CITY OF WANAMINGO
City Council Regular Meeting Monday, December 9, 2024 7:00 P.M.
Wanamingo City Council Chambers – 401 Main Street Wanamingo, MN
CALL TO ORDER: Mayor Holmes.
PRESENT: Council: Ryan Holmes, Stuart Ohr, Jeremiah Flotterud, and Rebecca Haugen
City Administrator: Michael Boulton
Deputy Clerk: Karen Masters
ABSENT: Council: Eric Dierks
ALSO PRESENT: Brad Kennedy, Keith Krier, Beth Haas – Zumbrota News Record, and Goodhue County Deputy Dan Englund.
ADOPT AGENDA: Ohr motioned to adopt the agenda, seconded by Haugen. Passed 4-0-0.
CONSENT AGENDA: Haugen motioned, seconded by Ohr. Passed 4-0-0.
PRESENTERS:
A) Brad Kennedy reported on:
1) Worked on getting sander operating with the new plow truck. There were programing issues that needed to be worked out prior to use.
2) Winterized various buildings and equipment. Street Sweeper has been gone through, fully serviced and should be ready for next spring. Replaced filters and along with a new dirt shoe. The machine has been fully washed and greased. The sweeper will need a curb brush and main broom replaced next spring.
3) Picked up and put away Main Street benches and garbage cans.
4) Changed out Main Street banners from City logo to holiday theme
5) Put up Christmas/Holiday snowflake lights on Main Street light poles
6) Working on creating ice for ice rink. The rink was nearly ready for skating before the warm weekend.
7) Sludge truck repairs made to seals on valves in back of the truck
8) Replaced 30 hydrant markers throughout town. The old markers had deteriorated in the sun, exposing fiberglass.
9) Will be removing seven dead trees in Riverside Park this winter
10) Well House project is at a standstill. The electronics and controls still need to be able to communicate. The Minnesota Department of Health shut-off switch change order to the project is part of the problem. The wiring needs to be added to the well house as it was not considered with the design of the building.
NEW BUSINESS:
Public Hearing - Mayor Holmes opened the 2025 Budget & Levy Public Hearing at 7:04PM. Administrator Boulton provided a written memo of the Proposed Final 2025 Budget, budgeting and levy process. The overall levy is proposed to increase 9.35% from $1,070,000 to $1,170,000. The Midco Utility Building increased is taxable value by an estimated $20,000, Zumbro Valley Landscaping New Salt Sand Shed increased taxable value by an estimated $11,000, Beulke new greenhouse increased taxable value by an estimated $25,000, and Casey’s remodel increased taxable value by $94,000 in 2023. This would bring in roughly $5,740 (slightly less than half City portion) in property taxes (0.041). The improvements at the Wanamingo Medical Facility will be captured in additional TIF. New construction within the community over the last year (7 new taxable homes in 2023) should aid with the increase to the taxable market value increase. The new construction should off-set roughly 1/5 of the proposed levy increase (1.75% of the proposed 9.35% increase). In 2026, potential commercial (Jason Grant’s proposed warehouse, Reckitt-Mead Johnson expansion, and other discussed commercial expansions) projects, and addition residential growth (3 new homes) will continue to expand the tax base. Goodhue County calculated the 2025 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 $1,504,376 (includes TIF) to $1,568,304 (Includes TIF) a 4.24% increase. Wanamingo Market Value will go from $136,012,400 to $145,168,200 or an 6.73% increase. The tax pool (what the levy gets divided out by) will go from $1,495,661 to $1,559,087 or an 4.24% increase. The tax rate is proposed to go from 71.959 to 75.044 or an increase of 3.0850%. The Wanamingo City Council proposed levy increase to $1,170,000 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 an increase of $22.00 for $100,000 value, an increase of $38.71 for $150,000 value, an increase of $55.42 for $200,000 value, an increase of $72.13 for $250,000, and an increase of $88.84 for $300,000 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 3%-5% increase in valuations from 2023 to 2024. This would show changes on the low end of value increases to roughly $60 for $100,000 home, $80 for a $150,000 value home, $95 for a $200,000 value home, $110 increase for $250,00, and $125 for a $300,000 value home. It would show increases of $65 for $100,000, $85 for $150,000 value, an increase of $100 for $200,000 value, an increase of $115 for $250,000, and an increase of $130 for a $300,000 value City portion of a property tax increase per year) on the high end. The new commercial and residential growth in 2023 helps offset the levy increase from going onto existing property owners. Boulton stated that LGA is proposed to increase from $302,161 in 2024 to $302,415 in 2025. Boulton stated that 52% of the general fund revenue comes from the levy. The other areas of the general fund revenue either do not increase or increase/decrease slightly. This means that the levy shares a higher percent of the burden each year. Boulton stated that inflation makes 2025 budgeting harder for the general fund than 2024. Boulton stated that increases to utilities, salaries, ambulance levy, fire, future police contract, health insurance, street maintenance, and future capital needs are putting pressure on the general fund. 