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cp12-10-24HUTCHINSON CITY COUNCIL MEETING AGENDA TUESDAY, DECEMBER 10, 2024 CITY CENTER — COUNCIL CHAMBERS (The City Council is provided background information for agenda items in advance by city staff, committees and boards. Many decisions regarding agenda items are based upon this information as well as: Citypolicy andpractices, inputfrom constituents, and other questions or information that has not yet been presented or discussed regarding an agenda item) 1. CALL MEETING TO ORDER — 5:30 P.M. (a) Approve the Council agenda and any agenda additions and/or corrections 2. INVOCATION — Oak Heights Covenant Church (The invocation is a voluntary expression of the private citizen, to and for the City Council, and is not intended to affiliate the City Council with, or express the City Council's preference for, any religiouslspiritual 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 PUBLIC COMMENTS (This is an opportunity or 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 ifhe will be acceptingpublic comments during the agenda item ifnot apublic hearing. Ifyou have a question, concern or comment, please ask to e 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 from personal or derogatory attacks on individuals) 5. CITIZENS ADDRESSING THE CITY COUNCIL 6. APPROVAL OF MINUTES (a) Council Workshop of November 26, 2024 (b) Regular Meeting of November 26, 2024 (c) Truth in Taxation Hearing of December 3, 2024 CONSENT AGENDA (The items listedor consi eration 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 items are not discussed) 7. APPROVAL OF CONSENT AGENDA (a) Consideration for Approval of 2025 License Renewals (b) Consideration for Approval of Purchase of Leaf Vacuum (c) Consideration for Approval of Resolution No. 15799 — Resolution to Sell at Auction Surplus Property (Parks Department Pick-up) (d) Consideration for Approval of Enterprise Center Lease Agreement, Master Relationship Agreement and Non -Disclosure Agreement with LMAO, dba Smokey Dukes, LLC (e) Consideration for Approval of Out of State Travel for Dan Broucek and Dion Carter to Attend the United States Composting Council's Annual Conference in Phoenix, Arizona From January 27-30, 2025 CITY COUNCIL AGENDA — December 10, 2024 (f) Appointments to Parks/Recreation/Community Education Board 1. Eric Thovson to August 2027 2. Ann Lamecker to August 2026 (g) Consideration for Approval of Items for Franklin Site Improvement Project (Letting No. 3, Project No. 25-03) 1. Resolution No. 15800 - Resolution Ordering Preparation of Report on Improvement 2. Resolution No. 15801 - Resolution Receiving Report and Calling Hearing on Improvement (h) Claims, Appropriations and Contract Payments PUBLIC HEARINGS — 6:00 P.M. - NONE COMMUNICATIONS REQUESTS AND PETITIONS (T e purpose oJ this portion oJ the agenda is to provide the Council with information necessary to craft wise policy. Includes items like monthly or annual reports and communications from other entities) 8. REVIEW OF TRUTH IN TAXATION HEARING UNFINISHED BUSINESS NEW BUSINESS 9. APPROVE/DENY PROPOSAL FROM GC REAL ESTATE PARTNERS FOR REDEVELOPMENT OF THE CITY -OWNED FRANKLIN STREET SITE 10. APPROVE/DENY SETTING DATE FOR CITY ADMINISTRATOR'S ANNUAL PERFORMANCE REVIEW 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) 11. MINUTES/REPORTS FROM COMMITTEES, BOARDS OR COMMISSIONS �a) Library Board Minutes from October 28, 2024 b) PRCE Board Minutes from November 4, 2024 MISCELLANEOUS 12. STAFF UPDATES 13. COUNCIL/MAYOR UPDATE ADJOURNMENT 2 HUTCHINSON CITY COUNCIL SPECIAL WORKSHOP MEETING MINUTES TUESDAY, NOVEMBER 26, 2024, AT 4:00 P.M. CITY CENTER — COUNCIL CHAMBERS Call to Order — 4:00 p.m. Mayor Gary Forcier called the meeting to order. Members present were Pat May and Chad Czmowski. Others present were Matt Jaunich, City Administrator and other city directors and staff as well as Planning Commission Member Dan Janssen. DISCUSSION/REVIEW ITEMS 1. Review of Draft Hutchinson Downton Plan Dan Jochum, Planning/Zoning/Building Director, introduced Bryan Ha.rjes of HKGI Consulting. HKGI worked with the steering committee and staff on development of the updated downtown plan. Mr. Harjes provided a presentation of the final draft of the Hutchinson Downtown Plan Update. Mr. Harjes explained that the purpose of the plan is to reassess and refresh initiatives as community circumstances have evolved since the 2013 Downtown Vision & Action Plan was adopted. The City and the EDA initiated the creation of the 2013 Plan to establish a unified and strategic vision for downtown Hutchinson with an implementation strategy for the 10-20 year future. The 10+ years since the 2013 Plan's adoption, the overall vision remains intact with many similar initiatives to continue into the foreseeable future. Although, many changes have occurred in the City and the downtown since, a renewed outlook will ensure that the foundations of the 2013 vision and actions remain aligned and adapt to the current and future conditions of the community. The project's objectives for the 2024 Plan include building and enhancing Hutchinson's sense of community; expanding and improving the range of livability factors in the community; strengthening and diversifying the local economy and enhancing Hutchinson as a destination. Mr. Harjes reviewed the accomplishments in the downtown area since 2013 as well as the downtown's strengths and weaknesses. The Plan indicates that there are key market findings in the housing industry that anticipate that downtown population and household growth will be higher than that of the city overall. It is anticipated that downtown Hutchinson could support a significant portion of the city's high -density residential demand. It is estimated that there will be a demand for up to 380 units of general high -density occupancy housing in downtown between 2024 and 2030. However, planning for higher unit residential development in downtown may be challenging due to smaller parcels and difficulties in accommodating parking needs. In addition, there are key findings for retail use and restaurants. For retail, about 1/3 of retail spending is generated by consumers outside of the city but 80% of spending occurs within the primary market area. Commercial and retail consumer expenditures are projected to grow in the restaurant and retail primary market area, but this growth is modest, at about 1%. The highest categories of projected growth over the next five years are grocery and restaurants. There is a high concentration of general merchandise and major drugstores at the south end of the city with boutique retail, restaurants and professional services concentrated in the downtown. Occupancy has recently stabilized in southern Hutchinson which could emphasize the opportunity for more infill in downtown. It is estimated that there will be a demand for about 2000 square feet of restaurant and retail development between 2024 and 2030. This demand will primarily come from restaurants and specialty uses, likely seeking redevelopment and reuse spaces that downtown could accommodate. There is also potential in increasing missed -use developments in downtown Hutchinson. Based on the complete market analysis and findings, HKGI is making the following recommendations to lead to actionable steps to guide future development and enhance downtown Hutchinson's economic vitality: Support anchor businesses that drive traffic to downtown such as large employers, restaurants, and the Hutchinson liquor store; Plan for long-term growth north of the Crow River and at the intersection of Highways 15 and 7; Prioritize signage and wayfinding at the intersection of Highways 15 and 7; Enhance connectivity south of the Crow River and 2nd Avenue corridor; Identify more opportunities for larger parcel assemblage for residential development; Further study, increase marketing or develop subsidy programs for reuse and redevelopment of existing downtown buildings; Explore resources to support residential development in existing second -floor spaces within commercial buildings as well as support mixed -use opportunities by incorporating ground floor commercial spaces in new residential developments; Encourage the reuse of existing building rather than focusing solely on new development and adopt flexible and creative approaches to encourage redevelopment; and Prioritize enhancing existing retail spaces through customized approaches for utilizing available floor area. Mr. Hares reviewed the community engagement used in development of the 2024 Plan. This included an online survey, a steering community, gathering feedback at Water Carnival and Music in the Park, and holding an open house. The summary of public input themes included community events, affordable housing options, support of local businesses, increase variety of uses, invest in physical improvements and maintaining community assets. Mr. Harjes also reviewed the Downtown study area and the subdistricts within the defined area. The primary focus of the Downtown Plan update aims to invigorate and maintain the heart of the city by fostering a vibrant business climate and commerce. The goal is to transition from a predominance of service -oriented uses to a balanced mix of specialty retail and entertainment options; creating an activated downtown. Implementation of this could include redevelopment or reinvestment in the underutilized land such as the Cenex Site North of the River, MITGI site for infill of commercial building, Northwest corner of Hwy 15/Hwy 7, commercial edge along Hwy 7 at Bluff Street and the unique commercial opportunity near Depot Marketplace along Adams Street. Other recommendations for implementation include establishing a continuous retail/commercial frontage along Main Street, maintaining and enhancing quantity of destination retailers in the downtown, continue to promote and support mixed use projects, continue to explore ways to expand lodging options, consider the re-establishment of a downtown business group, develop a combined branding/marketing and communication effort and integrate business recruitment and incubators. The Plan also recommends developing attractive housing options such as developing a variety of housing options, enhancing upper levels of commercial building into living spaces, maintaining and strengthening the existing housing in the neighborhoods surrounding downtown, exploring incorporation of intergenerational/life-cycle housing, developing incentives for property owners and developers and providing more affordable housing options. Implementation will also include developing strong connections such as building multi -modal infrastructure, developing a riverfront trail along the south side of the Crow River near Franklin Street, continuing to implement wayfinding and signage, enhancing the 2nd Avenue corridor, enhancing downtown parking, focusing on side streets and gateways and promoting active living. Implementation will also include "Destination Hutchinson" such as identifying and aligning downtown spaces with specific events and programming, expanding opportunities and locations for outdoor dining, establishing design standards and guidelines to preserve and enhancing historic architecture, identifying and developing a multi -functional performing arts facility/amphitheater/outdoor entertainment venue, exploring strategies for preservation of state theater, experimenting with the creation of a festival street, studying the potential of a social district, promoting third spaces in downtown, providing a community center, cross -promoting community events, exploring partnerships with McLeod County and City for use of fairgrounds space and market Hutchinson as a destination. Mr. Hares reviewed strategies listed in the plan to evaluate city operations and leveraging investments toward community resiliency. These include reviewing, clarifying and updating regulatory procedures and ordinances; establishing performance targets; promoting sustainable development benchmarks; and using redevelopment and rehabilitate finance tools. Implementation also includes strengthening tourism through enhanced Parks & Recreation such as establishing Hutchinson as the premier trailhead west of the Twin Cities for cycling enthusiasts; establishing a strong waterfront recreation component to expand tourism; establishing a strong winter recreation component to expand tourism; enhancing partnerships to benefit parks in the downtown area; and add additional park elements that will benefit the downtown. The Plan's implementation summary main focus areas are enhancing business climate and commerce, developing attractive housing options; developing strong connections; Destination Hutchinson — celebration of Arts, Culture & Heritage; fostering sustainability and stewardship and strengthening tourism through enhanced parks and recreation. The final plan will be before the City Council at its December 19, 2024, Council meeting. Motion by May, second by Czmowski, to adjourn at 5:10 p.m. Motion carried unanimously. ATTEST: Gary T. Forcier Mayor Matthew Jaunich City Administrator HUTCHINSON CITY COUNCIL MEETING NHNUTES TUESDAY, NOVEMBER 26, 2024 CITY CENTER — COUNCIL CHAMBERS (The City Council is provided background information for agenda items in advance by city staff, committees and boards. Many decisions regarding agenda items are based upon this information as well as: Citypolicy andpractices, inputfrom constituents, and other questions or information that has not yet been presented or discussed regarding an agenda item) 1. CALL MEETING TO ORDER — 5:30 P.M. Mayor Gary Forcier called the meeting to order. Members present were Pat May and Chad Czmowski. Also present was Matt Jaunich, City Administrator. (a) Approve the Council agenda and any agenda additions and/or corrections Motion by Chad Czmowski, second by May, to approve the agenda as presented. Motion carried unanimously. 2. INVOCATION — Christ the King Lutheran Church (The invocation is a voluntary expression of the private citizen, to and for the City Council, and is not intended to ailiate the City Council with, or express the City Council's preference ffor, any religious/spiritual organization. The views or beliefs expressed by the invocation speaker have not been previous y reviewed or approved by the Council or staff) 3. PLEDGE OF ALLEGIANCE 4. RECOGNITION OF GIFTS, DONATIONS AND COMMUNITY SERVICE TO THE CITY PUBLIC COMMENTS (T is is an opportunity or 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 ifhe will be acceptingpublic comments during the agenda item ifnot apublic 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 from personal or derogatory attacks on individuals) 5. CITIZENS ADDRESSING THE CITY COUNCIL 6. APPROVAL OF MINUTES (a) Budget Workshop of November 12, 2024 (b) Regular Meeting of November 12, 2024 Motion by Czmowski, second by May, to approve the minutes as presented. Motion carried unanimously. CONSENT AGENDA (The items iste or consi eration 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 items are not discussed) 7. APPROVAL OF CONSENT AGENDA I (a) Consideration for Approval of 2025 License Renewals (b) Appointment of Kayla Zuidema to Planning Commission to March 2025 CITY COUNCIL MINUTES —November 26, 2024 (c) 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 Czmowski, with Forcier abstaining, to approve Consent Agenda II. Motion carried unanimously. PUBLIC HEARINGS — 6:00 P.M. 9. APPROVE/DENY DALE STREET SW (LETTING NO. 1, PROJECT NO. 25-01) (a) Resolution No. 15795 - Resolution Ordering Improvement and Preparation of Plans and Specifications (b) Resolution No. 15796 - Resolution Approving Plans and Specifications and Ordering Advertisement for Bids Mike Stifter, Public Works Manager, presented before the Council. Mr. Stifter reviewed the Dale Street project which includes a full depth reclamation from South Grade Road SW to Roberts Road SW. The project will include partial curb and gutter replacement, water main, sanitary sewer and storm sewer repairs, restoration and appurtenances. The total project cost is estimated at $2,079,050. Mr. Stifter explained construction is anticipated to start in early June of 2025 and to be substantially completed by the time school starts next Fall. Bids are scheduled to be opened for this project on February 11, 2025. Michelle Jozwick, 710 Dale Street, presented before the Council. Ms. Jozwick explained that the neighboring house across the street continually parks in front of her residence and allows for no leaf pickup or street sweeping in front of her house. Ms. Jozwick asked if parking on both sides of the street could be allowed as part of the project. Mayor Forcier noted that perhaps no parking on either side of the street could be the resolution. Matt Jaunich explained the Council's authority they have on parking issues and noted that this is a policy issue not necessarily a construction issue for the Dale Street project. Mike Stifter noted that he will try to work on this issue with Ms. Jozwick. Motion by Czmowski, second by May, to close public hearing at 6:15 p.m. Motion carried unanimously. Motion by Czmowski, second by May, to approve Resolution Nos. 15795 and 15796. Motion carried unanimously. 10. APPROVE/DENY 2025 STREET IMPROVEMENT PROJECTS (LETTING NO. 2, PROJECT NO. 25-02) (a) Resolution No. 15797 - Resolution Ordering Improvement and Preparation of Plans and Specifications (b) Resolution No. 15798 - Resolution Approving Plans and Specifications and Ordering Advertisement for Bids Mike Stifter presented before the Council. Mr. Stifter explained that this project includes Hassan Street SE from 1st Avenue North to Oakland Avenue SE, 1st Avenue SE from Main Street South to Jefferson Street SE, 3rd Avenue SE from Main Street South to Hassan Street SE, 6t' Avenue SE from Main Street South to Hassan Street SE, 7t' Avenue SE from Main Street South to Hassan Street SE and Stoney Point Road SW from School Road SW to Roberts Road SW. The estimated project cost is $1,975,550. The project is anticipated to start in the Spring of 2 CITY COUNCIL MINUTES —November 26, 2024 2025 and be substantially completed by the time school starts in the Fall. The bids for this project will be opened on February 18, 2025. Terri Robbins, 311 Stoney Point Road, presented before the Council. Ms. Robbins commented on her support of this project. She noted that the only concern she has is the consideration of the heavy traffic Stoney Point Road has with school bus and vehicle traffic and ensuring the construction allows for a long useful life. Mr. Stifter noted that this has been considered into the construction plans. Dave Kraemer, 105 Washington Avenue East, presented before the Council. Mr. Kraemer explained that he has two semi -truck deliveries each week and he was told that staff and contractors would work with him on getting service deliveries. Mr. Stifter provided assurance to Mr. Kraemer that accommodations will be made for his business. Eldonna Rettman, 564 Hassan Street, presented before the Council. Ms. Rettman asked what the assessment rates mean under water service lateral and sewer service lateral on the project notice information sheet. Mr. Stifter noted that her property will only be assessed for what is noted on the personal notices sent out and the water service lateral and sewer service lateral fees do not apply to her property. Motion by Czmowski, second by May, to close public hearing 6:32 p.m. Motion carried unanimously. Motion by Czmowski, second by May, to approve Resolution Nos. 15797 and 15798. Motion carried unanimously. purpose of this portion of the agenda is to provi e t e ounci with information necessary to craft wise policy. ides items like monthly or annual reports and communications from other entities.) 