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HomeMy WebLinkAbout09-08-25-WS lt ,-4RQEN HILLS Approved: September 22, 2025 CITY OF ARDEN HILLS, MINNESOTA CITY COUNCIL WORK SESSION SEPTEMBER 8, 2025 5:30 P.M. - ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor Grant called to order the City Council Work Session at 5:30 p.m. Present: Mayor David Grant; Councilmembers Brenda Holden, Tena Monson, Emily Rousseau and Kurt Weber Absent: None Also present: City Administrator Jessica Jagoe, Finance Director Joua Yang, Public Works Director/City Engineer David Swearingen and Assistant to the City Administrator/City Clerk Julie Hanson 1. PUBLIC INQUIRIES/INFORMATIONAL None. 2. RESPONSE TO PUBLIC INQUIRIES None. 3. AGENDA ITEMS A. State of the City Update City Administrator Jagoe stated the City Council has decided to host an in-person State of the City event on Saturday, February 20, at 10 a.m. at City Hall. Light refreshments will be provided for attendees. Nine North will record, edit, and post a recording of the event online. Staff reviewed the topics that will be addressed and asked if the Council wanted to hold a Q&A segment at the State of the City event. Mayor Grant questioned how long the event would be. ARDEN HILLS CITY COUNCIL WORK SESSION— SEPTEMBER 8, 2025 2 City Administrator Jagoe explained in the past the State of the City event has run about 45 minutes. Councilmember Holden supported a Q&A segment being held at the end of the State of the City event. Councilmember Monson asked what was done last year. City Administrator Jagoe stated a Q&A segment was held at the end of the State of the City last year. Councilmember Weber indicated he wanted residents to be able to submit questions prior to the State of the City event as well. Mayor Grant reported he supported holding a Q&A segment at the end of the event. Councilmember Holden requested further information be provided in the presentation regarding Outlot A, noting only 10 acres had been developed by Ryan Companies and 30 acres remained. Councilmember Monson explained Ryan Companies signed a purchase agreement with Ramsey County for the 40 acres and Ramsey County sold 10 acres for development of Micro Controls. She indicated Ryan Companies was now marketing the remaining 30 acres. C. Use of City Logo Policy Discussion Mayor Grant asked the City Council if they want to create a policy related to use of the Arden Hills City logo and would they want to also trademark the City's logo. Councilmember Holden supported the City trademarking the City's logo with the State process. Councilmember Weber supported this action but anticipated businesses would still use the City's logo, at which time a cease and desist letter could be sent by City staff. Councilmember Rousseau indicated she supported the action that was taken by Anoka by having a general policy in place. She did not support the City trademarking its logo but if the City did pursue, she felt the Federal trademark was the better option. Mayor Grant stated he supported trademarking the City's logo with the State. Councilmember Monson was of the opinion the City was well protected without trademarking the City's logo. She specifically noted the campaign language that was within Anoka's policy. Council consensus was to direct staff to trademark the City's logo with the State and to bring forward a use of City logo policy mirroring that of the City of Anoka's for approval at a future Council meeting. ARDEN HILLS CITY COUNCIL WORK SESSION – SEPTEMBER 8, 2025 3 B. 2026 Operating Budget Discussion Finance Director Yang stated annually, the City prepares a five (5) year Capital Improvement Plan for budgeting and forecasting. The focus of the CIP is on the maintenance and protection of the City’s existing assets, redevelopment, and investment in new initiatives. The CIP is part of the budget process, but it is not a budget, it is a plan, and one that changes often. The CIP does not commit the Council to the proposed projects, nor implement the assumptions made during the preparation; however, this is the basis for the 2026 Budget as we continue with its preparation. Staff provided further information on the PIR Fund. Finance Director Yang explained due to the strong demand and positive feedback around the 2025 Tree Trust Partnership pilot program, Tree Trust has asked the City to continue its tree sale partnership, which promotes environmental sustainability. The 2026 cost is estimated to be $6,750. Council’s consensus at the August 25 Special Work Session supports the continuation to partner with Tree Trust and funding to come from the Tree Preservation and Landscaping Fund. Finance Director Yang reported annually, City staff prepares and submits a preliminary budget to the City Council for review and feedback. Each department provided their respective forecasts for this budget. The proposed 2026 budget is $7,518,589, an increase of $757,310 or 11.2%. For the purpose of this discussion, there is a 15.0% or $906,103 tax levy increase reflected in the budget, of which $754,103 for the General Fund, $100,000 for the EDA Fund, and $52,000 for the Public Safety Capital Fund. As presented, the General Fund Budget is underfunded by $122,009, which is the budget shortfall projected in the 2025 budget. This practice is not sustainable in the long term. A tax levy increase of 17.1% or $1,028,112 would be needed to balance the budget in 2026. Staff provided further comment on the amount the General Fund Budget is underfunded at different tax levy increase amounts and requested feedback from the Council on how to proceed. Mayor Grant commented on a number of ways the PIR Fund could be protected, such as putting off the Perry Park improvements in order to create a non-bonding scenario. Councilmember Holden indicated the Council would have to raise the levy in order to pay the debt service. Finance Director Yang reported this was the case. Councilmember Monson explained the City’s revenue was stagnant, but expenditures continue to rise. She