December 13, 2021

REGULAR COUNCIL MEETING
CITY COUNCIL CHAMBERS, CITY OF ALBERT LEA
December 13, 2021 7:00 P.M.

PRESENT: Mayor Vern Rasmussen Jr., Councilors Rich Murray, Larry Baker, Jason Howland, Reid Olson, and Al Brooks. Also present were City Manager Ian Rigg, Public Works Director Steven Jahnke, Public Safety Director JD Carlson, City Attorney Kelly Martinez, Finance Director Kristi Brutlag, City Planner Megan Boeck, and City Clerk Daphney Maras.

ABSENT: Councilor Robert Rasmussen

CEREMONIAL ITEMS:
Pinning – Jason Taylor – Sergeant
Oath of Office – Tyler Lair – Police Officer

PUBLIC FORUM – No one spoke

CONSENT AND APPROVAL OF AGENDA

A. Approve Minutes Of The November 22, 2021 Regular Council Meeting
B. Approve Minutes Of The November 22, 2021 Work Session
C. License & Permits
D. Resolution Accepting Donations As Presented To the City of Albert Lea
E. Resolution Designating Polling Places for 2022
F. Resolution Accepting and Awarding Bids For Yearly Chemicals Supplies, Gasoline and Diesel Fuel
G. Resolution Accepting Bid and Awarding Contract for 2022 – 2026 Airport Property Farm Land Lease (Job 2111)
H. Resolution Approving Plans and Specifications and Ordering of Bids for the East Main Street Rehabilitation and Trail Project (Job 1805)
I. Resolution Authorizing Execution of Emerald Ash Borer Grant Agreement No. 203996 with the Minnesota Department of Natural Resources (Job 2204)
J. Resolution Approving Purchase of Dual Purpose Modular Surveillance System – Department of Public Safety
K. Resolution Declaring Unclaimed and Abandoned Property and Authorizing City Sale Following Published Notice
L. Resolution Authorizing Agreement with Dave Klatt d/b/a Mocha & Mini LLC
M. Resolution Authorizing Agreement with Linga Properties LLC, dba Freeborn Suites and Amending Resolution 21-121

Mayor Rasmussen read aloud each item on the Consent and Approval Agenda.

Motion made by Councilor Baker to approve the Consent and Approval Agenda as read, seconded by Councilor Brooks. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Rasmussen, Brooks and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.

(See Secretary’s Original Resolution 21-204 through 21-213
Included with these minutes)

PETITIONS, REQUESTS AND COMMUNICATIONS – None

UNFINISHED BUSINESS – None

NEW BUSINESS

A. Public Hearing Regarding Tax Abatement Housing Assistance Policy
• Resolution 21-214 Amending Tax Abatement Housing Assistance Policy

Rigg said a public hearing is being held regarding the amendment to the Tax Abatement Housing Assistance Policy. He explained this policy is on the increment value created by new construction or rehabilitation. What a person receives is determined by the increment value assessed against the property and the tax rate. The dollar amount of what was spent is not the determining factor of what the incentive will be, unlike qualifying expenses in TIF. The changes to single family homes will take the 5-year guarantee and reduce it to 3 years with another potential 3 years at 50% if the owner does something that has some level of community benefit. Regardless, the maximum would be equivalent to 4.5 years instead of 5 years if the applicant even qualifies for the extension.

Rigg noted as for the rehabilitation, there is already have one person ready to officially submit their application for abatement on a property getting a serious renovation. Again, this will only rebate the increment generated and would be in a smaller amount than what you would typically see in a new construction project. This is one of a few programs we can apply to spur improvements with homebuyers, flippers or landlords. Due to the smaller amount and a long term need for updating of existing properties to stabilize values in neighborhoods over the age of 50, the time allotment is greater. As for multi-family housing, not all projects are large enough to warrant the expense that goes with TIF or business tax abatement. Some may be conversions into 3-4 units. If it renovates some vacant houses into rentals, all the better.

Mayor Rasmussen spoke of his support of this amended policy.

Mayor Rasmussen opened the public hearing. He called three times. No one spoke. Mayor Rasmussen closed the public hearing.

Motion made by Councilor Baker, seconded by Councilor Olson. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Brooks, and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.

