HomeMy WebLinkAbout2025-4-16 City Council Meeting Minutes
COTTAGE GROVE CITY COUNCIL April 16, 2025
12800 RAVINE PARKWAY SOUTH
COTTAGE GROVE, MN 55016
COUNCIL CHAMBER - 7:00 P.M
1. CALL TO ORDER
The City Council of the City of Cottage Grove, Washington County, Minnesota, held a regular meeting on
April 16, 2025, at Cottage Grove City Hall, 12800 Ravine Parkway. Mayor Bailey called the meeting to order at
7:00 p.m.
2. PLEDGE OF ALLEGIANCE
The audience, staff, and City Council Members stood and recited the Pledge of Allegiance.
3. ROLL CALL
City Clerk Tammy Anderson called the roll: Mayor Bailey-Here; Council Member Clausen-Here; Council Member Garza-Here; Council Member Olsen-Here; Council Member Thiede-Here.
Also present: Jennifer Levitt, City Administrator; Tammy Anderson, City Clerk; Ryan Burfeind, Public Works Director; Zac Dockter, Parks and Recreation Director; Pete Koerner, Public
Safety Director; Korine Land, City Attorney-LeVander, Gillen & Miller, PA; Gretchen Larson, Economic Development Director; Brenda Malinowski, Finance Director; Emily Schmitz, Community
Development Director; Sam Pierret, Senior Planner; Jon Pritchard, Fire Chief; Phil Jents, Communication Manager; Greg Rinzel, Public Safety Captain.
4. OPEN FORUM
Mayor Bailey opened the Open Forum. As no one wished to address the Council, Mayor Bailey closed the Open Forum.
5. ADOPTION OF AGENDA
Motion by Council Member Olsen to adopt the agenda; second by Council Member Thiede. Motion carried: 5-0.
6. PRESENTATIONS
Spring Cleanup Presentation
Staff Recommendation: Receive Public Works Spring Cleanup Presentation.
Mayor Bailey said our Public Works Director, Ryan Burfeind, will speak about this year’s Public Works Spring Cleanup, and welcomed Ryan.
Director Burfeind said thank you, Mayor, and Members of the Council. You also have the flyer in front of you tonight, so on Saturday, May 3, always the first Saturday in May, we
have a Spring Cleanup; I’m here a little early talking about it because we won’t have a Council Meeting until May 7. It’s real similar to other years, down at the Public Works facility
on West Point Douglas Road, right across Highway 61 from Target. We take all manner of
things for you, either trash or recycling, and also other things like shredding that we do there. It’s been several years, but I still like to mention the Hazardous Waste component,
that went away four years ago now when Washington County doesn’t come there anymore; they look for folks to go to the Environmental Center in Woodbury, so that is something that we
do not accept. Everything’s on the screen here that we do accept, and prices are very similar to last year, we’re able to maintain those as we have good vendors that we work with to
do that. I always like to mention that a lot of people like to come early, so, we’ll have a line all the way down to the roundabout early on; I think people like to get about their
day, but if you do want to come later, it’s a lot quieter, so I’d say by 10:00 or 11:00 a.m. the line has kind of worked its way through, and you can probably get through in 10 or 20
minutes after 11:00 a.m. That’s just something I like to mention, and we are there, rain or shine, and I’m hoping it’s more shine this year because last year it was about 40 degrees
and raining the entire day. Some of the guys who have worked in Public Works for over 30 years said it was probably their coldest event that they’ve ever worked, but we were there the
whole day and we made it work. So, yeah, come on down and bring your items.
Director Burfeind asked if there were any questions; none were asked.
Mayor Bailey said the only thing I’ll just mention, Ryan, is I think it’s pretty awesome that yeah, there are some fees for most items, but they’re small; for example, for a car
battery, it’s free, and pretty much anything electronic, including microwave ovens or old TVs or such, and the only reason I’m bringing this up is the one thing we don’t want to see
is those out on the side of the garage or out in the back yard or something like that just collecting dust, so to speak. So, use this opportunity to kind of clean out your garage or
the areas around your yard.
Arbor Day Proclamation
Staff Recommendation: Proclaim Friday, April 25, 2025, as Arbor Day in the City of Cottage Grove.
Director Burfeind said next week is Arbor Day, not just in Cottage Grove, but across the United States. So, we’re talking about all those events we have for our 2025 Arbor Day celebration.
It is actually an internationally recognized event, and we’re really promoting the planting of trees, conservation, reforestation, both protecting everything that we have and planting
new trees, both of those are a big part of what we do.
First is a volunteer tree planting event that we do each year: It will be next Tuesday, April 22, starting at 1:00 p.m., and it’s in that trailway corridor, so that’s the corridor
where we’ve got the overhead power lines with a trail; it won’t be under the power lines because we can’t plant trees there, but near Imperial Street where it crosses through, that’s
where we’ll be doing the planting event.
We also have a tree giveaway that we keep doing, that’s always been extremely popular, and the way we started doing it during COVID really stuck, and we’re continuing to do that.
So, it’s a drawing, it’s out there on social media, there’s a QR Code I know that people can use to put their name in the drawing for a bareroot tree through next Wednesday, April 23,
at 8:00 a.m. We have 100 trees that we’re giving away, and I think we usually get like 1,000 or more people entering, so I’d definitely put your name in and see if you can be the lucky
one to get a tree. We actually deliver the trees to the homes at 7:00 a.m. and 12:00 p.m. on April 25, which is Arbor Day. So, that’s always a great event.
When you think about kind of maintaining what we have, maintaining our forest, we’ll do a buckthorn pickup. So, if you have buckthorn on your property and you remove it and bring
it out to the edge of the Right-of-Way or the back of the curb, depending on what your street is like, we will pick it up for you next week. So, we do like to have folks call that in
by Friday, April 18, so we can plan to do that pickup throughout the week next week.
With that, I do have the Arbor Day proclamation on the screen, and I’ll stand for any questions.
Mayor Bailey said I’m going to ask one weird kind of question: Do you know what kind of trees we’re giving away?
Director Burfeind replied I should probably know that, and I couldn’t tell you off the top of my head, but that’s probably a smart thing to know. He asked if someone else knew.
Council Member Olsen said I do believe they’re more of an ornamental tree. Didn’t you put it out on Facebook, though?
Someone said Blue Beech and Admiration Oak; Council Member Olsen said both of those sound absolutely fabulous, thank you.
Mayor Bailey thanked Ryan for the presentation, and he asked Council Member Thiede if he would go ahead and read the Arbor Day Proclamation.
Council Member Thiede replied I’d love to and proceeded to read aloud the Arbor Day Proclamation.
Motion by Council Member Thiede to proclaim Friday, April 25, 2025, as Arbor Day in the City of Cottage Grove; second by Council Member Clausen. Motion carried: 5-0.
7. CONSENT AGENDA
A. Receive the response to the City Council Open Forum inquiry on April 2, 2025.
B. Approve the February 11, 2025, Economic Development and Convention & Visitors Bureau Joint
Meeting Minutes.
C. Approve the issuance of rental licenses to the properties listed in the attached table.
D. Staff recommends the approval to implement this policy and establish governance structures that
align AI deployment with public trust and City values.
E. Receive information on the General Fund as of December 31, 2024.
F. Adopt Resolution 2025-57, 2024 Budget Revisions.
G. Approve Resolution 2025-56, Approving interfund transfers and closing funds.
H. Approve Resolution 2025-055, Authorizing Write-offs of the EMS accounts receivable of $4,742,890.
I. Adopt Resolution 2025-58, authorizing the abatement of a Tall Weed Certification in the amount of
$334.81 for Parcel Identification Number 17.027.21.41.0063.
J. Approve the 2025 Grant Agreement for Municipal Recycling Grant Distribution in the amount of
$59,016.00.
K. Approve the one-year rental agreement with Midwest Machinery for a track loader for the amount of
$12,000.
L. Authorize Resolution 2025-59 awarding the City Hall Fountain Renovation Project to Superior
Landscape and Irrigation in the amount of $14,877.63, and authorize the service agreement between
Superior Landscape and Irrigation and the City of Cottage Grove.
M. Adopt Resolution 2025-062 amending the scope of the 80th Street Reconstruction Project feasibility
report to include East Point Douglas Road from 80th Street to the three-way intersection of East Point
Douglas Road.
N. Accept the Maxfield Research Comprehensive Housing Needs Study.
O. 1) Adopt Resolution 2025-060 approving the amended Final Plat for Prairie Dunes. 2) Approve the
First Amendment to the Prairie Dunes Development Agreement with Pulte Homes of Minnesota, LLC,
and DRP Multistate P, LLC, with minor modifications as approved by the City Attorney.
P. 1) Adopt Ordinance No. 1100 amending Title 11, Zoning Regulations. 2) Adopt Ordinance No. 1098
amending Title 12, Sign Regulations. 3) Adopt Ordinance No. 1099 amending Title 3, Business and
License Regulations.
Q. Declare surplus for fixed assets Belden Park (#100778) and Hardwood Park (#100781) and authorize
disposal services agreement with Kids Around the World.
R. Adopt Resolution 2025-064 approving the plans and specifications and authorize bidding for the
Oltman Park Project.
S. 1) Approve the Residential Smart Irrigation Controller Program Cooperative Agreement with SWWD.
2) Approve the work order from Water in Motion. 3) Approve the expenditures from the Water Utility
Fund of up to $96,000 to supplement the SWWD contribution of $4,000 for the implementation of the
2025 Water Conservation Program.
T. Approve the Agreement for Contractor Services and the Memorandum of Understanding and
appropriate officials are hereby authorized to sign all necessary documents to effectuate these
actions.
U. Approve Agreement for Professional Services with Eckberg Lammers to create a Crisis
Communications Plan for the City of Cottage Grove.
V. Accept the Marathon Community Investment Programs grant in the amount of $8,900.
W. Approve the Hotel Leakage Study by HVC, LLC in an amount not to exceed $13,300, plus approved
expenses. Funding is approved and will come from the Economic Development budget.
Council Member Clausen wished to pull Item S, 2025 Water Conservation Program, SWWD Cooperative Agreement, and Water in Motion Work Order; Council Member Olsen wished to pull Item M,
80th Street Feasibility Report Scope Amendment; and Mayor Bailey pulled Item H, 2024 Ambulance Write-offs, for further discussion and/or approval.
