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Councilmember Jeffrey stated he would prefer the contract be limited to minimal or approved expenses. Mayor Gamec suggested the motion state that the contract is for consulting purposes on more of a local basis and does not include travel out of the country. Acting Chairperson Elvig noted the Northstar Rail Authority was just involved in an audit where there was a question as to the use of the same person in a couple of different roles. He stressed the need to be very careful to include delineation in the contract. This contract may not involve a conflict of interest, but the goals should be identified clearly. He noted the need for itemized invoices that outline the activities to be included with the billing. He also noted the need to be certain there is a distance between the function of these consulting services and the work of The Ramsey Foundation. He expressed his agreement that a fairly sizable learning curve would be involved for someone on staff to be involved with this type of work. Motion by Mayor Gamec, seconded by Councilmember Jeffrey, to recommend that the City Council enter into a consulting agreement with HSP & Associates for consulting and advisory services to locate a Chinese commemial interest in Ramsey for a not-to-exceed amount of $5,000, that the services not include international travel, and that HSP & Associates work with the Finance Officer to determine the appropriate itemized billing to be provided to the City. Motion carried. Voting Yes: Acting Chairperson Elvig, Mayor Gamec and Councilmember Jeffrey. Voting No: None. Absent: Chairperson Strommen. Case #1: Connexus Energy Billing City Administrator Norman reviewed that the Connexus Energy under-billing for actual water usage dates back to 2003. There was a committee that met with representatives from Connexus, and he was then directed to begin meeting directly with Connexus representatives sometime in late 2004. He and Larry Peterson of Connexus Energy have discussed the possibility of a land exchange. An appraisal of land on the northeast comer of Ramsey Boulevard and Sunwood Drive was performed and it was proposed that the City could purchase the land at a reduced rate. Larry Peterson is present tonight to discuss this issue with the Finance Committee. Mayor Gamee noted the total under-billing was in the amount of $684,450. However, there have been companies involved that have since gone through bankruptcy. Larry Peterson, Connexus Energy, stated when the City quotes an amount of $600,000 or $700,000 they are talking about an expectation of a loss of income from a particular account. Connexus reviewed the City's billing history and rate setting, and for nine years of the ten year period the City increased the water and sewer rates every year to either meet the shortfall or meet a need. The City has over-collected from some customers and under-collected from others. There are so many things that have happened on both sides of this issue, that the amount in question is not that clean. He stated the fund was never reconciled, even though Connexus sent the information annually. The obligation of Connexus to bill is there, but to do this accurately is Finance Committee / February 14, 2006 Page 3 of 6