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 increase low. Boulton stated that the City will be putting agreements together for the Street Shop rehab project for 2025. The total cost is roughly $210,000. Boulton stated that the City needs additional growth to help offset these levy increases moving forward. Flotterud asked when and why the general fund reserve balance changed from $500,000 to $650,000. Boulton stated that the Council approved the updated fund balance policy in April 2024. Boulton stated that the City general fund yearly expenditures have increased from roughly $700,000 in 2018 to $1,000,000 in 2024 (roughly 5% increase per year). The fund balance policy is 35%-65% or $650,000, whichever is higher. A general fund reserve balance of $500,000 is 50% while $650,000 is 65%. Flotterud asked if the higher general fund spending would require higher reserve balance funds. Boulton stated that adjustments to the policy would need to take place every few years to increase the reserve balance amount. Boulton stated that the fund reserve balance policy is a standard practice for cities, including Wanamingo’s neighboring communities. Flotterud asked what spending had and would occur out of Fund 216 and Fund 336. Boulton stated that the City spent roughly $190,000 in 2024 on the combined Ford F-550, Crysteel truck accessories, and Ford F-250. Boulton stated that the Fund 216 had $56,000 while Fund 336 had $110,000. The rest was paid out of the street capital line item in the general fund. Boulton stated that the plan in 2025 is to utilize the $150,000 from the 336 fund and the $45,000 from the street equipment fund to go toward the estimated $210,000 street shop rehab project. The remaining funds will come out of the street capital line item in the general fund. Boulton stated that the Riverside Park parking lot (estimated at $200,000) and pickleball court (estimated at $60,000) projects were discussed for 2026/2027 out of the 336 fund. Boulton stated that a street reconstruction project could take place in 2027/2028. The 336 Fund $150,000 would cover the yearly bond project on a $1.5 million project. Flotterud stated that he struggles with setting aside funds for future work. Ohr stated that the City is still taking money out of multiple funds to piecemeal capital projects. Flotterud suggested dropping the final 2025 levy by $30,000 to $1,140,000. Flotterud stated that his neighbors’ property taxes are starting to approach $10,000/year and that taxes were too high and may push residents out of town. Boulton stated that Wanamingo’s proposed property tax increase is close to the State average for cities (8.8%). Boulton stated that Wanamingo’s current and proposed tax rate is lower than Pine Island and Kenyon, and similar to Red Wing, but higher than Cannon Falls, Goodhue, and Zumbrota. Boulton stated that 42% of the City tax levy is for debt service to pay back past bonds. The City’s debt is higher than most communities. Ohr stated that the Emerald Ash Borer dying trees in the boulevards need to be removed and the City has not formalized a plan or budgeted funds. Ohr stated that the City should hire one contractor to take down the roughly 100 trees at the best price. Ohr stated that the City could assess back some or all the cost to the adjacent properties. The City would need to cover the costs until the assessments are paid back and possibly a portion of the total costs. Boulton stated that if the developer of Emerald Valley II moves forward with construction the City would need to come up with $120,000 for their share of the improvements for the park land. Boulton stated that this was not budgeted and would need to come from cash reserves. Flotterud stated that the City financial position was better than ten years ago and that the equipment is in good shape. Boulton stated that the Council discusses and approves the updated capital improvements plan each year. Boulton stated that there are a few equipment and building needs coming in the future. Kennedy stated that the older pay loader snowplow may not be able to be repaired in the future and will need to be replaced ($50,000). Kennedy stated that equipment such as the leaf vacuum, sewer jetter, and street sweeper are in similar positions to the snowplow. Kennedy stated that staff will keep equipment running as long as possible. The Council should be ready to replace as they fail, which include budgeting/planning. Holmes stated that it is tough with needs coming up compared to the tax burden to residents. Boulton projected the 2026 levy to be around 5%, with today’s snapshot projections. Mayor Holmes closed the public hearing at 7:15PM.