11. DISCUSSION ON THE PRELIMINARY BUDGET AND TAX LEVY FOR 2025 Matt Jaunich, City Administrator, presented before the Council. Mr. Jaunich explained that significant changes have been made to the preliminary budget and tax levy since September. Increased revenues of $313,534 helped to reduce the tax levy by $178,734. These revenues include the new state delivery fee for street maintenance, airport fuel sales, increased building permit revenue, increased police pension aid, increased DMV fee revenues and other minor adjustments. Expenses also increased $218,528 — these expenses included fuel expense increases for the airport system, increased wages and benefit due to staff adjustments, increased software costs, increased utilities, increased equipment costs and other minor adjustments. Because of these changes, the general fund tax levy is proposed at a 7.1% increase which is down 1.5% from the preliminary levy and the total tax levy is proposed at a 6.8% increase which is down 1.1% from the preliminary levy. Mr. Jaunich noted that the Truth in Taxation hearing is scheduled for December 3, 2024, where this information will be covered in more detail. UNFINISHED BUSINESS NEW BUSINESS CITY COUNCIL MINUTES —November 26, 2024 12. APPROVE/DENY SETTING ORGANIZATIONAL MEETING FOR JANUARY 2, 2025, AT 5:30 P.M. Motion by May, second by Czmowski, to approve setting 2025 organizational meeting for January 2, 2025, at 5:30 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) 13. MINUTES/REPORTS FROM COMMITTEES, BOARDS OR COMMISSIONS (a) City of Hutchinson Investment Report and Financial Report for October 2024 (b) Sustainability Advisory Board Minutes from April 15 and August 19, 2024 MISCELLANEOUS 14. STAFF UPDATES Matt Jaunich — Mr. Jaunich reminded the Council that the Truth in Taxation hearing is set for December 3, 2024. He also noted that city offices are closed this Thursday and Friday for the Thanksgiving Holiday. 15. COUNCIL/MAYOR UPDATE Pat May — Council Member May noted that the Public Arts Commission is calling for artists for the sculpture stroll. Chad Czmowski — Council Member Czmowski noted that the EDA board has selected a developer for the old medical clinic site on Franklin Street. The developer is proposing to build a 79-unit apartment complex. Gary Forcier— Mayor Forcier provided updates from the HRA Board regarding housing statistics. He Also provided updates from the Resource Allocation Committee and Airport Commission. Motion by May, second by Czmowski, to recess until 6:00 p.m. Motion carried unanimously The Council convened into session at 6:00 p.m. ADJOURNMENT Motion by Czmowski, second by May, to adjourn at 6:33 p.m. Motion carried unanimously. .19 MINUTES CITY COUNCIL TRUTH IN TAXATION HEARING DECEMBER 3, 2024 CALL TO ORDER — 6:00 P.M. Members Present: Mayor Gary Forcier, Pat May, Tim Burley, Dave Sebesta and Chad Czmowski. Others present: Matt Jaunich, City Administrator and Andy Reid, Finance Director. TRUTH IN TAXATION HEARING Mayor Forcier opened the hearing at 6:00 p.m. Matt Jaunich, City Administrator, presented before the Council. Mr. Jaunich explained the budget process the City has used to date. Four work sessions have been held over the past seven months. The Council adopted the preliminary budget and tax levy in September and recently truth in taxation notices were mailed to all City property owners. Mr. Jaunich explained the purpose for tonight's hearing is to enhance public participation in the property tax system by allowing a public forum to discuss the budget, discuss the proposed tax levy, explain the increases and hear public comments and questions on the budget and tax levy. If the hearing needs to be continued it will be continued at the next Council meeting on December 10, 2024, and the final budget and tax levy is expected to be adopted by the Council on December 19, 2024. Mr. Jaunich noted that at tonight's hearing the Council discusses the City's share of citizens' total 2025 proposed tax bill, not property valuations. Mr. Jaunich explained that property valuation open book meetings are held in May/June by McLeod County. Mr. Jaunich briefly explained valuations and noted that the market value of a property is determined by January 2 of the year prior to the year in which taxes on that property are due. Therefore, market values for taxes payable in 2025 were set in January 2024. Property values on statements recently received are based off of home sales from October of 2022 to September of 2023. Property owners will receive new notices of market values from the assessor in March/April of 2025. Questions on valuations should be addressed in May/June with the County Assessor/County Board. Mr. Jaunich explained that the preliminary tax levy set in September showed a City tax increase of 7.9% and included a balanced budget. The revised budget has reduced the tax levy increase to 5.8% while maintaining a balanced budget. The City has adjusted its revenue and expense projections and eliminated roughly $183,750 in taxes since its preliminary budget was adopted in September. Hutchinson's 2024 average City tax rate ranked the second lowest in McLeod County, however ranked in the average range amongst other outstate regional centers. The state-wide city average tax rate is 62.59% and Hutchinson is at 54.32%. Hutchinson is the fifth lowest of all outstate regional centers for the poverty level, 4t' highest of all outstate regional centers for median household income, 5t' highest of all outstate regional centers for median home value and is the third lowest of all outstate regional centers in LGA payments. The 2025 state-wide proposed property tax increase of cities is 8.8% and the 2025 state-wide proposed property tax increase for all taxing agencies is 6.0%. Mr. Jaunich provided data on the price of government for the City of Hutchinson related to enterprise funds and governmental funds. Mr. Jaunich noted that there are 14 reasons property taxes vary from year to year. These include: the market value of property may change; the market value of other properties in the taxing district may change, shifting taxes from one property to another; the State general property tax may change; the city budget and levy may change; the Township budget and levy may change; the County budget and levy may change; the School District's budget and levy may change; a Special District's budget and levy may change; special assessments may be added to a property tax bill; voters may have approved a school, city/township, county or special district referendum, federal and state mandates have changed; aid and revenue from the state and federal governments may have changed; the state legislature may have changed the portion of the tax base paid by different types of properties; and other state law change may adjust the tax base. Mr. Jaunich also reviewed Minnesota's property tax system and how it is based off of five components, those being: local property tax levies (city, school district, county, etc.), property tax classification rates (ranges from 0.25% to 2.0% - set by the state) property value (based off of property sales and is set by the county assessor), tax credits (only certain properties get this) and state general tax (set by the state and assigned to mainly commercial/industrial properties). Hutchinson's property tax rate is set by taking the city's tax levy and dividing it by its total tax capacity. Tax capacity is determined by multiplying a property's market value by its classification rate. Each property rate is assigned a classification rate depending on its use by the State Legislature. Properties associated with income production (commercial & industrial) have a higher classification weight than other properties. The City's total tax capacity is an accumulation of all parcels within the city, minus adjustments. Mr. Jaunich also explained how the City's portion of a proposed tax bill is determined. Mr. Jaunich shared four options that the Council is considering for the tax levy that range from a 0% increase to a 7.9% increase. Mr. Jaunich noted that with the proposed 5.8% levy increase that means a $164.00/year increase on a home valued at $275,000. Mr. Jaunich also noted that even with a 0% levy increase, a property owner's taxes would increase $85 due to the increase in valuation. Again, this is the City's portion of the tax statement. Mr. Jaunich also explained the homestead exclusion and market value history. He noted that the State adjusted the Homestead Market Value Exclusion amounts upwards to address rising residential property values. The increased MVHE will result in a lower Net Tax Capacity and ultimately a higher tax rate than under the prior HMVE. Mr. Jaunich reviewed the entities that share a Hutchinson tax bill those being the County, the School (operating), the School (debt), the City, the EDA, the HRA and Region 6E. Mr. Jaunich then reviewed the City's mission statement and seven core areas of focus, which include public safety; health & recreation; transportation; economic development; environment, good government and housing. Mr. Jaunich reviewed the proposed tax levies for 2025 which includes a 5.8% increase for the City's portion and a 3.3% increase for the EDA levy and a 3.0% increase for the HRA levy, for a total tax impact increase of 5.7%. Mr. Jaunich reviewed the 2025 debt levy and the tax levy comparison since 2017. The proposed 2025 tax levy includes the tenth straight year of an increase in the general fund portion of the levy. The proposed 2025 tax levy includes the fourth straight year of an increase to the debt fund portion of the levy (5.6%). Compared to 2015, the City's total tax levy has increased by 40.7%. The average annual tax levy increase since 2015 has been 3.3%. The 2025 total tax levy accounts for a per capita tax of $661, which is up from $617 in 2024. Mr. Jaunich provided additional information on the City's tax rate such as: 1.) The City's growth in tax capacity (0.9%) has slowed down, increasing the pressure on tax rates; 2.) This will be the second time that the tax levy (5.8%) outpaces the tax capacity in 10 years, resulting in a likely increased city tax rate; 3.) The median home value would see a $164 city tax bill increase, based on an estimated 10% increase from $250,000 to $275,000 (a property possibly might not see a city tax increase if its value does not increase at the same rate as the median home value and a property valued at $250,000 in 2024 with the same value in 2025 would see a $61 increase in its city tax bill). Mr. Jaunich also provided data on the 10-year tax rate trend. Mr. Jaunich reviewed the general fund revenues and expenses. Mr. Jaunich explained that the general fund revenues include property taxes, other taxes, licenses & permits, intergovernmental revenue, charges for service, fines & forfeitures, miscellaneous revenue, and transfers -in. He noted additional facts on general fund revenues which include: general fund revenues include a 5.8% tax levy increase ($370,598) - $25,000 of the levy is allocated to the Uponor tax abatement; property taxes account for approximately 43% of the General Fund Revenues; there will be no increase in the PILOT payment from HUC for 2025; there is a minimal increase in LGA and the Fire & Police Pension Aid; includes new State money of $52,346 which is a new tax on retail deliveries; includes a slight increase in building permit fees ($25,000) and new fuel sales at Airport ($107,000); transfer -ins account for $2,812,628 and is equivalent of a 48% tax levy increase (Liquor Fund, Creekside and HUC); miscellaneous increases on charges for services (DMV, Civic Arena); and a 1% tax levy increase to the general fund is equivalent to $63,586. Total general fund expenses are comprised of wages & benefits, supplies, services & charges, miscellaneous expenses, transfers - out and capital outlay. Public safety accounts for 34.4% of general fund, 26.0% is general government, 22.6% is culture and recreation, 14.4% is streets and highway and 2.6% is miscellaneous. Mr. Jaunich noted the following: wages & benefits increased 4.9% for 2025 which includes performance and other annual adjustments, a new Fire Inspector/Firefighter position, a DMV position switched from part-time to full-time and includes a full year of an Engineering Technician position; wages and benefits account for 68% of general fund expenses; supply costs are going up due to the City taking over the fuel at the Airport; large costs for software and licensing; additional $25,000 for fleet funding; and the 2025 budgeted expenses are balanced with revenues. Mr. Jaunich then reviewed the enterprise funds — consisting of the liquor, compost, garbage, water, wastewater and stormwater funds. Mr. Jaunich noted that the Liquor Hutch and Creekside continue to do well and will contribute $670,000 to the general fund in 2025. There will be a 5% increase in garbage rates which is the second of probably four straight increase since 2008. All enterprise funds continue to have healthy fund balances. There will be a rate increase to stormwater rates of 8%. Transfers to the general fund from the enterprise funds will be at $870,000 in 2025. Total enterprise money is $2,812,628 when HUC money is included. Mr. Jaunich noted that capital needs are due to the age of all of the facilities continuing to be a factor. Mr. Jaunich reviewed the 2025-2029 capital improvement plan. The capital improvement plan is made up of infrastructure, enterprise funds, public safety, public works, Park & Recreation, and general government and is approximatelyy $65 million. The approximate breakdown of distribution of the funds is as follows: $21.34 million to infrastructure; $2.86 million to ppublic safety; $19.28 million to Enterprise Funds; $14.285million to Public Works; $6.37 million to Park & Rec and $1.12 million to General Government. Funds for the CIP come from new debt, enterprise funds, taxes, special assessments, aids/grant, special funds/reserves and unfunded (no current funding sources). Major capital items included in the capital plan are: Water and Wastewater improvements and equipment, water meters, liquor store and Creekside improvements, lakes/river improvements, Franklin Street redevelopment, Dale Street, Hassan Street, airport, cemetery, vehicles/equipment, lighting improvements at Roberts Parks, library, playgrounds, aquatic center/rec center, ladder truck -chassis, police vehicles, City Center improvements, IT upgrades and election equipment. Mr. Jaunich reviewed the debt management plan. The big impact was the new police station. 