[0:00] **Mayor Wayne Boucher:** Let's call the meeting to order and stand for the pledge of 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. [0:24] **City Clerk Alissa McClure:** Roll call, please. Councilor Geissler? **Councilor John Geissler:** Here. **City Clerk Alissa McClure:** Councilor Hjelle? **Councilor Andy Hjelle:** Here. **City Clerk Alissa McClure:** Councilor LeBlanc? **Councilor Brian LeBlanc:** Here. **City Clerk Alissa McClure:** Mayor Boucher? **Mayor Wayne Boucher:** Here. Do any councilors have announcements this evening? **Councilor Andy Hjelle:** I guess I'd just like to congratulate a Hermantown athlete on representing her country. Uh, we had Tyya Manion representing Team USA over the last week. So, congratulations to her. [0:46] **Mayor Wayne Boucher:** Thank you. Any other announcements from council? Uh, public hearing to move out of public hearing on a proposed assessment for the construction of road improvement district number 541 and 542 Hermantown Road and Bridge. I'd like to start with a couple of comments. We're going to ask for a three-minute limit for anyone that would like to speak. Got a lot of people to get to tonight. We want to try and get everybody through and give everybody some time. Uh, if you do have a—if you're challenging the assessment, you can do so either verbally during the meeting at the podium or you can hand in something in writing to the city clerk over here before the end of the public hearing. Uh, I'd also ask for civility. Um, you can disagree with what's going on. We understand that. Just please be courteous to everyone and we will do the same. At the end of the public hearing, we'll have a short break to allow everybody to leave. Uh, it's hard to get business done when everybody's headed for the door. Every one of you is invited to stay for the whole meeting. [1:59] **Mayor Wayne Boucher:** Uh, we've got a whole lot of good stuff going on, but uh, we understand that there's a lot of people here for just one purpose. Um, we will open the public hearing with anyone that wants to speak. And if you'd like to speak, please step to the podium and start with your name and address. [2:18] **Councilor Brian LeBlanc:** Mr. Mayor, was Mr. Mulder going to do a presentation? **Mayor Wayne Boucher:** Do a presentation first? **John Mulder (City Administrator):** Sorry. **Councilor Brian LeBlanc:** Yeah. And then just a reminder that um, there's no action being taken tonight. **Mayor Wayne Boucher:** Yes. Um, agenda was in error in mentioning public action. We won't be voting on this till a later meeting. [2:39] **John Mulder (City Administrator):** So, I just want to walk through um, the purpose of this meeting tonight is to hear um, the resident's input relative to the assessment, the proposed assessment. Um, this project is um, over two and a half years in its making. Um, we first had our first public information meeting on August 6 of 2023 and we met with the residents there informally to talk about what the proposed um, project was and what we were planning on doing in terms of the improvements. Then on April 17th, um, the city council held its first public hearing. There are two public hearings that are required through the assessment process. Um, the first one is um, was done in April of 2023. Um, at that meeting, the city had the preliminary engineering report which described in a preliminary way the improvements that were planned and a preliminary engineering estimate of the cost of that project. Um, at that meeting, we talked specifically about um, how we would fund it, including an assessment. Um, following that public hearing, the city council did order the project um, and um, asked that we prepare um, plans and specifications for that project. [3:56] **John Mulder (City Administrator):** Then in August of 23, we had our second public information meeting. Um, that was after the engineers had started their design work and were in fact about a 30%—that's usually a mark where the engineers say, "Okay, we're about 30% done." And at that meeting, we had a public information meeting where we described in more detail um, the work that was to be done, including how that might impact uh, various residents and their driveways and and you know, and just all of the work. And we we got feedback from employees about the construction at that point in time. Um, late last year, we had um, this same type of public hearing. Um, and following that public hearing, the city council um, decided that they would not um, adopt the assessment role at that point in time because there was just some concern about finishing the project and addressing some of the concerns relative to mainly driveways. Um, but um, there was a number of other concerns. So the city council said—I mean they could have gone with the assessment role—but they decided let's finish the project and be—and have a more comfort level with the completion of that project. So they postponed that until this year. So tonight is the official second public hearing um, and