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HomeMy WebLinkAbout5C Fire and Rescue Services/ � PRIO ti U 4646 Dakota Street SE Prior Lake_ MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: SEPTEMBER 6, 2011 AGENDA #: 5C PREPARED BY: JERILYN ERICKSON, FINANCE DIRECTOR PRESENTED BY: JERILYN ERICKSON AGENDA ITEM: APPROVAL OF A RESOLUTION TO RENEW AGREEMENTS WITH CREDIT RIVER TOWNSHIP AND SPRING LAKE TOWNSHIP TO PROVIDE FIRE AND RESCUE SERVICES DISCUSSION: Introduction The purpose of this agenda item is to have the City Council consider the approval of 5 -year Agreements with Credit River Township and Spring Lake Township to provide fire and rescue services. Hi story In 2009, the City entered into its most recent Agreement with Credit River Town- ship and Spring Lake Township to provide fire and rescue services for the period January 1, 2009 through December 31, 2013. Current Circumstances City Staff met with representatives from both Credit River Township and Spring Lake Township to discuss their concerns regarding the calculation of the amount they pay each year for fire and rescue services especially when there are signifi- cant cost savings in the Fire Department operating budget. The current agree- ment did not provide for any adjustment based on actual operating costs (as com- pared to budgeted operating costs). The City contracted with Springsted Inc. to conduct a study on the total actual costs for operating the fire department (includ- ing allocations for indirect expenses and amortization of all fire - related assets). Township representatives did not want to implement this full- costing system at this point due to the significant financial impact. City Staff did agree to open the existing Agreement in order to add a provision that allows for a credit or debit adjustment based on actual operating costs (as com- pared to budgeted operating costs). In return, the Townships agreed to change the termination provisions such that the Agreement cannot be terminated before December 31, 2015 and a 365 -day written notice must be provided to terminate the Agreement during any renewal term. In addition, the term of the Agreement would be extended for two years so that this revised Agreement would cover the period January 1, 2011 through December 31, 2015. The revised Agreements were reviewed by the City Attorney and Township attor- neys. Both Townships have approved the Agreements. Copies of the executed Agreements are attached to this report. Conclusion This Fire Agreement will continue the long- standing relationship between the City of Prior Lake and the residents of Credit River Township and Spring Lake Town- ship to deliver fire and rescue services. ISSUES: The revised Agreements address concerns about significant changes in the Fire Department operating budget by providing a credit or debit provision. The revised Agreements do not provide for termination during the initial term of five years. This will provide the City with reliable funding sources for the next five years (through 2015). A 365 -day termination notice for any renewal term provides the City more time to plan for any change in service and /or consideration of other funding sources that is necessitated due to the loss of revenues from a terminated Agreement. The City of Savage has raised the question of reimbursement when they are asked through mutual aid to assist Prior Lake at a township fire. Mutual aid is a long standing concept wherein each participant is responsible for its own costs recognizing that there will be times when each entity benefits and others where an entity contributes. No funding is contained in the fire department budget to provide for reimbursement to Savage or any other department, like Jordan who could make a similar claim. I propose we monitor and record the number of incidents in which this occurs for a year or more and decide what action to take, if any, with such information in hand. FINANCIAL The Agreements with Credit River Township and Spring Lake Township provide a IMPACT: funding source for a proportionate share of the operating and capital expenditures associated with the fire department. The formula for calculating the Townships' proportionate share did not change in this revised Agreement. The estimated 2012 revenue from both Agreements is $344,000 which is down from the $362,000 received in 2011. This reduction is primarily due to a reduction in the preliminary 2012 fire department operating budget. ALTERNATIVES: 1. Approve the Fire Agreements as submitted. 2. Table the Fire Agreements for a specific reason. 