2022 was the first increase in the debt levy since 2016. The 2025 increase is at a 5.8% increase and accounts for debt associated with a new fire ladder truck. Increased interest rates have/will impact future debt decisions. Rising project costs have put pressure on increasing the debt tax levy. Debt levy has not kept up with inflation. The City still has future debt needs for heavy equipment. There may be an option where the City won't have to borrow for a fire ladder truck which would result in a tax levy reduction of approximately $70,000. Mr. Jaunich reviewed that staff is recommending a 5.9% increase in general fund revenue/expenses which means a 5.8% increase in the total general fund and a 5.6% increase in the debt tax levy with an overall tax levy increase of 5.8%. With the EDA tax levy proposed to increase 3.3% and the HRA tax levy proposed to increase 3.0% the total tax impact is 5.7%. One of the biggest factors behind the levy increase is the general wage and benefit increases along with a couple of additional positions are expected to cost the City an additional $492,186 in 2025. There is an additional $69,849 into the debt levy to account for a new fire ladder truck (there is the possibility that this may be eliminated by final certification). The 2025 budget includes an additional fire inspector position and a change in the staffing models at the DMV and in engineering. The proposed budget for 2025 includes no other significant increases or cuts in staffing or changes in service. Staffing costs and capital needs are the biggest "driver" of the budget. Fund balances continue to remain high and the fiscal condition of the City is healthy. The State's budget forecasts is projecting a slight surplus — meaning there should be any State budget issues impacting the City. Home values continue to increase and the City is continuing to see growth at all levels (residential including multi -family, commercial, industrial) and inflation/supply chain issues continue to impact the City as well. The Council asked general questions related to revenues and expenses related to the airport and the event center and park/recreation facilities. Council Member Burley encouraged staff to continue to look for efficiencies. Moran Baum asked what the $100,000 licensing fees are specifically for. Mr. Jaunich noted that is for a Microsoft 365 software conversion. Ms. Baum also clarified that the City received $3.1 million in LGA in 2024. Mr. Jaunich confirmed that 50% goes to the general fund and 50% goes to the capital fund. Ms. Baum asked the pros/cons of buying the fire ladder truck with cash as opposed to borrowing. Mr. Jaunich noted that the pro is there is no direct effect to the tax levy and the con is taking funds out of reserves. A" approach was used for the aquatic center. The use of funds for the fire ladder truck will be discussed in more depth at the next City Council meeting. A resident in the audience stated he has lived in his house for 46 years and property taxes increase every year. He stated that is market value went up $23 however his taxes went up $300. Mr. Jaunich reviewed the resident's tax statement and clarified that the home's valuation went up $23,000. Mr. Jaunich also clarified that the City's portion of taxes went down however the county and school taxes increased. The resident questioned the need for a new fire ladder truck. The resident also opposed the building of a splash pad. The resident also commented on the cost of the new police facility. Mike Schumann, Fire Chief, reviewed the need and the requirements for a new ladder truck. Jim Lauer, 775 Laura Avenue SW, presented before the Council. Mr. Lauer spoke about valuations and capacities increasing. Mr. Lauer spoke about the four options the Council can consider for the tax levy increase. He noted that inflation needs to be considered as well as cost of living increases. Taxpayers' income increase is averaging 2.5% however it doesn't match the proposed tax levy increase. He asked that the Council consider this in the future that the tax levy increases don't exceed cost of living and inflation increases. Mr. Lauer stated that the proposed 5.8% levy increase is higher than the county's and the school district's. ADJOURN Motion by Czmowski, second by May, to adjourn at 7:20 p.m. Motion carried unanimously. ATTEST: Gary T. Forcier Mayor Matthew Jaunich City Administrator To: Mayor and City Council From: Stephanie Nelson, HR/Admin Technician Date: December 10, 2024 Subject: 2025 License Renewals The following establishments have applied for 2025 license renewals. The appropriate paperwork has been submitted. Please approve the following licenses: On -Sale Intoxicating Sunday Liquor License Caterer Flank Bar & Char Flank Bar & Char Flank Bar & Char Taxi Cab Tobacco On -Sale 3.2 Malt Liquor Quality Transportation — Matt Reed BP 47803 Tara Tepley - The Paint Factory RA HUTCHINSON CITY COUNCIL HUTCHINSON Request for Board Action A CITY ON PURPOSE. Approval for Leaf Vacuum Purchase Agenda Item: Department: Public Works LICENSE SECTION Meeting Date: 12/10/2024 Application Complete N/A Contact: Mike Stifter Agenda Item Type: Presenter: Mike Stifter Reviewed by Staff Consent Agenda Time Requested (Minutes): License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: We would like to proceed with purchasing a leaf vacuum that was approved by the fleet committee earlier this year. Similar to some of our larger purchases we're able to get this year's pricing by providing a purchase order and signing a purchase agreement. Also like the other purchases delivery and payment would not be until next year. BOARD ACTION REQUESTED: Approval to purchase a leaf vacuum unit Fiscal Impact: $ 137,330.20 Funding Source: Stormwater and Creekside FTE Impact: Budget Change: New Bu Included in current budget: Yes PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A OLYMPIAN 11 (TRAILER MOUNT) PRICE WORKSHEET Effective 06-01- Date 6/3/2024 Phone 320-234-4479 Company MACQUEEN GROUP E-mail Tread@hqtchtnspn!pn.gov Name C/O HUTCHINSON Title O l m 0� F ; y �,l n �4 49 Address 1400 ADAMS ST. S.E. City J HUTCHINSON IState I MN lZip 55350 STANDARD FEATURES 3-axis proportional electric/hydraulic pickup overhead boom w/ 180° swing Fully accessible hydraulic valve on swing out door 23 yard capacity leaf containment box with hoist Hydraulic rear tailgate Hydraulic Jack 4 Wireless Camera monitoring system (single camera) 74 H.P. liquid -cooled, diesel engine r Quick Disconnect Suction Hose 40 gallon fuel tank Elbow liner Enclosed operator platform for controlling collection boom Straight Rear Exhaust Belt drive fan with idler tensioner adjustment & blower liner Clean Out Door Heavy dutyhand clutch with engagement lever at operator station Removable radiator screen and Rear mud flaps Flx-Thane VHD Clear Urethane Hose Fire extinguisher, wheel chocks and amber LED flashers 042002 ENTER BASE UNIT QUANTITY HERE: SOURCEWELL BASE: $156,978.00 TOTAL SOURCEWELL BASE PRICE: Part # CAPACITY OPTIONS • Sourcewell CONFIGURED PRICE 042110 Standard Capacity (23 YD) Standard Standard 042112 High Capacity (30 YD) $4,391 $0 Part # ENGINE OPTIONS Sourcewell CONFIGURED PRICE 042200 74 HP Kubota* V38M Tier 4 Diesel Engine Standard Standard 042210 Eco Mode Patent Pending $660 $660 042202 74 HP John Deere* Tier 4 Diesel Engine r $9,097 $0 042203 99 HP John Deere* Tier 4 Diesel Engine $26,322 $0 Part # ENGINE COUPLER OPTIONS - Sourcewell CONFIGURED PRICE 0423SO Heavy Duty Hand Clutch Standard Standard 042351 Transfluid° Coupler a $4,027 $0 042352 Hydraulic Operated Clutch With Operators Switch $7,296 $0 Part # J DUST CONTROL OPTIONS IStraight Rear Exhaust • Sourcewell Standard CONFIGURED PRICE Standard 042601 042602 Down Draft Tailgate Exhaust • $5,763 $0 042603 Down Draft Exhaust with Water Suppression r $16,733 $0 Part # ADDITIONAL OPTIONS r Rear Dump Wireless Camera r Sourcewell $649 CONFIGURED PRICE $0 042701 042703 Directional Light Bar r $1,471 $0 042708 Tool Rack r $566 $0 042710 Spare Tire r $848 $0 Operator's Hood Installed $2,795 $0 SOperator's Tongue Extension r $706 $0 Cab ILO Operator's Platform Patent Pending r $12,148 $0 TOTAL CONFIGURED SOURCEWELL PRICE: 1 $ 157,638 PAINT POLICY - Titan Leaf SolutionsTM Standard coloron Titan Leafequipment is New Cat Yellow. Optional colors area available at an additional cost. Titan Leaf Solution products can be painted various colors. Some colors may result in a higher cost as well as a longer lead time. Please check with us for current pricing. HUTCHINSON CITY COUNCIL C==y�f 'Ajja� Request for Board Action 79 =-W Agenda Item: Consideration approving disposal of surplus property (Resolution #15799). Department: Parks LICENSE SECTION Meeting Date: 12/10/2024 Application Complete N/A Contact: Chris Hutton/Lynn Neumed Agenda Item Type: Presenter: Chris Hutton/Lynn NeumM Reviewed by Staff F1 Consent Agenda Time Requested (Minutes): 0 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: The Parks Department has surplus property no longer needed for municipal operations as described below: For sale at auction: 1. 2007 Ford 1 /2 ton 4x2 vin #1 FTRF122X7KD42127 This equipment is no longer needed for municipal operations. The intent is to offer this equipment for sale through Jeff Martin Auctioneers Incorporated at an upcoming auction. Proceeds from item 1 shall be deposited into the Equipment Replacement Fund (701-4951-9054) BOARD ACTION REQUESTED: Consideration approving disposal of surplus property (Resolution #15799) Fiscal Impact: Funding Source: FTE Impact: Budget Change: No Included in current budget: No PROJECT SECTION: Total Project Cost: $ 0.00 Total City Cost: $ 0.00 Funding Source: Remaining Cost: $ 0.00 Funding Source: RESOLUTION NO. 15799 RESOLUTION APPROVING DISPOSAL OF PARKS AND REC DEPARTMENT SURPLUS PROPERTY WHEREAS, the Hutchinson Parks and Recreation Department has equipment that is no longer needed for municipal operations, AND WHEREAS, the Hutchinson City Code Section 91, Subdivision 3, Paragraph C provides for the sale at auction of surplus equipment, AND NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, MINNESOTA, That the Hutchinson City Council hereby approves the sale at auction of the surplus property identified herein. Items to be sold at auction through Jeff Martin Auctioneers Incorporated: 1. 2007 Ford 1/2 ton Truck (vin #1FTRF122X7KD42127) Proceeds from the sale of item number 1 shall be deposited into the Equipment Replacement Fund (701- 4951-90540) Adopted by the City Council this 10th of December 2024 Gary Forcier, Mayor ATTEST: Matthew Jaunich, City Administrator RA HUTCHINSON CITY COUNCIL HUTCHINSON Request for Board Action A CITY ON PURPOSE. CONSIDERATION OF ENTERPRISE CENTER LEASE AGREEMENT, MASTER RELATIONSHIP Agenda Item: AGREEMENT, AND NON -DISCLOSURE AGREEMENT WITH LMAO, DBA SMOKEY DUKES, LLC Department: EDA LICENSE SECTION Meeting Date: 12/10/2024 Application Complete N/A Contact: Miles R. Seppelt Agenda Item Type: Presenter: none Reviewed by Staff ❑ Consent Agenda Time Requested (Minutes): 0 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: The Hutchinson EDA is proposing to lease 8,000 square feet in the Hutchinson Enterprise Center to Smokey Dukes, LLC, a new start-up manufacturer of snack foods. Smokey Dukes has developed a line of seasoned, smoked pretzels that they've been selling at farmer's markets. Their goal is to significantly ramp up production and sell their pretzels regionally and nationally. The lease would be for three years, with the option for a one-year extension. The base rent would be $2 per square foot for the first year with increases of $1 per year. On top of this would be about $2 per square foot of additional rent to cover "common area maintenance," which covers property taxes, building insurance, snow removal and grounds upkeep. Enclosed for your consideration is a Lease Agreement, Master Relationship Agreement and Non -disclosure Agreement between the City and the company. These have been reviewed by staff and found to be satisfactory. The EDA Board is recommending approval. If you have any questions or need additional information, please give me a call anytime at 234-4223. BOARD ACTION REQUESTED: Approval of Lease, Master Relationship Agreement and NDA and authorization for Mayor and City Staff to sign. Fiscal Impact: Funding Source: FTE Impact: Budget Change: New Bu Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A DigiSign Verified - 832d50db-7ecf-4a74-a32d-fc5b0937d497 H T HIN N ENTERPRI� CLIENT LEASE AGREEMENT Client LMAO dba Smoky Dukes, LLC Client Contact Mari Wildt Address 1164 Benjamin Avenue SE City / State / Zip Hutchinson, MN 55350 Rental Space Bay's 5 & 6 Square Feet 8,000 Dates of Lease January 1, 2025 to December 31, 2027 2025 Base Rent $2.00 psf annually $1,333.33 per month 2025 CAM $2.00 psf $1,333.33 per month DigiSign Verified - 832d50db-7ecf-4a74-a32d-fc5b0937d497 This Lease Agreement ("Lease"), made this 14 th day of November 2024 by and between the City of Hutchinson, 111 Hassan Street SE, Hutchinson, MN 55350 ("City") and LMAO dba Smoky Dukes, LLC ("Client"). City and Client agree as follows: 1. CLIENT SPACE City agrees to lease to Client and Client agrees to lease from City 8,000 square feet (the "Client Space") of the Hutchinson Enterprise Center (the "Facility") located at 1164 Benjamin Avenue SE., Hutchinson, Minnesota, 55350. The Client Space is shown on the attachment hereto, marked Exhibit A and made a part hereof. 2. TERM Client agrees to lease Client Space from the City for an initial term (the "Initial Term") of thirty-six (36) months, commencing January 1, 2025 ("Commencement Date") and ending December 31, 2027 ("Expiration Date"). Additional terms may be negotiated between the City and the Client. 3. RENT Client agrees to pay without further demand to City at its offices in Hutchinson, MN, or at such other place as City may from time to time in writing designate, Base Rent and Additional Rent in the amounts shown in this section on the first day of each month during the term hereof. All rent payments received shall first be applied to past due rents. A. BASE RENT Client shall pay to the City a rental rate of $2.00 per square foot annually for the Initial Term in monthly installments equalling 1/12 of the annual rent (the "Base Rent"). Such monthly Base Rent payments are payable in advance and shall be made on or before the first day of each month. B. COMMON AREA MAINTENANCE (CAM) Client shall pay to the City, at the same time and in the same manner as the Base Rent, $2.00 per square foot annually, in monthly installments equalling 1/12 of the annual amount, an additional amount for the client's proportional share of property taxes, basic garbage service, snow removal, grounds maintenance and building insurance (the "Common Area Maintenance" or "CAM""). The CAM is subject to an annual adjustment each calendar year by the City to reflect changes in the costs that make up the CAM. Upon request by the Client the City shall provide documentation supporting the need for changes to the CAM. C. ESCALATOR Commencing with year two (2) of the Lease, Client shall pay to the City, at the same time and in the same manner as the Base Rent, an additional rent (the "Escalator") annually for the Initial Term, in monthly installments equalling 1/12 of the annual amount, as follows: DigiSign Verified - 832d50db-7ecf-4a74-a32d-fc5b0937d497 Year 2 $1.00 per square foot Year 3 $2.00 per square foot Year 4 (if any) $3.00 per square foot Year 5 (if any) $4.00 per square foot D. TOTAL RENT The total rent due each month for the term of the lease shall be the sum of the Base Rent plus Common Area Maintenance plus the Escalator, if any. E. LATE PAYMENT If Client fails to pay the Base Rent and Additional Rent by the tenth (101n) day of the month for which such Base Rent and Additional Rent is due, Client shall pay a late payment fee of ten percent (10%) of the total amount due. 4. SECURITY DEPOSIT The Client is further required to deposit with the City a Security Deposit in the amount of one month's rent. The Security Deposit shall be held by City, without liability for interest, as security for the faithful performances by Client of all of the terms, covenants, and conditions of this Lease by said Client to be kept and performed during the term hereof, it being expressly agreed that such deposit is not an advance rental deposit or a measure of City's damages. If, at any time during the term of this Lease, any of the Rent herein reserved shall be overdue and unpaid, or any other sum payable by Client to City hereunder shall be overdue and unpaid, then City may, at the option of City, appropriate and apply any portion of the Security Deposit to the payment of any such overdue Rent or another sum. In the event of the failure of Client to keep and perform any of the terms, covenants and conditions of this Lease to be kept and performed by Client, then City at its option may appropriate and apply the entire Security Deposit, or so much thereof as may be necessary, to compensate City for loss or damage sustained or suffered by City due to such breach on the part of Client. Should Client comply with all of said terms, covenants and conditions and promptly pay all of the Rent herein provided for as it falls due, and all other sums payable by Client at the end of the term of this Lease, the Security Deposit shall be returned in full to Client at the end of the term of this Lease, or upon the earlier termination of this Lease. 5. ADDITIONAL SERVICES The City shall provide the following services to the client: A. CENTRALIZED OFFICE FACILITIES The City shall provide access to common areas, ("Offices") including scheduled access to conference rooms, access to shared restrooms and kitchen facilities, a centralized mailbox, including a mailbox for the Client, access to an office work room and equipment. B. BUILDING SERVICES The City shall provide the Client Space and Facility with snow removal, lawn care, grounds maintenance and basic garbage service. In addition, the City will provide janitorial services, supply and maintenance for the Offices. DigiSign Verified - 832d50db-7ecf-4a74-a32d-fc5b0937d497 6. CITY PERSONAL PROPERTY City is providing personal property and/or equipment in the Leased Premises ("City Assets") for use by Clients. Client hereby understands and agrees that City may, in its sole discretion, add, modify, remove, repair, and/or alter City Assets at any time and without any liability for loss of use or potential damages to Client's business operations. City Assets shall remain the property of City and Client shall not alter, damage, remove, modify, encumber or repair any of City Assets without the express written consent of the City. Client shall have the right to use City Assets during the Term; however, said use is subject to City's right to revoke Client's ability to access City Assets, at its sole discretion. All City Assets in the Leased Premises are available on a first -come, first -serve basis with other co - lessees. 7. UTILITIES AND MAINTENANCE FEES Client shall be solely responsible for and promptly pay for electricity, heat, telephone, internet, water and sewer charges and all other utilities serving the Client Space. 8. POLICIES, PROCEDURES, RULES AND REGULATIONS Hutchinson Enterprise Center policies, procedures, rules, and regulations, contained in the City's Client Handbook and Building Manual are hereby made a part of this Lease and are incorporated herein by reference. Client agrees to abide with and observe all policies, procedures, rules and regulations, amendments thereto and supplements thereof. Client's failure to keep and observe said policies, procedures, rules, and regulations shall constitute a breach of the terms of this Lease. City reserves the right from time to time to amend or supplement said policies, procedures, rules, regulations and to adopt and promulgate additional policies, procedures, rules, regulations applicable to the Hutchinson Enterprise Center. City shall provide to Client written notice of any amendments or modifications to policies, procedures, rules, and regulations which shall be effective with respect to Client thirty (30) days after such notice has been given. 