CITY OF WANAMINGO
City Council Regular Meeting
Monday, July 22, 2024 6:00 P.M.
Wanamingo City Council Chambers – 401 Main Street
Wanamingo, MN
CALL TO ORDER: Mayor Holmes @6:00PM
PRESENT: Council: Ryan Holmes, Stuart Ohr, Jeremiah Flotterud, Rebecca Haugen, and Eric Dierks (Late)
City Administrator: Michael Boulton
ABSENT: Deputy Clerk Karen Masters
ALSO PRESENT: Brad Kennedy and Buffy Beranek (SEMMCHRA)
ADOPT AGENDA: Ohr motioned to adopt the agenda, seconded by Haugen. Passed 4-0-0.
PRESENTERS:
A) Buffy Beranek – SEMMCHRA – Heritage Hills Report
1) Presented 2024 projected expenses and transfers from the Operating Reserve Fund – required yearly as part of transfer agreement.
2) Operating losses and capital for 2024 are projected at being up to $13,868.00
3) In the past 15 years since SEMMCHRA took over operations the City of Wanamingo has contributed $403,195 toward operations of the facility
4) SEMMCHRA is asking for a transfer of up to $38,868.00 from the operating reserve for projected losses and capital expenditures. The capital items include air conditioning core, flooring, outside tiling, and replacement of aging appliances. There is also higher budgeting for ground maintenance, snow removal, and utilities.
5) 2025 Levy Request will be $25,000.
6) There were not many capital item expenditure items in 2024.
7) Not quite there to refinance the facility and end the City levy. If the interest rates fall the bonding agency staff are watching to move on the refinance.
8) Small Cities Grant surveys are out. Roughly 30% of the surveys have been returned. Please let residents know to submit the surveys as soon as possible. The greater the return of surveys the greater chance of receiving $600,000 grant for low-income housing rehab. SEMMCHRA will advertise and look to work with local contractors on rehab projects in Wanamingo.
Boulton asked what the expected rent increase would be for 2025. Beranek stated that the rent increase should be $75 per month but that it would likely be $40-$50 per month. The current rent on a one-bedroom apartment at Heritage Hills is $820 per month. The increase in rent should help offset new costs. The modest increase should help maximize the section 8 reimbursement rate as well.
NEW BUSINESS:
1) 2025 Budget discussions
A) City Council looked at the staff proposal of the 2025 proposed budget, Memo on 2025 proposed budget, and proposed 2025 levy. The proposed increase to the levy is 9.35% ($1,070,000 to $1,170,000). There are concerns with additional inflation along with addressing future capital needs. The general fund, Street Capital, EDA, Debt Service Fund 332, and Debt Service Fund 336 are proposed to increase as part of the 2025 levy. The City will no longer levy for Debt Service Fund 328 or the Debt Service Fund 331.
B) Administrator Boulton explained several line items that had either changed from the previous year or needed an explanation. The proposed wage increases were roughly 6% while proposed health insurance increases would 10%. The fire department budgeted expenses are proposed to increase by roughly $6,294.48 (5.09%) from 2024. There are no scheduled elections in 2025. Proposed employee pay raises will roughly average 6% ($21,000 – general fund is roughly 60%). The ambulance contract is expected to increase from $16,695 in 2024 to $19,478 in 2025 ($2,783 increase). The police contract under 6 hours per day is expected to increase from $127,873 in 2024 to $192,198.70 in 2025 ($64,255.70 increase). With 5 hours per day is expected to increase from $127,873 in 2024 to $160,107.25 in 2025 ($32,234.25 increase). Public safety is expected to increase from a range of roughly $41,000 to $73,000. The proposed $75,000 street maintenance (seal coating) project and $10,000-$15,000 Prairie Ridge Estates Park Equipment (playground equipment in 2025 or 2026). The street shop rehab work is estimated to cost $200,000. $140,000 is planned to be spent out of the 336 Fund while the remainder of $60,000 will come out of the Street Capital budget ($80,000 in 2025).
