6:30 on June 15th, I'll call the Wilmer City Council meeting to order. Clerk Larson, will you please call the roll? >> Mayor pro tem Ask. >> Here. >> Council member Nelson. >> Here. >> Gilbertson. >> Here. >> Gardner. >> Here. >> Davis. >> Here. >> Butterfield.
>> Here. >> And Schuldes. >> Here. >> Absent is Mayor Reese and Council member Fagerly. Seven present, two absent. >> Thank you. Please stand for the Pledge of Allegiance. >> I pledge allegiance to the flag of the United States of America and to the
republic for which it stands, one nation under God, indivisible, with liberty and justice for all. >> Council members, are there any additions or deletions to our agenda tonight? >> Move to accept. >> Second.
>> A motion and a second, any conversation? Roll call. >> Council member Schuldes. >> Aye. >> Ask. >> Aye. >> Nelson. >> Aye. >> Gilbertson. >> Aye. >> Davis. >> Aye. >> Butterfield. >> Aye. >> And Gardner. >> Aye.
>> Seven ayes, zero noes. >> The motion passes. Um for our consent agenda tonight, we have uh several items of to approve and then also for information. Clerk Larson, will you go through those, please? >> Tonight for your approval, Mayor pro tem
Ask and Council members, I have the City Council minutes of June 1st, 2026. Wilmer Municipal Utilities Commission minutes of June 8th, 2026 as a draft. The Kandiyohi County Firefighters Honor Guard Lawful Gambling application. The Planning Commission applicant. And the
accounts payable report from May 28th, 2026 to June 10th, 2026. Also for your information, I have the directors' reports. The Wilmer Municipal Utilities Commission application. The Wilmer Municipal Utilities financial report for April 2026, and the financial
report from May of 2026. >> Council, what are your wishes? >> Motion to approve the consent agenda. >> Second. >> Any further conversation? Roll call. >> Council member Nelson. >> Aye.
>> Mayor pro tem Ask. >> Aye. >> Council member Butterfield. >> Aye. >> Davis. >> Aye. >> Schultz. >> Aye. >> Gardner. >> Aye. >> And Gilbertson. >> Aye. >> Seven ayes, zero noes. >> That passes. Madam Clerk, anyone to
speak for the open forum? >> There were none. >> All right. Thank you. Then we will move into our presentation on Willmar Fests from our royalty and James Miller, who is not royalty. >> To be clear, James Miller is royalty.
Just Thank >> Thank you for clarifying that. >> I appreciate that. Mayor pro tem Ask and members of the council, I am James Miller. I'm here representing the Willmar Fests Board of Directors as we prepare for our 80th celebration for Willmar Fests,
minus that one COVID year, but that that's still this is 80 this year, so officially. With me as I pull up their presentation, are two of our ambassadors for this year, our Queen of Festivals and our Aqua Princess. In front of you, you have a letter from our International
Princess, Heather Damhof, who was unable to be with us tonight as part of that, though she will be here for Willmar Fests week, but is unable to present and and talk about it. I will step aside and let these two talk a little bit about their experience as ambassadors for Willmar Fests, representing not only the Willmar
Fests Board of Directors, but the city of Willmar throughout this past year, and then I'll come back and talk a little bit about the events we have scheduled, some of the changes, and some of the challenges, and uh answer any questions you might have. So, I'll step out. >> Hello everyone. I'm Julie Lindquist and
I am the 2026 Willmar Fest Aqua Princess. >> Hello everyone. My name is Kayla Maciel and I am the 2026 Willmar Fest Queen of Festivals. >> First, we need to talk about what we do as ambassadors of the Willmar community. >> As ambassadors of the Willmar community,
we go to visiting communities and connect with their community members. >> We also help represent and volunteer at our local events such as Willmar Fest Week, Welcome Week, the Daddy Daughter Dance, and holidays. >> What events have we attended through our reign?
>> One of our favorite events that we attended was Raymond. We got to be there for 2 days. The first day we got to participate in their amazing race, which we had so much fun getting to run around the town and compete against local community members. And then we went back to celebrate
Raymond in their parade and we got to see everyone come together and celebrate Raymond. >> We also got to spend several days in Anoka. The first thing we went to was their candidate dance where we got to meet all the lovely ladies representing their community. And then we also got to be a part of their Halloween parade
where we got to dress up as characters from Willy Wonka and had fun handing out Wonka bars with our own golden tickets inside of them. We ended off our time in Anoka by attending the coronation where we got to see the new Anoka ambassadors get crowned. >> Another one of our favorite events was
the Cokato Corn Carnival. We had so much fun the first day going to celebrate Cokato when we got to be a part of their parade and we got to see local community members come together and support Cokato. And then for the second day we got to participate and be a part of the Cokato Corn Carnival Festival where we
got to see the crowning of Miss Cokato and the Cokato Princess. >> We also spent a weekend in Aberdeen, South Dakota for the South Dakota Snow Queen Festival. This was a very busy weekend filled with many things, but some of our favorites were playing a game of Frost-opoly, where we got to
explore the town of Aberdeen. We also got a tour of Northern State University and visited the Dakota Prairie Museum. We ended off our time in Aberdeen by attending the coronation where we got to see the new South Dakota Snow Queen get crowned. >> What relationships have we built with
the communities we've visited? Two of my favorite relationships have been with Litchfield and Cambridge. I got to meet them as a candidate and I've had the privilege of getting to further my connection with not only their communities, but with those girls as well.
