CITY OF WANAMINGO

City Council Regular Meeting

Monday, May 8, 2017 7:00 P.M.

Wanamingo City Council Chambers – 401 Main Street

Wanamingo, MN

CALL TO ORDER: Mayor Holmes.

PRESENT: Council: Ryan Holmes, Stuart Ohr, Larry VanDeWalker, Jeremiah Flotterud (Late) and Eric Dierks

City Administrator: Michael Boulton & Deputy City Clerk: Karen Masters

ABSENT: None

ALSO PRESENT: Alicia Hunt-Welch – Zumbrota News Record, Brad Kennedy, Brandon Theobald - WHKS,, Andy Zelinskas - WHKS, Jason Boynton - Smith Schafer & Associates, & Terri Lenz - Kenyon Leader.

ADOPT AGENDA: VanDeWalker motioned to adopt the updated agenda provided to Council at the meeting, seconded by Ohr. Passed 4-0-0.

CONSENT AGENDA: Ohr motioned, seconded by VanDeWalker. Passed 4-0-0.

PRESENTERS:

A) Brad Kennedy reported on:

1) Hydrants flushed throughout community

2) Alley potholes filled with crushed asphalt

3) Swept Streets

4) Repaired storm sewer culvert - replaced portion with PVC near Ag Partners Elevator

5) Replaced ware washers on ten water hydrants

6) Riverside Park - water turned on for the season

7) Wood Chipper put together and started trimming trees

8) Community Garden ground level plots tilled twice

B) Jason Boynton - Smith Schafer & Associates reported on:

1) Conducted Power Point Presentation of the 2016 Wanamingo City Audit

NEW BUSINESS:

RESOLUTION:

Public Hearing On Assessments for the 2017 Roadway Improvements Project - Mayor Holmes opened the public hearing at 7:22PM. Brandon Theobald presented final assessment hearing worksheet and assessment roll. He explained the overall project, costs of the project and how recommended assessments were determined, and process for appeals. Apparent low bid for the project was Rochester Sand & Gravel for $168,770. Emerald Valley (assessed) portion of the project was $97,500; including engineering, financing, and contingency. The remaining portion of the low bid along with a portion of the engineering, financing, and contingency would be considered maintenance and financed/paid for by general fund tax levy dollars. The Council set the initial assessment rate at 100% to parcel owners and 0% City. There are 36.5 lots - $2,671 for full lot assessments or $1,360 for 1/2 lot assessments. No further public input was offered. Mayor Holmes closed the public hearing at 7:29PM.

Considering Objections on Assessments for the 2017 Roadway Improvements Project - Administrator Boulton read a letter from Ron Liu, owner of 14 parcels in consideration from assessments. Mr. Liu stated that he was pleased to see the second layer of asphalt completed and had a willingness to financially contribute to the project. However, he felt that the City benefits from future development with additional tax base. Mr. Liu stated that this project is unique due to the original developer going bankrupt and the letter/line of credit not being invoked/followed through by the City. Mr. Liu also spoke about the declaration/association placed on the lots by the original developer. With no formal organization in place, the specifics of the declaration/association can't be enforced. Banks are not willing to finance construction of homes due to the recorded declaration/association without enforcement. Mr. Liu stated that he, the City, and other parties are working on dissolving the declaration/association. Mr. Liu asks that the City fully share in the costs associate with the second layer of asphalt. Administrator Boulton shared copies of the letter that the City issued to parcel owners on December 21, 2016. The excerpt Mr. references stated: 'The proposed project would involve special assessments levied against the benefitting properties to pay for all or a portion of the project costs. While the remainder, if any, is paid for through future years City general property tax levies.' The City never stated that it would financially contribute to the project. Flotterud stated that dissolution of declaration/association should be considered separately when dealing with the question of final assessments. He stated that Mr. Liu should have asked questions before financially investing into lots within the development. Flotterud does not want to set a precedence, especially in the next phase of Emerald Valley for who pays the bill. Flotterud stated that new roadway improvements should be 100% assessment/0% City while reconstruction should be 70% assessments and 30% City. Mr. Liu has the most to gain off improvements (second layer of asphalt). These improvements will assist in selling lots while increasing the value of the lots. The City, Mr. Liu, and other parcel owners inherited a bad situation. Dierks stated that we need to place final layer of asphalt on road before the base layer falls apart. Can't believe that it has held up as well as it has for over ten years without second layer. Ohr said that the City should not consider reducing the assessments because the City would be subsidizing a developer/investor. Ohr also stated that worst case scenario of going to 70% assessment/30% City would not amount to a dollar value reduction for parcel owners. Holmes stated that the City should have pursued letter of credit in order to finance second layer of asphalt with original developer a decade ago. Brandon Theobald stated that the City would need to show increase in property values based on the dollar amount being assessed. He said that each assessor would bring separate figures and it is not always easy to show value changes. However, if the second layer of asphalt is not placed on, the City would need to review if the lots would be buildable moving forward due to the lack of finished infrastructure. Mr. Liu owns fourteen lots (4 full and 10 townhome) with a proposed assessment of $24,000. Once set, if Mr. Liu would continue to challenge, the City could directly negotiate. Mr. Liu could still challenge assessment if the City wishes to lower assessments tonight. Flotterud stated that the City should only consider 100% assessments or 70% assessments in order to follow City policy on new build or reconstruction. Administrator Boulton stated that if the Council considers reduction, it should specify the reasoning such as failed development and City legal share of pursuing letter of credit from original developer that went bankrupt. Brandon Theobald stated that the this is an attractive bid for bituminous and that the City has incurred costs for engineering. It would be unwise to rebid project because more than likely would see higher bid costs and additional engineering fees. Holmes had concerns that he wished to see all properties assessed that same percentage when the process has been exhausted so that everyone is treated fair. Brandon Theobald stated that if Mr. Liu does continue to challenge the assessments moving forward he will incur substantial attorney fees along with his time and effort. Holmes stated that the City should consider some skin in the game due to the letter of credit in order to stave off challenge. Dierks asked if Mr. Liu's letter was a formal challenge. Other Council members were confused if Mr. Liu was challenging the assessments and also confused what he was asking for. Brandon Theobald stated that the Courts would more than likely see the letter as a challenge. VanDeWalker said that the City could and should show good faith mowing forward with a possible reduction. Brad Kennedy stated that a 10% reduction in the assessment would show that the City cares about the project moving forward and that it shoulders a small burden for the letter of credit issue. VanDeWalker and Holmes said that they liked the idea of a 10% reduction in the assessments. Dierks asked where the money would come from if the City shouldered a share of the assessment. Administrator Boulton stated that it would be reflective in the next eight years general fund tax levy. 10% reduction would be an increase of $1,300 per year to the tax levy.

