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09-24-2024HUTCHINSON CITY COUNCIL MEETING MINUTES TUESDAY, SEPTEMBER 24, 2024 CITY CENTER — COUNCIL CHAMBERS (The City Council is provided background information for 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. (a) Approve the Council agenda and any agenda additions and/or corrections Motion by Czmowski, second by Sebesta, to approve the agenda as presented. Motion carried unanimously. 2. INVOCATION — River of Hope (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. 15772 — Resolution Accepting $500.00 Donation from Walt & Lynne Clay for Future Equipment Purchases at Hutchinson Police Services (b) Resolution No. 15773 — Resolution Accepting $2,000.00 Donation from Tyriina Kalenberg for a Sensory Panel at Shady Ridge Park Motion by May, second by Burley, to approve Resolution Nos. 15772 and 15773. 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. If you have a question, concern or comment, please ask to be recognized by the mayor state your name and addressfor 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 September 10, 2024 (b) Budget Workshop of September 10, 2024 Motion by Burley, second by Czmowski, to approve minutes as presented. Motion carried unanimously. 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 I (a) Affirmation of Board Reappointments 1. Reappointment of Kyle Wendling to PRCE Advisory Board to August 2027 CITY COUNCIL MINUTESSeptember 24, 2024 2. Appointment of Andrew Hedin to Airport Commission to September 2025 3. Appointment of Tara Oberg to Sustainability Advisory Board to May 2026 (b) Consideration for Approval of Service Line Repair Program Changes (c) Consideration for Approval of Issuing Short -Term Gambling License to Upper Midwest A-C Club on July 27, 2025, at McLeod County Fairgrounds (d) Consideration for Approval of Resolution No. 15769 — Resolution Adopting Findings of Fact and Reasons for Approval of a Preliminary Plat for Danielson Addition With Favorable Planning Commission Recommendation (e) Consideration for Approval of Resolution No. 15770 — Resolution Adopting Findings of Fact and Reasons for Approval of Conditional Use Permit for a Tattoo Establishment in a C-3 Zoning District Located at 225 Main Street South With Favorable Planning Commission Recommendation (f) Consideration for Approval of Resolution No. 15775 — Resolution Accepting Petition and Approving Annexation Under Orderly OA-1197 Between City of Hutchinson and Township of Lynn With Favorable Planning Commission Recommendation (g) Claims, Appropriations and Contract Payments — Register A Motion by Czmowski, second by May, to approve Consent Agenda L Motion carried unanimously. 8. APPROVAL OF CONSENT AGENDA II (a) Claims, Appropriations and Contract Payments — Register B Motion by May, second by Sebesta, with Forcier abstaining, to approve Consent Agenda IL Motion carried unanimously. PUBLIC HEARINGS — NONE COMMUNICATIONS, REQUESTS AND PETITIONS (Thepurpose of thisportion of the agenda is to provide the Council with information necessary to craft wisepolicy. Includes items like monthly or annual reports and coniniunications f on2 other entities.) UNFINISHED BUSINESS NEW BUSINESS 9. APPROVE/DENY RESOLUTION NO. 15771 — RESOLUTION RELATING TO THE ISSUANCE OF GENERAL OBLIGATION STREET RECONSTRUCTION AND IMPROVEMENT BONDS, SERIES 2024A Andy Reid, Finance Director, presented before the Council. Mr. Reid explained that bids have been received for the 2024 bond issuance. The new 15-year debt, which had an estimated par value of $2,265,000, will finance several roadway and infrastructure improvement projects. 2 CITY COUNCIL MINUTES September 24, 2024 Nick Anhut, Ehlers, presented before the Council. Mr. Anhut explained that the City's Standard & Poor's bond rating was reaffirmed at AA-. S&P found that the City's financial performance and level of reserve funds are positives in addition to the City's financial management policies and practices. Mr. Anhut explained that TD Securities came in with the low bid of a true interest rate of 3.32%. The final bond amount comes in at $2,075,000. The rate includes paying for bond insurance which is favorable to the City. Motion by Sebesta, second by May, to approve Resolution No. 15771. Motion carried unanimously. 