>> The first people we got to see get crowned was Clara City, so those girls will always hold a special place in our heart and we've got to support each other throughout the year, which has been great. We also built a close relationship with Minneapolis Aquatennial, which has girls that we got to see first as ambassadors of their community and then be crowned as
Minneapolis Aquatennial ambassadors. So, it's been so great to see them grow into their new roles. >> How has being a Willmar Fest Ambassador impacted you? >> Being a Willmar Fest Ambassador has meant so much to me. I've lived in Willmar my whole life and this town is
filled with so many people that I love and care about. This town has come together time and time again to support me and take care of me. So, I'm so grateful for the opportunity to give back to a community I love so much. >> Being a Willmar Fest Ambassador has also meant so much to me. I'm representing
not only a community that I call home, but I know many others as well. It's a community that is rich in spirit and tradition. So, being able to represent that has meant so much. I've had the privilege of being able to connect and be a role model to future
generations to come, which is so special to me. >> Finally, we're going to be talking about our favorite part about Willmar Fest and Willmar community as a whole. >> Our favorite part about Willmar Fest is that it truly brings our community together. We celebrate each other and
our community. Our favorite part about the Wilmar community is truly how you can see our our community come together. I like to say that Wilmar makes everyone feel at home. You can truly find a friend anywhere you go. Thank you so much for having us. >> Thank you.
>> Thank you. Hey, don't run away yet. I have a couple I just wanted to ask like as ambassadors as you're out there um interacting with other people around the state on behalf of Wilmar like do you run into like preconceived notions or reputations that people have of Wilmar,
assumptions that they make about you from being from Wilmar? Like is that does that happen when you're talking with folks? >> Yes, that does happen. I remember going to Litchfield and one of the first interactions I had with one of their
community members was, "Oh my gosh, you're from Wilmar. Like we love people from Wilmar." And I feel like our reputation of community is very highly looked at. >> It's awesome. Great. Thank you guys for all your leadership, for being ambassadors for
the community. Thank you for sharing the best of what makes us Wilmar and we're looking forward to to Wilmarfest coming up. Council members, anything to add? >> Thank you. >> Yeah. >> Thank you. >> What they failed to mention and the pictures didn't show was the sheer
amount of food that they consume >> [laughter] >> when they're out and about at all the different events. So that was I'm glad you guys didn't touch on that one cuz that would have taken another 5 minutes. Uh so as we said, we kick off a week from Wednesday. So Wednesday, June 24th is the start of this year's Wilmarfest
celebrations. Uh we're once again going to do a coffee with the royalty over at the Kandiyohi County Historical Society next to the big coffee pot. Um Thursday's is block party day. Oh, I should go back cuz I got to mention the kids day stuff with the Quanas. The Wilmar Quanas have really stepped up in
the last several years to to take on the kids day events. They coordinate, they bring all the events together, they bring all the bouncy houses and activities and musical components and they tie it in with the Prairie Winds Summer Band concert. So that is a really a great event. Thursday night, as I was about to say, was the
the block party. A couple of the new things this year, they are bringing back the kids pedal tractor pull. Tommy, you might be able to compete in that this year if you'd like to. I'm sorry, Council member Gilbertson, you might be able to compete in that if you'd like. You and Evan would be good in that. I think that'd be fun. The unicycling unicorn will be
there. The musical act on the block party stage is the Brothers Burn Mountain. One of the exciting things that we're able to do this year, if you hearken back to the old days of Willmarfest when it was Coffee Fest, we were known as coffee capital of the world. So we're going to do a free coffee Friday with
Peace Coffee and the Goodness Coffee House. Downtown Willmar will be right there at the corner in the Masons lot right by the Masons building there doing free coffee. We're going to try to do up to 5,000 cups of free coffee both hot and iced coffee for people that would like to come by and pick up a cup.
That'll be Friday morning from 7:00 till 11:00 a.m. That evening, we do not have a Stingers game unfortunately due to some scheduling conflicts. They are actually on the road that night. So we will actually have a Stingers fun night out at the ballpark. Our visiting dignitaries will be in from
all the different communities that help us celebrate Willmarfest so we can compete with them and have a little food and fun and you're all welcome to come join us as well at that event. It is should be a fun night out at the ballpark still having fun out at the field and interacting with each other and and kind of networking. Saturday as
always is the big day. The Willmar Fire Department has their pancake feed going on in the morning. The Foot Lake 4 walk run, the grand day parade at 10:30 and then the beach party that night once again will cap off everything. Food trucks, the Willmar Conference Center is going to do our beer garden this year.
We'll have the Little Crow Ski show at along with a beach party concert from the band Big Machine. Some of you might be familiar with that name from years and years and years ago. So, Pat Jacobson from Fat Freddy's, Bob Thompson, it's it's going to be a fun fun night. Pete Johnson is part of the
group as well. And then we'll cap things off with the fireworks from Lakeland Media and Q102. As I mentioned, there's been some challenges. The scheduling issue um not a side was a bit of a disappointment to not be able to have a seniors game on Friday night like we've been known for
for a number of years. But again, that that happens when you're trying to manage all the different teams and all the different activities. We also need volunteers. And and this is maybe not only a plea, but an alert. Um like other groups in the community, Willmar Fest is struggling to get enough
volunteers to make sure that we can continue to do all the events and all the programs that we're doing. This year, due to the lack of volunteers going forward, we're actually losing four of our members at the end of this month that will be stepping off the board. Breanna, Marissa, Carly, and Hannah all stepping away. We are pushing
a pause on our ambassador program for this year. So, there will be no new candidates this year going forward. And that's because we don't have enough volunteers to continue to carry that forward. So, my plea is to find more people that would like to step up and be part of this and help with this. Um I've been on this committee or on this board
for going on 16 years. That's too long. Um we need some new ideas. We need some fresh entertainment. So, if we can get more people involved as a community, that would be amazing. Like I said though, we've had some really great opportunities to try to do some new things this year and add some
different events. My thanks goes out to as always our public works department do such an amazing job of making sure that we are ready for Willmar Fest week. Setting up all the things, all the barricades, all the cones, making sure that we have what we need to be able to create a safe environment for all the activities that
we're doing. Whether it's the kids day event, the block party, the parade, all the things that go into it. The Wilmer Police Department do an amazing job as well. Um and I I know they're uh down a few people timing-wise and it's going to be a challenge, but again, once again, they've stepped up to make sure that we can put on a safe event for for the
residents of this community. And of course, the Wilmer Fire Department, all the opportunities that Chief Hanson and their team uh do to get involved. We are excited to have our grand marshal this year be uh Pablo Bregan and his wife Erica as our grand marshals for the Grand Day parade. That means they'll be in front of you as council members in
the parade. So, watch out as they throw candy. I don't think he'll throw any at Maybe at you, you never know. But uh uh again, should be a fun fun event. We're looking forward to all the opportunities for us to get together and build community uh throughout the entire week of Wilmerfest.