Council Member Clausen said thanks, just very briefly, I just wanted to mention the City works in cooperation with the South Washington County Watershed District for a program every
year, and one of the main things that we do is we help fund Smart irrigation controllers. That program is used every year and offers at reduced cost Smart irrigation controllers; I
know when I installed mine, I saved thousands of gallons of water a year, and I want to especially reach out to anybody who’s watching from HOAs. HOAs and businesses can take advantage
of that and see what we can do and work with the South Washington County Watershed District to try to save some water.
Mayor Bailey replied there you go, and I also years ago got mine, and it definitely makes a difference, it’s very good.
Council Member Olsen said thank you, mayor. I’m going to ask Director Burfeind from our Public Works team to step back up to the podium, if he doesn’t mind. This is a bit of an update
in what we’re doing with the 80th Street Reconstruction Project, and I think it’s important for people to understand not only what, but why, because this is really a big thing, and
it’s really going to benefit a lot of people. He asked Director Burfeind if he could take a few minutes and walk us through the change, please, Ryan.
Director Burfeind replied certainly. So, originally, in 2025, we had the 80th Street Reconstruction from Highway 61 to Ideal, that was that last stretch of 80th that we did, then
we also had East Point Douglas Road, from Jamaica all the way up to well, where it makes the turn and then goes by Hy-Vee. As we talked at last year’s Capital Improvement Plan (CIP),
that was too much work in that area, so we moved East Point Douglas out to 2027; but that section of East Point Douglas that goes by Hy-Vee, just south of 80th Street down to that three-way
stop kind of by Arby’s, that we really do need to have done in 2026. There’s just an efficiency, all those signals kind of interact together, but one of the things we’re really working
to do is right now, when you are going westbound on 80th Street, and you go south on East Point Douglas, a lane drops when you go to Hy-Vee. That’s just what we had to do in 2017 with
all the reconstruction, but we want to expand that: We want to have two through lanes and two left-turn lanes in, but with that, we have to do all that work at the same time. The feasibility
report that Council initially authorized was specifically for 80th Street only, from Highway 61 to Ideal; so, we’re just expanding that scope of the feasibility study a little bit to
make sure we’re including that section of East Point Douglas because that will be part of that overall project now and bid as one project.
Council Member Olsen said wonderful, and I think you get an economy of scale when you kind of do things like that, and the opportunity presented itself, and we took advantage of
it. It certainly will make life a little easier for residents who use that intersection, which pretty much everybody who lives in town does. So, I appreciate the update, I think it’s
a really wise decision, and I’m grateful that you made the call to do that. Thank you.
Mayor Bailey said the last item, I just wanted to bring it up to the public, just for a heads up: So, every year, as I think most people realize, the City of Cottage Grove runs the ambulance
service. So, we obviously make a point to have fantastic service, which we do, with a full array of tools, if you will, in the event that somebody’s having a heart attack or something’s
going on. One of the challenges, though, that we’re having and have had for the last I don't know how many years, is we end up having to write off a bunch of the ambulance bills, the
accounts that we cannot get money back from. One of the big challenges that I will share with you is Medicare and Medicaid have a cap, it doesn’t matter how much money it cost anybody,
whether it’s our ambulance service or somebody else’s, it doesn’t allow us to charge any more than a very specific number; frankly, it’s like pennies on the dollar, it’s just really
ridiculous to be honest with you. We had been hoping that there was a study being done, federally, to relook at that formula because of the issue that I’m going to bring up to you,
about writing off ambulance bills, is
happening nationwide. This is not just a Cottage Grove issue. But what I wanted to do is bring up to the public that as we run our own ambulance service, the amount of money that we
will be approving to write off this evening, is $4,742,890; and a big chunk of that is because of the amount of Medicare or Medicaid write-offs that we cannot go back after anybody
to get that money back. Because the federal government was looking at doing a study, we were kind of hoping in a year or so that we can kind of keep things moving along and do the best
we can with that big number; but with all the changes that are happening in Washington, D.C. right now, that study that they were doing has been stopped. So, what we have been doing
is we as a City now are starting to reach out to our neighboring cities, as we have their coverage area, so currently, we are managing those areas. I thought I would just share with
the public that when I mention the $4,742,890, $1,359,000 of that is what we’re paying for as taxpayers of Cottage Grove, are expenses from those surrounding communities. For example,
Newport’s cost to us for write-offs is $567,000, St. Paul Park is $650,000, and Grey Cloud Township is $142,000. You might go, oh, my gosh, this is just ridiculous, and I agree, it
is ridiculous, but I also wanted to say that we’re having conversations now with the mayors and staffs of those communities. So far, I would just say that two of the three communities
have been very receptive in helping, not necessarily this whole dollar amount, especially not right now, but at least to help cover some of the losses, if you will, that we’re taking
in our ambulance service. I know this Council is very adamant about getting a program together with our surrounding communities to help pay for those costs that are being borne by the
citizens of Cottage Grove in their taxes, for those other cities around us to be able to fund some of that, if not eventually maybe all of it. There are a couple other options that
we can look at as a City when it comes to divvying out different cities to a different ambulance service if they’re not willing to work with us; hopefully, that won’t be the case, but
that is an option that the Council would have the ability to do at some point in time. As I mentioned, two of the cities we’ve had meetings with so far have been very receptive and
understand the excellent service that Cottage Grove provides. Lastly, I’ll just share if we were to generally say we were going to cut off a city, so to speak, and give it to another
ambulance service, the response time getting to an incident from an ambulance service that’s not from Cottage Grove, is 20-to-30 minutes; and that might not necessarily have all the
bells and whistles of the things that we do in lifesaving measures within our ambulance service. So, I want to bring it up to the public because we’re starting this conversation, and
you may hear more about that, especially as we’re getting into the budget cycles and such. If you have questions, you can obviously reach out to myself or one of our staff members.
Brenda Malinowski, our Finance Director, does an excellent job of tracking all the numbers and being able to literally give me these numbers tonight so I could share with you. We’re
just working to make sure that everybody is helping I’ll say pay their fair share as we go forward.
Motion by Council Member Olsen to approve the Consent Agenda; second by Council Member Garza.
Motion carried: 5-0.
8. APPROVE DISBURSEMENTS
Approve disbursements for the period of 3-28-2025 through 4-10-2025 in the amount of
$2,067,537.18.
Motion by Council Member Garza to approve disbursements; second by Council Member Thiede.
Motion carried: 5-0.
9. PUBLIC HEARINGS - None.
10. BID AWARDS
2025 Denzer Park Project - Reject All Bids
Staff Recommendation: Adopt Resolution 2025-063, rejecting all bids submitted for the 2025 Denzer Park Project.
Director Burfeind said thank you, Mr. Mayor and Members of the Council, so we took bids on March 25, 2025, for this project, as the Council had approved plans and authorized bidding
back on March 5.
Just a real quick discussion on where this park was, so this is down on the southwest corner of Cottage Grove, you can see it labeled here, just east of where we had that 40-acre
Zywiec parcel where we realigned 103rd Street and Hadley Avenue last year. A couple things to call out, and of course, we’re here talking about the rejection of bids that was discussed
at the last Council Meeting, at the workshop, with specifically here, one of the major considerations was the Norhart property, where they actually had their permit in and withdrew
that. Really, when you looked up the park dedication fees that was really going to have the funding source for this park, also the immediate use, right? You had that high-density product
that was going to be using this park. There is some additional single-family residential to the south, Prairie Dunes, that’s really just getting under construction, but you won’t have
really any people living in those homes until next year, at the earliest. So, looking at that and looking at all the other projects that are in the City with the Oltman Park Project,
specifically, the direction at the last Council Meeting was to reject the bids at this time and revisit it as development continues in the area.
So, here are the bids that we received, that were discussed briefly at the last meeting. They did have a lot of interest in this project and we had good bid results; but as we discussed,
it’s just not the priority now, and we’re shifting that to the Oltman Park Project, which also has a grant of $350,000, so it’s very important to complete that project and not lose
that grant funding.
Tonight, the recommendation is before you for rejecting bids, and I’ll stand for any questions.
Mayor Bailey asked Council if there were any questions, none were asked. Again, just for anybody that might be interested as Director Burfeind just shared, it isn’t that we’re not going
to build this park, we’re just going to wait for some development to happen over there; because we do capture park dedication money in those developments that will help pay for this
park vs. just having a park kind of in the middle of nowhere with nobody really around it yet does not make sense. So, I think the Council and staff did a great job of coming up with
this alternative.
Motion by Council Member Thiede to Adopt Resolution 2025-063, rejecting all bids submitted for the 2025 Denzer Park Project; second by Council Member Clausen. Motion carried: 5-0.
Public Works Shop Remodel
Staff Recommendation: Adopt Resolution 2025-054 awarding the Public Works Facility Mechanics Shop Remodel to Rochon Construction for the Base Bid amount plus the Alternate, for a total
of $298,915.
Director Burfeind said my last item for you tonight is we had bids taken last Thursday for our remodel of the shop area of Public Works.
Just looking really quick, here’s kind of a rough diagram, but just to give you an idea of what we’re doing, in this kind of light green, that’s the existing shop with all the different
hoists and places for our mechanics to work. On the bottom end is the existing wash bay, that’s kind of the full area; it was designed as a pull-through wash bay, which we actually
haven’t used as a pull-through wash bay for many, many, many years just because of the way we store things and do different things. What we’re looking at doing is with the addition
of a fifth mechanic in the budget was also the expansion of the shop. So, in the orange-red colored area is where we’re removing the wall between the shop and the wash bay, building
a new wall to basically cut the wash bay in half, and then create this space for a new portable hoist. It’s a hoist that someday, whenever we do move to a new building, we can take
it with us, so that’s a complete reusable item, no loss of investment there. And then a pretty, in general, for what we’re trying to do, I’d say cost-effective way of looking at adding
really usable space because there’s a door on the end, so we have the overhead door to pull large trucks in. So, this portable hoist will handle any of our large equipment, all the
way up to a tandem dump truck.
What we have is the total Engineer’s Estimate combined, between the Base Bid and Alternate, was $301,000. The reason I show it as combined is when we took this to Council the first
time, we didn’t show that item as an Alternate, that was for as long as we were in there, the actual lighting in the shop is not really up to currently what
you’d look for in standards for the lumen output level. That’s been a serious kind of complaint issue in the shop for many, many, many years. So, we had that in the bid, but it’s also
a project that has a very tight funding source, right? So, we didn’t want to have something, you know, we’re a little high and then we had to reject the bids, right? So, we added that
Alternate during the bidding process, we just kind of broke it out to have that separately.
