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HomeMy WebLinkAbout2025-1-21 FOC Special Meeting MINUTES HERO TRAINING CENTER 1/21/2025 FACILITY OPERATIONS COMMITTEE 10125 85TH STREET SOUTH COTTAGE GROVE, MINNESOTA 55016 SPECIAL MEETING – 8:00 A.M. (TEAMS Online) Pursuant to Minn. Stat. 13D.02 sub. 1, FOC members Gridley and Gorall will be attending remotely at the following location: 8301 Valley Creek Road, Woodbury, MN 55125 in the Birch Conference Room. FOC members Koerner, Malinowski and Levitt will be attending remotely at the following location: 12800 Ravine Pkwy, Cottage Grove, MN 55016 in the Minnesota Conference Room. 1. CALL TO ORDER The Facility Operations Committee Special Meeting was held via a TEAMS meeting on January 21, 2025. Pursuant to Minn. Stat. 13D.02 sub. 1, FOC members Gridley and Gorall attended remotely. FOC members Koerner, Malinowski and Levitt attended remotely. Jennifer Levitt called the meeting to order at 8:02 a.m. 2. ROLL CALL HERO Center manager Daniel Anselment called the roll: Levitt – Here; Malinowski – Here; Gorall – Here; Gridley – Here; Posel – Here; Koerner – Here. No other people were present. 3. PRESENTATIONS/UPDATES 4. CONSENT AGENDA 5. APPROVE DISBURSEMENTS 6. REGULAR AGENDA A. HERO Center Vehicle Lease Agreement Recommendation: Discuss terms and conditions of the lease agreement, the status of the truck at the end of the 60-month lease term and when appropriate approve the lease agreement with the estimated purchase price with the final exact cost to be provided by the City of Woodbury Fleet Manager. Levitt opened the meeting and acknowledged that there were no presentations, no consent agenda items and no approval of disbursements. Levitt advised that the regular agenda item was to go over the lease agreement. Levitt inquired if the FOC was taking the total lease payment and then calculating the monthly vehicle payment based on the total cost of the vehicle. Levitt asked if we take the cost of the vehicle over the 60-month term of the loan. Levitt questioned how the lease payment was being calculated? Gridley stated he thought we were taking the lease payments plus insurance. Gridley then asked Anselment if that is what his understanding was. Gridley inquired if the owner (Woodbury) had to carry the insurance. Levitt stated that in section 7.1 of the lease agreement draft, Woodbury would require the HERO center to hold the insurance. Levitt stated this was verified with the insurance agent for the City of Cottage Grove and stated that the insurance could be carried through the HERO Center. So, the HERO Center would pay the actual cost of the insurance separately. Gridley asked if there was some level of time/value/money and asked if Anselment was able to do any additional work on this. Anselment advised that he spoke with Woodbury’s fleet manager in June 2024 and was provide an approximate cost of the vehicle. Anselment advised that the FOC approved the approximate total dollar amount to purchase the vehicle and noted that Woodbury had indicated they could purchase the vehicle and lease it to the HERO center. Anselment stated that the truck would be a low mileage vehicle at the end of the 60-month term. Anselment asked if the truck could remain in the possession and use of the HERO center after the end of the lease term. Gridley mentioned that at the end of the lease it is paid for the full cost of the vehicle and at the end of the lease term maybe it reverts to the lessee. Also wondering if there is a time/value/money to add. Gridley inquired if any FOC members have leased a vehicle and how that worked. Levitt advised that the city did have to lease/rent vehicles during the COVID time period and it was short duration lease. Gridley inquired if there was a reasonable proposal we could agree to. Cost of the vehicle divided by 60 and maybe an inflator for time/value/money? Gridley advised the fuel would be paid for at the City of Cottage Grove. Gridley then asked Gorall her thoughts on a fair calculation for this truck payment. Gorall stated that she was not at the budget meeting when this was discussed, but her understanding was we were not going to put an inflator on it as “our” contribution to HERO. Gorall stated she thought Woodbury was going to do straight costs divided by the term of the lease. Gorall mentioned that it does state clearly that the City of Woodbury would still own the vehicle at the end of the lease. Posel then stated that it would fall inline with a more traditional lease by taking the total value and dividing it by 60. Posel stated it is more of a loan than a lease. In a lease term, you have the option of buying it or not but the lease payment is usually lower which is why people pay for a lease. Gridley indicated that he was fine with that and seeing if HERO wants to keep the truck at the end of the term. Levitt asked for clarification stating that if you take the full value of the vehicle and dividing it by 60 then the HERO center has paid