CITY OF WANAMINGO
City Council Regular Meeting
Monday, November 18, 2024 7:00 P.M.
Wanamingo City Council Chambers – 401 Main Street
Wanamingo, MN
CALL TO ORDER: Mayor Holmes.
PRESENT: Council: Eric Dierks, Rebecca Haugen, Ryan Holmes, Jeremiah Flotterud, and Stuart Ohr
City Administrator: Michael Boulton
Deputy Clerk: Karen Masters
ABSENT: None
ALSO PRESENT: Brad Kennedy, Patrick Michener – SEMMCHRA, Beth Haas – Zumbrota News Record, and Daren Strobel – Kenyon Leader.
ADOPT AGENDA: Ohr motioned to adopt the agenda, seconded by Dierks. Passed 5-0-0.
CONSENT AGENDA: Haugen motioned, seconded by Flotterud. Passed 5-0-0.
PRESENTERS:
A) Brad Kennedy reported on:
1) Hauled and land applied biosolids from the WWTP. Completely cleaned out and repaired air lines.
2) Worked with Jason’s Sewer Sucking and Excavation to pump out grit tank at wastewater treatment plant. The tank needs to be pumped out yearly to remove solids.
3) Worked with Jason’s Sewer Sucking and Excavation to pump solids out of five manholes that filled with solids after jetting sewer lines city wide.
4) Utilized the street sweeper and leaf vacuum to suck up the leave numerous times this fall. Went around and cleaned out storm sewer grates of leaves by hand as well.
5) Riverside Park winterized – water turned off/drained, volleyball nets taken down, and screen shelter doors screwed shut.
6) Durst Outdoors completed asphalt patching on previous water line repair, sewer line repair, alley ramps, and damage from garbage truck.
7) Snow Equipment hooked up, serviced, and ready for the first snowfall.
8) The new wellhouse work is nearly complete and the facility should be operational in the coming weeks. We are waiting on Automatic Systems to finish the communication integration between the two well houses and the water tower. Once the new wellhouse is operational there is a couple of weeks’ worth of work to be completed in the other wellhouse by the contractor.
B) Patrick Michener, SEMMCHRA reported on:
1) Small Cities Development Program survey results have been completed for the City of Wanamingo
2) Survey results - 44 qualified income answers while 36 qualified where work needed to be completed
3) There was a 30% response rate in the survey process. That means that the application will include 12 units for $345,000.
4) The pre-application is due November 27th at 4:00PM to MN DEED
5) The final application will occur in Spring 2025
6) The funding announcements from MN DEED will come out Fall 2025
7) If funded work on individual homes could start as early as March 2026
Flotterud asked the amount that could be funded per household. Michener stated that there is a $25,000 per household cap for funding. Michener stated that SEMMCHRA was hoping to find other funding sources to increase the dollar amount per household. Michener stated that the average project is running around $30,000, creating a funding gap. Michener stated that most of the work is in roofing, windows, and doors. Holmes said that SCDP is a great program for the City to take advantage of to improve single family dwellings.
NEW BUSINESS:
RESOLUTION:
24-068 = Approving Changes to the Wanamingo Personnel Policy: Flotterud moved to approve, Seconded by Ohr. Boulton stated that the personnel committee is recommending that language be added to allow employees 65 and older to voluntarily opt out of City group health insurance and sign up for Medicare. The City would cover the Medicare Part B premium and advantage or supplemental plan if the cost were less than the group health insurance premiums. This could save the City over $1,000/month for each employee that opts for the Medicare option. The Personnel Committee is also recommending increasing the health insurance dependent premium City share from $450/month to $600/month. Dependent health insurance increased significantly causing a potential spike in out-of-pocket coverage for those employees who have dependent coverage. Kennedy stated that this increase has caused employees to consider their long-term employment with the City. The Personnel Committee sees a need to increase the City share in order to attract and maintain quality employees. Boulton stated that the proposed dependent premium City share increase is only a one-year band aid as the City insurance agent has seen projection for roughly 15% increase for 2026 renewals. Boulton stated that the Personnel Committee and City Council may need to adjust again in 2026. Boulton stated that health insurance is 20% more in SE Minnesota than the rest of the state. Boulton stated that this is due to Mayo Clinic and Olmsted Clinic’s negotiating power and the leverage that they have in SE Minnesota with insurance companies. Flotterud stated that the Medicare option more than offsets in the dependent premium City share increase and is a no brainer. Holmes agreed that the increase is necessary for dependent coverage especially with the lower wages in comparison to other communities for staff. Passed 5-0-0.