3. Deny the Fire Agreements. RECOMMENDED Alternative #1. MOTION: /� PRIp� U � 4646 Dakota Street SE '_j � sor Prior Lake, MN 55372 RESOLUTION 11 -xxx A RESOLUTION TO RENEW AGREEMENTS WITH CREDIT RIVER TOWNSHIP AND SPRING LAKE TOWNSHIP TO PROVIDE FIRE AND RESCUE SERVICES Motion By: Second By: WHEREAS, The Townships are authorized by law to provide fire protection for all of the property in said townships; and WHEREAS, The City owns fire apparatus and equipment generally consistent with nationally recognized standards and employs fire fighters trained for the purpose of providing suppression and rescue services; and WHEREAS, The Townships deem advisable to have available for the benefit of its residents and businesses the services of the Prior Lake Fire Department of Said City; and WHEREAS, The Fire Agreements will continue the long- standing relationship between the City of Prior Lake and the residents of Credit River Township and Spring Lake Township to deliver fire and rescue services. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The Mayor and City Manager are authorized to execute the Agreement for Fire and Rescue Services with Credit River Township and Spring Lake Township. PASSED AND ADOPTED THIS 6th DAY OF SEPTEMBER 2011. YES NO M ser M ser Erickson Erickson Hedberg Hedber Keeney Keene - Soukup Souku Frank Boyles, City Manager CADocuments and SettingslcgreenNy DocumenWSharePoint Drafts12011 -2015 Fire Agreement - Resolution - 2011.09.06.doc AGREEMENT FOR FIRE AND RESCUE SERVICES THIS AGREEMENT, entered into by and between the TOWNSHIP OF SPRING LAKE, an organized township in Scott County, Minnesota, hereafter referred to as "Township" and the CITY OF PRIOR LAKE, a municipal corporation located in Scott County, Minnesota, hereafter referred to as the "City ", RECITALS A. The Township is authorized by law to provide fire protection for all of the property in said Township; B. The City owns fire apparatus and equipment generally consistent with nationally recognized standards and employs fire fighters trained for the purpose of providing fire suppression and rescue services. C. The Township deems it advisable to have available for the benefit of its residents the services of the Prior Lake Fire Department of Said City, and NOW, THEREFORE, IN CONSIDERATION OF THEIR MUTUAL COVENANTS THE PARTIES AGREE AS FOLLOWS: 1. SERVICES PROVIDED. During the term of this Agreement the City agrees to provide to the Township with Fire and Rescue Services ( "Services ") for interior and exterior structures, undeveloped land, vehicles and miscellaneous fire rescue activities. 2. TERM. This Agreement shall be for one (1) Initial Term of five (5) years and subsequent Renewal Term(s) of five (5) years. The Initial Term shall commence on January 1, 2011 and end on December 31, 2015. This Agreement shall automatically renew at the end of the Initial Term unless either party serves written notice upon the other, delivered to the respective City Clerk or Township Clerk, on or before December 31, 2014 of their intent not to enter into a Renewal Term. This Agreement may be terminated by either party during any Renewal Term upon 365 days written notice served on or before December 31 of the calendar year preceding the year the Agreement will terminate. 3. PAYMENT. On or before the first day of August each year, the City shall notify the Township of the proposed cost of fire services enumerated herein for the following year. The final amount shall be based upon the actual budget adopted by the Prior Lake City Council for each year of this Agreement period. The City shall invoice and the Township shall pay the bill in two equal semi - annual installments due on the fifteenth day of January and the fifteenth day of June. Payments shall be based upon the formula set forth in paragraph 4 below. 4. PAYMENT CALCULATION METHOD. The Township shall pay a percentage of the City's cost of operating the City's Fire Department as set forth below. A. The City's cost shall be calculated as follows: Costs included: Annual Fire Operating Budget (excluding capital costs) Cost of Fire Station I (20 year amortization - $169,960 /year) Cost of existing and new fire fighting equipment (15 year amortization) Cost of renovating existing equipment (15 year amortization) Credits to be applied to above costs: State Fire Aid received (2 years prior) - Shakopee Mdewakanton Sioux Community contribution (as noted below) Historically, the City has received a contribution from the Shakopee Mdewakanton Sioux Community (SMSC) for police and fire services. The City has passed on to the Townships the benefit of this operating cost subsidy. The SMSC has implemented its own fire services and therefore, the City no longer receives a contribution from the SMSC for fire services. To mitigate the impact of eliminating the historic $70,000 per year subsidy that has been applied to the annual cost calculation, the City reserves the right to incrementally phase out the subsidy as follows: Year 1 - $10,000 Year 2 - $10,000 Year 3 - $15,000 Year 4 - $15,000 Year 5 - $20,000 B. The Township shall pay a percentage of the City's cost determined as follows: Tax Capacity Valuation of Spring Lake Township = Spring Lake Provided by Scott County for Year Prior to Year Cost % Payment is Due (divided by) the Combined Tax Capacity Valuation of Prior Lake and those Participating Townships for Year Prior to Year Payment is Due. C. Spring Lake Cost Percentage (413) X Cost (4A) = Annual Payment 5. CREDIT OR DEBIT. After