where they would consider the assessment role and consider um, the resident's input relative to that assessment. [5:18] **John Mulder (City Administrator):** Um, just a brief history about the road improvement plan. Um, the road improvement plan dates back to almost 10 years now. In 2015, um, the city conducted, um, an inventory of roads um, and we did a review of all the roads in in the city of Hermantown. The second kind of component of the road improvement plan was in 2019, the city council adopted a long-term financial plan and that financial management plan was to provide guidance on how we could pay for various infrastructure and maintain um, the city's assets in part. And we'll talk a little bit more about that in just a second. The other thing about the road improvement plan is that we typically um, is the number one issue that we get back feedback from residents in terms of um—to be honest, this is where we score the lowest. We only get um, somewhere in the 40s noting that our roads are good or slash excellent, meaning that over 50% of you believe that our roads are less than good or excellent. And so that's a number one issue that, you know, the city council and the city have um, made a point of trying to address. So again, going back to that inventory, um, we ranked them in 2015 and all of the roads segments um, we identified 164 road segments. Um, 45 were gravel, 73 were rural, 20 were um, urban, and 26 segments had municipal state aid. Um, and they were all ranked one through five. One and two were roads that were in really good shape, fairly tend to be new. Um, and we would look at preservation efforts just to extend that life because no road, all roads have a life cycle. No road lasts forever. Um, and so you take steps in the meantime to try to preserve those and make those a little bit longer than last a little bit longer. So roads ranked one and two, we've looked at preservation efforts. Um, roads rank three and beyond really um, are beyond preservation and need to be reconstructed. Um, and four or five really talk about a reclaim and overlay or full reconstruction. [7:26] **John Mulder (City Administrator):** Um, there are three kind of basic strategies for um, this road improvements. Um, there's a milling overlay and what that is is this um, where you peel off the uh, bituminous and you haul it away. Um, but in these cases, in this case, we did a what's called a reclaiming overlay. What we do there is we peel up the existing asphalt and put it back down and add to the base of the road. So, we're actually really improving the road base there. Um, so, it's a more a solid base for putting the new layers of asphalt on. And in some cases, we do full reconstruction. Now, in this particular case, we didn't have to do full reconstruction on the entire four miles, but there were various parts of the road where um, as we got into it, um, the soils underneath were part of the contributing problem. Um, so, we pulled out what's affectionately called as muck, and it's just kind of organic uh, soils and um, decayed vegetation that muck. So we pulled that out and replaced it with um, gravel and sand and stuff like that. So would provide a better road base. So it basically is some fundamental changes to the road, fundamental reconstruction and that's why we look at an assessment process. [8:50] **John Mulder (City Administrator):** A little bit more about the financial management plan. What we did in 2019 was we looked at um, all of our existing debt, future debt, our capital improvement plans, the possibility for tax-based growth. We made some assumptions about that. We also looked at future operating expenses, both in terms of just operations, but also staffing. How would staff need to grow going looking forward in the future? We looked at kind of where we currently were at with our financial results and we looked at some of our policies to think about how can we best manage um, the city from a financial perspective. That process helps us to um, kind of review new proposals. It helps us to maintain assets and provide appropriate fund balances in various accounts um, and just provides a little bit more clarity as we go through the budget process. [9:40] **John Mulder (City Administrator):** As we looked at this, we looked at different pieces of funding um, that could be used for roads and different kinds of funding streams that the city has. Um, cities often have various different funding streams, but those funding streams are limited as to what they could be used for. So, how could we fund um, roads? Road assessments is one process. It is a process adopted and approved by the legislature outlined in state statutes chapter 429. Um, and we've used that process for various projects. There's also the just the general tax levy. Um, we've used that a part of that as um, funding our roads as well. We also get municipal state aid but that can only be used for roads that are designated for municipal state aid. In this particular project, none of the roads are designated