Wanamingo City Council Meeting - July 25, 2022

Posted

CITY OF WANAMINGO

City Council Regular Meeting

Monday, July 25, 2022 7:00 P.M.

Wanamingo City Council Chambers – 401 Main Street

Wanamingo, MN

CALL TO ORDER: Mayor Holmes @7:00PM

PRESENT: Council: Ryan Holmes, Larry VanDeWalker, Stuart Ohr, Jeremiah Flotterud (Late), and Eric Dierks

City Administrator: Michael Boulton

ABSENT: Deputy Clerk Karen Masters

ALSO PRESENT:   Brad Kennedy, Shawn Anderson, Christine Lundin, and Patty Heraty (SEMCHRA)

ADOPT AGENDA:  Ohr motioned to adopt the agenda, seconded by Dierks.  Passed 4-0-0.

PRESENTERS:

A) Patty Heraty – SEMMCHRA – Heritage Hills Report

1) Buffy Bernarek was not able to attend the meeting.  Patty Heraty is the accountant for SEMMCHRA

2) Presented 2022 projected expenses and transfers from the Operating Reserve Fund – required yearly as part of transfer agreement.

3) Operating losses and capital for 2022 are projected at being up to $20,415.00

4) In the past 13 years since SEMMCHRA took over operations the City of Wanamingo has contributed $355,190 toward operations of the facility

5) SEMMCHRA is asking for a transfer of up to $20,415.00 from the operating reserve for projected losses and capital expenditures.  The were major repairs completed to the fire sprinkler and heating system completed in 2022.  There were unanticipated appliances replaced in 2022.  The costs of utilities are up in 2022, which are reflective in the 2023 budget.  There were some vacancies in 2022 which are reflective in less projected income as well.

6) 2023 Levy Request will be $25,000

Holmes asked if the increased utilities and other operating costs would be reflective with potential rent increases in 2023.  Heraty stated that there is a request for a 5% rent increase for 2023, which will require approval.  VanDeWalker asked when refinancing of the Heritage Hills bonds could take place.  Heraty stated that August 2022 is the planned refinancing date for the Heritage Hills bonds according to Buffy Bernarek. Holmes stated that the City was eager for this to occur and that the date would be circled on the calendar.  Holmes thanked Heraty for filling in for Bernarek for the yearly budget presentation.

B) Shawn Anderson and Christine Lundin spoke to the City Council on the proposed Ordinance (Wanamingo Ordinance #200) change requiring paved driveways.   Asked if the proposed Ordinance change would be retroactive to residential properties.  Holmes stated that the way the proposed ordinance language read, it would only be enforced to new construction.  Holmes stated that it would be up to the City Council whether or not to require current residential properties to comply with the requirement.  Anderson asked why the ordinance was considered?  Was it to keep gravel off the street for stormwater and why is it only for Residential areas?  Holmes stated that the reasoning was for both keeping stormwater off the street and aesthetics for new homes.  Boulton stated that the current Wanamingo Code of Ordinances does not require an impervious driveway or timeline to complete the driveway.  There is concern that this should be a requirement similar to Ordinance 152.54 l Landscape Planting (30 days after the issuance of a certificate of occupancy is issued).   Boulton stated that that Wanamingo Code of Ordinances already requires commercial/industrial areas have impervious driveways/parking areas.  Holmes stated that commercial/industrial areas are required to have, at minimum, concrete aprons and crushed asphalt parking areas.  Anderson stated that he intends to pour a concrete driveway once he completes the second phase of his home.   Lundin and Anderson both stated that they did not want to have a gravel driveway.  Lundin stated that there are roughly twenty (20) residential driveways in Wanamingo that are gravel.  Holmes stated that the intention is to only enforce the ordinance with new home construction, 30 days after certificate of occupancy is issued.  VanDeWalker thanked them for providing the Council with information on the current twenty residential driveways that are gravel.  Holmes thanked Anderson and Lundin for attending the meeting and providing feedback on the proposed Ordinance.  Holmes stated that the second reading would take place at the August 8th City Council meeting.

