that uh everyone's on board with that work. So uh we'rehopeful that we will be uh looking to execute a change order to the ThirdAvenue uh project. A lot of this work is very similar to what they're alreadydoing. So, it it blends well. Uh I the unit prices are going to change slightlybecause it is different work, but we do have a basis that we can kind of use asa as a judge to make sure that we are um we're still getting, you know, a goodcost for the for the work that's um being performed. Um, and so hopefullywithin a three or three weeks or so or mid August, we'll have a we'll have apath forward to start getting this work done. Uh, I know that the One Oak has acontractor identified to do that concrete cap over the top of their uh,pipeline. Uh I don't yet know what schedule that has, but they haveidentified a contractor and I they were likely waiting for us to see who wecould get to do uh this work. So positive developments. Uh we still havea long way to go between then and now or then and or now and then, but we arehopeful that we're we're moving forward. >> And are we keeping in touch with theneighborhood just of like what's anticipated and what's happened so far?Yes. Uh there will be the the two property owners on the south side of17th between 1 and 2nd Avenue will be will be the largely the um most impactedand we've had some dialogue with both. We would expect that once we have acontractor on board that that'll be a sit down meeting and showing whatimpacts there will be to to their property because there will beadditional impacts. We are moving that storm sewer further outside the street.So, they'll be occupying a portion of the rightway that we didn't intend to beexcavating within. So, I it will be a it will likely be a conversation. They havesome uh vegetative screening that provides some privacy in their in theiryards now that will likely need to be removed and we want to make sure thatwe're putting something back in there that meets their expectations thatthey're getting that that privacy back. I think it's it's certainly somethingthat um is is workable, but obviously they uh they'll have to have some inputin how we how we put everything back together. >> Thank you. Other project update.>> Yeah. So, also on our water system interconnect project, uh we are havingour startup on Monday. So representatives from our uh our citysystems integrator that's uh the controller that provides information toour SCADA system to control our wells and and our lift stations and know whatlevel of water is in our tanks. They uh provide all that programming. So theywill be on site to start integrating both the meter as well as the PRV intothat SCADA system. And then also a representative from the meter and thevalve manufacturer will be on site to program that uh those um facilities tomake sure that they operate as intended. And then after that work gets done,we'll bring in uh Matt and his staff as well as Cottage Grove staff to get somesome training. And then after those uh after that startup is complete, pendingany uh issues that we have to work out, we'd be in a position that we can thenum start getting full-time water from Cottage Grove. We would expect thatwe'll probably have maybe a couple week uh period where we'll test things outand then get some information out to the public, including some frequently askedquestions and a notification letting folks know that nothing is reallychanging from a delivery standpoint. It's coming from a different source, butNewport is still going to be the uh operator of of our facility, and we'regoing to be their their first uh their first call if they have concerns orquestions. >> Okay. And I think, and I've said thisbefore, but I never know who might be watching, you know, for a first time,but this interconnect is really about the fact that Cottage Grove has built awater treatment plant that filters out PAS. And we are not at that stage yet.So what it will result in is that it will be PAS free water versus what we'redoing right now which is mixing from our two wells to bring you know the PASnumber down below what the EPA uh recommended number is and the EPA numberhas not gone into effect yet. So we're not running into any sort of complianceissues but are it has always been our objective to comply once that numbercame out. And so, um, this allows us to have water that's already been filteredand treated, I guess, uh, however you want to describe how the GA systemworks. And the contract is for 3 to 5 years. So, this is not a permanentsolution. This is just a short-term solution while we continue forward withour own um, treatment options uh, for Newport.>> Thank you, Mayor. And then my last update uh is for the 12th Street AreaImprovements Project. Uh you may recall that we were anticipating to award thatproject this evening. Um well, the city had received a federal grant through acongressional congressionally delegated >> congressionally directed spending.