We got eight bids, which is really great to see, and Rochon Corporation was the low bidder, and they were under that combined Engineer’s Estimate that we had brought forth previously
so we’re happy with that. Specifically, because of the type of work this is, we haven’t worked directly with these contractors; but our architect was Stantec in this case, and they
had good familiarity with many of these contractors and specifically have worked with Rochon on other projects of other clients they have. So, that’s something that we talked to them
about just because we haven’t specifically worked with these contractors.
Director Burfeind said and with that, the recommendation is before you.
Mayor Bailey asked the Council if there were any questions, none were asked.
Motion by Council Member Olsen to Adopt Resolution 2025-054 awarding the Public Works Facility Mechanics Shop Remodel to Rochon Construction for the Base Bid amount, plus the Alternate,
for a total of $298,915; second by Council Member Garza. Motion carried: 5-0.
Council Member Olsen said congratulations.
Director Burfeind replied thank you, and said we are very excited for this, this is a small project, but it really means a lot to the mechanics shop. So, we’re very excited.
Mayor Bailey said fantastic.
11. REGULAR AGENDA
Leafline Labs - Conditional Use Permit
Staff Recommendation: Adopt Resolution 2025-061 rescinding prior Conditional Use Permit and
Site Plan Resolutions and approving the Conditional Use Permit for a Medical Cannabis
Combination Business at 8235 97th Street South.
Samantha Pierret, Senior Planner, said thank you, good evening, Mr. Mayor and Members of the Council. Leafline Labs has applied for a Conditional Use Permit to allow their operation
on 97th Street to be licensed as a Medical Cannabis Combination Business with the State of Minnesota. The property is currently approximately 21.8 acres, Zoned I-1, General Industry;
currently, they are using it for Medical Cannabis manufacturing, production, cultivation, and warehousing, which was permitted via a Conditional Use Permit in 2014 with Amendments in
2020 and 2022.
In 2023, the State of Minnesota legislature created an Adult Use Cannabis Marketplace and the Office of Cannabis Management (OCM). OCM will oversee and enforce Statute 342 and the
licensing of cannabis businesses. In response to these changes, the City of Cottage Grove updated its ordinances for Adult Use Cannabis. At the State level, the Statute under which
Leafline is currently operating will be repealed on December 1, 2025; and so to account for the State and Local changes, Leafline has applied as a Medical Cannabis Combination Business,
and a new Conditional Use Permit must be approved to ensure they comply with the new City and State regulations.
They’re not proposing any footprint changes or substantive changes to their operations at this time; the biggest change is going to be that their products will be allocated to the
Medical and the Recreational Cannabis Marketplace. Any future building expansions or operational changes would require a new separate planning application to the City for review.
The OCM was tasked with rulemaking to establish the final State regulations governing Adult Use Cannabis; those were approved by the Administrative Law Judge on April 7, and will
be official once they post it in the State Register. The Statute created 13 different license types, one of those being this Medical Combination License. The deadline for businesses
to apply for consideration to OCM was March 14, 2025. OCM is now reviewing these
applications for compliance with their standards, and they will issue preliminary approvals after which the applicants have 18 months to finish the next steps, including: Obtaining local
government approvals, finalizing their licensure with the State, and obtaining inspections from the OCM. As one of only two Medical Cannabis producers in the State of Minnesota, the
applicant does not foresee any issues getting through the rest of this process.
In the City Code Title 11-4-18, Cannabis Use Performance Standards are included, and the applicant does meet these standards; buffers are also required from other cannabis businesses,
schools, parks, daycares, things of that nature, and the property does exceed all of these setbacks.
The operation has been the subject of various odor complaints since the construction of the building expansion in 2022. The applicant hired Byers Scientific to analyze odor mitigation
equipment and processes on site in February 2025. They toured the entire facility, identified odor mitigation measures that could be done in the future or taken at the present time.
Leafline plans to do all of the immediate mitigation measures and to complete the long-term mitigation measures as orderly times allow for the facility.
There are also conditions included in the resolution related to odor mitigation. It is important to note that Condition #4 is an Odor Mitigation Plan that the City and the applicant
will be working through; there’s a 45-day timeline for them to get that into us, as staff.
The Recommendation is on the screen for your approval, and we’ll stand for any questions. The applicant’s representatives are also here tonight for any questions.
Mayor Bailey asked Council if anybody had any questions for Planner Pierret, none were asked.
Mayor Bailey asked if Leafline wanted to speak at all, and asked if she’d just state her name and address for the record.
Good Evening, my name is Carol Moss, I’m an attorney at Hellmuth & Johnson; lucky for you, I had dental work this afternoon, so I won’t talk very long. Again, we appreciate the
time that the Council has spent with us, and especially with the City staff and City Attorney, we’ve worked with them very closely. We are adamant that we are going to address all the
concerns and work diligently to continue to be a good corporate citizen in the City of Cottage Grove.
I just would like to reiterate, I know it’s been spoken of, but sometimes it gets lost in the translation, but our operations are not changing. Our products are not changing, our
processing, our manufacturing, nothing is changing. All it is, is the end result, the products, can also be sold recreational or continue to be sold to medical patients. So, I just
wanted to make sure that that was addressed, and that we are not changing anything.
We’ve already made all of the immediate remediation recommendations that the expert has told us, and already feel confident that odor mitigation has already started to improve.
So, we’re continuing to work with the staff to address all of the City’s concerns, and if there’s any questions, I’d be happy to answer any that you, the Council, may have.
Mayor Bailey said thank you, by the way, for working on those challenges. I have kind of maybe a weird question, so with the new process that you’re going through with the State of
Minnesota, heaven forbid, but let’s say that you apply for this co-permit process they’re doing, and let’s say they don’t give it to you. Does that mean you just continue to do medical
marijuana?
Ms. Moss replied so, our current medical license is under Statute 152, and that expires on December 1. So, if for some freak reason, we aren’t able to get a business combination,
which I’m very confident we will, we’d be able to continue until December 1. That’s obviously not what we want to do with our transitioning, and we have to because all of the rules
and regulations that are in place will apply to cannabis businesses licensed under Chapter 342. So, in order to stay compliant, we need to switch our license.
Mayor Bailey replied perfect. And, obviously, I want you guys to be able to continue on, obviously, within Cottage Grove, and I think we’ve had an overall good relationship from
the first time that we talked about getting this facility here in Cottage Grove. So, yeah, let’s just make sure there; I know there’s nothing you can do to make sure that that happens,
but I just had to ask because I didn’t know if there was a clause in there or something that if you’re already doing something, if that was the case, but the answer is no.
Ms. Moss said as of December 1, the answer would be no, but we’ve been working with OCM, we’ve been very good stewards of the medical industry, and worked well with government regulators.
So, I don’t foresee any issues coming up.
Mayor Bailey replied fantastic.
Council Member Olsen said I had the opportunity to sit through the longer version of this presentation at the Planning Commission recently, and there were a couple of relevant points
that I wanted to bring up, please correct me if I’m wrong. Relevant Point #1: In terms of your overall production capacity, nothing’s changing, you’re just reallocating what you’re
producing. Is that correct?
Ms. Moss replied correct. We are reallocating products that today are only sold to people registered in the medical program. Once we have everything in place and license in hand,
those same products could be sold on the recreational market.
Council Member Olsen said perfect. And then #2, that I think a lot of people will be interested in hearing about, and I know the Planning Commission asked several questions about
this: When Byers came into your facility, and they are known internationally for doing this kind of work, they came in with a standard; they said that the standard is X, I believe the
number 7 was the standard, in terms of the degree to which you can either notice or not notice this odor within a certain square footage, essentially, your lot line. And they made several
recommendations that you have already implemented, I believe, one of which was adding some new technology from scrubbers and those kinds of things. Can you just tell us just a smidge
about how you work in conjunction with Byers and the science that they’re using to make sure that you are meeting the standards that the public and the City are looking for with respect
to odor mitigation?
Ms. Moss replied Council Member Olsen, I greatly appreciate that question, and my answer, I would have to say will be superficial on the science part. Council Member Olsen said
understood, yeah.
Ms. Moss said but as it relates, so what you are talking about on the ratio of 7; so, that has to do with detection using a device that’s called the nasal ranger. It is a device
that we will be using, and it’s outlined in the proposed CUP where a staff member of Leafline will be taking daily readings of odor; and there is a range and it has to do with the D/T,
I can’t remember exactly. So, 7 is considered the industry norm as to whether an obnoxious odor is detected. So, that is a reading that will be taken daily and is outlined in the CUP.
In addition, we are working with City staff that if there is an odor complaint from somebody within the City or somebody within the community, that we have a system in place so
that information can be shared with us so that we may use it as a data point in order to rectify any odor issues. For example, if somebody says that I was driving and I got a whiff
on Tuesday, that’s probably very difficult for us to do anything with; but if we had a complaint that somebody was standing at this location at 6 o'clock, he stood there and it was
a constant odor, once we get that information, we can have staff go out there immediately and detect it. That would then help us determine if there is an issue with our Odor Mitigation
Plan. So, we are putting systems in place so that we could take immediate actions.
Regarding the filtration system that you mentioned, one of the slides talked about short-term and longer-term mitigation actions. Some of the short-term ones were things that we
could do immediately and probably the biggest thing that we immediately did and has already showed improvement is Byers noticed that we had our rooftop units on economizer mode, and
this allowed leakage of the air. That has been switched off, and so there were things that we could do immediately that could improve the odor leakage. Some of the things are going
to take longer; we have been working with Byers on what those systems will take to get them, they are custom-built systems, and right now, we’ve been told at least 8-to-10 months to
get those systems in place. There is probably going to be other issues that might delay that: We have tariffs, we probably may have supply-line issues. So, those longer terms, those
longer remediations, we are not going to be able to get done in a short time, and that’s one of the issues that we’ve been working very diligently with City staff is what can be done
now vs. what can be done later. We are hopeful that the systems that we can get in place sooner rather than later will help rectify the issues, and those daily odor readings that we
will be doing will help give the City data to understand if those systems are working, but that is something that is more long term than things that we can get done right now. So, we
are doing quite a bit.
