CITY OF WANAMINGO
City Council Regular Meeting
Monday, December 12, 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, Eric Dierks, and Jeremiah Flotterud
City Administrator: Michael Boulton & Deputy Clerk: Karen Masters
ABSENT: Larry VanDeWalker
ALSO PRESENT: Brad Kennedy, Todd Greseth, Rebecca Haugen, Dan Fritz, Annette Fritz, Goodhue County Deputy Ringelmann, and David Friese – News Record.
ADOPT AGENDA: Ohr motioned to adopt the amended agenda, seconded by Dierks. Passed 4-0-0.
CONSENT AGENDA: Dierks motioned, seconded by Flotterud. Passed 4-0-0.
PRESENTERS:
A) Brad Kennedy reported on:
1) Plowed snow and sanded the streets twice
2) Finished getting snow equipment ready for season
3) Cleaned up debris, including wood pile, on Concast site where watermain was recently installed
4) Started cutting and removing trees growing over into the South side of 440th Street
5) Filled and disinfected the new water tower twice
6) Nelson Drive storm retention pond – Schumacher will clean out the pond later this winter for $10-$15 per cubic yard. Each truck will remove 13 yards at a time. There is expected to be between 150-200 yards of material that needs to be removed from the storm pond. Jason’s Sewer Sucking & Excavation declined the job due to the scope of the work.
7) Put up Christmas/Holiday lights and banners on Main Street
8) Replaced 3 new water meters around town. Hoping to replace 25 per month to complete the entire town in two years. Roughly 150 meters and endpoints have been delivered from Metering Technologies and Solutions. Meters and endpoints have been on backorder for several months.
9) Put away the park benches and garbage containers located on the Main Street sidewalks for snow season
Flotterud asked about the Wanamingo Locker enforcement. Kennedy stated that he and Councilmember VanDeWalker have been attempting to schedule a site visit with Lindsey Fulton. The site visit was potentially schedule for December 4th and could take place December 12th. Kennedy stated that there have not been large amounts of blood or animal biproducts present in the waste water influent at the plant since the June 2022 Wanamingo City Council meeting. City staff are monitoring the influent at the WWTP 24 hours a day.
B) Todd Greseth, Goodhue County Commissioner reported on:
1) County set final property tax levy at 4.69% after preliminary levy was set at 7.27% and later worked down to 6.8%. The final plan included taking funds out of reserve.
2) Goodhue County has six (6) months’ worth of reserve. Auditors recommend five (5) months of reserve.
3) County is currently down twenty (20) staff. In the past the County has normally been down 8-10 employees. All Minnesota Counties are short on staffing. The three common areas of County employee shortages include jails, assessor’s office, and public works
Kennedy asked that Greseth speak with County staff regarding the timing of work on Goodhue CSAH 63 (loop around KW School on 3rd Street E, 3rd Avenue, and 2nd Street E). The City is concerned with the timing of any work on the road, curb/gutter, or sidewalks. Kennedy stated that the work was originally slated to be completed on the backend of the 10-year road work plan schedule. Kennedy had spoken with County survey staff that stated work may be completed sooner. Kennedy stated that the City needed 2-3 years advanced notice to prepare and complete underground water and sanitary sewer line replacements. Greseth stated that he would relay the City’s concerns to Jess Greenwood. Greenwood will take over as County Engineer starting in May 2023.
