City officials discuss ‘state of New Ulm’
NEW ULM – A “state of the city” event was held at the New Ulm Country Club Friday, as part of the Hot Topic Breakfast series sponsored by the Chamber of Commerce.
The “state of the city” address included updates on city projects from city officials.
City Manager Brian Gramentz spoke first on New Ulm’s growth over the last few years.
According to the 2010 Census, the population of New Ulm decreased slightly, but Gramentz explained this decrease is related to enrollment at Martin Luther College. Once MLC is taken out of the equation, the permanent population increased, he said.
Evidence of this increase is shown in the number of building permit requests. In the last seven years, New Ulm has experienced a sharp increase in building permit values. In 2007, building permits were at $17,830,713. By 2013, this figure has risen to $35,122,547.
Gramentz acknowledged home values dropped due to the economic recession in 2008, but said market value has been on the rise since 2011.
In terms of bonding, Gramentz commented New Ulm could not be in a better position. Currently New Ulm has an Aa2 Bond rating which is typically reserved for larger cities similar to Mankato. To achieve a higher ranking, New Ulm would need to grow by an additional 10,000 people. Gramentz cites New Ulm’s tax base, stable financial profile, ample reserves and conservative management team as key reasons for the high credit rating.
“In that respect, we are really fiscally sound,” said Gramentz.
On the downside, New Ulm is limited by high fixed costs. Gramentz estimated $11 million of New Ulm’s 2014 budget is dedicated to labor and benefits. This leaves $7,780,265 to cover additional costs. The annual budget does not allow for easy cuts. Gramentz said if government aid was cut, New Ulm would likely need to borrow from city reserves.
Gramentz closed with a survey of public services. The survey results show an overall positive score. The complete survey results are available on the city web site.
City Engineer Steve Koehler gave an update on utility infrastructure and 2014 construction projects. Koehler commented that 2014 had more activity than average years. The combined cost of city and public utility projects totals $14,803,646.
The Utility Department currently maintains 79 miles of water mains, 74 miles of sanitary sewers, 68 miles of storm sewers and 82 miles of paved road surfaces. Koehler further indicated that a third of the 82 miles of roads is in need of replacement.
The cost for 2014 utility, street and alley improvement projects is estimated at $3 million. The largest project scheduled is the utility and road reconstruction of Franklin Street, from 6th Street to 10th Street South. Similar road projects are scheduled for 12th North, Garden, 2nd North, Linden and 3rd North Streets. Koehler explained that, in addition to the road reconstruction, new mid-walk crossings and new bike lanes will be added near Vogel Arena.
Capital improvement plans include upgrades to North Highland Avenue and bridge repairs on 20th South Street. The total cost for capital projects is estimated at $3,405,075. Airport improvements will add another $2,654,265. The total of 2014 capital improvements is estimated at $9,814,646.
Koehler explained that $4,510,000 of the cost would come from local funds, while approximately $5,300,000 would come from a combination of federal and state funding.
Public utility projects are expected to total $4,989,000. Projects will include work on electric distribution, water and steam, and facilities. Half the funding will come from utility rates and cash reserves, while the remaining half will come from bonding.
Park & Rec
The update closed with a review from Park and Recreation Director Tom Schmitz.
New Ulm’s Park & Rec system consistently ranks in the top five of 853 municipalities in Minnesota in per capita spending. In total, Parks & Rec is responsible for 42 park units and 319 acres valued at $50 million. The department also maintains 52 buildings and structures.
Revenue for the department comes equally from three sources: user fees, property taxes and state local government aid.
Schmitz stated his department’s philosophy was to maintain and repair. The department will continue to partner with other communities and the private sector. Donations and volunteering are also strongly encouraged.
Schmitz acknowledged that future development ideas were being examined, but would not be implemented without proper funding. Future sources of funding could include a half percent local sales tax.
The city update was followed by a short question-and-answer session.
Concerns were raised about airport development projects. Koehler explained the federal system covers 95 percent of costs to insure the airport is properly maintained. Much of the information is available at the Minnesota Department of Transportation aeronautics web site.
Other questions pertained to the city comprehensive plan. Gramentz estimated that a new plan would be developed in the next couple of years. The previous plan was developed in 2007. Gramentz added that changes to the plan would be influenced by expansion. New businesses continue to open in New Ulm, bringing new jobs. “Things are always changing that you don’t hear about,” said Gramentz.
Gramentz closed the session saying, if anyone has additional questions, “you know where I work.”