Council Member Olsen said my understanding was from listening to Mr. Byers, and it was great that he was able to come to the Planning Commission meeting and explain the science, is that
each of these individual actions actually work in conjunction with all of the others. So, while you’re making progress at the moment, the full system is not calibrated because it’s
not in place yet, but that’s what you’re working towards; and if I recall, you also have a team that you’ve built in the facility whose job it is to consistently monitor whether these
mitigation systems are actually in place and working properly, and that’s a daily function. So, they’re checking like I know you mentioned the airflow changes and some different things,
they’re checking all of that every day just to ensure that somebody didn’t flip the switch that they weren’t supposed to or whatever the case might be. And then, further, you’re reporting
that data to the City on a consistent basis, is that accurate?
Ms. Moss replied we are reporting, so we’re taking daily readings, we’re not making those reports daily, we’re making them weekly. Council Member Olsen stated understood. Ms. Moss
said those reports will be provided on a weekly basis without being asked. We are keeping records so that if the City gets an odor complaint, Emily can give us a call and we’d be like
here’s our record so that we have that information available to you. So, yes, and it’s really important to understand as we talk about these systems, that this facility is growing 24/7,
365, there’s no breaks. In order to have an adequate supply, they’re constantly has to be a rotation of product, and we need to mitigate the odor at the facility as a whole, rather
than breaking it down by room. We look at the facility as a whole because pretty much every part of the process is going to emit an odor; some parts of the plant, some parts of the
drying may emit more odor than others. Really, the office area may be the only area not emitting any kind of an odor. So, while we do look at all of this, we are looking at the facility
as a whole and not necessarily room by room or process by process.
Council Member Olsen said hence the comment about the systems have to work in unison with each other, and as you mentioned, they’re not all going to be in place at the same time,
there’s going to be sort of a progression of that. So, thank you very much for clarifying that. I think that odor piece is really what people get concerned about, and that certainly
was a primary focus of the Planning Commission, so I appreciate your feedback on that.
Ms. Moss replied thank you.
Motion by Council Member Garza to Adopt Resolution 2025-061, rescinding prior Conditional Use Permit and Site Plan Resolutions and approving the Conditional Use Permit for a Medical
Cannabis Combination Business at 8235 97th Street South; second by Council Member Thiede. Motion carried: 5-0.
Mayor Bailey said thank you again for the great information, we appreciate it.
12. COUNCIL COMMENTS AND REQUESTS
Council Member Clausen said nothing new from this end, mayor.
Council Member Olsen said I have two things this evening: First of all, this week, 4-13 to 4-19, is Public Safety Telecommunications Week, which sounds really fancy, and it’s essentially
our time to really focus and thank and honor those who work as 911 Dispatchers. This week and actually all year round, we definitely want to give thanks to those who connect those callers
with non-emergency services or emergency services, based on the call. Oftentimes, the Dispatcher is the unsung hero in the chain of events that occurs when something unfortunate may
happen and a first responder has to actually address that issue. The 911 Dispatcher is the person in the middle, who makes all of that happen and gives all of the critical information
to the first responders and also provides significant support to the caller. I’ll remind everybody a few years ago in the City of Cottage Grove we had a situation at Menards where a
customer had a cardiac event. One of the employees from Menards noticed that this event occurred, called 911; this person did not have training that a first responder would have in
trying to give any kind of resuscitation effort, but the 911 Dispatcher actually worked very closely with the caller while help was on the way to make sure that they could start critical
care, and that ended up saving this woman’s life. 911 Dispatchers are a critical piece of the Public Safety apparatus, so let’s take some time this week through the 19th and then of
course, all year round, to give honor and thanks to those who serve in that very, very difficult role. It’s
a high stress, high burnout role, and it takes a very special person to be good at it. So, thank you to our Telecommunication Professionals in the Public Safety realm.
Additionally, mayor, tomorrow night we have the opportunity to spend some time at River Oaks as we do each year honoring our various volunteers in the City of Cottage Grove, as
we celebrate Volunteer Appreciation. One of the things that I always enjoy about that event is we will identify a Volunteer of the Year, an individual that has gone above and beyond
just the normal call of duty with regard to giving great volunteer service to our community in some way, shape, or form. We will also identify a Volunteer Group of the Year. I know
you like to talk about this, and I’m sure you will, but the one thing that I wanted to say is this: Cottage Grove is an extremely special place, and one of the things that makes it
so special is the spirit of volunteerism in this community. For as long as I’ve lived here, from the time that I was a kid playing CGAA baseball and all the way through my time as a
coach and working with other individuals who work with youth, whether it’s in athletics or some other function, Boy Scouts, Girl Scouts, etc., the City of Cottage Grove steps up. We
have a lot of people in this community who give of their time and of their talents, and we want to be grateful for that. Trust me when I tell you, especially when it comes to youth
sports, and I know my friend, Zac Dockter, can attest to this probably better than anybody, it isn’t always easy, especially if you’re a ref. You know, there’s a lot of people out there
who have opinions that they like to share with you, but it is a very rewarding experience, and the fact is everybody can do something, everybody can do something. So, if you’re interested
in giving back in some way, shape, or form, please reach out, speak to somebody on the City Council, speak to somebody with the Athletic Association, call City Hall, we’ll connect you
with people who are looking for volunteers. There are hundreds of opportunities that people don’t know about, but the fact of the matter is we’ve got tons and tons of people in this
community who give of themselves selflessly, very humbly, and this is our opportunity to show our respect. So, thank you to everybody, and take some time and consider maybe what you
can do to volunteer; it could be as simple as reading books at the library for a few hours each week, but trust me when I tell you that you can do something, and you will make Cottage
Grove an even better place than it already is. With that, mayor, I’ll turn it back to you.
Council Member Thiede said so, speaking of volunteers, we always love to have people on the Strawberry Fest Committee. So, if you’re looking for someplace to volunteer and you want to
have fun, that’s the place to do it.
And I do want to mention that there’s the Chamber of Commerce 20th Annual Community Showcase, actually a week from this coming Saturday, so, April 26, at Park High School, from
10:00 a.m. to 2:00 p.m., and they have all sorts of booths, they have all sorts of fun things to do. They have food, it’s just a great time to see some of the other businesses in the
community, some of the other places that you could actually volunteer, also, and Strawberry Fest will also have a booth there; you can get your button for this year and everything else
and get into the raffle, and it's just a fantastic time to pop over there and see what’s going on. You certainly can get more information, I believe they’ve got things online at the
Chamber of Commerce and the City and so forth. So, yeah, come on out and have some fun.
Council Member Garza said well, thanks, Dave, the Showcase, I’m excited and looking forward to that. I know we are going to have free painting for the kids, so come on out, bring your
families, it’s going to be a lot of fun.
I know, too, this weekend coming up, on Saturday, it’s another pancake breakfast; so, we just enjoyed last week’s with the Lions Club, and this week the 2025 Pancake Breakfast for
the Accacia Masonic Lodge No. 51 is this Saturday morning, at 11094 70th Street South. Tickets are online, $11 for the adults, and for kids 12 and under, it’s only $6. So, I would say
get out if you have nothing to do on Saturday or just start your day off with a great breakfast.
Mayor Bailey said so, I’ll just kind of piggyback a little bit on Council Member Thiede and Council Member Olsen, one of the things, obviously, the month of April is Volunteer Month
for the City of Cottage Grove, as well as others. One of the ways also where you can be a volunteer, here’s my segue, is I do know that the Cottage Grove Ambassadors program is still
looking for either girls or boys to sign up to compete, if you will, to be the Ambassadors of Cottage Grove for the next year. They crowned it right after Strawberry Fest is finished,
usually that Monday after. So, I do know in talking to Laurie Olsen, she’s a little concerned because they have not had much interest at this point; mind you, that happened last year,
and then they finally got a bunch of girls and ladies
that came up. I just wanted to share if there was interest in that, you can obviously reach out to one of us here, and we’ll get you into there. I know they had a meeting last night
at Carbone’s, like an informational meeting, I have no idea how many people were there or whatever, but if you’re interested and want to support a great City, again in a volunteer status,
that is another opportunity for that.
Council Member Thiede said I’ve got to mention they definitely are Ambassadors for the City; it’s really quite fun if you like to be in parades and things like that, you go around
to the different cities, we take our float and everything like that, and so it really is fun, you get to meet new people all around the area. So, I haven’t heard of anybody that has
not had a great experience being an Ambassador for the City of Cottage Grove.
Council Member Garza said my family definitely can attest to that; we actually were Ambassadors last year, my daughter was an Ambassador, and it was an amazing experience. I mean,
the confidence, just the experience of being able to grow with our community, and learning all of the different communities that we went and learned their history of the communities.
So, it was a really great experience, and I would encourage anyone that has a son or daughter who would love to learn more about our City and other cities to go and sign up, or at least
just learn more about it.
Mayor Bailey said so with that, the next item on our agenda is a Workshop, which is Open to the Public, and we’re already starting the 2026 Budget, starting early indications and discussions,
so that Workshop will be held in the Training Room. We will not be adjourning the meeting from in here, so everybody have a great Easter, and thank you to all of our volunteers. Take
care.
13. WORKSHOPS - OPEN TO PUBLIC - TRAINING ROOM
2026 Budget Workshop
Staff Recommendation: Receive information regarding the 2026 Budget Workshop and provide
feedback to staff.
Administrator Levitt said well, Mayor and Members of the Council, tonight is our annual budget kickoff. Now, since you all know that I went to Gettysburg last week, I’ve decided that
I’m going to use some Civil War analogies. Now last time I attempted an analogy that revolved around a hill, there was a lot of issues and it broke down. So, today, hopefully, you’ll
stay with my analogy through the end and humor me, even if it breaks down at one part, so, okay, Dave? Council Member Thiede replied yeah. She confirmed you’re with me on that? Okay,
thanks.
Administrator Levitt said so, now one could say if I’m talking about a battle, I’m actually not talking about a battle between staff and Council; don’t worry, the real battle happens
internally, that’s why there’s these people back here, they’re just trying to prepare us how they’re going to strategically take Brenda and I on, and so, there’s a little internal battle.
Dave, you don’t know how this internal dynamic happens, so I’m going to give you a few hints.
Council Member Clausen replied I can’t wait.
Administrator Levitt said yeah, exactly. So, internally, it kind of feels like a battle. So, tonight’s objective is I’m going to give you a little bit of my overall view on where
I think we’re at, and some of my recommendations on the larger vision plans.
Council Member Olsen said before we go any further, how much fun did you have putting these slides together?