24-069 = Approving Pay Request No. 7 to The Joseph Company, Inc. for the Well House Portion of the 2022 Utility Improvements: Ohr moved to approve, Seconded by Dierks. Boulton stated that the pay request is for the prefabricated building, dirt work, well pump, and other various items. The total pay estimate is $371,373.42. Kennedy stated that project completion would be roughly a month. Boulton stated that there is $76,082.30 left to be paid out to the contractor for work that will be completed on the project. Passed 5-0-0.
24-070 = Approving Delegation for Cannabis Registration Agreement with Goodhue County: Flotterud moved to approve, Seconded by Haugen. Boulton stated that the City Council had indicated to Goodhue County a willingness for the County to take on the registration and enforcement of cannabis in June 2024. Flotterud asked if the City would be giving up taxes. Boulton stated that the City would give up the registration fee, but not the sales tax if there were a cannabis business in Wanamingo. Flotterud stated that he has a difficult philosophy giving up control and tax dollars to the County. Dierks agreed that he disliked giving up potential tax dollars to the County. Boulton stated that the proposed agreement allows for the City to provide 30-day notice to terminate. Boulton stated that the City of Wanamingo will still craft a cannabis ordinance for regulation within the City that will include zoning restrictions. Boulton stated that samples are just starting to come out in other cities. Boulton stated that he hoped to have a draft ordinance in front of the Council by January 2025. Flotterud stated that he prefers that the City retain the power. Boulton stated that the State has yet to release much of the rules that govern the many cannabis businesses that could be applied for within the County and Wanamingo. Boulton stated that the City lacked staff time and that it would fall to him to administer. Boulton stated that he did not want the liability on the City or himself of potential error in the registration or enforcement process on cannabis businesses. Flotterud asked if the agreement could be approved later to allow for more research. Boulton stated that the County is requiring approval and the signed agreements back by November 27, 2024. Holmes stated that the lack of State guidance for the entire cannabis rollout was frustrating. Holmes stated that the lack of action by the State leading up to the January 2025 business licensing opening pushes the City into a corner. Holmes stated that the City will have to delegate to the County the registration and enforcement process at least until the process becomes clear. Passed 5-0-0.
24-071 = Approving the Renewal of Agreement with Goodhue County for Building Inspection and Authorizing the Mayor and City Administrator to sign the Agreement: Ohr moved to approve, Seconded by Haugen. Holmes stated that the City has enjoyed a great 14-year relationship with Goodhue County Building Permits and Inspections Department. Passed 5-0-0.
24-072 = Declaring 1984 Ford Dump Truck and 1984 Chevrolet Lift Truck Surplus Property and Authorizing the Sale of Surplus Property by Houghton Auction Services: Dierks moved to approve, Seconded by Haugen. Boulton stated that the City had recently received $1,700 through Graves Online Auctions for the 1998 Ford Ranger. Kennedy stated the Houghton seems to be a better location to sell equipment rather than Graves Online Auctions or Oronoco Online Auctions. Passed 5-0-0.
OLD BUSINESS:
2025 Proposed Property Tax Effects Table – The proposed 2025 Wanamingo tax rate is 75.044%. This is based off tax capacity of $1,568,304 less TIF of $9,217 = $1,559,087 (fully taxable tax capacity). The City preliminary levy was $1,170,000. You take the preliminary levy and divide it by the fully taxable tax capacity to get the 2025 proposed tax rate.
