I'll call this meeting to order. City of International Falls City [clears throat] Council. It is 5:30 p.m. Please rise. We'll say the pledge. >> I pledge algiance to the flag of the United States of America and to the
republic for which it stands. One nation under God, indivisible, with liberty and justice for all. All members of the council are present this evening for the record. Are there any additions or deletions to the agenda
as presented? Seeing none, we'll move on to approve the minutes of the Tuesday, January 20th, 2026 regular city council meeting. >> I'll move.
>> Thank you, Councelor Holden and Fuller, I believe. Thank you. Any discussion? Ask a question. I >> I I vote yes. Minutes are approved unanimously. Thank you. Moving to payments [clears throat] and
claims and approvals, [cough] >> mayor. Was that for the uh agenda you're approving? >> Pardon? >> Were you approving the agenda there? >> Or was it the minutes? Excuse me. >> The minutes. >> He approved the minutes. Okay. >> Did I skip the uh
>> approving the agenda? >> Moved to approve the agenda. >> Thank you, Councelor Buller. >> Thank [laughter] you, Councelor Holden. Is there discussion on the agenda as approved? >> I would ask the question. >> I >> I >> I >> I >> and I will vote yes. The agenda is
approved. Thank you, Lisa. >> Next, we will move to payment of claims and approval for those beginning with transfers. City of International Falls transfers to fund number 101, general fund from fund
number 812, lodging tax fund, $15,158 for total transfers of $15,158. Moving to accounts payable and claims. City of International [clears throat] Falls claims 337,22064.
Airport commission claims 131,000 or $131,83. Airport major capital project claims $220,84152. Total accounts payable in claims $689,14516. >> I'll move.
>> Thank you, Councelor Taylor. >> Second. >> Thank you, Councelor Wgner. Is there discussion [clears throat] on approving these payments and claims? Seeing none, ask the question. >> I I >> I. >> I'll vote yes. And the bills are paid unanimously. Thank you.
At this point in our meeting, there is uh an opportunity for anyone here tonight in the audience to come forward for open form. If you do name an address for the record, and it is limited to 5 minutes. >> Good evening.
>> Good evening. >> Nancy off 3393rd Street, International Falls. Okay. At the risk of jumping the gun here, um I wanted to just ask about number one under the new business about the water rates. Um my question about
that would be do you is this something that you're going plan to take action on tonight? >> It is an agenda item uh under new business number one. Um in regard to taking action, the city council has
historically set their water and sewer rates by ordinance, which requires two readings. And Chelsea, do we have to have a hearing on this one before the next meeting?
>> No. >> Okay. So, um, in the answer to your question there, it would take two consecutive votes of the city council to pass that ordinance on the water rates. >> Okay. So, if you took a vote tonight,
there's still another one to be taken. >> That would be correct. >> Okay. And I guess like that's I've thought about this before that I sometimes have a problem with the way the agenda is done and I'm it's probably the way that most organizations do it. I
don't know. But like a lot of times this first open forum it's I guess it would be for other things that aren't on here. But the time but by the time we get to the second open forum all of this new business is talked about
and sometimes decisions made before the public gets a chance to speak or ask questions about that. Is that just the way that agendas are made? I mean,
it's like it by that second open forum, it's kind of after the fact >> a lot of times when we're questioning. So, like normally I wouldn't come up here and talk about this water thing right now because it's down on the
agenda, but if a person had a valid argument or or had some thoughts that maybe you guys hadn't thought about or whatever, if you don't talk about it now and action is taken when it's comes on
the agenda and then the next forum isn't until after that action's taken, really doesn't give the public much Um, not that [clears throat] we often change your mind, but but do do
you I guess it's just a question that with the agenda if agendas are always done like this or is there a way that that can be juggled? Well, to to answer the question, I think
in a reasonable manner, I don't think we have to have um the open forum twice in a meeting. I think we only need to have it once. So, I think we're as generous as we can be with that. But um
>> you know I think that some of this lies uh that there's dissension in our [clears throat] country, in our state, in our communities everywhere and and over various things, water plants, uh business expansions, EDAs, you name it.
