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 the United States of America and to the
republic for which it stands, one nation under 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 the agenda 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 member Sumar 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 audit presentation. We have Jim Iikton here from LB Carlson to share this year's results.
Thanks, Mayor, members of council, administration. My name is Jim Iikden with Elby Carlson here this evening to provide a presentation of the audit results for the year ended December 31st, 2025. I think Joe, I think you're running the show over there with my PowerPoint. So,
um the role of the auditor um with the city is to provide uh um information and an opinion on the city's financial report. It is a requirement of the city to prepare an annual financial report and have that financial report submitted
to various uh governmental agencies um most specifically the office of the state auditor as well as the f federal government as needed. Um, as part of the role of the auditor, we do audit your uh internal controls over financial reporting. Um, those financial reporting
activities as well as your compliance with Minnesota legal uh compliance areas, specifically statutes that are provided by the office of the state auditor. >> So on the next slide, um, in my audit report, we do provide what's also called
a management report. The management report provides a a summary of the findings for the audit for the year as well as providing some additional information um on the financial results which I'll cover. We just lost everything. Oh, there we
go. >> They're they're toying they're toying with me. Uh so in that uh in that document we did provide uh um the financial results, the out results for the year. So, um, we did issue an unmodified opinion on the city's
financial statements. An unmodified opinion 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, but reportable items. Um, the city is does have limited segregation of duties and
relies on a limited staff to prepare and complete the controls of the city. The city council should be aware of those controls. We do uh find compensating controls in place uh related to that process that allows for the city to operate effectively and efficiently. U
we also help and assist with the preparation of the city's annual financial statement. Anytime an auditor has that sort of role, I'm required to report that to the council. Again, no action really uh in the in related to correcting any of those items. Just an awareness factor. On the next slide, we
did have one finding this year related to uh your compliance with Minnesota laws and regulations. Uh the the city is required on an annual basis to prepare and submit an unclaimed property report to the state of Minnesota that lists out any unclaimed property. Mostly mostly
the unclaimed property would be things like outstanding checks that uh are outstanding. Nobody really claimed the those proceeds. uh that particular report uh uh was was not filed on a timely basis uh this year um and was
filed after the deadline. It was filed um you know uh after the fact but it is it 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 the report in terms of what it was intended
to to uh to do and and really reporting the 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 my management report provide information on the fund balances uh and the financial
activities both of your governmental funds uh as well as your enterprise funds. And you can see on the PowerPoint we do provide some very small detail on the fund balances but but I'll cover a couple of the highlights. the uh the general fund of the city did experience
a decline in fund balance of about 350,000. That was very close to what was anticipated in the budget uh for the year. You did anticipate a deficit in in the budget for the year. Uh the financial results really reflected um
your revenues were uh in excess of budget. Uh your expenditures were lower than budget, which is exactly what you would hope for. uh um there was a transfer that was made out of the general fund to the economic development authority for the purchases of land that
that ultimately uh was the majority of the decline in in uh that fund balance category. Uh you can see throughout the uh um presentation on the fund balances there was a significant uh activity related to sewer lining projects. U the
decline in the overall balances relate to those projects. Uh most of those projects going to be are going to be funded uh um in upcoming fiscal years through either special assessments or grants or some other intergovernmental revenue. So, we'll see that uh fund
balance swing around uh in the in the near future. Uh I think the next graph goes into specifically the general fund. The general fund fund balance as I mentioned declined um roughly 300,000 this particular year uh related to the items
I I mentioned. If you go to the next graph, uh you'll actually see a presentation that we put in there this year that represents the city's fund balance policy. The city's fund balance policy in the general fund uh uh strives to maintain a fund balance of of 40 to
50% of operations 40 to 50% of expenditures. You can see that particular graph uh shows the green line is showing that percentage uh for the last 5 years and the red line is really that percentage at 40% to show the comparisons. Um so at the end of the
fiscal year 2025 um 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 transfer that I re referenced earlier. Um so as
you look at that there's no action to be made other than to be aware of the percentages. uh your percentages fund balance policies are very consistent with re what the recommendations would be of both my firm as well as the office of the state auditor they use those percentages uh so those are very
positive results uh in that particular presentation so next graph shows the uh I believe u shows some data on revenues some of the highlights in the general fund this year the general fund's revenues were in higher than budgeted as I mentioned uh there were more activity
related to building permits which is certainly a positive thing for the city. Uh you had additional revenues in investment earnings which is again a result of the market but also a reflection of uh of the city's actions being taken to invest uh in those um
areas to gain those positive market values. The graph also shows some trends over the the last five years. You can see the the property taxes did increase in 2025 mostly related to an increase in the levy that took place. Um and you also see that increases in those
licenses and permits as you see on that particular graph. The next slide shows the exact same information on expenditure basis. As I mentioned um expenditures were lower than anticipated than than in the budget. U um overall uh some of the
areas that did u um um that were actually higher in the budget was building permits. um you had some additional revenues, however, that offset those permits. Anytime you have more pimpits, you're going to have more costs. You outsource some of those inspections, 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, you can do see uh some some trends there um um showing some of that information. Um overall 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 over year-over-year. Again, that's really a contracted service that continues to
increase. I will say that when I look at other cities of your size, that particular graph is also increasing at a very significant level. Uh, city governments um are making public safety a priority and the city of Newport is no different.
