The most newsworthy item of the meeting was the establishment of Tax Increment Financing (TIF) District Number 1-26. This new district is aimed at facilitating the development of approximately 50 housing units in the North Industrial Park, known as the PNY project. Mike Bubani, representing the development team, outlined key details of the project during a public hearing. The housing project will allocate 20% of its units to meet the 50% Area Median Income (AMI) requirements and include five units accepting federal housing assistance through Section 8 vouchers. This represents a first for the partnership group involved in the project.

The TIF district is structured as a pay-as-you-go district with a budget of approximately $1.01 million and is expected to last around 12 years. Bubani emphasized that the financing structure is similar to other housing TIF districts in St. Peter, providing a financial safety net for the city, as the city will not bear financial liability if the developer fails to pay taxes.

In addition, the council discussed amendments to the boundaries of the existing TIF District 1-23 to facilitate the new district’s establishment. Clarifications were provided to address concerns about the perception of giving away tax money through TIF districts, with explanations that TIF mechanisms are designed to be tax neutral and stimulate development that would not otherwise occur. The council approved the resolution amending the boundaries with unanimous support.

Another topic was the approval of the 2023 audit findings presented by Jim Ikon from MMKR, the auditing firm. Ikon provided an overview of the audit process, which included examining internal controls, compliance with laws and regulations, and a single audit of federal awards due to the city’s expenditure exceeding $750,000 in federal revenue. The audit identified several findings, including financial statement adjustments not recognized by city management, segregation of duties within the finance staff, collateralization of bank deposits, and issues related to withholding affidavits from contractors.

The audit also revealed completeness issues in the schedule of federal awards, emphasizing the importance of accurate reporting. Despite these findings, the audit reported positive financial results for the city, with market values increasing over time and the average tax rate declining in 2023. The council unanimously approved the resolution accepting the 2023 financial statements.

The council also tackled various infrastructure improvement projects, including the Klein Street and Cullen Street improvements. A public hearing on Klein Street improvements, related to the development of a Minnesota Department of Transportation (DOT) truck station, was held, confirming compliance with Minnesota State Statute 429 for assessments. The resolution authorizing the project was later approved unanimously.

The council further discussed and approved a resolution for the 2024 Klein Street improvements, with documentation indicating that the contract had already been awarded. Attention then turned to the Cullen Street improvements, with the council confirming that they were the sole landowners being assessed for the project. The resolution for Cullen Street improvements was also approved unanimously.

Additionally, the council authorized awarding the bid for the 2024 Cullen Street improvements from Esler Drive to north of Clark Street to Northwest Asphalt for nearly $1.2 million, below the engineer’s estimate. The project, part of a residential development initiative, will proceed in two phases, factoring in winter conditions. The council expressed satisfaction with the competitive bidding process, with ten bids received.

Discussions during the meeting also highlighted the city’s financial performance related to the general fund and enterprise funds. The general fund equity position improved by approximately $86,000 in 2023, with a reported fund balance of $4.5 million, aligning with the city council’s fund balance policy. Graphs presented during the meeting illustrated various aspects of the city’s financials, including increasing property tax revenue and public safety expenditures.

The council also reviewed the city’s outstanding debt and enterprise funds, noting concerns about the environmental services fund but commending the new policy to monitor equity positions in these funds. The resolution accepting the financial statements, which received a clean audit opinion, was approved unanimously.

In new business, the council approved a revised job description for a Wastewater laboratory technician to better align with the actual duties and responsibilities, facilitating the recruitment of suitable candidates. The council also reviewed updates on the Safe Routes to School initiative, electric incentive programs, and guidelines for political signage ahead of the upcoming election season.