municipal state aid roads. Some examples would be Arrowhead Road, um, Ugstad Road north of Maple Grove um, a portion of Hermantown Road, um, on the east side of town on the open near Hannes and Stebner, and there's a couple other ones. Um, Stebner is part of it. So, some of those were some of the the state aid roads. In this case, we did not have municipal state aid money to to use for those projects. Um, up until a couple years ago, the city did not get any local government aid. So, we have a very limited amount um, of local government aid. The city does collect sales tax um, and but that is restricted by the legislature for uses for trunk sewer, water upgrades, the building of this building, the wellness center, and more recently the community recreation initiative projects, the arena, Vickner Park and trails. [11:27] **John Mulder (City Administrator):** We can use the water utility fund and the sanitary sewer fund when we're making upgrades and repairs to the water or sanitary sewer. We also have the storm water utility fund. And in fact, we did use some of those monies for this project to help pay for either driveway culverts or culverts that what we call um—I forgot—cross culverts—centerline culverts. So where they're crossing the center line across the road. So, we did use some money for that. Um, and then we also have the ability to use street light utility funds. In this particular case, we did not because there's no signals and there's very few um, street lights that we replaced in this project, if at all. [12:11] **John Mulder (City Administrator):** So, as we looked at this, we looked at um, the assessment and we looked at, you know, what that would be. And we are proposing an assessment of $9,400 um, that would go on your taxes. There would be one payment per year for a total of 15 years. The interest rate is 5.5. So the annual payment is $936. That assessment could be paid all upfront at once or it could be spread out um, over those 15 years um, and paid through your taxes. Um, again, like I said, the road improvement plan goes back a number of years. Um, we started in 15 with making the assessment of those roads and then in 2020 um, was the first time we actually implemented the road improvement plan and on that that year we did Johnson, Portland, Carlson, um, Alexander and a portion of Hermantown Road between Orchestra and Stebner. Um, at that point in time those were the worst roads in town. Um, despite um, though we we recall um, I think it was in 2019 somebody thought it was funny and there was a certain amount of truth to that about uh, marking Hermantown Road um, about uh, some of the bad spots on Hermantown Road. In 2021 we did uh, Lake Junction um, and then Sunbe and Swan Lake Roads up in the very uh, north-eastern part of the city. In 22, we had planned to do Ugstead Road from Maple Grove north to Highway 53, but because there was some federal participation um, money involved in that, those road plans got delayed and we didn't actually do that construction until 2023. So, we kind of had one project that went over two years. In 2024, uh, we did Hermantown Road. Um, this particular project between Highway 2 and Ugstad, but then also um, a portion of Old Midway Road. [14:18] **John Mulder (City Administrator):** Um, again, this is kind of the process that we used. As you recall, as I stated before, we had our first public information meeting on April 6 of 23. So, we've been talking to the public and to the residents about this project for about two and a half years. Um, we went through uh, that public hearing back in April of 23. We did that second public information meeting in August. Um, and then this schedule got changed because we delayed it for a year as we finished the work in at the end of 24 and into 25. Again, here's just a project map. It goes from Ugstad west to Highway 2 and then Old Midway Road from the intersections of the new Midway Road. Um, these are a close approximation of the finalized cost. We still have a few bills to pay. Um, but generally construction was 3.5 million and we had about almost 600,000 in what is typically called soft cost or other costs that included uh, engineering, legal fees, and fees miscellaneous things like that. Though the total cost was 4.1 million. [15:24] **John Mulder (City Administrator):** We're going to fund that. What we're proposing is a very large portion of that. Um, 75% is being funded by the general fund through the issuance of of debt. Um, that debt is paid over uh, 20 years and um, so that 3 million is being funded by debt and being paid back through the general property taxes. We are estimating that there'll be about $100,000 in storm water and there just happens to be 100 assessments—proposed assessments—at the 9,400, so $940,000 which is just under 23% of the project. The city council has always taken the position that on some level roads should be paid for by all because all could use them, not just the residents. But the city also takes the position is that the people that benefit