completion of the City's Annual Financial Report, the Finance Director will determine the actual cost to the City to deliver fire service to the Township using the formula set forth above in paragraph 4A. If the actual cost is more than or less than 7.5% of the amount paid by the Township, the Township will receive a corresponding adjustment, for the amount less than or exceeding the 7.5 %, which will be identified separately and applied against the first payment due in the following year. For example, if the actual City cost to provide services to the Township in 2011 exceeds the amount paid by the Township in 2011, an adjustment will be applied to the payment due in January, 2013. No funds shall be disbursed or requested except as provided for in Paragraph 5.1. 5.1 If this Agreement is not renewed by either party or terminated at the end of a calendar year within a Renewal Term the adjustment for actual costs described in Paragraph 5 above will be handled as follows: (1) If the actual costs in the preceding calendar year reflect an overpayment by the Township, the City shall disburse to the Township the amount overpaid, based on the formula described in paragraph 4A and provisions described in Paragraph 5; (2) If the actual costs in the preceding calendar year exceed the amount paid by the Township to the City based on the formula described in Paragraph 4A and provisions described in Paragraph 5, the City shall invoice the Township and the Township shall pay the City the amount of the underpayment. For example, if the Township terminates the Agreement as of 12/31/2015, any final adjustments for year 2015 based on the formula described in paragraph 4A and provisions described in Paragraph 5 will be paid in January, 2017. 6. CITY AGREEMENT. The City agrees: A. To respond to all alarms for fire and rescue itself or through its agents. It is understood and agreed, however, that at times weather and road conditions will interfere with the rendering of Services, and that any given time the equipment may be engaged for Services in the City, mutual aid emergency service, or in another township. In any of these events failure to provide the Service herein agreed upon shall not be considered a breach of this Agreement. B. The operation, management and control of the people and equipment provided by the City shall at all times be under the charge and direction of the City Fire Chief or the Chief s duly authorized agent. C. To consider participation in mutual aid agreements regarding fire protection services. D. To meet with representatives from the participating townships at minimum two times per year (December and June) for purposes of reviewing and receiving input on financial reports, call activity, and future equipment, training and personnel needs. 7. INDEMNIFICATION. The City agrees, to the fullest extent permitted by law to indemnify and hold the Township harmless from any damage, liability or cost (including reasonable attorneys' fees and cost of defense) to the extent caused by the City's negligent acts, errors or omissions in the performance of services under this Agreement and those of its contractors, subcontractors, consultants or agents and arising from the provision of services under this Agreement. The Township agrees, to the fullest extent permitted by law to indemnify and hold the City harmless from any damage, liability or cost (including reasonable attorneys' fees and cost of defense) to the extent caused by the Township's negligent acts, errors or omissions in the performance of services under this Agreement and those of its contractors, subcontractors, consultants or agents and arising from the provision of services under this Agreement. The City is not obligated to indemnify the Township in any manner whatsoever for the Township's own negligence. Under no circumstances, however, shall either the City or the Township be required to pay on behalf of itself and other parties, any amounts in excess of the limits on liability established by Minn. Stat. § 466. 8. DAMAGE TO CITY EQUIPMENT AND INSURANCE. The City will make no claim against the Township for damage to City property while City is providing fire services to the Township. The City will carry workers compensation and liability insurance against claims by its firefighters for personal injuries sustained while providing services in the Township pursuant to this Agreement; and further will carry liability insurance saving both parties harmless so far as negligent acts of the firefighters in the employ of said City are concerned. 9. EMPLOYMENT RESPONSIBILITIES. It is understood and agreed that the Township shall have no responsibility whatsoever toward the fire fighters or other emergency personnel including any employment related responsibilities such as training, supervision, performance reviews, discipline, compensation, benefits, insurance coverages, compliance with any employment related federal, state, and local laws and rules such as OSHA, ERISA, RLSA, FMLA, or any other employment related responsibilities or liabilities. It is further agreed that except for paying the agreed upon Annual Payment Amount as set out in this Agreement, the Township shall have no responsibility for acquiring, operating, maintaining, housing, or replacing equipment as needed to provide the fire services described herein. 