(See Secretary’s Original Resolution 21-214
Included with these minutes)

B. Public Hearing Regarding Proposed Tax Abatement – VFW Lofts
• Resolution 21-215 Approving Property Tax Abatement For Clark Street East, LLC

Rigg stated as required, a public hearing is being held to approve a tax abatement for Clark St. East, LLC. Staff has been working with Clark Street East on a redevelopment project of 20-22 market rate apartment units at 131-137 E Clark Street (locally known as the VFW Building). The total redevelopment project is estimated to cost between $2.6 and $3 million dollars. Due to increased costs in rehabbing historic structures or meeting historical standards, especially one in a dilapidated state such as this property, the developers have requested a subsidy or incentive of tax abatement for a 10-year period. Attached is a resolution approving a ten-year tax abatement from year 2024 to year 2034 for the City’s share of property taxes in an amount not to exceed $71,394 or $7,750 annually. This is based on findings that:

1) The redevelopment of the VFW facility is not feasible without the Abatement.
2) The redevelopment to be assisted by the Abatement is likely to encourage additional development or redevelopment in the area.
3) The redevelopment will generate significant tax revenues after termination of the Abatement because the minimum market value of the Abatement Property after completion of the Project is estimated to be $1,144,000. The current market value of the Abatement Property is $104,200.
4) The redevelopment will provide employment opportunities in the community.
5) The project will promote redevelopment of an underutilized and aging historical facility and prevent the spread of blight in the area.
6) The project will provide access to services for residents by expanding the available housing stock.
Lastly, staff has provided an overview of this project and the same ten-year abatement request to both Freeborn County and Albert Lea School District and received positive comments and feedback. Staff anticipates approval of the same abatement resolution by the Albert Lea School District Monday, December 20th and Freeborn County on Tuesday, December 21st.

Mayor Rasmussen opened the public hearing. He called three times. No one spoke. Mayor Rasmussen closed the public hearing.

Motion made by Councilor Baker, seconded by Councilor Howland. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Brooks, and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.

(See Secretary’s Original Resolution 21-215
Included with these minutes)

C. Public Hearing Regarding Fee Increase For 3.2% Off-Sale Beer and On-Sale Wine License

Rigg explained this is a public hearing. No action has to be taken at this time. The changes in the fees will occur during Item 8D5. The reason for the change is the volume of labor and time associated with processing these permits. Issuing a wine license requires equal labor to the on-sale liquor licenses for which the fee is $2000 annually. The legal limit allowed to charge for an annual wine license is half of what is charged for an annual on-sale liquor license. Staff is recommending increasing the fee for an annual wine license from $200 to $400 to recuperate some of the cost for staff time without creating a much larger unexpected cost going to the full amount of $1,000.

Staff also recommends increasing the annual off-sale 3.2 beer license fee from $25 to $200. Until 2021, the 3.2 beer off sale was not permissible as a standalone license. After going through the process and finding the work load is equal to issuing a 3.2 beer on-sale license, an increase of fees equal with 3.2 on-sale license is equitable.

Council asked if any calls or correspondence has been received from businesses currently in possession of one of these license, to which City Manager Rigg and City Clerk Maras stated no comments have been received.

Howland commented the increase seems very reasonable and equitable.

Mayor Rasmussen opened the public hearing. He called three times. No one spoke. Mayor Rasmussen closed the public hearing.

D. TRUTH IN TAXATION (Public Comment Session) No one from the public spoke during the public comment section.

Brutlag displayed a slide show detailing the following items in addition to several other slides. Then Rigg provided details of each of the resolutions included.

• 2022 General Fund & Debt Levy noting the total GF and DL increase is at 3.50%
• 2019-2022 Levy, Tax Capacity & Tax Rates revealing the net tax capacity increased to 4.30% and the City tax rate decreased to -4.54%
• General Fund Revenue/Expenditure Budget shows an increase of $328,925 or 1.95% from 2021
• Changes from the Preliminary to Final General Fund Budget revealed significant changes including decreases in personnel costs, workman’s comp, and inspections and in various other areas.
• Slides outlining the 2022 Revenues and Expenditures were discussed
• What do you taxes buy detailed total annual charges of $595.47 based on a $100,000 home
• Comparative Levy Changes reveals the City of Albert Lea’s levy at 3.50% The Levy and the residential monthly utility bills remains within or below the neighboring communities included on the chart
• The HRA Levy remains at $109,000
• Brutlag reviewed significant changes in the fee schedule
• 2018-2022 Water & Sewer Rates were reviewed
• CIP items were reviewed
• 2022 Project over $200,000

Rigg responded to Howland’s question as to why the water and sewer rates continue to increase every year. Brutlag added the water fund was in trouble for about four years straight and needed to be built up once again. The rates will be reviewed for 2023 to ensure they are being kept at the lowest possible amount, and a full water rate study will be performed at that time as well. Howland thanked his fellow budget committee members for working on this budget and commended city staff for working so hard to keep the Levy as minimal as possible.

1. Resolution 21-216 Establishing The Tax Levy For 2022

The City Council in September approved a preliminary levy of $7,376,914. The levy being recommended for final adoption will be established at $6,941,914 ($435,000 less than what was proposed in September), with $5,065,000 for the General Fund operating levy and $1,876,914 for the debt service levy. The increase from 2021 is $234,681 or 3.5%.