the most should pay—should pay for that. And um, as people talk about their road, their road was improved. Their road and their approaches to that road were all improved and therefore they do receive a special benefit and therefore um, the council believes that they should pay a portion of that through an assessment. [16:36] **John Mulder (City Administrator):** Um, just kind of a summary is that tonight is the opportunity for residents to express their opinions about the proposed assessment. Um, no decision is being made tonight. The council—for those people that do object—the council will hold individual objection hearings sometime in September. We have not finalized dates and times for that, but sometime um, in the next uh, week or so, we'll try to nail down what dates that will be. And then a final decision relative to the assessment um, um approval would be made in October. And at this point depending upon the timing of those individual objections, either on October 6th or the 20th. If approved, then residents could pay that assessment in full by the—by the before the end of the year. Um, and then theoretically even after the end of the year, but—but if you don't pay by the end of the year, it'll show up on your taxes as a—as a—an assessment. Um, and then that can be paid—the assessment can be paid with your general property taxes. Again, this has been a long process, a long um, process for the city council, not just in terms of this project, but we've been doing this for now for five years through an assessment process where we assess the residents who are benefiting from that um, improvement. And this particular project has been uh, longer than most in that—in that it's been over two years. And we've informed residents through a number of public information meetings um, during the construction meetings on that project. So, we we've tried to keep the community um, both informed and engaged on this process. [18:08] **John Mulder (City Administrator):** Are we ready for public? **Mayor Wayne Boucher:** Yes. Anyone that wishes to speak to this, you can approach the podium and start with your name and address. [18:38] **Nathan Gilbertson:** Mr. Mayor, city councilmen. My name is Nathan Gilbertson. Property address 5854 Hermantown Road, Hermantown, Minnesota 55810. So, my wife and I have been living there for the last 10 years. And uh, over this time we have purchased residential property, sold residential property, refinanced the mortgage three times, taken out a construction loan and converted the construction loan to a traditional mortgage. And each of these transactions was based upon an assessment of value. And this assessment is called a paired sales assessment or more commonly known as an appraisal. As property owners, we've all been through this. Minnesota state law, as you mentioned, does allow for municipalities to appropriate cost of improvements to property owners based upon the benefits received by the property. To do this, the municipality needs to demonstrate a benefit to the property. And this benefit is defined specifically as an increase in market value—not perceived value—market value of residential property. [19:48] **Nathan Gilbertson:** Now, in order to do this, the city of Hermantown hired a local certified general real estate property appraiser, Sanford Hoff. Mr. Hoff is also a local property owner and developer. He has been working with the city council for years requesting permits to develop a number of properties including as you well know timber trails down the road on Stebner which is completed; future developments included but not limited to being the co-developer of Engul's property on Hermantown Road along with Ron Saline. By definition, this is a conflict of interest. The definition of conflict of interest is where the individual has an external interest that may or may not influence their findings, their objectivity, the integrity or credibility of their findings. Now, Sanford Hoff knows this. He states that he does not have a conflict of interest on page one of the assessment despite his known affiliation and needs from the city council members. Nonetheless, he is hired. He agrees to do this. Our position is that this is unethical. Further review of the assessment identifies on page 8. He references the state law as you mentioned 429.01 that there needs to be a specific benefit to the project from the project to the land on the road. The assessment does not exceed the specific benefit and the assessment is uniformly applied across the same class of properties in the assessed area and it must be—as mentioned before—an increase in property value. Page 9 and 10 outlines other accessory benefits not related to property value. [21:39] **Mayor Wayne Boucher:** So you're at three minutes if you can wrap it up. [21:58] **Rebecca Gilbertson:** Rebecca Gilbertson, 5854 Hermantown Road. On page number eight, he references the state law outlined above, specifically citing that the special benefits test that the land receives a special benefit