Wanamingo City Council Meeting - March 21, 2022

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CITY OF WANAMINGO

City Council Regular Meeting

Monday, March 21, 2022 7:00 P.M.

Wanamingo City Council Chambers – 401 Main Street

Wanamingo, MN

CALL TO ORDER: Mayor Holmes. 

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

City Administrator: Michael Boulton

ABSENT: Deputy Clerk: Karen Masters

ALSO PRESENT:   George Eilertson – Northland Securities

ADOPT AGENDA:  VanDeWalker motioned to adopt the agenda, seconded by Ohr.  Passed 5-0-0.

PRESENTERS:

C) George Eilertson – Northland Securities, reported on:

1) 2022A Series Bond discussion 

2) Went through Standard & Poors Bond Rating – A/Stable for the City of Wanamingo.  The City will utilize the State of Minnesota enhanced AAA/Stable Rating for Utility Improvements.

3) Standard & Poors underlying rating reflects their view of the City’s:

-Growing residential and commercial economy within commuting distance of Rochester

-Positive operating performance, offset by a nominally low available fund balance with potential growth in interfund receivables

-Very weak debt position with additional debt plans in the next few years

-Good financials policies and practices under their Financial Management Assessment (FMA) methodology; and a strong institutional framework

4) The bond is scheduled for a 24-year payback (2046) with a 2/1/2030 early call date for repayment or refinancing.  The yearly payback principal and interest will average roughly $152,500/year.

5) The bond will have a true interest rate (TIC) of 3.08% and an all-inclusive cost (AIC) of 3.16%

6) Total project cost of $2,800,639.55.  The ARPA funds will cover $115,938 of the project.  The bond is covering $2,600,000 with a reoffering premium of $28,701.55.  The water fund will cover the remaining $56,000.

7) The Series 2022A Bond closing date will be on April 20, 2022.

Flotterud asked if the City could have had lower interest rates on this bond in the past two years.  Eilertson said that the City could have seen a little less than 1% better interest rates in January 2021.  The City could have issued the bond based off the engineer’s estimate of the project last year to lock in those rates.  However, the City would have been short on financing the 2022 Utility Improvements Project as the bids/project cost are $300,000 higher.  VanDeWalker asked how the City could increase its bond rating from an A to and A+ in the future.  Eilertson stated that the City needed to maintain $500,000 general fund reserve balance for two years which includes taking into account general fund being borrowed against by other funds.  VanDeWalker asked what the City needed to do to get an AA- bond rating.  Eilertson stated that the City would need to build and maintain a $600,000-$700,000 general fund reserve balance and eliminate other funds borrowing from the general fund.  Flotterud asked what the difference was in interest between an A and A+ bond rating.  Eilertson stated that the difference was between 1/10 to 5/10 percent better rates.  Eilertson stated that Standard & Poors would periodically review the City finances (roughly every three years) to re-examine the bond rating.  The City would more than likely improve to an A+ rating by maintaining and improving the general fund balance.  Holmes asked if Cities ever see their bond rating fall backwards with the periodic reviews.  Eilertson stated that he had seen Cities drop their bond rating due to turmoil with staffing and/or Council in the past.    

NEW BUSINESS:

RESOLUTION:

22-024 = Awarding the Sale of General Obligation Water Revenue Bonds, Series 2022A, in the Original Aggregate Principal Amount of $2,600,000; Fixing Their Form and Specifications; Directing Their Execution and Delivery; and Providing for Their Payment: Dierks moved to approve, Seconded by Flotterud.  Passed 5-0-0.

OLD BUSINESS:

Administrator Boulton explained about two smaller capital purchase needs in a skid loader sweeper attachment and a hot water pressure washer.  The City Council approved the sale of the 1995 John Deere 6675 skid loader in summer 2021.  The City leased a John Deere 325 Compact Track Skid Loader from SEMA Equipment (Midwest Machinery).  There was no need to utilize the current sweeper attachment on the new skid loader due to the extremely dry year.  The staff was preparing to sweep the streets this spring and noticed that the attachment mount plate from the sweeper attachment did not match or fit to the leased skid loader. 

The sweeper attachment mount plate would require significant scrap steel and staff time (at least a day) in welding/fabricating to fit the leased skid loader.  The City staff received a quote of roughly $350 for a new replacement attachment mount plate.  The current skid steer sweeper attachment is only six feet wide while the John Deere 325 compact skid loader is 6.2 feet wide.  The 1995 John Deere 6675 skid loader was 5.58 feet wide.  The old skid loader and sweeper attachment setup barely worked for detailing sweeping that the sweeper cannot get.  This includes sweeping out the curbs/gutters and getting around the radius of the streets and pedestrian ramps.  It is important to clear the debris from the street for pedestrian, wheel chair, bicycle, and motorcycle safety.  It is also important to keep the material out of the storm sewers and rivers for reducing sewer line plus and environmental reasons.  Streep sweeping is also important for aesthetics of the community so that the streets are free of debris.

The skid loader sweeper attachment is an unknown brand and is more than 20 years old.  It was purchased used at the same time the City purchased other attachments for the 1995 John Deere skid loader in 2003.  The maintenance staff rebuilt the internal mechanisms in 2015 and had a hard time find replacement parts.  The current broom has roughly half life.  Replacement brooms are over $600.  The sweeper attachment has some value since it is operational, but it is hard to determine with the current market.  The current market does not have many older sweeper attachments for sale.  Newer, used sweeper attachments are listed for $2,000-$3,000.  The sweeper attachment’s age and condition make the value significantly less that those listed in the $2,000-$3,000 range.  The City staff believes that the sweeper attachment is worth between $500-$800 if the Council finds a replacement and desires to sell it.