So moving to the next graph, the city does have four different enterprise funds. These are really business type activities including the water, the sewer, street light and storm sewer activities of the city. Uh you can see there that you had some very positive operating results in that particular
fund. Uh increasing net position by almost $3 million year-over-year. Um um the the city uh did receive a couple of um if not more than a couple a number of one-time contributions to these funds by
developers uh related to development activity which is certainly a positive uh for the city. Uh you're also seeing some sewer access fees and water access fees coming into these funds uh which are are are showing up in in that increased equity position as you see
there. So very positive results in these funds. Uh next slide shows individual uh funds activity. Uh this particular graph is intended to show uh um trend data over the last five years for this water fund. Uh revenues, expenditures, really
net uh income or or net loss if it if pertains. Uh the line that I like to focus on is the red line. Uh the red line there really shows is a reflection of cash flow. Is this fund cash flowing itself? Are you are you charging enough
revenues to cover your expenses? And you can see that red line has kind of gone up and over down over the last few years. Um, but overall uh the the the fund does show a positive for 2025 of almost $200,000 in cash, which is certainly a positive. Uh the next graph
is the same information for the sewer fund and you can see that red line again is always at is at a positive level. Uh this fund did show some increases in overall revenues. You can see the blue line in 2025 increased um almost 124,000 which was about 13%. There were some
increased rates and increase consumption occurring in that fund. This fund is also showing some increases in overall cost the MC the Met Council uh charges did increased significantly um this past year which is
showing up in that particular fund. But overall 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 drainage fund or excuse me the storm sewer fund. And again that red line is uh jetting
off the page. So that's definitely a positive thing uh in in for the city. Uh and lastly we show show the storm. I think it's a street light fund. This one doesn't have a red line because it does not have any depreciation uh which is the difference between the
red and the green line. But overall you can see the net income the operating income of that particular fund is that a positive really reflecting positive operations of the city. So before I move on to the next graph, I did want to reflect on a few things uh you know
overall uh at the city um the the in in talking with Joe in our exit conference related to the audit. It was discussed um you know related to some of the financial activities of the city that there appears to be a significantly more operations happening, more state grants,
more uh uh um more federal grants, more special assessments, a lot more development. very positive uh activity this at the city from a financial perspective. Uh but one of the things I mentioned was hey that there's a lot more to it for city staff. Um uh Joe and
his staff uh have a limited staff and there's a lot a lot happening in this in in the city that's changed over the time at least I've been here which is quite some time. Uh and and what I'm getting at really is this is all very commendable. Uh this this audit result
is very positive. these financial results are very positive and really the the the um observation I may want to make is this increased activity is all being handled very appropriately and professionally from my perspective and I wanted to just share that just uh at
this presentation so it was heard by by uh the city council the mayor and Joe already heard it so he doesn't need to hear it again but uh that being said um >> you can say it again I can say it again I'll say it again thank Uh what you'll also reflect and what
stands out to me when you look at the there's a graph in here. I won't even bring it up but um there's one graph in my reports that show entitywide um entitywide financial results and it really just comes to puts the whole picture together as one versus
individual results. Uh that particular graph went from a equity position of about 30 million last year to about 35 million this year. So about a $5 million uh increase in overall well-being at the city from a financial perspective when
you really were starting at 30. It all happened in one year. Um and those are very positive things for the city and and really will vault you forward in a very positive uh manner. Um and it really just jumps off the page for me uh when you stand and look at it. Uh so I just want to bring that that forth to
you as well. That being said, uh there are a lot of work that Joe has for his for going forward with the grants that he's got working on and his team and and the the special assessments and all that work. There's a lot to it and and so be respectful, I guess, uh as an audit team
and as a as a group to to what they have to go through and some of the challenges they have uh which aren't normal always in city government. So uh so moving forward, I think I have one a couple of graphs left. Yes, I do um as an auditor provide accounting and auditing updates
each year. Uh the governmental accounting standard report is always changing and we did implement a new standard this year. Nothing to point out. We are going to be issuing and in um changing uh your financial report for some of the financial reporting model that's changing for next year. Um and
all that's in your report and really nothing to be uh too excited about other than we we got you covered. Uh so the last graph shows uh a summary of the audit results. I did issue a complaint opinion on the financial statements. We had those two reportable conditions. The
