CITY OF WANAMINGO
City Council Regular Meeting
Monday, November 13, 2023 7:00 P.M.
Wanamingo City Council Chambers – 401 Main Street
Wanamingo, MN
CALL TO ORDER: Mayor Holmes.
PRESENT: Council: Ryan Holmes, Eric Dierks, Jeremiah Flotterud, and Rebecca Haugen
City Administrator: Michael Boulton
Deputy Clerk: Karen Masters
ABSENT: Council: Stuart Ohr
ALSO PRESENT: Brad Kennedy, Beth Haas – Zumbrota News Record, Goodhue County Deputy Cory Krause, and Beth Giese – Kenyon-Wanamingo School Superintendent.
ADOPT AGENDA: Dierks motioned to adopt the agenda while removing Resolution 23-072 from agenda, seconded by Flotterud. Passed 4-0-0.
CONSENT AGENDA: Haugen motioned, seconded by Flotterud. Boulton stated that along with the North Zumbro Sanitary Joint Powers minutes the House Capital Investments Committee stopped in Zumbrota for a presentation on October 25th for the construction dollars request of the project. Boulton stated that the presentation went well, the legislators were interactive in the presentation, and the legislators we supportive of the project request. Boulton stated that the Senate Capital Investments Committee is scheduled to stop in Zumbrota November 30th for a project capital request presentation. Passed 4-0-0.
PRESENTERS:
A) Brad Kennedy reported on:
1) Hauled and land applied fifty loads of biosolids from the WWTP. The south digester was completely clean out. Two full dumpsters of rags were removed from the bottom of the south digester.
2) Made makeshift repairs to one of the steel walls in the south digester that had separated from the outside concrete wall.
3) The WWTP operations process running better than the last three months after tanks cleaned out and stocked with a couple of loads of activated sludge with new bugs.
4) Durst Outdoors completed the roughly 2,650 square feet of asphalt patching on previous three water leak repairs.
5) Graded out boulevard and seeded locations where water leak repairs were completed. Graded out and seeded Nelson Drive storm water retention pond area.
6) Swimming pool fence base plate repairs completed.
7) Riverside Park winterized – water turned off/drained, volleyball nets taken down, and screen shelter doors screwed shut.
8) Trimmed landscaping and removed leaves at City Hall/Community Center and at Riverside Park
9) Compost pile sorted into two piles; one for additional composting and the other to be land applied. The piled will be moved, a spreader will be rented, and compost spread once the repairs are completed to the City dump truck.
10) Manhole casting in Prairie Ridge was reset by Floorcoat Midwest. Floorcoat Midwest came back to Wanamingo to reset this manhole after the asphalt was replaced. This completes the thirty-six manhole castings reset project of 2023.
11) Continuing to remove trees along the south side of 440th Street. The City staff have removed the smaller trees. Schumacher Excavating will be removing larger trees within the ditch right-of-way.
12) River Road Repair is still working on City dump truck. The truck has been down since a small engine fire occurred August 22nd. Additional parts have been ordered. Brian Gudknecht hopes to get the dump truck running in the very near future. Until up and running the City does not have a way to salt/sand the streets. Once it is running the sorted portion of the compost pile needs to be hauled out and spread.
13) Automatic Systems has installed a fan in the control box at the water tower. This is a work around to overheating in the control box on a number of new towers with similar control boxes.
14) Leaf vacuum has been out getting leaves sucked off the streets on multiple occasions.
B) Cory Krause – Goodhue County Deputy Sheriff reported on:
1) Attending the Wanamingo City Council meeting to see if there are any concerns that need to be addressed around town
2) If there are concerns you can reach out to Patrol Major Mychal Johnson or Community Liasson Officer Jenny Hofschulte
Boulton stated that the City will be sending over additional community events so that there is sheriff presence at the events. Holmes thanked deputy Krause for attending the meeting and appreciates the continued outreach to Wanamingo.