The maintenance staff reached out to Midwest Machinery, Ziegler Equipment, Olson Attachments Inc, and Sunbelts Rentals for purchase or rental.  Midwest Machinery and Ziegler Equipment have no skid loader sweeper attachments for sale or rent due to supply chain issues.  Ziegler Equipment has a lease price of $210/day, $530/week, or $1,320/month when they have a sweeper attachment available.  Sunbelt Rentals has a lease price of $150/day, $310/week, or $750/month for a sweeper attachment and they are available.  Olson Attachments Inc. has a Jenkins eight-foot sweeper attachment on order that is scheduled to arrive any day.  They are asking $5,300 with $500 down to secure the order since it has not been purchased yet.

VanDeWalker stated that he wished to see a sweeper attachment purchased now.  There are safety concerns at pedestrian ramps with built up debris.  VanDeWalker stated that he had a family member tip a wheelchair on debris on a pedestrian walking ramp.  Flotterud stated that he was in favor of purchasing the sweeper attachment but wanted the current sweeper attachment sold.  The City Council reviewed the options to make repairs, purchase a new attachment, or lease an attachment moving forward.  The Council agreed to the purchase of the Jenkins eight-foot sweeper attachment for $5,300 from Olson Attachments Inc.  The Council requested that staff sell the current sweeper attachment at the same time.  Boulton suggested listing the current sweeper attachment for $500-$800.  The Council agreed to the sale price and declaring the property surplus.  Boulton stated that the City would list the sweeper attachment at Facebook market place. 

Administrator Boulton explained the hot pressure washer concerns from staff.  The City maintenance staff have been requesting a hot water pressure washer for the past three years.  The City owns a 2001 Alkota 3-gallon 3,000 PSI mobile pressure washer.  The City has also borrowed other local business’s pressure washers in the past to complete larger projects such as the swimming pool.  The City staff have been able to order parts to repair and maintain the Alkota pressure washer (Express Pressure Washer – Blooming Prairie).  Over the winter the maintenance staff have identified a number of tasks that would be better suited for a hot water mobile pressure washer.  Some of these projects would be completed sooner with a second pressure washer.  The list includes preparation work for painting at the swimming pool, pressure washing the mildew off the stucco Medical Center Building, cleaning the mildew off the Riverside Park playground equipment, and pressure washing the grease/grime/dirt off the street department equipment (specifically the pay loaders). 

The pressure washer that the City owns does not have hot water with soaping capability.  Projects trying to remove mildew, grease, grime, and caked on dirt require hot water and soap to remove from surfaces.  The pressure washer is powered a gas engine.  If the City were to purchase a 4-gallon 3,000+ PSI hot water pressure washer it would require 220 40-amp plug-ins.  The City shop has the necessary 220-Volt 40-amp plug ins.  The Swimming Pool Medical Center Building, and Riverside Park Shelter have 220-Volt into the buildings but would need some electrical box upgrades and new 40-amp plug-ins installed.  City staff spoke with Shane Electric which estimated $500/building ($1,500-$2,000) to make the necessary upgrades and plug-in installations.

The pressure washer is an Alkota brand and is 21 years old.  City staff have determined that they need two pressure washers moving forward.  The limitations of the current pressure washer have led to a request to purchase a new pressure washer with hot water capabilities and other add-ons.  Other add-ons would include auto start/stop, hose reel platform, 100-foot hose reel, 100-foot pressure hose, 5-foot jump hose from pressure washer to hose reel, and live pressure swivel.  These add-ons are roughly $800-$900 more to the list prices of new pressure washers.

The maintenance staff reached out to American Pressure Inc. (Robbinsdale) and Express Pressure Washers, Inc (Blooming Prairie) for new and used 4-gallon 3,000+ PSI hot water pressure washer purchases.  American Pressure Inc. and Express Pressure Washers, Inc. have new 4-gallon 3,000+ PSI hot water pressure washers.  American Pressure Inc. has the State bid contract at $6,945 for a Landa 4-gallon 3,000 PSI hot water pressure washer.  Express Pressure Washers Inc. is at $7,565 for an Alkota 4-gallon 3,000 PSI hot water pressure washer.  Express Pressure Washers, Inc. has a used Predator 4-gallon 3,000 PSI hot water pressure washer for $3,995 or a used Aaladin 4-gallon 3,000 PSI hot pressure washer for $3,795.  The used pressure washers work, but are sold as is.  The potential for high-cost repairs with a used pressure washers are a real possibility.

City staff recommend the purchase of the State bid Landa 4-gallon 3,000 PSI hot water pressure washer from American Pressure Inc.  City staff further recommends purchasing the add-ons and making the necessary electrical upgrades to the Medical Center Building, Swimming Pool Bath House, and Riverside Park Shelter.  The total cost for a new pressure wash ($6,945), add-ons ($890), and rough estimate for electrical upgrades ($1,500-$2,000) is $9,335-$9,835.

The City Council reviewed the options.  The Council agreed with the idea of purchasing a hot water pressure washer in the near future.  Boulton suggested waiting to see what the final numbers of the 2021 general fund reserve balance was from the 2021 audit.  Boulton stated that the initial general fund reserve balance appears to have grown, but will shrink with changes in the fund and transfers.  If the fund grew enough to sustain a $550,000 reserve balance (including factoring in what is owed to the general fund from other funds) with the unbudgeted purchase of the skid loader sweeper attachment, he would recommend to purchase a 4-gallon 3,000 PSI hot water pressure washer.

*Next City Council meeting on 4/11/2022 at 7:00pm. 

Adjourn: At 7:46PM a motion to adjourn was made by VanDeWalker and seconded by Flotterud. Passed 5-0-0.

Signed: Ryan Holmes, Mayor

Attest: Michael Boulton, City Administrator