2025 Proposed Tax Rate - Property Tax Effect – The 2025 proposed tax rate is 75.044 while the 2024 tax rate is 71.978. This means that on $100,000 estimate market value would see a $22.00 increase in 2025 taxes compared to 2024. This means that on the $200,000 estimate market value would see a $55.42 increase. This means that on the $300,000 estimated market value would see a $88.684 increase. This means that on $400,000 estimated market value would see a $105.55 increase. However, most residentials properties saw a 2-4% increase in valuation. So, the tax rate change increased 3.066%. A 2%-4% increase in valuations would lead to increase of 5.066% to 7.066% in City portion of the property tax increase for 2025, depending on valuation increases from the previous year.
Boulton asked if the City Council had a consensus to keep or lower the final property tax levy. The Council set the levy at $1,170,000, up from $1,070,000 from 2024 (9.35%). There was no consensus on a change to reflect in the December City Council agenda packet.
Enforcement Process – Mead Johnson - Reckitt – 330 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 October. 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 has to 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.
Flotterud stated that he and Kennedy had received estimates on State Bid for a Ford F-250. The base price for gas is $50,000 while the base price for diesel is $59,132. Flotterud stated that the ¾ pickup will be 5 years old in 2025. Flotterud stated that the City should be able to sell the current truck for at least $25,000 with it being purchased on State Bid for $35,000 in 2020. Flotterud stated that the warranty would soon be up and that maintenance is costly, including $2,000 for tires. The vehicle has 20,000 miles and is now a liability. Flotterud stated that the City should be buying new trucks and selling old trucks every three years. Flotterud stated that the City could work with potential buyers to choose the accessories to get a truck that the public would want to buy. Flotterud stated that the City would still go through the legal process to sell, but would have a better idea for the desired accessories. Ohr stated that potential buyers do not want the base model but rather most of the bells and whistles. Flotterud and Kennedy stated that the next pickup would not have to be a ¾ ton. Kennedy stated that the F-550 could pull any trailer. Kennedy stated that the current F-250 was purchased because the 2000 Chevrolet one-ton was the only vehicle that could pull trailers. The City only needs two pickups that can pull heavy trailers. Flotterud stated that the truck purchases should be treated like a lease to always keep a new vehicle around for the lowest cost. Flotterud stated that the City has a great deal in leasing the John Deere Skid Loader. Flotterud stated that the City could pay for the new truck out of the revolving fund loan account that has $66,000. Flotterud stated that the account could be paid back with the sale of the old truck. Boulton stated that there is a $25,000 to $35,000 gap and that this would take cash away. Boulton cautioned that the City Council should consult with the EDA before thinking about spending these funds as they are intended for economic development. Boulton stated that the City does have a street equipment fund which will levy $45,000 in 2025. Boulton stated that this money and funds from street capital and levy for future street projects are dedicated toward the 2025 street shop rehab. Boulton stated that the truck purchase should go through the capital improvements planning process. The City could make this a priority in 2026 with street capital funds. However, the City would either need to spend cash in 2025 or not complete the street shop rehab project in 2025. Boulton stated that over the next five years the City will be spending much of the built-up cash to finish out the well house project, paying off planned debt service payments, and future regional sanitary sewer project. Boulton stated that the Council must be careful to keep up cash flow and cash reserves. Boulton stated that the Council may not have the capacity to increase the levy and/or utility rates in the future due to lack of growth. Holmes agreed that trading trucks is a great idea but that it does not fit into the 2025 budget and that spending reserve funds is not wise.
*Next City Council meeting on 12/9/2024
Adjourn: At 8:26 PM a motion to adjourn was made by Ohr and seconded by Flotterud. Passed 5-0-0.
Signed: Attest:
_____________________ ____________________________________
Ryan Holmes, Mayor Michael Boulton, City Administrator