NEW BUSINESS:
RESOLUTION:
23-068 = Re-Establishing the Polling Precinct and Precinct Location for the City of Wanamingo: Dierks moved to approve, Seconded by Flotterud. Passed 4-0-0.
23-069 = Approving the Renewal of Agreement with Goodhue County for Building Inspection and Authorizing the Mayor and City Administrator to sign the Agreement: Haugen moved to approve, Seconded by Flotterud. Passed 4-0-0.
23-070 = Approving Proposed Updates to the Wanamingo Personnel Policy: Dierks moved to approve, Seconded by Flotterud. Boulton stated that the proposed changes include adding Juneteenth to the observed holiday list along with increasing the health insurance dependent premium City share from $350/month to $450/month. Passed 4-0-0.
23-071 = Approving the Combination of Tax Parcels: Flotterud moved to approve, Seconded by Haugen. Boulton stated the Riverview Services had requested to join parcel number 70.145.0012 (Lot 1, Block 1) and 70.145.0011 (Lot 1, Block 1) in the Cenex II Addition. Boulton stated that staff had no easements or public improvements concerns. Passed 4-0-0.
23-072 = Certifying Curb Stop Repair and Restoration Costs to Goodhue County Auditor-Treasurer for Collection with Real Estate Taxes in 2024: Item removed from Agenda for consideration because of payment prior to City Council meeting.
Administrator Boulton provided a memo on KW School District utility bill concerns. The Kenyon-Wanamingo School District No. 2172 has voiced concerns regarding the water and sewer debt service along with storm sewer portions of the monthly utility bill (Account #2008.00). The monthly water debt service/base rate bill is $625.00 while the monthly sewer debt service/base rate bill is $550.00 and the storm sewer monthly fee is $87.50. These three charges are twenty-five times the rate of a regular monthly charge. Monthly charges are $25 for water debt service/base rate, $22 for sewer debt service/ base rate, and $3.50 for storm sewer for 2023. The 2024 rates are recommended to be $26 for water and $28 for sewer with storm sewer unchanged.
The monthly rate formula has been in place since the City installed water meters in 2002. The monthly billing has been in place for over twenty years. It has been assumed that there was a valid reasoning for the higher monthly rates when they were initiated. City staff had conversations with school staff and building construction consultants in 2018/2019 when the school addition was constructed regarding the high water usage and significant monthly bills. No changes were discussed.
City staff researched possible reasons why the three-monthly charges were set twenty-five times the rate of a regular monthly charge. Staff combed through hard copy and electronic records without success. There were hypotheses of the higher rate being set to cover the large water meters. This was put to rest when records were found that the school district paid for the meters. Another hypothesis that the higher rate had been placed on similar to how apartments are charged for base rates. However, these are individual living units being billed and there were no other units being billed similarly. Current City staff reached out to previous City staff and previous Council members to see if anyone remembered why the Kenyon-Wanamingo School District billing was set up the way it was. No one knew why or remembered the reasoning for the higher rate of billing.
City staff have researched what are communities charge for debt service/base rate charges for schools and other large users. Most of the communities charge a single debt service/base rate charge while the others do not have a debt service/base rate charge. School staff wished to see the monthly rates better in line with the City charges to other customers. School staff do not wish to go back to past billing to make corrective adjustments. Kenyon-Wanamingo School District has two water meters, one for high flow and one for low flow readings. City staff recommend billing based off the two meters with a two-times debt service/ base rate ($50/month water and $$44/month – 2023 rates) for both water and sewer and one debt service charge. The City has considered and may consider in the future higher charges for water/sewer/storm sewer for larger users.