C) Administrator Boulton explained that the new Midco Utility Building increased is taxable value by an estimated $20,000, Zumbro Valley Landscaping New Salt Sand Shed increased taxable value by an estimated $11,000, Beulke new greenhouse increased taxable value by an estimated $25,000, and Casey’s remodel increased taxable value by $94,000 in 2023. This would bring in roughly $5,740 (slightly less than half City portion) in property taxes (0.041). The improvements at the Wanamingo Medical Facility will be captured in additional TIF. New construction within the community over the last year (7 new taxable homes in 2023) should aid with the increase to the taxable market value increase. The new construction should off-set roughly 1/5 of the proposed levy increase (1.75% of the proposed 9.35% increase). The Council will see how the finalized 2025 market value rates compared to the proposed levy increase will affect property values based on $100,000 levels in October. The Council will be setting the initial levy at the August meeting and could stay at the same levy amount or decrease at the December meeting. The Council could not increase the levy from August to December.
D) Boulton stated that Local Government Aid (LGA) certified amounts would increase from $302,161 in 2024 to $302,415 in 2025. The legislature recently approved funding for Small Cities Assistance to communities under 5,000 population for use on road construction and maintenance. This formula has been periodically funded in recent years. The City of Wanamingo is set to receive close to the 2024 number, $22,900, in 2025.
D) Administrator Boulton shared concerns with continued inflation and meeting capital needs while balancing property taxes from rising too quickly. Boulton also shared concerns with not budgeting for dead tree removal from Emerald Ash Borer and Emerald Valley II Addition. Boulton stated that there are expenses coming involving both but the proposed levy would need to increase to nearly 20% ($200,000) in 2025 to be realistic in covering costs. Boulton stated that boulevard tree removal cost could be as high as $100,000 the next two years. Boulton stated that the City share of the Emerald Valley II Addition construction could be $50,000-$100,000. Boulton stated that the City could utilize TIF 3-1 Fund 448 and General Fund 101 to cover construction costs. The expectation would be future levy needs to pay back the funds.
Flotterud stated that the City should not pay for tree removal in boulevards. Boulton stated that the ordinance does place primary responsibility for care and removal on the adjacent property owner. Boulton stated that property owners have been calling City Hall and are not happy with the ordinance/policy of the City. Holmes suggested that the City could bid out all the boulevard tree removal costs for economies of scale. Holmes stated that costs cost be placed back to property owners in special assessments. The Council had concerns with special assessments for tree removal. Dierks stated that the dead trees would start to break off with high winds and storms in the future. Ohr stated that there were at least seventy-five dead Ash trees in the boulevards and more than that on private property. No consensus was provided on boulevard dead tree removal budgeting. Flotterud asked if a 2025 street maintenance project is planned. Boulton stated that there is $75,000 budgeted in 2025. A portion of the funds may be utilized for the street shop rehab. Kennedy stated that the remained would cover necessary small patches and repairs. Kennedy stated that we may need to either budget more funds for maintenance or save up a couple of years to do a worthwhile project. Flotterud asked where the sump pump inspection program and smoke testing would be paid out. Boulton stated that the costs would come from the Sewer Fund. Boulton stated that this would be the first step in identifying and correcting inflow & infiltration into the wastewater treatment plant. Boulton expects in the coming years that repairs will be made and paid for out of the sewer fund. The sewer fund is projected to have $650,000 by the end of 2024. Ohr stated that the repairs could cost more than the identification process but are necessary to save user fee costs with the proposed new regional wastewater treatment facility. Boulton stated that the plan is to slowly increase the sewer rates to build a reserve to pay some of the initial costs. Boulton also stated that the other reason was so rate increases are lessoned for residents at the time these projects are completed. Boulton also noted that the Council's intentions are to increase the utility rates incrementally for future wastewater treatment plant and clay sanitary sewer line replacements. Boulton recommends the water user rates increase from $6/1,000 gallons to $6.25/1,000 gallons. Boulton also recommends an increase on the sewer base rate from $26/month to $32/month along with user rate increase from $7.00/1,000 gallons to $7.25/1,000 gallons. Boulton noted that new construction probably will not continue at the same rate in the next few years and will in turn slow the levy growth. The tax rate growth should be captured in the levy now because 2026 and 2027 the levies should stay under 5% each year. Boulton stated it would be ideal for the increase in the 2026 levy to be inflationary plus capturing the new table market value (tax base) in the levy. The Council directed Administrator Boulton to bring the recommended budget and levy information at 9.35%, or $100,000 levy increase in the 2025 proposed Levy Resolution and 2025 Proposed Budget.
