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07-28-2020 CCM Workshop (Audit Report)HUTCHINSON CITY COUNCIL MEETING MINUTES TUESDAY, JULY 28, 2020 CITY CENTER — COUNCIL CHAMBERS (The City Council is provided background information fog° agenda iten2s in advance by city staff, committees and boards. Many decisions regarding agenda iten2s are based upon this information as well as: City policy and practices, inputfiron2 constituents, and other questions or information that has not yet been presented or discussed regarding an agenda iten2.) 1. CALL MEETING TO ORDER — 5:30 P.M. Mayor Gary Forcier called the meeting to order. Members present were Steve Cook, Chad Czmowski, Mary Christensen and Dave Sebesta. Members were present via electronic means. Others present in the Council Chambers were Matt Jaunich, City Administrator, Marc Sebora, City Attorney and Kent Exner, City Engineer (a) Approve the Council agenda and any agenda additions and/or corrections Motion by Christensen, second by Sebesta, to approve agenda as presented. Roll call vote was taken: Cook — aye; Czmowski — aye; Sebesta — aye; Christensen — aye; Forcier — aye. Motion carried unanimously. 2. INVOCATION — The invocation was dispensed due to the absence of a pastor. (The invocation is a voluntary expression of the private citizen, to andfor the City Council, and is not intended to affiliate the City Council with, or express the City Council's preferencefor, any religious/spiritual organization. The views or beliefs expressed by the invocation speaker have not been previously reviewed or approved by the Council or staff) 3. PLEDGE OF ALLEGIANCE 4. RECOGNITION OF GIFTS, DONATIONS AND COMMUNITY SERVICE TO THE CITY (a) Resolution No. 15191 — Resolution Accepting $150 Donation from Our Saviors Lutheran Womens' Guild for Law Enforcement Memorial Park (b) Resolution No. 15192 - Resolution Accepting $1000 Donation from Hospital Auxiliary for Hutchinson Fire Department Motion by Cook, second by Sebesta, to approve Resolution Nos. 15191 and 15192. Roll call vote was taken: Cook — aye; Czmowski — aye; Sebesta — aye; Christensen — aye; Forcier — aye. Motion carried unanimously. PUBLIC COMMENTS (This is an opportunity fog° members of the public to address the City Council. If the topic you would like to discuss is on the agenda, please ask the Mayor if he will be accepting public comments during the agenda item if not a public hearing. Ifyou have a question, concern or comment, please ask to be recognized by the mayor state your name and address for the record. Please keep comments under 5 minutes. Individuals wishing to speakfor more than five minutes should ask to be included on the agenda in advance of the meeting. All comments are appreciated, but please refrain fi on2 personal or derogatory attacks on individuals) 5. CITIZENS ADDRESSING THE CITY COUNCIL 6. APPROVAL OF MINUTES (a) Regular Meeting of July 14, 2020 Motion by Sebesta, second by Christensen, to approve minutes as presented. Roll call vote was taken: Cook — aye; Czmowski — aye; Sebesta — aye; Christensen — aye; Forcier — aye. Motion carried unanimously. CITY CO UNCIL MINUTES July 28, 2020 CONSENT AGENDA (The iten2s listedfor consideration will be enacted by one motion unless the Mayor, a member of the City Council or a city staff member requests an item to be removed. Traditionally iten2s are not discussed) 7. APPROVAL OF CONSENT AGENDA (a) Consideration for Approval of Resolution No. 15190 - Resolution to Sell at Auction Surplus Property (Compost Site Equipment) (b) Consideration for Approval of Bituminous Repair Project at Creekside (c) Consideration for Approval of Developers Agreement for WUHF, LLC - 7 East Business Park (d) Consideration for Approval of Reaffirmation of City of Hutchinson Data Practices Policies (e) Consideration for Approval of Issuing Short -Term Gambling License to Hutchinson Fire Relief Association on September 12, 2020 (f) Consideration for Approval of Issuing Short -Term Gambling License to St. Anastasia Catholic Church on September 12 & 13, 2020 (g) Consideration for Approval of Items for South Central Drainage Area Improvements Phase 2 (Letting No. 3/Project No. 20-03) 1. Resolution No. 15194 — Resolution Ordering Preparation of Report on Improvement 2. Resolution No. 15195 — Resolution Receiving Report and Calling Hearing on Improvement (h) Claims, Appropriations and Contract Payments Item 7(g) was pulled for separate discussion. Motion by Czmowski, second by Forcier, to approve Consent Agenda with the exception of the