Um, and I think is what I'm sensing is on some of these hot button topics is that people want input and right >> I want everyone into the in the room to know that they have the opportunity to give that input. I think we want to hear
that. We need to hear that. Um, but the authority to set the water rates is going to fall within the city council and I would hope that everyone is um interested in input, but the the bonds
have or are going to be issued. The plant is going to be rehabbed on a 3-2 vote. Okay. >> And um we're going to have to raise the money to pay for it. >> Okay. Well, and with anything any issue that you guys are going to take action on, that's kind of so I guess the
smartest thing we can do is look at the agenda before everything gets going and [clears throat] or check the new business out before and try to hit that first open forum is kind of what I'm thinking has to be done. So, I probably
don't have much time left. So with this then jumping on to the water rates then um why is is this is this increase to do with the new building of the new
water plant? Is this this or is this increase just besides that just an just a separate increase and then are do we have another increase once the new water plant is completed and put in place?
>> Yeah, I'm comfortable answering that and it has been five minutes but please if the council will allow I would [clears throat] like to answer that. Um what you will see later as we read the ordinance and we have some um professional staff here that's going to
do some explaining to the council and to those all in attendance to that matter that the debt service charge that is proposed on future water bills should those rates be adopted by ordinance would be to service the debt for
rehabilitating the current water plant. and that item um that is going forward that was voted on about a year ago. Um there's also a water rate component. Emma, our finance
officer, could speak more to it. The city uh has now bonded water debt on 9inth Street project. Um which that affects the water rates because the debt service has gone up. Um, but I know
there's going to be questions about water tonight and we want to answer them to the best of our ability. >> Okay. So, this increase in the base rate is just an annual or whatever periodic
increase. It's the it's the debt service that's the one that has to do with the new plant. the the basically the water rates the the gallonage is for on andm operations and maintenance the water that we sell
>> and the debt service is towards the debt we're incurring. >> So is there a reason why this um water rate increase is happening right now like immediately?
Yes, it is per uh the viability plan that Northland Securities put together about a year and a half ago um that we can make available should you request it uh on the water and sewer rate study
and uh we that will be it is in the packet and we'll be uh we'll have several professionals here to explain how what's what you're seeing has come to discussion. Okay. >> Okay. Thank you.
>> Thank you. [snorts] >> At this point and a reminder, there will be an opportunity um at the end of the meeting uh to come forward again should you choose. We will move to the consent agenda
and I would ask for a motion to approve and allow necessary expenses for 2026 public works training as presented. >> I'll make that motion. >> Thank you, Councelor Holden and Buller. And the question >> I >> I >> I
>> I'll vote yes. The consent agenda is approved unanimously. Thank you. We will move to new business. Item one, consider first reading of contract ordinance setting water and sewer rates.
I believe um that is Brian here and >> Brian and Tammy both are online. Yep. Um, at this point, Brian Golden is uh with Bolton and Mink and has worked uh extensively on the plant rehab and uh
has worked with our administrative and finance staff uh in the creation of the rates and also Tammy Amdall from Northland Securities uh who will be able to speak to projections and uh those
items of nature at this time. Um, if you are there, Brian and Tammy, the floor is yours. >> Thanks, Mr. Mayor. And I think I'll hand it over to Tammy on on the financials here, but I'm happy to help help answer any questions that might come up.