RESOLUTION:
24-073 = Adopting Final 2025 Budget: Flotterud moved to approve, Seconded by Ohr. Passed 4-0-0.
24-074 = Certifying Final Tax Levy for 2025: Flotterud moved to approve, Seconded by Haugen. The 2024 levy would go from $1,070,000 to $1,170,000 ($100,000 increase or 9.35%). Flotterud wished to see a $30,000 decrease in the levy on the 336 Fund. Ohr and Haugen expressed desire to keep the final levy at the proved levy amount. Passed 3-1-0 (Flotterud No).
24-075 = Approving Fire Department Budget & Township Budget Contract Allocation Formula for 2025:
Haugen moved to approve, Seconded by Flotterud. Passed 4-0-0.
24-076 = Approving Licenses (Cigarette & Liquor) for 2025: Ohr moved to approve, Seconded by Haugen. Passed 4-0-0.
24-077 = Adopting 2025 1st Quarter Maintenance Work Plan: Ohr moved to approve, Seconded by Haugen. Passed 4-0-0.
24-078 = Approving Smith Schafer Engagement Letter for 2024 Audit: Flotterud moved to approve, Seconded by Ohr. Passed 4-0-0.
24-079 = To Not Waive the Monetary Limits on Tort Liability Established by Minnesota Statutes 466.04:
Haugen moved to approve, seconded by Flotterud. Passed 4-0-0.
24-080 = Approving a Land Lease Agreement with Kenyon-Wanamingo School District, No. 2172, for the Operation of an Ice Rink and Warming House: Flotterud moved to approve, seconded by Ohr. Flotterud asked if the future pickleball court would also include an ice rink at Torkelson Park. Kennedy stated that his hope was to make it multi-use. Boulton stated that the multi-use court/rink would cost more than the original $60,000 estimate (pickleball court only). Passed 4-0-0. 23-081 = Accepting Wanamingo Fire Relief Association Charitable Gambling Donation and Designating the Funds to the 333 Equipment Fund: Ohr moved to approve, seconded by Flotterud. Passed 4-0-0.
24-082 = Approving Final List of Non-Compliant Properties as Part of Sump Pump Inspection Program for Monthly Surcharge: Ohr moved to approve, seconded by Haugen. Boulton stated that the monthly fee would start with the end of December billing. Boulton stated that the fee would be waived if the inspection was scheduled (and passed/corrected). Flotterud asked if an up-to-date report had been provided to the City on the sump pump inspection program, smoke testing, or curbs stop mapping/lead piping identification. Boulton stated that he had not received an up-to-date report on the sump pump inspection for a few weeks and has not seen reports on the smoke testing or curb stop mapping/lead piping identification. Boulton stated that he would send on the request to WHKS to provide reports for the Council. Passed 4-0-0.
