CITY OF WANAMINGO
City Council Regular Meeting
Monday, July 28, 2025 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
City Administrator: Michael Boulton & Deputy Clerk Laurie Musselman
ABSENT: None
ALSO PRESENT: Brad Kennedy, Patricia Heraty – SEMMCHRA, Andrew Deziel – Kenyon Leader, and Peter Grimsrud – News Record
ADOPT AGENDA: Ohr motioned to adopt the agenda, seconded by Haugen. Passed 5-0-0.
PRESENTERS:
A) Patricia Heraty – SEMMCHRA – Heritage Hills Report
1) Presented 2025 projected expenses and transfers from the Operating Reserve Fund – required yearly as part of transfer agreement.
2) Operating losses and capital for 2025 are projected at being up to $13,844.00
3) In the past 16 years since SEMMCHRA took over operations the City of Wanamingo has contributed $430,190 toward operations of the facility
4) SEMMCHRA is asking for a transfer of up to $28,844.00 from the operating reserve for projected losses and capital expenditures ($15,000.00). The capital items include replacement of aging appliances, leaking issues around the garage, and corrections needed to the concrete by the garage. Appliance replacement is rough $1,500 per unit. SEMMCHRA lowered the management fees from 6% to 3% in 2025. It is not certain if the lower management fee reduction will continue in 2026.
5) 2026 Levy Request will be $25,000.
6) The facility has been relatively full with little to no monthly vacancies.
7) SEMMCHRA intends to refinance the bond for the facility in the future. The hope is to refinance with other SEMMCHRA properties. If refinanced the City levy would end. If the interest rates fall the bonding agency staff are watching to move on the refinance.
Holmes asked about the capital costs. Heraty stated that the appliances are about $1,500 per unit. They are being replaced as they no longer work. Heraty stated that work needs to be completed to repair leaking garage and corrections to the concrete around the garage areas. Holmes asked about the shortfall. Heraty stated that operation expenses continue to increase even though the facility is at full capacity each month. Heraty stated that rents are set to increase by 5% in 2026. Flotterud asked how much was still owed on the bond. Boulton stated that the bond has roughly $570,000 owed at the end of 2025. Boulton stated that the bond payments run through 2034.
NEW BUSINESS:
1) 2026 Budget discussions
A) City Council looked at the staff proposal of the 2026 proposed budget, Memo on 2026 proposed budget, and proposed 2026 levy. The proposed increase to the levy is 5.13% ($1,170,000 to $1,230,000). There are concerns with additional inflation along with addressing future capital needs. The general fund, Street Capital, EDA, and Debt Service Fund 337 (new 2026/2027 fire department rescue pumper) are proposed to increase as part of the 2026 levy. The City will no longer levy for Debt Service Fund 306 or the Debt Service Fund 330.
B) Administrator Boulton explained several line items that had either changed from the previous year or needed an explanation. The proposed wage increases are proposed between 4%-7% while proposed health insurance increases are proposed at 16%. The fire department budgeted expenses are proposed to increase by roughly $5,046.24 (3.88%) from 2025. This is due to $1,000 decrease in Building R& R, $1,000 increase in small tools and minor equipment, $100 increase in telephone, $300 decrease in automotive insurance, $200 increase in workers comp insurance, and a $100 increase in water/sewer. $5,000 was added to the bond repayment in 2026 for future truck purchases. There are scheduled elections in 2026 with estimated $4,850. Proposed employee pay raises will roughly average 4%-7%, depending on job ($12,000 – general fund is roughly 60%). The deputy clerk position turned into full time from ¾ time ($5,000 increase). The State of Minnesota passed a 0.88% payroll tax increase for Minnesota Paid Leave. The City is required to pay at least 0.44% of the tax. The City can choose to pay all of the 0.88% payroll tax increase. The ambulance contract is expected to increase from $19,478 in 2025 to $22,260 in 2026 ($2,782 increase). The police contract increases from $129,275 in 2025 to $145,236 in 2026 ($15,961 increase). Public safety is expected to increase from a range of roughly $23,789.24. Health insurance premiums are projected to increase by roughly 16% ($6,500 increase). The Council Street Maintenance plan has proposed to spend roughly $30,000 of the $80,000 for chip sealing/crack filling/manhole adjustments. The City has committed to $10,000 for a playground equipment at Prairie Ridge Estates in either 2026 or 2027. The general fund is projected to have a slight surplus (less than 3% - policy), depending on potential unplanned transfers at the end of 2026. The Riverside Park curb and parking lot rehab work is estimated to cost $200,000. $150,000 is planned to be spent out of the 336 Fund while the remainder of $50,000 will come out of the Street Capital budget (out of $80,000 in 2026). A portion of Emerald Valley II Addition is planned to be completed by the developer. The City will be upfronting the cost with reimbursement from the developer and while a special assessment will be levied onto a separate parcel(s) owner. The City could be fronting could rand from $40,000 to $50,000 in special assessment costs.