9. USE OF CLIENT SPACE The Client Space shall be used by the Client solely as office and manufacturing production space and for such additional uses as may be customary and incidental to the business of Client. All uses of the Client Space shall be in accordance with all applicable municipal and zoning ordinances and any and all other applicable rules and regulations of any duly constituted authority governing such uses. Client will have full access to and use of the Client Space, and the right to use and access all common areas within the Hutchinson Entperprise Center on an "as available" basis, subject to the City's Client Handbook and Building Manual. Client will not have access to any other areas within the Hutchinson Enterprie Center, including but not limited to the space of other Clients and the City's executive offices. Client shall not use or occupy the Client Space for any unlawful purpose, and will conform to and obey all present and future laws, ordinances and all rules, regulations, requirements DigiSign Verified - 832d50db-7ecf-4a74-a32d-fc5b0937d497 and orders of all governmental authorities or agencies, respecting the use and occupation of the Client Space including, without limitation, all environmental laws regarding underground storage tanks, pollution and hazardous wastes. Client agrees, upon reasonable notice, to permit City to enter the Client Space from time to time for the purposes of inspection, protection, preservation, repair or restoration of the Client Space. The officers or agents of City may so enter the Client Space upon reasonable notice without being liable to any prosecution, claim or cause of action for damages by reason of such entry and without in any way affecting the obligations of this Lease; provided only that City use reasonable care in making such entry. City reserves the right to market and exhibit the Client Space to prospective Clients during the last 180 days of the Lease Term. 10. QUIET POSSESSION City represents and warrants that it has full right and authority to enter into this Lease. City covenants that if and so long as Client pays the rent required by this Lease and performs and observes all of the covenants, conditions, rules and regulations hereof, Client shall peaceable and quietly enjoy the Client Space for the Lease Term, subject, however, to the terms, covenants, and provisions of this Lease. 11. SURRENDER OF CLIENT SPACE Client will, at the termination of this Lease by lapse of time or otherwise, yield up immediate possession of the Client Space with all improvements located thereon (except as may otherwise be provided in this Lease) and surrender the Client Space to City in good condition and repair, reasonable wear and tear excepted, clean and with all debris removed. 12.IMPROVEMENTS, ALTERATIONS AND SIGNS Client shall not make alterations or improvements in, or erect exterior signage upon or to the Client Space or Building without the prior written approval of the City and the City's Planning, Building and Zoning Department, if applicable. Upon termination of the Lease, at the sole discrection of the City, all improvements (excepting those agreed to in writing prior to Lease signing by the City and the Client) made by the Client in the Client Space shall become the property of the City. If the City elects to not retain the improvements made by the Client in the Client Space, Client shall be responsible to return the Client Space to its original state prior to Lease Expiration and vacating the Client Space. 13. MAINTENANCE AND REPAIRS A. CLIENT'S MAINTENANCE RESPONSIBILITIES. Client shall, at its expense, maintain the Client Space (including the interior walls, ceilings, doors, floor coverings, and fixtures) in good repair and condition the same as existed as of the Commencement Date, reasonable wear and tear and damage from fire and other insured casualty excepted. DigiSign Verified - 832d50db-7ecf-4a74-a32d-fc5b0937d497 Client agrees not to and shall not overload the electrical, water and/or plumbing facilities and keep the Client Space free from waste or nuisance. Client shall be responsible for maintenance of entrances, electrical and plumbing systems. Client shall repair, at its own expense, any damage to the Client Space caused by the wilfull acts or negligence of Client, its officers, contractors, licensees, agents, employees, guests, invitees or visitors. Client agrees to furnish, at its expense, all lamps, bulbs, tubes, starters and ballasts in connection with the lighting of the Client Space. B. CITY'S MAINTENANCE RESPONSIBILITIES. Except for those maintenance responsibilities of Client, City shall, at its expense maintain the entire Facility including, but not limited to, the foundations, outer walls, roof, gutters and down spouts, exterior windows and doors. 14. INSURANCE Client agrees to keep and maintain during the entire term of this Lease and any extension thereof or holding over thereunder comprehensive liability insurance on the Client Space covered hereunder, including the parking and other common areas, insuring City and Client against liability for personal and bodily injury, death and property damage (including water) with limits not less than $2,000,000 in aggregate and $1,500,000 per occurrence. Client is responsible for procuring and maintaining casualty insurance on Client's personal property, business assets, equipment and leasehold improvements. Client shall not carry any stock of goods or do anything on or about the Client Space which will in any way impair or invalidate the obligation of any policy of insurance on or in reference to the Client Space or the Building. A copy of these policies must be provided to the City prior to occupancy. 15. TERMINATION City and Client may terminate the Lease upon 90 days notice to the other party. If both parties mutually agree, the lease may be terminated at any agreed upon time. 16. REPORTING REQUIREMENTS A. MONTHLY. On a monthly basis Clients must meet with Enterprise Center staff to provide a verbal update on the current state of the business. Topics may include challenges, opportuities, successes, frustrations, and so forth. B. QUARTERLY. Each quarter, Client shall provide profit & loss statements and balance sheets to Enterprise Center Staff for review, after which they will be returned to the Client. The City will not keep said Client documents on file. Quarterly reporting information shall be used solely for the purpose of pooling program economic impact data in an anonyomous fashion; to assist the Client through the delivery DigiSign Verified - 832d50db-7ecf-4a74-a32d-fc5b0937d497 of business incubation program technical assistance services; and to ensure compliance with the terms of this Lease. Reporting requirements A and B may be combined. C. AS NEEDED. Client agrees to report job creation information to Enterprise Center staff, to include number of permanent jobs created, job title per job, hourly wage, hourly value of benefits, date employee(s) are hired and list of benefits provided. The reporting requirement to provide job creation informtion shall remain in effect for a period of five years beyond the date of lease expiration. City agrees to keep all such information confidential to the maximum extent allowed by law. 17. EDUCATION REQUIREMENT Client is required to complete and document 12 hours of business coaching / mentoring / continuing education per calendar year with an advisor from the Small Business Development Center, Southwest Initiative Foundation or other source chosen by the Client and approved by the City. Failure to complete the requirement constitutes an event of Default. The City shall have the right to waive this requirement. 18. LOW TO MODERATE INCOME REQUIREMENT Client agrees that, during the term of the Lease, 51% of new jobs created by the company in the Facility shall be "taken by" or "available to" persons of low -to -moderate income per Section 8 guidelines. To meet this requirement the Client agrees that it will have each new employee complete a Job Information Form (provided by the City) to self -certify family income. 19. INDEMNIFICATION Client shall defend, indemnify and hold harmless City from and against any and all liability, losses, damages, costs or expenses, including attorney's fees, arising from any act, omission or negligence of Client or its affiliate companies, officers, contractors, licensees, agents, servants, employees, guests, invitees or visitors in or about the Client Space. City shall defend, indemnify and hold harmless Client, its , directors, officers and employees from and against any and all liability, losses, damages, costs or expenses, including attorneys fees, arising from any act, omission or negligence of City or its contractors, licensees, agents, servants, employees, guests, invitees or visitors in or about the Client Space. 20. ASSIGNMENT AND SUBLETTING Client shall not assign this Lease or sublet the Client Space, or any part thereof, or in any other manner transfer this Lease, leasehold or the Client Space, without the prior written consent of City, which consent may be witheld for any reason or no reason. No lease assignment shall relieve Client of primary liability to City hereunder, unless City so agrees in writing. Client shall continue to make all payments due under the Lease directly DigiSign Verified - 832d50db-7ecf-4a74-a32d-fc5b0937d497 to City, even if the Client Space is sublet or assigned. All subleases or assignments must be approved by City and its attorney and Client shall promptly provide City with a conformed copy of such approved sublease or assignment. Consent by City to any subletting or assignment shall not constitute a consent by City to any subsequent assignment or subletting. 21. CLIENT DEFAULT A. Definition of Default Each of the following events, ("Event of Default"), shall be a default hereunder by Client and a breach of this Lease: 1) If Client shall materially violate any covenant or agreement providing for the payment of rent or other amounts due under the terms of this Lease, and such violation shall continue for ten (10) days after the due date. 2) If Client shall assign, transfer, encumber, sublet or permit the use of the Client Space by others except in a manner permitted in herein. 3) If Client shall be adjudicated as bankrupt whether voluntarily or involuntarily, or makes any general assignment for the benefit of creditors under any Insolvency, Receivership or Bankruptcy Act. 4) If a Receiver or trustee shall be appointed for, or to take possession of, all or a substantial part of the property of Client or any part of Client's leasehold interest. 5) If the Client Space is abandoned by Client. Client's failure to occupy and operate its business on the Client Space for thirty (30) consecutive calendar days may, at the option of the City, be deemed an abandonment, unless the rent has been paid in full during the period of absence. 6) If there be any attachment, execution or other judicial seizure of all or a substantial part of the assets or Client or Client's leasehold, where such an attachment, execution or seizure is not discharged within thirty (30) days. 7) If the estate of Client be transferred or passed to, or devolve upon, any other person or corporation by operation of law or by assignment of Client other than allowed herein. 8) If Client shall be in default of fulfilling any of other covenants, conditions and requirements of this Lease and such default shall continue for thirty (30) days after written notice thereof from City to Client and Client has not commenced to cure such default within such thirty (30) days and is diligently pursuing the remedies or steps necessary to cure or correct such default, but in no event more than ninety (90) days. B. In the Event of Such Default: DigiSign Verified - 832d50db-7ecf-4a74-a32d-fc5b0937d497 1) City has the right to enter upon the Client Space and again have, repossess, and enjoy the same as if this Lease has not been made, and thereupon this Lease shall terminate without prejudice, however, to the right of City to recover from Client all rent and other sums unpaid up to the time of such re-entry. In the event of any such default and re-entry, City shall have the right to re -let the Client Space for the remainder of the then existing term for the highest rent then obtainable, and to recover from Client the difference between the rent provided by this Lease and the amount obtained by such re -letting, less the costs and expenses reasonably incurred by City in such re -letting. 2) Any equipment, tools, supplies or products left in the Client Space by the Client for thirty (30) consecutive calendar days may, at the option of the City, be deemed abandoned property and liquidated in any manner deemed appropriate by the City, unless the rent has been paid in full during the period of absence. 3) Exercise any other remedy allowed by law or equity, including acceleration of rental payments remaining for the balance of the term of this Lease. 4) In the event of a breach of this Lease by Client, whether abated or not, City shall recover from Client reasonable and necessary attorney's fees and costs incurred by City in enforcing its rights under this Lease. 5) All rights and remedies of City under this Lease shall be cumulative and none shall exclude any other right to remedy at law. Such right and remedies may be exercised and enforced concurrently and whenever and as often as occasion thereof arises. No waiver by City of performance by Client shall be considered a continuing waiver or shall preclude City from exercising its rights in the event of a subsequent default. 22. CITY DEFAULT If City shall fail to perform any of its obligations under this Lease and such default shall continue for more than thirty (30) days after receipt by City of written notice from Client specifying the default (or) if such default cannot be cured or corrected within that time, then such additional time as may be necessary if City has commenced to cure such default within such thirty (30) days and is diligently pursuing the remedies or steps necessary to cure or correct such default, but in no event more than ninety (90) days), then Client may, at its option, but shall not be obligated to, cure such default. City shall reimburse Client the reasonable costs incurred by Client in curing City's default as aforesaid within thirty (30) days after receipt of Client's statement itemizing such costs, including, if any, reasonable attorney fees, in reasonable detail and evidence of payment thereof. Any rights under this Section shall be cumulative and shall not limit Client's rights at law or in equity. 23. NOTICES Any notice permitted or required to be given under the terms of this Lease shall be in writing, signed by or on behalf of the party giving the same, and shall be deemed to have been duly given if delivered by hand or if mailed by registered or certified mail, DigiSign Verified - 832d50db-7ecf-4a74-a32d-fc5b0937d497 postage prepaid, return receipt requested, or by a nationally recognized overnight delivery service to the following address: If to the City: Economic Development Director City of Hutchinson 1164 Benjamin Avenue SE Hutchinson, MN 55350 Ph. (320) 234-4223 If to the Client: Mari Wildt LMAO dba Smoky Dukes, LLC 12288 N Cloud Crest Trail Fountain Hills, AZ 85268 Ph: 970-685-0143 Either party may designate a different address or recipient for purposes hereof by notice to the other party in the manner provided in this Section. Client shall designate a contact person in Client's organization whom City may contact regarding the Lease. Client may designate a new contact person or persons at any time by giving notice to City in writing. 24. CASUALTY 1) If the Client Space is destroyed or damaged by fire or other casualty covered by insurance as required to be maintained by City, then (unless this Lease is terminated as hereinafter provided) City shall proceed to repair or restore the Client Space to the condition which City furnished improvements to Client upon the commencement of the Term. If City repairs or restores the Client Space as provided herein, then Client shall repair and restore its leasehold improvements, furnishings, furniture and equipment to at least a condition equal to that prior to their damage. Notwithstanding any provision in this section to the contrary, neither City nor Client shall be required to spend more than the amount of insurance proceeds either or both parties receive for such damage or destruction. 2) If the Client Space or any part thereof shall be rendered unClientable by any destruction or damage, except where such damage is caused by Client, then a pro rata portion of the rent based upon the number of square feet of area in the Client Space which are unClientable shall be abated or if the unClientable portion effectively prevents Client from using the Client Space for its stated purpose then all of the rent shall be abated until the Client Space or such part thereof shall have been put in Clientable condition. If, however, any destruction or damage to the Client Space is so extensive that City is unable to render complete restoration within 120 days, or is not covered by City's all- risk policy, City or Client may terminate this Lease (effective as of the date of destruction or damage) by written notice to the other party given within 120 days from DigiSign Verified - 832d50db-7ecf-4a74-a32d-fc5b0937d497 the date of casualty. 25. PARKING Client and Client's employees, customers, agents and invitees shall have the nonexclusive right to use any parking areas located adjacent to Client's leased space. 26. SEVERABILITY If any term or provision of this Lease or the application thereof to any person or circumstance shall, to any extent be invalid or unenforceable, the remainder of this Lease or the application of such term or provision to persons or circumstances other than those to which it is held invalid or unenforceable shall be valid and enforced to the full extent permitted by law. 27. GOVERNING LAW This Lease shall be governed by, enforced and construed under the laws and regulations of the State of Minnesota. 28. INTERPRETATION The invalidity or unenforceability of any provision of this Lease shall not affect or impair any other provision. Whenever the singular number is used, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders. Any captions appearing in this Lease are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or intent of such sections or paragraphs of this Lease nor in any way affect this Lease. 29. SUCCESSORS AND ASSIGNS Each of the covenants, provisions, terms and agreements of this Lease shall inure to the benefit of and be binding upon the respective heirs, executors, and administrators, successors and assigns of City and Client. 