10. EMERGENCY SERVICE CHARGE. The Township, in its sole discretion, may exercise its authority to impose and collect an emergency service charge on those persons and properties receiving emergency services, including fire services, within the Township. The City shall have no right to, or interest in, any service fees collected by the Township. If the Township imposes an emergency service charge it shall provide the City a list of the specific types of information it determines it needs collected in order to successfully impose and collect the charge. City shall make a good faith effort to collect the requested information for each service call to the Township and promptly provide the Township with the information it collected. 11. NO WAIVER. Nothing herein shall be construed to waive or limit any immunity from, or limitation on, liability available to either party, whether set forth in Minnesota Statutes Chapter 466 or otherwise. 12. MODIFICATION. This writing contains the entire agreement between the parties and no alterations, variations, modifications, or waivers of the provisions of this Agreement are valid unless reduced to writing, signed by both City and Township. 13. SUBCONTRACTING & ASSIGNMENT. City shall not subcontract or assign any portion of this contract to another without prior written permission from the Township. Services provided to Township pursuant to a mutual aid agreement City has, or may enter into, with another entity does not constitute a subcontract or assignment requiring prior approval of Township so long as City remains primarily responsible for providing fire services to the Township. 14. MINNESOTA LAW GOVERNS. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Minnesota. All proceedings related to this Agreement shall be venued in Scott County in the State of Minnesota. 15. SEVERABILITY. The provisions of this Agreement shall be deemed severable. If any part of this Agreement is rendered void, invalid, or otherwise unenforceable, such rendering shall not affect the validity and enforceability of the remainder of this Agreement. 16. AMENDMENT. This Agreement may be amended at any time by the mutual consent of the parties. Any such amendment shall be in writing and will be an amendment to this Agreement. 17. JOINT VENTURE. This Agreement shall not constitute a joint venture between the parties. IN WITNESS WHEREOF, the parties have caused this instrument to be executed by the respective offices thereof and the respective seals to be affixed hereto. Dated !!�% i Clt (SEAL) Dated (SEAL) TOWNSHIP OF SPRING LAKE BY Chair Town o BY 1 VW L A 1 —" Clerk df Tol hoard CITY OF PRIOR LAKE BY Its Mayor BY Its City Manager AGREEMENT FOR FIRE AND RESCUE SERVICES THIS AGREEMENT, entered into by and between the TOWNSHIP OF CREDIT RIVER, an organized township in Scott County, Minnesota, hereafter referred to as "Township" and the CITY OF PRIOR LAKE, a municipal corporation located in Scott County, Minnesota, hereafter referred to as the "City ", RECITALS A. The Township is authorized by law to provide fire protection for all of the property in said Township; B. The City owns fire apparatus and equipment generally consistent with nationally recognized standards and employs fire fighters trained for the purpose of providing fire suppression and rescue services. C. The Township deems it advisable to have available for the benefit of its residents the services of the Prior Lake Fire Department of Said City, and NOW, THEREFORE, IN CONSIDERATION OF THEIR MUTUAL COVENANTS THE PARTIES AGREE AS FOLLOWS: 1. SERVICES PROVIDED. During the term of this Agreement the City agrees to provide to the Township with Fire and Rescue Services ( "Services ") for interior and exterior structures, undeveloped land, vehicles and miscellaneous fire rescue activities. 2. TERM. This Agreement shall be for one (1) Initial Term of five (5) years and subsequent Renewal Term(s) of five (5) years. The Initial Term shall commence on January 1, 2011 and end on December 31, 2015. This Agreement shall automatically renew at the end of the Initial Term unless either party serves written notice upon the other, delivered to the respective City Clerk or Township Clerk, on or before December 31, 2014 of their intent not to enter into a Renewal Term. This Agreement may be terminated by either party during any Renewal Term upon 365 days written notice served on or before December 31 of the calendar year preceding the year the Agreement will terminate. 3. PAYMENT. On or before the first day of August each year, the City shall notify the Township of the proposed cost of fire services enumerated herein for the following year. The final amount shall be based upon the actual budget adopted by the Prior Lake City Council for each year of this Agreement period. The City shall invoice and the Township shall pay the bill in two equal semi - annual installments due on the fifteenth day of January and the fifteenth day of June. Payments shall be based upon the formula set forth in paragraph 4 below. 