10. APPROVE/DENY RESOLUTION NO. 15774 - A RESOLUTION PROVIDING FOR AN ALLONGE TO SENIOR HOUSING FACILITY REVENUE BOND OF 2019 (PRINCE OF PEACE PROJECT) AND AUTHORIZING THE EXECUTION OF DOCUMENTS RELATED THERETO Andy Reid, Finance Director, presented before the Council. Mr. Reid explained that conduit bonds were issued by the City in 2019 to help fund an expansion to the Prince of Peace multi -family senior housing facility. The City issued the bonds and then borrowed those proceeds to Prince of Peace through a loan agreement. The City then assigned the loan agreement to Citizens Bank which relieved the City of any responsibility or liability in the transaction. The City is not obligated in any manner to make debt service payments. The bonds do not affect the City's credit rating and do not count against the City's statutory limitations on borrowing. The benefit of the conduit bonds is to provide tax exempt financing to a non-profit organization which results in a lower cost of debt than if the non- profit received private financing directly from a bank. With this type of financing the City must approve any future changes to the bonds or loan agreement therefore this action is required at the request of Prince of Peace. Price of Peace, and Citizens Bank, are requesting to make amendments to the bond only and no changes to the loan agreement. All previous rights and obligations are still assigned to the bank. Motion by Czmowski, second by May, to approve Resolution No. 15774. Motion carried unanimously. 11. APPROVE/DENY DEVELOPMENT AGREEMENT WITH CADOTT HOLDINGS, LLC Matt Jaunich, City Administrator, presented before the Council. Mr. Jaunich explained that a local developer, Cadott Holdings, LLC, has submitted a proposal for the redevelopment of the city -owned lot located at 135 Franklin Street North. The developer is planning to construct four rowhomes on the site with work scheduled to begin no later than July 1, 2025 and be completed by December 31, 2025. Motion by May, second by Czmowski, to approve development agreement with Cadott Holdings, LLC. Motion carried unanimously. 12. APPROVE/DENY FIRST ADDENDUM TO LETTER OF INTENT FOR HUTCHINSON EVENT CENTER Lynn Neumann, PRCE Director, presented before the Council. Ms. Neumann explained that City staff and representatives from Hutchinson Health Partners have continuously been working on an agreement for the future ownership of the Hutchinson Event Center. On June 30, 3023, the City and Hutchinson CITY COUNCIL MINUTES September 24, 2024 Health Partners entered into a Letter of Intent regarding the potential transfer of control of the Event Center. The original letter of intent was set to expire on December 31, 2024, but both parties have agreed to extend the expiration date to December 31, 2025, to allow for future negotiations and due diligence. Motion by May, second by Sebesta, to approve first addendum to letter of intent for Hutchinson Event Center. Motion carried unanimously. 13. APPROVE/DENY RESOLUTION NO. 15766 — APPROVING THE 2025 HRA PRELIMINARY TAX LEVY Andy Reid, Finance Director, presented before the Council. Mr. Reid noted that the City must certify the 2025 preliminary HRA tax levy to the County Auditor by September 30, 2024. This tax levy has a statutory limit of $287,521, however the HRA Board is requesting $170,000 to fund its 2025 operations. The levy amount represents a 3% increase from the 2024 levy of $165,000. Motion by Burley, second by Sebesta, to approve Resolution No. 15766 in a levy amount of $170,000. Motion carried unanimously. 14. APPROVE/DENY RESOLUTION NO. 15767 — APPROVING THE 2025 EDA PRELIMINARY TAX LEVY Andy Reid, Finance Director, presented before the Council. Mr. Reid noted that the City must certify the 2025 preliminary EDA tax levy to the County Auditor by September 30, 2024. This tax levy has a statutory limit of $281,771 and that is the amount the EDA Board is requesting. The levy amount represents a 3.3% increase from the 2024 levy of $272,842. Motion by Czmowski, second by May, to approve Resolution No. 15767 in a levy amount of $281,771. Motion carried unanimously. 