2) Administrator Boulton provided a memo regarding the proposed street shop rehab. The City Council identified that the City shop, located at 648 2nd Ave, is in need of rehab nearly ten years ago. The building was purchased in 2006 and has not had any major upgrades or improvements since. The building roof is split into two portions with steel on the newer portion of the building and rubber on the older portion. The maintenance staff have worked to seal up leaks in the roof, but the repairs are temporary. The siding is dented so badly that the only option is to replace large portions. The siding of the building is an extremely faded yellow with a red accent. The faded color of the siding does not present a welcoming entrance to the community as seen from the roundabout at MN TH 60 and MN TH 57. The building lacks the necessary insulation and proper sealing of doors and windows to be energy efficient. The office/break rooms lack climate control for record storage. The building does not meet MN OSHA standard for ventilation. The building should have a ventilation system since it stores six or more vehicles driven by combustion engines.
Potential items of rehab include roofing, siding, service doors, windows, overhead doors, gutters/downspouts, ventilation system, spot concrete work, and potential electrical work. The street shop building ventilation upgrade has been on the Capital Improvements Plan (CIP) since it was developed in 2014. The City Council added the entire shop building rehab project to the Capital Improvements Plan (CIP) in 2020. The City Council toured the City shop building in July 2023. The Council was able to see, firsthand, the condition of the building. The City Council moved up the project to 2025 on the CIP. The plan is to utilize a combination of the 2025 budgeted $140,000 set aside for debt service on the future street project (Fund 336), the 2025 budgeted $45,000 from the street capital (Fund 221), and the 2025 budgeted $75,000 general fund street & road expenses capital (Fund 101).
Mayor Holmes has appointed an ad hoc committee to work with Mitch Jackson of Tri Valley Construction, Inc. to identify the scope of work and put together estimates for the 2025 proposed Wanamingo Street Shop rehab project. The estimated rehab is roughly $180,000-$210,000, depending upon the final scope of work. In addition to the Street Shop Rehab numbers Mitch has estimated a new building would run $130-$150 a square foot. The current building is roughly 80’ x 80’ or 6,400 square feet. Brad Kennedy has a rough sketch of a new building being slightly larger; 120’ x 80’ or 9,600 square feet. A new, slightly larger, building would cost between $1,248,000 to $1,440,000 and would require a new site for construction. The Committee includes Mayor Ryan Holmes, Council Member Rebecca Haugen, Brad Kennedy, and Michael Boulton. The committee met at the Street Shop building with Mitch Jackson (Tri Valley) to review the building and proposed scope of work. The committee unanimously agreed that rehabbing the current building is more cost effective than construction. The committee recommends that the scope of proposed street shop rehab work include roofing, siding, service doors, windows, overhead doors, gutters/downspouts, office climate control, ventilation system, spot concrete work, and any potential electrical work. There would need to be several contractors that would need to be hired to complete the proposed scope of work. The roofing and siding could be completed by one contactor, the windows and service doors could be completed by another contractor, the overhead doors could be completed by another contractor, any concrete work could be completed by another contractor, the office climate control and ventilation system could be designed and completed by another contractor, and the electrical could be completed by another contract.
The committee will research State bid requirements with consultation with the City Attorney. Since this would be a cash project there are no requirements for an architect or engineer to been involved. The committee made initial contact with Goodhue County Building Permits and Inspection on the scope of the work. The committee was told that there would be no requirement for an engineer or architect based upon the proposed scope of work. The committee is inclined to recommend hiring Mitch Jackson of Tri-Valley Construction to act as the project manager to oversee, organize, and coordinate the proposed street shop rehab project. The plan would be to obtain no less than two quotes from contractors for each separate portion of the project. State law allows contracts under $25,000 to obtain quotes or do work in the open market, contracts between $25,000, to $175,000 at least two quotes are required, and contracts exceeding $175,000 must use the competitive bidding process.