24-083 = Adopting the 2024 Goodhue County Hazard Mitigation Plan: Flotterud moved to approve, seconded by Ohr. Boulton stated that he provided the Council a link to read through the roughly 250-page 2024 County Hazard Mitigation Plan. Passed 4-0-0.
Ordinance #209 - 2025 Fee Schedule – 1st Reading – Mayor Holmes went over the recommended changes from 2024 Fee Schedule for the proposed 2025 fee schedule including increasing the park shelter rent from $35 to $40, increasing the copy and fax (per page rate) from $0.25 to $0.50, increasing the sewer hook-up from $700 to $750, increasing water meter cost from $360 to $370, increasing the per 1,000 gallons water rate from $6.00 to $6.25, increasing the per 1,000 gallons sewer rate from $7.00 to $7.25, increasing the sewer debt service/base fee from $28.00/month to $32.00/month, increasing the monthly garbage fee from $16.50/month to $19.11/month, and increasing the monthly recycling fee from $6.85/month to $7.35/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 per 1,000-gallon water rate increase of $0.25 would bring in roughly $7,000/year more for water in 2025. Boulton stated that the proposed per 1,000-gallon sewer rate increase of $0.25 would bring in roughly $7,000/year more for water in 2025. Boulton stated that the proposed monthly sewer base rate/debt service fee increase of $4.00/month to each hook-up would bring in roughly $28,000 in new revenue in 2025. The garbage and recycling monthly increase reflect the yearly new contract with Highland Sanitation. 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 soon 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.
Ordinance #210 – Amending Chapter 116 Business Regulation – Regulating Cannabis Business – 1st Reading – Administrator Boulton stated that a sample ordinance was recently made available by the State. Boulton stated that the sample ordinance was modified into the Wanamingo format. Boulton stated that all cities were required to have cannabis business regulation ordinances in place by January 2025. Boulton stated that the City Attorney, David Jacobsen, would be reviewing the ordinance with potential changes before the January City Council meeting.
OLD BUSINESS:
Administrator Boulton provided a 2024 Economic Development for the City. 2024 saw continue high Federal interest rates, continued slowing down residential and commercial expansion. Supply chain delays are getting better, however shortage of labor, and high inflation continue to hurt the economy. Inflation, coupled with elevated Fed’s rates have seen a slowing of the residential housing market. 2024 saw a slowdown throughout Wanamingo. The City has seen some commercial building work, a few new homes, and infrastructure improvements. The commercial work, new homes, and valuation increases will increase the City of Wanamingo tax base.
There were no major commercial building expansions in 2024. However, there were several minor projects. Hillcrest Center ($93,000) and Riverview Services ($33,000) completed new garages. Caseys completed additional remodel work ($14,000). The Spot Sports Pub expanded their deck ($10,000). Mead Johnson is working on a re-roofing project ($10,000). NTS Tire/Bakers completed work on the exterior of the building, including signage.
In the residential side we have seen seven (3) new home building permits issued in 2024. The three homes have a collective building permit valuation of $479,000. The three (3) units is considered aa average year of residential growth in Wanamingo. There have also been a few new decks, mechanical work, new windows/doors, re-roofing’s, and other home improvement building permits in 2024.
The City continues to work on the 2022 Utility Improvements Project. The watermain looping project was finalized in 2024. The new well house will be completed at the end of 2024. The total cost of the project was $2.8 million (including new water tower). The City has been working to reduce ground water inflow and infiltration. The City completed smoke testing all the manholes to check for leaks and cross connections. The City is wrapping up the sump pump inspection program to ensure that there are no illegal connections to the sanitary sewer system. Along with the sump pump program that City is identifying all the water service connection locations and material. This is to eventually replace all lead and galvanized piping. The mapping of water service valve locations helps to find easily shut-offs in case of emergencies. The City spent roughly $35,000 on repairing leaking water valves, asphalt patching, and concrete replacement work in 2024. The City obtained a $3,000 grant for a new basketball hoop that will be installed at Prairie Ridge Estates park in 2025.