Administrator Levitt replied I just created the outline and told the staff that she didn’t have to use the template, but she saw my vision, and she loved the fact that I was all
out creative.
Council Member Olsen said you seemed very passionate, so, that’s why I asked. Administrator Levitt replied it was very passionate; I mean, we’re going to have to talk some more
offline, it was really good.
So, overall today, we’re going to be looking at the objectives for 2026 and 2027, because we know that whatever we do will have a tail to it, so that’s why we do a two-year budget,
looking at that tail. So, Brenda is going to kind of tell you where we’re starting from last year’s two-year budget projection for 2026, and then we’re also looking at 2027. Staff is
going to dive into the details of the budget; our goal and objective is to give you options, suggestions, and ideas of how to hit your large target thing you set for us tonight and
what your objectives are. I
will tell you the plan is going to change; so, Dave, for your benefit, you know, it’s challenging, right? Because you’re going to look at broad, huge numbers, and we’re going to continue
to refine each month, practically, as we go, and then even in August, when the County gives us some final numbers, it will change again. And, so, we won’t really have a finetuned number
until September. So, we’re going to just continue to refine our numbers and our assumptions as we go.
All right, so, here is how my battleplan starts, but you have to understand that Culp’s Hill was Day 2 of the battle, and there is a guy by the name of Greene, who I’ll tell you
about in a moment. Now, here’s the thing, Culp’s Hill was a very strategic place in the War of Gettysburg. So, if you think about it, the blue is the Union, and they’re going to try
to hold the Hill, the right is the Confederacy, they’re going to try to take the Hill, and this is actually one part of what they call the fishhook. And, so, this is where the very
flank is very susceptible to attack, and, so, what’s interesting is George Greene was a civil engineer; can you imagine that? I know, a civil engineer I found in the Gettysburg and
he became my new hero; it used to be Chamberlain, now I think it’s Greene. So, Greene is actually a civil engineer who did some of the first water and sewer actually in New York City,
so, he is a very prominent, known civil engineer. And, so, his brigade had to actually hold 1.5 miles on Culp’s Hill. Now, what’s interesting is he was going to be greatly outnumbered,
and the Confederates didn’t attack early in the morning, and so they had all day, and he said to his commanding officer, can we dig in and fortify? Now, the military strategy at the
time was don’t allow your troops to actually do that because they won’t get out and fight. So, his commander said, well, I guess we won’t have anything else to do for the day, we’re
going to violate command, you know, we’re going to probably be outnumbered, so, what’s it hurt? So, they actually let him dig in and fortify on that hill. So, in that circle around
the hill, they actually dug in and fortified for 1.5 miles, and in the end, he was attacked by twice the number of soldiers than he had actually holding the hill, and it was actually
because they dug in and fortified is actually how they saved that whole flank from actually collapsing. So, moral of the story is not necessarily violate commander orders and strategic
plan of the Army, but the thing is empower your people to actually be able to make decisions to events, right? I’m speaking your language, right, Brad?
Captain Brad Petersen said I heard violate orders.
Mayor Bailey said that’s exactly what I think I heard.
Administrator Levitt replied well, it was interesting because Buell, who was in command of the Confederates coming up, Lee told him, he said if practical, take the hill. Well, he
had been under Stonewall Jackson for so long and had ever only been given a direct order, he didn’t know what impractical meant. And, so, it was one of those indecisive moments in time,
and so, I can understand Brad’s misunderstanding of the directions. So, he’s like hearing the orders from Lee, if practical, take the hill, and was not sure what that meant. So, it
didn’t mean defy orders, but I can understand your confusion.
So, here’s what we have done to fortify our position, just like Greene had fortified: So, on our left flank, we actually took compensated actions, which was a huge liability to
us; so, we took that, set that money aside specifically in the budget, this strengthens our AAA Bond Rating and helps us shore up that area. That’s what we did last year. We then on
our right flank, we went okay, we’ve been still having issues with our Internal Service Funds; Brenda will show you that we started to bring them into the black, but we just have fruit
that’s hanging below the line. We’ve now improved that with Internal Service Funds and helped correct that. In the center, we’ve actually fortified and improved our employee wages,
so, we had the 9% and the 6%, so we’ve got our wages and our employee compensation adjusted and handled. You know, equipment, Brenda is going to tell you how many millions, I think
she’s going to tell you like $6M in the last couple years we spent on equipment. We have been improving that backlog of equipment, so, we’ve been taking care of business there. When
it comes to pavement management, we held the course for that. So, we’ve done a good job I’ll say fortifying.
So, now, here’s the problem: The future is before us, and if you listen to the radio, if you watch the news, you watch your stream coming in, we don’t know actually what’s going
to attack us. So, we need to be a little more strategic this year because a lot of variables are changing in regards to our budget, and we don’t know what is actually going to attack
us. So, like Greene on the top of the hill that day, he didn’t know how many soldiers were coming up the hill, but he was prepared for a lot of them.
What I’m preparing you for is to think about this is maybe our year to dig in and fortify and hold our position. We have a good financial position, we have a AAA Bond Rating, and
we’re doing very well and strong in that. So, what does that plan actually look like? I’m saying that in this year, we focus on operations, our operational
efficiencies, our operational level of service, and maintaining. I’m saying that I would recommend that we don’t take on any new hires in 2026. I don’t think we want to take on that
liability, we still have some liabilities hanging out there in Police and Fire for 2026 and even for 2025. So, I would caution on that.
I would also say that we maybe want to actually pull back a little of what we have planned for equipment replacement for our bond sale related to equipment. And the reason I would
say that, even though Myron was successful today in getting and secured our $7M project money for another year to use it; we may want to use that debt capacity that we had for equipment,
we may need to use it for debt capacity to start building 100th Street so we don’t want to lose the money. I told Ryan maybe we just build the bridge, right? Because people are going
to give us the money if we go it’s a bridge and there’s no road connecting it. Right, exactly, we really need the money, we’re ready. So, I said use the money, build the bridge, but
we may need to think about how we have the debt capacity for that.
And, so, I think for us, until that financial picture becomes clear, I’m saying I think we just hold our position and dig in, and not try to take on any large initiatives or other
projects this year because we don’t know what’s going to happen, both in the State and Federal and what’s going to be happening with that. We also don’t know what’s going to happen
with the economy. I mean, right now, interest rates are still okay, but we don’t know what’s going to happen. IT is starting to scare me because we’re talking about tariffs, the impacts
on that, they’ve waited some of our orders that we put in months ago, we don’t know what that’s going to do; so, we think about that IT Internal Service Fund number, even though we’re
in the black, we may struggle to hold that with tariffs from where we sit. So, that’s my big overall picture for where we’re sitting for the budget, and now, Brenda, you get to do the
numbers.
Director Malinowski said all right, I just feel like it was November, in the room talking final budget numbers for 2025, and here we are back. So, we’re starting early this year, and
we’re excited to be here, great opening by Jennifer, and to also kind of review what’s happened since November. And, so, we’ll also do some of that historical tax review tonight with
our Tax Capacity, our Tax Levy; we’ll talk a little bit about the FMP, talk about our Internal Service Funds, where we stand and where we are going, Utility Funds, so, that is one of
the focuses that’s we’re going to be looking at during this budget cycle. We’ll look at our Water, Sewer, Streetlights, Stormwater Funds, just to verify that we are charging, having
practical rate increases there. And then we’re going to talk about prioritization of the budget, and ask for your feedback as we start the process here next week with our budget kickoff.
In the past, we did have that Assessor’s Report that the County releases in March. We didn’t have at that time preliminary tax numbers, and we got those over the weekend, and so
these are updated numbers; very similar to what we saw in the Assessor’s Report, so that is good news. Estimated market values are up about 6%, taxable market values are up just over
6%. New construction, you know, we’re lower than we were last year, but when I look at other communities in the County, everybody was down; and really, at the end of the day, what we
care about is that Tax Capacity number, and that’s up over 6%; 3% due to the new construction and 3% due to other or appreciation in existing homes and, so, this was good news, that
median home is going up about 3.9%.
Tax Capacity History
I just wanted to remind everybody that when we do property taxes on an individual homeowner or a business, what they pay is based on that City Tax Rate. And that City Tax Rate is calculated
by taking that property tax levy, divided by our Tax Capacity, that gets to that rate that we apply to that individual homeowner or business in our community. So, that’s why it’s important
to talk about that Tax Capacity. We had those nice little increases until 2023, then we had those large appreciations on existing homes in 2023 and 2024, over 20% for 2025; a reminder
that we dipped just a little bit, however, communities that were fully developed actually decreased more, a 3% decrease in those Tax Capacities. Because we had new construction here
in Cottage Grove, we’re about net neutral for 2025, so we have good news there, and now 2026 is at 6%. When we look here at that history, here’s the percentage increases that I had
roughly said that last July.
Administrator Levitt said I told Brenda just is supposed to put a yo-yo on this slide because I think property owners are going to struggle, right? Because they saw their property
valuations decrease last year, and now, this year, they’re seeing them shoot way back up again, and so it’s that yo-yo effect, right? They go up, they go down,
and so they’re not going to understand that a large percentage of any tax increase is just going to be due to the fact of their valuation.
Council Member Olsen said it is very confusing for them, and I’m glad you acknowledge that. Because as we’ve talked about dozens of times, the manner in which we communicate our budget
and the explanations that we provide behind what’s happening and why it’s happening, are going to be more critical than ever this year, especially with the market unease at the moment.
I mean, the Fed just came out today and said, hey, we’re having a hard time figuring out what to do, right? Council Member Garza said I think we’re heading to inflation. Council Member
Olsen said yeah, I think there’s going to be a lot of pullback, and people are going to wonder well, we’re pooling that money, why is that, I don’t get it. So, we’re going to really
need to be crystal clear and very relentless with our communication, Phil.
Council Member Garza said well, that has really been a hard one for consumers. They don’t understand that jump, and they don’t get that it’s not the City that’s driving that extreme
up and down, it’s more what the market is doing, but consumers think that it’s the City that’s driving it. So, being able to verify that and making sure that they understand that it’s
the market, and it changes like the wind.
Property Tax History
Director Malinowski said we had those increases and then in 2024, 2025, and 2026, this is where we’re now operating under the Financial Management Plan (FMP) that we did back in 2023.
We looked at our debt, future debt, tried to not have big increases in our property taxes that our median homes pay per year, and so that’s what we’re seeing for 2024, 2025, and 2026.