one finding um which has already been corrected. Uh uh the slight decline in the general fund financial position. Uh you are adhering to your general fund fund balance policy. And I did mention the improving financial results both in the enterprise fund as well as the city
as a whole. And lastly, the city is very committed 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 finance department level uh or the finance director level, whatever title that
might be. And really things are very smooth um and the transition to those individuals have gone quite well uh from an audit perspective. So with that, I'll turn 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 two
reportable 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's an observe. It's an observation that you have to share. >> Correct. >> Okay. >> Well said. Y
the the main concern that I have is when I bring up items of this nature would be the corrective action plan. What what is the corrective action plan? How are you going to correct this? Well, this one doesn't have any. there is no correction. You're just it's an understanding that you have no corrective action could be taken. For
the 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 be taken care of. >> Do you see these two reportables as something 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, you know, small cities just do not have enough to separate duties, you know. >> Yeah.
>> Yeah. And as I said earlier, we look for compensating controls, controls that that would help you and support the limited size. Frankly, you are part of that. You as council members are part of that control. Um we we see and as an auditor we see and observe you taking u
interest in the finances of the city and you'll note you would note if something was odd or unusual hopefully uh and that's a compensating control or one of them >> and are all cities required to have an annual outside audit? >> They are. Um not every city is required
to 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 I don't even know the number anymore, but >> like $750,000, which is not you're not even near that, then they have a
different type of process. They have to do an audit type process. It's just not called an audit. >> Okay. >> Yeah. >> Yeah. >> Fortunately, we're moving in the other direction. Yes. >> You made note of that, too. So that was a good finding. >> Yeah. >> Yes.
>> Other questions? Okay. Well, thank you very much for this report. I think again it's very positive. We know we have a lot of infrastructure work to do. So, it's good to see those balances be in a place where we're going to be able to continue that work and um continue rebuilding
some of those things. That always means fewer water main breaks, fewer sewer main breaks, um storm water management, so it makes the systems last longer. I mean, 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 to continue that work. >> Okay. Well, thank you very much, Jim. >> Thank you. >> So, um next on our agenda is public comments. As we have no uh members of the public in the audience, we will move on 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 from council member Ingamman to adopt the consent agenda as presented. All those in favor say I. I. Those opposed. The
consent agenda is adopted. Next on our agenda is the engineers report. We have our engineer John Herdigan with us this evening. >> Good evening mayor, members of the council. Uh two items for formal consideration, then a few updates on ongoing projects. Uh first item is the
2025 street and utility improvements project. Uh Meyer Contracting has remobilized to the site to put in the storm sewer uh from the river uh east through the unimproved rightaway of 17th Street. That's along the south edge of
the Circle K tank farm up to Cedar and approximately 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 as
well as our large grit chamber uh working pretty carefully around Circle K's um uh containment area as well as their pipeline going into their facility. So they had staff on site to observe that construction. Uh and has
now they have all of their buried infrastructure done up to the Mellan line that we are we're still working on. Uh the plan is now toward the end of uh next week. They're going to be grading that road and hopefully we'll have curb
in and around that Cedar Lane intersection by the end of next week uh and then paving the following week. We haven't got that one confirmed yet. Uh so once that paving work is complete that will um that will likely conclude
what Meyer Contracting is going to complete as part of that project. Uh we have engaged uh Geisinger who is our contractor for the Third Avenue improvements about completing the remainder of that storm sewer work. I'll get to that uh in the in the project
updates. Uh but the item for consideration on the 2025 street improvements is the partial payment number nine. Uh the contractor has completed $2,817,000 worth of work on that project. Uh less 5% retainage and the previously paid
amount. 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 standard request that these payments come through
as the work gets done. I would mention as our auditor said, we are bringing in a lot of money to help pay for these things to try to keep that off the property taxes. And um you know, as a result, when you see these big dollar figures, it doesn't necessarily mean
it's all um city of Newport money. I mean, it's ours as it comes in uh through the grant process, but um it's not necessarily property tax dollars doing it. So um I think that's helpful for everyone. And um basically all this work that's been done from the river to
where we're at right now on third is has all had a lot of supplemental funding to help pay for it. So um with that I guess I 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 Sumar and a second from council member Ingamman. Any discussion? All those in favor say I. >> I. those opposed and the partial payment is approved. >> The next item is our third avenue improvements project. I mentioned Geisinger and Suns. They are the