NEW BUSINESS:
RESOLUTION:
Public Hearing - Mayor Holmes opened the 2023 Budget & Levy Public Hearing at 7:08PM. Administrator Boulton provided a written memo of the Preliminary/Proposed 2022 Budget, budgeting and levy process. The overall levy is proposed to increase 10.00% from $900,000 to $990,000. The DET Properties (Marcstone) expansion increased its taxable value by an estimated $500,000 with 2021 expansion. This would bring in roughly $20,500 (slightly less than half City portion) in property taxes (0.041). New construction within the community over the last year (12 new taxable homes in 2021) should aid with the increase to the taxable market value increase. The new construction should off-set roughly 1/2 of the proposed levy increase (3.5% of the proposed 10.00% increase). In 2024, Revland Alignment expansion and additional residential growth (7 new homes) will continue to expand the tax base. Goodhue County calculated the 2023 tax capacity numbers based on the proposed levy and new valuation figured into tax capacity and taxable market values. Wanamingo tax capacity will go from $1,141,146 (includes TIF) to $1,389,590 (Includes TIF) or an 21.77% increase. Wanamingo Market Value will go from $105,840,400 to $125,912,600 or an 18.96% increase. The tax pool (what the levy gets divided out by) will go from $1,075,840 to $1,303,406 or an 21.05% increase. The tax rate is proposed to go from 84.109 to 75.954 or a decrease of 8.155%. The Wanamingo City Council proposed levy increase to $990,000 will have a net increase on tax rates. Administrator Boulton received additional data to show potential changes to homeowners’ property taxes with the proposed levy (roughly a decrease of $58.52 for $100,000 value, a decrease of $102.97 for $150,000 value, a decrease of $147.41 for $200,000 value, and a decrease of $191.84 for $250,000 value City portion of a property tax increase per year). This is depending on home valuation changes from the past year. Most homes saw a 10%-20% increase in valuations from 2021 to 2022. This would show changes on the low end of value increases to roughly $29 for $100,000 home, $51 for a $150,000 value home, $74 for a $200,000 value home, and $96 increase for $250,000 value home. It would show increases of $110 for $150,000 value, an increase of $150 for $200,000 value, and an increase of $200 for $250,000 value City portion of a property tax increase per year) on the high end. The new commercial and residential growth in 2021 helps offset the levy increase from going onto existing property owners. Boulton stated that there was no small cities street aid (around $20,000) in 2022 and will be not small cities street aid in 2023. This makes the 2022 and 2023 budgeting harder for the general fund. Boulton stated that increases to utilities, salaries, ambulance levy, fire, police, health insurance, and property insurance are putting pressure on the general fund. Annette Fritz stated that she appreciated all the work that the Wanamingo City Council and staff had done in preparation of the 2023 budget. Fritz stated that she was concerned with the property taxes and utilities continuing to increase. Fritz asked when or how would citizens expect property taxes and/utility rates to decrease. Holmes stated that the City Council had intended to ease the size of levy increases that the Council has put in place the past five years but that inflation threw the plan out the window. Boulton stated that City operation costs continue to rise. Boulton stated that in addition infrastructure and equipment needs over the next few years put the City in a tough position in attempting to keep levies flat. Boulton suggested that the two-ton truck/plow be ordered in 2023 to replace the unsafe 1984 dump truck that is barely limping along. Boulton stated that it is estimated to take two years for delivery. Boulton estimates the two-ton truck and plow will cost $125,000. Ohr stated that the two-ton truck and plow will cost more than $125,000 due to inflation. Holmes stated that he is still concerned with inflation pushing the costs higher than expected. Boulton stated that the City needs additional commercial growth to help offset these costs so that residential burden does not get out of control. Annette Fritz stated that the City has seen a lot of growth the past few years and has increased the levy as well. Flotterud stated that the City has been working on improving its financial position for over a decade. The City has reached and exceed its intended $500,000 reserve balance in the general fund by over $50,000. Flotterud stated that he did not wish to see the City increase the general fund further. Is the City looking at trying to make cuts to the budget to hold steady or decrease the levy. Flotterud stated that the budget process begins in July and the levy is set in August. Flotterud stated that he voted for a 10% preliminary levy increase with the intention of decreasing the final levy increase in December. Boulton stated that well over half of the levy is to pay debt service on past projects. Boulton also stated that staff looks at every way of saving money for the City, which will cost the City in the future due to lack of maintenance. Annette Fritz asked if there was a plan to keep up on asphalt trails around Prairie Ridge. Holmes stated that this work was not in the budget and was not on the 10-year capital schedule. Holmes stated that the City is trying to prioritize maintenance but there are a lot of potential expenses and not enough funds to address all of them. Holmes stated the balancing higher tax levy increases to cover expenses and keeping the tax burden down is difficult. Holmes stated that he has concerns with too high of property tax levies because some residents may not be able to afford to stay in their homes with their overall property tax bills. Mayor Holmes closed the public hearing at 7:31PM.