>> Mayor, Council, good evening. Tammy Amal from Northland Securities, Northland Public Finance. Um, soundcheck, can you hear me? Okay. >> Yep. >> Yep. Yes. >> Great. So I um I'm with Northland Securities. I um and our team um
prepared the original utility study in 2024. For some of you who have may were on the council then may recall that that I was before you in person. And then Northland was asked um to update that study for the water fund only related to
changes in the estimated cost for the water um treatment plant rehabilitation. as well as um the city wanting to consider a strategy of a new water treatment plant charge instead of increasing um the city's current fee
structure in order to service the new debt on the water treatment plant which will be financed through a loan through the public facilities authority. And that total estimated debt service, annual debt service is approximately $850,000.
um that's an estimate um that will be final after the loan closes and the um the city has drawn down on that authorized loan. So in your packet um for this evening's meeting there is the ordinance that includes the two years of
proposed rate. It includes the um rates for under your current fee structure which on a percentage basis represent a 3% increase from 25 to 26 and another 3% from 26 to 27. That increase does not
relate to the water treatment plant and the debt service. that increase being necessary to pay for existing operations, planned um capital where the city is not bonding, so payo capital as well as debt service on bonds that are
already outstanding that are payable for from the water fund. it. Um, Northland again was brought in to look at instead of having larger increases in those existing fees which would have been in that six to seven% range for example um
city staff um and desiring to present to the city council a separate new line item so that the rate payers know why their rates are going up directly related to the debt service for the water treatment plan. And that amount um
includes a base rate, a fixed rate that all customers would be charged on their monthly bill. And then for commercial and multifamily, an additional um volume charge for volume above the first 3,000 gallons. So
that's the basis for the 26 and 27 and the new water treatment plant. Those numbers were determined based upon and included in your packet is three pages from the Northland model or from the original study updated to reflect the change in the fee structure and changes
in projected costs and those rates are demonstrated to be sufficient to cover both the following year debt service. three months of operating cash which I had reviewed with the council in 24 having that as a reserve pay go capital
and then maintaining some reserve above that and that's important for all utilities because this is a long-term plan I know the council can appreciate the challenge to do your one-year budget with respect to estimates this looks out
10 years specifically related to future capital improvements those numbers may be too low to the extent they're too high, it would give some capacity, but it's important to have some contingency or additional reserve and this plan provides for that. With that, mayor and
council, I'm going to close my comments. So, in summary, there is an ordinance before you that introduces a new water treatment plant fee. Those fees were determined based upon detail analysis and using the framework from the original utility study from 2024,
updated for new cost estimates. Thank you, Mayor Councel. >> Thank you, Tammy. And for the council, um is there questions uh for Tammy on this item? Seeing uh no questions, um Tammy, please
if you will for at least a few minutes stay uh with us and we will uh continue moving along on this issue. >> Is there motion to approve? >> Yes. >> Yeah. >> Thank you, Councelor Wagner. >> I'll second. Thank you, Councelor
Kaylor. [clears throat] Is there discussion on the topic? Um, I would like to uh support all of you uh no matter how the votes go on the water rates. Um, I'm planning on voting no on
the issue, but uh the reason I'm doing that is because I wanted to attempt to get state assistance with the plate plant rehab. um is what my point is uh and I want it to be known for the whole
group, everyone here this evening, everyone listening, is that tonight's actions weren't really made tonight. We made them a year ago. The council voted 3 to2 to go ahead with the plant rehab.
Um and as the contracts have been signed, um the contractor has been selected. There's all this is in the works. So the debt is going to be here now per the contract whether we raise
the rates or not. We have to raise the water rates to pay the debt. And that's what I want to be known that this is the outcome of of rehabbing the plant and that's the way it is. We have to raise the money. We have to raise the
rates to start paying on those bonds once we've advanced the credit and it the line of credit um to make those payments. Is there any further discussion? >> I would call the question. >> I I
>> I I'll vote no. Um, and that passes 41, first reading of an ordinance to set water and sewer rates. Thank you. We'll move to new business item two to adopt a resolution
terminating the internal tax abatement and pledge of future tax revenues established by resolution and closing fund number 413 known as the river riverfront improvement fund.