contractor that the city has hired to do this work. Uh they're they're progressing very quickly and very efficiently. I think I mentioned at the last council meeting that they had a pretty difficult excavation at the intersection of 17th and 17th Street and
3rd Avenue in and around a lot of or multiple pipelines and some deep excavation. They got in and out of that intersection pretty quickly and has kept up that uh momentum moving the water man and sewer mains both north and south from that intersection. Uh as of today
all of the sanitary sewer is mains are installed. uh they should be done with the water man work uh by the end of this week and they have their second crew working on connecting the uh individual home services to water and sewer. Uh in
about a week or so we will move into storm sewer construction. Up till this point 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 a lot more uh bedrock excavation. So,
we're uh we're we're bracing for a little noisier um few weeks. I know that folks in the area are are likely growing tired of us already, but I I can assure you they're they're moving along uh as quickly as possible. Slightly shorter days over the last few weeks. They're
only working till like 5:30 um and only putting in 10hour days with all the heat. Um but the the guys are are doing great work. We're getting a lot of great feedback from uh from our staff that's on site and uh with two crews working in the area. They're doing they're doing a
great job to get in and and get the work done uh like like I mentioned pretty efficiently. Uh they have uh requested their first partial payment estimate. Uh as a reminder, the total contract amount for this project is 3,85,000.
Uh to date the contractor has completed uh just under $670,000 worth 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 Member Ingamman and a second from Council Member Sumar. Any discussion? I have one question. >> Yes, Council Member Sumar. >> We've talked in in several different locations about expanded hours for the people to operate. You just mentioned
that they're only down to 10 because of the extraordinary heat that these guys are facing and just to be out there that number of hours is commendable. Have we had any concerns expressed from people when they are working these extra hours? Because we've been asked for other
locations to have expanded hours. I'm just wondering what the what the local residents are feeling and expressing to you about expanded hours. I have not been uh I've not heard of any uh complaints or any feedback. uh I can check with our staff on on site to see
if you know a lot of times they'll have that dialogue on site and and provide an explanation as to why they may be doing this and then if they are starting early or going late we can usually correct that in the field without being without
it getting up to me or or staff but or at 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. Uh
all those in favor say I. I. Those opposed. The partial payment is uh approved. >> So then a few updates continuing on with the 17th Street improvements. Uh so as mentioned, we had provided some preliminary information to Geisinger about the scope of work and the
complexity of working in and around the pipeline. uh they were they were frankly I don't maybe not excited might not be the right word but very willing to take on that work especially with their crews uh in town and with having the equipment and the ability to procure the
materials. Uh so MSA had prepared updated plans to uh remove part of those or the the work from the original 2025 uh plans and then incorporate them into the third avenue plans. So we provided
those to Gisinger this week and then so they are in the process of reviewing and then providing unit prices for the different work items. Uh we also have a meeting scheduled for Wednesday of next week with the operations team from One
Oak so that Gistlinger and One Oak can kind of understand what those expectations will be and what the what the uh construction uh means and methods will be to make sure that uh everyone's on board with that work. So uh we're hopeful that we will be uh looking to
execute a change order to the Third Avenue uh project. A lot of this work is very similar to what they're already doing. So, it it blends well. Uh I the unit prices are going to change slightly because it is different work, but we do
have a basis that we can kind of use as a as a judge to make sure that we are um we're still getting, you know, a good cost for the for the work that's um being performed. Um, and so hopefully within a three or three weeks or so or
mid August, we'll have a we'll have a path forward to start getting this work done. Uh, I know that the One Oak has a contractor 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 have identified a contractor and I they were likely waiting for us to see who we could get to do uh this work. So positive developments. Uh we still have a long way to go between then and now or then and or now and then, but we are
hopeful that we're we're moving forward. >> And are we keeping in touch with the neighborhood 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 of
17th between 1 and 2nd Avenue will be will be the largely the um most impacted and we've had some dialogue with both. We would expect that once we have a contractor on board that that'll be a sit down meeting and showing what impacts there will be to to their
property because there will be additional 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 be excavating within. So, I it will be a it will likely be a conversation. They have
some uh vegetative screening that provides some privacy in their in their yards now that will likely need to be removed and we want to make sure that we're putting something back in there that meets their expectations that they're getting that that privacy back. I think it's it's certainly something