>> Thank you. Uh and so that uh program or that grant is administered through theEPA and we we were aggressive in getting our plans out and designed and bid andthe the process by which the uh grant is administered is a little slower. We cananticipate some of the requirements for that federal grant like federal wagerates and other uh uh provisions that we can include in our bidding documents.But unfortunately, we didn't include all of them. So, we have recently connectedwith our representative from the EPA, our grant administrator, and we've gonethrough our contract documents and are are looking to make sure that all of theprovisions are included. The ones that are not included, uh, likely can beadded by a change order. Uh, and we're working with the contractor. Forinstance, they have a Baba uh requirement which is by America builtAmerica and that is for American Iron and Steel for our products. We didn'thave that specific certification requirement in our contract. So, we haveto work with their suppliers to see if there's any kind of cost difference. Itif there is any, it'll be pretty minor. our specifications call out that it hasto be domestic uh iron and steel but not the exact language that's required byBaba. So we at the EPA's recommendation, we're going to hold off uh awarding theproject uh until we make sure that we have that they're satisfied that all therequirements are met and so that we don't get into an issue where we'veawarded a contract prior to a grant agreement and and any of those costswould become ineligible. Uh we have communicated this to A1 Excavating. Theyare the low bidder for the project. uh they are they are still very interestedin doing the work. They can accommodate a delayed schedule. Obviously, some ofthe milestone completions uh uh that we were looking to have them do yet thisyear will change, but once we get an idea of when this will be awarded, wecan go back and look at how much we can get approved uh or sorry, completed thisyear. Likely working from the river east. So that first block or maybe theuh first two blocks of of 12th Street would be the the first area that wewould look at. Uh but again, we set up this project so they have all year nextyear to complete this work. And we if if that isn't enough time, we can certainlywork through uh with the contractor to make sure that they have ample time toget their their work complete. And I believe that ties a little bit toanother item on the agenda uh in in a few moments.>> Well, and I think um >> to our auditor's point about there's awhole administrative component to when you get this, you know, federal or statemoney, and this is just another example ofthere are some different uh requirements that you that vary for different typesof funding sources. Uh but this grant was for over a million dollars and so ifwe have to go back and make some changes and we have some delays, it's still amillion dollars uh in the end or it's a million and 93,000.So it's a significant amount of money. Sorry it is happening that we have toredo this but nonetheless um I still think it's it's good for our our ourresidents. >> Do you have a rough idea when do youthink they might be able to bring this to the council? My I thinkoptimistically it would be the first meeting in August. We have that extraweek. Um I think realistically it would be the second meeting in August that wecan we can bring that uh um or recommendation for award and that'sassuming that again the EPA is comfortable with addressing all thesekind of retroactively by a change order. We'll certainly provide an update ifit's if it's not at the first meeting in August. We'll we'll provide hopefully alittle better uh schedule um for that at the at the first August meeting.>> Great. Thank you. Lots going on. >> Thank you.>> Uh next we have the public works report. >> Good evening, Mayor Elliot and councilmembers. I have nothing formal this evening. Uh but I do have a few updatesand reminders. Um, I would encourage uh residents to take advantage of our DNRrelief grant, which gives you the opportunity to potentially have uh deador dying trees removed for no cost. Um, and there's also an option if you don'tremove a tree, but you want to plant a new one to get a tree supplied for free.Um, that information is on our website. Um, it's on public works website. I'vebeen handing out um door hangers. uh they're yellow. Um so if you know youhave a tree that you need to get removed or you see your neighbor, you know, byall means encourage them. Uh we're taking applications through the end ofAugust. But um like I said, it's limited funding, so the sooner you get in, thebetter chance you have to have a tree removed for free. Umanother tree note, we are removing two trees at Pioneer Park before Pioneer Daythat have died. unfortunately the big uh big oaks that uh the last couple yearshave been a little tough on. Um and along the same note, we uh if if timeallows, we to intend to remove the buckthorn hedge at Pioneer Park beforeuh Pioneer Days as well to uh increase the visibility for law enforcement, getrid of an invasive species, and then also with this tree grant, um we'rehoping to plant a substantial number of trees in place of that around the ringof the park to give us a little better shade and uh and again not have aninvasive species growing in the park. So with that, I'd be happy to stand for anyquestions. >> I imagine the roots on that buckthorn gopretty deep. >> I'm I mean I'm just envisioning like ahuge like mound of dirt. You're going to have time to kind of level that over andand put something there before uh Pioneer Day.