City Tax Rate History
We don’t have 2026 on here yet, because we’re just starting the process. This is just a reminder 2025 is really close to where we were back in 2021 and 2022 before we had those large
appreciations on the existing homes, that broke that down for two years, and so now we’re back to neutral there. Now that the property tax bills for 2025 have gone out to our community,
we do have our final Tax Rate for Cottage Grove and for the other cities in Washington County. As you see, no difference in last year or the year before: Cottage Grove is second from
the bottom in combining City property taxes on that median home in Washington County. So, we know that we provide exceptional services to our community from that wonderful lower Tax
Rate that we have.
Property Tax Levies
Property tax levies in 2024 and 2025 and 2026 is operated under that 10-year FMP. Just a reminder, when we did the 2025 budget, that was a 12.98% increase in that levy, and City Council,
Mayor, what you did do is you moved some equipment here over to here because this 12.93% increase was larger at that time, last fall. And, so, that is why we have the 2% increases pretty
much the same for the next two years; for 2026 this is just the plan, this is why we did that two-year budget last year, that is the impact of the 2025 decisions on 2026. But as you
can see there in our FMP, we started to increase levies strategically in some areas: You’ll see that the EDA Levy that we’re looking to increase it by $50K for 2026; the Park Improvement
Levy, as you go up, we need to start funding Park Improvements a little bit more because we’re adding parks and we need to replace equipment, hockey rinks, those sorts of things in
those existing parks. So, we’re starting to say we need to fund those, and so we worked that into the levy for 2026. And then the Equipment Replacement Levy, we’re starting to increase
that more, $584,000 for 2026. We could fund about $1.6M in equipment per year, and so we’re working toward that as we look at all the equipment needs.
Council Member Olsen asked is that Debt Levy number a refined number, after some of the changes that we discussed?
Director Malinowski asked after the 2025 debt issuance? Council Member Olsen replied yes. Director Malinowski said it’s tentative, I want to take a look, and we’re just finalizing
our 2024 information. Once we get that auditor’s report, we will refine that some more, to make sure where we’re at; we know where our Closed Debt is at, but just looking at each of
the Debt Service Funds as part of that, and we will review and refine that, but that does include the 2025 debt. Council Member Olsen said thank you.
Council Member Garza asked for the Park Improvement Levy, what were we doing prior? How were we funding those improvements?
Director Malinowski replied great question, I was just about to tell you that. We’ve been funding it with antenna revenue on our water towers. We made that decision several years
ago to do that, we get about $480K in antenna revenue per year, and that’s what was funding it; so, as we look at some of those improvements in the future that are needed for the parks,
it’s something to think about, if that is enough.
Council Member Garza said so, this is in addition to that other park revenue. Okay, thank you.
Administrator Levitt said when you think about it, we had as a City to forego Debt Service for the parks, even though we had a bid, because we don’t really have a built-up fund balance
to support that growth; and now you’ve got Lochridge Development coming in that has a park, we don’t have the money to fund that, you know, and that would pace their progress moving
forward. There’s a neighborhood park there, we don’t have the money for that, so we’re going to be dedicating more land. And, plus, as we start to build the larger community park on
the Tank’s property, north of 80th Street, because we talked about the Strategic Plan, we need money for both land acquisition and the actual building of it; which we did talk about
a large chunk of that, most likely we will bond for future debt and bonding, but we still need to be positioned for these smaller neighborhood parks, to be able to start to build those.
Director Malinowski said and this is going into our Park Improvement Fund, and so those are existing parks, but we can certainly, if there is a need in a Park Trust for development
of parks, we could move it there.
HRA Levy
Director Malinowski said the HRA Levy, we did that for the first time back in 2025, for this year, right? Right now, it’s just net neutral on that; that will be a part of the discussion
on the budget, too, as to any updates for that.
FMP
The FMP that we first did back in 2023, where we put that future debt that needed to be issued for Pavement Management projects, street projects, we needed to do some Equipment Certificates
for a couple of years because we had a backlog of equipment that needed to be acquired. Other initiatives included starting to increase the EDA Levy for economic and redevelopment activities,
that was put in here. One new position was all that we could really fit into the FMP based on a 2% appreciation in existing properties, that 2% increase in growth until we got higher
and could fund more positions with that. But, importantly, what we found out is we needed about a $110 increase in 2024 on our median home, and then $100 increase per year is everything
that had been identified. We hit that target: So, for 2024, we’re at $78 on that median home, for 2025, $67, and we noted that in order to do it in 2026, we’re at $130, that’s above
our target. This is based on last fall’s numbers, from the number that came in from the County this weekend, that $130 is about $115. And, so, are there any questions about the FMP?
None were asked.
Debt Issuance
Director Malinowski said just a reminder, when we did our CIP last fall, we look at the debt issuance that we’re going to need for the next five years to fund those projects. So, for
2026 and 2027, we’ve got about $90M in debt per year: 2026: We’ve got the Pavement Management Project, the East Point Douglas portion and then Kingsborough Trail, $2.9M in debt issuance;
100th Street, about $2.9M, that’s based on what we thought our costs were last fall for 100th Street; Equipment Certificates, $1M; and then the Oltman Park Project that we talked about
last week, at least $2.3M. 2027: You can still see the Pavement Management, 100th Street, Equipment Certificates, and then maybe some park building replacements.
Administrator Levitt said, so, as I said at the beginning, one of my big fears is that I think we need to spend some of the money we have for 100th Street before we lose it, and,
so, that’s why I’m saying you might want to be more careful with your Equipment Certificates here; if you can allocate some of that debt to help with any additional bonding that we
need to do to develop 100th Street to help save the building or a segment or a phase of the bridge, so that we don’t lose the Federal money related to that.
Council Member Garza asked and that’s lost at the end of this year? Council Member Olsen asked has that been delivered already?
Administrator Levitt asked which part? Council Member Olsen replied the Federal dollars. Administrator Levitt said it kind of, which, yeah, I mean.
Director Burfeind said, I mean, it’s allocated, but no, it hasn’t been specifically put in the bank.
Council Member Olsen asked but it hasn’t been taken back? Director Burfeind replied no, I don’t think they’d take it back, seriously.
Mayor Bailey said well, and the $7M she’s talking about, we were just today, on TAB, it’s there; they just gave us another year, just in case.
Council Member Olsen said which is good, it’s nice to have that flexibility with the Federal dollars.
Equipment
Director Malinowski said a little bit more about Equipment. At the end of 2025, with all of the equipment that we have on order, we will have to replace $6M in equipment in 2026 throughout
the City, about $2M per year. So, thankfully, we’ve been able to look at that backlog of equipment; when the supply-chain issues started with the pandemic, there were things that we
couldn’t get that we’re now able to get, so, $6M of equipment. 2026: This was a really big number, right, $3M? We knew that they had a lot of equipment that was left in there, and so,
here is some of that equipment that is being requested for 2026, that’s $3M.
Administrator Levitt asked so, which things can we not use Equipment Certificates, unlike the others, why?
Director Malinowski replied yes, so, you know, this part, things less than five years; and so, that is what we list one and two. We’re not able to do Equipment Certificates for
longer than the value of the asset. So, that would be one thing that we should talk about in the levy, and right now, we’ve got $584K in the levy for equipment. This is based on the
budget requests from last year, that was $600K.
Internal Service Funds
Director Malinowski said as we looked at the FMP, one of the things that I had been seeing is that we had been using cash from our Internal Service Funds for the last couple of years,
as we lived through the pandemic and even a little bit before that. And, so, our Insurance Fund that funds our workers comp, our property insurance, and our health insurance for the
City, we paid those out of that Internal Service Fund for insurance, and then we allocate that back to the departments. And the reason to have an Internal Service Fund or use Internal
Service Funds that we have is when we have large increases in premiums, so a workers comp premium of 15%. When we have the money in our Internal Service Fund, we can then mitigate that
increase on our property tax levy over a couple of years, and so that is the reason to have balances in our Internal Service Funds. And, so, under the FMP, we’ve been able to grow in
blue, get that insurance Internal Service Fund up to $405K.
Administrator Levitt said clearly, we’d like to be more than a $2M balance, like we were before. So, I mean, we’d really like to see that get to a healthier balance, that’s where
we absorb risk and liability, like legally against us or other factors that we need to adjust for. So, especially with litigation, PTSD and things of that nature come out of here, and
so the more healthy we can get that fund back up there, the better.
Director Malinowski said yeah, and when we have a property claim, that’s a $50K deductible, with $100K aggregate per year. Our workers comp claims are a $25K deductible, so that
is another reason to grow that fund balance back up. In the FMP, they have that at about $1.5 or $2M at the end of ten years.
Fleet Services Fund
While we went negative in 2021, the good thing that we’ve been able to do in 2023-2024 and 2025 now, is at least not go negative any further, and so we’re holding that steady. We look
for opportunities to bring that back up.
IT Services Fund
We were able to recover that fund back in 2023, and at the end of 2024, we’ve got about $316K, and that’s important. We’re working on a Capital Equipment Upgrade for IT right now for
a City Data Center, that was included in the budget, $250K, and so we’re able to use a little bit of that cash in order to not have to fund that all in 2025.
Absences Fund
That’s our new fund; as of the end of the year, we’ve got $1.3M or $1.4M in there. It’s just for being a little bit more transparent, important disclosures to our rating agencies and
to our bondholders that need to know that when people retire or move on from the City, that we can have that liability out there and we have that fund.
More Practical Information on the Internal Service Funds
Director Malinowski said so, here’s our Operating Revenue, that’s that line on this chart, and then the blue bar is our Operating Expenses. So, you can see until 2024 that we were dipping
into cash, which we saw on the last slide. And, so, now here in 2024, we were able to add to our cash balance in that fund.
Fleet Service Internal Service Fund
In 2021 and 2022, we were dipping into cash a lot then here, in 2023 and 2024, we’ve just been able to at least stabilize it.
IT Internal Service Fund
We’ve been able to recover that fund, so that’s been good.
Utility Funds
Director Malinowski said next, I wanted to go into our Utility Funds; I said that we’re going to look to make sure that our rates are correct in our Utility Funds: Our Water and Sewer
Funds, we did rate studies back in the fall of 2022, but we’ve got some information regarding our treatment plants and wondering about operating costs, so those are the ones that we’re
going to look at. Our Streetlight Fund is also being analyzed by Gavin, our Management Analyst at Public Works, and so these are some of the things that we’re looking at. These charts
that you’re going to see on these slides regarding our Utility Funds will be similar to what you’ll see when Rebecca from Redpath comes here in June and gives the audit report; these
are similar to the slides that they look at for determining whether we’re charging for our rates properly.
