CITY OF WANAMINGO
City Council Regular Meeting
Monday, March 14, 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
Deputy Clerk: Karen Masters
ABSENT: None
ALSO PRESENT: Brad Kennedy, David Friese – News Record, Todd Greseth – Goodhue County Commissioner, George Eilertson – Northland Securities, and Brandon Theobald – WHKS.
ADOPT AGENDA: Ohr motioned to adopt the agenda, seconded by Dierks. Passed 5-0-0.
CONSENT AGENDA: Dierks motioned, seconded by VanDeWalker. Passed 5-0-0.
PRESENTERS:
A) Brad Kennedy reported on:
1) Changed out twenty-six water meters this past month.
2) Ordered tri-pod and winch set for potential confined space entry
3) 3rd Street E leaking water service line repaired by Schumacher Excavating, Inc. The well is pumping roughly 20,000 gallons less of water per day after the leak was repaired. The street and curb/gutter where water was disappearing will be observed this spring and determined what repairs will need to be completed later this year.
4) Two pumps were repaired by Olson Motors at the WWTP
5) Trimmed trees hanging out over the streets along West Avenue and High Avenue
6) Starting to paint walls for Heidi Smith, new tenant, at the Wanamingo Medical Center
7) Plowed snow, scraped ice, and sanded streets on a number of occasions.
8) Route 60 Plumbing & Heating repaired two of the four radiant heaters at the street shop building. The City received and approved a $3,100 quote from Route 60 Plumbing and Heating to replace one of the radiant Heaters that is beyond repair.
B) Brandon Theobald, City Consulting Engineer of WHKS, reported on:
1) Presented the bids from the Wellhouse and Water Main Looping portions of the 2022 Utility Improvements Project
2) The Well House apparent low bid was from The Joseph Company, Inc. for $756,900. The engineer’s estimate for the project was $580,000 (difference of $176,900 more in costs).
3) The higher bid compared to engineer’s estimate was due to higher than foreseen costs with the pumps and control system costs.
4) The Water Main apparent low bid was from R.A.W. Construction for $425,501.25. The engineer’s estimate for the project was $500,000 (difference of $74,498.75 less in costs).
5) The total 2022 Utility Improvements project costs are up roughly 12% ($2,729,531 from $2,434,000) from the original engineer’s estimate that WHKS had produced for the City in early 2020.
6) Each of the well house bidders were concerned with the completion date and asked if it could be pushed back to 2/1/2023 in order to obtain and install the controls and pumps (due to supply chain issues). Theobald instructed the contractor that if the project pushed into winter that there will need to be temporary controls to operate the well pumps with the new water tower.
VanDeWalker asked if WHKS has worked with R.A.W. Construction in the past. Theobald stated that R.A.W. Construction had struggled with a City of Zumbrota project a couple of years ago. The Zumbrota project was in the core of town. This Wanamingo project is all out in the open without challenges of road repairs, curb/gutter, sidewalks, and boulevards that comes with reconstructing urban areas. Holmes asked what issues WHKS had run into with R.A.W. Construction. Theobald stated that there was detail work and communications on the Zumbrota project with R.A.W. Construction. Must of the restoration work with the project is straight forward. Theobald recommends entering into contract with lowest responsible bidders for each of the projects. Holmes asked what drove up the well house bids. Theobald stated that changes on well house number three were not included in original estimate, that the plans for the controls were more complex than originally thought, and that there were only two contractors interested in bidding. Theobald stated that WHKS has a good working relationship with The Joseph Company. Flotterud asked if the Mingo View tower would be operational until the new tower is operational. Theobald stated that the contracts state that there needs to be continuity within the water system and that both current towers will be in operation until the new tower is in full operation. Dierks asked if WHKS had any additional concerns with the project. Theobald stated that he has concerns water line breaks with the estimated additional 15 PSI within the water system. The City will need to monitor and potentially address these leaks if they occur. VanDeWalker thanked Theobald for his help on questions related to service with the private utilities (WiFi services) on the current water tower. Theobald stated that all private utilities responded to the private utility meeting. The WiFi providers are planning in advance for the move to the new tower once they are given the green light. WHKS staff and the tower contractor will be assisting the private utilities on the transfer. Holmes asked if there is conduit within the new tower for these services. Theobald stated that there is conduit within the new tower for cables/lines which run adjacent to the ladder system leading up to and through the tank. Flotterud asked if it was even possible for the City to not pick the lowest bidder if there were concerns with a given contractor. Theobald stated that the City would need to have had prior issues with a contractor in order to declare the contractor to not be responsible. Even so, the City would open themselves up to litigation defending the reasoning to declare a contractor not responsible.
C) George Eilertson – Northland Securities, reported on:
1) Lead 2022A Series Bond discussion
2) The bond amount is $2,729,531-$115,938 (ARPA Funds) = $2,693,593 needed.
3) The Council would like to have roughly a $150,000-$155,000/year bond payment. This would allow the City to have either a 23-year or 24-year payment schedule with the current market.
4) Interest rate have continued to tick up since December
5) Standard & Poor reaffirmed the City’s ‘A’ stable bond rating which will be enhanced to a ‘AAA’ bond rating from the State of Minnesota
6) The City Council approved a resolution with the State of Minnesota enhanced bond rating program in which the City stated that it would not exceed $2,600,000 in bond issuance in February.
7) The final bids placed the total financing needs at $2,814,531(2,729,531+$85,000 issuance cost)-$115,938(ARPA Funds) = $2,698,593. This leaves the City with $98,593 not financed through bond and ARPA fund.
