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HomeMy WebLinkAbout09-22-25 WSlt ,-AI�EN HILLS Approved: October 13, 2025 CITY OF ARDEN HILLS, MINNESOTA CITY COUNCIL WORK SESSION SEPTEMBER 22, 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 (excused for reconvened portion of work session), Tena Monson, Emily Rousseau (excused for reconvened portion of work session) 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. Ramsey County Projects Discussion Public Works Director/City Engineer Swearingen introduced John Mazzitello from Ramsey County. They would like Council input on the Old Highway 10 Trail, the Lake Johanna Boulevard Trail and the Spine Road that the County is designing for the TCAAP site. We're in the budget season. We need to make decisions and coordinate with the County. John Mazzitello said the Old Highway 10 Trail project was in the TIP and scheduled for construction in 2026. There is the potential to move that project to 2027 because Ramsey County is engaging with the City Engineers and the Public Works Directors in all of the cities in trying to ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 2 recraft the cost participation policy. They meet every other month with an organization called Joint Engineers of Ramsey County (JERC). They have been discussing what a recrafted cost participation policy could look like. The County has three criteria for rethinking the cost participation policy. First, they want to simplify the process. When breaking down the costs of a project, it must delineate between what the County, City, Federal Funds and State Aid Funds are paying for. The County Road J and I 35E project includes two counties, three municipalities, MnDOT, two watersheds and federal funds. The cost breakdown table for that project is massive and it's a complicated process for the technicians to follow who pays for what. They want to simplify the process of cost participation with the cities. There is nothing they can do about MnDOT or Anoka County. But with Ramsey cities they can try to simplify it. The second criteria is to provide financial relief to Ramsey County cities. Cost participation expenses can be large and can eat up one or more years of municipal State Aid. They are trying to find a way to reduce the burden to the cities. The third criteria is that cost participation will not be zero. There will be some form of cost participation in this policy. John Mazzitello said they have been discussing this in the JERC meetings. There is a possibility that there may be a new cost participation policy by the 2027 construction season. He can't guarantee that. The County Board still has to approve it. Washington County went through this exercise five years ago. They made a really great case for changing the policy and the County Board decided to keep it the same. He can't promise the changes will be approved. There is a potential for having a reworked participation policy by 2027. Assuming it is approved, the cost participation, which is currently a 50150 spit on a large trail project, has a possibility of being reduced. He understands this has been a high priority project for several years. He would like to have a discussion with Council to gauge interest in moving this project out one year, on the chance it might reduce the City's portion of overall cost. Councilmember Rousseau asked what the likelihood is that the cost share would decrease the participation from Ramsey County if we waited a year. Is there a chance we could lose some of the anticipated funding? John Mazzitello said no. There is the potential for the County share to go up and the City share to go down. It would not be the other way around. Trails are split 50150 right now between the City and the County. They are trying to craft a cost participation policy that sets a flat percentage of the total project cost. Councilmember Holden asked if the County has received grants for this project. John Mazzitello said the City has. Councilmember Holden said the City used to pay lower costs and the County determined it was going to be 50150. When she asks for money from the legislature, for our City, why isn't that coming off the City's portion? We have our side covered. Where does it say it comes off the total. We work hard for our grants. John Mazzitello said he used to work as a Public Works Director at a City. That is one of the reasons he brought forward a change in this policy. Right now, any grant, regardless of who gets it comes off the total cost of the project and the participation applies to what remains. The County is looking to provide relief to the Cities for that. The policy has been that the grant comes off the top cost of the project for as long as he's been there. ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 3 Councilmember Weber said his understanding is it is 50150. John Mazzitello said it is 50150 for trail projects. He outlined that other line items have a different percentage split on them. Councilmember Weber said it is just happenstance then. There are other items involved in this project. The drainage under the driveways and other drainage items. A sidewalk or board walk is different than a trail. There are other items that aren't 50%. John Mazzitello said the County would break the project out by line items according to the cost participation policy. Councilmember Weber asked if they have done that, to get to the 50. John Mazzitello said the City is putting together the plans. The majority of this project is a trail. It may wind up 51 /49. Councilmember Weber thanked him for the clarification. John Mazzitello said what you see in the TIP document is an estimate. He