RESOLUTION:
22-074 = Adopting Final 2023 Budget: Flotterud moved to approve, Seconded by Dierks. Flotterud asked about inflation and utilities in the general fund. Boulton stated that he had on average budgeted a 21% increase to natural gas, electric, and fuel from the 2022 budget to the 2023 budget. Boulton stated that the City was significantly over budget in these areas in 2022 and thought that the proposed increases may not be high enough. Flotterud asked what street maintenance work was scheduled in 2023. Boulton stated that there was $100,000 budgeted with $50,000 from 2023 levy and $50,000 from general fund reserves. Flotterud asked what sort of balance is expected with the 2022 general fund. Boulton stated that the Prairie Ridge Estate Park shelter construction delay will also add a little over $30,000 to the project 2022 general fund surplus. Boulton stated that if you take off the roughly $80,000 between the 2023 street maintenance work and park shelter the general fund may show roughly $30,000 in 2022 operating surplus. Flotterud stated that he wished to see deficit spending to bring down the reserve. Boulton stated that the City needs to set funds aside for future street maintenance and equipment replacement. Boulton stated that the City should not be touching the $500,000 reserve as it is difficult to build back up once spent and that it helps to maintain bond rating. Flotterud stated that he was not concerned with bond rating as it has not helped the City save money on borrowing in the past. Flotterud stated that street maintenance and equipment replacement should be budgeted the year the funds are spent. Ohr stated that the one item of street maintenance or equipment replacement was too expensive to budget in one year and that many of the items would take a couple of years to save for in order to be completed. Flotterud stated that the City could spend reserves from other fund balance. Ohr stated that spending other fund balances would be robbing Peter to pay Paul and that he was opposed. Ohr stated that this philosophy is how the City got into trouble prior to Administrator Boulton being hired. Ohr stated that the City should be paying cash for small street maintenance and equipment purchases and not take out bonds or transfer from other funds. Passed 4-0-0.
22-075 = Certifying Final Tax Levy for 2023: Dierks moved to approve, Seconded by Ohr. The 2023 levy would go from $900,000 to $990,000 ($90,000 increase or 10.0%). Flotterud stated that he wished to see closer to an 8.5% or $975,00 increase in the levy due to concerns with property taxes from his neighbors. Holmes stated that he was concerned with inflation but that he thought a potential lowering of the final levy to $980,000 and seeing where we are at is his preferred route. Ohr stated that a 10% increase to the levy does not cover the increased inflationary/operational costs let alone puts funds away for future street maintenance, equipment replacement, or future park improvements. Ohr stated that the levy should stay the same at $990,000. Dierks stated that he was fine with a 10% levy increase ($990,000) as long as the funds are spent in the 2023 budget and that there is no surplus. Kennedy stated that he was both concerned with increases in property taxes and the list of City needs in from street maintenance, equipment replacement, building repairs, and other requested improvements. Kennedy stated that the City needs to get a plan together to start addressing a few of these needs before all the needs are in front of us at one time. Flotterud moved to amend the levy increase to $980,000 (increase of $80,000 or 8.89%, removing $10,000 from general fund levy), seconded by Holmes. Amendment Passed 3-1-0 (Ohr). Amended Resolution Passed 3-1-0 (Ohr).
