City of Wanamingo City Council Meeting - April 11, 2022

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CITY OF WANAMINGO

City Council Regular Meeting

Monday, April 11, 2022 7:00 P.M.

Wanamingo City Council Chambers – 401 Main Street

Wanamingo, MN

CALL TO ORDER: Mayor Holmes. 

PRESENT: Council:  Ryan Holmes, Stuart Ohr, and Eric Dierks

City Administrator: Michael Boulton

Deputy Clerk: Karen Masters

ABSENT: Council: Larry VanDeWalker and Jeremiah Flotterud

ALSO PRESENT:   David Friese – News Record, Trevor Aase, Lisa Asse, Twila Simonson, and Julie Steberg.

ADOPT AGENDA:  Ohr motioned to adopt the agenda, seconded by Dierks.  Passed 3-0-0.

CONSENT AGENDA:  Dierks motioned, seconded by Ohr.  Passed 3-0-0.

PRESENTERS:

A) Brad Kennedy reported on:

1) Place fence posts and caution tape at the entrances to Emerald Valley II Subdivision (3rd Street E & Nelson Drive).  Two commercial vehicles and a private vehicle got stuck once the frost came out and the path became muddy.

2) Finished trimming trees hanging out over the streets West, 1st, & High Avenues along with 3rd, 4th, and Centennial Street)

3) Cut tree down at Riverside Park along the parking lot near the park shelter that had split down the middle

4) Emergency siren was repaired by Ancom.  The repairs included new fuses and new batteries.  The fuses have been replaced every three years and the batteries are original (2015).

5) Cleaned out contact tank at WWTP

6) Painted walls for Heidi Smith, new tenant, at the Wanamingo Medical Center

7) Swept Streets twice

8) Ordered $5,300 skid loader sweeper attachment from Olson Attachments.  A $500 deposit was made with the remaining $4,800 to be paid upon deliver.

9) Rebuilt dump box on street sweeper.  Purchased two pieces of steel from R & M Steel that were cut to fit the week points on the box.

10) Replaced broken posts on south side of swimming fool fence that were damaged by high winds.

B) Julie Steberg reported on:

1) Starting to get prepared for the 2022 swimming pool season

2) Application deadline for lifeguards was April 7th – five new applicants

3) 9 out of the 16 lifeguards from 2021 returning

4) Swimming Pool is scheduled to open on Monday June 6th

5) Lifeguard orientation and safety training is scheduled for June 3rd

6) Daniel and Katie VanEpps will be teaching swimming lessons

7) Proposing slight increases to swimming pool fees.  They will be brought to the City Council in May for consideration of approval.

8) Maintenance staff purchased paint for the pool.  It does not sound like Diamond Vogel or Sherwin Williams in Rochester will be getting more paint.

9) Had a question regarding family pool passes.  Do grandparents/grandchildren/parents count as family for pool pass?  Boulton suggested a formal extended family pool pass for a slightly higher fee than family pool pass to clear up any confusion.

Boulton presented a letter from Julie Eddington of Kennedy & Graven regarding a request to issue conduit bonds.    Northland Securities is working with Jones-Harrison Residence, a Minnesota nonprofit corporation to refinance its skilled nursing home facility and assisted living facility located at 3700 Cedar Lake Road, Minneapolis.  In addition, the non-profit would like to finance improvements to the facility to improve handicap accessibility and infection control.  The non-profit would like to issue one or more taxable or tax-exempt bonds in the maximum principal amount of $13,500,000. 

The City is authorized in the Tax Code to issue tax-exempt bonds as a conduit for the benefit of nonprofit entities for the purpose of financing projects.  Because the interest on these bonds is not taxable, bond purchasers will buy them at a lower interest rate, which allows nonprofits to borrow money at a reduced cost.  When cities issue conduit bonds, there is no financial obligation of the City to pay the debt service or other costs of the bonds.  These conduit bonds are different from general obligations bonds in that the full faith, credit, and taxing powers of the City are not pledged to the payment of debt service.  Rather, the City would issue the conduit bonds and loan the proceeds thereof to the Borrower, and the Borrower would pledge to repay the loan by executing and delivering a loan agreement.  The loan repayments to be made by the Borrower would be assigned by the City to the bond trustee and would be payable from the revenue generated from the operation of the Facilities.  The obligation of the Borrower to make the loan repayments would be evidenced and secured by a guaranty from the Borrower’s affiliated foundation.  If the Borrower is not able to make a payment, the City has no obligation to make the payments and the bondholders cannot require the City to levy a tax to make up for the deficiency. 