from the project, that the assessment does not exceed the special benefit. The special benefit is specifically defined as an increase in market value. Um, page 9 and 10 outlines a number of benefits that the resurfacing the road would provide. I believe he read that. Um, interesting. The majority of the benefits do not apply to this project or the properties affected by the project. Discussing improved infrastructure for development, efficiency of road travel, improved lighting, reducing the chance of accidents and potentially lowering insurance premiums. I've reached out—we've reached out—to our homeowners insurance agent after laughing, and this person said, "Absolutely not." [23:10] **Rebecca Gilbertson:** Um, instead Sanford Hoff used statistical data from RERC. A simple Google search reveals that this data set is designed to assess value added to commercial—commercial—properties. RERC highlights this on their website, bringing you the latest insight and perspectives on commercial real estate and markets. This is based on rental income, investment returns, capital gains. To be clear, there are no commercial properties within the scope of this restructuring project. There are very few rental properties on Hermantown Road. Um, Hermantown Road is populated with middle-class single-family residential properties and dwellings. To summarize, we are being assessed $9,400 without any anticipated financial benefit from the resurfacing project on the standard—not commercial—appraisal process. According to Minnesota state law, statute 429.051, the city of Hermantown has no grounds to assess any money for the resurfacing of the road. Um, we're going to request that the assessment for the resurfacing of Hermantown Road be permanently tabled. [24:39] **Mayor Wayne Boucher:** Thank you. [24:59] **Mayor Wayne Boucher:** Yes sir. **Paul Pearson:** 5382 Hermantown Road. **Mayor Wayne Boucher:** Could you name again, please? **Paul Pearson:** Paul Pearson. 5382 Hermantown Road. Um, I believe what you guys are doing was ruled unconstitutional in 2022 in First Baptist Church of St. Paul versus St. Paul. And uh, what you're doing is you're—you're saying that—that maintenance is a special assessment, but there's nothing that you did that changes the fact that you're just maintaining a road. That's all you did. That you re-blacktopped a road. Uh, there's—there's no—if you take a street that—that had—had not been replaced in Hermantown and you look at the property values of it and you look at the natural progression of the increase in property value and you compare one from—from Hermantown Road for example and one that—that was—that you guys didn't do anything to, the percentage is exactly the same. There's no special benefit that came from that. It's provable. And then secondarily, I think that it is interesting that Hermantown Road, if you look—if you go back a couple years and look at what you guys did on Maple Grove Road just a couple years prior, your same verbiage, same exact things. $9,700. Oh, we're—we lowered it to 94. It's exactly the same wording. It's just—it's make-believe in my opinion. Uh, it's you guys are—you guys are changing maintenance into a special assessment and it's a violation of the constitution of Minnesota and it—it's—I—I—I suggest everybody read it man. It—it was in uh, yeah, First Baptist Church at St. Paul versus St. Paul, they covered this and they just lambasted people for doing this. [26:54] **Mayor Wayne Boucher:** Thank you. Let's keep the extraneous noise down so we can get through this. Uh, you can comment if you'd like by approaching the podium, please. Who would like to be next? [28:04] **Rachel Lanto:** Hi, I'm Rachel Lanto. I reside at 5319 Hermantown Road. Quote from Northern News Now, Hermantown City Assistant City Administrator Joe Wicklund says, "Assessments are an equitable way to fund projects." I wasn't entirely sure how to take that. Whether he meant equity based on what's fair for the individual or equity based on home value. I took it both ways. Hermantown is a growing city and Hermantown Road is and has been used by many who live in the neighborhood, live in the city, and by others passing through. All while the road had been decreasing in safety for transit. Indeed, Hermantown Road has needed to be repaired for many years, and I'm glad it is finally done. Duluth and surrounding cities are subjected heavily to road degradation from traffic, weather such as rain, snow, ice, and flooding. Due to such, there has been a lot of road construction on nearby Hermantown roads, including but not limited to the roundabout project on Midway and Maple Grove roads, which has made Hermantown Road a detour road. While a small portion of the road was fixed following the 2012 flood, the majority was not. [28:43] **Rachel Lanto:** The degradation of the road was becoming so significant that in 2019 somebody illegally spray painted graffiti in the words of "yikes" and "warning" on the road indicating where the potholes and uneven surfaces were. Joe