30. ENTIRE AGREEMENT This Lease constitutes the entire agreement between City and Client and shall supersede all previous communications, understandings and representations, whether oral or written. Amendments hereto shall not be valid unless in writing and signed by both parties. IN WITNESS WHEREOF, the parties have executed this agreement as of the day and year first written above. Dated: Dated: 11/14/2024 DigiSign Verified - 832d50db-7ecf-4a74-a32d-fc5b0937d497 City of Hutchinson (City) By: Gary T. Forcier Title: Mayor By: Matt Jaunich Title: City Administrator (Client) RaAi, GVplat By: Mari Wildt Title: Pr�rt Co -Owner DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 HIN N ENTERPRISE CENTER MASTER RELATIONSHIP AGREEMENT By and between City of Hutchinson and LMAO, LLC DBA Smoky Dukes DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 This Master Relationship Agreement ("Master Relationship Agreement") dated as of November 7th, 2024, is entered into by and between LMAO, LLC, ("Client"), and the City of Hutchinson. ("City"). RECITALS A. City operates a business Incubator known as the Hutchinson Enterprise Center ("Incubator"). One of the primary objectives of Incubator is to nurture start-up and early stage enterprises, like Client, and help them develop into successful, mature companies. B. City's objective is to combine ongoing business education and a low-cost environment in order to maximize the chances of business success for the Client. C. Client desires to enter the program at the Incubator facilities and to take part in the services and offerings made available by and through Incubator. D. Client acknowledges that residency in the Incubator is temporary, for a period that may be three or four years in duration. At the sole discretion of the City, residency may be extended to a duration not to exceed five years. E. This Master Relationship Agreement, together with the other agreements, rules and policies referred to in Section 1 below, will (i) govern the business relationship between City and Client and (ii) set forth the terms and conditions for Client's use of the facilities and services provided by and through the Incubator. AGREEMENT In consideration of the recitals and mutual covenants set forth in this Master Relationship Agreement, City and Client agree as follows: 1. OTHER CLIENT DOCUMENTS Together with this Master Relationship Agreement, the following documents will define the business relationship between City and Client: a. Lease Agreement. Contemporaneously with the execution of this Master Relationship Agreement, City and Client shall enter into the Lease Agreement attached to this Master Relationship Agreement as [Exhibit A]. The Lease Agreement will govern the landlord/tenant relationship between City and Client, including but not limited to the size of the space leased by Client, rental rates, infrastructure, associated services and related matters. b. Client Handbook and Building Manual. Client agrees to follow and abide by the Client Handbook and Building Manual attached to this Master Relationship Agreement as [Exhibit B]. The Client Handbook and Building Manual are important for safety reasons, as well as for promoting the efficient use and maintenance of Incubator's facilities. In the Client Handbook and Building Manual will be found the Conference Room Rules and Regulations. DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 C. Nondisclosure Agreement. Contemporaneously with the execution of this Master Relationship Agreement, City and Client shall enter into the Nondisclosure Agreement attached to this Master Relationship Agreement as [Exhibit C]. The Nondisclosure Agreement details the City's commitment to keep certain Client information confidential to the maximum extent permitted by law. Client acknowledges that the foregoing descriptions of the supplemental documents are only brief summaries. Client represents and warrants that it has carefully read and understands each of the attached supplemental documents (together with this Master Relationship Agreement, the "Client Documents"). 2. EDUCATION REQUIREMENT The single most important determinant of success for a start-up / early -stage business is the amount and quality of business knowledge possessed by its leadership. The number one reason businesses fail, according to the Small Business Administration, is insufficient business knowledge. People sometimes don't know what they don't know. To address this, continuing business education, coaching and mentoring is a key part of Incubator's services. A member of Client's senior management team shall be required to meet with Incubator's management on a regular basis (schedule to be determined jointly by City and Client) to discuss Client's progress on its business plan, product development and other matters relating to Client's business. Also, the City anticipates offering occasional seminars at Incubator facilities on topics relating to entrepreneurship and business. A member of Client's senior management team shall make best efforts to attend these seminars. In addition, Client is required to complete and document for the City 12 hours of business coaching / mentoring / continuing education per calendar year with an advisor from the Small Business Development Center, Southwest Initiative Foundation or other source chosen by the Client and approved by the City. The City shall have the right to waive this requirement. 3. LOW TO MODERATE INCOME REQUIREMENT Because some of the funding used to build the Hutchinson Enterprise Center comes from Federal sources, certain requirements apply to the Client as they hire new employees. Generally, this means that 51% of the jobs created by the Client have to be of a nature that pretty much anyone with an average level of education would qualify for them. Client agrees that, during the term of the Lease, and subject to bona fide occupational requirements, 51% of new jobs created by the company in the Incubator shall be "taken by" or "available to" persons of low -to -moderate income per Section 8 guidelines. To meet this requirement the Client agrees that it will have each new employee complete a Job Information Form (provided by the City) to self -certify family income. 4. REPORTING REQUIREMENTS Because the Incubator was funded utilizing public resources, the City is required to report certain information to other public agencies, specifically the Minnesota Department of Employment and Economic Development and the DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 Federal Department of Commerce, Economic Development Administration. Typically, this information centers around job creation, wages & benefits paid and so forth. In addition, because the goal of the City is to facilitate the success of the Client, certain financial information is required to assess the Client's progress in executing their business plan, evaluate the financial health of the Client and guide the delivery of business incubation program technical assistance services. Subject to the terms following this sentence, Client agrees to provide such profit & loss statements and balance sheets as may reasonably be requested by City, to ensure compliance with the terms of this Lease and such governmental programs as provide subsidies hereunder. Client shall redact any and all personal identifiers to protect the identity of individual employees; and, Client may further edit such information to preclude disclosure of proprietary information and sensitive financial data. After the City inspects said documents they will be returned to the Client. The City will not keep said Client documents on file. This information shall be used solely for the purpose of pooling program economic impact data in an anonymous fashion; or to assist Client through the delivery of business incubation program technical assistance services. City agrees to keep all such information confidential to the maximum extent allowed by law. During the term of the Lease, and subject to the protections above, Client agrees to report job creation information to include number of permemenent jobs created, job title per job, hourly wage, hourly value of benefits, date employee(s) are hired and list of benefits provided. 5. REPRESENTATIONS AND WARRANTIES. Client represents and warrants to City as follows: a. Client is a limited liability company duly organized and, validly existing under the laws of the State of Minnesota. b. All corporate action on the part of Client and, as applicable, its officers, directors, managers and owners, necessary for the authorization, execution and delivery of this Master Relationship Agreement and the other Client Documents and the performance of all obligations of Client under this Master Relationship Agreement and the other Client Documents has been taken. This Master Relationship Agreement and the other Client Documents constitute valid and legally binding obligations of Client enforceable in accordance with their terms. The execution, delivery and performance of this Master Relationship Agreement and the other Client Documents will not result in any violation of, be in conflict with, or constitute a default under, (i) any provision of Client's organizational documents or (ii) any material contract, obligation or commitment to which Client is a party or by which Client is bound. C. Client has provided City with all of the information that City has requested in connection with the business relationship contemplated by this Master Relationship Agreement and the other Client Documents. All of the information provided to City in all applications, documents, marketing materials, or through interviews or otherwise is true and does not fail to DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 state any fact that would make such information misleading as of the date of this Master Relationship Agreement. 6. CONFIDENTIAL INFORMATION a. The City and Client shall enter into a Nondisclosure Agreement to govern the use of confidential information. This is attached to this Master Relationship Agreement as [Exhibit C]. b. The City agrees that Confidential Information (as defined below and in the Nondisclosure Agreement) shall be kept strictly confidential to the maximum extent allowed by law and that the City shall not furnish or divulge Confidential Information to any individual or entity without the prior written consent of the Client. C. Notwithstanding the foregoing, it is understood that City will, on behalf of Client, need some latitude to communicate with potential strategic partners, advisors and others in the course of providing services to Client through Incubator. Unless otherwise specifically requested in writing by Client, City and its agents shall be permitted to communicate Confidential Information regarding Client with these individuals or entities, always provided that City first obtains their agreement, in writing, to maintain the confidentiality of any Confidential Information communicated to it by City. d. Notwithstanding any other provision of this Section, City shall be permitted to use Client's name and generally describe Client's business in marketing materials, news releases, articles, speeches, and other promotional opportunities. e. For purposes of this Master Relationship Agreement, the term "Confidential Information" means any and all confidential or proprietary information concerning the Disclosing Party including, without limitation, confidential studies, data, calculations, patents, patent applications, copyrights, trademarks, trade names, service marks, service names, "know-how," customer or prospect lists, details of client or customer contracts, pricing policies, sales techniques, operational methods, marketing plans or strategies, products and formulae, product development techniques or plans, business acquisition plans, computer programs (including source of object codes), processes, research or technical data, improvements or other intellectual property of the Client. The term "Confidential Information" does not include information that (i) is or becomes generally available to the public other than as a result of disclosure by the City or its representatives, or (ii) is or becomes available to the City on a non -confidential basis from a source other than the Client, which source is lawfully in possession of such information. f. Each party agrees that money damages would be both incalculable and an insufficient remedy for any breach of the terms of this Section 6 and that, in addition to all other remedies available, the Client shall be entitled to equitable relief, including temporary and permanent injunctive relief in the event of any such breach. DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 7. TERMINATION a. City and Client may terminate this Master Relationship Agreement at any time by mutual agreement. b. Either party may terminate this Master Relationship Agreement in the event the other party (i) breaches any of the terms and conditions of this Master Relationship Agreement and (ii) fails to cure completely such breach within thirty (30) calendar days. C. City may terminate this Master Relationship Agreement immediately and without notice if any of the representations and warranties set forth in Section 5 were false or misleading in a material respect as of the date of this Master Relationship Agreement. d. Sections 6, 8, 10, 12 and 13 (and Section 14 with respect to the foregoing) of this Master Relationship Agreement shall survive the termination of this Master Relationship Agreement for any reason. 8. INDEPENDENT ADVISORS Client may receive business and technical consulting services from local business professionals, students and/or faculty from a University, and others (collectively, "Independent Advisors"). These Independent Advisors are not employees or agents of City and they will not be bound by this Master Relationship Agreement (including Section 6 hereof) or the other Client Documents. Client acknowledges and agrees that City shall not be held liable for the acts or omissions of these Independent Advisors. 9. NO GUARANTEE OF RESULTS Client acknowledges and agrees that City cannot guarantee that Client's business will succeed. City makes no representation as to the commercial utility of its recommendations or that the use of such recommendations will not infringe on any intellectual property rights of others. Client shall be solely responsible for making all decisions and taking actions related to its business, including compliance with all applicable laws and regulations, and Client hereby waives, and covenants not to sue City or its employees, agents, contractors or other representatives for any claim related to such matters. 10. INDEPENDENT CONTRACTOR STATUS Neither party is, nor shall be deemed to be, an employee, agent, partner or legal representative of the other party for any purpose. Neither party shall be entitled to enter into any contracts in the name of, or on behalf of, the other party, nor shall either party be entitled to pledge the credit of the other party in any way or hold itself out as having the authority to do so. 11. INSURANCE Client shall maintain insurance in such types and amounts customary for and necessary to protect and insure against the type of risks involved with the type of business operated by Client, including but not limited to, as applicable, general property and casualty, worker's compensation, directors and officers, and product liability insurance, with the City being named as an additional insured. Client shall provide City with a certificate of insurance for all insurance coverage maintained by Client. DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 12. INDEMNIFICATION Client shall defend, indemnify and hold harmless City and its employees, agents and representatives from and against any and all liability, loss, damage, action, claim or expense suffered or incurred by City or its employees, agents and representatives (including attorneys' fees and costs) that result from or arise out of any breach by Client of the Client Documents. The indemnification rights contained in this Master Relationship Agreement are in addition to all other rights that may be available to City or its employees, agents and representatives at law, in equity or otherwise. This Section shall survive any termination of this Master Relationship Agreement. 13. LIMITATION OF LIABILITY Neither party shall be liable to the other for indirect, incidental, consequential or special damages, including but not limited to lost profits arising from or relating to any breach of this Master Relationship Agreement, regardless of any notice of the possibility of such damages. Nothing in this Section is intended to limit or restrict the indemnification rights or obligations of either party. 