22-076 = Approving Fire Department Budget & Township Budget Contract Allocation Formula for 2023: Dierks moved to approve, Seconded by Flotterud. Passed 4-0-0.
22-077 = Approving Licenses (Cigarette & Liquor) for 2023: Ohr moved to approve, Seconded by Dierks. Passed 4-0-0.
22-078 = Adopting 2023 1st Quarter Maintenance Work Plan: Ohr moved to approve, Seconded by Flotterud. Passed 4-0-0.
22-079 = Approving Smith Schafer Engagement Letter for 2022 Audit: Ohr moved to approve, Seconded by Dierks. Passed 4-0-0.
22-080 = To Not Waive the Monetary Limits on Tort Liability Established by Minnesota Statutes 466.04: Dierks moved to approve, seconded by Flotterud. Passed 4-0-0.
22-081 = Approving a Land Lease Agreement with Kenyon-Wanamingo School District, No. 2172, for the Operation of an Ice Rink and Warming House: Ohr moved to approve, seconded by Flotterud. Passed 4-0-0.
22-082 = Approving A Proposed Billing Change to the City/EDA Civil Attorney Services From Jacobsen Law Firm, P.A.: Flotterud moved to approve, seconded by Ohr. Passed 4-0-0.
22-083 = Approving the Sale of Land and Development Agreement with Goodhue County Habitat For Humanity: Flotterud moved to approve, seconded by Ohr. Passed 4-0-0.
22-084 = Authorizing a Temporary Gambling Permit for the Cannon Falls Youth Sporting Club, Inc.: Dierks moved to approve, seconded by Flotterud. Passed 4-0-0.
22-085 = Approving Lot Split for Goodhue County Parcel 70.145.0010 (700 3rd Avenue): Dierks moved to approve, seconded by Flotterud. Passed 4-0-0.
22-086 = Accepting a Wanamingo Fire Relief Association Charitable Gambling Donation and Designating the Funds to both the 333 Equipment Fund and Fire Relief Association Retirement Fund: Flotterud moved to approve, seconded by Ohr. Boulton stated that $22,500 would go toward the 333 Fund to the bond payment while $14,500 would go toward the general fund for the Prairie Ridge Estate Park Shelter project. Passed 4-0-0.
Ordinance #201 - 2023 Fee Schedule – 1st Reading – Mayor Holmes went over the recommended changes from 2022 Fee Schedule for the proposed 2023 fee schedule including increasing the labor rate for each the Deputy Clerk, Public Works, and City Administrator by $5/hours, the skid loader from $65/hour to $75/hour, the water meter cost from $315 to $340, adding a daily ($25) and yearly ($100) mobile food cart & mobile food trailer fees, increasing the water debt service/ base fee from $24/month to $25/month, increasing the sewer debt service/base fee from $20.00/month to $22.00/month, increasing the monthly garbage fee from $15.21/month to $16.25/month, and increasing the monthly recycling fee from $6.45/month to $6.65/month. The increase to the water meter fee helps to cover increases to the actual costs of the water meters and readers. Boulton stated that the proposed monthly water base rate/debt service fee increase of $1.00/month to each hook-up would bring in roughly $7,000 in new revenue in 2023. Boulton stated that the proposed monthly sewer base rate/debt service fee increase of $2.00/month to each hook-up would bring in roughly $12,000 in new revenue in 2023. The garbage and recycling monthly increase reflect the yearly contract increases with Waste Management. Throughout the year, including the budgeting process the Council has discussed and has recommended the above changes. The City Auditors recommend that the Council review sewer/water rates and make small adjustments regularly to capture revenue as opposed to large jumps. The wastewater treatment plant will need upgrades in the near future which could cost millions of dollars. Mayor Holmes asked if the Council wished to see changes made to the proposed fee schedule before the January City Council. No changes were requested.