>> We're we've got a plan. I can't guarantee that'll go as smoothly as aswe have it planned, but um you know, and that's obviously pending no um otheremergency uh>> yeah, >> things that would, you know, rear itshead. >> You never know what we're going to runinto, but that's what we'd like to do. Um so, um yeah, like I said, right>> with that. >> Okay. Well, I'm glad you're uminterested in doing some tree replacement on that perimeter as well. Ithink that'll look nice. >> Yeah.>> Any questions for that? Thank you very much. So, next we have theadministration report. >> Uh, mayor, members of the council, oneitem for consideration tonight, resolution 2026-58,a resolution authorizing the sale of bonds. And we do have our financialadvisor, uh, Jason Arsvald with Ellers here to walk through it with council. Good evening, mayor, members of council.Again, Jason Arzald with Ellers. Uh, as I think you all are well aware, uh, withall of these various road utility projects you've been discussing, one ofthe strategies to pay for all of that was to have some portion of thatfinanced with debt. Uh, I think the last time I was before you, we were talkingabout a larger tax abatement bond. Uh, that was, I think, the same week youlearned that you were going to be receiving more money from the state tohelp pay for these projects. And so, uh, we went back after that meeting andtalked with staff and and, uh, switched course a little bit, which, uh,involved, uh, resizing the bond issue such that we're, uh, we're onlyfinancing the special assessment portion, uh, that's out there. And then,uh, we also, uh, uh, shortened the term to 10 years to match the term of thosespecial assessments. We had been looking at 15 years uh, and switched thestatutory authority. So if as you recall, you need some kind of statutoryauthority to issue bonds. Uh because of all the various funding sources and thedollar amounts involved, uh we had been pursuing tax abatement bonds becausethere was clear authority that way. But with the reduced amount uh and the mixof funding, we determined that we could issue these as uh chapter 429improvement bonds, which are just special assessment bonds. Uh and that isbecause we have at least 20% of the um uh project costs being paid with specialassessments. And so uh we switch course to to that method of of uh bonds. It'sthe same cost, same interest rate. All those things stayed the same. Uh alittle bit improved actually just because of the shortened term. Insteadof being 15 years, it's now 10. Uh and proceeded that way as we prepared forthe sale. So from from that point then everything is kind of as has beentypical. Uh we did have this issue rated by standard and pores. So worked withstaff to obtain that rating. That's included in the sale day report thathopefully you all have at your desk there. Uh and uh they came back uh withan affirmation of the city's double A rating with a stable outlook. And sothat's what that report indicates. Again, they've highlighted uh the thingsthat they have historically which are, you know, strong uh management practicesand financial policies. So, reflecting, you know, uh your all's uh you know,management and staff's management of the finances of the city. Uh they, you know,took note of the, you know, a lot of the great things that are happening herewith respect to economic development uh and the way that just generally youmanage things as a community. And so in affirming that double A stable ratingand then uh we did today then uh take bids so that you know your your bids gotexposed to the to the bond market broadly. We took in bids today 10:00. Uhthere were five biders and the lowest bidder in this case was uh Bayerd out ofMilwaukee, Wisconsin with a rate of 3.31%.So uh good result and and a good sale uh and a and a good interest rate there. uhthere was a small premium which just means that they pay more than face valuefor the bonds in exchange for higher uh individual coupons on those bonds. Sowhat we we did there was reduce the amount of the borrowing. So we were at 1million445 and now we're down to 1,ion335but we retain the same amount of proceeds available to pay for projectcosts. Uh and so what that does then is make sure that the debt annual debtservice is consistent with what we had been originally anticipating uh and iswill be uh less than what those predicted special assessments are inthis case. Uh and so so uh then uh the purpose of tonight's meeting then is topass the resolution that uh administer Hatch mentioned which would be to awarduh the sale of the bonds to be in the amount of 1,ion335.So forever might make that motion. And that's a different number than is inyour agenda, but should be consistent with the replacement resolution that wasprepared uh by Taft and submitted as well. So, uh so anyways, yes, goodresult. Uh but I'm happy to stand for any questions about the sale or uh therating itself. >> Council member Sumar,>> I've got some questions on the rating from standard and pores. Are you able toanswer those? >> Yeah, I believe so.