um would like to give some background on this because I think it's a bright spot this evening. About 14 years ago, the city uh created an economic development authority
uh in which the city owns and owns some land in the Voyagers National Park headquarters, which is city-owned, sits on it, and GSA, which is the government leasing arm of the federal government, leases it from our EDA, and our EDA
makes a profit off of that. When all of those improvements o we incurred them and they occurred, the city opted to finance the water and sewer and hydrants to that
property internally. And if you look on a fund balance worksheet that is uh in city council packets that shows all the internal funds that the city uses for bookkeeping, there's been a fund on there for a long time that says
riverfront improvements and it has a negative balance. And every year there's been tax dollars levied to slowly pay that off over time. The city-owned economic development
authority is in a position where it has enough cash to transfer money to the city and to zero out that account, that negative fund balance and thus reduce the taxpayer funded burden on that internal
note over time. And uh we spoke about it in the budget meetings um and it's part of the budget. We've had an EDA meeting prior to this meeting and it was passed unanimously to transfer the funds and make this [snorts]
a reality. Uh that is the backstory to the best of my knowledge. Is there any discussion? >> Is there a motion to approve? >> I'll make the motion. >> Thank you, Councelor Holden. >> Is there a second? >> Second. >> Thank you, Councelor Wagner. Is there
discussion? [clears throat] >> Ask a question. I >> I >> I >> I >> I'll vote yes and that is carried unanimously. Thank you. Item three, new business [snorts]
to consider a committee recommendation for IT managed services and authorize staff to prepare a contract for city council approval. the IT committee which uh has consisted
of administrator Bergstrom, um Sherry Stenland, our human resources director, and myself uh have met and interviewed um well, first we put out a request for appro approval or request for services
for um IT services. We received uh many uh I'm going to say a couple dozen. Uh we met many times uh whittleled them down many meetings. Recently the IT committee uh unanimously
agreed that it would be 3S [clears throat] and it was recommended amongst us that at this time to move that forward that it should be moved for council and
asked for um Chelsea to prepare a contract for services uh with that firm should the City Council be in concurrence with the committee. >> I'll move. >> Thank you, Councelor Kaylor. Second.
Thank you, Councelor Buller. Is there discussion? >> I would ask the question. >> I >> I >> I >> I'll vote yes. And that is approved unanimously. [clears throat] Thank you.
Moving to agenda item number four, new business. Approve removal of a volunteer firefighter from the International Falls Fire Department. Is there any questions
um on this ask for removal? If not, I would ask for a motion to approve. So move. >> Thank you, Councelor Buller. >> Second. Thank you, Councelor Wagner. Is there discussion? >> I'd ask a question. >> I I >> I
>> I'll vote yes. Motion carries unanimously. [clears throat] Thank you. Is there other business for the council? >> Seeing none, we will move on. reports are available uh in the city
council packets that uh are laid out for everyone. If you have not received a packet, um please ask. We will get you one. I'll put you on the spot. Chief Orley, how's your first month on the job going?
>> Um been stressful at times for the first couple of weeks, but after that been smoothly transitioning. something new comes up every day it seems like just working out there making sure
people are filling shifts and things like that otherwise so far so good. >> Thank you and thank you for your service. [clears throat] >> At this point we will move back to audience um open form as we've
discussed. The opportunity is now to come forward if you would like to address the city council on any matter. >> Mary Wilson, 1711 First Avenue East. I just have a question about the uh water
rates that are going up. Is this is the same fund that you borrow from every month to pay extra bills or whatever? Or is it that money going to go right into paying for water
treatment? >> I think it's a legitimate question. I'm glad you asked it. I think it's a longstanding uh item that should be addressed this evening. Um, and I think you're referring to the transfers that the
council approves. There's uh a transfer of $66,666 from the water fund to um fund number 402 permanent improvement. that money I
approximately eight years ago I want to say the city became an enterprise fund which means the water plant is its own business and that infrastructure and there's certain laws that surround it. Um 25 years ago
maybe water money was being used for nonwater things. I don't know that it's a rumor. It's a common question. [clears throat] the the money that you're seeing being currently transferred goes to a specific pot of money that's earmarked directly