The proposed street shop rehab project outlines the scope of work, rough budget, and how the project is proposed to be paid with City cash in 2025. The proposed project is built into the 2025 proposed budget. Once the 2025 budget is approved the committee could work putting together formal estimates/bids for the work and provide recommendations upon low bids and contracts to complete the work in December 2024/January 2025. Work could be expected to be completed between late spring and summer 2025. Flotterud asked how Tri-Valley construction would be paid. Kennedy stated that the estimates included general contractor costs. Boulton stated that the City Attorney stated that the City will be serving as the general contractor and possibly hiring a construction manager (Tri-Valley Construction) to supervise and advise on the project to reduce the total cost of the project. The City will likely request two or more quotes from each specialty contractor needed. There may be four or more specialty contractors that the city contracts with for a specific trade. The City Attorney recommends that this request for quotes separate out labor and materials. The City should purchase the materials directly to meet the criteria for the sales tax exemption with the Department of Revenue. Holmes stated that the estimates are a great deal for the size and scope of work. Kennedy stated that the roof would be commercial rib with no exposed screws, similar to the City Hall/Community Center roof. Haugen stated that Jackson was very thorough on the estimates and walk through. Boulton stated that Tri-Valley Construction has been either the general contractor or construction manager on most of the new commercial buildings or additions in Wanamingo for the last twenty-five years. Tri-Valley Construction has the experience and helps ensure a quality finished product.
RESOLUTION:
24-042 = Approving Residential and Commercial Solid Waste and Recycling Collection Request For Proposal (RFP), RFP Process and RFP Notice: Haugen moved to approve, seconded by Ohr. Boulton stated that along with Waste Management there were four other haulers willing to provide proposals for residential and commercial solid waste and recycling collection. The four other haulers include LRS, Highland Sanitation, Flom Disposal, and Harter’s. Boulton stated that the proposals would be sent to each of the haulers on July 23rd and would be due back on August 6th by 4:30PM. Boulton stated that a resolution approving the low-priced hauler would be included for consideration at the August 12th City Council meeting. Passed 5-0-0.
24-043 = Approving Updated 10-Year Capital Improvements Plan for the City of Wanamingo: Dierks moved to approved, seconded by Haugen. Capital Improvements 10-Year Plan Discussion took place. Items added in 2024 were the community center/city hall exterior rehab ($25,000), one-ton truck replacement ($65,000), Riverside Park parking lot ($200,000), and hydrant sandblasting and painting ($15,000). Boulton stated that the proposed 2025 levy would include funds for street shop rehab project. The funds will come from budgeted $140,000 set aside for debt service on the future street project (Fund 336), the 2025 budgeted $45,000 from the street capital (Fund 221), and the 2025 budgeted $75,000 general fund street & road expenses capital (Fund 101). Flotterud asked about utilizing FEMA funds to construct a combination pickleball court and volleyball court at Riverside Park as mitigation. Boulton stated that the FEMA funds for flood damage would have to replace what was damaged. There is a whole process for mitigation. Boulton stated that a future pickleball court might be better suited to Emerald Valley Park. The Emerald Valley II Addition may be fully constructed in 2025 and the park has plenty of space and power for courts. Boulton stated that the 2026 project could include work at Riverside Park parking lot. The parking lot needs to be replaced, including corrective action on the aggregate base. Boulton stated that a curb/gutter could be installed as a buffer for the parking lot and park. The curb/gutter could be sloped from west to east to send the surface water toward the walking path low point. Boulton said that the levy for future street fund 336 could be utilized to accomplish this capital project along with a street project that could be bonded for in 2026 or 2027. Passed 5-0-0.