>> Okay. Yep. Some of them are definitional and on what is page three of the reportthe 2026 go improvement bonds there are some on the middle of the page a creditsummary there's some numbers uh institutional framework for instance hasa one individual credit profile ICP is a 2.65 65. What is that on a scale ofthat? Is the scale of 1 to three, a scale of 1 to 5? A scale of 1 to 10?>> So, uh, mayor, members of the council, good question. Uh, what those are arenumbers that relate to, uh, S&P's methodology, uh, for how they actuallyassign a rating. uh and so each of those categories with the ex exception of theinstitutional framework and the individual credit profile which I'lltalk about later but all of those below that so the economy financialperformance reserves and liquidity management and debt and liabilities arethe numbers that they put into their methodology to spit out uh ultimatelywhat is that individual credit profile number the 2.65 65 number. They'regenerally on a scale of 1 to four for each of those. Lower is better. Uh andso uh and they're all weighted 20%. So what they're effectively doing is takingeach of those numbers, multiplying them by 20% and that yields the 2.65 numberthat you see as the ultimately the individual credit profile. And so whatthey then do is that they look at that and the institutional framework which isbasically assigned to you. uh it's it's it's uh a function of you know uh beinglike a metropolitan community for example they they've got a definition ofhow they assign that and so that's one is the lowest that's the best uh and souh they look at your credit your institutional framework credit profileand they look and say what does that mean for a rating in your case thatthat's a double A and so that's just how they uh that's how they work theirmethodology yep and so the lower that number goes the more likely then thatthe rating could increase. If that number goes higher, the rating is worseor decreases or is a lower rating. So that's that's how they're assigning thatin their methodology. And they've taken to being more open with what thosenumbers are uh in these reports uh in the re in recent years so that you cansee exactly what they're calculating and showing for their rating.>> So with that in mind, is the 2.65 a good number?>> What uh mayor members of the council, what that means is that when they whenthey look at their matrix and they get to 2.65 65 and they look down, it's it'sa double A. It's it's a double A rating, which is that's that's a strong rating.It's two only two notches below the highest rating they assign. So therewould be from there upwards there'd be a double A plus and then AAA, which is thehighest that they assign. And uh you know, you uh Newport uh in uh it's beenseveral years now was you were recently upgraded I I don't know maybe five yearsago, six years ago to a double A, you know, from a lower rating previously. Soas you've, you know, as your economy's growing, as your finances have improved,as your reserves have strengthened, uh they they recognize that and andassigned an upgrade. Uh the the next two thresholds are are harder to to reachand are are largely dependent on uh really the values and incomes in thecommunity, the economic metrics that are there, and they allude to that in thereport if you kind of read through that. So when and if those metrics strengthen,then there could be an opportunity, you know, these numbers would change, right?So the economy right now is a four and and as I said one to four four is is theworst, right? I mean that that's as low as they assign. So as that numberimproves, it would improve that 2.65 number which could slide you nearer to ahigher rating if that makes sense. >> So is that Newport's economy or is thatthe national economy, the state's economy?>> Uh well they so the that number is derived uh from the metrics that are inthe table below. So, uh there's the e economic metrics that they use. Uh theythey look at, you know, market value, market value per capita. Uh they'relooking at uh household income and effective buying income. Uh and thosemetrics are all listed there. Um and then in their methodology that spits outa number, and in this case, that number is four. Uh and then they also look tocompare your economic metrics to those of other peer-rated communities. So likeif they assign a double A rating as they have in this case, they're going to lookat other AA rated communities and say, is is this consistent with the metricsthat we see in those double A rated communities? And I think what theanalyst told me on the phone actually is thatyour economic metrics are on the lower end of those double A rated communities,but still within that, you know, within that framework. So, um, just kind of howthey operate and how their methodology works, but but but the economics areprimarily market values of your of your property in the community and theincomes of the people that live here. And they they manipulate those numbersin a couple different ways to come up with their their answers. So, so that'sthe one thing. It's not really in your control, but as you think about like,you know, economic development and growing the tax base, uh, and building,you know, for example, as you have in some of these other developments, youknow, higher valued housing, things of that nature, that might start to changethe income profile over several years, but that's what it would take toprobably boost that rating up a little bit.