CITY OF WANAMINGO
City Council Regular Meeting Monday, December 11, 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, Stuart Ohr, Jeremiah Flotterud, and Rebecca Haugen
City Administrator: Michael Boulton
Deputy Clerk: Karen Masters
ABSENT: None
ALSO PRESENT: Brad Kennedy, Beth Haas – Zumbrota News Record, Goodhue County Deputy Matul, and Brandon Theobald - WHKS.
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) Changed out Main Street banners from City logo to holiday theme
2) Put up Christmas/Holiday snow flake lights on Main Street light poles
3) Main Street flag brackets are in rough shape either require significant repair or replacement
4) Picked up and put away Main Street benches and garbage cans. Three of the benches are beyond repair and will need to be scrapped and pieces salvaged to repair other benches.
5) Two loads of thick biosolids were hauled into the WWTP to reseed the microorganisms. The WWTP operations process is running better than it has in the last couple of weeks. This includes being significantly under the State wastewater discharge limits. The past 2-3 months have included being over for the monthly average on wastewater discharge limits.
6) Insulated City shop behind City Hall with foam boards and patched holes to keep out birds and rodents. This should help with heating costs this winter.
7) Street Sweeper has been gone through, fully serviced and should be ready for next spring. Replaced curb brush, springs for the main broom, new filters, along with rubber slides for the main broom. The machine has been fully washed and greased.
8) Continuing to trim trees on 3rd Avenue and alleys. Will be trimming additional trees on Hill Avenue, 440th Street, Riverside Park, and other various areas around town.
9) River Road Repair completed repairs to City dump truck. The sander has been installed and has been utilized a couple of times on the light snow falls
B) Eddie Matul – Goodhue County Deputy Sheriff reported on:
1) Has been with the sheriff’s office for three years.
2) Goodhue County Sheriff’s squad car parked behind City Hall during officer training
3) Five deputies are currently in training. Three more new deputies will begin training in the near future. Three deputies will be retiring in the near future as well.
Boulton stated that Patrol Major Johnson and Chief Deputy Huneke met on December 1st. There will be regular meetings on the 1st even month Friday to discuss concerns, share data, and ensure that that City is getting what they require for policing services. Boulton stated that he is developing a policing list for Wanamingo that will include daily tasks, seasonal tasks, and how to deal with certain City code violations. This will assist with new officer training.
NEW BUSINESS:
Public Hearing - Mayor Holmes opened the 2024 Budget & Levy Public Hearing at 7:12PM. Administrator Boulton provided a written memo of the Preliminary/Proposed 2023 Budget, budgeting and levy process. The overall levy is proposed to increase 9.18% from $980,000 to $1,070,000. The Revland Alignment expansion increased it’s taxable value by an estimated $135,300 with 2022 expansion. This would bring in roughly $5,547 (slightly less than half City portion) in property taxes (0.041). New construction within the community over the last year (7 new taxable homes in 2022) should aid with the increase to the taxable market value increase.
Maple Island/Mead Johnson TIF will be de-certified and placed back in the tax levy pool. In 2022, there was
$80,000 TIF generated. The City portion is roughly half of the generated TIF; $40,000. The new construction and captured TIF that has been de-certified should off-set roughly 2/3 of the proposed levy increase (6% of the proposed 9.18% increase). In 2025, Reckitt improvements at the Wanamingo Medical Center, Casey’s interior work, Beulke’s new green house, Zumbro Valley Landscaping new salt/sand shed, along with addition residential growth (7 new homes) will continue to expand the tax base. Goodhue County calculated the 2024 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 $1,389,590 (includes TIF) to $1,494,529 (Includes TIF) a 7.55% increase. Wanamingo Market Value will go from $125,912,600 to $136,012,400 or an 8.02% increase. The tax pool (what the levy gets divided out by) will go from $1,303,406 to $1,408,016 or an 8.02% increase.