item noted above. Roll call vote was taken: Cook — aye; Czmowski — aye; Sebesta — aye; Christensen — aye; Forcier — aye. Motion carried unanimously. Item 7(g) had further discussion. Council Member Cook asked the extent of the project with the funding sources (wastewater and stormwater funds) when aggregate is included in the project. Kent Exner, City Engineer, presented before the Council. Mr. Exner explained that last week bids were received for the Civil Air Patrol project and the low bid came in approximately 35% lower than estimated. There is an excess of bonding dollars in the stormwater fund and some grading and pipework needs to be completed in the area as part of the South Central Drainage Area Improvements project. This project will be completely funded by wastewater funds and stormwater funds — no assessments or bonding dollars. The roadwork and pipework on the west side of the area is scheduled for 2022. Motion by Cook, second by Czmowski, to approve Item 7(g). Roll call vote was taken: Cook — aye; Czmowski — aye; Sebesta — aye; Christensen — aye; Forcier — aye. Motion carried unanimously. 2 CITY CO UNCIL MINUTES July 28, 2020 PUBLIC HEARINGS — 6:00 P.M. - NONE COMMUNICATIONS, REQUESTS AND PETITIONS (The purpose of this portion of the agenda is to provide the Council with information necessary to craft wise policy. Includes items like monthly or annual reports and coniniunications f on2 other entities.) 8. ECONOMIC DEVELOPMENT AUTHORITY YEAR END REPORT Miles Seppelt, EDA Director, presented before the Council. Mr. Seppelt reviewed items accomplished in 2019 which included business retention and expansion visits. A new business was recruited to Hutchinson and that was Zephyr Wind Services whom bought the NuCrane building. This company currently has 11 jobs. Warrior Manufacturing also expanded by adding over 40,000 square feet. This was a $3.4 million project and they intend to add five new jobs over two years. Grant writing is always a large task of the EDA and one grant was received in 2019 for Technology Drive which is a city street that serves Uponor, TDK and MITGL The grant paid for almost half of the project and the remainder was assessed to Uponor. Mr. Seppelt spoke about the Hutchinson Enterprise Center and the start-up businesses it houses. There are currently three client companies in the center along with a satellite office for the Small Business Development Center. Another focus of the EDA is skilled workforce development and supporting TigerPath. Other main emphases include marketing, downtown grant & loan programs, and staffing support for the Hutchinson Downtown Association. 2020 projects and goals include downtown redevelopment, pursuing a new company for Industrial Park, cultivating a relationship with SCSU MBA program, continue support of TigerPath, updating new EDA website, obtain at least $100,000 in grants, finalize EDA strategic plan, and continue work on establishing McLeod County Economic Development. 9. REVIEW OF AMERESCO ENERGY SAVINGS INVESTMENT GRADE AUDIT REPORT John Paulson, Environmental/Regulatory/Project Manager, presented before the Council. Mr. Paulson provided a review of the Energy Savings Investment Grade Audit Report prepared by Ameresco. The four major energy conservation measures identified include facility lighting, street lighting, building envelope improvements and building automation upgrades. Staff intends to self perform the improvements identified. 10. UPDATE ON CARES ACT FUNDING AND PROPOSED USE OF FUNDS Matt Jaunich, City Administrator, noted that approximately $1 million will be received this week in CARES funding. At the last Council meeting, the Council expressed a desire to see most of that money spent to assist small businesses. Staff has been working on a plan that they will be presenting to the Council tonight. The intention is to allocate the funding as follows: $750,000 Small Business Assistance; $200,000 to cover eligible City expenses; $124,352 to cover any unforeseen city costs/consumer grant program/miscellaneous costs. The EDA has created a CARES Act Business Assistance program and Miles Seppelt, EDA Director, presented the program concept to the Council. Mr. Seppelt explained the program would be a forgivable loan for six months with no interest. The loan size would range from $5000-$20,000. Eligibility would include 1. small businesses (defined as had a net profit in 2019, COVID-19 pandemic negatively affected the profits of the business, annual gross revenue of $4,000,000 or less and employment