uses that for budgeting fund balances and all the other pots of money he uses to piece together this puzzle. When it comes to a trail project, he uses 50150 for Fund Balance purposes. The actual numbers come in with the bid. Mayor Grant said we are in the middle of the budgeting process right now. There are two different $1 million grants for the Old Highway 10 Trail. Councilmember Monson said the question is if we want to push this to 2027, in the hopes a new policy would be in place. Considering it hasn't been defined and that it hasn't gone before the County Commissioners for approval, this feels high risk. She wondered if both of the $1 million grants could go towards construction in 2027. Public Works Director/City Engineer Swearingen said he confirmed both grants can go to 2027. Councilmember Monson doesn't like the idea of delaying it. We've been working on this for so long and there is no guarantee we'll get there. Mayor Grant said an increase of cost share with the County is something we should strongly consider. Councilmember Weber has a letter that is signed by all the engineers in Hennepin County, sent to the County Engineer, requesting this action. Hennepin is a different county and have a different board. The cities in Hennepin County feel that the County should take a greater responsibility in these types of projects, particularly on trails and maintenance of those trails. He asked if Ramsey is aware of this letter and asked if this is a response to that. John Mazzitello is aware of this letter and he is aware of the City Engineer's Association lobbying the State Legislature to do away with cost participation policies, altogether. This has ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 4 been a sore spot for him while working at Ramsey County. He is in a position to try to make some change. Councilmember Weber said this is in response to the Hennepin County letter. John Mazzitello said Hennepin County City Engineers helped get the rest of Ramsey County on board to have a discussion with our Cities. Councilmember Weber appreciates his outlook on cost participation and his proactiveness. The community of engineers coming together to tell the County we can't afford this stuff is commendable. He can't see how this can go bad. Of course, the Board could vote it down. It can't get worse than 50150. But we do face the risk of increased costs due to delaying the project. He thinks we should take this opportunity to possibly save a significant amount of money. This trail is important but the City would benefit if there is significant savings. Councilmember Holden said Ramsey Commissioners are well aware of what happened in Hennepin County. That's probably why they are open to listening to this. She heard this trail would fit better into the Ramsey 2027 season. She asked if that is true. John Mazzitello said potentially. There is a large project that may or may not be built in 2027. He is planning on it being built. They just hired a lot of new technicians. They will be fully trained and capable of handling more projects in 2027. We can still do it in 2026. Councilmember Holden said if we postpone it a year and get a 10% larger break, it could pay for another trail. She said the County would have to pay more for the County Road E Trail and Lake Johanna. John Mazzitello confirmed. The County would pay a larger percentage. The goal is to keep the Cities invested in the work the County does to balance out the work across the cities. They are looking to reduce the amount of share that cities give for cost participation on a County job. Mayor Grant said the trail we're talking about leads to TCAAP. It's important to the City and County. It would increase safety. He thinks pushing it a year to see what happens with the cost participation policy is a good idea. Councilmember Rousseau asked where the additional funding would come from, on the County's side, to offset the increase in participation. What would be cut to make room for this? John Mazzitello shared a story about a light rail project. When the County Board decided that wasn't going to happen, the revenue that had been set aside came up for grabs. He has been given a chunk of that money. Councilmember Rousseau said it's sad to push it out another year. This is going to the underserved community with manufactured homes to the high school. It sounds like there could be a substantial change. John Mazzitello said Public Works Director/City Engineer Swearingen did a great job expressing how important this project is to the city. This project has been on the table for the whole time he ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 5 has worked at the County. He didn't want to make this decision arbitrarily. He understands the project is important but cost savings is important, too. He wants guidance from Council and Staff. Mayor Grant asked about timeframes moving forward. John Mazzitello is hoping to get the 2026-2030 TIP in front of the board in November. The next JERC meeting is also in November. If discussions continue to progress as they have been and he can get a super majority, he can make a presentation to the board. He wants the cities to drive what this looks like. It has to work for the cities, otherwise it's a futile effort. Mayor Grant asked if this will be presented at one of those meetings or is this a meeting or group of meetings in the future. John Mazzitello a proposal to the board would come after the TIP approval in March or April Mayor Grant thinks this is a 2027 project. He asked Council's thoughts. Councilmembers agreed to delay the project until 2027. John Mazzitello shared a handout for the