for water improvements. [snorts] Um Emma, is that correct? >> In part, um I can speak to that more if she has additional questions. I don't want to interrupt, but I can speak to that more. Go ahead. >> Please do. Do you want me to come on or
>> Sure, if you'd like. I think it's an important topic. So, I think we're speaking about a couple different things. There's a couple different transfers that take place. There's a transfer that goes to the 401 fund, which is the PI fund, and then there's also the 403 fund, which is
our capital outlay water and sewer fund, which is dedicated to water and sewer. Um, the water sewer fund was once a a conjoined fund. It was a joint fund. It's always been maintained as an enterprise fund, meaning it should be
self- sustaining um specifically from water [clears throat] and sewer rates. Um I can't recall exactly what year it was. It's been since I was here, I think it was roughly 2018 that the two funds had to be split and the assets and
everything had to be independently separated and segregated. Um so that is when the 603 fund was initiated which is the sewer fund. Um as as it relates to the debt service for the water treatment plant, that was exactly the reason and
the rationale that we as city staff have chosen to go with a separate debt service um rate that is um a flat rate for single residential homes that is nonvarying um from month to month. And then a um
flat base rate with um a tiered structure component as it relates to gallons because we did not feel that it was uh proportionate to bill out to commercial properties the same as a
single family home. Um we've based that based on what we have found to be the average of um our average for single family homes is 2900 gallons which is where we came up with you know things
over 3,000 for commercial and multifamily. Um and so that is the whole intent of why the debt service rate is structured in the manner in which it is for transparency. That was the number one
concern that staff had and we met two, three, four times a week with Tammy and Brian at Bolton and Mink um to ensure that we could create a structure that would not adversely impact
um single family homes any more than we had to and also maintain um a sense of transparency in terms of how we were going to be displaying that on a water bill. We did not feel that it was um the most transparent to build it in as a
straight percentage as it was initially uh structured in the 2024 Northland model. Um so it took a lot of additional work on our end to separate that out and segregate that um 850,000 debt service. So, um, all of that to say that yes, it
will be kept separate and it will be strictly for the purposes of um, paying off said debt service. And that is also why we are only doing two years. Well, there's a couple reasons we're doing two years. one is we
are still um going to be strong arming and trying to go for state um state bonding money and we're working with our lobbyist firm um and Rob Ecklund and the firm down there in the cities to hopefully lobby for some money to offset
and lessen the impact to taxpayers um and water rate um customers. And then two, um we need to ensure that we have some good historical data as it relates to flow and gallonage um for ongoing um
and continuing to make sure that we have adequate funds um moving forward to offset that debt service. Does that hopefully answer things a little more clearly? >> I I certainly hope so.
>> As far as this service, yes, I understand that, but I'm [clears throat] I'm talking about every the money that we're paying in monthly >> for water and sewer. >> It's all going into water and sewer either, >> but it gets transferred out to pay this
bill and that bill. >> It it would be for either water or sewer infrastructure. It's not being paid, you know, it's not being transferred out to pay for your streets or your lighting. It it is strictly for enterprise the water and sewer enterprise related
expenses. >> Okay. And that's that's >> that's what I didn't understand. >> Yes. >> And and I want to I think you're asking the most important question um that could be asked about it because I'm
asked that all the time. And the question is framed as is the water plant buying fire trucks? Is the water plant buying squad cars? Um it is not. We could not pass an audit if that was the case. >> Nor could I sleep at night. [laughter]
and and Emma, thank you. It's it's the 401 and the 403. It probably doesn't matter the fund, but that money that's transferred out is to pay certain debt service or those related issues, water and sewer. >> Okay, that's what I needed to know. So, I thought it was paid for other things
in the city to because we [clears throat] don't have enough money. >> If it was, we would have real problems. >> Okay. Thank you. >> Thank you. >> Thank you, Alan. We will move on at this time. Uh seeing none further, I'd like to thank the
council and everyone for their attendance this evening. Reminders. Offices will be closed Monday, February 16th for President's Day. And the next regular city council meeting is Tuesday,
February 17th, right here at city hall, 5:30 p.m. This meeting's adjourned.