Wicklund, manager of Hermantown Communications and Community Engagement, commented on such with appreciation of the tameness of the wording and with upset of the safety of the individual or individuals in question and those driving on the road. While I don't agree with vandalism, I do agree that the potholes and uneven pavement was more than an eyesore, but a major safety concern. Mr. Joe Wicklund was recently reported saying to Northern News Now that the assessment of charging homeowners $9,400 is an equitable way to fund a road project. However, that is incorrect because equity means to make things the same while equitably means to adjust due to specific needs for the individual. [29:35] **Rachel Lanto:** While I am unsure what others who are affected by this project make for a living, how much their mortgages are, what their homes are worth, or what their monthly expenses are, I personally know several of my neighboring families, and I'm sure that we don't all have the same cost of living nor make the same wages. Some of these families, in fact, are elderly and or retired. Therefore, the proposed amount of over $9,000 to all cannot be equitable. My ex-husband and I purchased this 1,082 foot home on 2 and a half acres next to—next door to an unused parts business, a major eyesore, and roughly 250 ft from the stop sign on Hermantown and Ugstad roads in 2013 for roughly $130,000. I refinanced this humble home solely in my name as part of our divorce decree on September 13th, 2024 with a mortgage payment of $1,802. I cannot afford this. I know many cannot afford this. I'm a parent of two. I have a teacher salary. This is half of what I make a month. [30:54] **Mayor Wayne Boucher:** Who would like to be next? [31:13] **Mike Loel:** Mike Loel, 5524 Hermantown Road. I'm just going to read uh, part of what—the objection that I sent to uh, Joe and uh, everybody else. I'm just going to read a short part of it. I will agree that the road needed to be repaired. It should have been done years ago. Why wasn't a contingency fund established for these inevitable repairs years ago? Everyone who drives on the road will be enjoying the benefit of it. The improved road now has more traffic as drivers who used to avoid our rough road are now using it. While you were in the planning stage of this project and asking yourselves how to get the landowners to pay for it part of it, why weren't you instead asking each other "why should they?" My wife Lorraine and I would like to formally object to the assessment. Thank you. [32:09] **Mayor Wayne Boucher:** Thank you. [32:26] **Dennis Loal:** Dennis Loal, 5464 Hermantown Road. I think people have addressed a lot of the issues. I won't re-address those. Uh, I have one concern uh, with the uh, the work that was performed on the road. The uh—you know if you look at for example our ditches in our area uh, that they cleared out, they look really nice from the road. Um, you try dry—try mowing them and they are a bumpy wet mess. Um, poor quality. Uh, our—our family used to have a sod business. I worked in it when I was 13 or 14. I'd have been fired if I did a job like that. Um, the other part are the shoulders on the roads. Um, they're very inconsistent and unsafe. Uh, parts of them are wide, parts of them are narrow. Has anybody on the council walked—do they walk that road at all or bike that road or anything? The Hermantown Road. Um, the—the shoulders are anywhere from here to here. Uh, very—very unsafe. Uh, and the material that they used, I believe it was supposed to be class 5 and they used some other material. I'm not sure what it is, but there's no clay in it. Um, it doesn't hold together and that is going to wash out in no time. We're gonna have uh, no shoulders left. Uh, we—we already see it with some of the rainstorms we've had. So I—I think if you're considering paying off the contractor, they should redo all the shoulders with the proper material because they're in poor shape. Um, and they're not going to get any better. Okay. Thank you. [33:55] **Mayor Wayne Boucher:** Thank you. Is there anyone else that would like to speak? Would anyone else like to address the council during this public hearing? [34:41] **Jonathan Thornton:** My name is Jonathan Thornton at 5869 Hermantown Road. I do not have any prepared remarks, but I did send in an objection which you all have received, I'm sure, and I appreciate those that responded. First, I wanted to thank the council and uh, and everyone. I know this is a—it's a tough job. Uh, I've been in public office before. I understand your positions are—are tough, especially balancing budgets, and I appreciate all the time you guys put in. Uh, I've also put in a lot of time with this community and uh, and I do want to see it improve. Uh, and so I—I want to put that out there. I have 34 years of experience selling homes in this market. I can assure you that moving from a bumpy paved road to a smooth paved road does not add a dollar of value to an assessment or to a—an appraisal. It just—it simply does