of 30 full time employees or less); 2. Non -profits; 3. Located within the city limits of Hutchinson; 4. Owner resides in the State of Minnesota. The eligible use of funds would include mortgage or rent payments, payroll costs, utility payments, inventory costs, PPE/masks/cleaners/public safety items, and costs to restart the business after shutdown. The expenses would have had to have been incurred from March 1 — December 31, 2020. The conditions of the loan forgiveness would include the recipients providing documentation of qualified costs and the applicant certifying that funds are not used for expenses covered by other government pandemic aid programs. Scoring would be on a 100 point scale with a sliding scale to determine award amount. Points would be awarded for annual gross revenue, number of FTE as of CITY CO UNCIL MINUTES July 28, 2020 February 1, 2020, and percent of decline in net profit from Q2 2019 to Q2 2020. Additional points would be given for a business deemed non -essential and ordered to close by Governor's Executive Orders 20-04 and 20-08. The EDA will provide assistance to applicants with the application process. If this is a program that appears acceptable to the Council, a Resolution will be on the next Council agenda for the Council to consider that will formally assign the funds. Council Member Cook suggested capping the loan amount to $15,000 as opposed to $20,000 in order to assist more businesses. And perhaps there could be a round two of the program at a later date. Council Member Cook also suggested other items in the scoring criteria. Council Member Cook also commented on being able to identify and target the very small businesses. UNFINISHED BUSINESS NEW BUSINESS 11. SUMMARY REVIEW AND APPROVAL OF 2019 AUDITED COMPREHENSIVE ANNUAL FINANCIAL REPORT Justin Juergensen, Assistant Finance Director, presented before the Council. Mr. Juergensen introduced Andy Berg and Layne Kockelman of Abdo, Eick & Myers of the City's auditing firm. Mr. Juergensen explained that a summary financial statement will be printed in the Hutchinson Leader and an electronic copy of the audited financial report will be available on the City's website. A hard copy will be available to the public at the Hutchinson Library and at the Hutchinson City Center. Layne Kockelman presented before the Council. Mr. Kockelman provided a summary review of the information that was covered in detail at the workshop held prior to the Council meeting. Mr. Kockelman noted that the City is in a very healthy financial condition. Mr. Kockelman explained that total general fund balance was about $7.6 million which was an increase from 2018. The City did increase its fund balance in 2019 by approximately $375,000. The general fund balance for 2020 will be at approximately 55% which is well above 40% which is the requirement in the City's policy. Motion by Czmowski, second by Christsensen, to approve 2019 audited comprehensive annual financial report. Roll call vote was taken: Cook — aye; Czmowski — aye; Sebesta — aye; Christensen — aye; Forcier — aye. Motion carried unanimously. 12. APPROVE/DENY RESOLUTION NO. 15193 — RESOLUTION REGARDING THE SUPPORT OF A JOB CREATION FUND APPLICATION IN CONNECTION WITH 3M Miles Seppelt, EDA Director, presented before the Council. Mr. Seppelt explained that 3M is considering the addition of a new product line at its production plant in Hutchinson. The project is estimated at $50,600,000 of new investment at the 3M facility for machinery and equipment, renovations to the existing building and site improvements. The project will create 10 new jobs over the next three years with pay ranging from $20-$29 per hour plus benefits. To aid with the project 3M is applying to the State of Minnesota's "Job Creation Fund" for $175,000 of assistance. As part of the application, a Resolution of support from the community is required. There would be no cost to the City. 11 CITY CO UNCIL MINUTES July 28, 2020 Motion by Christensen, second by Czmowski, to approve Resolution No. 15193. Roll call vote was taken: Cook — aye; Czmowski — aye; Sebesta — aye; Christensen — aye; Forcier — aye. Motion carried unanimously. 13. APPROVE/DENY FIRST READING OF ORDINANCE NO. 20-819 — AIRPORT ZONING UPDATES Dan Jochum, Planning Director, presented before the Council. Mr. Jochum explained that the City has been working with MnDOT to update the airport zoning ordinance. A public hearing was held in front of the Planning Commission and the Planning Commission recommended approval of the ordinance. The ordinance has been in front of MnDOT for review and the City received the Commissioners Order of Approval. Motion by Czmowski, second by Forcier, to approve first reading of Ordinance 20-819. Roll call vote was taken: Cook — aye; Czmowski — aye; Sebesta — aye; Christensen — aye; Forcier — aye. Motion carried unanimously. 