for the entire value of the vehicle, and then shouldn’t HERO own the vehicle then? Levitt mentioned if you wanted to add “x” amount of interest then just let HERO own it at the end. So, the vehicle would be paid off in full value at the end of the 60-month term. Gridley said he believes we could do that by taking the final cost and divide it by 60. Gridley asked how we could do a time value, dollar for dollar so Woodbury gets their money back? Malinowski said they are currently doing 5-year coupon certificates and the true interest cost on the debt has been ~3.8% and we could look at adding that to the payment schedule. Gridley asked if we would just take a loan calculation then. Levitt asked if we are taking each monthly payment and multiplying that by 3.8% or doing 3.8% over the entire purchase price of the vehicle. Malinowski said she could do some calculations and send out a sample payment schedule. Levitt mentioned having the exhibits which can show the payment schedule. Gridley asked when we expect delivery on the truck. Gorall stated truck hasn’t been ordered yet. Levitt stated asked if the State contract was open for vehicle purchases right now. Levitt stated that we have exhibit A, which is the vehicle specifications, Exhibit B would be the payment schedule that Malinowski will work on. Levitt asked if everyone agreed that the HERO Center would own the vehicle at the end of the lease? Levitt stated we would update the agreement to reflect this new language under section 4.1. Levitt inquired about under the maintenance section 6.1 schedule and adding the City of Woodbury’s maintenance schedule under exhibit C. Assuming there was a standard schedule, so the HERO Center doesn’t default on the terms of the lease under this section. Gridley questioned whether section 6.1 is something Woodbury put in the agreement or if the lawyer drafted this section. Gridley needs to find out if they have a maintenance specifications worksheet schedule and said if they do, they will attach this schedule to the lease agreement. Levitt advised that we don’t have the details for Exhibit A and asked if this document should be sent blank? Gridley said they wouldn’t send the lease agreement to City council they would just ask for authorization for the mayor and city administrator to sign. Levitt asked what date this could happen, and Gridley indicated February 12. Gridley asked if Anselment had the order “teed up”? Anselment advised that he thought the truck was ordered back in June after seeking approval from the FOC, because of the delay in truck orders. Anselment advised he just found out it had not been ordered and is trying to move this process along. Gridley advised Anselment to connect with Dan Solheid from City of Woodbury and Gorall mentioned Anselment connect with Woodbury public works director Mary who can work directly with Solheid. Gorall advised that Solheid was told to not order the truck because he didn’t have authority to order. Gridley advised that the truck could be ordered if the FOC approves the body of the lease subject to the attachments. Gorall mentioned that the fleet manager will need budget amendment details to order the truck. Gridley advised he should be able to get the order in to get the clock going on this. Levitt inquired if Mary is the one that will work with the city attorney regarding the agreement and Gorall stated she (Gorall) would follow-up on that because she was in this FOC meeting. Levitt summarized the changes and review them as editing 2.1 being changed to a term of 5-years. 3.1 the FOC will verbally talk about the total cost divided by 60 with the 3.8% interest payment with schedule attached by Brenda. Then modify 4.1 that after the lease is done it will become property of the lessee (HERO Center). Only outstanding item was 6.1 verifying if there were any other specifications. Koerner then inquired under section 1.3 Storage of vehicle, which states to keep in covered in secure garage. Anselment advised that the HERO Center does not have secure covered garage storage, however the vehicle could be parked outdoors in the back enclosed secure gated back parking lot at HERO. Levitt mentioned we could indicate that it will be stored in the secure gated back parking lot. Gridley advised we can just remove the word “garage” from the agreement. Levitt asked for a motion to approve the modified lease agreement to the items that were discussed. A motion was made by Pete Koerner, and second by Clint Gridley. Anselment called the roll: Levitt – Aye; Malinowski – Aye; Gorall – Aye; Gridley – Aye; Posel – Aye; Koerner – Aye. Motion carried: 6-0. 7. ADJOURNMENT @ 08:25 A.M. Levitt stated the last item on the agenda was for a motion to adjourn. Motion to adjourn the meeting was made by Brenda Malinowski and second by Pete Koerner. Anselment called the roll: Levitt – Aye; Malinowski – Aye; Gorall – Aye; Gridley – Aye; Posel – Aye; Koerner – Aye. Motion carried: 6-0. Meeting was adjourned at 8:25 a.m.