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HomeMy WebLinkAbout12-09-24-R '21t - DITEN HILLS Approved: January 13, 2025 CITY OF ARDEN HILLS, MINNESOTA REGULAR CITY COUNCIL MEETING DECEMBER 9,2024 7:00 P.M. - ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor David Grant called to order the regular City Council meeting at 7:00 p.m. Present: Mayor David Grant, Councilmembers, Brenda Holden, Tena Monson, Tom Fabel and Emily Rousseau Absent: None Also present: Interim City Administrator Jessica Jagoe; Public Works Director/City Engineer David Swearingen; Finance Director Joua Yang; and Assistant to the City Administrator/City Clerk Julie Hanson PLEDGE OF ALLEGIANCE 1. APPROVAL OF AGENDA Councilmember Holden requested Item 8L be pulled from the Consent Agenda for discussion as Item 9A. MOTION: Councilmember Monson moved and Councilmember Holden seconded a motion to approve the meeting agenda as amended. The motion carried (5-0). 2. TCAAP/RICE CREEK COMMONS UPDATE Interim City Administrator Jagoe stated the JDA met on December 2"d. County staff provided an update on the status of the PSA with Alatus. The original LOI from Alatus was presented to the County on July 31". Since that time, the County and Alatus have been exchanging comments, and the LOI was turned into a PSA as drafted by the County Attorney. During September and October, the County shared that they had not received comments back from Alatus on the PSA terms. Before Thanksgiving, the County requested from Alatus a schedule for achieving the milestones necessary to get to a Final Development Agreement by June 30, 2025, per the terms of the Preliminary Development Agreement. ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 2 County staff informed the JDA that they had received an LOI from Alatus that has a"new" terms structure. It was communicated that this new structure would be with Alatus finding private financing for mass grading and the County would transfer the land to Alatus and then they would do private financing of the mass grading versus County bonding and public funding for the mass grading. The County Board held a closed session on December Yd to review this new structure and discussions continue on potential PSA terms. Additionally, County staff noted there is a tentative placeholder for an agenda item at the County Board meeting on December 17th. Also from the JDA discussion, Jenny Boulton, the JDA Attorney, provided an update on the PDA terms which includes language to have reached substantial agreement as to the terms of the final DA by October 31, 2024. She reviewed the notice details should substantial progress have not been made and noted that neither party has issued that notice. Following these updates, the JDA has tentatively scheduled a Special Work Session on December 20th at 4 PM to hear updates on the PSA and discuss the terms of the PDA. Councilmember Monson discussed the events that occurred at the last JDA meeting noting the JDA was made fully aware of the preliminary development agreement notice. She indicated if the JDA were to give notice, there would be a 30-day period where additional negotiations could be made to try and reach substantial progress. She commented the JDA would be holding a special meeting on December 20 in order to be able to respond quickly in the event the County does not approve the purchase and sale agreement on December 17. Councilmember Fabel commented the developer has worked very hard to overcome the financial problems which were created by the long delay of this project. He noted this led to tremendous increases in interest rates and construction costs which has thrown a substantial monkey wrench in moving this project forward. He indicated the proposed private financing for the mass grading would help the County's reluctance to inject bonding funds into the development and creates a level of hopefulness for him. He stated the next couple of weeks would be critically important for this project. Councilmember Holden stated this was the same action that happened to the long delay when Alatus did not come forward with any agreement with the County. She understood the financial costs have gone up, along with the cost for the land given the delays. 3. PUBLIC INQUIRIES/INFORMATIONAL Ed Dickinson, 3188 Asbury Avenue, stated a section of Old Snelling from Trunk Highway 51 to County Road E had a 40 mile per hour limit and for much of that time the road was in a deteriorated condition. He reported this section of roadway has been completely resurfaced and a curbed walkway was created for pedestrians. However, at this time, the speed limit was lowered to 25 miles per hour. He indicated this roadway runs through an uncongested area where houses along the roadway were set well back. He recommended the 25 mile per hour speed limit be reconsidered and changed back to 40 miles per hour as this would be more in synch with the area north of the roundabout. Steve Scott, 4286 Norma Avenue, thanked the Council for the Christmas card that was sent to his address. He explained 10 months ago there was a large deployment ceremony for the 34th Infantry Division known as the Red Bulls. He indicated this impacted 574 soldiers that were sent to the ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 3 Middle East. He was pleased to report he just learned these soldiers would be returning sometime this week. He reported the soldiers were not interested in a welcome home ceremony as they wanted to get home to their families for the holidays, but he recommended the City post a comment on social media welcoming home these soldiers. Councilmember Monson supported this recommendation. 4. RESPONSE TO PUBLIC INQUIRIES None. 5. PUBLIC PRESENTATIONS None. 6. STAFF COMMENTS None. 7. APPROVAL OF MINUTES A. November 7, 2024, Special City Council Work Session B. November 12, 2024, City Council Work Session C. November 12, 2024, Regular City Council D. November 18, 2024, Special City Council Work Session MOTION: Councilmember Holden moved and Councilmember Rousseau seconded a motion to approve the November 7, 2024, Special City Council Work Session meeting minutes as amended, the November 12, 2024, City Council Work Session meeting minutes as presented, the November 12, 2024, Regular City Council meeting minutes as amended; and the November 18, 2024, Special City Council Work Session meeting minutes as amended. The motion carried (5_0). 