NEW BUSINESS:

1) 2023 Budget discussions

A) City Council looked at the staff proposal of the 2023 proposed budget, Memo on 2023 proposed budget, and proposed 2023 levy.  The proposed to increase to the levy is 6.67% ($900,000 to $960,000).  The Council may wish to consider a higher levy ($975,000 or 8.33%) due to inflation along with addressing future road maintenance and equipment needs.  The general fund, Street Capital, EDA, Debt Service Fund 328, and Debt Service Fund 335 are proposed to see the increases.

B) Administrator Boulton explained a number of line items that had either changed from the previous year or needed an explanation.  Proposed wage increases were roughly 6% while proposed health insurance increases would 5%.  Boulton stated that an aggregate 21% ($12,600) increase has been built in for fuel, electric, and natural gas.  The proposed $100,000 street seal coating ($50,000 from general fund and $50,000 from general fund reserves) project and $10,000 Prairie Ridge Estates Park Equipment (basketball hoop and other equipment in 2023 or 2024).  Boulton stated that the 2024 truck purchase to replace the dump truck may appear in 2023, depending on order date/down payment.

C) Administrator Boulton explained that the new DET Properties (Marcstone) expansion increased is 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 six years (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 6.67% increase).  The Council will see how the finalized 2023 market value rates compared to the proposed levy increase will affect property values based on $100,000 levels in October. The Council will be setting the initial levy at the August meeting and could stay at the same levy amount or decrease at the December meeting.  The Council could not increase the levy from August to December. 

D) Boulton stated that Local Government Aid (LGA) certified amounts would increase from $272,559 in 2022 to $276,253 in 2023.  Last year the legislature recently approved funding for Small Cities Assistance to communities under 5,000 population for use on road construction and maintenance.  This formula has been periodically funded in recent years.  It is unknown if the City of Wanamingo will receive these funds in 2023 ($14,015 in 2021 and 2022).    

Flotterud asked if a 2022 chip sealing project is going to take place.  Boulton stated no, that the $50,000 budgeted is planned to be rolled into a larger chip sealing project in 2023 ($100,000 or more size project).  This is in order to obtain economies of scale with having a larger project.  VanDeWalker stated that he was comfortable with a higher levy increase than the proposed 6.67% levy increase ($960,000).  VanDeWalker was concerned with additional inflation, long-term State LGA funding, and keeping/building upon the $500,000 general reserve balance.  Flotterud stated that the City did not need to increase reserves because the $60,000 revolving fund loan could be utilized as a rainy-day fund.  Boulton stated that the revolving fund loan is the only economic development tool available and that if spent, could take years to build back up.  Flotterud stated that he was fine with starting the discussion higher than a 6.67% preliminary levy increase in August and coming down with a final levy in December.  Flotterud is happy that the City of Wanamingo continues to grow and has provided increases to the tax base.  The proposed 2023 chip sealing project may have to wait if the budget gets tight.  VanDeWalker stated that street maintenance could not be pushed further out and that the longer we wait the faster the roads deteriorate.  Flotterud stated that he does not like having general fund surpluses.  Dierks asked if the public works needs new equipment.  Kennedy stated that the needs are listed in the capital improvements plan.  Kennedy stated that the dump truck needs to be replaced as soon as possible.  Kennedy stated that the dump truck keeps being repaired in order to keep it working but the brake system is not the best and the box is rusted out.  Kennedy stated that a 2-ton truck (similar to a 550 or 650) could replace the dump truck, depending on what functions it will need to do.  Kennedy stated that the replacement truck would need a sufficient hydraulic pump system to handle the insert sander.  Ohr stated that maybe the replacement could be ordered next year.  Flotterud stated that the preliminary levy increase should start at 11.11% ($1,000,0000 2023 levy) increase.  Flotterud stated that he wanted to bring the public into a conversation about the levy and the City’s needs moving forward.  VanDeWalker stated that he thought that the preliminary levy should be no more than 10% increase ($990,000 2023 levy).  Flotterud asked why the water and sewer funds could not cover more of the staff time compared to the General Fund.  Boulton stated that each of the funds (General, Water, and Sewer) cover the actual hours/time that the staff spends in each area.  Boulton said that pay staff wages accurately out of these funds is a best accounting practice.  Boulton stated that the water and sewer funds are enterprise funds and should only pay their own expenses.  Boulton stated that the water fund will not have a significant reserve at the end of 2022 and that the sewer reserve is for a new sewer plant and for replacing clay sewer lines in the future.  Flotterud stated that the reserve is a drop in the buck for those actual costs and that the rates should be adjusted when those projects are completed.  Boulton stated that the plan is to slowly increase the sewer rates to build a reserve to pay some of the initial costs.  Boulton also stated that the other reason was so that rate increases are lessoned for residents at the time these projects are completed.  Ohr stated prior councils spent fund balances down from one fund to the other creating the financial difficulties from 2009-2013.  The City should never purposely put itself in another difficult financial situation.  Flotterud stated that having money in the account can lead to spending on wants and not needs.  VanDeWalker stated that the buildup of reserves is for future planned spending such as road maintenance, equipment purchases, and new park improvements.  VanDeWalker agreed that starting with a higher preliminary levy with the assumption of a lower final levy is the smart move in uncertain times.  Dierks stated that he was comfortable with a preliminary levy increase of 10% ($990,000 2023 levy).  Holmes agreed that the City should look at starting with a higher preliminary levy (10% - $990,000 2023 levy) and possibly coming down with final.  Ohr agreed that a $990,000 2023 preliminary levy is a good starting point for budget discussions.  Boulton noted that new construction probably will not continue at the same rate in the next few years and will in turn slow the levy growth.  Boulton also noted that the Council's intentions are to increase the utility rates incrementally for future waste water treatment plant and clay sanitary sewer line replacements.  Boulton stated it would be ideal to for the increase in the 2024 levy to be inflationary plus capturing the new table market value (tax base) in the levy.  The Council directed Administrator Boulton to adjust the budget and levy information to a 10.00%, or $90,000 levy increase in the 2023 proposed Levy Resolution and 2023 Proposed Budget.