C) Administrator Boulton explained that the Caseys remodel increased its taxable value by an estimated $15,000 in 2024. This would bring in roughly $615 (slightly less than half City portion) in property taxes (0.041). New construction within the community over the last year (3 new taxable homes in 2024) should aid with the increase to the taxable market value increase. The new construction should off-set roughly 1/10 of the proposed levy increase (0.5% of the proposed 5.13% increase). The Council will see how the finalized 2026 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 will be slightly higher ($302,415 in 2025 and $302,649 in 2026). Small Cities Assistance Account distribution will be funded for 2026 and is estimated at $24,554 (up from $18,298 in 2025. The Small Cities Assistance Account provides funding for construction and maintenance of roadways in cities with a population less than 5,000. City staff are concerned with the continued State budget projected shortfall. City staff have recommended budgeting $300,000 out of the combined $327,198 LGA and Small Cities Assistance funding (assuming cuts coming of roughly 10% - passed in original 2025 State Senate budget bill).
D) Administrator Boulton shared concerns with continued inflation and meeting capital needs while balancing property taxes from rising too quickly. Boulton shared concerns with lack of real growth in 2024 that will affect the 2026 taxable market value not increasing. Boulton stated the much of any increase in the levy would fall to the existing property tax payers. Boulton shared concerns with upcoming potential costs that are not budgeted including pool repairs ($10,000-$20,000), establishment of school building TIF district ($20,000), Emerald Valley II Addition phase II improvements (fronting part of assessment costs), and dead tree removal from Emerald Ash Borer and Emerald Valley II Addition (unknown). The expectation would be future levy needs to pay back the funds if expenses come to fruition in 2026.
Holmes stated that he and Boulton have had several conversations regarding keeping the levy increase to a minimum in 2026 due to limited growth in 2024. Holmes stated that costs have still increased for the City, but that the City has to be realistic on an increase to property tax payers. Ohr asked about the condition of the pool. Kennedy stated that the City will be contracting with American Leak Detection to identify the location of a leak on the south end of the pool. Kennedy stated that one of the pool heaters is no longer working while the other is working at less than optimum rate. Kennedy stated that other piping concerns may need to be addressed. Kennedy stated that the diving boards need to be inspected and possibly replaced. Kennedy stated that staff continues to patch side walls of the pool while a year or two later chunks fall off and need to be removed. Boulton and Kennedy stated that each of the above-mentioned repairs would be over $10,000 each. Flotterud stated concerns with the general fund ending up close to budget, but the expenses shifting from one area to another. Flotterud stated that he would like to see a negative fund balance in the general fund. This would show a reason to increase the general fund budget and therefore the levy. Flotterud stated that the 336 Fund was a shell fund for projects until the next street rehab project which would turn into a bond payment fund. Holmes stated that it is the Council’s responsibility to stay within budget. Holmes stated that the funds from the 336 fund have been for the new vehicles, street rehab, and future Riverside Park parking lot rehab, and pickleball court. Boulton stated that the City has no way of seeing all expenses when budgeting. Boulton stated that the City needs to be able to pivot within budget constraints each year. Boulton stated that the City will be over budget in the general fund in 2025 due to hiring a full time City clerk (previous was ¾ time) and having significant overlap of two clerks during transition. Boulton stated that costs incurred with school building sale will at least temporarily push costs onto the general fund that were not budgeted. Boulton stated that the new vehicles (2024), street shop rehab (2025), and future Riverside Park parking lot rehab (2026), and pickleball court (2026/2027) have been planned to be paid out of the 336 fund until the next street rehab project (2027/2028). The sewer fund is projected to have $775,000 by the end of 2025. 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 also recommend an increase on the sewer base rate from $32/month to $34/month. Boulton noted that new construction may not continue at the same rate in the next few years and will in turn slow the levy growth. The tax rate growth could be captured in future levies for 2027 (7%) and 2028 (5.5%). The goal is be around 5% levy increase each year. The Council directed Administrator Boulton to bring the recommended budget and levy information at 5.13%, or $60,000 levy increase in the 2026 proposed Levy Resolution and 2026 Proposed Budget.