The tax rate is proposed to go from 75.256 to 71.959 or a decrease of 3.297%. The Wanamingo City Council proposed levy increase to $1,070,000 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 a decrease of $23.66 for $100,000 value, a decrease of $41.60 for $150,000 value, a decrease of $59.60 for
$200,000 value, and a decrease of $77.57 for $250,000 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 5%-10% increase in valuations from 2022 to 2023. This would show changes on the low end of value increases to roughly $15 for
$100,000 home, $25 for a $150,000 value home, $30 for a $200,000 value home, and $40 increase for $250,000 value home. It would show increases of $50 for $100,000, $80 for $150,000 value, an increase of $105 for
$200,000 value, and an increase of $135 for $250,000 value City portion of a property tax increase per year) on the high end. The new commercial and residential growth in 2022 helps offset the levy increase from going onto existing property owners. Boulton stated that LGA is proposed to increase by roughly $25,000 from 2023 to 2024. Boulton stated that inflation makes 2024 budgeting harder for the general fund than 2023. Boulton stated that increases to utilities, salaries, ambulance levy, fire, police, 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 had ordered a 550 Ford Truck with accessories for a new plow truck to be delivered and paid for in 2024. The total cost is roughly
$145,000. Boulton suggested that the half-ton truck be ordered in 2024 to replace the unsafe 1999 Ford Ranger that is barely limping along. Boulton estimates the half-ton truck will cost $45,000. Boulton stated that the City needs additional growth to help offset these levy increases moving forward. Boulton stated that Dan and Annette Fritz had provided a written statement requesting the City Council to consider a lower final levy increase than the proposed levy increase of 9.18%. The Fritz’s stated that inflation was hitting citizens hard.
The Fritz’s understand that inflation is also hitting the City. Holmes stated that the combination of inflation and planning for future needs is the reason for the proposed levy increase. Flotterud asked how much the general fund was proposed to increase. Boulton stated that the general fund portion of the levy was proposed to increase by $52,000, the LGA was proposed to increase by roughly $25,000, while interest was projected to increase by roughly $40,000, with projected other income decreases of roughly $7,000. The total new revenue would be 110,000. Flotterud stated that the proposed new revenue was a lot of new money. Boulton stated that the proposed general fund increase would be roughly 15%. Boulton stated that street maintenance, capital, and inflation were driving factors in the proposed general fund budget for 2024. Flotterud asked how much was budgeted for street maintenance (crack filling/chip sealing/manhole repairs). Boulton stated $67,000 in 2024, up from $50,000 in 2023. Flotterud stated that the street maintenance fund seems to always be utilized in other areas or pushed off for future years. Boulton stated that the City spent over $70,000 in street maintenance in 2023, mainly on manhole repairs and minor asphalt patching. Boulton stated that the plan is to increase the street maintenance plan in coming years to $80,000/year. Flotterud asked why so much in street maintenance. Boulton stated that the $80,000/year number is what the Capital Improvements plan shows in addition to street reconstruction projects in either 2025 or 2026. Boulton stated that the proposed 2024 infrastructure
improvements for Dollar General could push back the next reconstruction project a year or two for financing purposes. Boulton stated that there is roughly $130,000/year of debt service that will be available, stating in 2024/2025 with additional debt service payments falling off in 2025(2), 2026 (2), and 2027 with the levy portion totaling $169,000/year. Ohr stated that the City needs to plan for and be ready in case the economy takes a downturn and either LGA gets cut or a significant portion of the property taxes are delinquent in future years. Ohr stated that each fund should be prepared for rainy days. Ohr stated that $67,000 or $80,000 does not go very far in street maintenance. Theobald agreed that $80,000 does not go far in street maintenance work.
Theobald stated that street reconstruction costs are estimated at $1,000 a foot. Ohr stated that many of the streets need base work completed, which is significantly more expensive that crack filling/seal coating/manhole repairs. Holmes stated that the City has had growth and has a TIF district that has been decertified that significantly add to the tax base. Holmes stated that the growth and TIF funds should be captured because the next couple of years will not have the same growth or significant TIF districts being decertified. Holmes stated that that the growth and TIF decertification covers 2/3 of the proposed increase. Ohr stated that he prefers small property tax increases like $100/year that has been proposed for 2024 rather than $0 one year and +$500 the next. Flotterud asked why the projected 2025 levy has 7.94% proposed increase. Boulton stated that the 7.94% increase reflects the proposed increase of policing by Goodhue County for a Sheriff contract. Boulton stated that this number was included to start discussions for both budgeting and policing contract negotiations. Mayor Holmes closed the public hearing at 7:22PM.
RESOLUTION:
23-073 = Adopting Final 2024 Budget: Dierks moved to approve, Seconded by Ohr. Passed 5-0-0.