RESOLUTION:

21-046 = Approving Updated 10-Year Capital Improvements Plan for the City of Wanamingo: Flotterud moved to approved, seconded by Ohr. Capital Improvements 10-Year Plan Discussion took place – hot pressure washer/installation/electrical updates for $10,000, increase to $5,000 yearly leasing of skid loader, Prairie Ridge Park Equipment, and pool chemical feed for baby pool and rust filter system ($5,000).  Kennedy stated that the dump truck will more than likely need to be replaced earlier than the capital improvement plan lists.  Boulton stated that the truck replacement would be moved to 2024 with the assumption that it would be ordered in 2023.  Boulton stated that the proposed 2023 levy would include $26,000 ($13,000 in 2022) for the street equipment fund (221).  Passed 5-0-0.

OLD BUSINESS:

Updates:

Affidavits of Candidacy will be accepted at the City Hall (401 Main Street) during the filing period of August 2, 2022 through August 16, 2022 at 5:00 p.m. for the following City Council seats:

Mayor – 2 Year Term

2 At-Large City Council Positions - 4 Year Terms

Candidates’ names will appear on the November 8, 2022 General Election ballot.

Listed below are the filing requirements for those individuals seeking public office:

1. Candidate must be an eligible voter.

2. Is, or will be on assuming the office, 21 years of age or more.

3. Maintained residence in the district from which the candidate seeks election for 30 days before the General Election.

Candidates must file an Affidavit of Candidacy and pay a $2 filing fee at City Hall, 401 Main Street, Wanamingo, MN. Office hours are 7:00 a.m.–4:30 p.m. Monday – Thursday and 7:00AM-12:00PM Fridays. Filings will be accepted until 5:00 p.m. on August 16, 2022.

*Next City Council meeting on 8/8/2022

Adjourn: At 8:25PM a motion to adjourn the meeting made by VanDeWalker and seconded by Dierks.  Passed 5-0-0.

Signed: Attest:

Ryan Holmes, Mayor

Michael Boulton, City Administrator