Questions you might have for me? >> James, how could people from the community that want to volunteer, how could they how should they contact you or someone else? >> Well, I'll give them two easy ways. We have a website uh wilmerfests.com at the s f e s t s.com. Uh we actually
have a volunteer tab on there. They can put their information in there, get their contact information back to us. If they want to call me directly, um 320- 212-2184 is my phone number. And uh we will gladly connect them with a different
event or different activity. There are things they're passionate about helping with um or if they've got really cool ideas of how we can move forward with different activities to continue to enhance this and try to touch as many people as we can in the activities that we do hold, uh we'll gladly take them.
Um I will say this that in August, we will sit down once again and start planning for next year and what those events look like and and it all in told try to figure out what other opportunities we can get people engaged in different ways to to make sure this event continues to get better and better every year.
>> All right, thank you, James, so much. Appreciate all your hard work over these 16 years and after another 16, maybe you can think about doing something else. >> Uh you know, I've tried to quit twice and it hasn't worked. But [clears throat] that's okay. It's it's been an enjoyable experience and again,
this is my hometown. I I love to continue to celebrate as best we can. Thank you. >> Thank you. We have two public hearings before us tonight. Our first one on utility bonds, Director Odins and Ms. Bergman from Baker Tilly. We'll invite you to present
that information. >> [clears throat] >> Good evening, Council. Thank you so much for having me today. I was thinking about what a pleasure it is cuz I had a 2-hour drive here with my 16-year-old son. I convinced him to come with me. So I got 2 hours of talking to my son. So I it's hard hard to imagine something
better. So thank you. It's also hard to imagine a harder act to follow than a couple of royalty, but I'm going to try. All right. Oops. There we go. All right. So we are here tonight to talk about um
issuing bonds for the city, 2026 B's. Um this says A, but it should be B. You did A already this time. Uh for various purposes, we've got street improvement, we've got um the Lakeland path, park path, excuse me, and waste water utility improvement
bonds. Um so three portions, the utility and the improvement are over 15-year repayment term, and the abatement bonds are 10-year. You can see here the projects that are supported by the bonds. Um street projects, Fourth Street Southwest and
engineering, about $4 million, tax abatement for that Lakeland park path, and then a number of waste water utility projects um totaling about $7.9 million. Just in terms of looking at how it's going to be repaid when you um issue
bonds, you need to levy 105% of debt service. It's a state statute, and it ensures that if anything if there's any flux in the in in your collections that you still have enough money. So, you've got about $771,000 that you need to pay annually. That will
come from assessments of approximately $86,000, utility revenues of 328, and then abatement of about $45,000 with the levy impact of 356. This is a hard one to see cuz there are a lot of numbers on the screen, but it
does show you your annual debt service over the next 15 years. Like I say, the abatement portion is just 10 years, so you'll notice that there's one column that's a little short. And um you can see that the projected levy is about 375. Uh as part of the process, we'll also
engage Moody's Investor Service to put a levy on or excuse me, a rating on the uh the city's bonds. Um the rating agencies offer a third-party independent evaluation of your willingness and ability to repay debt.
So, it's important to understand it's how able and how you know, positioned you are to repay debt. Um it's it's something that is a signal to the market about Wilmer's credit quality, and investors also do research on their own, but they they take it the
rating agency as well. And the stronger the rating, the lower the debt. It's like your personal credit score in that way, right? The higher the rating, the lower the rate on your debt is. Oops. There we go. Okay, so our rating was just published
for the 2026 A bonds at a double A3. Given the recency of that, the expectation is that we'll work with Moody's just to get some questions as opposed to the traditional uh approach, which is a rating call or a rating visit. Generally, it's about an hour conversation with the rating analyst. In
this case, their information is very fresh, no new financials. They'll just uh ask some questions, some updates. And it's our expectation that the AA3 that was assigned to the most recent issue and that's on your outstanding debt will be on this issue as well, given that
your financial condition is pretty much the same as it was a couple months ago. And also, when we spoke with them before, we let them know that this debt was coming. So, they have factored that into their previous discussions. Here is the rating scale. Um you'll
often hear about AAA rated bonds. That's the highest rating. And then you can see here is it's showing you all the way from AAA to BBB or BBB on the S&P and Fitch scales. The city has Moody's, which is why you've got the teal color
highlighting it here. And when this is highest and lowest, this is within investment grade ratings. So, all of these are um ratings that signal to the market that we that the rating agencies would expect you to pay in full and on time. There's some other ratings that you never want to see um
including C, which means you're in default. We're We're We're not going to We're not going to get there. So, you can see that the rating for the city is um in that highest tier underneath the AAA. When the rating agencies issue a rating report, there's a lot of commentary
about strengths and weaknesses of uh the credit profile. And remember, it's not strengths and weaknesses of the city per se, but from an investor's point of view, what what's the the strengths and weaknesses. Um so, you know, the strong financial position, the regional economic center are things that Moody's
points to as giving really good credit strength. Um one of the concerns is the leverage the leverage levels, which I think is not surprised to you all. I think that's been a conversation previously. And then just economic growth that's a little slower than the nation.
