06-20-1994 Special Workshop MinutesSTATE OF MINNESOTA
COUNTY OF WRIGHT
CITY OF OTSEGO
SPECIAL WORKSHOP MEETING OF JUNE 20 1994
A WORKSHOP MEETING WAS HELD THIS 20th DAY OF JUNE, 1994, AT 7:30 PM
IN THE CITY HALL CONFERENCE ROOM.
Norman F Freske, Mayor, Doug Lindenfelser, Floyd Roden, Larry Fournier and Ron
Black, Council Members, Jerome Perrault, Clerk, Larry Koshak, Engineer and Andy
McArthur, Attorney, were present representing the City of Otsego.
Representing the Darkenwalds, were John Darkenwald, George Yankoupe, Wally Odell
and Attorneys, Lee Hanson and Brian Schonburn.
The Workshop Meeting was called to order by Mayor Norman F Freske. The purpose of
the meeting was to discuss the municipal well and prioritization of the Darkenwald wells
and sewer plant.
Attorney Lee Hanson addressed the meeting and said that the City can license a private
well (water service) and a private sewer system. Indianapolis is the largest City with a
private water and sewer system but there are thousands of others throughout the United
States.
The Darkenwalds have met with the PCA and their system is the same as used by many
cities.
The Darkwenwalds would like to franchise the water system and sewage system to the
City and the City would control the rates and set the rates.
Attorney Andy McArthur said he had gotten some information from the PCA regarding
private franchises and there are 3 in existence in the State at this time. Mr McArthur said
there is no doubt that the City can enter into a franchise agreement, the question is
whether they want to. He also questioned whether there could be an interruption of
services.
Attorney Hanson said that it is part of the franchise agreement that the City would monitor
the operation.
Brian Schonburn said that while there is only 3 franchises in this State there are thousands
throughout the Country, the largest being in Indianapolis which has been in operation
since 1980.
CITY OF OTSEGO SPECIAL WORKSHOP MEETING OF JUNE 20, 1994
Page 2
Norman F Freske said he was concerned that some areas might get preferential treatment
at the expense of other areas if the systems were private.
Attorney Hanson said that there was language in the franchise agreement to prevent this
from happening.
Doug Lindenfelser asked if the service would be limited to a certain district (area) and Mr
Hanson replied that it would be as there is a limit to the capacity of the sewage plant.
Larry Koshak asked what would happen if the Darkenwalds failed to pay the bonds and
Mr Hanson replied that the bond holders would take over.
Ron Black commented that private utilities are required to pledge their assets when
bonding.
Larry Fournier said he was concerned why a private franchise would be better than City
owned water and sewer systems.
Larry Koshak said the Darkenwalds Sewage Plant is currentiy not ready and must be
expanded, also we do not know much about the Darkenwald wells and whether they have
the capacity needed.
Mr Hanson replied that we do need to study the existing sewer system and see what is
needed in improvements. As far as the wells are concerned, we can give you information
right away on their capacity. We know changes have to be made in the sewage plant but
we feel that private ownership can do it cheaper and with less headaches for the City.
Ron Black said he felt a feasibility study was needed on the project with all parties
participating.
Norman F Freske commented that he was concerned that the city would be stuck with the
bill for the feasibility study.
George Yankoupe said that the Darkenwalds would not be operating the sewage plant,
professionals would.
Larry Koshak said he was concerned about the water lines as much as anything and Mr
Hanson replied that in Indianapolis the franchise holder takes care of everything.
Floyd Roden commented that we will need more facts and figures to determine which is
the best way for the taxpayers of the city.
CITY OF OTSEGO SPECIAL WORKSHOP MEETING OF JUNE 20, 1994
Page 3
Doug Lindenfelser asked if the municipal well is considered to be a money maker, why
shouldn't the city put in the well themselves?
Mr Hanson replied that the Darkenwalds have the wells already in place and the city
would have a lot of expense before realizing any revenue.
Norman F Freske said we do need to know what is best for the residents of the city.
Andy McArthur said that the city will eventually need a municipal system and the question
is whether the private system will be compatible with a municipal system.
Larry Koshak commented that he questioned whether the Darkenwalds wells could serve
the school as well as the municipal well we are proposing, also the school needs to know
soon as they will need water by this fall.
Mr Hanson said the Darkenwalds are proposing to put up a water tower to maintain
pressure instead of the pneumatic tank being proposed for the municipal well.
Larry Koshak also said that the school will be investing over $100,000.00 in a septic
system soon.
Ron Black commented that we do need more study on the private franchise agreement.
The school has already spent considerable money designing a septic system. He also said
he has an open mind on the subject of a franchise agreement but we do need more study to
determine which is best for the citizens of Otsego.
Andy McArthur asked if there was any difference between Indiana and Minnesota laws
regarding franchise agreements and Mr Schonburn replied that there was not.
Norman F Freske commented that we are in a position where a system is available.
Larry Fournier agreed that the franchise agreement is something to consider but we do
need more information.
Ron Black commented that he thought the whole district should be involved in the
planning and studies. He also said a meeting should be held with school administration on
wells and sewage service and inform them of the City's position on this.
Larry Koshak, Ron Black and Norman F Freske will be meeting with the school
administrators on Tuesday, June 22, at 5:00 PM.
CITY OF OTSEGO SPECIAL WORKSHOP MEETING OF JUNE 20, 1994
Page 4
Mr Hanson said he would like to meet with the City Engineer and City Attorney on
Wednesday, June 22, at 10:00 AM to discuss a feasibility study on the franchise
agreement, cost of sharing of the feasibility study and review legal aspects of the franchise
agreement.
Motion by Larry Fournier to adjourn the Workshop Meeting. Seconded by Ron Black, all
Council Members voted in favor of the motion.
Norman Freske, Mayor
Doug LAx(enfelser, Co ncil
nd
4
Floyd Rodefi, Council Larry Fo
Ron Black, Council
Attest: Jerome Perrault, Clerk
JP/co