14. APPROVE/DENY PURCHASE OF NEW FIRE TANKER TRUCK Fire Chief Mike Schumann presented before the Council. Chief Schumann noted that the fire department is recommending purchase of a new 3000 gallon tanker truck from Midwest Fire out of Luverne, Minnesota. The complete purchase price of this truck will be reimbursed from the rural townships served by the Hutchinson Fire Department. The truck should be delivered in mid -late 2021. The total price of the truck is $261,869. Motion by Cook, second by Sebesta, to approve purchase of new fire tanker truck. Roll call vote was taken: Cook — aye; Czmowski — aye; Sebesta — aye; Christensen — aye; Forcier — aye. Motion carried unanimously. 15. APPROVE/DENY SETTING SPECIAL MEETING ON AUGUST 14, 2020, TO CANVASS ELECTION RESULTS Matt Jaunich noted that the primary election results must be canvassed within three days of the primary election. The McLeod County Board is holding their canvassing board at 10:00 a.m. on August 14, 2020, and has requested that the City canvass after their meeting. Motion by Christensen, second by Forcier, to approve setting special meeting for August 14, 2020, at 12:00 p.m. to canvass primary election results. Roll call vote was taken: Cook — aye; Czmowski — aye; Sebesta — aye; Christensen — aye; Forcier — aye. Motion carried unanimously. GOVERNANCE (The purpose of this portion of the agenda is to deal with organizational development issues, including policies, performances, and other matters that manage the logistics of the organization. May include monitoring reports, policy development and governance process items.) 16. MINUTES/REPORTS FROM COMMITTEES, BOARDS OR COMMISSIONS (a) CITY OF HUTCHINSON FINANCIAL REPORT AND INVESTMENT REPORT FOR JUNE 2020 CITY CO UNCIL MINUTES July 28, 2020 (b) HUTCHINSON HOUSING & REDEVELOPMENT AUTHORITY BOARD MINUTES FROM JUNE 16, 2020 (c) ECONOMIC DEVELOPMENT AUTHORITY BOARD MINUTES FROM JUNE 24, 2020 MISCELLANEOUS 17. STAFF UPDATES Tom Gifferson — Council Member Cook asked if the Police Commission will be reviewing the department's policy and procedures based on law changes that have been made. Chief Gifferson noted that the Police Commission will be reviewing and revising as needed. The police department will be receiving model policies from POST to coincide with recent legislation changes. Chief Gifferson thanked the community and the Council for support received over the last few weeks. Matt Jaunich - Mr. Jaunich noted that the Council meeting is at 4:00 p.m. on August 11, 2020, due b the primary election being held that day. He also noted that staff is recommending that a construction manager be hired for the police facility project. Interviews will be happening in the next week or two and if any council members (up to two) are interested in being part of the interview panel they should let Matt know. 18. COUNCIL/MAYOR UPDATE Steve Cook — Council Member Cook asked with regard to the utility work on Main Street what the quality of the infrastructure looks like when it is being removed. He asked if what is being put in now is of better quality and will it last longer than 50 years. Kent Exner explained that the materials put in today are much different than 50 years ago and is much more advanced than even 15 years ago. PVC piping is used and plastic lasts for a very long time. Council Member Cook also mentioned that the south central pond in the Linden Avenue area looks very nice with all of the plantings and benches being added, the area is very nice. Council Member Cook also mentioned that awhile back it was noted that an analysis of the source separated program at Creekside was going to be conducted. Mr. Jaunich noted that just today a contract was signed for an evaluation that will be taking place in the next few months. Council Member Cook lastly mentioned that Skyview Dairy may be expanding and asked if there are any reviews in the works. Mr. Jaunich noted that he will ask Dan Jochum, Planning Director, to follow up with the Council on that item. ADJOURNMENT Motion by Czmowski, second by Cook, to adjourn at 7:40 p.m. Roll call vote was taken: Cook — aye; Czmowski — aye; Sebesta — aye; Christensen — aye; Forcier — aye. Motion carried unanimously.