They do identify things that could make the rating go up and things that would make the rating go down. That transparency is something that's relatively new from the rating agencies. I think before, sometimes people would get upgraded or downgraded, It felt out of the blue. Like, what why has this happened? And this gives you some
insight into their thinking and allows you to um control the controllables, right? And think about what the things are that are going to make your credit rating weaker or stronger. So, fund balance is definitely a strength and main maintenance of that is something that could bolster an upgrade. I think
it's really the um debt levels and the economic expansion that will get you to a stronger rating. Um and both of those are not the kinds of things that you'd change in a year. So, they are uh the kind of generational projects and and something to be discussed.
So, with that, I'm just going to recommend that you all approve the author or the resolution authorizing the sale of the bonds and welcome questions from anywhere. >> Thank you, Ms. Bergman. Um this is a public hearing, so I will now open the hearing and we will hear from any member
of the public wishing to speak on this topic. Anyone wishing to speak? All right. I will close the hearing and turn things over to the council. Go ahead, Council Member Gardner. >> Thank you, Mayor Pro Tem. Uh Ms. Bergman, do we know what our I know it's
on the upgrades or downgrades possibility as percentage of fixed cost. Do we know what our percentage of fixed cost is? >> Yes, it's currently 310%. That's as a percentage of revenues. And uh the what would make the rating go
down, I believe, is 350, if I remember correctly. 350. And uh we've had uh some conversations with Finance Director Odens, and we're going to provide some additional data about other neighboring cities and Minnesota cities that are in your rating
category and what the um level of debt uh uh, and those metrics look like for other cities to give you a little bit more context. >> That's the long-term liabilities ratio, right? >> Yeah. >> And so, what's the fixed cost for Santa >> I apologize. Um,
I did not note that down. Um, I believe I don't want to quote it cuz I will quote it to you wrong. I will I will follow up on that. I'm sorry I didn't note that down. >> Thank you. >> I have it on my phone in the audience, so I'll send it right away.
>> Appreciate it. Thank you. >> Any other comments at the rest of council? I'm looking for a motion. >> I'll make that motion. >> Mayor pro tem, second. >> [clears throat] >> Motion and [snorts] a second authorizing the issue of up to $8,600
general obligation improvement abatement and utility bonds series 2026B. Any more conversation? >> Roll call. >> Council member Gardner. >> Aye. >> Gilbertson. >> Aye. >> Davis. >> Aye.
>> Mayor pro tem Ask. >> Aye. >> Council member Butterfield. >> Aye. >> Shoulders. >> Aye. >> And Nelson. >> Aye. >> Seven ayes, zero noes. >> [snorts] >> The motion passes. I'm now looking for a motion to adopt a resolution providing
for the competitive negotiated sale of the general obligation improvement abatement and utility bonds. >> So moved. >> Second. >> Any discussion? Roll call. >> Council member Shoulders.
>> Aye. >> Nelson. >> Aye. >> Mayor pro tem Ask. >> Aye. >> Council member Davis. >> Aye. >> Gilbertson. >> Aye. >> Gardner. >> Aye. >> And Butterfield. >> Aye. >> Seven ayes, zero nose.
>> That motion passes. Now, we have a public hearing on resolution approving tax abatement. Director Odens, is that you? >> Good evening, Mr. Mayor Pro Tem and members of the council. The second public hearing this evening is regarding along the lines of the same bond
issuance, but it's the abatement resolution coinciding with that. So, um the public hearing would will allow the public to comment on the tax abatement bonds. This is the Lakeland Avenue path from Highway 12 north to Civic Center Drive on the east side of the road
there. The reason this is a little bit different bonding structure is because it would not be assessable. No special assessments along with this. This would be a city general obligation abatement bond only. The parcel numbers that are listed in the abatement are attached in exhibit A
for your review. I'll stand for any questions. >> Thank you, Mr. Odens. Anyone I'll open the public hearing. Anyone wishing to speak on this matter? Anyone wishing to speak? I'll close the public hearing. Council,
the issue is before you. >> I'll move to approve the issuance of the general obligation tax abatement utility bond series 2026B. >> Second. >> Motion on >> Sorry, I said that wrong, didn't I?
Tax abatement. >> Yeah. >> Mhm. >> Yeah, no, that was right. Yeah, sorry. Apologies. >> Any discussion? Roll call. >> Mayor Pro Tem Bosque. >> Aye. >> Councilmember Davis. >> Aye. >> Butterfield. >> Aye.
>> Nelson. >> Aye. >> Gilbertson. >> Aye. >> Scholdes. >> Aye. >> And Gardner. >> Aye. >> Seven eyes, zero nos. >> The motion passes. I want to go to regular business, and our interim director Frank, you're up first about
the opportunity zone. >> Thank you very much, Mayor Pro Tem and council members. It's a good thing I am first tonight on this cuz I am going about to throw some tax law at you. So, if I was last, you might all end up asleep. Um
But first, I'd like to introduce uh Sarah Lundquist. This is the city's new hire for our new position, which is the economic and community development specialist. Uh she'll be primarily focusing on downtown and uh the industrial park. Um but Sarah helped me put together this
proposal. Uh and she's been a great help right now as we uh put together this new position. So, I'd like to thank her for >> Thanks. >> for joining me. Um And she comes from uh she was the
executive director of the Morris, Minnesota uh chamber. So, we need might have to give some competition to James back there, but >> [laughter] >> Um Anyway, getting into this new program. Uh
I don't know if any of you have heard of opportunity zones. Uh there was a 1.0 program that was started in 2017. It uh is being modified by the One Big Beautiful Bill Act. So, there's an opportunity zone 2.0 they're calling it.