OLD BUSINESS:
Administrator Boulton provided updates on the proposed policing contract. Boulton and Ohr had attended the July 16th. The board formally approved the police contract pricing. The pricing included three-year agreements at $87.70 per hour in 2025, $90.63 per hour in 2026, and $93.68 per hour in 2027. The board also approved the formula for a minimum number of contract hours per day. The formula is the population times 1.6 and then divided by 365 (days). The board acknowledged that representatives from the cities affected were present but were not asked or allowed to address the board. Boulton and Ohr expressed their disappointment in Commissioner Greseth with his vote for the significant per hour cost, vote for the formula for minimum coverage, and his lack of action to address the cities’ concerns with the cost, minimum hour requirement, and accountability. Boulton and Ohr expressed thanks to Commissioner Anderson who was the only commissioner to express the cities’ concerns. Many commissioners either expressed thoughts that the Cities should have other policing coverage or that the pricing per hour should be more. Boulton stated that he and Mayor Holmes had reached out to Chief Deputy Huneke before the meeting to try and decrease the minimum hours of coverage from 5 hours per day to 4 hours per day. Huneke stated that if the Sheriff’s Office goes below these minimum hour’s requirement, we could potentially be dealing with lowering of our patrol deputies’ numbers in the future based on the contract hours we provide throughout the county. Boulton also provided a correspondence from Kenyon Police Chief Jeff Sjoblom stating that Kenyon Police Department would not be a good option for Wanamingo Policing at this time. There were concerns that the department does not have 24-hour coverage. The staff had concerns responding to Wanamingo during off-duty, on call hours. There would be significantly more time involved for a Wanamingo call than a Kenyon call and would require additional pay. Kenyon does not wish to significantly increase their policing budget at this time. Flotterud stated that Kenyon may still be open to a contract to enforce City ordinances during reasonable daytime hours. Goodhue County is holding the City of Wanamingo hostage with policing including new cost formula and minimum hours of coverage. It might be cheaper to hire a City police officer. Right now, the coverage is roughly four hours of patrol and then four hours of administration. Flotterud asked what would happen if there was no policing contract. Boulton stated that none of the local ordinance would be enforced. Holmes stated that the County would only come if the calls were an emergency. All other calls would not be responded to, coming back to City Hall. Holmes stated that he spoke with Zumbrota Police Chief Callahan who stated that small crime items such as vandalism and petty theft would turn into larger crime issues without the psychological patrol presence. Flotterud expressed his frustrations that there was very little growth in 2023 or new LGA to offset the 2025 levy. Flotterud stated that there are not that many calls for policing issues per month. Haugen stated that the police presence may be a helpful deterrent on crime. Haugen hopes that the deputies that have recently moved into Wanamingo will take pride in the community and help as a deterrent to crime. Flotterud asked what the West Concord budget was for policing and if it made long-term sense for Wanamingo to have its own department. Boulton stated that he could check into the cost and coverage for West Concord. Boulton stated that a regional police force of several communities will be further explored in the coming years, but it will not occur in 2025. Holmes liked the idea of a regional police force and said that it has been successful in other parts of the State. Holmes did not believe that the costs for a regional police force would be less than a County contract, but the service and accountability would be better. Holmes stated that a department would require at least two full-time staff and other part-time staff to allow for time off and on-call response to occur. Holmes stated that the cost is more than the average citizen would think, especially with the significant rise in pay for the law enforcement field over the last few years. Flotterud asked if the City were to throw out a dollar amount to the County for coverage why would they not negotiate a contract. Boulton stated that the County Board took away control for negotiation of the price per hour and the daily contract hour minimum. Boulton and Ohr stated that questions should be directed to our County Commissioner Todd Greseth. Without our own County Commissioner on board with a proposal it will go nowhere. Holmes suggested members reach out to Greseth regarding lowering the daily contract hour minimum from 5 hours per day to 4 hours per day for Wanamingo. Ohr stated that Commissioner Greseth was no help to Wanamingo in setting the price per hour formula for the County or the minimum hours. Ohr was frustrated at the lack of engagement with the communities affected that the County had in the decision-making process. Ohr stated that it is not feasible for the City of Wanamingo to have its own police force.
Updates:
Affidavits of Candidacy will be accepted at the City Hall (401 Main Street) during the filing period of July 30, 2024 through August 13, 2024 at 5:00 p.m. for the following City Council seats:
Mayor – 2 Year Term
2 At-Large City Council Positions - 4 Year Terms
Candidates’ names will appear on the November 8, 2024 General Election ballot.
Listed below are the filing requirements for those individuals seeking public office:
1. Candidate must be an eligible voter.
2. Is, or will be on assuming the office, 21 years of age or more.
3. Maintained residence in the district from which the candidate seeks election for 30 days before the General Election.
Candidates must file an Affidavit of Candidacy and pay a $2 filing fee at City Hall, 401 Main Street, Wanamingo, MN. Office hours are 7:00 a.m.–4:30 p.m. Monday – Thursday and 7:00AM-12:00PM Fridays. Filings will be accepted until 5:00 p.m. on August 13, 2024.
*Next City Council meeting on 8/12/2024
Adjourn: At 8:08PM a motion to adjourn the meeting made by Flotterud and seconded by Haugen. Passed 5-0-0.
Signed: Attest:
____________________________ ____________________________________
Ryan Holmes, Mayor Michael Boulton, City Administrator