that um is is workable, but obviously they uh they'll have to have some input in 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 having
our startup on Monday. So representatives from our uh our city systems integrator that's uh the controller that provides information to our SCADA system to control our wells and and our lift stations and know what
level of water is in our tanks. They uh provide all that programming. So they will be on site to start integrating both the meter as well as the PRV into that SCADA system. And then also a representative from the meter and the
valve manufacturer will be on site to program that uh those um facilities to make 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 some
some training. And then after those uh after that startup is complete, pending any uh issues that we have to work out, we'd be in a position that we can then um start getting full-time water from Cottage Grove. We would expect that we'll probably have maybe a couple week
uh period where we'll test things out and then get some information out to the public, including some frequently asked questions and a notification letting folks know that nothing is really changing from a delivery standpoint. It's coming from a different source, but Newport is still going to be the uh
operator of of our facility, and we're going to be their their first uh their first call if they have concerns or questions. >> Okay. And I think, and I've said this before, 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 a water 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're
doing right now which is mixing from our two wells to bring you know the PAS number down below what the EPA uh recommended number is and the EPA number has not gone into effect yet. So we're not running into any sort of compliance
issues but are it has always been our objective to comply once that number came out. And so, um, this allows us to have water that's already been filtered and treated, I guess, uh, however you
want to describe how the GA system works. And the contract is for 3 to 5 years. So, this is not a permanent solution. This is just a short-term solution while we continue forward with our own um, treatment options uh, for
Newport. >> Thank you, Mayor. And then my last update uh is for the 12th Street Area Improvements Project. Uh you may recall that we were anticipating to award that project this evening. Um well, the city
had received a federal grant through a congressional congressionally delegated >> congressionally directed spending. >> Thank you. Uh and so that uh program or that grant is administered through the EPA and we we were aggressive in getting
our plans out and designed and bid and the the process by which the uh grant is administered is a little slower. We can anticipate some of the requirements for that federal grant like federal wage rates 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 connected with our representative from the EPA, our grant administrator, and we've gone through our contract documents and are are looking to make sure that all of the
provisions are included. The ones that are not included, uh, likely can be added by a change order. Uh, and we're working with the contractor. For instance, they have a Baba uh requirement which is by America built America and that is for American Iron
and Steel for our products. We didn't have that specific certification requirement in our contract. So, we have to work with their suppliers to see if there's any kind of cost difference. It if there is any, it'll be pretty minor. our specifications call out that it has
to be domestic uh iron and steel but not the exact language that's required by Baba. So we at the EPA's recommendation, we're going to hold off uh awarding the project uh until we make sure that we have that they're satisfied that all the
requirements are met and so that we don't get into an issue where we've awarded a contract prior to a grant agreement and and any of those costs would become ineligible. Uh we have communicated this to A1 Excavating. They are the low bidder for the project. uh
they are they are still very interested in doing the work. They can accommodate a delayed schedule. Obviously, some of the milestone completions uh uh that we were looking to have them do yet this year will change, but once we get an idea of when this will be awarded, we
can go back and look at how much we can get approved uh or sorry, completed this year. Likely working from the river east. So that first block or maybe the uh first two blocks of of 12th Street would be the the first area that we
would look at. Uh but again, we set up this project so they have all year next year to complete this work. And we if if that isn't enough time, we can certainly work through uh with the contractor to make sure that they have ample time to get their their work complete.
And I believe that ties a little bit to another item on the agenda uh in in a few moments. >> Well, and I think um >> to our auditor's point about there's a whole administrative component to when you get this, you know, federal or state
money, and this is just another example of there are some different uh requirements that you that vary for different types of funding sources. Uh but this grant was for over a million dollars and so if we have to go back and make some changes
and we have some delays, it's still a million 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 to redo this but nonetheless um I still
think it's it's good for our our our residents. >> Do you have a rough idea when do you think they might be able to bring this to the council? My I think optimistically it would be the first meeting in August. We have that extra week. Um I think realistically it would
be the second meeting in August that we can we can bring that uh um or recommendation for award and that's assuming that again the EPA is comfortable with addressing all these kind of retroactively by a change order.