Conduit bonds are not subject to any debt limitation imposed on the City, and the issuance of conduit bonds will not have any adverse effect on the credit rating of the City, even in the event that the Borrower encounters financial difficulties with respect to the Project.  If a default did occur, the bond trustee and the bondholders will be required to work directly with the Borrower to develop a work-out strategy for the payment of the conduit bonds.

Tax-exempt obligations are usually not eligible for purchase by banks and other financial institutions, but each year the City has the ability to designate up to $10,000,000 in tax-exempt bonds as “qualified tax‑exempt obligations” (sometimes referred to as “bank-qualified bonds”) for purposes of Section 265(b)(3) of the Code, which are eligible for purchase by banks and other financial institutions.  Because the City sold its own Water Revenue Bonds prior to having knowledge of this potential conduit bond issue, the City’s Water Revenue Bonds will be bank-qualified bonds.  The conduit bonds, if the City chooses to issue them, will not be considered bank-qualified bonds. 

The City, as an issuer of conduit bonds, may charge an administrative fee payable by the Borrower.  It is up to the City to set the administrative fee, but the Borrower has offered to pay the City $25,000 as a one‑time administrative fee payable at the closing of the Bonds. 

If the City Council is interested in issuing the conduit bonds to help finance the Project, the City will be asked to hold a public hearing in accordance with state statutes and the Tax Code and approve the issuance of the conduit bonds and related documents after the public hearing.  Kennedy & Graven’s office would prepare the necessary public hearing notice (and handle its publication in the official newspaper of the City), approval resolution, and bond documentation.  The Borrower will agree to pay the out‑of-pocket expenses of the City with respect to this transaction as well the administrative fee that the City charges.  The Borrower also pays for all attorneys’ fees and expenses related to the conduit bonds.  If the City agrees to issue the conduit bonds, the City of Minneapolis, as the municipality in which the Facilities are located, will also hold a public hearing to provide “host approval” for the City to issue the conduit bonds, which is required by the Tax Code and state statutes.

Holmes has concerns with the City being on the hook for costs and possibly effecting the City credit rating in the future with default.  Holmes stated that the $25,000 administrative fee to the City would be nice.  Boulton stated that the City would not be on the hook if there is a default and that it will not hurt the credit rating.  The City has to go through the legal actions to issue the bond and that the only concern is potentially maximizing the current year’s $10,000,000 tax free limit issuance.  The City might not be able to issue additional debt in 2022 that would be tax free for investors (lower interest rate for City to borrow).  Dierks asked if conduit bonds are common.  Boulton stated that he had never heard of them prior to this proposal, but they are used for larger non-profit financed projects.  Holmes stated that Northland Securities and Kennedy & Graven had reached out to the City regarding this opportunity, so it is legitimate.  Boulton stated that Northland Securities had approached another community and is waiting to hear back if they wish to participate.  The Council is not closed to the opportunity but wished to hear additional information and see if the other community commits before proceeding.  Boulton stated that he would stay in contact with Northland Securities and that he might be back at the May City Council meeting with additional information.

NEW BUSINESS:

RESOLUTION:

Public Hearing – Mayor Holmes opened up the Variance Request public hearing at 7:22PM.  Trevor Aase explained that he intends to take down existing two stall, detached garage.  Aase then intends to construct a new three stall, detached garage.  This garage would be wider towards the alley for the extra stall garage.  Aase is proposing that the new garage be five feet from the side property line.  The current garage is four feet from the existing side property line.  The ordinance requires six feet setbacks.  Aase’s reasoning is to avoid building over the top of his clay sanitary sewer service line on the south side of his current garage.  Aase was making the formal variance request so that if approved, the variance would be recorded and be approved so that it could be rebuilt, as is, if it were ever destroyed.  Boulton stated that the Council could consider approval the reasoned variance request or deny the request because the sanitary sewer service line could be moved or construct a smaller garage.  Aase stated that he had estimates of $8,000-$10,000 to replace the sanitary sewer service line in order to build the garage according to code.  No additional public comments offered.  Mayor Holmes closed the public hearing at 7:28PM.