23-074 = Certifying Final Tax Levy for 2024: Ohr moved to approve, Seconded by Haugen. The 2023 levy would go from $980,000 to $1,070,000 ($90,000 increase or 9.18%). Passed 5-0-0.
23-075 = Approving Fire Department Budget & Township Budget Contract Allocation Formula for 2024:
Haugen moved to approve, Seconded by Flotterud. Passed 5-0-0.
23-076 = Approving Licenses (Cigarette & Liquor) for 2024: Dierks moved to approve, Seconded by Flotterud. Passed 5-0-0.
23-077 = Adopting 2024 1st Quarter Maintenance Work Plan: Ohr moved to approve, Seconded by Haugen. Passed 5-0-0.
23-078 = Approving Smith Schafer Engagement Letter for 2023 Audit: Ohr moved to approve, Seconded by Dierks. Passed 5-0-0.
23-079 = To Not Waive the Monetary Limits on Tort Liability Established by Minnesota Statutes 466.04:
Ohr moved to approve, seconded by Flotterud. Passed 5-0-0.
23-080 = Approving a Land Lease Agreement with Kenyon-Wanamingo School District, No. 2172, for the Operation of an Ice Rink and Warming House: Ohr moved to approve, seconded by Haugen. Passed 5-0-0. 23-081 = Approving A Proposed Municipal Prosecution Legal Services Billing Change with Jacobsen Law Firm, P.A.: Haugen moved to approve, seconded by Dierks. Boulton stated that the proposed prosecution legal services billing increase is for $150/month. Passed 5-0-0.
Ordinance #204 – Renewing Northern States Power Company (Xcel Energy) Electric Franchise Agreement – 1st Reading - Administrator Boulton explained that the current 20-year Franchise agreement with Xcel Energy is expiring and needs to be renewed. Boulton stated that the current franchise agreement is coming to an end. Boulton stated that there was language requiring Xcel Energy to move their lines, at their costs, when City infrastructure needs to be installed or moved. Mayor Holmes asked if the Council wished to see changes made to the proposed new franchise agreement before the January City Council. No changes were requested.
Ordinance #205 - 2024 Fee Schedule – 1st Reading – Mayor Holmes went over the recommended changes from 2023 Fee Schedule for the proposed 2024 fee schedule including increasing the water meter cost from
$340 to $360, increasing the water debt service/ base fee from $25/month to $26/month, increasing the sewer debt service/base fee from $22.00/month to $28.00/month, increasing bulk water from $7.00/1,000 gallons to
$15.00/1,000 gallons, increasing the monthly garbage fee from $16.25/month to $16.50/month, and increasing the monthly recycling fee from $6.65/month to $6.85/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 monthly water base rate/debt service fee increase of $1.00/month to water for each hook-up would bring in roughly
$7,000/year more for water in 2024. Boulton stated that the proposed monthly sewer base rate/debt service fee increase of $6.00/month to each hook-up would bring in roughly $43,000 in new revenue in 2024. The bulk water proposed increase reflects the staff time to set up a meter on a hydrant for the bulk user. The garbage and recycling monthly increase reflect the yearly contract increases with Waste Management. 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 in the near future 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.
Boulton provided background on the wastewater treatment facility operations the past few months. Boulton stated that the Wanamingo staff have been monitoring the wastewater discharge from Reckitt-Mead Johnson since March 2023. The results show extremely low and at times high pH levels along with 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 a solution to bring the pH levels within the limits. The City appreciates the open dialogue and work, to date, from Reckitt- Mead Johnson.
During the above-mentioned monitoring time period, the Wanamingo wastewater treatment plant operations have failed several months of State treatment discharge limits. City staff have attempted several potential trouble shooting options. A comprehensive list of staff actions was provided to the Council for review. After numerous corrective action steps, the South side digester of the facility coming from the community wastewater discharge seems to be improving. However, the Reckitt-Mead Johnson diverted wastewater discharge to the North side digester continues to have operational problems seemingly due to consistent low pH levels. The City has kept the Minnesota Pollution Control Agency informed during this process. The City is required to be within the discharge limits or show significant steps toward getting back under the discharge limits. The next step is to provide formal notice to Reckitt-Mead Johnson with a formal timeline to correct the pH violations.