not. I've—I've been on literally hundreds if not thousands of market evaluations for local homes. I have spoken with several appraisers since this came to light for my own personal property. Uh, I've spoken to them directly. I've spoken to literally dozens of realtors in this market. I've all asked them the exact same question without preferencing any of this going on before that came to light in the news. I had these conversations last year and not one real estate agent has told me that they feel like that adds value to the property—not one. Uh, so I just wanted to put that out there. Um, and I would appreciate uh, if you guys would table this permanently and find a new way to finance these projects going forward. Thank you. [36:36] **Mayor Wayne Boucher:** Thank you. Is there anyone else that wishes to speak to the council? This will be the last opportunity for public input at this public hearing. If no one steps forward, we will end the public hearing very shortly. Is there anyone else that would like to address the council? [37:10] **Mayor Wayne Boucher:** Thank you for being here this evening. We'll end the public hearing. We'll have a short 3 to 5 minute break to allow people to exit the room. And if you're interested in what else we do, you're welcome to stick around. [37:29] **Mayor Wayne Boucher:** Okay, we will move back into the meeting. Mr. Mulder, could you highlight the presentation of the general fund budget from our earlier discussions? **John Mulder (City Administrator):** Yes. Um, we presented the uh, general fund budget. Um, you will need to take um, action in the first meeting in September to set the public hearing and set the maximum uh, proposed levy. Um, and then set the hearing for December. I think it's the 1st. Um, that's when um, people will have an opportunity to express their um, opinions and concerns about the budget. Um, the uh, proposed tax levy rate increase is 1.75%. The total increase in expenditures um, was about 12%. [38:14] **Mayor Wayne Boucher:** Thank you. Um, now we have general public discussion. Is there anyone that would like to address the council? I still have to say it three times. Do we have general public discussion? And last opportunity for public discussion? We have no motions. We have the consent agenda. Approval or correction of the August 4th, 2025 city council continuation minutes and accounts payable. Approved general city warrants from August 1st, 2025 through August 15, 2025 in the amount of $1,637,141.47. Do we have a motion relating to the consent agenda? [39:07] **Councilor Brian LeBlanc:** Move to approve. **Mayor Wayne Boucher:** Motion by Councilor LeBlanc to approve. Is there a second? **Councilor Andy Hjelle:** I'll second. **Mayor Wayne Boucher:** Second by Councilor Hjelle. Roll call, please. **City Clerk Alissa McClure:** Councilor LeBlanc? **Councilor Brian LeBlanc:** Aye. **City Clerk Alissa McClure:** Councilor Hjelle? **Councilor Andy Hjelle:** Aye. **City Clerk Alissa McClure:** Councilor Geissler? **Councilor John Geissler:** Aye. **City Clerk Alissa McClure:** Mayor Boucher? **Mayor Wayne Boucher:** Aye. We have no ordinances this evening. Resolutions. Resolution 2025-130, resolution approving wage rates for part-time employees in 2025. Do we have a motion relating to this resolution? [39:41] **Councilor Andy Hjelle:** Motion to approve. **Mayor Wayne Boucher:** Motion by Councilor Hjelle to approve. Second by Councilor Geissler? **Councilor John Geissler:** Second. **Mayor Wayne Boucher:** Mr. Mulder. **John Mulder (City Administrator):** Um, it's—this follows um, the um, negotiations with all of our various unions. Um, this is the same wage increase for the rest of those employees. We only have um, one part-time custodian and several—I want to say five, six or uh, six uh, public works uh, seasonal employees. [40:11] **Mayor Wayne Boucher:** Thank you. And this uh, wage increase is in line with the negotiations of the other units? **John Mulder (City Administrator):** Yes. **Mayor Wayne Boucher:** Thank you. Any questions or comments from council? Hearing none. Is there any public input on this resolution? Any public input on Resolution 2025-130? Any public input on the resolution approving wage rates for part-time employees in 2025? Roll call, please. **City Clerk Alissa McClure:** Councilor Hjelle? **Councilor Andy Hjelle:** Aye. **City Clerk Alissa McClure:** Councilor Geissler? **Councilor John Geissler:** Aye. **City Clerk Alissa McClure:** Councilor LeBlanc? **Councilor Brian LeBlanc:** Aye. **City Clerk Alissa McClure:** Mayor Boucher? **Mayor Wayne Boucher:** Aye. [41:08] **Mayor Wayne Boucher:** Resolution 2025-125. Resolution approving final pay request to Northland Constructors for road improvement district number 541 and 542 in the amount of $248,364.71. Is there a motion? **Councilor John Geissler:** I'll move to approve. **Mayor Wayne Boucher:** Motion by Councilor Geissler to approve. Do we have a second? **Councilor Brian LeBlanc:** I'll second. **Mayor Wayne Boucher:** Second by