stated she appreciated the options that were presented by staff, and suggested the Council find a balance where revenues cover inflation while also investing in the City’s amenities. Mayor Grant reported a bond would cost the City 3% to 4% in interest. He supported the $250,000 number rising because revenues have become stagnant. He indicated some of the proposed projects may have to flex in order to address increasing costs. Councilmember Rousseau stated in the last two years there has been a recommendation to increase the PIR Fund by $50,000 and this has not been done. She asked how much the City would save by partnering with other organizations to complete the trail work. ARDEN HILLS CITY COUNCIL WORK SESSION— SEPTEMBER 8, 2025 4 Finance Director Yang reported the City received $2 million in local grants for the Old Highway 10 project to assist with covering the costs for the trail work. Councilmember Weber commented on how bonding costs the City money, but noted it also costs the City money to defer projects. He explained in the last Council meeting there was a consensus to go with Option D or E. He noted he supported Options D or J moving forward. Mayor Grant supported the Council focusing on Options D and J. Councilmember Holden asked how many years the City would be bonding for. Finance Director Yang reported this would be a 20 year bond. Further discussion ensued regarding Options J-1 and J-2. Councilmember Holden indicated she would rather levy for dollars up front than throw away funding on interest payments. She asked how much the City would be paying in interest each year for 20 years. Finance Director Yang estimated this to be $1.3 million on a $2.8 million bond. There was further discussion around the interest amount and whether it was $1.3 million or $1.5 million. Finance Director Yang confirmed it is the $1.3 million. Councilmember Weber commented if the proposed street projects were further delayed, costs to the City would continue to rise. He did not want to risk the street projects rolling over to a full reconstruction. He supported the City paying $1.3 million for 20 years starting in 2028 then end up with an unhealthy PIR Fund. Councilmember Monson explained Scenario J has a shift in the PMP projects. She expressed concern with how the delay and bonding would impact expenses for the City. She stated she would like to see what it would look like to not shift the 2028 project. Councilmember Holden indicated the bonding was not a short term action but rather would require putting enough money into the budget for the future. She was of the opinion $50,000 was too low. Mayor Grant commented if the City set aside $180,000 (three levy points) in addition to the $250,000, the City would have $430,000 annually. He indicated the Council could consider a 3% additional levy increase over the next few years and this funding could go directly into the PIR Fund. He explained he would like to avoid the $1.5 million in interest each year for the next 20 years. Councilmember Rousseau stated she understood this levy number would be high, but this does have some appeal as this would assist with saving money over time. She understood this increase would hurt initially but this may be the best option for the City in the long run. She indicated she was also interested in making sure the road projects weren't shifted. Mayor Grant noted Karth Lake was proposed for 2026 and Benton Way was proposed for 2028. ARDEN HILLS CITY COUNCIL WORK SESSION— SEPTEMBER 8, 2025 5 Councilmember Monson asked if the City were to levy for the funds up front, what would the number have to be. She recommended 2028 be held and not be split. Councilmember Holden questioned how much of the residents' money the City wants to hold. She noted Option J would have the City holding up to $8 million. She reported Ramsey County was proposing a 9.7% increase. Councilmember Weber stated his previous statement was based on the assumption the City should not push the projects because it does not make sense for the City to bond. He supported the City holding enough funding to pay for all three projects. He indicated he wanted the City's ten year outlook to be good. He reiterated that he did not support splitting the projects. Mayor Grant commented if Director Swearingen had brought these projects forward as a 2026 and 2028 project, there would be no discussion about pushing the projects. He noted only a single project was brought forward for 2026. Public Works Director/City Engineer Swearingen clarified the 2026 project remains the same and the 2028 PMP was being proposed to split. Mayor Grant indicated if the project had been brought forward as a split, the Council would not be discussing this matter. Councilmember Holden asked what percentage of the budget is placeholders 10 years out. Public Works Director/City Engineering Swearingen commented the estimates get more refined as projects are five years out and beyond five years the today's rate was inflated until the year it is proposed. Mayor Grant stated another item that comes into play is the possibility of improvements to Lake Johanna Boulevard. He reported this project may require bonding and he did not want to see the City double bonding for this project and a future project. Councilmember Monson asked that staff provide the Council with another round of scenarios. She stated Option D was a 15% levy and Option J was a 15.9% levy. She indicated these were significant numbers. Councilmember Holden reported there was a time when the legislature had put a cap on what the City could levy. She explained this occurred for six or seven years and she feared the legislature may do this again. She stated it may be advantageous for the City to levy over 15% for the coming year should the legislature put a cap in place for future years. City Administrator Jagoe indicated staff would take another look at Option D, shifting the PMP projects with an increase annually beginning in 2026 with no bonding. She asked if the Council