14. GENERAL a. Execution in Counterparts. For the convenience of the parties, this Master Relationship Agreement may be executed in two or more counterparts, in the original or by facsimile, each of which shall be deemed an original, but all of which together shall constitute one and the same document. b. Notices. All notices that are required or may be given pursuant to the terms of this Master Relationship Agreement shall be in writing and shall be sufficient in all respects if given in writing and personally delivered emailed, or mailed by registered or certified mail postage prepaid as follows: If to City: City of Hutchinson ATTN: Economic Development Director 1164 Benjamin Avenue SE Hutchinson, MN 55350 If to Client: Mari Wildt LMAO, LLC dba Smoky Dukes 12288 N. Cloud Crest Trail Fountain Hills, AZ 85268 or to such other address as either party shall have designated by notice in writing to the other. C. No Third -Party Rights. None of the provisions of this Master Relationship Agreement or any of the other Client Documents shall be for the benefit of or enforceable by any third party, including, without limitation, any creditor of either party. DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 d. Waivers. The waiver by either party of a breach of any provision of this Master Relationship Agreement shall not operate or be construed as a waiver of any other provision, or of any further breach of the provision so waived or of any other provision, of this Master Relationship Agreement. No extension of time for the performance of any obligation or act under this Master Relationship Agreement shall be deemed an extension of time for the performance of any other obligation or act. e. Entire Agreement/Amendments. This Master Relationship Agreement, together with the other Client Documents, constitutes the entire agreement between the parties with respect to the subject matter covered and supersedes all prior agreements and understandings, oral and written, among the parties with respect to the covered subject matter. This Master Relationship Agreement may not be amended, modified or changed in any respect without the written consent of the parties. f. Severability. Whenever possible, each provision of this Master Relationship Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Master Relationship Agreement shall be unenforceable or invalid under applicable law, such provision shall be ineffective only to the extent of such unenforceability or invalidity, and the remaining provisions of this Master Relationship Agreement shall continue to be binding and in full force and effect. g. Applicable Law. This Master Relationship Agreement and the other Client Documents and the legal relations between the parties shall be governed by and construed in accordance with the laws of the State of Minnesota. h. Binding Effect. This Master Relationship Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. i. Expenses. Each party shall bear all expenses incurred by it in connection with the negotiation and preparation of this Master Relationship Agreement and the other Client Documents. j. Joint Drafting/Interpretation. Both parties acknowledge and agree that this Master Relationship Agreement and the other Client Documents have been jointly prepared by the parties and their respective legal counsel and will not be strictly construed against either pa rty. k. Advisors Consulted. Each party hereby acknowledges and agrees that it (a) has read this Master Relationship Agreement and the other Client Documents in their entireties prior to executing this Master Relationship Agreement, (b) understands the provisions and effects of this Master Relationship Agreement and the other Client Documents, and (c) has consulted with such attorneys, accountants, and other financial advisors as each has deemed appropriate in connection with its execution of this Master Relationship Agreement. IN WITNESS WHEREOF, this Master Relationship Agreement has been executed by the parties as of the date first above written. DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 The City of Hutchinson ("City") By: Printed: Title: Mayor By: Printed: Title: City Administrator LMAO, LLC ("Client") By: Ra.tw UJUax Printed: Mari Wildt Title: Co -Owner DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 Exhibit A Lease Agreement DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 Exhibit B Client Handbook and Building Manual DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 Exhibit C Non -Disclosure Agreement DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 H T HIN N ENTERPR' NONDISCLOSURE AGREEMENT By and between City of Hutchinson and LMAO, LLC DBA Smoky Dukes DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 This Nondisclosure Agreement (the "Agreement") is entered into by and between LMAO, LLC dba Smoky Dukes with its principal offices at 1164 Benjamin Avenue SE, Hutchinson, MN 55350, ("Disclosing Party") and the City of Hutchinson, located at 1164 Benjamin Avenue SE, Hutchinson, MN 55350 ("Receiving Party") for the purpose of preventing the unauthorized disclosure of Confidential Information as defined below. The parties agree to enter into a confidential relationship with respect to the disclosure of certain proprietary and confidential information ("Confidential Information"). 1. Definition of Confidential Information. For purposes of this Agreement, "Confidential Information" shall include Profit and Loss Statements, Balance Sheets, Tax Information and all information or material that has or could have commercial value or other utility in the business in which Disclosing Party is engaged. If Confidential Information is in written form, the Disclosing Party shall label or stamp the materials with the word "Confidential" or some similar warning. If Confidential Information is transmitted orally, the Disclosing Party shall promptly provide a writing indicating that such oral communication constituted Confidential Information. 2. Exclusions from Confidential Information. Receiving Party's obligations under this Agreement do not extend to information that is: (a) publicly known at the time of disclosure or subsequently becomes publicly known through no fault of the Receiving Party; (b) discovered or created by the Receiving Party before disclosure by Disclosing Party; (c) learned by the Receiving Party through legitimate means other than from the Disclosing Party or Disclosing Party's representatives; (d) is disclosed by Receiving Party with Disclosing Party's prior written approval; (e) payroll information, Low -to -Moderate Income documentation and / or job creation information required to be reported by the Receiving Party to the Minnesota Department of Employment and Economic Development and/or the United States Department of Commerce Economic Development Administration. 3. Obligations of Receiving Party. To the maximum extent allowed by law, Receiving Party shall hold and maintain the Confidential Information in strictest confidence for the sole and exclusive benefit of the Disclosing Party. Receiving Party shall carefully restrict access to Confidential Information to employees, contractors and third parties as is reasonably required and shall require those persons to sign nondisclosure restrictions at least as protective as those in this Agreement. Receiving Party shall not, without prior written approval of Disclosing Party, use for Receiving Party's own benefit, publish, copy, or otherwise disclose to others, or permit the use by others for their benefit or to the detriment of Disclosing Party, any Confidential Information. Receiving Party shall return to Disclosing Party any and all records, notes, and other written, printed, or tangible materials in its possession pertaining to Confidential Information immediately if Disclosing Party requests it in writing. DigiSign Verified - ba145eab-fc2b-4269-b5d0-9e3a6bb14f08 4. Time Periods. The nondisclosure provisions of this Agreement shall survive the termination of this Agreement and Receiving Party's duty to hold Confidential Information in confidence shall remain in effect until the Confidential Information no longer qualifies as a trade secret or until Disclosing Party sends Receiving Party written notice releasing Receiving Party from this Agreement, whichever occurs first. 5. Relationships. Nothing contained in this Agreement shall be deemed to constitute either party a partner, joint venturer or employee of the other party for any purpose. 6. Severability. If a court finds any provision of this Agreement invalid or unenforceable, the remainder of this Agreement shall be interpreted so as best to effect the intent of the parties. 7. Integration. This Agreement expresses the complete understanding of the parties with respect to the subject matter and supersedes all prior proposals, agreements, representations and understandings. This Agreement may not be amended except in a writing signed by both parties. 8. Waiver. The failure to exercise any right provided in this Agreement shall not be a waiver of prior or subsequent rights. This Agreement and each party's obligations shall be binding on the representatives, assigns and successors of such party. Each party has signed this Agreement through its authorized representative. Dated: City of Hutchinson (Receiving Party) By: Gary T. Forcier Title: Mayor By: Matt Jaunich Title: City Administrator Dated: 11/07/2024 LMAP, LLC dba Smoky Dukes (Disclosing Party) Ram GV Udt By: Co-owner Title: RA HUTCHINSON CITY COUNCIL HUTCHINSON Request for Board Action A CITY ON PURPOSE. Out of State Travel for Dan Broucek and Dion Carter to attend the United States Agenda Item: Composting Council's annual conference in Phoenix, AZ Jan 27-30, 2025 Department: Creekside LICENSE SECTION Meeting Date: 12/10/2024 Application Complete N/A Contact: Andy Kosek Agenda Item Type: Presenter: Reviewed by Staff Consent Agenda Time Requested (Minutes): License Contingency N/A Attachments: No BACKGROUND/EXPLANATION OFAGENDA ITEM: Creekside staff is requesting consideration for approval to allow Dan Broucek, Creekside Operations Supervisor, and Dion Carter, Compost Equipment Operator to travel to the United States Composting Council annual conference and trade show being held in Phoenix, Arizona January 27th - 30th, 2025. This conference is the premier event in the composting industry with many workshop sessions available regarding all dynamics of the composting process: curbside collection topics, combating contamination issues, how to improve participation and demos of the latest equipment and compostable products to name a few. Vendors and other composting colleagues are also all together in one place to allow a better networking environment. Expenses for this travel are included in the 2025 budget. Total expenses for two employees is expected to be approximately $4,500 (includes conference registration, airfare, hotel, parking, ground transportation and meals) and will be split 50/50 between the Compost and Refuse Funds. BOARD ACTION REQUESTED: Approve/Deny out of state travel for Dan Broucek and Dion Carter to attend the United States Composting Council's annual conference Jan 27th - 30th, 2025. Fiscal Impact: $ 4,500.00 Funding Source: Refuse/Compost Funds FTE Impact: Budget Change: New Bu Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A HUTCHINSON A CITY ON PURPOSE. BOARDS/COMMISSION INTEREST FORM www.ci.hutchinson.mn.us Fax # (320) 234-4240 Hutchinson City Center, 111 Hassan St. SE, Hutchinson MN Phone # (320) 587-5151 Name: / R1 0—1 d14) V,5 b� Address: r7Pa IArinr)nLj Home Phone #: 3 d6 5239 2 q9? Work Phone #: Cell Phone #: 3 ;ta ? y 3 3 Y00 Email Address: +v54-3n 6,7 &:gma,4 ea?j Occupation: ,, e Place of Employment: .5J- P- ffl , r'r,` ,-Je Educational Background: Lc - C'; 11,1,,,E Number of years as Hutchinson Resident: 3-'7 I am interested in serving on the following City Board or Commission: ❑ Airport Commission (5 yr. term) ❑ Bicycle/Pedestrian Advisory Committee (3 yr. term) ❑ Charter Commission (4 yr. term) ❑ HRA Board (5 yr. term) ❑ EDA Board (6 yr. term) ❑ Library Board (3 yr. term) JW Park/Rec/Comm Ed Board (3 yr. term) ❑ Planning Commission (5 yr. term) ❑ Police Civil Service Commission (3 yr. term) ❑ Public Arts Commission (3 yr. term) ❑ Senior Advisory Board (3 yr. term) ❑ Sustainability Advisory Board (3 yr. term) ❑ Utilities Commission (5 yr. term) -OVER- Explain why you are interested in this board/commission: bf- rtVe_ i"n Volali4fer,t5,%,v `y'% oln C=.s e b Caxe i_ e, i-a 4 I9>`� ,n -"i r _.� �etye c'rsb t Please describe any prior/current experience that ma,Y relate to serving on this board/commission: vi '� �� !n of _ SC W'4& �i,� C 4k l VGt`Ur id cseurs �nti�h��n�c�i°rl1 —� vi Mr- X ,94 ° rs, " er v K o 4V' +y Please List Other Municipal Boards and/or Commission you may have served. / �Years Served to r �' 2. S /J trt"1��j ! Nair /p .�G�i1 �+Pzz l.(✓Gr ! ur/i !ff r fs . t0 tT 3. f" , `I l�+ a�C �� '5LIO , 6y) to 6,20 f q ---------------------- 4,) i1i/ N1 c v' /71 ivl% fh !2 i►I�Cr� l I'�n�j� j2 rru`rn eta f 3 to c t? Please return completed form to Melissa Starke at City Center, 111 Hassan Street SE, if you are interested in serving on any of the above boards/commissions. We thank you for your interest. This form will be placed on file and we will refer to the file as openings occur. N R HUTCHINSON A CITY ON PURPOSE. BOARDS/COMMISSION INTEREST FORM www.ci.hutchinson.mn.us Hutchinson City Center, 111 Hassan St. SE, Hutchinson MN Name: Anh �OtmeGCe�(' Address: 1211D Tx pN-r—nll'C' 0�'khvseS�' Home Phone #: Cell Phone #: f 32a1 55 2 — S W Occupation: o m A -r r)4- Place of Employment: kiAA Ghincon CeEkc Educational Background: Pinch,cWS Qf4yee, Number of years as Hutchinson Resident: 1 0 Fax # (320) 234-4240 Phone # (320) 587-5151 Work Phone #:---- Email Address: ann. lass I am interested in serving on the following City Board or Commission: ❑ Airport Commission (5 yr. term) ❑ Bicycle/Pedestrian Advisory Committee (3 yr. term) ❑ Charter Commission (4 yr. term) ❑ HRA Board (5 yr. term) ❑ EDA Board (6 yr. term) ❑ Library Board (3 yr. term) Park/Rec/Comm Ed Board (3 yr. term) ❑ Planning Commission (5 yr. term) ❑ Police Civil Service Commission (3 yr. term) ❑ Public Arts Commission (3 yr. term) ❑ Senior Advisory Board (3 yr. term) ❑ Sustainability Advisory Board (3 yr. term) ❑ Utilities Commission (5 yr. term) -OVER- T i—�— s Explain why you are interested in this board/commission:_ One o�f kl chic N CD,mmunik� need' �F�urn �rhe��r P�C1✓ board M�� k eko�roved `abON -b Please describe any prior/current experience that may relafb to serving on this Sefv�e 4v-,e_ 994C bmv'6 Please List Other Municipal Boards and/or Commission you may have served. Years Served 1.) C th b11 K— 5 ? r,566 Lt fern to eurre+nq�- 2.) to S2r�J V i 3.) 4.) to to Please return completed form to Melissa Starke at City Center, 111 Hassan Street SE, if you are interested in serving on any of the above boards/commissions. We thank you for your interest. This form will be placed on fife and we will refer to the file as openings occur. RA HUTCHINSON CITY COUNCIL HUTCHINSON Request for Board Action A CITY ON PURPOSE. Items for Franklin Site Improvement Project (1-3/P25-03) Agenda Item: Department: PW/Eng LICENSE SECTION Meeting Date: 12/10/2024 Application Complete N/A Contact: Mike Stifter Agenda Item Type: Presenter: Mike Stifter Reviewed by Staff Consent Agenda Time Requested (Minutes): 0 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: City staff requests that the City Council approve the appropriate Resolutions to set a Public Hearing for the above referenced project letting during their January 14th meeting. Please note that City staff will be communicating project related information (including estimated assessment amounts) to adjacent property owners and hopefully address any questions/concerns prior to the forthcoming Public Hearing. BOARD ACTION REQUESTED: Approval of Resolutions Fiscal Impact: Funding Source: FTE Impact: Budget Change: No Included in current budget: Yes PROJECT SECTION: Total Project Cost: $ 0.00 Total City Cost: $ 0.00 Funding Source: Remaining Cost: $ 0.00 Funding Source: u HUTCHINSON PUBLIC WORKS AND ENGINEERING FEASIBILITY STUDY & ENGINEERING REPORT DATE: December 2, 2024 TO: Honorable Mayor & City Council members FROM: Justin Black, City Engineer PROJECT: Franklin Site Improvement Project Having studied the following proposed improvement, Public Works staff finds that the proposed project is feasible and recommend that it be constructed: L3/P25-03: Franklin Site Improvement Project: Glen Street NW (1st Avenue NW to the dead end) 1st Avenue NW (Glen Street NW to Franklin Street NW) and Franklin Street NW (1st Avenue NW to 2nd Avenue NW) partial reconstruction of street, including partial curb and gutter replacement, water main, realignment of sanitary sewer, storm sewer, storm water pond, river bank restoration, rip rap, turf restoration and appurtenances. ESTIMATED COSTS TOTAL Construction Cost $862,595 Engineering $81,000 Administration $32,942 TOTAL ESTIMATED COSTS $ 976,537 ESTIMATED FUNDING TOTAL Assessments $10,758 City - GO Improvement Bond $503,807 City - Water Funds $35,590 City - Wastewater Funds $126,540 City - Stormwater Funds $299,842 TOTAL ESTIMATED FUNDING $ 976,537 RESOLUTION NO. 15800 RESOLUTION ORDERING PREPARATION OF REPORT ON IMPROVEMENT LETTING NO. 3/PROJECT NO. 25-03 WHEREAS, it is proposed to improve: Franklin Site Improvement Project: Glen Street NW (1st Avenue NW to the dead end) 1st Avenue NW (Glen Street NW to Franklin Street NW) and Franklin Street NW (1 st Avenue NW to 2nd Avenue NW) partial reconstruction of street, including partial curb and gutter replacement, water main, realignment of sanitary sewer, storm sewer, storm water pond, river bank restoration, rip rap, turf restoration and appurtenances, and to assess the benefited property for all or a portion of the cost of the improvement, pursuant to Minnesota Statutes, Chapter 429. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, MINNESOTA: THAT, the proposed improvement, called Letting No. 3/Project No. 25-03, be referred to the Engineer for study and that that person is instructed to report to the Council with all convenient speed advising the Council in a preliminary way as to whether the proposed improvement is necessary, cost-effective, and feasible; whether it should best be made as proposed or in connection with some other improvement; the estimated cost of the improvement as recommended; and a description of the methodology used to calculate individual assessments for affected parcels. Adopted by the Council this 10th day of December 2024. Mayor: Gary Forcier City Administrator: Matthew Jaunich RESOLUTION NO. 15801 RESOLUTION RECEIVING REPORT AND CALLING HEARING ON IMPROVEMENT LETTING NO. 3/PROJECT NO. 25-03 WHEREAS, pursuant to a resolution of the Council adopted December 10, 2024, a report has been prepared by Justin Black, City Engineer with reference to the following proposed improvements: Franklin Site Improvement Project: Glen Street NW (1st Avenue NW to the dead end) 1st Avenue NW (Glen Street NW to Franklin Street NW) and Franklin Street NW (1 st Avenue NW to 2nd Avenue NW) partial reconstruction of street, including partial curb and gutter replacement, water main, realignment of sanitary sewer, storm sewer, storm water pond, river bank restoration, rip rap, turf restoration and appurtenances, and said report was received by the Council on December 10, 2024, and WHEREAS, the report provides information regarding whether the proposed improvement is necessary, cost-effective, and feasible; whether it should best be made as proposed or in connection with some other improvement; the estimated cost of the improvement as recommended; and a description of the methodology used to calculate individual assessments for affected parcels. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, MINNESOTA: 1. The Council will consider the improvement of such street(s) in accordance with the report and the assessment of abutting property for all or a portion of the cost of the improvement pursuant to Minnesota Statutes, Chapter 429 at an estimated total cost of the improvement of $976,537.00. 