17-029 = Adopting Assessments for the 2017 Roadway Improvements Project: VanDeWaker moved to approve, Seconded by Flotterud. Flotterud moved to amend final assessment roll to 90% assessments/10% City portion of the Emerald Valley work. Further amending that the Fredrickson lot with parcel I.D. 70.149.0010 be considered a 1/2 lot as opposed to the recommendation of a full lot for the purpose of assessment with the City taking on the remaining 1/2 portion of the assessment, seconded by Dierks. Flotterud explained that this would reflect the rough costs on what it would have taken compensate an attorney to go after the original Emerald Valley Developer, Mr. Doug Durst, for his line/letter of credit to finish the second layer in 2007-2009. The Council was in agreement that this would not have been successful due to Mr. Durst’s business going bankrupt. Flotterud felt that it owed the parcel owners a good will gesture on this project. Amendment Passed 3-2-0 (VanDeWalker & Ohr opposed). Full lot assessments would now reflect $2,403.90 and townhome assessments would now reflect $1,202.40. Passed 5-0-0.

17-030 = Receiving Bids and Awarding the Bid for 2017 Roadway Improvement Project: Dierks moved to approve, Seconded by VanDeWalker. Passed 5-0-0.

17-031 = Accepting the 2016 City Audit: Dierks moved to approve, Seconded by Ohr. Passed 5-0-0.

17-032 = Accepting 2017 Yearly Driver's License Check: VanDeWalker moved to approve, Seconded by Ohr. Passed 5-0-0.

17-033 = Approving Temporary Liquor License for Wanamingo Fire Relief Association for 4th of July Dance: VanDeWalker moved to approve, Seconded by Dierks. Passed 5-0-0.

17-034 = Authorizing Downtown Water Tower Clean-Out and Inspection Service Agreement to be completed utilizing Low Quote: Flotterud moved to approve, Seconded by Dierks. Passed 5-0-0.

Ordinance #179 - Amending Cable Communications Franchise Ordinance - 1st Reading - Administrator Boulton explained that Midco Communications is working on a broadband grant through a Goodhue County application to the State of Minnesota to offset costs of bringing broadband from Randolph (where Midco has lines) to Wanamingo. Midco would like one year to see if they can get such a project going. If Midco fails with the grant, they may look at selling off to a provider than can make updates to the Wanamingo system.

Ordinance #180 - Amending Wanamingo Code of Ordinances 152.30(E) - 1st Reading - Administrator Boulton explained a need to align the code of ordinances with City policy to make C-1 Commercial Downtown pave or concrete all parking areas.

OLD BUSINESS:

Administrator Boulton provided an update on the Wanamingo Community Garden. There are two remaining 4' x 8' raised beds and two 25' x 25' ground level plots still available. The signup is available at Wanamingo City Hall for those who have interest through May 15th. After May 15th, residents are able to sign up for multiple plots.

*Next City Council meeting on 6/12/2017 at 7:00pm.

Adjourn: At 8:11PM a motion to adjourn was made by VanDeWalker and seconded by Ohr. Passed 5-0-0.

Signed: Attest:

______

Ryan Holmes, Mayor Michael Boulton, City Administrator