Uh it's a federal income tax program. I'll get into the timeline here. We'll be It'll be choosing eligible tracks throughout the city or throughout the state uh uh, by the end of this year. uh, there we uh Governor Walz will be picking these zones and then sending them to the
federal government where the IRS will kind of administer this program. So, the way this program works is um, under the first program in 2018, we had uh, opportunity zone designated for the downtown area. Uh,
unfortunately, I don't think it was utilized very much during the first wave of this program. For this coming 2.0 version of this program, we have three eligible tracts in the city. We have that same downtown tract from our the 1.0 program.
Another tract just to the south and I'll go into these more in depth later. Another tract just to the south of downtown and then the entire southeast quadrant of the city is in another tract as well. Um, but the benefits this opportunity
opportunity zone program can offer is there's kind of three and a half uh, main benefits to it. They're all federal income tax benefits. Uh, and they all get triggered by reinvesting um, something that has triggered a
capital gains or capital gain income. Uh, so to to get more into that, anytime you hold anything for investment, so whether it's stocks, uh, interest in a business, real estate, whenever you go to sell that interest, if it has
increased in value or appreciated, you have a capital gain at the end of that triggers a tax liability. Typically, one of the main tiers of um, uh, level of tax for that is like a 20% capital gains tax, which I'll be using for several examp- examples here. Uh, but the first
incentive this program offer this opportunity zones 2.0 offers is if you have a capital gain, so say you own a building that you had a million dollars in and you sell it for two million dollars. That is a capital gain of a million dollars. Normally that would trigger at
20 at a 20% capital gains rate, that would trigger you in that year that you sold it to have to pay $200,000 to the IRS as capital gains tax. This program allows you to instead invest it in a property that is within the designated opportunity zone 2.0,
wherever that ends up being, and it defers that tax liability for 5 years. So now that $200,000 you owe to the IRS, you get to let it build and be reinvested for 5 years before having to pay that bill. So as a general rule, the longer you can push
off having to pay tax, the better. Um so that's the first and probably the worst benefit of the program is just a 5-year deferral on any of those funds. Uh the second incentive is after those 5 years, and this got upgraded for rural
areas, is you get a 30% step-up basis in that original capital gain. If that doesn't make sense to everyone, that's that's okay, but essentially that you get a 30% reduction from that gain. So if you sold that building for $2 million with a you made a million dollars on it,
now instead of having a $1 million gain, you've only got a $700,000 gain that you're paying tax on, which now creates an actual tax liability of $140,000 instead of $200,000. So you just saved essentially 30% of the taxes you were going to have to pay
after reinvesting that money in an opportunity zone for 5 years. Then third, the best incentive is if you hold it for 10 years or more, um but at least 10 years, when you go to
sell that new property that it you had reinvested in, any amount of appreciation over that original amount you invested, so in this case we were reinvesting that $1 million in capital gains to avoid paying the tax until after 5 years, then we had to pay the
$140,000 in tax, but now say that new building that we had invested in, that we had put that million dollars in, is now worth $10 million after 10 years. When you go to sell that, that difference from the 1 million you invested to the 10 million you sold it
for, then the new $9 million in capital gains on the subsequent transaction 10 years later is completely tax free. You don't pay anything on that, so it's another savings of you know, in that case it would have been whatever 20% of 900,000 >> [laughter]
>> or 9 million is. >> [gasps] >> Um so it it incentivizes holding it long term. Like I said, if you get to that minimum of 10 years or more, uh it it can create a huge tax savings to drive, and this can this goes for redevelopment and
new development. Uh another quick fourth incentive is there's also no depreciation recapture. So, a lot of times when um people are doing newer developments, you can depreciate a lot of the expenses and and
buildings and whatnot uh earlier in the life cycle. And so, if you sell it 5 years later, usually you have to pay back a lot of that depreciation that you took early on if you took accelerated depreciation. Under this program, you do not have to
repay any of that accelerated depreciation. And this is just a this slide is just a quick uh comparison of the old program compared to the new program. The old program got utilized a lot by metros, and so people took a look at it
and said, "We were looking for this to benefit rural areas more." And so, the 2.0 program put extra incentives on the rural nature of the program. Uh for non-rural areas, that you only get a
10% step-up basis, so 10% reduction if you hold it for that 5 years for that incentive, but for rural areas, you get 30%. Also, when it comes to improving, if you are either building new or redeveloping, you have to at least put 50% of your
original basis into the building to qualify for the program. So again, if you bought a building for if you are holding a building for million dollars, you have to put at least 500 half of it, 500,000 into the redevelopment to qualify for this program as well. Um the previous program, you had to do
100%, so you had to double the value of the building. And this is only if you're in a rural area, so this will not qualify for anybody in the metro. Uh and the program is now permanent. One of the issues with the first program as well is it had a uh
the first tracks were picked in 2018, and then it had a hard cut-off of the end of this year. So, as we approached the end of 2026, the program got less and less um attractive for redevelopers cuz your deferrals and everything were like if
you were to develop now, you'd get a half year deferral, which isn't even into the next year, so it there's no way you can hold it for 5 years or 10 years before the program ends again. So, the original program, you really had to get started early. This one now has a rolling 5-year deferral from whenever the investment
starts. Um and then it's got rolling 10-year zone designations as well. So, whatever the governor's office ends up choosing this year, those will be the opportunity zones for the 2.0 program for the next 10 years, and they will not be chosen again until 2036.
So, it's important that we um try to make our pitch to have Willmar be included in that 2.0 program again. >> [clears throat] >> Um our original 2018 opportunity zone 1.0, like I said, is the downtown area.