8) The City has options: A) To go back to the State of Minnesota with a new resolution to increase the bond issuance total. B) Pay for the difference all or partially out of the 601 Water Fund. C) Place a re-offering premium on the bond to cover a portion of the funds not covered.
9) Re-Offering Premiums bring the City additional cash up front and offer a higher interest rate to the investor.
10) Issuing $2,600,000 bond right now with a 24-year payment schedule the market would provide a 2.9% average interest rate and roughly $152,000/year payments
12) There is time for the Council to decide how to pay for the remaining $98,593 balance with regards to the options before the 3/21/2022 Wanamingo Special City Council meeting.
13) The 3/21/2022 Wanamingo Special City Council meeting will have the bond issuance resolution for the City Council to consider.
The Council did not wish to go back to the State of Minnesota with a new resolution to increase the bond issuance total. Boulton stated that the water fund is projected to end 2021 with roughly $100,000 in cash after the fund fronted over $40,000 in 2021 project engineering design expenses for the 2022 Utility Improvements Project. Boulton stated that the water fund could absorb up to the $98,593 project costs not financed through the issuance of the bond or the ARPA funds, depending on the Council direction. The water fund paid off bonds in 2020 ($31,000/year), 2021 ($101,000/year), and 2022 ($23,000/year) that will pay toward the Series 2022A Bond. In 2020 and 2021 the fund is both building up a balance and paying for the replacement of all water meters (roughly $150,000) in Wanamingo.
NEW BUSINESS:
RESOLUTION:
22-018 = Approving 2022 2nd Quarter Work Plan: VanDeWalker moved to approve, Seconded by Flotterud. Passed 5-0-0.
22-019 = Certifying Delinquent Utility Bills and Other Services to Goodhue County Auditor for Collection with 2023 Real Estate Taxes: Dierks moved to approve, Seconded by Flotterud. Boulton stated that the original certification list included five parcels. This twice a year process pushes those behind to get paid up. The list narrowed to one for certification. Mayor Holmes asked if anyone wished to contest the certifications. No input was given. Passed 5-0-0.
22-020 = Approving American Rescue Plan Act (ARPA) City of Wanamingo Funds to be Allocated to the 601 Water Fund to Offset the 2022 Utility Improvements Project: Ohr moved to approve, Seconded by VanDeWalker. Passed 5-0-0.
22-021 = Receiving Bids and Awarding Bid for the 2022 Utility Improvements Project Well House Portion: Flotterud moved to approve, Seconded by Ohr. Passed 5-0-0.
22-022 = Receiving Bids and Awarding Bid for the 2022 Utility Improvements Project Watermain Portion: Dierks moved to approve, seconded by Flotterud. Passed 5-0-0.
22-023 = Approving City of Wanamingo Redefined Boundaries and Re-Establishing the Polling Place Location as Part of the Minnesota Redistricting Plan: Dierks moved to approve, seconded by VanDeWalker. Holmes stated that the City of Wanamingo will no longer be represented by Mike Goggin as the State Senator or Steve Drazkowski in the State House of Representatives. Holmes stated that the City of Wanamingo would be represented by John Jasinski in the State Senate and Brian Daniels in the State House of Representative, if re-elected in November. Administrator Boulton has reached out to Senator Jasinski and Representative Daniels to build relationships. Passed 5-0-0.
OLD BUSINESS:
Public Hearing - Mayor Holmes opened Ordinance #198 – Water and Sewer Regulation Hearing at 7:40PM. Boulton stated that WHKS had provided suggested changes to the proposed Ordinance since the February City Council meeting. The changes have circulated between the City Attorney David Jacobsen, the City Licensed Sanitary Sewer District Operator Richard Turri, City Staff, and back to Brandon Theobald. The suggestions have been agreed upon but have not been included in a final draft. Boulton stated that changes would be made and that the final draft will come in front of the City Council at the April 11th City Council meeting. Theobald stated that the agreed upon changes include fats and greases section (Fog), requiring interceptors, and prohibiting flushable wipes. Boulton stated that the reason for rewriting the Water and Sewer Regulation section of the Code of Ordinance is part of a comprehensive plan to address the MPCA Compliance Evaluation Inspection Report with Letter of Warning. Part of the response included that the City would review and make necessary ordinance changes to address the monitoring and enforcement of limits on CBOD, TSS, and Phosphorus levels on large industrial users. The proposed ordinance sets those standards and puts in place a fine schedule if exceeded. No additional public comments offered. Mayor Holmes closed the public hearing at 7:46PM.
ORDINANCE #198 – Water and Sewer Regulation – 2nd Reading. Mayor Holmes noted that the proposed ordinance would be tabled for a third reading at the April 11th City Council Meeting.
The Wanamingo Fire Relief Association Vintage Snowmobile Ride, Chili Cook-Off, and Bean Bag Tournament went very well. Attendance was slightly down from previous years due to the warm weather and lack of snow. Michael Boulton and Cobus Peens made the competition chili on behalf of the Wanamingo City Council. The City Council chili did not place in the cook-off event but was well received.
* Special City Council meeting on 3/21/2022 at 7:00PM - Resolution 22-024 - Awarding the Sale of State Enhanced Water Revenue General Obligation Improvement Bond, Series 2022A, in the Original Aggregate Principal Amount of $2,600,000; Fixing its Form and Specifications; Directing Its Execution and Delivery; and Providing for its Payment
*Next City Council meeting on 4/11/2022 at 7:00pm.
Adjourn: At 7:48PM a motion to adjourn was made by Dierks and seconded by Flotterud. Passed 5-0-0.
Signed:
Ryan Holmes, Mayor
Attest:
Michael Boulton, City Administrator
