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Motion by Councilmember Elvig, seconded by Councilmember McClone, to move to closed <br />session at 5:21 p.m. <br />The closed session ended at 5:27 p.m. <br />2) Consider Lease Terms for Dennis Sharp for Properties at 6701 and 6745 Highway <br />10 <br />Finance Officer Lund reviewed the staff report and distributed a financial statement provided by <br />Mr. Sharp, which outlined operating losses within this division. <br />Mr. Sharp requested that Council reconsider his lease rates. He reviewed his mini - storage <br />operation, bay rentals, and expenses. He noted 2010 summer income was small and he expects <br />the same for 2011. He stated without a reduction he will likely have to close. <br />Finance Officer Lund reviewed expenses for the property through 2011 of $9,900 and rent of <br />approximately $1.95 /sq. ft., which resulted in an overall cumulative net result of $1,000 for the <br />City. She said when rent was set they did not account for property tax. <br />Mayor Ramsey asked if the City lowered the rents, would Mr. Sharp lose or still cover expenses. <br />Mr. Sharp said he has submitted no proposal but asked the Council to see what rents could be <br />reduced to. <br />Finance Officer Lund stated the net result would be a loss of $2,200 per year, adding they need <br />to consider building painting being charged against rental costs as well as possible foundation <br />damage repair. <br />City Administrator Ulrich stated if Council agrees to reduce rents staff can negotiate the actual <br />figures, taking into consideration capital expenses and income and expenses. <br />Councilmember Backous said he would be willing to explore options and asked if rents include <br />property management fees. <br />Finance Officer Lund said those fees are gone. <br />Councilmember Backous said they should not be making money but breaking even. <br />Discussion was held on setting a precedence for square footage costs and it was acknowledged <br />there was some flexibility because of the RALF funds. <br />Councilmember Wise agreed that while these buildings are temporary the City is affecting <br />market rents and he does not want to take business from the private sector. <br />Mr. Sharp stated he felt the current assessment was high as well. <br />City Council Work Session / June 14, 2011 <br />Page 2 of 7 <br />