11-28-22 Special City Council Meeting MinutesSPECIAL OTSEGO CITY COUNCIL MEETING
MONDAY, NOVEMBER 28, 2022
5:30 PM
OTSEGO PRAIRIE CENTER
Call to Order.
Mayor Stockamp called the meeting to order at 5:30 PM.
Roll Call:
Mayor Jessica Stockamp; Councilmembers: Tom Darkenwald, Brittany Moores, Tina Goede and Jeff Dahl.
City Staff: City Administrator/Finance Director Adam Flaherty, Assistant City Administrator/Human
Resources Sabrina Hille, Utility Operations Manager Kurt Neidermeier, City Planner Dan Licht, and City
Engineer Ron Wagner.
1. 2023 Budget, Tax Levy and Capital Improvement Plan Review.
City Administrator/Finance Director Flaherty outlined the Budget Meeting #10 items that were included
in the packet. Utility Operation Manager Neidermeier reviewed the 2023 Utility Budget Narrative and
presented a power point as included in the packet materials.
Mayor Stockamp asked for clarification that the replacement water meter cost is the City's responsibility.
Neidermeier clarified that the water meter replacements are a maintenance cost for the city, residents
are only responsible for the initial meter through their building permit.
Utility Manager Neidermeier presented the capital improvement plan and capital projects power point as
included in the packet materials.
Mayor Stockamp wanted to know if we needed one or two, 25 -acre properties for a water treatment
facility. Neidermeier said a water treatment facility, based on water storage capacity, would have a land
need of around 25 acres. That would allow to have full treatment hosted at the one 25 -acre property.
This facility would create another East West connection on the water systems. CM Goede wanted further
information on the need for the engineering study, Neidermeier stated the engineering study before the
rate study would allow for rate projections to reflect the future needed projects and improvements.
Mayor Stockamp at 6:47 PM motioned to continue this special meeting following the 7 PM
City Council meeting, seconded by CM Moores. All in favor. Motion carried 5-0.
Mayor Stockamp motioned to reopen this special meeting at 7:42 PM, seconded by CM
Goede. All in favor. Motion carried 5-0.
Conversation started back up on the water treatment projects in the future, with the wellhouse 3 & 4 to
see a benefit on both east and west side systems. Mayor Stockamp wanted clarification that if these
projects occurred there would not need to have wellhouse 1 & 2 upgraded. Utility Manager Neidermeier
said there is a benefit in the future to make those improvements, especially in regard to capacity needs.
Mayor Stockamp wanted to learn how the added projects would change the production capacity,
Neidermeier stated we need 2 Wonewoc wells to make the same production as 1 well in the Mt Simon.
CM Darkenwald said that White Bear Lake was dealing with an issue where they challenged the DNR,
and suggested we work with the Attorney to know the city's rights in the wells. Darkenwald said that
with the change in the project there is an increased in project costs. This is due to the Legislature
approving the restriction of Mt Simon, which originally was intended for the Metro, but was later
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MINUTES OF THE CITY OF OTSEGO SPECIAL CITY COUNCIL MEETING NOVEMBER 28, 2022
expanded out. The DNR is the keeper of the state water, and they implement laws changes at the
legislature. Neidermeier stated this change in law was a surprise, and it has significantly impacted the
City's Capital Improvement Plan cost projections and water needs. Darkenwald wanted to make sure
that we look into the City's water rights. City Council directed Administrator Flaherty to instruct City
Attorney Dave Kendall to investigate the City's water rights. Council agreed it would be valuable to have
the attorney look into this. With the possibility of collecting additional cities to challenge this restriction.
CM Darkenwald needed to leave at 7:55 PM for other commitments.
Water Utility Fund
City Administrator/Finance Director Flaherty said the utility rate study proposes a 6% increase to the
rates. Fund also includes the proposed staff increase and water meters (new and replacements) are
included in this budget. He stated it is difficult to project water revenue, as it is unknown in regard to
water usage trends, notably in drought years. Increase in Personnel costs, due to the planned hire of a
Utility Operator in May of 2023. Administrator Flaherty explained that the city inventories water meters
for new developments, but the city plans to see a decrease in the budget due to the slowing on new
builds within the city. Neidermeier stated there is also a supply issue with the meters that has delayed
the time to obtain meters.
Flaherty noted the improvement of technology at all sites for security and maintenance purposes, has
helped reduce staff time at locations. Increase of insurance premium due to the addition of the Water
Tower to the city policy.
