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HomeMy WebLinkAbout09-29-25-SR City of Arden Hills ▪1245 West Highway 96 ▪ Arden Hills Minnesota 55112 Phone 651.792.7800 ▪ Fax 651.634.5137 ▪ www.cityofardenhills.org Request for Special City Council Meeting A special meeting may be called by the Mayor or by any two Councilmembers. Reason for meeting: 1. Approval of Agenda 2. Public Inquiries/Informational 3. Response to Public Inquiries 4. Consent Items 5. Pulled Consent 6. New Business A. Set Preliminary Levy and Establish Truth-In-Taxation Public Hearing Date for Proposed Taxes Payable in 2026 • Resolution 2025-063 – Preliminary Levy • Resolution 2025-064 – TNT Public Hearing Date 7. Council/Staff Comments Adjourn Requested Date: 09/29/2025 Requested time: 7:30 pm Open meeting X Closed meeting Signature of person(s) making request: ________________________ 09/25/2025 Mayor or Council Member Date / / Council Member Date -This section to be completed by City staff- Date received: 09/25/2025 Date meeting to be held: 09/29/2025 Time of meeting: 7:30 pm Location: City Hall All necessary posting and notices have been completed. 09/25/2025 Signature of City Clerk Date 'It --fi QEN_HILLS Approved: October 13, 2025 CITY OF ARDEN HILLS, MINNESOTA SPECIAL CITY COUNCIL MEETING SEPTEMBER 29,2025 7:30 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 Special City Council meeting at 7:30 p.m. Present: Mayor David Grant, Councilmembers Tena Monson, Emily Rousseau and Kurt Weber Absent: Councilmember Brenda Holden(excused) Also present: City Administrator Jessica Jagoe; Public Works Director/City Engineer David Swearingen; Finance Director Joua Yang; Community Development Director Jake Reilly and Assistant to the City Administrator/City Clerk Julie Hanson PLEDGE OF ALLEGIANCE 1. APPROVAL OF AGENDA MOTION: Councilmember Monson moved and Councilmember Rousseau seconded a motion to approve the meeting agenda as presented. The motion carried (4- 2. PUBLIC INQUIRIES/INFORMATIONAL None. 3. RESPONSE TO PUBLIC INQUIRIES None. 4. CONSENT CALENDAR None. ARDEN HILLS SPECIAL CITY COUNCIL— SEPTEMBER 29, 2025 2 5. PULLED CONSENT ITEMS None. 6. NEW BUSINESS A. Set Preliminary Levy and Establish Truth-In-Taxation Public Hearing Date for Proposed Taxes Payable in 2026 • Resolution 2025-063—Preliminary Levy • Resolution 2025-064—TNT Public Hearing Date • Resolution 2025-065—Appropriating Funds to Pay Debt Service on the City's General Obligation Capital Improvement Plan Bonds, Series 2025A, and Authorizing Cancellation of the 2025 Debt Service Levy Related to Such Bonds Finance Director Yang stated State law requires that cities certify their proposed property tax levies to the county auditor by September 30th of each year. The proposed tax levy that is given preliminary approval may be lowered but cannot be increased. Therefore, it is important that the proposed tax levy provides adequate revenues to finance the 2026 Budget. The City Council needs to decide the maximum levy that it is willing to approve and then adopt the proposed Resolution. There will be another budget workshop in November. The City will hold its Truth and Taxation Hearing and set the final tax levy at the December 8, 2025 City Council meeting. A budget workshop was held with the Council on September 22, 2025. The drivers behind the proposed levy increases were further discussed with the Council. Staff commented on the changes made to the preliminary budget based on Council direction which included: • Adjust the police contract amount based upon the latest estimates from the Ramsey County Sheriff's Office—increase of$103,311 • Removal of the Public Works Maintenance Worker position per the Public Works Phase 2 staffing changes—decrease of$45,373 • Delaythe Old Highway 10 Trail project from 2026 to 2027—no impact to 2026 levy g Y P J Finance Director Yang provided further information on the changes within the budget and described how the median value homeowner would be impacted by the proposed tax levy at various percentages. She requested the Council approve the preliminary levy, set the Truth in Taxation Hearing Date and adopt a Resolution that would appropriate funds to pay debt service on the City's general obligation capital improvement plan bonds, Series 2025A and authorize cancellation of the 2025 debt service levy related to such bonds. Mayor Grant asked what the amount of increase in the budget would be from 2025 to 2026. He discussed how difficult it would be to maintain 50% of the general fund with a larger levy increase. Finance Director Yang reported this would be $1,024,255. Mayor Grant inquired if revenues were projected to come in $200,000 higher in 2025. Finance Director Yang stated this was the case. ARDEN HILLS SPECIAL CITY COUNCIL— SEPTEMBER 29, 2025 3 Councilmember Weber commented a lot of the expenses for the City are unavoidable and without building towards capturing the correct amount of funds, the City