Administrator Boulton and Richard Turri put together a proposed letter outlining the violation notice and corrective action plan. From City staff and Reckitt-Mead Johnson discussions, it sounds like Reckitt-Mead Johnson is well on their way to meeting the corrective action plan and assisting the City to keep under the wastewater discharge limits.
Flotterud asked if the pH issues have happened at the plant before. Kennedy stated that Reckitt-Mead Johnson started a different cleaning process around the time issues started to occur with the pH levels. Kennedy stated that the MPCA does not regulate QAC’s and that best practices should be utilized by businesses. Kennedy stated that the MPCA may regulate QAC’s in the future because of the widespread issues at wastewater treatment facilities showing high concentrations which lead to microbiological bacterial organisms dying off. These microbiological bacterial organisms are part of the treatment process at the wastewater treatment plant. Long periods of low pH levels (3-4) lead to the microbiological bacterial organisms dying off. It is important to not see sustained low levels of pH. Kennedy stated the sustained high level of pH doesn’t have the same effect on the microbiological bacterial organisms but is considered toxic waste. The City sampler collects samples every hour for twenty-four hours. Flotterud asked if the City and Reckitt-Mead Johnson could see the samples in real time. Kennedy stated that samples are gathered and tested every twenty-four hours. Kennedy stated that Reckitt-Mead Johnson should set up real-time testing/results onsite to treat the waste and ensure that the pH is within the required limits. Ohr asked if testing costs and fines had been imposed onto Reckitt-Mead Johnson.
Boulton stated that testing costs and fines had not been sent onto Reckitt-Mead Johnson. Boulton recommends sending the violation notice and allowing a corrective action time period. Boulton stated that if the problem continues after this time period, the City Council could direct actions such as fines, blocking sanitary sewer service pipe, or take legal action. Kennedy stated that it is hard to identify the problem beyond pH violations. The City can make Reckitt-Mead Johnson correct the pH issues, but the plant could still have operational problems. Kennedy stated that the City waste is going into the South digester and Reckitt-Mead Johnson’s waste is going into the North side digester. The microbiological bacterial organisms were reseeded, and the
operations are now running well in the South digester. The staff has re-seeded both digesters a number of times. The North digester continues to have operational issues. The latest troubleshooting fix was not to run the sampler out of the North digester. By doing this one day it sends over 20,000 gallons of waste from the North digester to the South digester. This cross contaminates the tank and must be enough for the microbiological bacterial organisms to die off. Flotterud moved to approve the drafted letter to Reckitt-Mead Johnson and send it off with copies of the monthly pH levels, seconded by Ohr. Passed 5-0-0.
OLD BUSINESS:
Theobald updated the Council regarding possible Dollar General development of the 14.8-acre parcel along MN TH 60. Theobald, Administrator Boulton, Public Works Director Kennedy, Mayor Holmes, and City Attorney Julie Eddington – Kennedy & Grave have had meetings with Dollar General Developer (First Links LLC) and consulting engineers (Kimley-Horn). Theobald put together estimated costs to construct Hill Avenue from MN TH 60 to Beverly Street with a regional stormwater pond along with bypass and turn lanes at MN TH 60. The costs were higher than expected. Construction of Hill Avenue and a regional storm water pond were roughly
$600,000 while the bypass and turn lane was roughly $400,000. MnDOT may ultimately not require a bypass lane which could save $200,000. There could be additional savings with respect to configuration of the regional stormwater pond/piping, reduced mobilization costs, and better than expected bidding. The $1,000,000 total cost would include all potential costs. The City has agreed to a cost share for the infrastructure costs. Theobald stated that the City/EDA would obtain the residual 5.19-acre lot on the East side of Hill Avenue and 4.04-acre residual lot on the West side of Hill Avenue. The City would have additional access for traffic to access MN TH 60. Boulton stated that Dollar General would benefit by utilizing the best portion of land for development and leaving the City with a flag shaped parcel on the West side of Hill Avenue. Theobald stated that a sidewalk was figured into the costs from Beverly Street to MN TH 60 on the West side of Hill Avenue. Theobald stated that the Beverly Street intersection to property line on Hill Avenue would need to be reconstructed. A meeting has been scheduled with Goodhue County Soil and Water to discuss wetland delineation. Dollar General would like to be open late next fall. This is a short schedule and there is a lot of planning, design, and engineering work that needs to occur to meet this schedule. Ohr asked what #22 & #24 - adjust sanitary sewer and sanitary and water service meant in the cost estimates. Theobald stated that the buried sanitary manhole in the field would need to be adjusted to grade to build the road. Theobald stated that there would need to be water and sewer service stubs installed for Dollar General and the other parcels. Flotterud stated that the project was a no brainer. Flotterud asked about any possible risk. Theobald stated that there is a $500,000 risk for the share of development if the lots are not sold and developed. Boulton stated that the City would need to have a preliminary development agreement with Dollar General to proceed with the engineering work for Hill Avenue, regional stormwater, along with bypass and turning lane work. The City needs to ensure that Dollar General will pay their half of the infrastructure and engineering work even if they do no exercise their purchase agreement as planned in May/June 2024. A formal development agreement with Dollar General will be completed after the sale of the land. Haugen stated that the proposed development seems a like a no brainer.