>> Okay. So, there things we're working on, but not necessarily quick fixes,>> correct? >> Okay.>> Yes. And then on the next page four up at the top there's available reservespercent of operating revenues. There's nothing in there in that most recentuh line. Is that just because we haven't had a full year of data on there? I seethe 2025 is a 6.4. This is just this the top line up there. So>> yeah, mayor members of the council. I don't know why they've left that blank.I mean, they we did have a pretty uh healthy discussion. In fact, they in thenarrative of the report, they talk about reserve balances and where they'reheaded, but I I don't know why that that number's blank there.>> Yeah, because I would think about a half a year of data already. So, but>> Right. >> But you've answered it.>> Yep. That that's the last period for which we had audited financialstatements effectively or year-end information. So, that's probably why.>> Okay. >> Well, those were the questions I had.Thank you for very thorough answers. Okay, thank you. Other questions? And Iwould just say, you know, Bill's questions on the bond rating and allthat, the better the bond rating, the lower the interest rates we get.Correct. And so there's a direct correlation there between how we'remanaging ourselves financially, um, you know, assets, all of thosethings all affect uh that. And so when we go out to borrow, it can make a bigdifference, you know, over the course of a 15 or 20 year bond when we're whenwe're out doing, you know, these larger bond sales. So, um, it's good news andcongratulations too to Joe. I think this was your first bond call that you wereinvolved with and second one. Okay. Um, and so I know you're always hoping youcan at least meet what you did the last time through. So, congratulations onthat. Any other questions on this? And did you say the resolution number wasdifferent than 2026-59? >> Uh, mayor, members of the council, theresolution number, I believe, will be the same, but the amount specified inthat resolution is adjusted from what is was in your agenda initially.>> I just wanted to make sure that >> that that was clear,>> right? Yeah. >> Okay.>> Well, if I can do the >> summary there, just the resolution thenumber without referring to the num amount. Okay. I don't have that in frontof me. If somebody else wants to have that in front of them, they could goahead and make >> the corrected number.>> Yeah. >> Uh 1,335,000.>> Oh, okay. I will make a I will move the resolutionto get a geo bond of 1,335,000 named as resolution 2026-59. I hear a second.>> Did you want to read the rest of the issuance and awarding the sale ofgeneral obligation improvement bonds? No, I don't. 2026A.>> Somebody wants to join in on this resolution. I'll uh I'll be glad to>> joint reading. >> I'll be glad to second if somebody's gotit pulled in front of them. Marv, >> jump in there. I move resolution 20 26-59resolution authorizing the issuance and awarding the sale of 1001,335,000 general obligation improvement bondseries 2026A pledging the security thereof specialassessments and levying at tax for the payment thereof.>> I'll second. >> Okay.>> I wanted to second it. All gone. >> I had a chance. I had a chance.>> Yeah, you had your chance. So, we have a motion from Taylor and a second fromIngamman with support from council member Sumar um on the resolution. Anydiscussion? All those in favor say I. I. Those opposed and the bond sale isapproved. And just >> I like to have the headline read so thatyou know people who are watching the meeting have a full understanding ofwhat it is we're approving rather than saying, you know, we're just we're we'reapproving a bond sale. So, it's really just for that. So,>> I just didn't have it pulled up. >> Yeah. Nope. That sounds great. And umany I think anything else uh from Jason? >> Jason, anything else?>> No, no, thank you. That's that's great. Appreciate>> it. Thank you. Thank you for coming. >> Yeah, of course.>> And for the presentation. And anything else for the administration?