4. PAYMENT CALCULATION METHOD. The Township shall pay a percentage of the City's cost of operating the City's Fire Department as set forth below. A. The City's cost shall be calculated as follows: Costs included: Annual Fire Operating Budget (excluding capital costs Cost of Fire Station I 20 year amortization - $169,960/ ear Cost of existing and new fire fighting equipment 15 year amortization Cost of renovating existing equipment 15 year amortization Credits to be applied to above costs: State Fire Aid received (2 years prior) - Shakopee Mdewakanton Sioux Community contribution (as noted below) Historically, the City has received a contribution from the Shakopee Mdewakanton Sioux Community (SMSC) for police and fire services. The City has passed on to the Townships the benefit of this operating cost subsidy. The SMSC has implemented its own fire services and therefore, the City no longer receives a contribution from the SMSC for fire services. To mitigate the impact of eliminating the historic $70,000 per year subsidy that has been applied to the annual cost calculation, the City reserves the right to incrementally phase out the subsidy as follows: Year 1 - $10,000 Year 2 - $10,000 Year 3 - $1500 Year 4 - $15,000 Year 5 - $20,000 B. The Township shall pay a percentage of the City's cost determined as follows: Tax Capacity Valuation of Credit River Township = Credit River Provided by Scott County for Year Prior to Year Cost % Payment is Due (divided by) the Combined Tax Capacity Valuation of Prior Lake and those Participating Townships for Year Prior to Year Payment is Due. C. Credit River Cost Percentage (4B) X Cost (4A) = Annual Payment 5. CREDIT OR DEBIT. After completion of the City's Annual Financial Report, the Finance Director will determine the actual cost to the City to deliver fire service to the Township using the formula set forth above in paragraph 4A. If the actual cost is more than or less than 7.5% of the amount paid by the Township, the Township will receive a corresponding adjustment, for the amount less than or exceeding the 7.5 %, which will be identified separately and applied against the first payment due in the following year. For example, if the actual City cost to provide services to the 2 Township in 2011 exceeds the amount paid by the Township in 2011, an adjustment will be applied to the payment due in January, 2013. No funds shall be disbursed or requested except as provided for in Paragraph 5.1. 5.1 If this Agreement is not renewed by either party or terminated at the end of a calendar year within a Renewal Term the adjustment for actual costs described in Paragraph 5 above will be handled as follows: (1) If the actual costs in the preceding calendar year reflect an overpayment by the Township, the City shall disburse to the Township the amount overpaid, based on the formula described in paragraph 4A and provisions described in Paragraph 5; (2) If the actual costs in the preceding calendar year exceed the amount paid by the Township to the City based on the formula described in Paragraph 4A and provisions described in Paragraph 5, the City shall invoice the Township and the Township shall pay the City the amount of the underpayment. For example, if the Township terminates the Agreement as of 12/31/2015, any final adjustments for year 2015 based on the formula described in paragraph 4A and provisions described in Paragraph 5 will be paid in January, 2017. 6. CITY AGREEMENT. The City agrees: A. To respond to all alarms for fire and rescue itself or through its agents. It is understood and agreed, however, that at times weather and road conditions will interfere with the rendering of Services, and that any given time the equipment may be engaged for Services in the City, mutual aid emergency service, or in another township. In any of these events failure to provide the Service herein agreed upon shall not be considered a breach of this Agreement. B. The operation, management and control of the people and equipment provided by the City shall at all times be under the charge and direction of the City Fire Chief or the Chief's duly authorized agent. C. To consider participation in mutual aid agreements regarding fire protection services. D. To meet with representatives from the participating townships at minimum two times per year (December and June) for purposes of reviewing and receiving input on financial reports, call activity, and future equipment, training and personnel needs. 