8. CONSENT CALENDAR A. Motion to Approve Consent Agenda Item- Claims and Payroll B. Motion to Approve the 2025 Non-Union Employee Compensation Plan C. Motion to Approve Resolution 2024-056 — 2025 City Contribution to Employee Monthly Benefits D. Motion to Approve Northeast Youth and Family Services 2025 Agreement E. Motion to Approve Planning Case 24-009 — Lake Johnanna Fire Department Development Agreement F. Motion to Approve Ordinance 2024-016 Approving the 2025 Fee Schedule and Authorizing Publication of a Summary Ordinance G. Motion to Approve 2025 Liquor License Renewals H. Motion to Approve 2025 Tobacco License Renewals ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 4 I. Motion to Approve Ordinance 2024-017 Amending Chapter 3 Related to Adult Cannabis Retail Business Registrations and Cannabis Events and Authorizing Publication of a Summary Ordinance J. Motion to Approve Cancellation of the December 23, 2024 City Council Work Session and Regular Meeting K. Motion to Approve Cancellation of the January 27, February 24 and March 24, 2025 City Council Regular Meetings and Work Sessions L. Adetio., to A..,..oye Agreement nt fef Pref ssio a Services for-D„1 he Works Su pe Sen4ees Engineering,, Parks,MS4 and via Belton Q,N4 M. Motion to Approve Resolution 2024-057 — Application for Metropolitan Council Environmental Services (MCES) for 2025 Private Inflow and Infiltration (I/I) Grant Program N. Motion to Approve Resolution 2024-058 Authorizing the City to Submit a 2024 MnDOT Safe Routes to School Infrastructure Grant Application O. Motion to Approve Resolution 2024-061 Approving Plans and Specifications and Ordering Advertisement for Bids— South Tower Improvement Project MOTION: Councilmember Monson moved and Councilmember Holden seconded a motion to approve the Consent Calendar as amended and to authorize execution of all necessary documents contained therein. The motion carried (5-0). 9. PULLED CONSENT ITEMS A. Motion to Approve Agreement for Professional Services for Public Works Support Services—Engineering, Parks,MS4 and GIS—Bolton & Menk Councilmember Holden recommended the budget be passed prior to this item being considered. She suggested this item be moved to Unfinished Business. Mayor Grant noted the Council had already approved the agenda and items are not typically moved after the agenda was approved. Councilmember Holden commented she could move to table action on this item. MOTION: Councilmember Holden moved and Mayor Grant seconded a motion to table action on this item. The motion carried 3-2 (Councilmembers Fabel and Rousseau opposed). 10. PUBLIC HEARINGS A. Truth-in-Taxation Hearing Finance Director Yang provided the Council with a presentation on the 2025 budget and tax levy. She explained budget discussions were held with the Council in August and September. Council adopted a maximum tax levy increase of 15.50% on September 23, 2024. Another budget workshop was held with the Council on November 12, 2024. She described why tax bills change for property owners. She provided a summary of the General Fund budget and reviewed the revenues and expenditures in further detail. She reviewed the City's past tax levies and discussed ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 5 how the proposed tax levy compared to other cities in Ramsey County. She commented on the resources available for property tax relief. Staff discussed how the median value home would be impacted by the proposed tax levy and asked for comments or questions from the Council. Councilmember Holden asked what percent Public Safety was of the overall budget. Finance Director Yang stated Public Safety made up 46%of the overall budget. Mayor Grant opened the Truth in Taxation public hearing at 7:36 p.m. Steve Erler, 1704 Chatham, spoke in support of the budget being considered by the Council, along with the 15.5% tax levy. He believed the Council has done all they could to come up with a reasonable balanced budget. He indicated the increase was justified due to increases in public safety expenditures and employee salaries. Brad Bjorklund, 3550 Ridgewood Court, stated he has served on the Planning Commission for several years now. He explained two years ago, the City Council let many weeds grow and allowed Rice Creek Commons to languish in weeds for 10 years, which cost every citizen in the community $400 in legal fees to no avail. He appreciated the fact Rice Creek Commons would now be developed thanks to the new City Council. He reported this development would enrich the community. He stated the City's reputation of practicing institutional racism was enhanced by Councilmember Holden and Mayor Grant's stance against the development of Rice Creek Commons, the lawsuit and the elimination of the Human Rights Commission. He believed the proposed budget and tax levy were a reflection of all the things Councilmember Holden and Mayor Grant let slide. He stated massive buckthorn weeds have taken over the City's parks and a couple of City benches were not enough. He discussed how City employee wages have been neglected and employee happiness was being threatened. He stated no meaningful or substantial input has been received from Mayor Grant or Councilmember Holden on where cuts could be made to offset the need for this tax increase. He discussed how inaction was no longer a meaningful option. He believed the proposed tax increase was meaningful and he appreciated the Councilmember's who supported it. Russell Bertsch, 4419 Amble Circle, stated this year's proposed tax bill was a concern to him, especially given the double digit increase that occurred last year. He explained he wanted to understand why his property value goes up 2.5% and his taxes were proposed to increase 18%. He indicated this was outrageous. He stated his County taxes were slated to go up 7.2% as well. He believed an increase of$255 per year was excessive for the City. He encouraged the Council to consider how the levy increases were impacting residents because Arden Hills would no longer be affordable. He feared that the Council would be pricing people out of the housing market in Arden Hills. He asked that the Council consider this before approving another double-digit levy increase. He discussed how residents were making adjustments to their standard of living and