2. A public hearing shall be held on such proposed improvement on the 14th day of January 2025, at the Hutchinson City Center at 6:00 PM and the Clerk shall give mailed and published notice of such hearing and improvement as required by law. Adopted by the Hutchinson City Council this 10th day of December 2024. Mayor: Gary Forcier City Administrator: Matthew Jaunich PUBLICATION NO. 8563 NOTICE OF HEARING ON IMPROVEMENT LETTING NO. 3/PROJECT NO. 25-03 (L3P25-03) TO WHOM IT MAY CONCERN: Notice is hereby given that the City Council of Hutchinson, Minnesota, will meet in the Council Chambers at the Hutchinson City Center, 111 Hassan St SE, Hutchinson, MN, at 6:00 pm on the 14th day of January 2025, to consider the making of an improvement of Letting No. 3/Project No. 25-03, an improvement of: Franklin Site Improvement Project: Glen Street NW (1 st Avenue NW to the dead end) 1 st Avenue NW (Glen Street NW to Franklin Street NW) and Franklin Street NW (1 st Avenue NW to 2nd Avenue NW) partial reconstruction of street, including partial curb and gutter replacement, water main, realignment of sanitary sewer, storm sewer, storm water pond, river bank restoration, rip rap, turf restoration and appurtenances pursuant to Minnesota Statutes, Sections 429.011 to 429.111. The estimated City cost of said improvement is $10,758.00 for the total estimated cost of $976,537.00. will be available at the hearing. Such persons as improvement will be heard at this meeting. Dated: 12/10/2024 $965,779.00 and an estimated Assessable cost of A reasonable estimate of the impact of the assessment desire to be heard with reference to the proposed Matthew Jaunich, City Administrator PLEASE NOTE: IT IS IMPORTANT THAT YOU ATTEND THIS HEARING, WHETHER YOU ARE FOR OR AGAINST THE PROJECT, IN ORDER THAT YOUR COUNCIL CAN BE BETTER INFORMED OF A TRUE REPRESENTATION OF OPINION. PUBLISHED IN THE HUTCHINSON LEADER ON FRIDAY, DECEMBER 27, 2024 AND ON FRIDAY, JANUARY 3, 2025. CHECK REGISTER A FOR CITY OF HUTCHINSON CHECK DATES 11/27/24 - 12/10/24 Check Date Check # Name Description Amount 11/29/2024 EFT EFTPS Payroll Report 11/10/24 - 11/23/24 83,123.92 11/29/2024 EFT MN Dept of Revenue Payroll Report 11/10/24 - 11/23/24 16,589.79 11/29/2024 EFT MNDCP Payroll Report 11/10/24- 11/23/24 325.00 11/29/2024 EFT Child Support Payroll Report 11/10/24- 11/23/24 850.01 11/29/2024 EFT PERA Payroll Report 11/10/24- 11/23/24 63,171.21 11/29/2024 EFT Further HSA Payroll Report 11/10/24 - 11/23/24 15,778.25 11/29/2024 EFT Mission Square Payroll Report 11/10/24 - 11/23/24 4,990.47 11/29/2024 EFT VOYA Payroll Report 11/10/24- 11/23/24 260.00 11/29/2024 118151 Manual Employee Check Payroll Report 11/10/24- 11/23/24 25.85 11/29/2024 118152 HART Payroll Report 11/10/24 - 11/23/24 400.22 12/10/2024 118153 ACE HARDWARE - 1315 REPAIR & MAINT SUPPLIES - MULTIPLE DEPTS 233.86 12/10/2024 118154 ADVANCED ENGINEERING & ENVIRONMENTA SCADA MAINTENANCE - WATER 2,794.79 12/10/2024 118155 ADVANCED POWER SERVICES INC AQUATIC CTR POWER OUTRAGE 480.00 12/10/2024 118156 ALL-AMERICAN ARENA PRODUCTS REPLACEMENT GLASS FOR EAST RINK -ARENA 3,094.65 12/10/2024 118157 ALPHA TRAINING & TACTICS LLC GUARDIAN CARRIER - POLICE 228.42 12/10/2024 118158 ALPHA WIRELESS ANNUAL RADIO MAINTENANCE - STREETS 840.00 12/10/2024 118159 AMERICAN BOTTLING CO COST OF GOODS SOLD - LIQUOR HUTCH 589.32 12/10/2024 118160 AMERICAN WELDING & GAS FIRE EXTINGUISHER MAINT- POLICE 970.46 12/10/2024 118161 AMPLIFY FOR CHANGE SUPPORTTO MPCAGRANT - CREEKSIDE 800.00 12/10/2024 118162 ARTISAN BEER COMPANY COST OF GOODS SOLD - LIQUOR HUTCH 972.95 12/10/2024 118163 AUTO VALUE - GLENCOE HATS SHOP SUPPLIES 99.84 12/10/2024 118164 B & C PLUMBING & HEATING INC BOILER REPAIR - WWTP 343.75 12/10/2024 118165 BCATRAINING EDUCATION DMT RECERTIFICATION - POLICE 75.00 12/10/2024 118166 BELLBOY CORP COST OF GOODS SOLD - LIQUOR HUTCH 3,892.12 12/10/2024 118167 BERNICK'S COST OF GOODS SOLD - LIQUOR HUTCH 829.08 12/10/2024 118168 BJUR, JESSE REIMB: FRAUD TRAINING - MV 77.05 12/10/2024 118169 BOBBING BOBBER BREWING CO COST OF GOODS SOLD - LIQUOR HUTCH 452.64 12/10/2024 118170 BOLTON & MENK INC LAKES AND RIVERS PROJECTS - ENG 6,777.50 12/10/2024 118171 BRADLEY SECURITY LLC REKEYS - MULTIPLE DEPTS 382.95 12/10/2024 118172 BRAUN INTERTEC CORP VMF GRANDSTAND REPLACEMENT 4,563.90 12/10/2024 118173 BREAKTHRU BEVERAGE MN WINE & SPIRITS COST OF GOODS SOLD - LIQUOR HUTCH 24,154.17 12/10/2024 118174 BSN SPORTS LLC OPERATING SUPPLIES - REC 1,421.18 12/10/2024 118175 C & L DISTRIBUTING COST OF GOODS SOLD - LIQUOR HUTCH 35,212.57 12/10/2024 118176 CARS ON PATROL SHOP LLC OIL CHANGE, TOW - POLICE 289.04 12/10/2024 118177 CENTRAL HYDRAULICS MS441T VALVES/NIPPLES - STREETS 190.87 12/10/2024 118178 CINTAS CORPORATION SUPPLIES & SERVICE - MULTIPLE DEPTS 408.29 12/10/2024 118179 COLDSPRING NICHE PLAQUE - CEMETERY 352.00 12/10/2024 118180 COMMERCIAL DRIVING 101 CDL TRAINING - STREETS 2,000.00 12/10/2024 118181 CORE & MAIN LP 3/4 IPERL WATER METERS, CHAMBER - WATER 31,467.38 12/10/2024 118182 CRESTED RIVER COST OF GOODS SOLD - LIQUOR HUTCH 480.00 12/10/2024 118183 CROW RIVER FLORAL & GIFTS ARRANGEMENT - ENG 56.50 12/10/2024 118184 DAHLHEIMER BEVERAGE COST OF GOODS SOLD - LIQUOR HUTCH 54,850.62 12/10/2024 118185 DAVIS MOTORS INC 2025 CHEVROLET ONE -TON TRUCK - PARKS 36,159.00 12/10/2024 118186 DELL MARKETING LP DELL SFF DESKTOPS - HUC 7,174.05 12/10/2024 118187 DESIGN ELECTRIC INC HWY 15/2ND AVE SE TRAFFIC LIGHT - ENG 323.75 12/10/2024 118188 DISPLAY SALES HOLIDAY DECORATIONS FOR LIBRARY SQUARE 117.00 12/10/2024 118189 EAST SIDE OIL COMPANIES DIESEL FUEL IN ST. CLOUD - CREEKSIDE 695.10 12/10/2024 118190 ECOLAB PEST ELIMINATION PEST CONTROL- POLICE 108.00 12/10/2024 118191 ELECTRO WATCHMAN WATER PLANT SECURITY UPGRADE 15,112.84 12/10/2024 118192 EWERT BROS INC STORMWATER TELEVISING 2,949.10 12/10/2024 118193 FASTENAL COMPANY EQUIPMENT PARTS - MULTIPLE DEPTS 283.43 12/10/2024 118194 FORCE AMERICA DISTRIBUTING LLC MS441T COMP VALVE ASSY - STREETS 619.62 12/10/2024 118195 FOSTER MECHANICAL REPAIRS - MULTIPLE DEPTS 1,615.66 12/10/2024 118196 FRONTIER PRECISION INC TRIMBLE REPAIRS - ENG 810.00 12/10/2024 118197 FUZE LOGISTICS SERVICES USA INC CREEKSIDE BAGGED FREIGHT 2,050.00 12/10/2024 118198 GAG SHEET METAL INC CITY CENTER ROOF REPLACEMENT 6,831.08 12/10/2024 118199 GAVIN, JANSSEN, STABENOW & MOLDAN LTD PROSECUTIONS - LEGAL 7,400.00 12/10/2024 118200 GRAINGER REPAIR & MAINT SUPPLIES - MULTIPLE DEPTS 927.46 12/10/2024 118201 GRANICUS LLC SOFTWARE - BLDG INSP 776.29 12/10/2024 118202 HAGER JEWELRY INC RETIREMENT GIFT- LIQUOR HUTCH 77.00 12/10/2024 118203 HAUGEN ARCHITECTURE INC DRAWING FOR THE VMF BATHROOM 1,000.00 CHECK REGISTER A FOR CITY OF HUTCHINSON CHECK DATES 11/27/24 - 12/10/24 Check Date Check # Name Description Amount 12/10/2024 118204 HAWKINS INC HYDROFLUOSILICIC ACID - WATER 3,494.70 12/10/2024 118205 HAYDAY EXPRESS FREIGHT - BAGGED - CREEKSIDE 2,000.00 12/10/2024 118206 HJERPE CONTRACTING DISCONNNECTS, CHECKVALVES - MULTIPLE DEPTS 4,536.76 12/10/2024 118207 HOISINGTON KOEGLER GROUP INC DOWNTOWN PLAN UPDATE 8,234.21 12/10/2024 118208 HOME CITY ICE COMPANY COST OF GOODS SOLD - LIQUOR HUTCH 624.23 12/10/2024 118209 HONEY -DO LAWN SERVICES LLC BAGGING PALLETS - CREEKSIDE 2,158.00 12/10/2024 118210 HUTCHINSON CHAMBER & TOURISM OCT LODGING TAX 11,519.45 12/10/2024 118211 HUTCHINSON CO-OP FUEL- POLICE 51.75 12/10/2024 118212 HUTCHINSON UTILITIES BUCKET TRUCK INSPECTIONS - STREETS 850.00 12/10/2024 118213 HUTCHINSON WHOLESALE #1550 EQUIPMENT PARTS - MULTIPLE DEPTS 422.06 12/10/2024 118214 HUTCHINSON WHOLESALE #1552 TOOLCAT FILTERS, TOOLS - PARKS 40.17 12/10/2024 118215 IMS-INDUSTRIAL MAINTENANCE SUPPLIES REPAIR & MAINTENANCE SUPPLIES - WWTP 146.00 12/10/2024 118216 INTERSTATE BATTERY SYSTEM OF MPLS HATS BATTERY STOCK 529.90 12/10/2024 118217 ISD #423 OCTOBER 2024 ECFE & COMM ED 3,391.85 12/10/2024 118218 JARL, TIM REIMB: SAFETY FOOTWEAR - WWTP 212.55 12/10/2024 118219 JOHNSON BROTHERS LIQUOR CO COST OF GOODS SOLD - LIQUOR HUTCH 13,004.46 12/10/2024 118220 JUUL CONTRACTING CO SEWER RPR - 6 FRANKLIN ST - WWTP 2,715.00 12/10/2024 118221 KERI'S CLEANING & HANDYMAN SERVICES CONTRACTED JANITORIAL - MULTIPLE LOCATIONS 5,229.06 12/10/2024 118222 KINNEY & LANGE SCULPTURE SCROLL TRADEMARK FILING 1,025.00 12/10/2024 118223 KLOSS, TOM REIMB: CJIS FOCUS GROUP MTG - IT 79.06 12/10/2024 118224 KOHLS SWEEPING SERVICE PILING CONCRETE AND ASPHALT - CREEKSIDE 525.00 12/10/2024 118225 KRANZ LAWN & POWER MOWER BLADES - CEMETERY 98.85 12/10/2024 118226 LOGIS LOGIS CONSULTING - IT 362.50 12/10/2024 118227 MARCO TECHNOLOGIES LLC PRINTING CONTRACTS - MULTIPLE DEPTS 1,937.89 12/10/2024 118228 MARCO TECHNOLOGIES LLC NW 7128 PRINTING CONTRACTS - MULTIPLE DEPTS 7,358.90 12/10/2024 118229 MCCORMICK'S FAMILY RESTAURANT ANNUAL RECOGNITION DINNER 1,867.69 12/10/2024 118230 MCLEOD COUNTY RECORDER RECORDING FEES - LEGAL 92.00 12/10/2024 118231 MEI TOTAL ELEVATOR SOLUTIONS ELEVATOR SERVICE - LIBRARY 236.42 12/10/2024 118232 MENARDS HUTCHINSON REPAIR & MAINT SUPPLIES - MULTIPLE DEPTS 1,332.14 12/10/2024 118233 MEUFFELS, CASSANDRA REIMB: SAFETY FOOTWEAR - CREEKSIDE 169.95 12/10/2024 118234 MIDWEST MACHINERY CO MW524Q DRAWBAR - STORMWATER 959.81 12/10/2024 118235 MINI BIFF MINI BIFF RENTAL- POLICE 110.16 12/10/2024 118236 MINNESOTA VALLEY TESTING LAB LAB SAMPLE TESTING - MULTIPLE DEPTS 915.60 12/10/2024 118237 MN STATE FIRE CHIEFS ASSOCIATION 2024 CONF REGISTRATION - FIRE 1,275.00 12/10/2024 118238 MPCA LICENSES & PERMITS - WWTP 2,192.00 12/10/2024 118239 NEO ELECTRICAL SOLUTIONS MAINTENANCE INSPECTION - AIRPORT 2,175.00 12/10/2024 118240 NORTHERN SAFETY TECHNOLOGY 2 BEACONS/2 AMBER WARNING/KIT- STREETS 2,007.38 12/10/2024 118241 NOTHING BUT HEMP COST OF GOODS SOLD - LIQUOR HUTCH 855.00 12/10/2024 118242 NUSS TRUCK & EQUIPMENT MS923T EQUIP PARTS - STREETS 64.19 12/10/2024 118243 NUVERA PHONE SERVICES - MULTIPLE DEPTS 5,423.86 12/10/2024 118244 ODP BUSINESS SOLUTIONS LLC FILE POCKETS - STREETS 77.92 12/10/2024 118245 O'REILLY AUTO PARTS SHOP SUPPLIES - PARKS 83.12 12/10/2024 118246 PALLET SERVICE CORPORATION BAGGING PALLETS - CREEKSIDE 4,316.00 12/10/2024 118247 PARK NICOLLET CLINIC CAM - EVENT CTR 1,500.00 12/10/2024 118248 PAUSTIS WINE COMPANY COST OF GOODS SOLD - LIQUOR HUTCH 761.00 12/10/2024 118249 PEOPLEREADY INC CREEKSIDE TEMP STAFFING 4,485.60 12/10/2024 118250 PHILLIPS WINE & SPIRITS COST OF GOODS SOLD - LIQUOR HUTCH 14,241.14 12/10/2024 118251 PINE PRODUCTS INC YARD AND GARDEN PINE BARK- CREEKSIDE 3,870.00 12/10/2024 118252 PLUNKETTS PEST CONTROL PEST CONTROL - ARENA 114.37 12/10/2024 118253 PREMIUM WATERS PARK BREAKROOM WATER 41.99 12/10/2024 118254 QUILL CORP QUILL MEMBERSHIP - POLICE 69.99 12/10/2024 118255 RAHN PAINTING & CONTRACTING LLC CONTRACTED SNOW REMOVAL- MULTIPLE DEPTS 6,743.75 12/10/2024 118256 REINDERS LIBRARY SQUARE HOLIDAY LIGHTS 1,520.28 12/10/2024 118257 REINER ENTERPRISES INC ST. CLOUD HAULING - CREEKSIDE 5,250.00 12/10/2024 118258 REVIER WELDING REBUILD, REPAIRS - MULTIPLE DEPTS 3,007.21 12/10/2024 118259 RIDGEWATER COLLEGE EMS REFRESHER TRAINING - POLICE 1,518.75 12/10/2024 118260 RUNNING'S SUPPLY REPAIR & MAINT SUPPLIES - MULTIPLE DEPTS 640.37 12/10/2024 118261 S&S TRUCKING LLC ST. CLOUD HAULING - CREEKSIDE 12,950.00 12/10/2024 118262 SEDERLUND, CORY REIMB: RADIO END USER TRAINING - POLICE 215.86 12/10/2024 118263 SHORT-ELLIOT-HENDRICKSON INC MISC ENGINEERING SERVICES 13,342.65 12/10/2024 118264 SHRED-N-GO 446138 SHREDDING - POLICE 17.50 CHECK REGISTER A FOR CITY OF HUTCHINSON CHECK DATES 11/27/24 - 12/10/24 Check Date Check # Name Description Amount 12/10/2024 118265 SIR LINES -A -LOT 2024 LONG LINE STRIPING - STREETS 4,190.00 12/10/2024 118266 SODERBERGS FLORAL AND GIFT ARRANGEMENT - LEGAL 79.98 12/10/2024 118267 SOUTHERN WINE & SPIRITS OF MN COST OF GOODS SOLD - LIQUOR HUTCH 14,091.21 12/10/2024 118268 STANDARD PRINTING-N-MAILING POSTAGE, UB BILLS - MULTIPLE DEPTS 3,417.43 12/10/2024 118269 STAPLES ADVANTAGE PACKAGING TAPE, BAGS, SORTER - CREEKSIDE 92.68 12/10/2024 118270 STARWIND SOFTWARE INC STARWIND SUPPORT- MULTIPLE DEPTS 3,084.00 12/10/2024 118271 TERMINAL SUPPLY CO SUPPLIES - HATS 618.96 12/10/2024 118272 THOMSON REUTERS-WEST OPERATING SUPPLIES - MULTIPLE DEPTS 1,535.44 12/10/2024 118273 TIDY TIGHTWADS/HUTCHFIELDSERVICES HATS JANITORIAL SERVICE 1,485.75 12/10/2024 118274 TRI COUNTY WATER BOTTLE WATER, SALT - MULTIPLE DEPTS 130.85 12/10/2024 118275 VALLEY ASPHALT PRODUCTS INC WINTER MIX ASPHALT- STREETS 2,079.00 12/10/2024 118276 VIKING BEER COST OF GOODS SOLD - LIQUOR HUTCH 11,100.75 12/10/2024 118277 VIKING COCA COLA COST OF GOODS SOLD - LIQUOR HUTCH 512.25 12/10/2024 118278 VIKING SIGNS & GRAPHICS INC AIRP VINYL DECALS - AIRPORT 590.00 12/10/2024 118279 WASTE MANAGEMENT OF WI -MN REFUSE TAKEN TO LANDFILL 8,918.46 12/10/2024 118280 WASTEWATER SERVICES INC WW MANAGER SERVICES 4,950.00 12/10/2024 118281 WINE COMPANY, THE COST OF GOODS SOLD - LIQUOR HUTCH 3,725.20 12/10/2024 118282 WINE MERCHANTS INC COST OF GOODS SOLD - LIQUOR HUTCH 1,106.94 12/10/2024 118283 BORG, CLIFFORD UB REFUND 133.00 12/10/2024 118284 EWALD, TANYA UB REFUND 20.63 12/10/2024 118285 FREEMAN, KELSEY UB REFUND 21.68 Total - Check Register A: $ 676,800.26 RA HUTCHINSON CITY COUNCIL HUTCHINSON Request for Board Action A CITY ON PURPOSE. Review of Truth in Taxation Hearing Agenda Item: Department: Administration LICENSE SECTION Meeting Date: 12/10/2024 Application Complete N/A Contact: Matt Jaunich Agenda Item Type: Presenter: Matt Jaunich Reviewed by Staff Communications, Requests Time Requested (Minutes): 10 License Contingency N/A Attachments: Yes 0 BACKGROUND/EXPLANATION OFAGENDA ITEM: As a follow up to the Truth in Taxation Hearing from December 3, the Council should have a discussion on whether or not there is a desire to change anything in regards to the 2025 budget and/or tax levy. Requests (if any) for additional information from the Truth in Taxation Hearing and/or any changes to the proposed budget/levy will be presented at this time as well. One last thing that we will need to discuss is our projected debt levy for 2025, and in particular, the funding for a new Fire Ladder Truck. There is a scenerio in which we could fund this without a tax levy increase. This would save the City roughly $70,000 in our debt levy for next year. I've have included an attachment with some additional information on this option for a discussion on Tuesday. In summary... If the Council would like to decrease our tax burden we could do that through our debt levy in relation to the new Fire Ladder Truck. We could finance with a combination of Capital Project dollars and Water/Sewer funds. There are no restrictions on using Water/Sewer funds, but we would need a city council resolution to do so. We've included 10-year financial forecasts for the Water/Sewer funds and they maintain very healthy cash balances after funding the ladder truck. One thing to be mindful of is this could change depending on future capital needs and state/federal mandates. Using Capital Projects funds in the first year (2025) buys us some time if the council doesn't want to use water/ sewer funds. We could then look at interfund loans from the water/sewer funds, potentially to be repaid using LGA to repay ($133K per year debt service for 15 years). Or a combination of the scenerios. BOARD ACTION REQUESTED: No action at this time. Final budget and levy will be approved at the December 19 meeting Fiscal Impact: Funding Source: FTE Impact: Budget Change: No 0 Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A Fire Ladder Truck Payment Schedule: Contract Signing $0 Late 2025 / Early 2026 - Chassis $600,641 Mid to Late 2026 - Aerial $668,822 Late 2026 / Early 2027 - Final Payment $824,841 TOTAL COST $2,094,304 Fundina Ootions: 1) Cash Reserves - Capital Projects Fund $600,641 28.7% 2) Water & Sewer Funds $1,493,663 71.3% 3) Interfund Loan - Water & Sewer funds 4) Proceeds from sale of old ladder truck reimburse Capital Projects? 5) GO Equipment Bonds 6) Combination of above items $2,094,304 Time Line: 2025 2026 2027 Total Estimated Cash Outlays-$600,641-$668,822-$824,841-$2,094,304 Funding: 2025 Undesignated LGA $200,000 $0 $0 $200,000 Capital Projects reserves $400,641 $0 $0 $400,641 Sewer Fund transfer $0 $168,822 $424,841 $593,663 Water Fund transfer $0 $500,000 $400,000 $900,000 Total Funding $600,641 $668,822 $824,841 $2,094,304 N V M i O O N V_ N d O O N V_ Y N (� C-4 i O O N V_ N R � i O O N V_ CDP N (� M i O O N V_ Y N (6 QA i O O N V_ N y Ci � rn L 3 Go N C LLO N L IL L N co N 0 i O O N V_ co d O O N V_ H W 0 O � N m Y N d O O N V_ V O O 1* OD LO V M r- O O h M (O N_ '* 00 r- O O ' O) O L 1.-O) ' O 0 N N O O (O O LQ O) ' (O O O a M Id O V M (O a M O N le LO ! 7 LO OD V O O (O M (O (O lf') O 00 M ; V (O N (3) h M M 00 r- — T O M (O N (3) N M 00 (O N N — — or T- M (`") 00 M (O OD (2 O 0) O O (O M V 00 O 00 N O O ' LQ O LQ N O 00 M (O (3) O O (`") 0 0 �r� ' N O T O h O r � 00 T N (G V O N h_ O) 00 N 00 N 00 O 00 00 N N M 0 00T O0N � T M ((O N 00 `-' 00 N N M r- O O h LO N 00 V O O O M 00 N T V O O ' N O L * h 0 (O N O O) O O � (O N OD ' O) O a)O) M T M O T T h h r- O N T LO O (3) r- O (O O (3) M 00 O 00 T LO O M — O N (3) M M (O (O h 00 00 (3) M (O N 00 O T O 00 N N — o T- M O O O O N r- V V N O O T T M O O V O O ' O Lo 1* (O O) (O (3) LO O O O V (O V O) ' LQ O O N (O O M T (M N h h Nt O O N N V (`") (O r- OD r- O 00 O M (O h O O 00 00 (3) N 00 00 (3) M L� T r-- 00 O) N (O r M O 00 O 00 N N M T- M M O O M O M r N O O M O 00 O O O N O lf') O h (3) LO O M_ O O lf') V V ' O O T (O T T V (O 00 O LID' T T M O r- O V (O V r- r- O O T 00 00 O O 00 O 00 h r- 00 LO (3) O M M N (0 — 00 00 N (O 00 T N h O h N N Mor M M O O M 00 N r- (O O 00 O N T O T M O O ' V O Lo M a V (O r- r- LO 00 O OD (O M T V O) O) O O h O (3) N (M h 00 M N Nt (O O N 00 (O 0) N (O LO V O O h 00 r- N (O (O (O O (3) O M r- O — (O O N O) O O O 00 (0 — 00 00 N (O M V h 00 M O T O N N M M 0) O O T N O O 00 r- O (O O M M T N O O ' OD O LQ N M r- V 0 V M O 00 O OD O) L V O) OD LQ O M O OO (O N OD M h h O (3) O N N O N O (O M M 00 O h O O N N V O (3) * O r- (3) LO O LO (3) 00 (3) T (O M (0 — 00 00 N LO — M (3) M N a N N — N 3 O O O O N M (O N LO N_ O N �_ O to M O O O) O O T r- M� N N O T O T O 0) 00 O (1)O LO 00 L V O) lf') V O O Oct Oct O lf') N= a (O ( O N (O (O 00 (O N r- (3) O O N (O 1 W M O N h (O (O r-V O r- O) N h O V 00 M O M r N LO (1) 1) T (O LO M N N M M or T- d M u O lf') O O O (` OD O O O LO 'ITO N N h LO a) y h_ w N O � 0 0 (O 00 N O N 'ITO N I,. 