wanted to see what this looks like earmarking $180,000 annually. Councilmember Monson stated she was in favor of running scenarios of funding the levy now with no bonding for the next 10 years and funding the levy now, assuming bonding, but no split of the 2028 projects. ARDEN HILLS CITY COUNCIL WORK SESSION— SEPTEMBER 8, 2025 6 Councilmember Holden inquired if the cost for Lake Johanna Boulevard was written into the proposed scenarios. Finance Director Yang reported it was not. Councilmember Holden asked if the projects in 2028 would require the City to hire consultants. Public Works Director/City Engineer Swearingen explained these costs were already included in the numbers. Councilmember Weber commented he was interested in seeing a scenario with no shift in 2028. Mayor Grant reported the Council would be deciding on the preliminary levy at the next City Council meeting. Councilmember Rousseau explained she would like to see how the levy would be impacted if the 2026 projects were not shifted. Finance Director Yang indicated the 2026 projects were not proposed to be shifted, just the projects for 2028. Mayor Grant inquired if the Council would like to hold a Special Work Session prior to the September 22 City Council meeting. Councilmember Monson proposed the Council hold a special City Council meeting after the Council strategic planning meeting on September 29 to approve the preliminary levy. Councilmember Rousseau asked that staff bring forward information on how a 15% through 20% levy increase will impact taxpayers. Councilmember Monson agreed it would be beneficial to have more specific numbers on how the median value homeowner in Arden Hills will be impacted. City Administrator Jagoe reported staff would come back to the Council with new scenarios for D-1, F-1 and F-2. She noted staff would schedule a special City Council meeting on September 29. She asked if the Council had direction for staff regarding the operating budget. Mayor Grant indicated he did not support hiring for the new maintenance worker or lead. In addition, he did not support the purchase of a new trailer. Councilmember Monson explained she could support the lead, but not the maintenance worker. Councilmember Weber commented he could support the lead position being included in the operating budget. Councilmember Rousseau noted she was in favor of the lead and the maintenance worker position being included. ARDEN HILLS CITY COUNCIL WORK SESSION— SEPTEMBER 8, 2025 7 Council consensus was that Director Yang would provide updated information regarding the new scenarios that were discussed. Council also agreed to have a Special Meeting on September 29 at 7:30 pm, following the conclusion of the strategic planning meeting. D. Twin Cities Gateway Discussion City Administrator Jagoe stated for 2025, the City has received $19,375 from the Twin Cities Gateway (TCG) Visitors Bureau; this money comes from a portion of the lodging tax that the City charges its hotels and remits to the Visitors Bureau. Additionally, at the end of the 2024 period there was $807.25 in grant dollars remaining which were carried over to this year for a total dispersal of$20,182.25 in 2025. At the May 27th Work Session, the City Council directed staff to utilize the funds towards the MN Ice Swim, Ribfest and the Norwegian Foot March, with any remaining funds going towards the City's 75th Anniversary. Staff reviewed the stipulations put forward by TCG regarding how the money can be spent; in short, the money is intended to bring outside visitors into the City. City Administrator Jagoe explained staff was recently informed that the MN Swim Event will not be occurring in January 2026. Therefore, the Council should discuss and direct staff on how to utilize the remaining funds of$10,145.80 for 2025. • Ribfest— $4,000 • Norwegian Foot March— $2,000 • 75th Anniversary—$4,036.45 (20%) Remaining Funds = $10,145.80 City Administrator Jagoe stated additionally, the City has a second Board Member serving on the Bureau's Board of Directors based on the percentage of lodging fee contributions during the preceding year. This appointment is currently held by John Connelly, Twin Cities North Chamber of Commerce. At the end of September, Mr. Connelly will be retiring from the Chamber of Commerce. Per the Bureau agreement, each member city shall have at least one Board Member. The first Board Member appointed by the City shall be an elected or appointed municipal representative of that City. The second Board Member selected by the City will be from the community's lodging industry. The City Council should discuss and provide direction on the replacement of this second Board Member appointment for the remainder of 2025. Councilmember Holden explained she supported the additional funding being designated to the 75th Anniversary. Mayor Grant requested staff confirm that the funds could be allocated to the 75th Anniversary. Councilmember Rousseau supported Councilmember Holden and Councilmember Monson make decisions on how this funding could be used to market the 75th Anniversary. E. Agenda Planning City Administrator Jagoe stated per Council's adopted policy on agenda setting, please find the proposed agenda below for the upcoming meeting. She noted the time needed for the Ramsey County Projects discussion, stating a follow up budget discussion could occur following that item. ARDEN HILLS CITY COUNCIL WORK SESSION— SEPTEMBER 8, 2025 8 She also asked if Council would be amenable to having the Affordable Housing Policy Discussion on October 13 instead of September 22. The next two Work Sessions' topics were updated as follows: September 22nd Work Session • Ramsey County Projects Discussion • Budget Discussion • Agenda Planning (time sensitive) October 13th Work Session • Accessory Dwelling Unit Discussion • Affordable Housing Policy Discussion • Agenda Planning (time sensitive) 4. COUNCIL/STAFF COMMENTS None. ADJOURN Mayor Grant adjourned the City Council Work Session at 6:57 p.m. Oiei Hanson David Grant y Clerk Mayor