suggested the Council take the same measures in order to reduce costs. Steve Scott, 4286 Norma Avenue, stated he has experience managing City finances and setting tax levies. He explained he was astounded by the callous nature of some of the members on the Council with respect to how they were approaching the proposed budget and tax levy. He encouraged the Council to truly consider how the proposed increase will impact residents. He stated Arden Hills was proposing the second highest tax levy increase in Ramsey County. He spoke on behalf of an elderly neighbor noting this resident has lived in Arden Hills for the past 40 ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 6 years and hoped to age in place. This neighbor feared that she would not be able to remain in her home given how taxes were rising. He implored the Council to consider dialing back expenses on behalf of the residents. Gregg Larson, 3377 North Snelling Avenue, stated the City has a history of budgeting at the margin and racing to the bottom seeking a low levy. He indicated this was a meaningless chase because cities were not comparable. He discussed how cities differ based on the services they opt to provide or not provide. He commented on how Arden Hills on the cheap has underfunded its parks, delayed improvements for streets and trails, failed to save for a new fire station, has insufficient compensation for staff along with failure to budget for inflation. He noted past Council's have done this with unbalanced budget and deficit spending. He reported the past strategies have not worked and five of the last seven years have resulted in general fund deficits, which leaves smaller carry over balances for the next year. He indicated previous Councilmembers Holmes and Scott recognized the problem in December of 2022. However, Mayor Grant and Councilmembers Holden and Raji were still racing for the bottom at 5.5%. He discussed how the chickens came home to roost in 2024 where a 12.55% levy increase was approved and Councilmember Holden and Mayor Grant voted against this. He discussed how Councilmember Holden predicted the City would end 2024 with a surplus, when in fact the City would be ending 2024 with a general fund deficit of $182,000. He explained staff was recommending a levy increase of 15.5% for 2025 and the majority of the Council was acting responsibly by offering support of this increase. He anticipated Councilmember Holden and Mayor Grant would act irresponsibly and would be voting against the proposed levy increase. He stated if the Council wants to lower the proposed levy, he recommended the Council speak to what expenses would be cut that would make a significant difference. Mary Henry, 3521 Ridgewood Court, stated she supported the proposed levy. She believed it took courage to face the reality of what the City was experiencing. She reported inflation was not the City's fault but it was the City's experience. She indicated it was important for the Council to recognize that when staff puts together the budget that it reflects increased costs for public safety, street maintenance costs, etc. She encouraged the Council to approve the proposed tax levy increase in order to continue to provide basic services for the residents of Arden Hills. Kris Shields, 1144 Karth Lake Drive, thanked the Council for their service to the community. She appreciated how Councilmember Holden and Mayor Grant had done their best in the past on the TCAAP development by not letting Ramsey County run all over the City. She thanked the Council for working to keep taxes reasonable and asked that the Council to work to reduce the proposed tax levy for those who live in the community that would like to age in place or are single parents. Mayor Grant closed the Truth in Taxation public hearing at 7:55 p.m. 11. NEW BUSINESS A. Adoption of the 2025 Budget and Tax Levy o Resolution 2024-059 Setting the Final Tax Levy for Taxes Payable in 2025 o Resolution 2025-060 Adopting the Proposed 2025 Budget Finance Director Yang reported this item was presented under Item 10A. ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 7 Councilmember Holden stated the public has spoken about how the City Council was substandardly paying its employees. She reviewed the market analysis, noting Arden Hills was at 90% to 105% for employee compensation, except for four staff members, which were at 80%. She explained these staff members received a three step increase along with an additional 3%. She explained she is deeply concerned about the fund balance target policy noting the auditor said the City was fine,but now the City was below the mark for 2023. Finance Director Yang explained the $9,000 extra was the operating activity for 2023, which meant revenues exceeded expenditures. However, she noted this dollar amount did not take into consideration the transfer that was approved in June of 2023 for the 2022 audit. She reported whenever an audit is completed, Council reviews the overall fund balance policy to determine whether or not the City has met the 50% fund balance policy. She commented the City had not met the 2023 fund balance policy as the City was at 47%. Councilmember Holden questioned why the audit states the City was at 51%. Finance Director Yang stated she did not recall this being the case and restated the City was at 47%. Mayor Grant reported in previous meetings the transfers have been reviewed for past years. He noted revenues exceeded expenditures by over $9,000. He concurred with Councilmember Holden that the auditor stated the City had met the 50% threshold and he was surprised by the change. He asked if staff had done an analysis on where the City will end up this year. Finance Director Yang estimated the City would be underfunded by about $14,000 for 2024. Mayor Grant stated this was about as close as the City could get on its budget that had over $5 million in revenues and expenditures. He clarified for the record that the shortfall was not $182,000. Councilmember Fabel asked if the underfunding referred to the proposed increase of 15.5%. Finance Director Yang stated she was referring to the 2024 actuals. Councilmember Fabel questioned if staff had projections for 2025. Finance Director Yang reported in order to get to a balanced budget for 2025, the Council would have to approve a 15.5% levy increase. Councilember Fabel indicated the drivers for the levy increases were due to increases in public safety costs, CIP increases, and personnel costs. He recalled that every member of the City Council voted in favor of the CIP, contracts with the police and fire departments, along with the proposed personnel pay increases. Councilmember Holden stated this was the first time she was considering the budget for 2025. Councilmember Fabel recalled that these three items had come to the Council previously and the entire Council had offered their support. ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 8 Mayor Grant reported the Council had offered their support for the CIP, but noted the police and fire contracts were provided by staff and a vote was not taken. Councilmember Fabel commented on the lengthy discussions the Council had regarding the police and fire contracts, along with the discussions held regarding employee compensation. He stated at the end of the day, the entire Council voted to support the proposed changes. He indicated his second observation was that even with an increase of 15.5%, Arden Hills would have the second lowest tax rate (28.07%) in Ramsey County. He explained in 2017, the City was less than 1%of this tax rate (27.2%) and in 2022 the City's tax rate was 26.5%. He discussed how the proposed increase would be similar to the tax rate that the City has had for years. Councilmember Rousseau stated it was disappointing that half of the cities in Ramsey County were considering a levy increase of 10% or higher. She indicated she did not know what the root cause of this was,but explained Arden Hills was looking at a 13%to 15.5% levy increase. Councilmember Holden commented the City overspent $100,000 on Ehler's and legal expenses in 2024. She stated without this overage, the City's budget would have come in with a net positive in revenues. She asked if the fire department pay increases were in the budget. Finance Director Yang reported these were included in the budget for 2025 and going forward. Councilmember Holden inquired if the Great River Greening increases were included in the budget. Finance Director Yang stated the CIP projects were included. Councilmember Holden inquired if the Public Works salary increases were included in the 2025 budget. Finance Director Yang reported this was the case, noting negotiations were still underway but a 3% COLA had been included. She explained she does not have the final salary numbers at this time but noted the insurance numbers were included. Interim City Administrator Jagoe reported the union contract has not been finalized, but estimated the pay increases for public works would be $25,000 to $30,000. Councilmember Monson commented on the general fund balances over the past eight years. She explained the general fund was the operating fund for most services the City offers. She indicated these activities were funded by tax dollars and permit fees. She stated this fund needs to be a healthy fund and should be keeping up with inflation. She discussed how the decreases in the general fund have led to a larger tax levy increase given how inflation and employee salaries were increasing. She described how over the years the City had not levied enough to meet expenditures. She noted incremental tax increases were necessary in order to avoid large tax increases. She believed when funding was transferred out, there needed to be better consideration of what levy expenditures truly were. She discussed how growing the tax base could assist with reducing taxes, which would occur once Rice Creek Commons began. She commented further on how the proposed increase was due to the fact only incremental increases were made to the levy over time and now as expenditures were rising the general fund did not have a balance to support these proposed increases. She reported this was not a new problem but rather staff has been ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 9 speaking to the Council about the unsustainability of underfunding the budget and deficit spending. She indicated she would not continue with the unsustainability of the underfunding because she believed this was fiscally irresponsible. She supported keeping the budget balanced, while also keeping the general fund at a minimum with inflation. Mayor Grant asked why there was an asterisk on the 2024 general fund. Finance Director Yang reported this indicates the 2024 general fund was predicted as of the end of September. She commented she does have another projection as of the end of November that shows the City was approximately $14,000 short. Mayor Grant commented when looking across the years, the ending fund balances were around $3 million each year. He was of the opinion the City was doing pretty good meeting obligations and raising taxes in an amount that equals what will be spent. He discussed how surpluses have been transferred out in the past per the City's fund balance policy. He noted the City did underfund this year by about $180,000, but in the final analysis, the City spent close to what was projected. He reported this was done each year because the City has not spent 100% of every single cost center as this would overtax the residents. Councilmember Holden stated the $400,000 that was transferred was set aside for future equipment replacement or vehicle purchases and noted this overage was the City overtaxing its residents. She commented these purchases have to be made out of the general fund and the Council had put these funds aside for CIP purchases. She indicated she was concerned with the fact the proposed budget has not had any strategic planning,but rather items were added and were being approved. She discussed how the City had three major trails coming up that would require City funding. She was of the opinion trails were more important to the community than parks because 27% of the City's population was 15 and under. She did not believe a master park plan should be a priority at this time and she did not believe the City's parks were underfunded. She reported the City's parks were in really good shape and were always well manicured. She commented further on potential cuts that could be made to the budget. She recommended the parks master plan be pushed out several years in order to assist with reducing the tax levy. Councilmember Rousseau explained this reminded