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12-10-2024HUTCHINSON CITY COUNCIL MEETING MINUTES TUESDAY, DECEMBER 10, 2024 CITY CENTER — COUNCIL CHAMBERS (The City Council is provided background information fog° agenda iten2s in advance by city staff, committees and boards. Many decisions regarding agenda iten2s are based upon this information as well as: City policy and practices, inputfiron2 constituents, and other questions or information that has not yet been presented or discussed regarding an agenda iten2.) 1. CALL MEETING TO ORDER — 5:30 P.M. Mayor Gary Forcier called the meeting to order. Members present were Tim Burley, Dave Sebesta, Pat May and Chad Czmowski. Also present were Matt Jaunich, City Administrator and Marc Sebora, City Attorney. (a) Approve the Council agenda and any agenda additions and/or corrections Motion by Czmowski, second by Sebesta, to approve agenda as presented. Motion carried unanimously. 2. INVOCATION — Oak Heights Covenant Church (The invocation is a voluntary expression of the private citizen, to andfor the City Council, and is not intended to affiliate the City Council with, or express the City Council's preferencefor, any religious/spiritual organization. The views or beliefs expressed by the invocation speaker have not been previously reviewed or approved by the Council or staff) 3. PLEDGE OF ALLEGIANCE 4. RECOGNITION OF GIFTS, DONATIONS AND COMMUNITY SERVICE TO THE CITY PUBLIC COMMENTS (This is an opportunity fog° members of the public to address the City Council. If the topic you would like to discuss is on the agenda, please ask the Mayor if he will be accepting public comments during the agenda item if not a public hearing. Ifyou have a question, concern or comment, please ask to be recognized by the mayor state your name and address for the record. Please keep comments under 5 minutes. Individuals wishing to speakfor more than five minutes should ask to be included on the agenda in advance of the meeting. All comments are appreciated, but please refrain fi on2 personal or derogatory attacks on individuals) 5. CITIZENS ADDRESSING THE CITY COUNCIL 6. APPROVAL OF MINUTES (a) Council Workshop of November 26, 2024 (b) Regular Meeting of November 26, 2024 (c) Truth in Taxation Hearing of December 3, 2024 Motion by Czmowski, second by Sebesta, to approve minutes as presented. Motion carried unanimously. CONSENT AGENDA (The iten2s listedfor consideration will be enacted by one motion unless the Mayor, a member of the City Council or a city staff member requests an item to be removed. Traditionally iten2s are not discussed) 7. APPROVAL OF CONSENT AGENDA (a) Consideration for Approval of 2025 License Renewals (b) Consideration for Approval of Purchase of Leaf Vacuum CITY COUNCIL MINUTES December 10, 2024 (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 (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 Council Member May noted that Item 7(e) — Out of State Travel request — seemed to be expensive for a three-day trip. Motion by Czmowski, second by Burley, to approve consent agenda. Motion carried unanimously. PUBLIC HEARINGS — 6:00 P.M. - NONE COMMUNICATIONS, REQUESTS AND PETITIONS (The purpose of this portion of the agenda is to provide the Council with information necessary to craft wise policy. Includes items like monthly or annual reports and coniniunications f on2 other entities.) 8. REVIEW OF TRUTH IN TAXATION HEARING Matt Jaunich, City Administrator, presented before the Council. Mr. Jaunich provided an update from the truth in taxation hearing that was held last week. Mr. Jaunich noted that the preliminary tax levy set in September showed a City tax increase of 7.9% with a balanced preliminary budget. The current revised budget includes a 5.8% tax levy increase and 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. Mr. Jaunich reminded the Council and the public that the valuation of properties was brought up at the truth in taxation hearing and noted that valuations are to be discussed with the McLeod County Assessor's Office in the spring. Mr. Jaunich noted that the biggest factors behind the levy increase include general wage and benefit increases, including a couple of additional positions, that are expected to cost an additional total of $492,186 in 2025. There is an additional $69,849 factored into the debt levy to account for a new fire ladder truck. The 2025 budget includes an additional fire inspector position and a change in the staffing models at the DMV and in Engineering. 2 CITY COUNCIL MINUTES December 10, 2024 Staffing costs and capital needs are the biggest driver of the budget. The fund balances continue to remain high and the fiscal condition of the City is healthy. The State's budget forecasts are projecting a slight surplus meaning there shouldn't be any State budget issues impacting the City, however the long-term focus has its challenges. Home values continue to increase and the city is continuing to see growth at all levels. Inflation and supply chain issues continue to impact the city as well. Mr. Jaunich noted that since the truth in taxation hearing, he has been approached by Council Members concerning funding for the new ladder truck. He and staff have provided other funding options which include: 1.) Use of cash reserves — Capital Projects fund; 2.) Use of Water and Sewer funds; 3.) Interfund loan — Water & Sewer funds; 4.) Proceeds from sale of old ladder truck; 5.) General Obligation Equipment Bonds; 6.) Combination of the above. Mr. Jaunich noted that if the Council determines to loan money from the Water & Sewer funds, it needs to be kept in mind that if state -mandated regulations come down related to capital improvements, those funds will need to be used for such regulations. The LGA allocation has also been discussed and the use of those funds. There is currently $201,733 as undesignated miscellaneous for capital improvements. However should LGA be cut in the future, these funds would not be available for use for loan payback. Mr. Jaunich then provided the following scenarios to fund the new ladder truck. A No Debt Scenario would use Capital Projects fund reserves, Water fund contribution and Sewer Fund Contribution. A Cash/Debt Scenario would use Capital Projects fund and Water/Sewer interfund loans. A third scenario would be a combination of Water/Sewer contributions and loans. Should an interfund loan be used repayment would come from undesignated LGA in the Capital Projects fund. Mr. Jaunich then provided various updated levy assumptions which included eliminating the fire truck debt and eliminating the proposed fire inspector position. Council Member Burley commented that perhaps employee salary increases could be tightened up a bit. Council Member May noted he is not sure what the best course of action is to fund the new fire ladder truck but thought perhaps he is leaning towards using reserves. Council Member Czmowski stated that he would like to keep the staffing proposals as is and noted that if bonding for the ladder truck is not going to be considered, he is comfortable using reserves since the cash balances are healthy. Mayor Forcier commented that he feels it is important to keep the proposed fire inspector position in the budget. Council Member Burley noted that he feels it is important to keep the number of employees and salaries of employees in line with inflationary factors and general cost of living projections. Mr. Jaunich noted that in May the Council directed staff to provide a balanced budget keeping all the same services as in 2024. The only additional items that have been added to the budget CITY COUNCIL MINUTES December 10, 2024 from 2024 are the fire ladder truck and the fire inspector position. He noted that budgets/levies for the Council to consider at the next Council meeting will include four options: the budget presented at the truth in taxation hearing, a budget eliminating the fire ladder truck, a budget eliminating the fire inspector position and a budget eliminating both the fire ladder truck and the fire inspector position. UNFINISHED BUSINESS NEW BUSINESS 9. APPROVE/DENY PROPOSAL FROM GC REAL ESTATE PARTNERS FOR REDEVELOPMENT OF THE CITY -OWNED FRANKLIN STREET SITE Miles Seppelt, EDA Director, presented before the Council. Mr. Seppelt explained that the EDA received three responses to a Request for Proposals for redevelopment of the block bounded by Franklin Street, Glen Street and F Avenue NW. 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. The developer will most likely be requesting some assistance from the City, such as a creation of a TIF district. The developer intends to begin site work in the summer of 2025 with building construction beginning August 2025. The project is anticipated to be completed by August 2026. Mr. Seppelt explained how a housing TIF district is created and operated. It was noted a detailed process is used to determine whether or not a TIF district is necessary for the project. Motion by Burley, second by Czmowski, to approve proposal from GC Real Estate Partners for redevelopment of city -owned Franklin Street site. Motion carried unanimously. 10. APPROVE/DENY SETTING DATE FOR CITY ADMINISTRATOR'S ANNUAL PERFORMANCE REVIEW Motion by Czmowski, second by Forcier, to set city administrator's annual performance review for January 14, 2025, at 4:30 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.) 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 Matt Jaunich — Mr. Jaunich reminded the Council that the next City Council meeting is December 19, 2024 (rescheduled from December 24, 2024). In addition, the City organizational meeting is set for January 2, 2025. City offices will close at 12noon on December 24 and be closed all day December 25 and January 1. Mr. Jaunich also provided an update from an LMC regional meeting held in Brownton 11 CITY COUNCIL MINUTES December 10, 2024 last week. 13. COUNCIL/MAYOR UPDATE Tim Burley — Council Member Burley mentioned that the Shop with a Cop program was held last weekend and spoke of the value of that program. He also provided a brief update from the Sustainability Advisory Board update Dave Sebesta — Council Member Sebesta provided an update from the Mid Minnesota Development Commission. Transportation and mobility issues for the public, especially the elderly, still remain to be issues. Gary Forcier — Mayor Forcier noted that Thomas Lambert has been recommended by the HUC board to fill the vacancy of Anthony Hanson whose term is up this month. Mr. Lambert's appointment will be on the next Council agenda. ADJOURNMENT Motion by Czmowski, second by Burley, to adjourn at 6:25 p.m. Motion carried unanimously. ATTEST: Gary T. Forcier Mayor Matthew Jaunich City Administrator