So, there's a picture of it on your screens there. The three eligible zones that we have for the 2.0 is again that same downtown downtown tract. And then you'll see the second one there is the entire almost the entire
southeast quadrant of the city. So that one is having some very attractive pieces in it as well such as the mall everything along First Street everything along the highway
12 corridor coming in from east to west up until you get down to the downtown tract. So there's a lot of good areas in that one as well. And then you'll also see the third tract is the one just south of downtown there
also along First Street. These zones are designated by the federal government and then sent out so they're all based on you have about a 70 um you have to have a uh >> [clears throat and cough]
>> income of 70% of the poverty rate uh and then a couple of other things that they were looking for. So these are the four that were sent to us by the federal government. Um the cost to the city of Willmar are none. These are all federal income tax incentives. So we are not going to be
losing any property tax. We these funds that they are [snorts] saving are all coming off whatever these investment funds that get put together end up filing for their own tax returns. Uh so there's no loss of money coming to us in any other fashion. So it's completely um there's there's definitely be no
reason for us to not to apply for this program. Um the only thing that we would really care about is picking where do we want to really want to focus any redevelopment. Of those three tracts I described, we have to rank them and we have to send that prospectus of
all those those rankings to Governor Walz's office. Governor Walz has 289 possible tracks throughout the state that he's going to be picking from. He is going to be picking 25% of them, which is 73 tracks throughout the state.
Of that 25 that he picks, 25% of them must be rural. So, we will So, we've got three tracks in Willmar. So, we should have a moderately good shot of at least getting one of our tracks in. Like I said, we have to rank them and
send them to the governor's office starting on July 1st. This program wraps up with their decisions on September 29th. Then, they send them off to the IRS, and then the rest of this is all administered by the IRS and federal programs, so.
There will be nothing No other um No nothing else that has to be done on our end to get into these programs as long as we get chosen by the governor's office. >> [snorts]
>> Mr. Frank, um you mentioned um that there's a lot of attractive properties in that southeastern section. I assume you meant my own house as well. So, that makes me wonder uh does this apply to residential properties? >> It could, yes. It's a little harder cuz the the hardest piece of this is getting
that initial capital gain. So, you have to have sold something, some sort of investment that brought in a large amount of capital gain to make it worth you going out and reinvesting that rather than paying the tax on it. So, you know, a lot of people that have their own residences you already get a a
tax um exclusion on sales of your personal homes. >> Right. >> So, that's not going to trigger a lot of much of that. But, say you have a bunch of rentals. If you end up selling a rental and you made couple hundred thousand dollars on that, the funds that are created for this program are called qualified opportunity
funds or qualified rural opportunity funds for the rural version and they can be pulled as well. So, a whole bunch of people investors can get together and if they all have a bunch of capital gains, they could all dump it into one fund create a new entity that operates under this fund and then they can go out,
redevelop property and that fund would be, you know, filing its own tax return and doing everything required by the IRS to fulfill all the requirements of this program. >> Another question I had, what's considered rural by this? What defines rural?
>> Under 50,000 population. >> Council, other questions, comments that you have? Go ahead, Council member Goberson. >> Mr. Frank, you mentioned the federal benefits, are there any state benefits? I see that >> [clears throat] >> Governor Walz has signed off on this, but is there any benefits on that state
to tax side? >> Right. I I and I'm not sure and I don't know if that'll take a a state update if they've addressed that yet or, you know, if they're going to follow suit and give similar benefits. I am I'm unsure on that. I don't know if they've addressed that at all. I'd have to double-check and get back to you on that, but usually I know Minnesota is usually
about a year behind on their adjustments, so. And this would start in the beginning of 2027, so anybody that is about to invest in something here at the end of 2026 might want to take a look at this and
decide whether they could wait till the very beginning of 2027 and try to utilize one of these funds. >> Go ahead. And when does this program sunset? >> Um like I said, it'll be a 10-year running windows, so it'll start in 2027
and then it'll end at the end of 2036 then. And so, in beginning of 2037, a new 10-year window will open up and that'll be the next time that new opportunity zones are granted. Um then it'll be another 10-year window again.
And so far until there's legislation to um end this, it will be permanent. It is permanent right now. So, it'll just be those 10-year windows going on in in perpetuity until until some other legislation steps in and ends it. >> Um
Thank you, Mr. Frink. Uh now, you mentioned that the opportunity zones were not utilized very much that for downtown Wilmer for the last 10 years. Um how much has this program changed that will more people be interested in downtown or um are we focusing on a different area
of town to spur some more? >> That's kind of the one hard question we have and the little bit of power that we do have as council members and in the city side is we do have to rank these. I would not be surprised if we end up getting one. I don't know if we get two.
Given that downtown um the only project I could even think of that might have utilized it would be block 25 and I can't find any evidence on my end that it was. So, I'll have I'll be reaching out to them. Um but I'm already setting up meetings with the other developers in town to
make sure they're aware of this program and you know, if they can start to plan and try to utilize it. Uh the problem with opportunity zone 1.0 was that it did have that hard end date. So, after about the first five years, it became a lot less attractive cuz now you've only got five more years to work
[clears throat] with it. It's hard to get to that 10 year um seeing those real 10-year benefits when this program has a defined end date that never got fully extended until this update. Now that it's got the rolling windows with whenever you start the investment. So, even if you start an
investment beginning of 2036, you still now have a new five-year window that you get to be in that program. Just get if that zone gets eliminated, it doesn't stop you from continuing the investment that you started in that area. So, I think 2.0 is going to be a lot more friendlier to
uh investment and then especially in the rural areas, too, where we do have the increased percentages on a lot of these incentives. It but that will be the question for us is do we want to um possibly look at focusing on the southeast side of the city instead [clears throat] of downtown and downtown
be number two or do we want to continue to rank downtown number one and the southeast side be number two? Um those from my analysis seem to be the the two more important ones in my mind. The our third tract is mostly residential. Um and it would just be harder to be
utilized as people would probably have to pull funds from you know, that the smaller residential sales to to form these funds. So, it just the the third tract seems less attractive, but but the southeast side and downtown are definitely attractive for the benefits they could
provide to the city. >> Mr. Frank, you're um asking the council today to to make a motion to engage city staff with support from KCED to recommend the eligible census tract to the governor's office. Um just to clarify, does that mean that
that this would come you would come back to the council um to seek a final uh ranking of those three zones or that would this be empowering staff to make that decision on behalf of the council? >> That would be however you would like to proceed. If you would like to leave it
up to staff to do this ranking, then it would just be a motion to engage city staff to with the support of KCED to to recommend eligible cons eligible census tracts to send to Governor Walz's office. If this council would like to be the one
that determines that ranking, I can definitely wait and come back. Like I said, this opens on July 1st, but there's no benefit to being the first ones to submit our prospectus to the governor's office. We just have to do it um before they make their final decision on September 29th.