We'll certainly provide an update if it's if it's not at the first meeting in August. We'll we'll provide hopefully a little 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 council members. I have nothing formal this evening. Uh but I do have a few updates and reminders. Um, I would encourage uh residents to take advantage of our DNR relief grant, which gives you the
opportunity to potentially have uh dead or dying trees removed for no cost. Um, and there's also an option if you don't remove 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've been handing out um door hangers. uh they're yellow. Um so if you know you have a tree that you need to get removed or you see your neighbor, you know, by all means encourage them. Uh we're
taking applications through the end of August. But um like I said, it's limited funding, so the sooner you get in, the better chance you have to have a tree removed for free. Um another tree note, we are removing two
trees at Pioneer Park before Pioneer Day that have died. unfortunately the big uh big oaks that uh the last couple years have been a little tough on. Um and along the same note, we uh if if time
allows, we to intend to remove the buckthorn hedge at Pioneer Park before uh Pioneer Days as well to uh increase the visibility for law enforcement, get rid of an invasive species, and then also with this tree grant, um we're
hoping to plant a substantial number of trees in place of that around the ring of the park to give us a little better shade and uh and again not have an invasive species growing in the park. So with that, I'd be happy to stand for any questions.
>> I imagine the roots on that buckthorn go pretty deep. >> I'm I mean I'm just envisioning like a huge like mound of dirt. You're going to have time to kind of level that over and and put something there before uh Pioneer Day. >> We're we've got a plan. I can't
guarantee that'll go as smoothly as as we have it planned, but um you know, and that's obviously pending no um other emergency uh >> yeah, >> things that would, you know, rear its head. >> You never know what we're going to run
into, 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 um interested in doing some tree replacement on that perimeter as well. I think that'll look nice. >> Yeah. >> Any questions for that? Thank you very
much. So, next we have the administration report. >> Uh, mayor, members of the council, one item for consideration tonight, resolution 2026-58, a resolution authorizing the sale of bonds. And we do have our financial
advisor, 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, with all of these various road utility projects you've been discussing, one of
the strategies to pay for all of that was to have some portion of that financed with debt. Uh, I think the last time I was before you, we were talking about a larger tax abatement bond. Uh, that was, I think, the same week you learned that you were going to be receiving more money from the state to
help pay for these projects. And so, uh, we went back after that meeting and talked 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 only financing 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 those special assessments. We had been looking at 15 years uh, and switched the statutory authority. So if as you recall, you need some kind of statutory
authority to issue bonds. Uh because of all the various funding sources and the dollar amounts involved, uh we had been pursuing tax abatement bonds because there was clear authority that way. But with the reduced amount uh and the mix of funding, we determined that we could
issue these as uh chapter 429 improvement bonds, which are just special assessment bonds. Uh and that is because we have at least 20% of the um uh project costs being paid with special assessments. And so uh we switch course
to to that method of of uh bonds. It's the same cost, same interest rate. All those things stayed the same. Uh a little bit improved actually just because of the shortened term. Instead of being 15 years, it's now 10. Uh and proceeded that way as we prepared for the sale. So from from that point then
everything is kind of as has been typical. Uh we did have this issue rated by standard and pores. So worked with staff to obtain that rating. That's included in the sale day report that hopefully you all have at your desk there. Uh and uh they came back uh with
an affirmation of the city's double A rating with a stable outlook. And so that's what that report indicates. Again, they've highlighted uh the things that they have historically which are, you know, strong uh management practices and 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 here with respect to economic development uh and the way that just generally you manage things as a community. And so in affirming that double A stable rating
and then uh we did today then uh take bids so that you know your your bids got exposed to the to the bond market broadly. We took in bids today 10:00. Uh there were five biders and the lowest bidder in this case was uh Bayerd out of
Milwaukee, 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. uh there was a small premium which just means that they pay more than face value for the bonds in exchange for higher uh
individual coupons on those bonds. So what we we did there was reduce the amount of the borrowing. So we were at 1 million445 and now we're down to 1,ion335 but we retain the same amount of proceeds available to pay for project costs. Uh and so what that does then is make sure that the debt annual debt
service is consistent with what we had been originally anticipating uh and is will be uh less than what those predicted special assessments are in this case. Uh and so so uh then uh the purpose of tonight's meeting then is to pass the resolution that uh administer
Hatch mentioned which would be to award uh 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 in your agenda, but should be consistent with the replacement resolution that was prepared uh by Taft and submitted as
well. So, uh so anyways, yes, good result. Uh but I'm happy to stand for any questions about the sale or uh the rating itself. >> Council member Sumar, >> I've got some questions on the rating from standard and pores. Are you able to answer those? >> Yeah, I believe so.