15. APPROVE/DENY RESOLUTION NO. 15768 — APPROVING THE 2025 GENERAL FUND & DEBT SERVICE PRELIMINARY TAX LEVIES Andy Reid, Finance Director, presented before the Council. Mr. Reid explained that the City's preliminary 2025 tax levy must be certified to McLeod County by September 30, 2024, for the general fund and debt service funds. Staff has two scenarios for the Council to consider: Scenario 1: Proposed preliminary tax levy of $9,460,161. This levy was shown at the last budget workshop with an overall City tax levy increase of 7.1 %. This is based on an 8.6% levy increase to the general fund levy and a 3.1 % increase to the debt levy. With the EDA and HRA tax levies the total tax levy increase is 6.9%. Scenario 2: Proposed preliminary tax levy of $9,530,010. This levy amount includes increased debt tax levy to account for $400,000 of additional construction costs to be funded each year by the debt levy. This does not affect the 2025 debt levy since it would apply to the 2025 project year with 2026 being the first year of debt service. This scenario also includes new debt for the fire ladder truck with $1 million of debt issued in 2025 and another $1.2 million of debt in 2026. This results in a $70,000 increase to the 2025 debt tax levy. This overall City tax levy increase for this scenario is 7.9%. The general fund levy is the same as Scenario 1 with an 8.6% increase, but a 5.9% increase to the debt levy. Combined with the EDA and HRA tax levies, the total tax levy increase is 7.6%. 11 CITY COUNCIL MINUTESSeptember 24, 2024 The general fund increase is attributed mainly to wages and benefits which includes the proposed request for a new fire inspector. The budgetary increase for the employee performance -based wage adjustments amounts to a 4.37% tax levy increase. The new fire inspector wages and benefits amounts to a 1.86% tax levy increase. Mr. Reid further detailed debt levies, cost targets and roadway costs for past projects and future projects and reviewed special projects fund balances and reserve fund balances. A combination of use of debt and cash could be used for the purchase of the ladder truck. Mr. Jaunich spoke about housing developments that may need the City's assistance with infrastructure. Therefore, this should be kept in mind as the Council discusses the debt levy and target amount. Council Members expressed that Scenario 2 gives the City flexibility with the levy in the event bonding is used for the fire ladder truck. Motion by Burley, second by Sebesta, to approve Resolution No. 15768 which includes Scenario 2. Motion carried unanimously. 16. APPROVE/DENY SETTING STRATEGIC PLANNING SESSION FOR OCTOBER 22, 2024, AT 3:45 P.M. (GOOD GOVERNMENT) Motion by Burley, second by Czmowski, to approve setting strategic planning session for October 22, 2024, at 3:45 p.m. Motion carried unanimously. 17. APPROVE/DENY SETTING TRUTH IN TAXATION HEARING FOR DECEMBER 3, 2024, AT 6:00 P.M. Motion by Czmowski, second by Burley, to set truth in taxation hearing for December 3, 2024, at 6:00 p.m. 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.) 18. MINUTES/REPORTS FROM COMMITTEES, BOARDS OR COMMISSIONS a) Library Board Minutes from July 22, 2024 b) Parks/Recreation/Community Education Board Minutes from August 5, 2024 c) Planning Commission Minutes from August 20, 2024 d) City of Hutchinson Financial Report and Investment Report for August 2024 MISCELLANEOUS 19. STAFF UPDATES Matt Jaunich — Mr. Jaunich noted that a meeting was held yesterday with local legislators on three bonding requests the City has. He also noted that Fall clean-up is this Saturday (hard good pick up) and starts at 6:00 a.m. Absentee voting has started and is taking place at City Center during normal business hours. 20. COUNCIL/MAYOR UPDATE Dave Sebesta — Council Member Sebesta provided an update from the Mid Minnesota Development Commission update — transportation is still a main issue. He also noted that the Meeker -McLeod Senior Expo is October 9, 2024, at 2:00 p.m. at the McLeod County Fairgrounds. CITY COUNCIL MINUTESSeptember 24, 2024 Pat May — Council Member May provided an update from the Public Arts Commission. Chad Czmowski — Council Member Czmowski provided an update from the EDA Board. Topics included a new tenant at the development center (incubator) and a proposal being received for the old medical center site. He also noted that the Hutchinson Station will be printing a candidate forum for the council member candidates. Tim Burley — Council Member Burley noted that on October 5, 2024, at Masonic West River Park preserved military war vehicles will be on display. He also spoke about resident concerns he has received regarding feral cat issues. Lastly, he provided a brief update from the Library Board and noted that there are lots of programs happening at the public library. Gary Forcier — Mayor Forcier provided updates from the HRA Board and Airport Commission. ADJOURNMENT Motion by May, second by Czmowski, to adjourn at 6:35 p.m. Motion carried unanimously. ATTEST: Gary T. Forcier Mayor Matthew Jaunich City Administrator