>> Council members? >> Mo- motion to uh engage city staff with support from KCED to recommend the Willmar's eligible census tract to the governor's office, the 2027-2037 opportunity zone. >> Second. >> We have a motion and a second. Further
conversation. Go ahead, Council member Baker. >> [clears throat] >> Mr. Gardner, you uh on that motion, you letting the city going to make the determination or do you want the council? >> I'm more than happy letting Mr. Frank make that decision. >> Roll call. >> Council member Gilbertson.
>> Aye. >> Davis. >> Aye. >> Mayor pro tem Ask. >> Aye. >> Council member Butterfield. >> Aye. >> Gardner. >> Aye. >> Scholders. >> Aye. >> And Nelson. >> Aye. >> Seven ayes, zero noes.
>> The motion passes. Thank you, Chris. And Sarah, thank you and welcome to Willmar. Thanks for choosing us. >> Yes, thank you. >> Thank you, Mayor pro tem and Council members. Mr. Box, donation from the Willmar Rotary Club. >> Good evening, Mayor pro tem. Good evening, Council. Uh we have a number of
action items regarding the amphitheater project at Robbins Island. Uh the first up is the official acceptance of the first donation from the Willmar Rotary Club. Uh this is laid out in the agreement between the city and the Rotary Club of Willmar
uh back in August of 2023. Uh Again, it was the agreement for the licensing and donation acceptance. So, under this agreement, uh the first donation, the Willmar Club of Rotary will provide the plans and specifications for use of the city to solicit competitive bids. The city has done so
and we'll be seeing that in the next agenda item. Additionally, as part of this donation, uh the Willmar Rotary Club will assign its rights, obligations, interest under the professional service contract with Engan Associates for the design of the project and preparation of plans and specifications to the city.
Uh this project has been bid and the award of bids are pending council action uh at in the next agenda item. Uh in your packet, you will see the resolution. I would like to call your attention to uh the second page of that resolution um that calls out the responsibilities
of the city. Uh number 1.b um as part of the donation, again, we will be uh the Rotary Club will be assigning its rights, obligations, and interest with the professional service contract with Engen Associates um to the city of
Willmar. Um it's important for the council to see that there are some outstanding uh balances a part of that a contract with Engen in the amount approximately [clears throat] $102,219.03. Uh those obligations um if approved,
would be assumed and satisfied uh by the city as a condition of the acceptance of the donation. Uh the reason that we are proposing this this evening is um the bids within the pre uh this dollar amount uh fits within the overall scope of the
project. Um for in order for the project to move forward, so we feel that it's important for the council to not only take the official action of accepting the donation, but also uh the bids and plans, but also making the council fully
aware uh that we'd be taking on um those obligations that were previously assigned by Rotary and Engen. Um at this time, I will pause and stand for any questions. >> Council members looking for a motion. >> I will make the motion to accept the
donation from the Willmar Rotary Club. Is there a second? >> Second. >> Motion and a second. Conversation. Go ahead, Council member Schultz. >> Of that $102,000 uh obligation, is there an for more donations to come in to help
cover that for the city? >> Yeah, Councilmember Shullis, it's a great question. Um, so this does fit within the project the overall bit of the project. The Rotary has paid just under half of this already. So I believe they have a total contract for just under 200,000 with Engan.
In addition to this, Rotary is also committing as part of the grant matching funds approximately $486,000 towards this project as well. So there are the opportunities for that only those commitments but the obvious the additional donations that Rotary can come up with as well.
>> Thank you. >> Ready to vote? >> Roll call. >> Councilmember Shullis. >> I. >> Butterfield. >> I. >> Gilbertson. >> I. >> Mayor Pro Tem Ask. >> I. >> Councilmember Nelson. >> I. >> Gardener.
>> I. >> And Davis. >> I. >> Seven eyes, zero nos. >> The motion passes. Go ahead, continue Mr. Box. >> Thank you, Mayor Pro Tem. The next action item is the resolution approving the contract with Marcus Construction for the construction of the
amphitheater project. The bid the bids were opened. Marcus was the apparent low bidder at $2,158,600. This would be in line under budget with the proposed overall budget of just over 3.1 million.
One thing that is noted and will be updated tomorrow are the entire bid bid tabulations. That will be included as part of the packet. I believe there were six six bids. If that sounds correct, that were part of the project with again Marcus being the low lowest responsible
bidder. Within your packet you can see the total budget breakdown starting with the construction budget of just over 2.1 million, the non-construction costs of 263,000. That's part of the action item that the council just took.
Bringing three phase power out to the amphitheater location. There'll be inspections soil corrections, which will be the next agenda item. And then an overall 10% contingency on the project. So we're asking for an resolution to accept and award the contract with
Marcus Construction for 2,158,600 and to set the overall budget for the project for 3,118,513. That includes the grant donation or the grants received for this project as well as the um funds that would be donated by Rotary.