would never have enough funding in order to have 50% of the general fund in reserves. He stated the City's goal is to get to 50% and he believed this was something the City should strive to achieve. He questioned if the Mayor believed the 50% should be lowered. Mayor Grant indicated he did not believe the 50% should be lowered. However, he understood the increases were part of the City's operating costs and were contractual. He stated his previous point was, the larger the levy was based upon the previous year, it becomes a larger number in order to maintain 50% of the general fund. He requested that Council consider this when making a decision. Councilmember Weber reviewed the tax history table. He requested further information on the practical implications of the values in the percent change column. Finance Director Yang described how the change in tax rate percent was calculated. She reported this calculation was based on the change in property tax values throughout the city. Councilmember Weber indicated the percentage changes were indicative to inflation, when it came to housing values. He stated as housing values rise, by not balancing this with the levy, the City runs the risk of other items also inflating. He commented on how he did not want to see a shortfall in the PIR Fund in the future. He was of the opinion there had been severe inflation over the last number of years, and the City did not address it until 2024 for the 2025 levy. Councilmember Rousseau asked when the final levy has to be set. Finance Director Yang reported the final levy had to be set by the end of December. Councilmember Rousseau addressed the public, stating that these percentage changes can be scary when it came to housing values. She discussed how 2026 may be a higher increase when it comes to the tax levy and explained how the median value home would be impacted by a 16.99% and 21.06% levy increase to help residents put the relational amounts in perspective. Mayor Grant stated the State of Minnesota was not on a mill rate when it came to property taxes and the tax levy. He noted every home could go up 50% and businesses can go up an equal amount without impacting the tax levy. He explained if everyone's property value increased at the same proportion then there would not really be an impact. He indicated the City determines its financial needs and this is apportioned back based on a homes value. He reported there was a difference in the budget of $600,000 from 2023 to 2024, which would require an additional $300,000 to be reserved. He noted from 2024 to 2025 there was a difference of$700,000, which would require an additional $350,000 to be reserved. Based on the presented budget, the City could have a $1 million increase, which would require $500,000 to be reserved. He did not believe the levy increases were strictly inflationary but rather had to do with increased spending. He stated the Ramsey County Sheriff's contract had increased by $343,000 and the Lake Johanna Fire Department's budget had increased by $159,000. These were sizeable increases that were impacting the budget that did not correlate with the rate of inflation. He stated the Council could not have projected these increases, nor would the Council compromise safety for the residents of Arden Hills. ARDEN HILLS SPECIAL CITY COUNCIL—SEPTEMBER 29, 2025 4 Councilmember Monson commented on the budget assumptions as presented by staff. She reported the City Council invested significantly in its staff and union negotiations were completed last year. She reported the budget included a 19% increase for police and a 17.6% increase for fire. She indicated there was nothing the Council could do to reduce these expenditures. She stated this Council has been in discussion on how to properly fund the PIR Fund and how to fix the shortfalls over the next five years. She stated it is complicated. She then explained the City had to put additional funding into the PIR Fund in order to fund it effectively over the next 10 years. She discussed how the Council was working to have 50% of the general fund set aside in reserves, noting she would like to see this fund increasing by the amount of inflation every year. She indicated her goal was to properly invest in the City to fund expenses that would be incurring both now and into the future. She appreciated Council Rousseau putting the dollar amounts into context and found that helpful for the public. She stated she was interested in using the excess franchise fees ($165,000) to cover the new fire costs. She explained Council has discussed the various scenarios and dollar amounts at previous work sessions and that Councilmember Holden had stated at a work session that we need to look at 19%. She said the Council has known for a while the levy was going to be high. She indicated she supports targeting one of the first three levy amounts. Councilmember Rousseau stated she would be interested in looking