RESOLUTION:
25-049 = 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 2025 were the city hall security camera system ($10,000), skid loader grapple ($4,000), and front end pay loader/skid loader ($100,000). The fire department helmet replacements are complete and will start over on the 10-year replacement program. The fire department rescue pumper truck price was updated to match the $1,083,913 number presented and approved at the July 14th Council meeting. The 2027 pickleball court/ice rink estimate was increased to $100,000. Boulton stated that the proposed 2026 levy would include funds for Riverside Park parking lot rehab. The funds will come from budgeted $150,000 set aside for debt service on the future street project (Fund 336) and the 2026 budgeted $50,000 general fund street & road expenses capital (Fund 101). Boulton stated that a future pickleball court/ice rink dirt work could start in 2026 with phase 2 of Emerald Valley II Addition street and utility improvements. The concrete work, lights, fences, benches, painting, and nets would be in 2027. Boulton stated that the Riverside Park parking lot rehab is scheduled for 2026. 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 2027 or 2028. Passed 5-0-0.
25-050 = Approving Sunday On-Sale Intoxicating Liquor License for Jake’s Hometown Liquor to Jason Grant: Flotterud moved to approve, seconded by Ohr. Boulton stated that when Jason Grant originally applied for a liquor license he did not apply for a Sunday liquor license because he wanted a day off for staff but might apply at a later date. Grant had inquired about a Sunday liquor license in May. Boulton and Jacobsen reviewed the State Statutes and City Ordinance finding that in order to apply the establishment needs to be a restaurant, club, bowling enter, or a hotel with a seating capacity for at least 30 persons. After further research the definition of restaurant can be as simple as obtaining a MN Department of Health permit for serving frozen pizza through an onsite oven. Boulton spoke with area bars with limited food options and lack of a kitchen. These bars operate with Sunday liquor licenses with nominal food such as pizza. Boulton recommends approval of the Sunday on-sale intoxicating liquor license after the City is presented with a MN Department of Health permit for Jake’s Hometown Liquor. Passed 5-0-0.
OLD BUSINESS:
25-045 = Approving Low Quote Pedestrian Walking Bridge Ramp Repairs: Haugen moved to approve, Seconded by Flotterud. Boulton stated that the City still does not have coverage from insurance, either private or City League of Minnesota Cities Insurance Trust (LMCIT). The City has recently been denied an appeal of coverage under error/omissions through LMCIT. The City has requested assistance from LMCIT to recover the loss with Warren and Cindy Buck or their insurance. Boulton advised the Council that the general fund may need to cover the costs in the meantime to make repairs. Boulton stated that the structural engineer from WHKS said there was no concerns between actual size and nominal size lumber in regards to structure. Theobald had provided the specs from the ramp construction in order to assist with estimates and the eventual repairs. It is recommended to approve Kleese Construction with a repair low quote of $22,080. Flotterud suggested bringing in Bucks for a discussion to lay out facts and explain costs of pursuing legal remedy to head off extra cost to everyone involved. Boulton stated that it had been suggested by another City Administrator colleague to work with Bucks to place a deferred assessment against their property. This way the City would be compensated when the Bucks sold their house and the Buck’s would not have pay up front for the repairs. Kennedy shared his concerns with type of lumber in estimate from Kleese compared to specifications in original plans. Boulton deferred any concerns to Theobald if the Council wished to table the award. Boulton stated that Theobald had been provided copies of the quotes for repair and had not shared any concerns on type of lumber after discussions and clarification and size of lumber from the July 14th Council meeting. Passed 4-0-0.
*Next City Council meeting on 8/11/2025
Adjourn: At 7:25PM a motion to adjourn the meeting made by Ohr and seconded by Haugen. Passed 5-0-0.
Signed: Attest:
____________________________ ____________________________________
Ryan Holmes, Mayor Michael Boulton, City Administrator