Council Member Olsen asked Brenda when we did the change to being per usage, did that result in any significant change with regard to kind of per capita water usage in the City? Did
we see any data on that?
Director Malinowski asked fee per usage for water?
Council Member Olsen replied yeah. So, do you remember a while back we changed the water bills so that if somebody used more water, they paid a higher fee.
Council Member Garza said a water conservation fee.
Director Malinowski said yes, it was a water conservation change.
Council Member Olsen asked so did that, to your knowledge, result in any significant change in usage?
Administrator Levitt replied no. Director Malinowski replied not a change in usage, I would say. We didn’t really implement that water conservation, but higher-tier until 2024,
I think is when we implemented that.
Council Member Olsen said yeah, Jennifer already read my mind, she knew where I was going with that, so how much of a revenue did?
Administrator Levitt replied no, it was the revenue being generated.
Council Member Olsen asked was that a big, big move?
Administrator Levitt replied it’s helped, but I can’t remember those numbers all the time.
Director Burfeind said yeah, it’s hard to know because so much of like 2024, that dip was because it rained so much last summer, most people just weren’t irrigating. Most of our
revenue is just based on is it a drought, which 2023 was, so.
Council Member Olsen said so, when we get into the nitty gritty, let’s dig into that a little bit.
Director Malinowski said and we do have it, so, we recalculate rates on a monthly basis to verify our revenues, and we’ve got that irrigation number because we do have to break
that out, and so we do have it. But yeah, 2024 was such a wet year, and we had that Operating Revenue, and people were not having to use as much water, obviously, there.
Transfers Out
That red line is Operating Revenues, the blue is our Operating Expenses without Depreciation. Orange is our Depreciation of Capital Assets: The watermain is being contributed to by developers
so that has to be replaced someday, our water treatment will go in those numbers. That Tan area is Transfers Out: When we do a Pavement Management project, or when we did the East Point
Douglas and Jamaica Avenue project, there are utility costs as part of that project; as we look at our watermains and our sewer and do some of that replacement as part of that project,
we will transfer that out to that construction fund. And, so, we want to make sure as we look at those rates, that we’re capturing our Operating Expense and that we’re capturing our
Transfers Out and a portion of depreciation; so, that when we go to replace or maintain those assets in the future, that way we’ll be able to do
that and so we’ll be looking at that, as we know that these Operating Expenses here for the Water Fund, that does not include water treatment. And, so, if those funds dry up, they’re
not available.
Council Member Olsen said we’re going to have some work to do there.
Sanitary Sewer Fund
Director Malinowski said we did really well for 2019, 2020, 2021, but we’ve started to dip a little bit, and so we want to take a closer look at that. That Operating Expense there, 68%
of that blue is out of our control because that is our wastewater charge that we get from Met Council, and so, that is just a bill that we pay to them every month to treat our wastewater.
Director Burfeind said and that did go up, I think about 30% over two years; obviously, we didn’t want to raise our rates to that extent, so you can kind of see that jump in 2022.
Director Malinowski said and that 2022 Rate Study showed that we need to do a 5.5% increase every year on this fund, and that’s what we’ve been doing, that’s what we’ve been operating
under.
Streetlight Utility Fund
Director Malinowski said we’ve been really aggressive with our rates in 2023 and 2024, and now 2025, there’s an 8% increase because we were recovering our costs; and when we even look
at the cash balance in our Streetlight Fund, we’re only at $484K, but $15M in assets in streetlights, and only less than half a million in that fund. So, we’ve been aggressive in that
rate increase, and we intend to keep looking at that. So, we’ve got Gavin down at Public Works really looking at the numbers there to determine if those Operating Expenses are correct
and what we can do in this fund.
Stormwater Utility Fund
Director Malinowski said there’s a 3% increase per year, and that’s been adequate with that. You don’t see depreciation in this fund because it’s not run as an enterprise fund, special
revenue fund, so we’re not capturing our depreciation in our rate structure right now. If that’s something that we need to do in the future, we’ll recommend it to you and bring that
to you. In 2024, though, you can see some high Transfers Out, some high costs with East Point Douglas and Jamaica, the two-year project for stormwater here. And then also even the 2024
Mill and Overlay Project on Jamaica had some costs there, and you approved those Interfund Transfers tonight, as part of that.
Director Malinowski said with that, do you have any questions about those enterprise funds?
Council Member Olsen said yeah, you guys are going to dig into those with the audit and then you’ll come back to us with any recommendations, correct? Director Malinowski replied
absolutely, yeah.
Unknown Items
Director Malinowski said unknown items, Jennifer reflected on it. So, as we did our 2025 Budget, we looked ahead at 2026. We thought that we knew everything at that point, well, obviously,
we didn’t. So, these are things that as we work through the 2026 Budget that we’re going to have to look at: Tariffs, the economy, health insurance. We are hearing from some cities
that have some double-digit increases in health insurance; we’ve got 10% in our numbers right now, but if that’ll be enough, I’m not sure. And then, you know, the impact of the Federal
funds: We’ve got two small grants out there that have the Federal funds attached to it, but even Medicare, Medicaid, where are we at with that? And then the impact of the Federal funds
on the State budget, they are going to be impacted more than we are, and so, are they going to start looking at some of our revenue streams that we get from the State; whether it’s
Police Aid, Fire Aid, MSA, we don’t know.
Facilities Study
That is underway right now to look at what replacement needs there are at our Central Fire Station, our Public Safety-City Hall building; and we’re looking if we can implement some of
that stuff to start recovering those costs so that when there is something that needs to be replaced at one of those buildings, that we’re not looking at in that year that it needs
to be done and how we’re going to fund that.
Family Medical Leave
We do have some funds in the 2026 Budget right now, we’re not sure if those are going to be enough, we’re waiting to hear from the State, and we’re hopeful that maybe they’ll push it
off, I don't know. We’re looking at if we could do private insurance and the cost of that, there are a lot of unknowns there on that.
Administrator Levitt said and to Brenda’s point, I mean, that is hard, right? We saw one woman when the legislative session started for the Family Medical Leave that looked positive
for us, it took a hard turn, now it’s not looking so favorable again. But, just so you know, it’s pretty bad when the cities are actually looking at going out for private insurance
to fund that, and so, that is a real dollar amount to us; and I will stress again it will be less of a value that our employees will get as part of it, and so it’s really disheartening
that it’s going to cost us more and our employees will get less.
Director Malinowski said right, because in our contracts it’s saying that the employer will pay half of FMLA and the employee will pay half.
Future Bond Issuance
Director Malinowski said just a reminder of future bond issuance again. So, we talked about 2026 and 2027, but in the CIP, we do have new debt that we are issuing in 2028 and 2029, and,
so, that is worked into our FMP. And here, we talked that in 2026, that debt has already been issued, so that’s our 2025 Bond and before; so, that isn’t new there, and then orange are
those future debt levies. We do have some debt falling off in 2027, 2028, and 2029, but here in our FMP, we’re continuing to issue debt, and so, we’re not seeing that go down.
Director Malinowski said and here we are to ask you what your considerations are as we start the budget process: Those 2026 projects that are going to require the debt issuance, facility
planning, the Kingston Park building, equipment replacement, level-of-service reductions, other budget additions, and other Council considerations.
Mayor Bailey asked don’t you just love budgets?
Council Member Olsen said I mean, we’re not really like starving, we’re just continuing, it never ends, honestly; and as you said at the outset, much of what we’re dealing with
right now is hypothetical because we don’t have hard data and we won’t for several months, so. It feels to me, personally, like we attempted to mitigate many of these concerns last
year, and when we kind of buttoned up the budget cycle last year, we were more generous than perhaps you had initially expected because we wanted to even out 2025 and 2026. The snapshot
that you showed us today shows that we’ve done that, but there’s a lot of unknown out there, a lot. So, to get back to your original statement, Jennifer, about kind of digging in, I
mean it feels like that’s really the smart move and it kind of is the only move at this point. We can’t be aggressive because we don’t have information, we just don’t, and it would
be easy to be regressive, but then we’re talking about service cuts and things, and we’re not there yet, we don’t need to have that conversation. So, we’re going to need to sit tight,
we’re going to need to be a little more patient and just wait and see what happens with the Feds, the State, the County; you know, if the Fed gets the flu, the State’s going to get
sick, too, and then that’s going to pass onto us, and you know, light a candle in church on Sunday and hope that doesn’t happen. But I’m nervous about it, but I guess I’m not at a place
personally where I’m ready to start making drastic decisions about cutbacks and things. You’ve given us good advice on do we hold tight on Denzer Park, do we wait on Kingston Park;
you know, those are realistic, reasonable, rational suggestions that are going to hedge our bets and protect us from any weirdness that comes our way, but how weird is it going to get?
We don’t know.
Council Member Thiede said or if we’re going to lose funds, you know, like Robert Street. Or I see this Oltman Park, then there’s a grant there, too, right?
Administrator Levitt replied $350K, yes. Mayor Bailey said but that’s a State grant? Council Member Olsen said we already got those funds, correct? Administrator Levitt replied
they’re eligible for us once we spend it, they reimburse us. Council Member Thiede said it doesn’t go away, though? Administrator Levitt replied yes, if we don’t use it, it goes away.
Council Member Thiede asked by when? Director Dockter replied June 30, 2026. Council Member Garza said so, by next year.
Council Member Thiede said and 100th Street, again, that’s a very real issue, but it’s potentially being clawed back if we, you know.
Mayor Bailey replied the money that’s out there won’t be clawed back, we confirmed that. The issue, though, is that some of the money has to be used by the end of 2026; the $7M
that we just did today, they’re giving us an extra year. But to your point and maybe a little bit like what Council Member Olsen just mentioned, I think by the time we get maybe to
the end of May, hopefully, things will have washed out at the Capitol. I think we’ll have an idea if there is going to be some funding that will be coming our way on 100th Street, as
an example. I think by
then, there will probably be some understanding of what’s going on with Family Medical Leave; it’s still sitting out there, there’s no deal with it. I mean, there’s nothing we can do
about the tariff thing, to be honest; I know it’s not in here, but.
Council Member Olsen said I know that the County’s nervous as hell about that, too.