Lake Johanna Boulevard Trail. He said he has been talking to Public Works Director/City Engineer Swearingen about how they want to tackle this project. It is a long, complicated corridor. There is a lot of public need and want for a change in facilities. There are five independent projects programmed that all depend on each other. The 2026 construction season will include a mill and overlay on County Road E. They looked at installing a trail on the south side, per City Staff request. There is a trail at the old railway right of way, they were looking at putting a trail connection on the south to Lake Johanna Boulevard. That would require right-of-way acquisition. The right-of-way process takes 15 months. That would have thrown the payment project out of it's cycle. They have talked about including that portion with the first leg of the Lake Johanna project. Lake Johanna Boulevard is programmed in the draft TIP as three separate projects. The first is County Road D, north to Lake Lane. They would be looking at scoping a project in 2026 with public engagement, agency involvement and the City would have a major say in the scope. The issues being discussed include loss of on street parking, do we need a separated facility or a facility behind a curb, do we need to put in a curb gutter and storm sewer system. These items will be flushed out during the design process starting in 2026. Actual construction will take place in 2029. They are going to request the consultant designer do an alternatives analysis from Lake Lane North to County Road E. Councilmember Holden said the original plan made Lake Johanna a parkway. She asked if the design has been simplified to reduce costs. John Mazzitello said at this point he doesn't want to take anything off the table. Any option that gets analyzed will have pros and cons. The section between Lake Lane and County Road E is constrained. The right-of-way is very narrow, there's a lake on one side and the grades to the homes comes right up from the curbline. He doesn't want to take anything off the table in the beginning because he doesn't want the County to dictate what the project is going to be. Councilmember Holden said the curb stabilization that is on the east side of the lake, people use that for trail. It's starting to get really bad. She asked if that can be paved again so it can be used ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 6 as a trail. Installing a trail to Lake Lane is great but then they have to pick up that little area. It would be nice if that area could be a little safer. John Mazzitello said he heard her say she would like some temporary measures to keep that together until we can get to something more permanent. He will see what the maintenance crew can do, or try to tie it into the first leg of the project. Councilmember Monson repeated the areas he outlined. She asked for more information on what the alternatives analysis is. John Mazzitello said the section from Lake Lane North to County Road E is the last one that gets built. He wants someone to look at the pros and cons of several different alternatives. The alternatives analysis will spawn a design, a right-of-way acquisition and then a project in 2031. In the middle is the County Road E up to the Old Snelling roundabout segment. That is the biggest of the three legs, but the simplest. Councilmember Monson asked if any power lines have been moved/buried or if trees have been removed. John Mazzitello said they follow the State Aid standards for clear zone safety for vehicles and pedestrians. They have moved some power lines. Every time they have talked about burying lines, Xcel Energy says the residents have to pay for it. Councilmember Monson said there are big cottonwoods along there. The County said these aren't imminent on the list of hazard trees. She would like buried lines to be explored. Mayor Grant said if the cost participation policy goes into effect in 2027 and we want a trail from County Road E2 to Perry Park, would that be a part of the participation policy. John Mazzitello said a City -led project like that, to install a trail or sidewalk along a County road, would be more County than City. Mayor Grant would be happy to call the County Commissioner and express approval. Councilmember Monson asked if New Brighton Road is included in the TIP and asked if is it a mill and overlay. John Mazzitello confirmed it is in 2026 and it is mill and overlay with County Road E and County Road D. Councilmember Monson said we would probably have to do a City -led trail there. John Mazzitello confirmed. He said the 2026 projects have all been designed already. Councilmember Monson said she assumes there is no plan for a trail beyond that, from the County, otherwise they would have designed it in 2026. Public Works Director/City Engineer Swearingen requested a connection from County Road E2 to Perry Park. It was beyond the scope of that pavement preservation program. ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 7 Councilmember Holden asked if the cost participation rate will be County -wide. John Mazzitello said it applies to all Cities the same way. He included the County's pre-scoping preliminary cost figures in the handout. A relief policy would be massive to the City of Arden Hills. If they are not successful in getting that policy, the City is looking at $3 million over three years, not including the construction cost for the last piece. They intend to make every effort to obtain grant money to keep cost down for the City and the County. It could be a joint effort and that may be more clout with review committees. John Mazzitello began the discussion on the Spine Road proposed cost share/funding strategy. He said the County's cooperative agreement for cost share will be sent to Staff and have the City Attorney and Council look at it. The County will pay costs related to non -participating Arden Hills city utilities. The County plans to recover these costs from the developer at the time Rice Creek Commons is developed. The City doesn't have a cost share for the Spine Road. The County will cover it all. Mayor Grant said that will simplify the project and it becomes a County -led project. City Staff will have a fair amount of input. The timing and minor details are for the County to deal with. Councilmember Holden said when they are putting in the Spine Road she assumes there will be mass grading. John Mazzitello said they have activated an unused task in the consultants contract to design the mass grading for the California parcel, based on the concept plan that was approved by the JDA. The consultant will design the mass grading so we know where the Spine Road will tie into, outside the right-of-way. Who does the mass grading has not been decided yet but there will be a designed mass grading plan and a designed piece of infrastructure ready to go whenever the green light is given. Councilmember Rousseau said there are a lot of steps between now and then but once people hear there is a funding source for this they will want to know when activity will begin happening. She asked what the timeline is. John Mazzitello said there are a lot of moving pieces and a lot of regulatory agencies to get through. They are targeting the Spine Road construction for 2027 in the TIP. Any grading activity necessary to build the Spine Road would happen in 2026. Mayor Grant said there are trunk utilities, booster stations, lift stations and associated items that go along with the road. He assumes they are included. John Mazzitello confirmed. He said the only component of the municipal utilities that isn't included is the water tower. The booster station is necessary when ever development happens. The water tower isn't needed until the site reaches a certain percentage complete. Councilmember Weber asked if the Roseville connection is being funded by the County. John Mazzitello confirmed. ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 8 Councilmember Weber said that is great news. His understanding was that the County wasn't going to fund that. It will allow the City to avoid the 429 process. Councilmember Monson said the grading will start in 2026 and it will take a construction season of moving dirt before the asphalt can be installed. John Mazzitello confirmed. The Spine Road is about a mile and a half long. Traditional construction in Ramsey County is we can totally reconstruct about a mile a year. Since there is nothing on either side of this road, they believe they can do a mile and a half in a year. Councilmember Monson said this frees up our bonding capacity. The 429 process is a low risk process for the City. This moves us from low -risk to zero risk. John Mazzitello said they are still working through a lot of those variables. He is pretty certain that they can get through them to have earth movement in 2026. It might be late in 2026, but they are working to get to that point. Councilmember Holden said the County has committed to do the PFAS Testing on the property. When will that happen? John Mazzitello said they have a contractor ready to mobilize at the end of September for the PFAS borings. They are just waiting on the approval from the Army. Councilmember Holden said the County committed to a trail on the east side of the property. She asked if that was part of the grading process. John Mazzitello said that is a gray area, depending on who does the grading. The trail is incorporated in the plans for the Spine Road. The contract to build the Spine Road will also build that trail. Mayor Grant wondered if the trail on Rice Creek Commons would be subject to the new cost share policy. John Mazzitello said the trail on the east property line that runs from Highway 96 to Rice Creek Parkway is a Ramsey County Parks and Recreation Regional trail. The City won't pay anything for that. Mayor Grant said there is an effort underway to dredge Round Lake. He knows they want to use a portion of Rice Creek Parkway to do something with the sediment. He assumes that is factored in. John Mazzitello said that is all built into the construction phasing. Their remediation program has to end by October 2027 which the same time the Spine Road will be completed. Councilmember Holden said the Army has moved the location of depositing the sediment from Round Lake to avoid the Spine Road. That won't be an issue. John Mazzitello said it all depends on how construction is phased. They can work with the Army on that. ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 9 Mayor Grant thinks the County doing the Spine Road has it's advantages. The County is in control of everything, including the scheduling. John Mazzitello confirmed. Councilmember Rousseau said she has residents reaching out to her about the roundabout at Lindy's. The vegetation looks terrible. There were pollinators were planted but there is an off - cycle with the folks that were cutting it. Is there a way to connect and discuss what's happening? John Mazzitello asked if she was talking about the center of the roundabout. Councilmember Rousseau confirmed. She said we didn't put the irrigation system in there. John Mazzitello said in the early stages of that project there was a group who was going to voluntarily landscape that area and that fell through. He will give Staff the contact information for the