Mayor Dr. Donald Hainlen announced that he would be submitting a notice of resignation to be effective March 25, due to his house being sold and his move out of the area.

Clerk Joel Young informed the council of the order of succession, which would have the vice-mayor step in as mayor and the council would make an appointment for the vacant council seat. He mentioned that how the succession will take place will depend on what the council decides.

Hainlen shared that he has enjoyed being mayor in the time he has been here and has really enjoyed the community.

Audit report

The council heard an annual audit report summary from Jason Boynton from Smith Schafer & Associates, LTD. Boynton pointed out that the audit opinion was unqualified this year, which meant there were no issues in doing the audit. He also showed Chatfield had no exceptions when it came to being compliant with Minnesota statutes. In a management letter, Boynton shared that due to the city's limited personnel, they would have a tougher time segregating accounting duties, which is typical of a community Chatfield's size.

"The audit went very well, and we didn't have any real issues," shared Boynton.

In the report, Boynton showed that the city's tax capacity appeared lower in 2012 than in 2011, but that shrinking was due to changes the state had enacted in calculating tax capacity. If the tax capacity grows, this means the city is growing and Boynton showed that in the past 10 years, Chatfield has been growing. Revenue from property tax levy collections increased from 2011 to 2012 and was considered the largest source of revenue for the city. Boynton shared that the increase correlated with the city's growth. Collections totaled a little less than $9,000 over what had been levied for, due to delinquent collections that came in 2012.

Tax increment (TIF) revenue increased slightly from 2011, and is usually impacted by property tax rates set by the state. Local Government Aid stayed roughly the same since 2010, which has increased the gap between state and local funding. The city has had to make up funds not coming through LGA in their General Property Tax Levy. Boynton shared that this same problem is being seen throughout the state.

In expenditures, the city spent an 8 percent increase over 2011 for a total of $517,401 in general government costs. The city was under budget by $2,594. Public works spending saw a decrease of $86,661 from 2011 for a total of $413,668.

In a report on city reserves, it was shown that the unreserved general fund balance equaled 62 percent of the general fund property tax levy and LGA projected in 2013. The ideal range for the city is between 40 percent to 60 percent. Boynton pointed out that payments are being made on any debt the city has.

Rochester Sales Tax Distribution

Young updated the council on the Rochester Sales Tax Distribution bill that would allocate $5 million from the Rochester sales tax collections to a certain number of designated cities near Rochester. The legislation had named 17 cities, which would receive the funds.

He mentioned that some cities were left out and are seeking help from already approved cities to get into the legislation. The money would be distributed on a per capita basis, so the more cities put into the bill, the less money Chatfield would receive.

Young said the city isn't in a position to comment on the situation one way or another. City attorney Frederick S. Suhler said the whole situation is getting messy with several pieces of legislation out there and cities getting worried that they will be forgotten.

"You have cities running around now saying you have to give me some of your money because I didn't have as good a friend in the Legislature as you did," Suhler said.

Young agreed that nobody likes the position cities are in right now and proposed that the city send a letter saying they can't make a statement either way.

"I think this is a political hot potato," stated Hainlen. "We weren't sitting at the table when the original planning came out. We don't know the original intent."

The money would need to be spent for economic development. Suhler said there was an attempt at one point to take cities out of the legislation that didn't have an economic development authority.

"Some cities don't have an EDA. Does that mean they aren't serious about economic development?" he asked adding, "Maybe they just don't have the resources."

He also mentioned that because of the confusion, nobody knows when the money would actually be distributed. Young mentioned they are planning on doing it in late July of this year.

Councilman Paul Novotny said if the city got any money, it would be a gift. "Hopefully it doesn't get mixed up in too much government," he said.

Other business

In other matters, the council handled the following issues.

• The council authorized the advertisement for bids for the 2013 Street Project. The project is to overlay three blocks on each side of Main Street on 4th, 5th and 6th streets. There would also be sidewalk, curb and gutter, and handicap ramp improvements.

• It was reported that Craig Manahan and CCTV received a plaque from the Wrestling Coaches Association of Minnesota for coverage of Chatfield High School's participation in the State Wrestling Tournament.

• The council approved a resolution to close an accounting fund. Young said this normally happens after an audit. The 1997 G.O. Water Revenue Bond Fund is no longer in use, but still has money in it. The council approved $48,770 to be transferred into the Water Infrastructure Fund and $16,257 into the Sewer Infrastructure Fund.

Committee of the Whole

In a two-part meeting on March 11, the Chatfield Committee of the Whole met and heard presentations from city engineer David Morrill as well as the Chatfield Center for the Arts.

Morrill spoke about city infrastructure and capital improvement projects. He brought up what he called a "semi-urgent" issue in the future work to be done on Highway 52. Morrill stated the city did not know if that work would commence in 2016 or later.

"We want to prepare either way," he shared with the committee. Morrill also went through plans for the Twiford street improvement area. He showed two areas where Twiford could be moved, but noted that it would affect the sewer line to be placed there.

"Wherever we pin the street down, that's where we would put it," Morrill shared.

There was also discussion on the new Kwik Trip and the impact it will have on nearby utilities, which would have to be extended. There were also several comments on how pedestrian crossings would line up with it. Mayor Hainlen said there would be an increase in pedestrian traffic, especially from the high school, which meant the city had to look at other safety measures.

The committee of the whole also heard a presentation from the Chatfield Center for the Arts (CCA). It focused on showing the committee why the CCA is a significant asset to the community. The meeting was held in the American Legion room where the Chosen Bean Concert series and other programming are held. Currently, all renovations done at the CCA are handled by volunteers. This has led to the restoration of the American Legion room, Potter Auditorium, and the Old Gym.

It was stressed that many of the visiting musical artists have enjoyed the opportunity to perform at the CCA and many have made a return visit, such as Billy Dean, who visited on Jan. 18.

Councilman Pederson mentioned that it seemed like the CCA would need a full-time director if the programming continues to expand.

Hainlen stated that he has heard of some people who have a good time at the events, but then don't know what to do afterward. Packaging the CCA events with other things Chatfield has to offer, was considered to be a must.

Testimony was shared by local business owners as to the bump in business they experience whenever there is a concert. Sustainability through grants, donations, and state support were highlighted as the keys to improve and increase programming as well as further renovate the building.