Holmes tried to talk to as many past Council members and City staff as he could and could not find the reason for the higher base rates. Flotterud stated that the higher billing was odd and that this predates any elected to appointed officials for the City. Holmes was curious why no one has said anything about the billing for over twenty years. Kennedy stated that it could have been set up as a higher rate before water meters due to the large number of users and not changed when meters were installed. Holmes stated that if the base rates and storm water rates were reduced it could save the school money moving forward. Giese stated that she was thankful for all the effort put in by Holmes and the staff to look into the billing history and reasoning. Giese stated that her focus was to lower the rate moving forward. Giese’s last district had seven buildings with a lower collective utility bill than the Wanamingo location. Giese stated that the Wanamingo location utilizes significantly more water than the Kenyon location. Giese stated that the Kenyon location should utilize more water than the Wanamingo location because of additional students and sports activities. Giese stated that the KW School Board has requested to look into the past two years’ worth of bills for either a credit or limiting rate increases moving forward. Giese stated that she wishes to continue the great relationship with City of Wanamingo and appreciates the City paying for the water at the baseball fields. Kennedy stated the KW Schools have a high flow/low flow meter, which is two meters in one. Kennedy stated the KW Schools have been consistently a top five water user in Wanamingo. Kennedy stated that the school has a continuous usage of four gallons per minute with 1,442 gallons per day usage. Kennedy stated that KW School staff could sign up to monitor water usage by going to helpeyeonwater.com. KW School can enter in their account number and get set up to monitor usage. Giese stated that the high utility bill and usage had been brought to her attention because the district had recently completed a free energy efficiency audit of both sites. Additional corrective changes at the school should result in utility savings for the district moving forward. Giese appreciates Administrator Boulton’s willingness to attend the KW Schools Board Meeting on November 20th. Boulton asked that any questions be sent over in writing ahead of the meeting so that information can be gathered an brought to the meeting. Giese stated that she would ask the board members for any additional questions.
Mayor Holmes said that there was a valid reason to charge the higher rates in the past. Holmes stated that the City staff could not find documented records of the valid reasoning. Holmes stated that the City is willing to change the billing moving forward with the November 2023 billing as recommended by staff. Holmes stated that this change does not mean that there was an incorrect billing in the past twenty-two years. Holmes stated that any past billing valid reasons will be discontinued moving forward. Holmes recommended that no past adjustments would be considered due to twenty-two-year consistent billing by the City and payments by ISD 2172. Boulton stated that the City Attorney stated that the school district would have a very weak legal case to recover funds from past billings due to the lengthy billing/payment schedule. Boulton stated that the City and School District have to work together moving forward. Boulton stated that the proposed change in billing would negate any past reasoning for the higher rate of billing. Boulton stated that there was consensus not to refund/credit/keeping rate increases lower for KW Schools. Flotterud moved to approve the recommended billing changes for the KW Schools of two base rates for water and sewer and one base rate for storm sewer starting with the end of November billing, seconded by Haugen. Passed 4-0-0.
Administrator Boulton provided a memo on 4M Fund investment update. The City of Wanamingo is sitting on access funds for future bond payments, future projects, and reserves. The market for the City legally investing the funds has been flat (0.1% - 2%) for many years. Over the past few months, the investment interest rates have jumped significantly. The City invested $1 million in 13-month CD’s in April 2023 for 4.5% interest. The City should keep any additional investments liquid. Money market rates are 5.32%.
The Wanamingo City Council approved reactivating the 4M Fund starting June 2023. The City 4M Account was fully activated at the end of September 2023. The intention was to invest funds in a 4M money market account. The City will be investing a $400,000 in the 4M Fund liquid money market fund for 5.32% interest. The City will be able to access the funds within two days. The interest earned will be accounted for under the general fund. These investments should leave plenty of funds for cash flow in checking account. The checking account, CD’s, the current CD, and two money market funds diversify the City investments. Flotterud stated that the new investment was a no brainer and the interest would be free money for the City in the future. Holmes stated that the money market interest rate of 5.32% was great.
