NEW ULM — The 2020 preliminary New Ulm city tax levy will increase by less than 5%.

Tuesday, the New Ulm City Council set a preliminary budget and tax levy for 2020. The total levy is $8.09 million. Finance Director Nicole Jorgensen said the city was projecting a total levy increase of $398,198 or 5.18%.

Councilor Les Schultz said it was his goal to keep the levy increase under 5%.

Jorgensen said for every $77,000 removed from the budget, the tax levy was reduced by roughly 1%. She recommended using fund balance to cover items in the budget.

Council President Charlie Schmitz said there was enough in the city’s fund balance account to fund the remaining Hermann Heights Hillside improvements without hurting New Ulm’s bond rating.

The Hermann Heights Hillside project was funded from multiple sources. Only $70,000 was to be funded by the levy. By covering this expense with money from the fund balance the tax levy is reduced by approximately 0.91%. Jorgensen estimated the change brought the levy increase to 4.27%, but this was not a final estimate.

Schultz made a motion that the preliminary budget is not to exceed a 5% increase.

The council is not approving the final 2020 budget and tax levy until December. The preliminary budget is set to establish a maximum levy amount for next year. Between setting the preliminary levy and the end of the year, the city can choose to lower the tax levy but cannot increase it.

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The council approved two Federal Emergency Management Association (FEMA) grant applications related to seasonal flooding. The first was a FEMA Flood Mitigation Grant and the second was a FEMA Pre-Disaster Mitigation Grant. Both grants would help New Ulm place a lift-station on 18th South Street.

During flooding events, the city has used large pumps to handle the excess water. If the pumps were to fail, the city would see significant damage to public infrastructure and privately owned homes. Two of these pumps were almost lost last year during excess rain events.

If approved for this grant, the city could build a lift station on 18th South. Both grants are approximately $1 million with a 25 matching component from either the state or city.

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The city agreed to support a resolution to continue with planning for the Minnesota River State Trail. The Minnesota River State Trail is a legislatively authorized state trail. When complete the trail will connect Big Stone Lake Park to Le Sueur. In Le Sueur, the trail will connect to the Minnesota Valley State Trail.

The DNR is focusing on planning efforts on the area between New Ulm and Nicollet. The most suitable locations in the corridor area on the south side of new expanded U.S. State Highway 14. Passing this resolution will allow for more detailed trail planning from the DNR and DOT.

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A request to fund the New Ulm Chamber of Commerce Retail Economic Development Coordinator (REDC) failed to move forward with a split council.

The Chamber requested $45,000 to fund a REDC position. According to the job description, the REDC would coordinate with local city government departments to promote, align and develop new retail segments within the New Ulm area. REDC would also work to maintain existing retailers by providing up to date economic conditions, regional development initiatives and align with member needs.

City Manager Chris Dalton said the position would mostly revolve around economic development. He recommended approving the funding to have two individuals in the city working on economic development.

Councilor David Christian said he was not sold on this position because the city already has a Retail Strategy group and Assistant City Manager Audra Shaneman working on economic development.

Dalton said Retail Strategy is focusing on recruitment and is not working on current businesses and entrepreneurs in the city. Shaneman’s position is focused on the industrial side of economic development. The REDC would focus on retail.

Chamber President Michael Looft said the city needed a person in the community to work with entrepreneurs.

Councilor Les Schultz supported funding this position. He said New Ulm needed to retain businesses and fill empty retail spaces.

Councilor Larry Mack wanted to wait before hiring another economic development position. He said the current arrangement with Retail Strategy and Shaneman as acting Assistant City Manager/Economic Development has only been in place a year.

Schultz said this is not a new position, it already exists and it does not need to be funded at the full $45,000.

Mack said it was a two-year temporary position the city funds for 10 years. He was not sure if the position should be funded without more on current economic development efforts.

Schultz made a motion to table funding with a second from Christian. Schultz and Christian both approved tabling, but Schmitz and Mack voted no. Councilor Lisa Fischer was absent. With a two-two split, the motion dies.

Rezone Request Denied

The council denied a petition from Arlyn and Susan Boddy to rezone and amend the comprehensive plan to allow the construction of a single-family home at 1703 S. Minnesota St., but will review zoning in this area.

Community Development Director David Schnobrich said this petition could only be approved if there was an error in the zoning plan or if the rezoning addressed a need arising from the changing condition. Schnobrich said this request did not meet either requirement.

He said the purpose of the request was to rezone a single lot allowing the Boddys’ to place a home near storage properties they own. This would change a single industrial lot into a residential property.

City staff described this as “spot zoning” and the approval could set a precedent that could make it difficult to manage land use in the city.

City Attorney Roger Hippert said legally he would have difficulty defending the decision to approve this petition.

City Councilor Larry Mack said at this time he would vote to deny the petition, but suggested staff review zoning changes for the area.

“I don’t see that area being a major industrial park,” he said.

The other councilors agreed staff should review this area for zoning changes, but the request needed to be denied until zoning regulations were changed.

Arlyn Boddy argued his request did meet the changing condition requirements to rezone. He said the land was previously used as a brick and tile yard but is now private use storage.

“To me, that is a huge, drastic difference in the usage of the land,” he said. “There is no way you are going to get an industrial business to come in here and come anywhere close to the lot I am proposing to bid on.”

Boddy added either he or his father owns the adjacent property, meaning no property adjoining it would be available. There is also a residential property directly across Minnesota Street from this lot.

Boddy pointed to North Minnesota Street where storage lots were located next to residential areas, arguing that spot zoning had happened in the town already.

Councilor Les Schultz said the council was willing to support the rezoning, but the city needed to go through the correct process to avoid violating the law.

Mack made the motion to deny the permit with the condition staff would report back on rezoning for discussion within 60 days.

Oktoberfest Alley and Street closures

The council approved requests to close the alley adjacent to the B&L Bar and both sides of Center Street from Minnesota Street to Broadway during the two Saturdays during Oktoberfest with the condition security be hired to ensure alcohol remained in the approved areas. The requests came from the B&L Bar and the Chamber of Commerce.

City Manager Chris Dalton said these were both annual requests, but the condition mandating security at the barricades was new.

City Attorney Roger Hippert said last year visitors to the B&L and Center street were walking all of Minnesota Street with alcohol, which is against law.

“Both applicants have to understand this,” he said. “You can’t just sell the drinks and watch these people leave. It is illegal.”

Hippert said state law does not allow for a free-for-all with alcohol between permitted areas. Part of the issue is responsibility. If alcohol was permitted on all of Minnesota Street it would be impossible to hold any seller responsible in the event alcohol was sold to a minor.

Councilor David Christian suggested security should not be volunteers but hire professional security.

The council approved both requests with the condition security be hired to monitor alcohol remained in the established boundaries.