her of the discussions that were held last year noting the Council voted to support a 12.5% tax levy increase. She noted the Mayor supported only a 10% levy increase. She discussed how approving the 12.5% levy increase kept the general fund budget on track. She hoped Councilmember Holden would support the parks master plan in order to make the City's parks a priority going forward as that was one of the priorities that she had told the community she was interested in. Mayor Grant reported earlier there was a comment about growing the City's tax base. He agreed the City wanted to grow its tax base through TCAAP, but noted this development would also grow the City's costs. He reported the Council voted to underfund the budget by $182,000 last year and the last projection had the budget coming in within $14,000. He reported he did not support overtaxing the residents of Arden Hills, which was why he supported some level of underfunding. He discussed the proposed shelter building and noted the $85,000 expense was quite high. He asked if the Hazelnut Park parking lot was in the budget at$315,000. Finance Director Yang reported this expense was included in the budget. ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 10 Mayor Grant anticipated this expense would come in substantially lower than the amount that was included in the budget. He asked if the public works FTE was to manage grants. Public Works Director/City Engineer Swearingen reported this would be just one of many duties for this position. Mayor Grant questioned if this position should remain in the budget as an expense item. He discussed the parks master plan, noting Mounds View recently completed a parks master plan that came back with an improvement price tag of$110 million. He supported the City Council looking at what was not done in the previous plan, prior to moving forward with a new parks master plan. He stated he did not support the City completing a parks master plan just to complete parks master plan. He understood one would be needed, but he was uncertain if this was needed next year. He discussed how the Great River Greening bid came in higher than anticipated. Public Works Director/City Engineer Swearingen reported this was the case, but noted this would not increase what the City will be contributing to these projects. Councilmember Monson asked what trails the City would be completing in the coming years. Councilmember Holden stated this included the Old Highway 10 trail, the Lake Johanna Trail, the County Road E trail from New Brighton and the Hamlin Avenue Trail by Ingerson. Councilmember Monson reported the City had $880,000 set aside for trails which would pay for the extension on Highway 51 which would connect the neighborhood southeast of Lake Johanna on Old Snelling Road. She indicated the City learned MNDOT would be covering this $550,000 cost. She noted this meant funding could be shifted to the Elmer Anderson and Roseville trails. She explained the Council has had minimal conversations about how to fund the Old Highway 10 and Lake Johanna Trails. She understood the City had some grants, was seeking more grants and was considering making a bonding request from the State. She indicated the public should understand the Council has not discussed the Lake Johanna trail or the Highway 10 trail and how these projects will be folded into the budget, but the City continues to find grants. She reiterated that the Council has been working on the budget since June of this year and this was the first time she was hearing about making cuts to parks. She discussed how removing the parks master plan would not make a dent in the proposed tax levy increase. She asked that staff speak to this further. Finance Director Yang reported the budgeted tax levy for the PIR/CIP fund was set at $250,000 annually and noted other revenue sources make up the overall increase to the fund balance. She explained the $75,000 for the parks master plan would be coming from the PIR/CIP fund balance. Councilmember Monson stated tonight was the first time she was hearing the cost for the Hazelnut Park parking lot would come in less than $350,000 and the Council has been reviewing the budget for the past six months. She did not appreciate the fact several Councilmembers were now sharing their thoughts at the last minute because this showed a lack of coordination and openness. She stated she has worked really hard to try and find areas where she could make cuts and no one came up with any ideas at the previous budget discussions. She explained she would have enjoyed discussing the Hazelnut Park parking lot at a previous meeting and did not believe now was the time to make a change. ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 11 Councilmember Holden reported she did bring up things she was not interested in funding at the previous budget meetings and she was told these matters were moving forward and it appeared the Council was not interested in hearing her comments. She indicated there was no open discussion. She commented she was now reviewing what she wanted to cut because she was not allowed to speak previously. She stated the bottom line was, she wanted to plan for items and noted the Lake Johanna and Old Highway 10 trails were in the five-year plan. She questioned why she was not allowed to voice her opinion at this meeting. Mayor Grant reported the Council has discussed the Old Highway 10 and Old Snelling project. He asked if these projects were included in the five-year CIP, including some source of funds. Finance Director Yang indicated these projects were included in the five-year CIP. Mayor Grant noted MSA funding was also discussed and when this funding would be available. Finance Director Yang reported this was the case. Mayor Grant rejected the fact that those discussions have been minimal, but noted this may be because the project was three years out. He stated in regard to the Hazelnut Park parking lot there would be negotiations with the church. He noted he met with Interim City Administrator Jagoe last week and noted staff could share what they have when they have it. He commented he was not in favor of doing the parks master plan in 2025, but the consensus was to move this item forward. He was of the opinion the City Council was making a great deal of investments in the parks in 2025. He indicated the