>> So moved. >> Second. >> [snorts] >> Any conversation on this? I do want to say that I I spoke with Mr. Box earlier before the meeting tonight and just asked that in the future when we're looking at different bids, it seems like we've gotten out of the habit
of including all the bids for the council's review and so I asked if those bids that were not selected or not being recommended to us would also be included in in future council action requests. Go ahead, Mr. Gardner.
>> Mr. Director Box, do you know how much or what was the Remind us again how much we received from a state for a state grant for this project. >> Two grants were received for a total of 2.6 million. So that will cover the bulk of this 3.1. >> Correct. >> [clears throat]
>> Thank you. >> Councilor, are we ready to vote? >> Roll call. >> Council member Gardner. >> Aye. >> Scholdis. >> Aye. >> Mayor pro tem Bosque. >> Aye. >> Council member Davis. >> Aye. >> Gilbertson.
>> Aye. >> Butterfield. >> Aye. >> And Nelson. >> Aye. >> Seven ayes, zero noes. >> That motion passes. You're still in front of us, Mr. Barnes. >> Thank you, Mayor Pro Tem. Thank you, Council. Uh last item for the
amphitheater project is a resolution for consideration with American Engineering Testing uh for special testing services associated with the project. Uh this is in the amount of $20,603. Uh again, with the overall budget of $26,000 that was uh part of the uh
budget that the Council just approved for this project. Uh what this is for is due to the unknown soil conditions um at the location of the amphitheater. Uh there's a potential need for additional testing during construction. Again, staff is recommending uh establishing
the overall testing budget of $26,000, but we have uh received a quote for $20,603. Uh we're looking for approval uh for that. Um approval for that contract contingent upon the city attorney review.
>> So moved. >> The motion is there a second? >> Second. >> Discussion. Go ahead, Council Member Gilbertson. >> Yes, the only thing um did soil testing was soil testing included in the any of
the other bids that the other [clears throat] bidders put forward? >> Uh as part of the construction bids, uh from my understanding, I I don't believe so. This was in addition to. >> Okay. >> Roll call. >> Council Member Nelson.
>> Aye. >> Schultz. >> Aye. >> Davis. >> Aye. >> Butterfield. >> Aye. >> Gardner. >> Aye. >> Gilbertson. >> Aye. >> Mayor Pro Tem Ask. >> Aye. >> Seven ayes, zero noes.
>> That motion passes. Thank you, Council. >> [snorts] >> Mr. Bogie, turn lane expansion. >> Good evening, Mayor Pro Tem, members of the council. Uh this item is related to the Trunk Highway 40 turn lane expansion project.
If council recalls, uh this is a project that was uh conceived as a result of the future rail park, essentially creating a new uh access off of Trunk Highway 40. The city applied for uh transportation
economic economic development funds or TED funds and was successful in that pursuit. What's before you this evening, um after that bit of background, are actually the bids. We did open bids on May 28th. We received two bids for the project. Uh the low bid was from Joe
Riley Construction in the amount of $1,308,812.34. There is a resolution in your packet this evening to award that project, a subsequent resolution uh for adopting the as bid budget. And I'd be happy to answer any questions that council might have.
Council. Council member Gardner. >> Mr. Bogie. >> Hi. Good evening. >> Hi. Uh just so I'm clear on this again, the same similar question I just asked Director Box, um it appears that 1.3 of the 1.8
was in grants. Is that correct? >> Yeah, so and fast forward to the next item in your packet that has or the as bid budget resolution, the breakdown of the project costs you can see here in the upper right hand corner. So, uh the city did
receive $900,000 worth of um transportation economic development funds. And the other piece that's identified as MnDOT SRC throughout the course of the project. Uh Mind out did look request some
modifications to Trunk Highway 40 and as a result of that they are funding that piece. So, the short answer to your question is yes. >> Okay. And then the rest of it's coming out of the industrial park fund? >> Uh that's what >> there's no impact to the tax levy?
>> That's what >> project. >> has been previously discussed as the funding source, yes. >> Excellent, thank you. >> Council, can we get a motion to award the expansion project to Joe Riley? >> So moved. >> Second. >> Any further discussion?
Roll call. >> Council member Davis. >> Aye. >> Butterfield. >> Aye. >> Nelson. >> Aye. >> Mayor pro tem Ask. >> Aye. >> Council member Scheldahl. >> Aye. >> Gilbertson. >> Aye. >> Gardner. >> Aye.
>> Seven ayes, zero noes. >> That motion passes. We're also looking for motion to adopt the resolution approving the as-bid budget for this project. >> So moved. >> Second. >> Any further discussion?
Roll call. >> Council member Butterfield. >> Aye. >> Gardner. >> Aye. >> [snorts] >> Mayor pro tem Ask. >> Aye. >> Council member Nelson. >> Aye. >> Davis. >> Aye. >> Scheldahl. >> Aye. >> And Gilbertson.
>> Aye. >> Seven ayes, zero noes. >> That motion passes. Thanks, Council. Council, that brings us to the completion of our regular business. Are there any announcements that anyone has this evening? All right.
We will then move into closed [clears throat] session. This portion of the regular meeting of the City Council will be closed pursuant to Minnesota Statutes Section 13D5 Subdivision 3C. The Council may be asked to take formal action after concluding
the discussions in a closed session. The following real property will be discussed separately in the closed session. Kandiyohi County Parcel 950034820 950034830 950034940. I'll now entertain a motion to close the meeting.
>> So moved. >> Second. >> Motion and a second. Is that a roll call or is that a a yea and nay vote? >> So far we've been doing everything as roll call. >> Okay, roll call. >> Councilmember Gilbertson >> Aye. >> Butterfield
>> Aye. >> Mayor Pro Tem Ask >> Aye. >> Councilmember Schultz >> Aye. >> Gardner >> Aye. >> Nelson >> Aye. >> Davis >> Aye. >> Seven ayes, zero nays. >> All right, we're now moving into closed session.