Mayor Bailey replied they are, and I think what we do is I think we hold the line at the moment, and then as we get more feedback and as we start through the budget process here,
then we’ll; feedback meaning what we’re going to see from the State and the Feds will really dictate what this is. I will share on the 100th Street thing, and I heard it again today,
obviously, we’ve got our funding processes out there, places we’re trying to get additional dollars. I mean, I literally even heard from Stan, who’s the Board Chair, once again today
say we are not going to walk away from all this money on 100th Street. So, if the County and/or the City or both, whatever, have to figure out something like we’ve been talking about,
if that was needed to make sure that that project gets done, then that’s what we’ll do, and they’re our partner in that, which is good to hear.
Council Member Olsen asked are you guys working on a prioritized equipment list for us?
Administrator Levitt replied Ryan will be; Director Burfeind said yep, definitely.
Council Member Olsen said okay, because look, I know equipment’s been a bugger for years, and even though we’ve caught up to some degree, we’re not caught up, and that goes for
the entire organization, but it’s probably going to be a year where we need to be very careful about what we can and can’t do. Certainly, we don’t want to put anybody in a bad safety
position or anything like that, we have to have the necessities, and you guys always do a lot to make stuff last longer than it should, but just please give us some options.
Mayor Bailey said the other, I mean, I’m not advocating it, but I’ll just say it. As I look at the list, I mean, I’d prefer not to have to push off the Kingston Park building, but if
we have to, we have to, as an example. Secondly, is pavement management; I guess it would be good for you guys to come back to us and kind of show us what you’re thinking in 2026. And,
again, what are the tails of that, we already know that there would be some.
Council Member Olsen said we’ve got to keep up, wouldn’t you agree?
Mayor Bailey replied but how big are we talking? If it’s a smaller scale vs. a larger scale, at that point, I mean, we just need to know, all right? And the reason I’m saying some
of that stuff is there are some things in there where there’s dollars tied to it where it’s like if we say no, we’re not going to do this, we’re going to lose funding, so, Oltman, 100th
Street.
Council Member Olsen asked is our MSA built up now, again?
Director Malinowski replied we’re net neutral, but we’ll have the funds next year, once we start digging.
Mayor Bailey asked so, and then, of course, is 80th Street next year? Director Burfeind replied yeah. Council Member Olsen said and then East Point the year after.
Director Burfeind said and then 80th would be another full advance against the $4M grant. Council Member Olsen said but we’ve been planning for that for years. Director Burfeind
replied yep, it’s not unusual, that was expected. Council Member Olsen said I shouldn’t say it’s okay because it’ll get grounded. Director Malinowski said that’s okay. Director Burfeind
said that’s how you pay for those big ones; you have to ask Brenda, everybody was looking at Brenda. Council Member Olsen said yeah, you’ve got to ask Brenda.
Administrator Levitt said the target, you know, we always had for the last few years is we start our target at $100 value for a median home; right now, we’re at $115, so I guess, Council,
do you want us to then hit that $100 mark to start the budget off with?
Council Member Thiede replied I do. We’re very, very close to it, I mean, we’ve got some demonstrated evidence that we’ve been going after the $100, and fortunately or not, you
know when all the numbers come out, it’s been below $100, right? So, if we kind of like what I was saying last year, if we looked at not just going into the future and what it is going
to be, it’s also looking at performance and what it’s been, right? And I see you’ve got demonstrated evidence that things are, you know, if the numbers we look at for the current year
tend to drop a little bit when all the numbers come in, then we can be a little bit more flexible, right, with where that number is in the current year.
Mayor Bailey asked would there be a way for you, that was a good comment, would there be a way for you to tell what the difference or what; if we’re sitting at $115 today as the number,
and we get to $100.
Council Member Thiede said if it’s $130, that’s going to be dropping to $115.
Council Member Garza said it’s already down to $115; Council Member Olsen said and it will drop some more as we get more refined data.
Mayor Bailey said that’s what I’m saying, I’m not sure if it’s going to be as big of an issue, but all I’m saying.
Council Member Thiede said it’s a little bit of a crazy year, right? A lot more uncertainty. Mayor Bailey agreed. Council Member Thiede asked so is it going to follow the same patterns
as it has in the last couple years, or exactly what’s it going to do, right?
Council Member Olsen asked what’s our five-year average, do we know? The five-year average on that levy increase, you know how you target $100 a year, but you’re typically kind
of coming in a little under; do you have a ballpark?
Director Malinowski replied I do not, and when you asked for that five-year average, are you asking the levy increase average or are you asking the amount on the median home?
Council Member Olsen replied the dollar on the median home. Director Malinowski replied I can get that for you.
Council Member Olsen said just out of curiosity, because not only have we hit the mark, but we’ve also exceeded the mark. So, I’d be curious what the five-year average is from 2025
back, yeah.
Council Member Garza said and I’m sure with what is happening with everything right now, our community probably would appreciate it being under that $100, if we can even get it
down there; and I only say that because this year is such an uncertain year, and people are going through so much change, I don't know how many people have been affected by losing their
jobs and such. So, if we can really, really try to figure out how to get it under $100, I think would be really beneficial just for the community, just for this year.
Council Member Olsen said and what we’ll learn over time, you know, we always end up, Brenda pointed it out tonight, we’re always the second lowest in Washington County, always,
consistently, and we don’t get LGA. St. Paul Park gets a lot of LGA, not that they want to necessarily share it, but they do get it, and they come in under us for that reason. But if
we can stay the course and continue to hold the line on being the second lowest per capita in the County, that’s a massive achievement when you combine that with the AAA Bond Rating.
And protecting that Bond Rating I know is your top priority, and you’ve done magnificent work in doing that. So, I think if we use those two targets as key data points, we’ll be okay.
Administrator Levitt said I think for staff, we’re going to start at a 2.5% commodity increase, a little bit less than what was in that 2026 Budget, and try to drive our commodity items
down.
Council Member Olsen said which will ratchet that $115 down, yeah; Administrator Levitt replied correct, exactly.
Council Member Garza said that would be ideal; Council Member Olsen said good.
Council Member Olsen said yeah, you’ve got to be sitting on about what, six years worth of salt now?
Director Burfeind replied I wish. We had a lot of little storms this winter, and the sad part is whether you get one inch or six inches, you’re still going to need the same amount
of salt, but we’re doing pretty good.
Council Member Olsen asked are you guys comfortable with kind of just, not necessarily making any big decisions at the minute but just kind of monitoring and waiting to see how the numbers
come down, or are there things that you really want firm, like right-now guidance on?
Administrator Levitt replied I think as long as you’re telling us to aim for that $100, that will be our target to bring you a budget that balances at $100. And, obviously, we’re
going to give you some options, right, to go lower and then like we did last year, we’ll kind of have the wish list. I know Brenda probably didn’t appreciate all the low-hanging fruit
we grabbed last year, the carry forwards. I thought it was just kind of a seize the moment, grab those low-hanging fruits since we didn’t know where we were coming in here, and it would
only help 2026 be easier and 2025. So, I think we’re just going to tighten our belt and kind of ride this storm out.
Mayor Bailey said I know it’s really early, but you know, just like we do with everything, we always compare ourselves to others. What are your peers saying out there?
Administrator Levitt replied they’re all saying the same thing. They don’t want to build, they don’t want big buildings right now because they’re a liability with the economy and
the tariffs. I think we’re all waiting to see what happens on the interest rate for new homes, right? That’s making us nervous, right? Because we’d all kind of stabilized with the interest
rate, and we saw the housing market start to respond favorably, but if there’s some big trend there, you’re going to start to see that drop back off, and then we might be below our
revenues.
Council Member Olsen said plus construction costs going up; Administrator Levitt replied correct.
Council Member Thiede said and any type of capital purchase, I can verify that people have been holding off, they haven’t said no to proposals, but. Mayor Bailey said they’re not doing
them. Council Member Garza said they’re dragging their feet.
Council Member Olsen said so, we’re going to have to watch durable goods and things like that to see where that’s at. From an IT perspective, I know that we were dealing with we
needed to upgrade cameras, body cams, we needed to have more storage, we need several things. Are we still tracking positively towards?
Administrator Levitt replied that was the $250K that Brenda mentioned.
Council Member Olsen said yeah, but you’re okay, like?
Administrator Levitt replied actually, our CPU updated in full as of this week, and so we aren’t at that number.
Council Member Olsen said because there’s not a lot of wiggle room between $316K and $250K.
Council Member Thiede said you know, all that stuff with like IBM and Dell and Sysco, they’re all saying well, here it’s going to jump up 25% and so forth. And, obviously, now Trump
is saying, you know, he’s so wishy washy on this and that, and I was thinking, well, it’s just going to be the components that, you know whatever gets imported. You know, with all the
silly stuff going on with China and the old games and everything, that’s why people are holding off because sanity could come back, and it’ll all kind of level out again and have some,
a little bit more certainty.
Administrator Levitt said right now, on our IT side of things, we have a replacement plan for all of our devices. At this point, we’re probably just going to push that forward,
the replacement, out one year, just to hold because it’s just unpredictable, and they’re cancelling, you know, hp’s cancelling our order. Bryan’s where he can’t even get X, Y, and Z.
Council Member Olsen said so, when you get this updated quote, is there any kind of option to lock in pricing?
Administrator Levitt replied if it is something that is favorable, we will probably come to you as a Council item to act on it.
Mayor Bailey said just do it.
Council Member Olsen said yeah, just do it; I mean, you guys are smart enough to know to do it, yeah. If the pricing is favorable, and we know it’s a need. I mean, we’ve been kicking
this can around for several years, let’s just get it done, is my view. I don't know if everybody else agrees or not, but there’s no reason you shouldn’t have the authority to just make
the call.
Administrator Levitt replied especially since I think that does exceed my purchasing limit, it will come back to you.
Council Member Olsen replied understood, yeah, but you have to ask for forgiveness instead of permission.
Council Member Thiede said now, now, we’re not supposed to tell her.
Administrator Levitt said right. Why do you think we have Brad and Brenda here, right?
Mayor Bailey said you’re not supposed to take the lead from me.
Mayor Bailey asked all right, Council, are we good? Council indicated they were.
14. WORKSHOPS - CLOSED TO PUBLIC - None.
15. ADJOURNMENT
Motion by Council Member Thiede, second by Council Member Olsen, to adjourn the meeting at 8:55 p.m.
Motion carried: 5-0.
Minutes prepared by Judy Graf and reviewed by Tamara Anderson.