PTRC was to identify what trail segments are missing and this could be done by using the current parks master plan as this document lists all of the trails that should be completed. He understood the current plan was old, but he recommended the current plan be fully utilized. Councilmember Rousseau asked what dollar amount Councilmember Holden and Mayor Grant wanted to cut from the budget. Mayor Grant stated he would cut the $85,000 park building, the Hazelnut Park parking lot expense had to be reduced, parks master plan was $75,000 and one FTE for the Parks and Recreation Manager was $111,000. He asked how much the levy would be reduced if these items were removed from the budget. Councilmember Rousseau asked what the cost difference would be for the Hazelnut Park parking lot. Mayor Grant stated staff may not have a good number for the parking lot. Interim City Administrator Jagoe explained $315,000 was in the budget for this project reflected the full project costs. She noted staff did not have a good idea on what the actual costs would be for the City and the church. Councilmember Fabel indicated the budget before the City Council had been carefully prepared by staff. He explained the City had tremendously professional staff members. He was of the opinion every single item in the budget was based on direction from City Council and received some discussion over the past year. He noted the additional FTE for the Public Works Department ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 12 was discussed at length by the City Council and this position would greatly assist the Public Works Department. He stated he did not support pulling this position out at this time. He recommended the Council not make quick decisions at this time, but rather that the thoughtful recommendations within the budget move forward as presented. Councilmember Holden reported she heard loud and clear from residents on National Night Out and from residents when she was door knocking that residents want the Council to curb costs. She indicated an expanded tax base only works when the City does not expand its expenditures. She discussed how people were hurting because costs continue to rise. She did not believe it was wrong for the Council to consider where cuts could be made. She explained the Council could approve 40 new positions, but this did not mean that these new positions had to be filled. She suggested the new parks position be hired for only half of the year next year and noted perhaps this new staff member could complete the parks master plan. She reported there were a lot of residents in the community that were living paycheck to paycheck that were looking for a break. She indicated she would continue to look for ways to make cuts because she believed this was what the residents of Arden Hills were asking for. Councilmember Rousseau asked if removing the building from Cummings Park would impact the levy. Finance Director Yang reported this project would not impact the levy if the PIR allotment remained at $250,000. Councilmember Rousseau questioned what the Hazelnut Park parking lot amount could be reduced to. Councilmember Holden estimated the expense could be reduced to $100,000. Councilmember Rousseau inquired if this reduction would impact the levy. Mayor Grant reported this would not have an impact on the levy. Councilmember Rousseau stated if the new FTE were to be placed at .75 versus .5 would impact the levy. Finance Director Yang reported this would create an underfunded amount of$110,000. Councilmember Rousseau explained the PTRC supported this position being fully funded and saw a lot of need for this new position. She asked if the $75,000 for the parks master plan would impact the levy. Finance Director Yang stated this expense would not impact the levy, rather just impacts the fund balance. Councilmember Holden questioned where the funding for the CIP and PIR came from. Finance Director Yang explained this came from the levy, grants, LGA, Minnesota State Aid and special assessments. She noted $250,000 from the general budget was being set aside for the CIP/PIR Fund. ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 13 Councilmember Holden reported if the Council did not put money in the CIP or PIR Fund, in future years, the City would have money to pay for other items. Finance Director Yang stated project expenditures drive down the fund balance and revenues increase the fund balance. Councilmember Monson reported the $250,000 allotment for the CIP Fund was set based on the five-year outlook for this fund. She explained the $250,000 was needed to cover the 2025 through 2029 projects. She stated under the CIP, $29.5 million was being spent in the next five years. She stated in 2025, $4.9 million would be spent. She stated if a $250,000 or $300,000 reduction was made into the CIP Fund allotment, would this impact the levy enough. She stated she was trying to figure out what type of levy Councilmember Holden and Mayor Grant would support. Councilmember Holden stated she did not see the purpose in coming up with a number. She indicated it has been spoken by the majority of the Council that they were happy with the proposed levy increase. She reported she was proposing to make cuts based on the concerns she has heard from residents. She stated just because staff was making the request for new vehicles does not mean the Council had to approve the request. Councilmember Rousseau asked if the Council was now to consider making cuts to vehicle purchases. Councilmember Holden indicated she was not making this recommendation because it did not matter. Councilmember Rousseau reported it appears the City did not need the funding for Hazelnut and with the park building, she could explain to the neighbors why the park building was no longer there. She indicated she would like to keep the FTE and parks master plan within the budget for 2025. Councilmember Holden stated the budget would still have to be amended to include an additional $25,000 to $30,000 for the public works salaries. Mayor Grant stated the Council approved the non-union compensation plan and the contribution to monthly benefits under Items 8B and 8C. He reported with the FTE and the parks master plan, he wasn't saying the items should not move forward at some point in time, but suggested the items be pushed off in order to lower the levy. Councilmember Holden reported if the FTE were pushed back to July, the savings would cover the funding needed for the Public Works salaries. She recommended the parks master plan be pushed off to 2026 when the new FTE was in place. Councilmember Rousseau stated the Council discussed the FTE and there was a recommendation to move hire this individual in April. She suggested conversations shift to the $215,000 reduction for Hazelnut and the $85,000 for the park building. Mayor Grant reiterated the fact that these two items do not impact the levy. ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 14 Councilmember Fabel stated during the course of the year the Council heard a compelling presentation from Director Swearingen regarding the need for this additional staff member. He indicated the positive and negatives aspects were reviewed by staff. He commented after hearing the presentation, the Council recommended the position begin April 1. He recommended staff speak to the necessity and negative impacts if this position were not to begin in April of 2025. Public Works Director/City Engineer Swearingen commented this position was a necessary component for operations for the City to get to the standard that is expected from residents. He reported if the position were delayed, the City would remain in the same status it was today and programs that could be developed by this new position would be further delayed. Councilmember Fabel indicated Director Swearingen's own time would be used more efficiently and effectively if he didn't have to do the tasks proposed for the new FTE. Public Works Director/City Engineer Swearingen reported this was the case, noting he only had so much bandwidth. Councilmember Holden reported many of the new tasks for Director Swearingen were voted on by the Council. She asked what new parks programs were being proposed. Public Works Director/City Engineer Swearingen stated he was speaking of programs very broadly. Mayor Grant commented three members of the Council prefer the 15.5% levy and if this were the case, the levy would be set at 15.5%. He indicated he would venture to say 2% could be removed from the levy. Councilmember Monson stated she did not believe it was fair for the Mayor to assume what the Council would or would not support. Mayor Grant asked what items Councilmember Monson would like to cut from the budget. Councilmember Monson indicated she was interested in hearing what the Mayor would like to cut from the budget. Mayor Grant commented he was of the opinion the City would not spend 100% of every cost center. He noted last year the City underfunded the budget by $182,000. He suggested the levy increase be reduced to 13.5%, which would be an underfunding of$106,000. Councilmember Holden stated she could support this number. Mayor Grant stated the 2% decrease would offer residents some relief. He indicated it has been expressed to him by residents that the City was devaluing their homes by raising taxes. He appreciated the improvements the City was making in the community, which helps keep property values up. Councilmember Rousseau asked how a levy increase of 13.5% would impact the median value homeowner. ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 15 Finance Director Yang reported the impact would be a savings of $25 to $30 per year for property owners. Councilmember Monson clarified her previous comment noting increasing the City's tax base was one way to address an underfunded general fund, but noted she was not advocating for a larger tax base or that this was the full solution,but rathe was a solution. Councilmember Fabel questioned if the Council were to reduce the levy from 15.5% to 13.5% would cause Arden Hills to have the lowest tax rate in Ramsey County. Finance Director Yang commented if the levy increase were reduced to 13.5%, the tax rate would be 27.547%, which would make Arden Hills the second lowest in Ramsey County. Councilmember Holden encouraged the Council to not compare itself to other cities in Ramsey County because every other city was different. She stated she was worried about the citizens of Arden Hills. She discussed why commercial businesses love to come to Arden Hills because the tax rate was low. Mayor Grant commented on how neighboring cities were different from Arden Hills. He commented on New Brighton's tax levy noting this community received LGA and Shoreview did not. He stated Mounds View had its own police department and Arden Hills did not, so there were differences in each community. MOTION: Mayor Crant moved and Councilmember Rousseau seconded a motion to adopt Resolution 2024-059 - Setting the Final Lew at 13.5% for Taxes Payable in 2025. A roll call vote was taken. The motion carried 3-2 (Councilmembers Fabel and Monson opposed). Mayor Grant reported the second item for the Council to consider was the 2025 budget. Councilmember Holden recommended $30,000 be added into the budget as a placeholder under public works union pay. Mayor Grant stated the park building valued at $85,000 could be removed, the Hazelnut Park parking lot was down by $215,000, parks master plan down by $75,000 and this would reduce the budget by $375,000. Councilmember Holden recommended the FTE begin in July of 2025, which would accommodate the $30,000 needed for the public works union pay and that the parks master plan be moved out to 2026. She noted this would cover the needed savings. Mayor Grant suggested the park building expenditure be removed and that the Hazelnut Park parking lot be adjusted. He stated these two items would reduce the budget by $300,000. He reported if the parks master plan were pushed out to 2025, this would be another reduction of $75,000. Councilmember Monson indicated she would not support the pushing out the parks master plan or changing the FTE, but noted she could support the reduction for the Hazelnut Park parking lot and Cummings Park building change and adding back in $30,000 for the public works union pay. ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 16 Councilmember Rousseau explained she would not support a further reduction to the FTE. She recommended the hire take place on April 1, nor was she willing to compromise on the parks master plan. She supported the Council having a strategic plan discussion in 2025 in order to assist with making better decisions going forward. She indicated she could support the Cummings Park building and Hazelnut Park parking lot being cut. Councilmember Holden commented she visits Cummings Park quite often and asked how the building at this park was utilized. Councilmember Rousseau indicated parents sit in this building and noted groups use the space. She explained she was not opposed to eliminating this expense, but she noted the residents have not had input on this matter. Councilmember Holden reported a concrete base would remain in place and the City could place benches or a table in the concrete area that would remain in place, but the covered shelter would be removed. She asked what size the current shelter was. Public Works Director/City Engineer Swearingen indicated the current size was 16 feet by 20 feet. He noted the proposed estimate was based on the shelter replacement at Floral Park. He commented on how the concrete slab was not able to be reused at Floral Park because six-foot footings were required. Mayor Grant asked if the Cummings Park shelter would be good for another year. Public Works Director/City Engineer Swearingen recommended this shelter be taken down sooner rather than later because it was showing rusting and deteriorating on the legs of the structure. He indicated the shelter at Hazelnut could be pushed out. Councilmember Holden questioned if the removal of the shelter would come in as a park maintenance expense. Councilmember Fabel asked how much the budget had to be reduced to reach a 13.5%levy. Mayor Grant stated $106,000 had to be cut to achieve a balanced budget. Councilmember Fabel recommended the Hazelnut Park parking lot expenditure be reduced by $106,000. Mayor Grant indicated he had proposed cutting $300,000 between the park building and the Hazelnut Park parking lot. Councilmember Fabel reported he did not support pushing back the hire of the Public Works employee. He noted if there were other levy related cuts, he would consider them. Councilmember Holden stated it made more sense to her to have the new Public Works employee completing the parks master plan in order to learn about the City's parks and their current condition versus paying an outside consultant to complete this work. ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 17 Councilmember Monson indicated she could defer the parks master plan to staff and if they recommended the plan be completed once the new FTE was brought on, she could support this recommendation. Interim City Administrator Jagoe stated it would take one year to complete the parks master plan. MOTION: Councilmember Monson moved and Councilmember Fabel seconded a motion to adopt Resolution 2024-060 - Adopting the 2025 Budget, remove the Cummings Park shelter building from the 2025 budget, reduce the Hazelnut Park parking lot expenditure down to $100,000 and add in the $30,000 for the Public Works union salary pay. The motion carried (5-0). 12. UNFINISHED BUSINESS MOTION: Councilmember Holden moved and Councilmember Monson seconded a motion to remove the Agreement for Professional Services for Public Works Support Services — Engineering, Parks, MS4 and GIS — Bolton & Menk from the table. The motion carried (5-0). A. Motion to Approve Agreement for Professional Services for Public Works Support Services—Engineering, Parks, MS4 and GIS—Bolton & Menk Councilmember Holden requested further information from staff on this item. Public Works Director/City Engineer Swearingen explained this was the engineering services proposal from Bolton & Menk. He indicated he had an engineering services contract that he was involved with in 2021 and 2022. He noted services were discontinued with the latest consultant and staff was looking to renew a contract for engineering services in order to support GIS, engineering, parks, MS4 and general engineering services on an as-needed basis. He reported the budgeted amount for 2025 was $90,000. Mayor Grant indicated the item before the Council was to consider the agreement for professional services and not the amount. Public Works Director/City Engineer Swearingen reported this was the case. Councilmember Holden questioned if the City was spreading the engineering work between several consultants. Public Works Director/City Engineer Swearingen stated the City utilizes a few other consultants as well. MOTION: Councilmember Holden moved and Councilmember Monson seconded a motion to Approve Agreement for Professional Services for Public Works Support Services — Engineering, Parks, MS4 and GIS—Bolton & Menk. The motion carried (5-0). 13. COUNCIL COMMENTS ARDEN HILLS CITY COUNCIL—DECEMBER 9, 2024 18 Mayor Grant stated he received a request from a resident asking to install a stop sign on Lake Valentine Road at Old Snelling. He reported there had been a number of accidents at this intersection. He indicated there used to be a stop sign at this intersection and it had been removed. He recommended City staff review this matter. Mayor Grant commented he received an email from Ramsey County noting funding has been earmarked and approved for the 800 megahertz radios, noting the County would be receiving $2,965,000 in federal funding. He thanked Betty McCollum and Amy Klobuchar for their support on this item. Councilmember Holden commented it was the County who made the decision about Lake Valentine Road and Old Snelling because they wanted traffic to flow on Lake Valentine Road, and Ramsey County pulled the stop sign. She anticipated staff would have to speak with the County regarding this matter. Councilmember Fabel stated in the interest of time he would forego further comment. Councilmember Rousseau explained she would like further information from staff on the plans for the Hazelnut Park parking lot. Councilmember Rousseau thanked Planning Commissioners Arlene Mitchell, Shelley Blilie and Jonathan Wicklund for their service on the Planning Commission. Councilmember Monson reported a LEED for Communities Kickoff was held for Rice Creek Commons where the rubric for the project was reviewed. Councilmember Monson indicated the fire department approved the budget at their last meeting. ADJOURN MOTION: Mayor Grant moved and Councilmember Monson seconded a motion to adiourn. The motion carried (5-0). Mayor Grant adjourned the Regular City Council Meeting at 10:00 p.m. Julie anson David Grant City Jerk Mayor