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•The council passed a preliminary general fund budget of $1,549,260 for 2006 and a preliminary property tax levy of $488,700 for 2006. The proposed budget increased $93,207, or 6.5 percent, from 2005 and the proposed levy increased $23,245, or five percent, from 2005.

The city is required to adopt a proposed budget and certify their proposed levy with the county auditor by September 15.

The council will hold special city council meetings on Monday, Oct. 24, and Wednesday, Nov. 16, both at 6 p.m., to review its 2006 budget. The council will hold a truth-in-taxation hearing on Wednesday, Nov. 30, at 6:30 p.m., with a continuation on Wednesday, Dec. 7, at 6:30 p.m.

The council expects to pass their budget and levy for 2006 at their meeting on Wednesday, Dec. 14. After certifying their levy in September, the council cannot increase it, except by referendum, while the council could opt to lower the final levy.

•The board approved allowing the segment of trail - to connect the city to the Glacial Lakes State Trail - to run on city property (the old airport). Bertram, who chairs the trail committee, said this trail will be built in 2006 and will cross the old airport before following the right of way along Cemetery Road to the Glacial Lakes State Trail.

If the west route is chosen for Highway 23, the council noted, this segment of trail would run along a refigured Cemetery Road.

The trail committee wants to get this segment finished before a new highway is built because if the trail is in place, MnDOT would be responsible for getting the trail across the new highway, a costly item, stressed Bertram.

Funding for this segment of trail - $365,000 - was included in this year's bonding bill from the state.

•The council also approved having Duininck Brothers, Inc., complete the engineering for this section of trail at a cost of $22,600. Three bids - up to $50,000 - were received, with Duininck Brothers' being the lowest.

•The council approved applying to MnDOT for a local initiative project on Service Road. City engineer Scott Hedlund told the council that his proposal included two possible fixes to a freezing/water problem in the ditch by that road: adding stormsewer in the ditch for an approximate cost of $94,500 or regrading the ditch for an approximate cost of $37,400.

The city will now have to wait for MnDOT to say which option it prefers and how much of the cost it will pay (since the ditch gets runoff from Highway 55). Hedlund said MnDOT could determine how much of the water is coming from its road and pay that percentage of the project, but more likely MnDOT would just pay for half. He predicted that they would want to add stormsewer, since regrading the ditch would still only make a grade of 0.2 in the ditch, still relatively flat.

The council discussed measures that could be done to improve flooding problem, where water does not drain properly and can freeze on Service Road. City staff could try hard to keep the culvert open, said public works director Ron Mergen, who also agreed with a suggestion that the city could fence around this culvert to reduce compaction from off-road vehicles in that ditch.

If the project is done next year, the council would need to decide how to pay for its share. Normally, the council would assess for part of a road project, but property owners on Service Road - a half dozen of whom attended the meeting - were just assessed for Service Road when it was rebuilt and paved in 2004.

•The council approved an amendment to its agreement with Mediacom, which excepts the cable company from any requirements not demanded from any provider. This revised agreement, which would revert to the original agreement should competition cease, concludes the agreements allowing Lakedale Telephone Company to operate an open video system within the city.

A Mediacom representative thanked the city for providing "fair competition" in a "regulatory-light setting." He added that Mediacom and Lakedale were nearing an agreement by which Lakedale subscribers would also receive the local public-access channel.

•The council approved raising certain zoning fees on several 4-1 votes. Fees will increase for variances (from $100 to $150), for conditional-use permits (from $100 to $150), for rezoning (from $100 to $150), for final plats (from $100 to $150), for road vacations (from $75 to $100), and for lot splits (from $20 to $30 for administration review and from $80 to $120 for a public hearing).

The impetus behind these fee increases was the county increasing its recording fee from $19.50 to $46.

Staff estimated that the city's normal cost for these procedures are: $90 in legal fees; $46 for recording; $40 for advertising; and $20 for postage (to mail notices to neighboring landowners). Lindquist stressed that the public needs to understand that the city is just passing on its costs in these fees. This cost breakdown will be added to the application forms.

Council member Jeff Bertram voted against the fee increases. Since some of these permits - variances, conditional-use permits, and rezoning - do not require recording, he didn't think the city should pay to have them recorded, which would lessen the need to raise the fees.

The other council members, however, agreed with administration that it was wise to have all these items recorded permanently with the property. The city does not keep any of these property records itself, rather relying on the county to do this recording.

•The council set a special joint meeting with the council and the public works committee for Thursday, Oct. 27, at 5 p.m. to conduct interviews with five engineering firms. The council reappoints the city engineer in January each year but is reviewing its engineering services this year. The public works committee has solicited proposals from five firms: Bolton & Menk, Inc.; Bonestroo Resene Anderlik & Associates; Mattson Engineering; SEH (the current city engineer); and Surveying & Engineering Professionals.

•The council set a public hearing to review proposed changes to the city's subdivision ordinance for Wednesday, Oct. 12, at 7 p.m. City administrator told the council that the changes were numerous, but mostly small. A public hearing is not required, but Helget said it is a good idea. The old subdivision or platting ordinance is two pages, and the proposal is 32 pages.

•The council set a public hearing for Wednesday, Oct. 12, at 6:30 p.m. to consider resubmitting a grant application to the Small Cities Development Program. Paynesville requested $1.3 million last year from this program, which could provide grants to homeowners and low-interest loans to businesses, in selected areas, for building upgrades. The state provided funding to 16 applications out of 50, with Paynesville finishing 22nd last year.

•The council approved rezoning Donna Bahr's residence on Hoffman Street (Highway 23) from R1 (single and two-family residential) to R2 (multi-family residential). Bahr intends to operate a four-unit bed and breakfast.

Mayor Jeff Thompson noted that bed and breakfast facilities are not addressed specifically in the city's zoning ordinance and said that the ordinance may need to be changed to be more accommodating to them.

•The council approved a 3.2-beer license for Alco Discount Store, pending background checks by the police department, on a 4-1 vote. Council member Tom Lindquist questioned why the city would allow competition to its liquor store before voting against the license.

•The council approved a payment of $67,807, to the League of Minnesota Cities Insurance Trust for property/liability insurance from July 2005 through June 2006.

•The council approved raising the city's reimbursement rate for mileage from 37.5¢ per mile to 48.5¢ per mile, which is the new maximum rate allowed by the IRS. The council discussed that this rate might go down if gas prices drop, but agreed to stay consistent and follow the IRS rate. Most driving by city employees is done in city vehicles, but the city does pay some mileage for employees who use their private vehicles.

•The council approved paying its dues for membership in the League of Minnesota Cities. This year's dues are $1,852, compared to last year's dues of $1,793.

•The council also approved joining the Minnesota Mayors Association for dues of $20.

•The council authorized advertising for bids to purchase a new snow blower, using the current 1997 model as a trade-in.

•The council approved selling three Dell computers that had been advertised as surplus property: one to Kent Kortlever for $31.50 and two to Nathan Bork for $25 each.

•The council approved the resignation of Sue Johnson as a liquor store clerk and also approved a step increase for her, retroactive to her completing 1,040 hours of service.