The City is planning on rehabbing the street shop building in 2025. The rehab work includes roofing, siding, service doors, windows, overhead doors, gutters/downspouts, ventilation system, spot concrete work, and electrical work. It is estimated to cost $210,000. 2025 has some planned private and public work on the horizon. The City staff have been working with Jon Whitcomb of Metro East Commercial Re Inc. He purchased the 24 tax forfeited Emerald Valley II parcels from Goodhue County. Mr. Whitcomb is working with the other landowners to put together a development plan for the area. Mr. Whitcomb hired engineering to put together plans for construction. Mr. Whitcomb obtained bids from three contractors. Mr. Whitcomb is working with the City to try and make changes to bring down the per lot costs and bids for 2025. Jason Grant Trucking is still looking at a cold storage warehouse in the industrial park. Jason Grant is held up by current high construction and interest rates. Reckitt/Mead Johnson has plans for building expansion along with traffic, parking lot, building expansion, and other outside esthetic improvements. There continues to be some interest in residential single-family dwellings. City Staff anticipates slowdown of construction in 2025 leading to fewer new homes. The City has been working with Zumbrota, Pine Island, Goodhue regarding a regional wastewater treatment facility. The City received $10 million from the State for predesign and land acquisition for the facility. The Cities have hired Winthrop & Weinstine lobbyist firm to help obtain State dollars for the next phase of construction. 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 to be financially feasible.
Enforcement Process – Mead Johnson - Reckitt – 360 day written letter toward meeting goal of waste pH – Boulton stated that the City had not yet received a letter from Mead Johnson – Reckitt for the month. Mead Johnson – Reckitt pH of wastewater discharge was within range during most of the month of November. There were low pH readings on November 19th and 20th. Reckitt had freezing pipes and the pipe was left open. The frac tank was installed and incorporated into their process back in March. Mead Johnson – Reckitt goal is to install a new lift station with pH treatment, which will wait until 2025. The temporary, above ground tank is having a shell constructed around it for winter to keep it from freezing. Goodhue County Building Permits and Inspections did not require a permit for the work, since it is a temporary structure. Boulton stated that the Wanamingo staff are still monitoring the wastewater discharge from Reckitt-Mead Johnson. The pH levels of the wastewater discharge are being adjusted before being sent to the wastewater treatment plant. Prior to December 2023, results have regularly shown extremely low and at times high pH levels along with the presence of high levels of QAC (Quaternary Ammonium Compounds) have been sent to Reckitt-Mead Johnson. The pH levels should be within 5.0 and 9.5. City Staff have been working with Reckitt-Mead Johnson toward the achieved solution of pH levels within the limits. Reckitt has introduced failsafe measures for the tank, including having security staff check the tank on each security round check. The valve now has a lock, and the key must be signed out when opened/closed. The City appreciates the open dialogue and work, to date, from Reckitt-Mead Johnson. The City continues to keep the Minnesota Pollution Control Agency informed during this process, including Carolle Ternus the new Municipal Wastewater Compliance and Enforcement staff member. Boulton stated the Enforcement Process would remain on the monthly agenda until Summer 2025 (or later), or when the permanent structure is completed. Boulton stated Reckitt-Mead Johnson would be required to provide written monthly updates to the City Council.
*Next City Council meeting on 1/13/2025
*Mayor Holmes and City Administrator will be working on dates to be host the annual employee appreciation dinner 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 2/3/2025 at 6:30pm
Mayor Holmes extended sympathies to the Ronningen Family, including Councilmember Stu Ohr (granddaughter), on the loss of Kambrynn.
Adjourn: At 8:43 PM a motion to adjourn was made by Flotterud and seconded by Ohr. Passed 4-0-0.
Signed:
Ryan Holmes, Mayor
Attest:
Michael Boulton, City Administrator