>> Uh mayor, members of the council, nothing formal, but I'm happy to standfor questions. >> Any questions for Joe?No questions. I'm going to move on then to mayor and council comments. One thingI just want to remind people, we've got the free mattress and box spring uhpickup event is happening again from July 20th to July uh 31st. You can go tothe city's website right now. It's on the popup. Um otherwise, you can look atthe news and events page and click through for how to put a call in andgive your address so that they can come and pick it up. You just need to get itto the curb. It's okay if it's a rain day and it gets wet. They can still useit. but they are able to recycle these mattresses. If you put them just in yourregular trash once they go in there, they can't reuse them. So, it's a greatway to keep uh the landfill empty and um help uh help get those recycled. Umalso, just a couple of uh I think uh good news items for us. We did receiveum the go-ahad for our city engineer toapply for what they would call a design grant for our own water treatment plantor plants. Basically, the analysis is part of that is to figure out if itshould be one larger plant or two smaller plants. Um, but I think this hasbeen a long conversation about whether we should have our own treatment uhfacility in Newport or whether we should, you know, actually be requiredto partner with a different community. And so it was nice to uh get that email.I always think it's not done till it's done. Um, but uh I think that's a that'sa good step in the right direction. And part of their decision analysis was toreally um cost us out 20 years and what was the least expensive way to operateand clean this water. And the answer was to uh do treatment within uh our own ourown facility. Again, I always think things can change, but right now that'swhere we stand. And and I was very pleased to get that email. The secondthing is that we received um one of the 3M Priority 2 grants. We had applied andreceived 800 $486,000. This will go towards the cost ofcreating our very first riverfront park in Newport and it will be on theproperties that are on Cedar Lane that are, you know, if you if you're in thearea, you know, it's an area that floods quite frequently. that limits a littlebit of what we'll be doing there, but essentially a picnic shelter, parking, aperimeter trail, an outlook, and an ADA accessible canoe kayak launch, as wellas we'll have a pad for a porta potty. That's kind of that's kind of the basicsof where we're at, and we'll be able to move forward with that. And that'sroughly about half the cost of building that park. and we've been able to findsome other you know staff has I should say found some other grants that willhelp with some uh pay for the cost of the trail work and um we'll justcontinue to develop that some of that uh other funding is not available until2028 so we'll be doing a lot of planning and uh if there's work we can do in 27we will otherwise most likely it's a 2028 build for that um so that's what Ihave uh council member >> uh the only thing that I want to remindeverybody is recycled food scraps. The bags are freefrom the RDF and you can get the boxesat city hall. >> Mhm.>> So, it's like we're recycling food scraps, soplease do it. >> It's roughly 20% of what goes in thelandfill. So, if we can stop that, that's great.Council member Taylor, I don't >> Yeah. Nothing to report at this time. Imean, I guess the planning Yeah. Yeah. We already have We already have thedaily lecture come to us or not. >> They came to us with a premium>> not to the council planning commission and council likely August 6th.>> Okay. All right. Worry about that. >> Coming soon. Okay. Uh, council memberSumar. >> Oh, yes. Well, I wanted to mention tothe city me residents that I attended League of Minnesota cities trainingsession down in Rochester along with Mayor Elliot and administrator Hatch andfellow council member Angman. And we were awarded a certificate ofparticipation with the Minnesota Greeneps Cities program. And I do havethis document. I'd like to hand it to the administrator for posting whereverthat's appropriate. So this is another indication of our continued commitmentto the recycling that council member Angman just mentioned. So that was oneexcellent thing that we attended and several days of sessions talking about awide variety of items that impact the successful running of our city. I alsowent to the dentist recently and learned that certain Teflon tapes that have beenused for flossing, they've had to change the chemical composition of them becausethey were filled with PAS. So, here we are trying to get PAS out of our waterand those of us that regularly floss have been introducing it prettysubstantially. So, that is something good to know. and the my involvementwith the library continues. The there are many activities going on all summerfor kids and adults. There are volunteer opportunities down at the library.Across from the library, there's an extensive building project going on forthe fence company. They're moving along pretty rapidly. Another thing that'shappening in the local area is the schooloolie program from the the theWashington County has a activities for kids and meals available in St. PaulPark at Pullman Elementary School on Mondays and on Tuesdays at NewportSchool. And this is from 5 to 6:30. And there's reading, games, and a meal. So,these are some of the things that are going on in our local communityto make summers more bearable. >> Thank you, council member. With that, doI have a motion to adjurnn? >> So, move.>> Second. >> A motion from council member Ingrammanand a second from council member Sumar. All those in favor say I.>> I. Those opposed, we are adjourned. Thank you, everyone.