Utility Operation Manager Neidermeier reviewed the Water CIP: IT equipment for computer
replacements and additions, building improvements to water sites for security purposes. Well Field
Study, Well 10 at Well House 4, Well 2 Improvements (emergency well), and the East/West Water
Connection Initiation is the large item for the year. The Rate study is needed due to changes in the
Capital Improvement Plan, and to ensure the city can fund the future projects. The Rate study will
project and review for the next 10 years.
Mayor Stockamp wanted to clarify that the RECs projected note both new homes and businesses.
Flaherty stated that the numbers are projected for 296 units in the near term and 260 units in the long
term whether homes or businesses. There is an equation that is set that determines based on usage for
businesses, their number of RECs, this is done by the intended uses of the building.
The City Council concurred as presented.
Sanitary Sewer Utility Fund
City Administrator/Finance Director Flaherty reviewed the fund. The sewer rate increase is 10%. This
number is taken from the rate study conducted. Fund also includes the addition of Utility Operator to
staff and then the change in chemicals for a full year for the East WWTF.
Mayor Stockamp wanted to clarify that the fuel budget includes the addition of trucks. Flaherty stated
that the fuel is budgeted by past use, estimated increased use, and the increase of cost.
The West WWTF will transition to a Class A facility, which increases the cost of the permit. Mayor
Stockamp wanted to know that with only Kurt having a Class A, he can oversee both facilities with that
change. Neidermeier clarified it can happen without another staff needing the licensure, but ideally 2
additional staff members will be getting their Class A license in the coming year.
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MINUTES OF THE CITY OF OTSEGO SPECIAL CITY COUNCIL MEETING NOVEMBER 28, 2022
Utility Operation Manager Neidermeier reviewed the Wastewater CIP: West WWTF, West WWTF Access
Road, Lift Station 2 Improvements, and Biosolids Building project wrap-up. IT and Lab equipment, and
2023 major project cost items are the West WWTF expansion and the other are the addition of 3 new
vehicles.
Cash balances are positive but show a need for a rate study to ensure the reserve as future projects
happen. CM Goede wanted clarification on when the bonds will be off, and Flaherty stated there will be
two bonds paid off in 2026.
The City Council concurred as presented.
Storm Water Utility Fund
City Administrator/Finance Director Flaherty does not recommend any rate increases. Revenue source
for this is tax levy, special assessments, and user rate charges. Potential in the future to combine the
two storm water funds, as they are separated based on the year the property was platted. The only
capital cost for 2023 is the Otsego Creek rehabilitation project which is included in the Otsego Creek
Watershed Fund (#408).
The City Council concurred as presented.
Utility Rates
City Administrator/Finance Director Flaherty were reviewed: Water 6% and Wastewater 10% as
outlined in the rate study.
The City Council concurred as presented.
General Fund
City Administrator/Finance Director Flaherty said the proposed changes since the Preliminary Budget
have been included. The bottom line listed is the amount that should be brought forward for City
Council approval at the next meeting.
City Administrator/Finance Director Flaherty reviewed the budget changes tracking sheet.
Property Tax Levy
City Administrator/Finance Director Flaherty stated the City Council approved a preliminary property tax
levy of $9,330,023 in September. The tax rate decreased from the 2022 rate, with it currently proposed
at 29.397. There have been no changes to the property tax levy since that preliminary approval.
CM Moores stated that with the needs coming in the future, this budget and levy is good for the amount
projects in the foreseeable future. Moores also stated the biggest concern moving forward was with
regards to a potential hiring of an Emergency Services Director, but it is outlined and budgeted for as
shown today.
Fund Balance Policy Transfers
Administrator Flaherty shared that the numbers shown do not need to be acted on at the next meeting,
but it will need to be approved before the completion of the upcoming audit. Administrator Flaherty was
potentially looking for direction, but as stated, action is not needed tonight since it is not an expense but
a transfer of city funds. Staff does not currently have recommendations other than what is presented
which follows the fund balance policy.
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MINUTES OF THE CITY OF OTSEGO SPECIAL CITY COUNCIL MEETING NOVEMBER 28, 2022
Next Meetings
City Administrator/Finance Director Flaherty noted the Truth -in -Taxation presentation is scheduled for
December 12, 2022 at 7:00pm.
2. Adjournment.
CM Moores motioned to adjourn at 8:53 PM, seconded by CM Goede. All in favor. Motion
carried 5-0.
t
J ica Stockamp, Mayor
ATTEST:
Sabrina Hille-Jungles, Assist nt Ci Adm-inistrator
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