OLD BUSINESS:
2024 Proposed Property Tax Effects Table – The proposed 2024 Wanamingo tax rate is 71.959%. This is based off tax capacity of $1,495,661 less TIF of $8,715 = $1,486,946 (fully taxable tax capacity). The City preliminary levy was $1,070,000. You take the preliminary levy and divide by the fully taxable tax capacity to get the 2024 proposed tax rate.
2024 Proposed Tax Rate - Property Tax Effect – The 2024 proposed tax rate is 71.959 while the 2023 tax rate is 75.256. This means that on $100,000 estimate market value would see a $23.66 decrease in 2024 taxes compared to 2023. This means that on $200,000 estimate market value would see a $41.63 decrease. This means that on $300,000 estimate market value would see a $59.60 decrease. This means that on $400,000 estimate market value would see a $77.57 decrease. However, most residentials properties saw 5-10% increase in valuation. So, the tax rate change decrease of 3.297%. With 5%-10% increase in valuations would lead to increase of 1.7030% to 6.703% in City portion of the property tax increase for 2024, depending on valuation increases from the previous year.
Boulton provided an update regarding possible Dollar General development. Boulton stated that an assessment search had recently occurred and that Dollar General was apparently moving ahead with the purchase of 14.8 acres along MN TH 60. The plan with Dollar General’s realtor was for Dollar General to utilize a portion of land for their building, parking lot, and outlot while additional land would go for public right-of-way with the rest being given the Wanamingo EDA/City for development.
Boulton informed the City Council that he, Mayor Holmes, City Consulting Engineer Brandon Theobald, and Public Works Director Brad Kennedy had a meeting with Dollar General developers and engineers from First Links LLC and Kimley-Horn. The developer sent over a proposed site plan that included a private access to MN TH 60. Theobald then drew up an AutoCAD sketch of the site plan to include a public access with Hill Avenue extended and a shared stormwater detention pond for the entire development for the discussion. Theobald stated that Minnesota Department of Transportation (MNDOT) approves access to State Highways. Theobald stated that MNDOT looks to the City for requests of access along State Highways. Theobald stated that it would be problematic to request a private access within the City. A shared access for a City street would be both an easier ask to MNDOT and a betterment for the land to be given to the EDA/City. Boulton stated that the City preferred an access for a public street (Hill Avenue) and not a private access. Theobald was not sure if MNDOT would require turning lanes. The developer had concerns with additional costs for constructing a street and potential turning lanes. Theobald stated that extending Hill Avenue was estimated around $300,000-$400,000 while turning lanes (depending on requirements) could be $300,000-$500,000. There was discussion of a shared storm water detention area rather each lot having its own. Theobald stated that there could be some time involved with wetland delineation on the east side of the property.
Flotterud asked what the cost would be to the City. Boulton and Holmes had spoken with the developer regarding cost sharing for the MNDOT turning lanes while having Dollar General pay of the share of the road along its proposed parcel while the City pay for the remaining costs from the end of Dollar General’s parcel into Hill Avenue/Beverly Street intersection. This would only be the case if the EDA/City would be acquiring the surplus land for future development. Boulton stated that this would put the costs close to half for the City and half for Dollar General. Haugen asked what the size of the Dollar General proposed building. Holmes stated that market size, larger Dollar General had been discussed that has additional food products. Flotterud asked if the EDA had been involved with the discussion. Boulton stated that they have been involved with the concept plans and that they will be brought in the next month or two when additional details come together. Flotterud stated that he liked the concept of getting a Dollar General and the EDA/City obtaining additional lots for development. Holmes stated that he was in favor of the proposal and said that Hill Avenue should be constructed. Dierks stated that he was okay moving forward and that Wanamingo needed a Dollar General. Boulton stated the Dollar General plans to be open by October 2024.
*Next City Council meeting on 12/11/2023
Adjourn: At 7:53 PM a motion to adjourn was made by Dierks and seconded by Haugen. Passed 4-0-0.
Signed: Attest:
_____________________ ____________________________________
Ryan Holmes, Mayor Michael Boulton, City Administrator