OLD BUSINESS:
Mayor Holmes went over Administrator Boulton’s 2022 Wanamingo Economic Development Update Memo. 2022 continued to have supply chain delays, shortage of labor, and high inflation. Inflation, coupled with increase in the Fed’s rates have seen a slowing of the residential housing market. 2022 did see continued improvement throughout Wanamingo. The City has seen commercial building additions, a number of new homes, and infrastructure improvements. These additions and valuation increases have increased the City of Wanamingo tax base.
One commercial building had an expansion; Revland Alignment building expansion for another large bay and storage area. Revland Alignment’s building addition has a permit value of $162,000. In the residential side we have seen seven (7) new home building permits issued in 2022. The seven homes have a collective building permit valuation of $1,409,000. The seven (7) units is considered a very good year of residential growth in Wanamingo. There have also been a number of new decks, mechanical work, new windows/doors, re-roofing’s, and other home improvement building permits in 2022.
The City constructed a new 250,000-gallon water tower and additional watermain loops in 2022. The project, including the new well house, will be completed in 2023. The water tower will replace the 50,000-gallon downtown water tower (built in 1926) and the 137,000-gallon Mingo View fiberglass tank (built in 1993). This new tower will increase the water pressure 10-15 PSI throughout Wanamingo. The watermain loops will assist with redundancy of water lines, get rid of dead ends, and help turn over water within the system. When completed the new well house will add redundancy in having two full well houses with chemical feeds. The new well house will be equipped with an onsite backup generator so that when power goes out the well will be able to pump water and chemicals into the system when needed. The total project cost is roughly $2.8 million.
2023 has some planned private and public work on the horizon. The City staff are working on a commercial project with Jason Grant Trucking for a cold storage warehouse. City staff have been working with Reckitt/Mead Johnson on making changes to the Wanamingo Medical Center building for offices and training area in two of the four suites. Reckitt/Mead Johnson plans to lease the space for a minimum of 3-5 years. There has been loose discussion on Reckitt/Mead Johnson purchasing the building. Reckitt/Mead Johnson has plans for building expansion along with traffic, parking lot, drainage, and other outside esthetic improvements. Dollar General is purchasing the prior 60 Stop lot with anticipation of constructing a Dollar General store in 2023. Casey’s is purchasing Ag Partner’s Cenex C-Store location. Casey’s is anticipating making improvements to the location. There continues to be some interest in residential single-family dwellings. City Staff anticipates slowdown of construction in 2023 leading to fewer new homes. The City has been working with Zumbrota, Pine Island, Goodhue regarding a regional wastewater treatment facility. The current wastewater treatment facility is at the end of its life and will need to be replaced within the decade. The Cities have hired Winthrop & Weinstine lobbyist firm to help obtain State dollars for at least the design work and land acquisition costs. The City could choose to be part of a regional facility or construct their own facility, depending on funding. Having capacity and reliability in the water and wastewater treatment are keys to allowing for future growth and current sustainability of the community. The North Zumbro Sanitary Sewer District hinges on State funding through the bonding bill and Point Source Implementation grant in order to be financially feasible.
Holmes thanked Council member Larry VanDeWalker for his 16 years of service on the Council. Holmes said that VanDeWalker’s knowledge, skills, and demeanor would be missed on the Council. Holmes welcomed Rebecca Haugen, who will take office in January 2023. Holmes stated that he looked forward to working with Haugen on the City Council.
*Next City Council meeting is on 1/9/2023 at 7:00pm.
*City Council discussed employee recognition event, usually held in January. Mayor Holmes and City Administrator are working on dates in mid-January to be hosted at Area 57 café. Administrator Boulton will send out invites to the Council and staff once the date and time have been finalized.
*Fire Department/Township/City Annual Meeting is on 2/6/2023 at 6:30pm
Adjourn: At 8:43PM a motion to adjourn was made by Ohr and seconded by Dierks. Passed 4-0-0.
Signed: Attest:
_____________________ ____________________________________
Ryan Holmes, Mayor Michael Boulton, City Administrator