7. INDEMNIFICATION. The City agrees, to the fullest extent permitted by law to indemnify and hold the Township harmless from any damage, liability or cost (including reasonable attorneys' fees and cost of defense) to the extent caused by the City's negligent acts, errors or omissions in the performance of services under this Agreement and those of its contractors, subcontractors, consultants or agents and arising from the provision of services under this Agreement. The Township agrees, to the fullest extent permitted by law to indemnify and hold the City harmless from any damage, liability or cost (including reasonable attorneys' fees and cost of defense) to the extent caused by the Township's negligent acts, 3 errors or omissions in the performance of services under this Agreement and those of its contractors, subcontractors, consultants or agents and arising from the provision of services under this Agreement. The City is not obligated to indemnify the Township in any manner whatsoever for the Township's own negligence. Under no circumstances, however, shall either the City or the Township be required to pay on behalf of itself and other parties, any amounts in excess of the limits on liability established by Minn. Stat. § 466. 8. DAMAGE TO CITY EQUIPMENT AND INSURANCE. The City will make no claim against the Township for damage to City property while City is providing fire services to the Township. The City will carry workers compensation and liability insurance against claims by its firefighters for personal injuries sustained while providing services in the Township pursuant to this Agreement; and further will carry liability insurance saving both parties harmless so far as negligent acts of the firefighters in the employ of said City are concerned. 9. EMPLOYMENT RESPONSIBILITIES. It is understood and agreed that the Township shall have no responsibility whatsoever toward the fire fighters or other emergency personnel including any employment related responsibilities such as training, supervision, performance reviews, discipline, compensation, benefits, insurance coverages, compliance with any employment related federal, state, and local laws and rules such as OSHA, ERISA, RLSA, FMLA, or any other employment related responsibilities or liabilities. It is further agreed that except for paying the agreed upon Annual Payment Amount as set out in this Agreement, the Township shall have no responsibility for acquiring, operating, maintaining, housing, or replacing equipment as needed to provide the fire services described herein. 10. EMERGENCY SERVICE CHARGE. The Township, in its sole discretion, may exercise its authority to impose and collect an emergency service charge on those persons and properties receiving emergency services, including fire services, within the Township. The City shall have no right to, or interest in, any service fees collected by the Township. If the Township imposes an emergency service charge it shall provide the City a list of the specific types of information it determines it needs collected in order to successfully impose and collect the charge. City shall make a good faith effort to collect the requested information for each service call to the Township and promptly provide the Township with the information it collected. 11. NO WAIVER. Nothing herein shall be construed to waive or limit any immunity from, or limitation on, liability available to either party, whether set forth in Minnesota Statutes Chapter 466 or otherwise. 12. MODIFICATION. This writing contains the entire agreement between the parties and no alterations, variations, modifications, or waivers of the provisions of this Agreement are valid unless reduced to writing, signed by both City and Township. rd 13. SUBCONTRACTING & ASSIGNMENT. City shall not subcontract or assign any portion of this contract to another without prior written permission from the Township. Services provided to Township pursuant to a mutual aid agreement City has, or may enter into, with another entity does not constitute a subcontract or assignment requiring prior approval of Township so long as City remains primarily responsible for providing fire services to the Township. 14. MINNESOTA LAW GOVERNS. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Minnesota. All proceedings related to this Agreement shall be venued in Scott County in the State of Minnesota. 15. SEVERABILITY. The provisions of this Agreement shall be deemed severable. If any part of this Agreement is rendered void, invalid, or otherwise unenforceable, such rendering shall not affect the validity and enforceability of the remainder of this Agreement. 16. AMENDMENT. This Agreement may be amended at any time by the mutual consent of the parties. Any such amendment shall be in writing and will be an amendment to this Agreement. 17. JOINT VENTURE. This Agreement shall not constitute a joint venture between the parties. IN WITNESS WHEREOF, the parties have caused this instrument to be executed by the respective offices thereof and the respective seals to be affixed hereto. � �'/' a // / (SEAL) Clerk, Credit River Township, Scott Co., Minnesota Notarial Officer (ex- officio notary public) My commission (term) expires 03 -2012 Dated (SEAL) TOWNS OF CREDIT RIVER B 01 it f Town B d BY C Clerk of Town Board CITY OF PRIOR LAKE BY Its Mayor BY Its City Manager E