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CONSIDER ACCEPTANCE OF PROPOSAL FROM GC REAL ESTATE PARTNERS Agenda Item: FOR REDEVELOPMENT OF THE CITY OWNED FRANKLIN STREET SITE Department: EDA LICENSE SECTION Meeting Date: 12/10/2024 Application Complete N/A Contact: Miles R. Seppelt Agenda Item Type: Presenter: Miles R. Seppelt Reviewed by Staff ❑ New Business Time Requested (Minutes): 10 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: For a number of years the Hutchinson EDA has been pursuing the redevelopment of the city block bounded by Franklin Street, Glen Street and 1 st Avenue NW, referred to as the 'Franklin Site.' As part of this process the EDA distributed a Request for Proposals (RFP) for redevelopment of the site. Responses were received from three developers: GC Real Estate Partners, Titanium Partners, and Ebert Construction. After extensive review of the proposals, and presentations by the developers, the EDA is recommending that the City Council accept the redevelopment proposal submitted by GC Real Estate Partners. They are proposing a four floor, approximately 79-unit market rate apartment project for the site. A copy of their redevelopment proposal is included for your review. Staff will be on hand to provide additional information and answer any questions the Council may have. In the meantime, if you have any questions or need additional information, please give me a call anytime at 234-4223. BOARD ACTION REQUESTED: Accept proposal from GC Real Estate Partners for redevelopment of the Franklin Street site. Fiscal Impact: Funding Source: FTE Impact: Budget Change: New Bu Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A 3345W St. Germain St, St. Cloud, MN 56301 REAL ESTATE Office:320.253.0003 1 Fax:320.253.0006 G: PARTNERS www.gcremn.com TO: Miles R. Seppelt, Economic Development Director City of Hutchinson FROM: Andy Martin Brian Bruggeman Date: October 10, 2024 RE: Franklin Street Redevelopment — Project Submission Worksheet Response Please see below responses to the Project Submission Worksheet. Worksheet Question: Developer Response: 1. Please provide a one -paragraph Our team has extensive experience developing and managing description of the proposed multifamily projects in non -metropolitan communities. Our development. vision for the site is to construct a 79+/- unit multifamily development that leverages proximity to the downtown urban core and riverfront. Anticipated shared amenities will include, but are not limited to, indoor parking, club room, elevator, indoor refuse room, fitness center, keyless access, surveillance cameras, outdoor patio area and on -site management. Apartment unit amenities will include, but are not limited to, granite countertops, balconies, in -unit laundry, plankflooring, walk-in closets and stainless -steel appliances. Examples of the common amenities and apartment features are represented in Exhibit C. 2. Estimated construction cost of Our team estimates the total development cost of the project: completed project, less the cost of the land that is being donated, to be $17,000,000+/-. The final approved unit count is the biggest cost variable. 3. Estimated market value (EMV) of With inclusion of Tax Increment Financing (TIF), the completed project: estimated market value is expected to match the total development cost of the project. 4. Building Size While the final design is subject to change, we anticipate a building size roughly as follows: Number of floors: 4 Square footage / floor: 26,600 SF Total square footage: 106,400 SF 5. If the project involves the The final unit mix is subject to change based on final building construction of apartments, design, however the intent would be to provide a mix of please provide a breakdown by studio, 1-bed, and 2-bed units, based on the below ratios: number of bedrooms and projected rent amounts: Approx. # of Monthly Unit Type SF/Unit Mix Units Rent Studio 570 - 625 12.7% 10 $980.00 1 Bed 725 - 775 40.5% 32 $1,125.00 1 Bed/Den 850 10.1% 8 $1,190.00 2 Bed/2 Bath 1,100 36.7% 29 $1,370.00 Total 79 6. If the project is a CO-OP or Not Applicable. Project is not a co-op model. similar housing type, how many units are projected? 7. Please include a conceptual site Please see conceptual site plan on Exhibit A. plan for the project. 8. Please provide a photo or Please see conceptual site plan on Exhibit A. rendering of what the project will look like. 9. Please summarize developer's Our development team consists of Brian Bruggeman, Andy experience with similar projects. Martin, Ted Schmid and Barb Brandes. We have over 100 Please provide project examples. years of combined experience in multifamily development and management. Following the completion of the project, our team will also remain as long-term owners of the property. Our team's experience and expertise is reflected in several similar sized projects that have been recently completed or are currently under construction. We are confident that we have knowledge and capabilities to fulfill the City of Hutchinson's vision for this property. Profiles and recent projects from the development team are highlighted on Exhibit B. 10. General Contractor Lumber One, Incorporated, which is owned by development team members Ted Schmid and Barb Brandes, is the selected General Contractor for the project. A resume of Lumber One's experience is available upon request. 2 1 P a g e 11. Property Manager GC Real Estate Partners ("GCRE"), which is based in St. Cloud, MN, is the contracted property management firm. GCRE was founded in 2004 and operates more than 4,600 apartments and 3 million square feet of commercial property throughout the state of Minnesota. Development team member Andy Martin is the Managing Partner of GCRE. 12. Please provide a Sources & Our team intends on using private capital and bank or credit Uses statement for the project. union financing as we have done on all the projects listed on Exhibit A. A proposed Sources and Uses statement can be found on Exhibit E. 13. Beyond the site improvements Yes, developer intends to seekTIF, abatement, or some being made by the City, will public combination thereof. financial assistance (such as a HousingTIF District) be needed? 14. If public financial assistance is TBD - subject to final construction pricing and mortgage needed, in what amount? terms/rate. Our current model does not contemplate assistance beyond the land grant and TIF. 15. Over and above the housing Our team has discussed a trail connection between the site units provided, will the Developer and Girl Scout Park. provide a `public benefit' as part of this project? What would the public benefit be? (e.g. public trail, public artwork, etc.) 16. City site improvements will be We intend to begin site work in the summer of 2025, with completed by July 3, 2025. What is building construction to immediately follow by August 2025. the estimated project timeline for This timeline avoid excessive winter condition costs and the following milestones? allows the project to open during the strong leasing months of 2026. Our team would anticipate the project to be completed within 12 months of the commencement of site work. Should you have any questions regarding our Project Submission Worksheet response, we would be happy to address them directly. Our team looks forward to the opportunity to invest in the Hutchinson community with the development of this property. 3 1 P a g e Exhibit A Conceptual Site Plan and Rendering Note: both site plan and rendering are conceptual and therefore subject to change. rr THE COLE GROUJ ARCH 1 T E C T H UTC H IN0 N, N V116 A�mtj� s., 3Uit0102 • St Cloud, MN 4 1 P a g e PARSING CALy, I UNff MX 5TAU5 PRO R-1 ZONING KQ9RMENT8 Exhibit A (cont'd) NJ 0 d =1 20 W.A -14 = Wroll h d 1. m i MIZ4 -4 ffel 2101 IMA FAA;V M-T-03-0 MM" NW JAMR LIM ASUMD RE* YARD 4' Pmr+ ray MQ LOT TO M WHED BY ON 2 Lo A STORY 11 IK7 APAVENT BADIN6 < — �SiT� PLAN 1ST AVE. 5 1 P a g e Exhibit B Development Team Brian Bruggeman Brian Bruggeman is a Senior Vice President at Colliers I Minneapolis -St. Paul office. He is a 15-year commercial real estate veteran and leads the Minneapolis Healthcare Services team. Over the course of his career, Brian has been involved in numerous segments of commercial real estate and transacted over $880M in sales and lease transactions. In addition to Brian's role at Colliers, Brian is also the Director of Real Estate for Allina Health, a Minneapolis based hospital system. At Allina Brian provides leadership and oversight for system- wide real estate services. His role includes cross -functional team management coordinating efforts between facilities, operations, and finance departments, capital planning initiatives, managing over 2.5 million square feet of real estate leases, acquisitions and dispositions, new developments and participating in strategic planning to optimize real estate assets. Brian is a graduate of the University of Minnesota. He has also earned the Certified Commercial Investment Member (CCIM) Designation. Andy Martin Andy is the CEO and Managing Partner at GC Real Estate Partners ("GCRE"). GCRE (fka Granite City Real Estate, LLC) is based in St. Cloud, MN and was founded in 2004. The organization manages 4,600 apartment units and 3.1 million square feet of commercial space throughout central and northern Minnesota. Andy has been owning and operating commercial and multifamily real estate since 1993. Prior to joining GCRE, Andy was the Executive Vice President at Minneapolis based IRET Properties (NYSE ticker: IRET) where he was a member of their Investment Committee and oversaw all property management operations of the REIT's a $1.8 billion apartment portfolio. Andy has a Bachelor's Degree in Real Estate and a Master's in Business Administration (MBA) from St. Cloud State University. He has earned the Certified Property Manager (CPM) designation from the Institute of Real Estate Management (IREM) as well as the Certified Commercial Investment Member (CCIM) Designation. Ted Schmid & Barb Brandes Barb Brandes is the CEO and Ted Schmid is the COO of Lumber One, a company that their father started in 1962. Lumber One has locations in Cold Spring and Avon, Minnesota and it provides full - service building and contractor materials and services including two lumberyards, interior design, drafting services and retail showrooms. Lumber One also develops and owns single-family homes, townhomes and apartments throughout Minnesota and North Dakota. Since 2009, Lumber One has constructed 36 multifamily housing projects that total over 3,000 units. The resume for Lumber One is shown in Exhibit D. 6 1 P a g e Block25 Lofts —Willmar, MN 58 Units / Opened 2023 Rivertown - Monticello, MN 48 Units / Built 2020 NorthviewApartments— Sartell, MN 71 Units / Opened 2018 Exhibit B (cont'd) Recent Projects Encore on the Park— St. Cloud, MN 105 Units / Opened 2021 d— Mayhew Apartments — Sauk Rapids, MN 71 Units / Opened 2020 Jackson Hills —Elk River, MN 40 Units/ Opened 2019 7 1 P a g e r Wobegon Crossings - Melrose, MN Exhibit B (cont'd) Pintail Preserve -Annandale, MN 73 Units / Phase 1 Opened September 2024 58 Units / Under Construction Phase 2 Opening November 2024 Midtown Lofts -Litchfield, MN 60 Units / Construction Starts November 2024 Opening October 2025 Opening August 2025 8 1 P a g e Exhibit C Common Area Amenities and Apartment Features Club Room Outdoor Patio 6. T, Heated Garage Exercise Facility f �` Fy 11 L Secured Mail/Parcel Room 9 1 P a g e Exhibit C (cont'd) Typical Apartment Features Kitchen In -unit Laundry Walk-in Closets Bathroom V' i Mftw Bedroom 101Page ,Rit ID Studio 3 r IWIFItimmi One Bed/Den Exhibit C (cont'd) Typical Floor Plans 1 rn U 0 r-7 1 Bedroom 2 Bedrooms 111Page Sources LTV Equity 25% $4,299,260.16 Debt 75% $12,897,780.48 TOTAL SOURCES $17,197,040.64 Exhibit D Sources and Uses Use Cost Per Unit Land costs/special assessments $ 1 $ 0 Building Permit, Plan Review, Surcharge, TIF Consultant, Legal, Development Agreement, etc $ 115,000 $ 1,456 Construction (Hard Cost) $ 14,615,000 $ 185,000 Interim Interest $ 600,000 $ 7,595 Financing and Legal Expense $ 60,000 $ 759 SAC & WAC $ 319,950 $ 4,050 FF & E $ 110,000 $ 1,392 Pre -opening Expense & Promotion $ 30,000 $ 380 Architectural, Engineering & Civil $ 225,000 $ 2,848 Builders Risk Insurance $ 50,000 $ 633 Site Development $ 100,000 $ 1,266 Park Dedication $ 10,665 $ 135 Operating Expense Carry $ 300,000 $ 3,797 Subtotal Uses $ 16,535,616 $ 209,312 Developer Fee (4%) $ 661,425 $ 8,372 TOTAL USES $ 17,197,041 $ 286,617 121Page RA HUTCHINSON CITY COUNCIL HUTCHINSON Request for Board Action A CITY ON PURPOSE. Consideration to Set Date for City Administrator Annual Performance Review Agenda Item: Department: Admin LICENSE SECTION Meeting Date: 12/10/2024 Application Complete N/A Contact: Kellie Wendland Agenda Item Type: Presenter: Kellie Wendland Reviewed by Staff ❑ New Business Time Requested (Minutes): 5 License Contingency N/A Attachments: No BACKGROUND/EXPLANATION OFAGENDA ITEM: Per the Employment Agreement between the City of Hutchinson and Matt Jaunich, City Administrator, the City Council will conduct an annual performance review for the City Administrator at the end of each calendar year. The Council may set the review as an agenda item of a regularly scheduled City Council meeting or set a special meeting for this purpose. Upon the scheduling of the review, Human Resources will provide the City Council with the performance review forms. As part of the review process and also per the agreement, the City will consider an increase in compensation to the Administrator dependent upon the results of the performance evaluation and consistent with the City of Hutchinson annual Compensation Plan. BOARD ACTION REQUESTED: Set a date for City Administrator Matt Jaunich's annual performance review. Fiscal Impact: Funding Source: FTE Impact: Budget Change: New Bu Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A Library Board Meeting October 28, 2024 Members Present: Mary Christensen, Sue Griep, Margaret Hoffman, Dianne Wanzek, and Katy Hiltner, Ex-officio. Excused/Absent: Tim Burley, Kay Hultgren, Julie Lofdahl Dianne called the meeting to order. Minutes from the September 23, 2024, meeting were reviewed and approved. Old Business: 1. Program Summaries: a. DNR Bird Programs: 14 attended the morning session for adults and 17 attended the afternoon program for children. b. Felting Workshop: 20 people, of varying ages (5 were youth) attended. 5 kits were set aside for patrons to pick up as take-home projects. c. Gabrielle Meyer Author Event: 9 attended d. Pumpkin Bling: 30 children and 10 adults participated. e. Children's Programming: StoryTime averaged 24 children and 12 adults per session. 4 children attended Graphic Novel Club. Lego Club had 10 children, 8 adults. Tween Gaming had 8; Teen Gaming had 6; Chess Club had 7; Crochet Club had 8; and Coding Club had 7 children, 1 adult, in attendance. Smash Bros Tournament (video games) was funded by a "Teentober" grant from Prairielands. 8 teens attended and received pizza and snacks with prizes awarded to the top 5 players. 2. Library Renovations: Painting on the main floor is completed and will continue on to Katy's office and the conference room. Rich Wanzek is moving a bookshelf and repurposing it into two smaller bookshelves for the main level. Katy might donate a storage cabinet (in the FOL room) to the museum and is looking at rehoming other items, as well. New Business: 1. Closure for Carpet Installation: The library will be closed from 12/6-12/21. The first several days will be a complete closure. Some curbside pickup services will possibly be available later. 2. Children's Book Bins: Fourteen wooden bins on wheels will be needed. Katy received a bid from James and Becky Matthews (Glencoe) for $950 per bin. Two grants, each for $5,000, have been received from FOL and the Hutchinson Area Foundation. Katy is searching for sources of additional funding. 3. November Calendar of Events: "Dinovember": Tim Burley will provide a "Dino" craft event on 11/23, for ages 10- 18. Smaller craft items will be available for younger children who visit the library during November. The library will also be having several "Dinovember" activities, such as scavenger hunts, etc. available during the month. There will be a break from activities in December. 4. Crafting Corner for Adults: Suggested by Rachel Trettin (crochet instructor), adults will have an opportunity to gather each month on the first, third, and fifth Thursdays, from 6-7:30 p.m. 5. Friends of the Library (FOL) Projects: a. Project Bookshelf: FOL will be collecting cash donations from 11/1 to 11/22, for purchasing books for children up to 18 years old. The books will then be given to UCAP for distribution at Christmas. b. Inventory Reduction Book Sale: On 11/16, from 9 a.m. to 4 p.m., many good books, including a "like new" Civil War Collection, will be available for purchase in the meeting room. P. 2 New Business, continued: 6. Hutch Health Holiday Event: On Thursday, December 5, the library will partner with Hutch Health for this event, which will include an Igloo for Santa visits, "characters" reading stories on the second floor of the library, and a craft giveaway on the main floor of the library. 7. December 23, Library Board Meeting: The board will not be meeting in December. September 2024 Donations and Grants: Legion Auxiliary Memorial for Pearl Seale $20.00 Anonymous Donation for DVDs $100.00 Teen SRP Prairielands Grant $1000.00 Total: $1120.00 Next Meeting: Monday, November 25, 2024, at 4:30 p.m. Meeting notes taken by Sue Griep. Respectfully submitted: Kay Hultgren, Secretary Parks, Recreation & Community Education Advisory Board Meeting Minutes November 4, 2024 Members present were Kyle Wendling, Liz Stearns, Margo Kaping, Chad Czmowski, Josh Kamrath, Sara Pollman Staff present Lynn Neumann and Jody Harms. The meeting was held at Burich Arena conference room and called to order at 5:15 pm. Chad Czmowski made a motion to approve the meeting minutes dated October 7, 2024. Sara Pollman seconded the motion. The minutes were approved. Old Business PRCE Advisory Board Vacancies • Currently there are 2 open seats for the PRCE Advisory Board. • Two applications have been received. • Applications are accepted through the end of November. • The position will be promoted through the school board, city council, and social media. VMF Project Update • The project has been slowed down due weather. • Concrete is being poured this week. • Bleachers are to be installed in a couple of weeks, press box and electrical work to be done by the completion date of November 30. New Business MDE Community Education Annual Report • The Community Education annual report includes class information and statistics from July 1-June 30. • The report is complete and will be sent to board members. 2025 Winter/Spring Brochure • The winter/spring PRCE Brochure will go to print on Friday, November 8. • Forum Communications Printing in Detroit Lakes prints and distributes the brochures to Post Office and the PRCE office. • A question was asked and discussed to possibly change over to an electronic brochure. • Advertisement opportunities and cost were discussed. Due to the size of the brochure, advertising opportunities are limited. Board Member Items Campground • Discussion regarding the campground usage report. • A campground expansion of 10-15 sites with electricity and water possibly in a few years was talked about. Adiournment • Next meeting is December 2 -Location TBD A motion to adjourn was made by Chad Czmowski and Kyle Wendling seconded the motion. The meeting adjourned at 5:45 pm.