Councilor LeBlanc. Mr. Mulder. **John Mulder (City Administrator):** So this is for um, some compensating change orders where we had different um, um, volumes of different items where we changed those rates and and those amounts. They also did some additional—we asked that they do some additional work um, in terms of some of the um, road bed in terms of muck and um, top soils and things like that. Um, and then finally just they completed their punch list and we're releasing the final retainage. [41:50] **Mayor Wayne Boucher:** Thank you. Any questions or comments from council? **Councilor Andy Hjelle:** I did have one, well it's two-parter so I apologize. Um, we did have one gentleman in here during our public discussion on assessments talking about quality of the shouldering, claiming that they didn't use the proper material. There was material testing done on site during the project, correct? **John Mulder (City Administrator):** Yes. **Councilor Andy Hjelle:** Okay. Um, if any of the shoulders were to wash out, is there a warranty on the work done by Northland? And how long is it? **John Mulder (City Administrator):** Typically, we have a one-year warranty on all work. **Councilor Andy Hjelle:** Okay. I think we've done—we've got enough rain over the last couple months to test these shoulders. So, I'm assuming if they were going to wash out, they probably would have done so already. **John Mulder (City Administrator):** Yeah, we had a pretty hard rain on Saturday morning and then this afternoon was pretty hard as well. So, but we will—and we'll have public works go out and check that again. **Councilor Andy Hjelle:** Keep an eye on it for the next couple. [43:03] **Councilor John Geissler:** I just have two uh, comments. Uh, I was assured by Mr. B today in our phone call conversation that the project was put in per plans and specs. So, um, that satisfies me there. The other thing he told me is that there was some dollars that were spent to the contractor to repair some uh, uh, pedestals. I believe it's for fiber optics that were put in by a—a different contractor that wasn't contracted to the city but had the right to work in that right of way. But I guess I'd like us to go back and see if there's any way we could get that money recouped or did they have the right permits in place and access to that. So, if we could just do some followup on that. But I do understand why we would just want to pay Northland to uh, move on and and get that cleaned up. But if we could look into that further, it'd be great. **Councilor Andy Hjelle:** We at least bill a fiber optic company to make ourselves feel better about it. **Mayor Wayne Boucher:** Correct. Well, I—I do remember that the—the fiber optic installation was held up by the project and that they had to receive specific permission for each portion of the road from Northland before they could go in and do it. So, that was given by Northland at the time, but apparently they didn't restore things like— **John Mulder (City Administrator):** This is the first we—I've heard of—right, any problems with it. And the reason they didn't want them in there was because of problems like this. [44:16] **Mayor Wayne Boucher:** Any other questions or comments from council? Is there any public input on this resolution? Do we have any more public input on Resolution 2025-125? Last opportunity for public input on the final pay request to Northland Constructors. Roll call, please. **City Clerk Alissa McClure:** Councilor Geissler? **Councilor John Geissler:** Aye. **City Clerk Alissa McClure:** Councilor Hjelle? **Councilor Andy Hjelle:** Aye. **City Clerk Alissa McClure:** Councilor LeBlanc? **Councilor Brian LeBlanc:** Aye. **City Clerk Alissa McClure:** Mayor Boucher? **Mayor Wayne Boucher:** Aye. [44:47] **Mayor Wayne Boucher:** Next, we have a closed session. Motion to close the meeting of the Hermantown City Council pursuant to Minnesota statute section 13D.05, subdivision 3A, to discuss the city administrator's performance evaluation. Following this closed session, the Hermantown City Council will reconvene in an open session. Do we have a motion? **Councilor Andy Hjelle:** Can I ask a question first or is that not allowed? Do we want to table this until Joe's [Peterson] here? **Mayor Wayne Boucher:** That's up to you. We can have any kind of motion that anyone on the council wants to put forward. **Councilor John Geissler:** A motion that we go into closed session and have a—uh—start of a discussion and then follow up with a second round when Joe is back. **Councilor Brian LeBlanc:** I can second that. **Mayor Wayne Boucher:** Motion by Councilor Geissler, second by Councilor LeBlanc. Roll call, please. **City Clerk Alissa McClure:** Councilor Geissler? **Councilor John Geissler:** Aye. **City Clerk Alissa McClure:** Councilor Hjelle? **Councilor Andy Hjelle:** Aye. **City Clerk Alissa McClure:** Councilor LeBlanc? **Councilor Brian LeBlanc:** Aye. **City Clerk Alissa McClure:** Mayor Boucher? **Mayor Wayne Boucher:** Aye. Thank you.