Motion made by Councilor Baker, seconded by Councilor Olson. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Brooks, and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.

(See Secretary’s Original Resolution 21-216
Included with these minutes)

2. Resolution 21-217 Approving Albert Lea Housing And Redevelopment Authority Final Property Tax Levy For Fiscal Year 2022

The City Council in September approved a preliminary property tax levy of $109,000. The maximum special levy as provided by Minnesota Statute 469.033 is $203,280 (.0185% of Estimated Market Value of $1,098,810,100 but the HRA and Staff are recommending $109,000 or 54% of the maximum.

Motion made by Councilor Baker, seconded by Councilor Murray. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Brooks, and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.

(See Secretary’s Original Resolution 21-217
Included with these minutes)

3. Resolution 21-218 Adopting The 2022 General Fund Budget

The proposed 2022 General Fund revenue and expenditure budget being recommended for approval is $17,206,606 which is an increase of $328,925 or 2 % increase over 2021.

Motion made by Councilor Baker, seconded by Councilor Olson. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Brooks, and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.

(See Secretary’s Original Resolution 21-218
Included with these minutes)

4. Resolution 21-219 Adopting The 2022 – 2026 Capital Improvement Plan

Each year a five-year Capital Improvement Plan (CIP) is developed by staff for the City of Albert Lea. One of the best approaches to this decision making process is to use long-range planning as a means of identifying needs, available resources and the significance of the impact. The five-year Capital Improvement Plan is a long-range planning tool the City can successfully use in setting priorities for the community’s infrastructure improvement. The attached resolution would adopt the proposed 2022 – 2026 Capital Improvement Plan.

Motion made by Councilor Baker, seconded by Councilor Howland. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Brooks, and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.

(See Secretary’s Original Resolution 21-219
Included with these minutes)

5. Resolution 21-220 Amending Fee Schedule For 2022 – Excluding Water And Sewer Utility Rates

There are two resolutions approving the fees for 2022. The first resolution approves all fees except Water and Sewer rates and the second approves the Water and Sewer Rates. The attached fee schedule is formatted to provide a comparison between the 2021 schedule and proposed 2022.

Motion made by Councilor Baker, seconded by Councilor Olson. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, and Mayor Rasmussen. Councilor Brooks voted Nay. Mayor Rasmussen declared the motion passed.

(See Secretary’s Original Resolution 21-220
Included with these minutes)

6. Resolution 21-221 Amending Fee Schedule For 2022 – Water And Sewer Utility Rates

This resolution approves the water and sewer utility rates only. The new fee schedule includes the recommended 5% increase to the sewer rates and water rates.

Howland stated although he will vote yes, but not without some hesitation on this resolution, he encourages staff to research rates in the future and find a way to stop the increases.

Motion made by Councilor Baker, seconded by Councilor Olson. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, and Mayor Rasmussen. Brooks voted Nay. Mayor Rasmussen declared the motion passed.

(See Secretary’s Original Resolution 21-221
Included with these minutes)

7. Resolution 21-222 Adopting The 2022 Water, Sewer, Solid Waste, Senior Center And Airport Budgets

While the City is not required to formally adopt budgets for other funds, Staff recommends approving the budgets to provide more information and transparency to the public on spending for such funds.

Motion made by Councilor Baker, seconded by Councilor Howland. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Brooks, and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.

(See Secretary’s Original Resolution 21-222
Included with these minutes)

E. Resolution 21-223 Denying Rezoning Parcels from B-2 Community Business to I-1 Limited Industrial

A request was made to rezone three separate parcels (listed in the attached resolution) from B-2 Community Business to I-1 Limited Industrial. The Planning Commission held a public hearing on December 7, 2021 to consider the request and has recommended denial of the request based on the following findings:

1) The request to rezone would have an adverse effect on existing and adjacent business and residential properties.
2) Rezoning considerations should be made based on the overall best use of the property and the surrounding area.

3) Properties should not be re-zoned based on economic considerations—such as to accommodate or lessen building standards.
4) Allowing the rezoning has the potential to alter the essential character of the locality—which is commercial business in nature.
If the Council were to decide it wanted to rezone the property in question they would have to vote against this resolution and in favor of an ordinance approving the rezoning the following two meetings.

Mayor Rasmussen recognized a resident in the audience requesting to speak to this item. Steve Zenk stated he owns a building in the area referenced and opposes the re-zone from B-2 Community Business to I-1 Limited Industrial, as doing so changes the setback requirements and outside appearance. He reported he attended the public hearing the planning commission held and learned the proposed building, should the zoning be changed, would have 17 foot sidewalls and will be a metal building resulting in dramatic changes to the neighborhood. He implored the council to approve the denial of zoning.