Holmes stated that Hill Avenue needs to be constructed from Beverly Street to MN TH 60 if Dollar General wishes to move forward. The proposed Dollar General would be considered a marketplace and have extra coolers for groceries. Flotterud asked if the neighboring properties had been notified. Boulton stated that the EDA had just been informed of the proposal and that it was too soon to inform the neighboring properties.
Theobald stated that a public hearing for preliminary plat would occur. Theobald stated that there would be concrete information to share at that time.
Mayor Holmes went over Administrator Boulton’s 2023 Wanamingo Economic Development Update Memo. 2023 saw interest rates jump significantly, slowing down residential and commercial expansion. Continued supply chain delays, shortage of labor, and high inflation continue to hurt the economy. Inflation, coupled with increases in the Fed’s rates have seen a slowing of the residential housing market. 2023 did see continued improvement throughout Wanamingo. The City has seen commercial building additions, a number of new homes, and infrastructure improvements. Reckitt Tax Increment Financing (TIF) district was decertified and will be included in the 2024 tax base. These additions and valuation increases have increased the City of Wanamingo tax base.
There were no major commercial building expansions in 2023. However, there were several minor projects. Midco installed a prefab building ($20,000) for their fiber cable network. Caseys completed interior work ($94,000). Beulke’s Greenhouse installed a new greenhouse ($25,000). Zumbro Valley Landscaping installed a new salt/sand shed ($10,000).
In the residential side we have seen seven (7) new home building permits issued in 2023. The seven homes have a collective building permit valuation of $971,000. The seven (7) units is considered a very good year of residential growth in Wanamingo. There have also been several new decks, mechanical work, new windows/doors, re-roofing’s, and other home improvement building permits in 2023. In total there have been 52 building permits with a total permit valuation of $1,758,000.
The City continues to work on the 2022 Utility Improvements Project. The new 250,000-gallon water tower project has been completed and is in warranty period. The watermain loops project still has punch list items to complete that may push into 2024. The new well house will hopefully be completed in 2024. The total cost of the project was $2.8 million. The City finalized replacement of roughly 575 water meters and/or endpoints.
The project was completed between 2021-2023. The total estimated cost was $160,000. The City completed manhole work for roughly $53,000 in 2023. The City spent $69,075.95 on repairing leaking water valves, asphalt patching, and concrete replacement work in 2023. The City constructed a new park shelter at Prairie Ridge estates in 2022/2023. The total cost of the project was $41,718.13. The City constructed a new salt/sand shed in 2023. The total cost was $30,231.32.
2024 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 is working with Bolton & Menk engineering to put together plans for construction.
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. Dollar General is purchasing the 14.8 acres along MN HWY 60 Stop lot with anticipation of constructing a Dollar General store in 2024. Casey’s plans to make additional improvements to the gas station/convenience location. There continues to be some interest in residential single-family dwellings. City Staff anticipates slowdown of construction in 2024 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.
*Next City Council meeting on 1/8/2024
*City Council discussed employee recognition event, usually held in January. Mayor Holmes and City Administrator are working on dates in mid-January to be hosted 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 2/5/2024 at 6:30pm
Adjourn: At 9:04 PM a motion to adjourn was made by Ohr and seconded by Haugen. Passed 5-0-0. Signed: Attest:
Ryan Holmes, Mayor Michael Boulton, City Administrator
