Hillsboro, Kansas

October 4, 2011

1. The city council met in regular session on Tuesday, October 4, 2011 at 4:00 p.m. in council chambers with Mayor Dalke and Council members Byron McCarty, Shelby Dirks, Bob Watson & Marlene Fast (arrived at 4:20 p.m.) present.

2. Others Present: Adam Stewart, Hillsboro Star Journal; Don Ratzlaff, Hillsboro Free Press; Chaz Doffing, Land Leasing Agent; Dan Kinning, Chief of Police; Dan Baldwin, City Attorney; Clint Seibel, HDC; Larry Paine, City Administrator; and, Jan Meisinger, City Clerk.

3. CALL TO ORDER – Mayor Dalke called the meeting to order at 4:00 p.m.

4. PUBLIC COMMENTS – none

5. APPROVAL OF MINUTES – The minutes of the 9-22-11 special meeting were approved as distributed.

6. VOUCHERS – Motion was made by Council member Watson and seconded by Council member Dirks to approve the vouchers in the amount of $110,192.36. Motion carried unanimously.

7. CDBG GRANT ADMINISTRATION CONTRACT – Motion was made by Council member Watson and seconded by Council member Dirks to authorize the mayor to sign the contract for professional administrative services, if we are awarded the CDBG grant between the City & Ranson Financial Consultants. Motion carried unanimously.

8. OIL & GAS LEASE – Chaz Doffing, land leasing agent representing J. Fred Hambright, Inc., met with council to discuss obtaining an oil and gas lease on the city’s property where the sewer lagoons are located and the property north where we have the farm lease with the Co-op. The lease would be for 3 years with a proposed $15.00 per acre payment, plus 1/8 royalties on any oil actually produced at the site. The oil company is planning to drill a deep oil well (up to one mile) for horizontal drilling. This does not include any mineral lease. And, there would not be any surface drilling on the city’s property. This company has already leased property around this area and plan to pool areas in 640 acre parcels. Mr. Doffing said there was a new drill site near McPherson. The company’s investment for each site is $1.2 million. Council member Watson said he didn’t favor approving the lease as it was written because it gave too low of value to the city. It also left open the possibility of actually drilling on the city’s property. He was also concerned about it interfering with the lease the city has given to the Co-op. Mr. Doffing told council the company would include an addendum requiring written permission from the city for surface work of any kind. Motion was made by Council member Watson and seconded by Council member McCarty to table this item until it could be discussed with City Attorney Dan Baldwin. Motion carried unanimously.

Later in the meeting, after City Attorney Dan Baldwin arrived, the discussion continued. City Attorney Baldwin said he wanted to see the city have a way to opt out in the future, and to have some say in the pooling process. He also questioned how the city could be sure it was getting its fair share of royalties. Mr. Doffing said the company will produce monthly reports of oil production. Council member Fast questioned the amount being offered per acre. Mr. Doffing said $15.00/acre was a typical rate for this area. He said the project would go forward on other properties with or without the city’s lease; and, he didn’t think another oil company would want to lease land in the middle of a horizontal drilling project. Item deferred until the next city council meeting.

9. POLICE CAR PURCHASE – Police Chief Dan Kinning met with council to seek permission to bid the purchase of a new police car. The 1999 Ford Explorer will be traded in. Ford has taken the Crown Victoria out of its production line. City Administrator Paine budgeted money to replace a vehicle in 2011 in the Special Law Fund. Police Chief Kinning said he has been trading vehicles every 9 years. The Impala was kept a couple of years past that and it cost the department a lot in repairs. Once we had multiple dealer brands to seek bids from, now there is only one, so we will also look at the State partner system. The city’s written policy is to purchase locally if the price is within 10%. A bid sheet will be developed. Motion was made by Council member Dirks and seconded by Council member McCarty to give Police Chief Kinning permission to seek bids for a new patrol car. Motion carried unanimously.

10. ORDINANCE 1213 – Motion was made by Council member McCarty and seconded by Council member Dirks to approve Ordinance 1213 – (AN ORDINANCE OF THE CITY OF HILLSBORO, PROHIBITING “J” TURNS ON ANY CITY STREET MARKED WITH A CENTER LINE). Council was polled with the following vote: Watson, yes; Dirks, yes; McCarty, yes; Fast, yes. Motion carried unanimously.

11. BOARD APPOINTMENTS –

Hillsboro Housing Authority – Mayor Dalke appointed Amy Simmons to the Hillsboro Housing Authority. Motion was made by Council member McCarty and seconded by Council member Watson to approve this appointment. Motion carried unanimously.

Library Board – Mayor Dalke reappointed Brenda Kimberly to the Hillsboro Library Board for her second term. Motion was made by Council member Watson and seconded by Council member Dirks to approve this reappointment. Motion carried unanimously.

12. SALE OF PROPERTY ON NORTH LINCOLN – Clint Seibel told council he had contracts for the purchase of city owned property at 310 N. Lincoln. The first offer is for 125’ for $6,000.00. The owner of 304 N. Lincoln would like to build a building for his heating & air conditioning business. This would also require a conditional use permit, which the neighborhood would have input on because this area is zoned for residential use.

The second contract is for 104’ for $8,000.00 and the buyer would like to build a duplex. This would leave approximately 170’ of what the city owns. After discussion, council preferred that this area remain residential. Motion was made by Council member Dirks and seconded by Council member McCarty to approve the second contract for the duplex. Motion carried unanimously.

13. CITY ADMINISTRATOR’S REPORT –

KMEA is holding their annual meeting on November 3 & 4 in Wichita.

Riggs Associates’ client appreciation dinner is Sunday in Wichita (in conjunction with the League meeting).

Letters have been mailed regarding the NLC’s underground service line warranty program.

Street Project – City Administrator Paine said he met with Darin Neufeld regarding the street projects. Due to some technical issues, we are not ready yet to go to bid. Plans should be finished next week. The target date to have the bid opening is October 25 – 27^th, so an award can be made at the November 1^st city council meeting. Mayor Dalke asked if we were issuing bonds right away or if we are going to use temporary notes. City Administrator Paine said he would look at both, but he was favoring bonds so we can include the TIF reimbursement.

Golf Course Agreement – Council member McCarty urged City Administrator Paine to work on a written agreement for the operations of the golf course, as it was again on the city’s audit report. He also felt council should make the building of a new fire station a priority.

14. ADJOURNMENT – Motion was made by Council member Dirks and seconded by Council member Watson to adjourn at 5:07 p.m. Motion carried unanimously.

DELORES DALKE, MAYOR

ATTEST:

JANICE K. MEISINGER, CITY CLERK