22-025 = Approving Variance Request to Wanamingo Code of Ordinances 152.36 Minimum Bldg. Setback Side Line Property in R-1 Residential District: Ohr moved to approve, Seconded by Dierks.  Holmes stated that the request is reasonable by not building over the top of a sanitary sewer service line and not adding costs to the project by moving the line.  Holmes stated that the one-foot variance request was minor.  Passed 3-0-0.

22-026 = Authorizing and Approving a Lobbyist Contract for the Proposed North Zumbro Sanitary Sewer District State Capital Request: Dierks moved to approve, Seconded by Ohr.  Boulton stated that Wanamingo’s share of the contract is $4,500.  Holmes stated that it was valuable to have the lobbyist be aware of the legislature’s actions on a day-to-day basis so that the Cities could make contact at necessary times.  Holmes stated that Winthrop and Weinstine have already been making contacts and making the case for the merits of the capital project request.  Ohr asked what the contract length for the contract.  Boulton stated that the contract is good through the 2022 legislative session, including possible special sessions.  Passed 3-0-0.

22-027 = Approving John Deere 331G Compact Track Loader Lease and Service Agreement with Midwest Machinery Co: Dierks moved to approve, Seconded by Ohr.  Passed 3-0-0.

22-028 = Approving Utility Easement Agreement with Bordson: Ohr moved to approve, Seconded by Dierks.  Passed 3-0-0.

22-029 = In Support of Minnesota House File 2670 and Minnesota State Senate File 2670 – Statewide Public Safety Radio and Communications System Equipment Grants: Dierks moved to approve, seconded by Ohr.  Passed 3-0-0.

22-030 = Approving Proposed Billing Change and Updated Sanitary Sewer Treatment Plant Operator Agreement with Richard Turri: Ohr moved to approve, seconded by Dierks.  Boulton stated that Rick Turri has been the licensed wastewater treatment plant operator since November 2011.  The contract price of $1,950/month has been the same of the duration of the agreement.  Boulton stated that Turri is requesting a $200/month increase.  Holmes stated that he is pleased with Rick Turri and what he has done for the City the last eleven years.  Passed 3-0-0.

22-031 = Approving State of Minnesota Joint Powers Agreements with the City of Wanamingo on Behalf of Its City Attorney: Ohr moved to approve, seconded by Dierks.  Passed 3-0-0.

OLD BUSINESS:

ORDINANCE #198 – Water and Sewer Regulation – 3rd Reading.  Dierks moved to approve, seconded by Ohr.  Boulton stated that the changes discussed by City Consulting Engineer Brandon Theobald of WHKS at the March City Council meeting had been incorporated into the proposed Ordinance with the help of City Attorney David Jacobsen.  The changes included fats and greases section (Fog), requiring interceptors, and prohibiting flushable wipes.  Boulton stated that the reason for rewriting the Water and Sewer Regulation section of the Code of Ordinance is part of a comprehensive plan to address the MPCA Compliance Evaluation Inspection Report with Letter of Warning.  Part of the response included that the City would review and make necessary ordinance changes to address the monitoring and enforcement of limits on CBOD, TSS, and Phosphorus levels on large industrial users.  The proposed ordinance sets those standards and puts in place a fine schedule if exceeded.  Holmes stated that 53.32 D should be changed to say Wanamingo and not Plainview Elgin Sanitary Sewer District.  Passed 3-0-0.

Ohr stated that he had three residents in Prairie Ridge Estates approach him regarding construction material, industrial packaging, and other garbage blowing around the residential subdivision.  Ohr stated that there was debris in the storm water detention ponds as well.  Boulton stated that he had spoken with Bigelow Homes (builder) and Jessup DeCook (developer) a couple of weeks ago to clean the mud off the streets and clean up construction debris.  The mud had been clean off and the debris had been picked up.  Boulton stated that he would speak with each of them again and ask that it be cleaned up again this week.

*Next City Council meeting on 5/9/2022 at 7:00pm. 

Adjourn: At 7:51PM a motion to adjourn was made by Ohr and seconded by Dierks. Passed 3-0-0.

Signed: Ryan Holmes, Mayor  

Attest: Michael Boulton, City Administrator