at the higher of the first three levy amounts with the understanding the amount could always be brought down. She commented on how costs could continue to rise in 2026 due to tariffs and purchasing a fire truck, and stated she believed it would be better to set the preliminary levy at a higher level. Mayor Grant explained the Council was looking to pay more attention to the PIR Fund. He indicated he would support one of the first two scenarios when it comes to the levy. Councilmember Monson asked if staff had any information regarding health benefits. Finance Director Yang explained the estimated increases were 15% for health insurance and 4% for dental. She indicated the Minnesota Paid Leave was at a preliminary amount that could change. Councilmember Weber inquired if the proposed budget would cover last year's debt. Finance Director Yang reported this was the case, as the scenarios she had brought forward assumes a balanced budget. Councilmember Weber questioned how staff was proposing to utilize the excess franchise fees in 2026. Finance Director Yang stated she was proposing a transfer to the general fund to offset public safety costs. Mayor Grant explained he supported the Council moving forward with the first option given the estimated strong revenues for 2025. He commented he was concerned with how the County and School District levies would adversely impact residents, on top of a large increase for the City. Councilmember Rousseau stated she supported keeping the levy high in order to properly put funding back towards the fire department. ARDEN HILLS SPECIAL CITY COUNCIL— SEPTEMBER 29, 2025 5 Councilmember Weber indicated he was inclined to agree with this recommendation. He discussed how there was a projected shortfall in the PIR Fund and noted the Council needs to further investigate the extent of the shortfall. He stated he could support directing the excess franchise fees towards fire department expenditures for next year. However, this was just a band- aid unless the Council intended to direct the excess franchise fees to excess fire expenditures every year. He explained he supported the proposed PIR Fund increases in order to properly fund City projects in the future. Councilmember Monson stated it was her understanding it was not beneficial to use the $165,000 in excess franchise fees to pay down the bond until after year 10. She explained staff was proposing to transfer the excess franchise fees into the general fund in order to cover public safety personnel costs. Further discussion ensued regarding the impact of using the franchise fees for paying for fire expenses versus using these funds to pay down debt. Councilmember Weber commented he believed using the excess franchise fees for fire expenditures was in keeping with the Council's intentions for the franchise fees. He explained he preferred to set the preliminary levy higher, noting there was an opportunity to bring the levy down. Councilmember Weber excused himself from the meeting at 8:25 p.m. Mayor Grant indicated if the $165,000 in excess franchise fees were used this year, it would not cover the cost of increases in 2027. He stated in 15 years the franchise fee would expire and the levy would then have to increase or the City would have to renew the franchise fee. MOTION: Councilmember Monson moved and Councilmember Rousseau seconded a motion to adopt Resolution 2025-063 Setting the Preliminary Levy at 18.32% for Taxes Payable in 2026. Mayor Grant stated he supported the preliminary levy amount being set at 16.99%. A roll call vote was taken. The motion carried 2-1 (Mayor Grant opposed). MOTION: Councilmember Monson moved an d Councilmember Rousseau seconded a motion to adopt Resolution 2025-064 Adopting Truth in Taxation Public Hearing Date for Proposed Taxes Payable in 2026 for December 8, 2025. The motion carried (3-0). MOTION: Councilmember Monson moved and Councilmember Rousseau seconded a motion to adopt Resolution 2025-065 Appropriating Funds to Pay Debt Service on the City's General Obligation Capital Improvement Plan Bonds, Series 2025A, and Authorizing Cancellation of the 2025 Debt Service Levy Related to Such Bonds. The motion carried (3-0). 7. COUNCIL COMMENTS ARDEN HILLS SPECIAL CITY COUNCIL—SEPTEMBER 29, 2025 6 Councilmember Monson commented the preliminary levy was set and it was her hope the Council would be able to make reductions between now and the end of December. Mayor Grant stated it was his hope the Ramsey County Sheriff's office could take a look at their cost structure in order to remove the surprise amount. Mayor Grant reported the Council set the levy high and it was his hope the Council could make reductions over the next three months. ADJOURN MOTION: Councilmember Monson moved and Councilmember Rousseau seconded a motion to adiourn. The motion carried (3-0). Mayor Grant adjourned the Special City Council Meeting at 8:31 p.m. Ju i Hanson David Grant C/t4 Clerk Mayor