Motion made by Councilor Howland, seconded by Councilor Baker On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Brooks, and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.

(See Secretary’s Original Resolution 21-223
Included with these minutes)

MAYOR AND COUNCIL REPORTS

First Ward, Councilor Murray reported:
• Ward Items – Received calls from residents in his ward
• Committee Update – Attended the ALEDA and budget meetings last week. Reports he has received alot of positive feedback regarding all the fun activities happening within the City. He gave a shout out to CVB Director Holly Karsjens and all the volunteers.

Second Ward, Councilor Baker reported:
• Ward Items – None
• Committee – Thanked the CVB for the luminaries around Lakeview Blvd. and thanked City staff for all they do

Third Ward, Councilor Howland reported:
• Ward Item – None
• Committee – None

Fourth Ward, Councilor Olson reported:
• Ward Items – None
• Committee Update – None

Fifth Ward, Councilor Rasmussen reported: ABSENT
• Ward Items –
• Committee Update –

Sixth Ward, Councilor Brooks reported:
• Ward Items – None
• Committee Update – Attended a CVB meeting and thanked Holly Karsjens for all her work

MAYOR’S REPORT – Mayor Rasmussen asked council to approve the following reappointments to Boards & Commissions for a second term:

Parks & Recreation Advisory Board
o Jodi Hartman
o Steve Ball

Airport Board
o Jerry Morstad
o Chuck Sandager
o Darren Schone

Planning Commission
o Chuck Paczowski
o Wyeth Anderson
o Jared Dawson

Heritage Preservation Commission
o Linda Bryant

Motion made by Councilor Murray, seconded by Councilor Howland. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Brooks, and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.

Mayor Rasmussen also mentioned the City is looking for people interested in serving on the following Boards with current openings:
o Planning Commission – 1 opening
o Heritage Preservation Commission – 1 opening
o Board of Zoning Appeals – 2 openings

• Mayor Rasmussen said he attended the ALEDA Board meeting last week and commended the board for collaboration.
• Attended the budget meetings and commended the committee for their commitment to working diligently to keeping the tax levy at a minimum
• Mentioned the City’s letter of support for the Watershed Board’s request will be going to the Governor
• City Manager’s evaluation is coming up. He encouraged council to provide written comments and expectations to assist the City Manager in understanding the Council’s expectations.
• Echoed the positive comments received regarding the downtown festivities and decorations.
• Wished the entire community Happy Holidays

CITY MANAGER REPORT
• Appreciates staff’s participation in finalizing the budget. He commented that all the leaders within the departments understand and take seriously how important it is to itemize every dollar
• Union contracts are almost finalized. He thanked HR Director Mike Zelenak, Public Safety Director JD Carlson, and Public Works Director Steve Jahnke for their input and support
• Asked council to think about whether they want to change the council work session days back to Thursdays or continue holding them prior to the council meetings.
• Will be providing a schedule of council items to present to council in advance
• Mentioned he attended the Santa Claus play at the Marion Ross Theatre and encourages the community to attend a play in the future
• Commended the police department who responded to a vehicle accident he witnessed.

APPROVAL OF CLAIMS

A. Resolution 21-224 Approving Contract with Councilmember Al D. Brooks dba Brooks Safety

The attached resolution directs the Mayor and City Treasurer to make payment in the amount of $74.57 on behalf of the City for a claim from Brooks Safety Equipment, and issue payment for filing the affidavit of official interest by the interested official, Councilor Brooks.
Motion made by Councilor Howland, seconded by Councilor Olson. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, and Mayor Rasmussen. Councilor Brooks abstained. Mayor Rasmussen declared the motion passed.

(See Secretary’s Original Resolution 21-224
Included with these minutes)

B. Resolution 21-225 Approving Claims
(1). Presentation of Claims Over $25,000

The attached resolution directs the Mayor and City Treasurer to issue the payment of claims as presented in the Detail of Claims report.

Motion made by Councilor Brooks, seconded by Councilor Howland. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Brooks, and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.

(See Secretary’s Original Resolution 21-225
Included with these minutes)

ADJOURNMENT – 8:15 P.M.

Motion made by Councilor Murray, seconded by Councilor Olson. That there being no further business, the Council meeting adjourn until the next regular meeting of the Albert Lea City Council

at 7:00 p.m. on Monday, December 27, 2021. On roll call vote, all councilors voted in favor of said motion.

Mayor Rasmussen declared the motion passed and the meeting adjourned.

____/s/________________________
Mayor Vern Rasmussen, Jr.
___/s/_________________________
Daphney Maras
Secretary of the Council