>> Okay. Yep. Some of them are definitional and on what is page three of the report the 2026 go improvement bonds there are some on the middle of the page a credit
summary there's some numbers uh institutional framework for instance has a one individual credit profile ICP is a 2.65 65. What is that on a scale of that? 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 are numbers that relate to, uh, S&P's methodology, uh, for how they actually assign a rating. uh and so each of those categories with the ex exception of the institutional framework and the
individual credit profile which I'll talk about later but all of those below that so the economy financial performance reserves and liquidity management and debt and liabilities are the numbers that they put into their methodology to spit out uh ultimately what is that individual credit profile
number the 2.65 65 number. They're generally on a scale of 1 to four for each of those. Lower is better. Uh and so uh and they're all weighted 20%. So what they're effectively doing is taking each of those numbers, multiplying them
by 20% and that yields the 2.65 number that you see as the ultimately the individual credit profile. And so what they then do is that they look at that and the institutional framework which is basically assigned to you. uh it's it's it's uh a function of you know uh being
like a metropolitan community for example they they've got a definition of how they assign that and so that's one is the lowest that's the best uh and so uh they look at your credit your institutional framework credit profile and they look and say what does that
mean for a rating in your case that that's a double A and so that's just how they uh that's how they work their methodology yep and so the lower that number goes the more likely then that the rating could increase. If that number goes higher, the rating is worse or decreases or is a lower rating. So
that's that's how they're assigning that in their methodology. And they've taken to being more open with what those numbers are uh in these reports uh in the re in recent years so that you can see 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 when they look at their matrix and they get to 2.65 65 and they look down, it's it's a 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 there
would be from there upwards there'd be a double A plus and then AAA, which is the highest that they assign. And uh you know, you uh Newport uh in uh it's been several years now was you were recently upgraded I I don't know maybe five years ago, six years ago to a double A, you
know, from a lower rating previously. So as 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 and assigned an upgrade. Uh the the next two thresholds are are harder to to reach
and are are largely dependent on uh really the values and incomes in the community, the economic metrics that are there, and they allude to that in the report 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 the worst, right? I mean that that's as low as they assign. So as that number improves, it would improve that 2.65 number which could slide you nearer to a higher rating if that makes sense.
>> So is that Newport's economy or is that the national economy, the state's economy? >> Uh well they so the that number is derived uh from the metrics that are in the table below. So, uh there's the e economic metrics that they use. Uh they
they look at, you know, market value, market value per capita. Uh they're looking at uh household income and effective buying income. Uh and those metrics are all listed there. Um and then in their methodology that spits out a number, and in this case, that number
is four. Uh and then they also look to compare your economic metrics to those of other peer-rated communities. So like if they assign a double A rating as they have in this case, they're going to look at other AA rated communities and say, is is this consistent with the metrics that we see in those double A rated
communities? And I think what the analyst told me on the phone actually is that your 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 how they operate and how their methodology
works, but but but the economics are primarily market values of your of your property in the community and the incomes of the people that live here. And they they manipulate those numbers in a couple different ways to come up with their their answers. So, so that's the 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, you know, higher valued housing, things of that nature, that might start to change the income profile over several years, but that's what it would take to
probably 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 reserves
percent of operating revenues. There's nothing in there in that most recent uh line. Is that just because we haven't had a full year of data on there? I see the 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 the narrative of the report, they talk about reserve balances and where they're headed, 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 financial statements 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 I would just say, you know, Bill's questions on the bond rating and all that, the better the bond rating, the lower the interest rates we get. Correct. And so there's a direct correlation there between how we're
managing ourselves financially, um, you know, assets, all of those things all affect uh that. And so when we go out to borrow, it can make a big difference, you know, over the course of a 15 or 20 year bond when we're when we're out doing, you know, these larger
bond sales. So, um, it's good news and congratulations too to Joe. I think this was your first bond call that you were involved with and second one. Okay. Um, and so I know you're always hoping you can at least meet what you did the last time through. So, congratulations on
that. Any other questions on this? And did you say the resolution number was different than 2026-59? >> Uh, mayor, members of the council, the resolution number, I believe, will be the same, but the amount specified in that 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 the number without referring to the num amount. Okay. I don't have that in front of me. If somebody else wants to have that in front of them, they could go ahead and make >> the corrected number.
>> Yeah. >> Uh 1,335,000. >> Oh, okay. I will make a I will move the resolution to 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 of general 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 got
it pulled in front of them. Marv, >> jump in there. I move resolution 20 26-59 resolution authorizing the issuance and awarding the sale of 1001,335,000 general obligation improvement bond series 2026A
pledging the security thereof special assessments 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 from
Ingamman with support from council member Sumar um on the resolution. Any discussion? All those in favor say I. I. Those opposed and the bond sale is approved. And just >> I like to have the headline read so that you know people who are watching the
meeting have a full understanding of what it is we're approving rather than saying, you know, we're just we're we're approving 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 um
any 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 stand
for questions. >> Any questions for Joe? No questions. I'm going to move on then to mayor and council comments. One thing I just want to remind people, we've got the free mattress and box spring uh pickup event is happening again from
July 20th to July uh 31st. You can go to the city's website right now. It's on the popup. Um otherwise, you can look at the news and events page and click through for how to put a call in and give your address so that they can come and pick it up. You just need to get it to the curb. It's okay if it's a rain
day and it gets wet. They can still use it. but they are able to recycle these mattresses. If you put them just in your regular trash once they go in there, they can't reuse them. So, it's a great way to keep uh the landfill empty and um help uh help get those recycled. Um
also, just a couple of uh I think uh good news items for us. We did receive um the go-ahad for our city engineer to apply for what they would call a design grant for our own water treatment plant
or plants. Basically, the analysis is part of that is to figure out if it should be one larger plant or two smaller plants. Um, but I think this has been a long conversation about whether we should have our own treatment uh facility in Newport or whether we
should, you know, actually be required to 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's a good step in the right direction. And
part of their decision analysis was to really um cost us out 20 years and what was the least expensive way to operate and clean this water. And the answer was to uh do treatment within uh our own our own facility. Again, I always think
things can change, but right now that's where we stand. And and I was very pleased to get that email. The second thing is that we received um one of the 3M Priority 2 grants. We had applied and received 800 $486,000.
This will go towards the cost of creating our very first riverfront park in Newport and it will be on the properties that are on Cedar Lane that are, you know, if you if you're in the area, you know, it's an area that floods quite frequently. that limits a little bit of what we'll be doing there, but
essentially a picnic shelter, parking, a perimeter trail, an outlook, and an ADA accessible canoe kayak launch, as well as we'll have a pad for a porta potty. That's kind of that's kind of the basics of where we're at, and we'll be able to
move forward with that. And that's roughly about half the cost of building that park. and we've been able to find some other you know staff has I should say found some other grants that will help with some uh pay for the cost of the trail work and um we'll just continue to develop that some of that uh
other funding is not available until 2028 so we'll be doing a lot of planning and uh if there's work we can do in 27 we will otherwise most likely it's a 2028 build for that um so that's what I have uh council member >> uh the only thing that I want to remind
everybody is recycled food scraps. The bags are free from the RDF and you can get the boxes at city hall. >> Mhm. >> So, it's like we're recycling
food scraps, so please do it. >> It's roughly 20% of what goes in the landfill. So, if we can stop that, that's great. Council member Taylor, I don't
>> Yeah. Nothing to report at this time. I mean, I guess the planning Yeah. Yeah. We already have We already have the daily 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 member
Sumar. >> Oh, yes. Well, I wanted to mention to the city me residents that I attended League of Minnesota cities training session down in Rochester along with Mayor Elliot and administrator Hatch and fellow council member Angman. And we
were awarded a certificate of participation with the Minnesota Greeneps Cities program. And I do have this document. I'd like to hand it to the administrator for posting wherever that's appropriate. So this is another indication of our continued commitment
to the recycling that council member Angman just mentioned. So that was one excellent thing that we attended and several days of sessions talking about a wide variety of items that impact the successful running of our city. I also went to the dentist recently and learned
that certain Teflon tapes that have been used for flossing, they've had to change the chemical composition of them because they were filled with PAS. So, here we are trying to get PAS out of our water and those of us that regularly floss
have been introducing it pretty substantially. So, that is something good to know. and the my involvement with the library continues. The there are many activities going on all summer for kids and adults. There are volunteer
opportunities down at the library. Across from the library, there's an extensive building project going on for the fence company. They're moving along pretty rapidly. Another thing that's happening in the local area is the schooloolie program from the the the
Washington County has a activities for kids and meals available in St. Paul Park at Pullman Elementary School on Mondays and on Tuesdays at Newport School. 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 community to make summers more bearable. >> Thank you, council member. With that, do I have a motion to adjurnn? >> So, move. >> Second.
>> A motion from council member Ingramman and a second from council member Sumar. All those in favor say I. >> I. Those opposed, we are adjourned. Thank you, everyone.