Forestry Department and see if there is anything that can be done. There is a safety concern with vegetation in the center of the roundabout. Whatever is in the middle of the roundabout is supposed to block the oncoming headlights. It has to be of a certain height. That would be the only criteria they would ask for. Ramsey County maintenance crews don't have the capability to manage landscape. Mayor Grant said he was approached by a resident in regards to installing a trail that goes around the west side of Mounds View High School. It's been on the County's plan for a long time. He wondered what is happening with that trail. Staff brought up the GIS map and discussion ensued regarding the location of this proposed trail. Mayor Grant said there are residents who remember this. It would be a picturesque trail and would connect to Chatham and Benton Way and the Fairwood neighborhood. He believes it is on County property. John Mazzitello said if a trail is not in a right-of-way, it doesn't belong to Public Works. That would be a Parks and Recreation trail. He would be happy to forward the question to the Parks and Rec department and ask where they are at with that project. B. 2026 CIP & Operating Budget Discussion Finance Director Yang said the 2026-2030 CIP has been discussed at the past several work sessions. The list of projects to be completed in 2026 hasn't had many changes over the past couple of sessions. Equipment has not changed. Finance Director Yang said at the last work session Council directed Staff to provide additional levy and/or bonding scenarios related to the PIR Fund. She pointed out where Councilmembers could find a recap of the scenarios in the packet. The first set of scenarios assumes no bonding and the PMP project expenditures are shifted. The 2028 PMP will be split into two separate projects. One in 2028 and the other in 2030. The 2030 project will shift to 2032 with 2032 shifting to 2034 and so on. ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 10 Finance Director Yang said scenario D is being brought back from the last work session. This scenario assumes no bonding, the levy is increased by $50,000 annually. That equates to a $400,000 increase in overall Fund Balance. In this scenario, the City would maintain a positive fund balance of $1.6 million through 2033. The Fund Balance would fall negative in 2034. This scenario would be a $50,000 levy increase in 2026 or 0.83%. The 2026 levy would start at $300,000. The 2035 levy would end at $750,000. Finance Director Yang said scenario D1 assumes no bonding, the PMP projects are shifted, the levy is increased by $100,000, and by that same amount annually, thereafter. This would achieve a positive Fund Balance of $3.2 million through 2035 and would result in a $100,000 or 1.66% levy increase in 2026. The 2026 levy would start at $350,000 and would end in 2035 at almost $1.3 million. Finance Director Yang said scenario D2 assumes no bonding, the PMP projects are shifted, levy is increased by $120,000, and goes down to $100,000 annually, thereafter. This would achieve a positive Fund Balance of $3.4 million through 2035 and would result in a $120,000 or 1.99% levy increase in 2026. The 2026 levy would be $370,000 and would end in 2035 at almost $1.3 million. Councilmember Rousseau asked what the estimated amount was, without bonding, for the Old Highway 10 trail. Finance Director Yang said the City's share of Old Highway 10 will still be $1.3 million. Finance Director Yang said scenario D3 assumes no bonding, the PMP projects are shifted, the levy is increased by $180,000 in 2026 and by $75,000 annually, thereafter. This would achieve a positive Fund Balance of $2.9 million through 2035 and would result in a $180,000 levy or 2.99% levy increase in 2026. The 2026 levy would start at $430,000 and would end in 2035 at $1.1 million. Finance Director Yang said scenario D4 assumes no bonding, the PMP projects are shifted, the levy is increased by $240,000 in 2026 and by $75,000 annually, thereafter. This would achieve a positive Fund Balance of $3.5 million through 2035 and would result in a $240,000 levy or 3.98% levy increase in 2026. The 2026 levy would start at $490,000 and would end in 2035 at $1.165 million. Finance Director Yang said scenario D5 assumes no bonding, the PMP projects are shifted, the levy is increased by $300,000 in 2026 and $50,000 annually, thereafter. This would achieve a positive Fund Balance of $2.9 million through 2035 and would result in a $300,000 levy or 4.98% levy increase in 2026. The 2026 levy would start at $550,000 and would end in 2035 at $1 million. Finance Director Yang said the next set of scenarios assumes no bonding and no shift of PMP project expenditures. Mayor Grant asked that she skip walking though scenario D6 and D7. Finance Director Yang said scenario D8 assumes no bonding and no shift in PMP expenditures. The levy is increased by $180,000 in 2026 and annually thereafter. This would achieve a positive ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 11 Fund Balance of $5.5 million through 2035 and would result in a $180,000 or 2.99% levy increase. There would be low Fund Balances in 2028, 2030 and 2032. The 2026 levy would start at $430,000 and would end in 2035 at $2.1 million. Finance Director Yang said scenario D9 assumes no bonding and no shift in PMP expenditures. The levy is increased by $240,000 in 2026 and annually, thereafter. This would achieve a positive Fund Balance of $8.8 million through 2035 and would result in a $240,000 or 3.98% levy increase in 2026. The 2026 levy would start at $490,000 and would end in 2035 at $2.7 million. Finance Director Yang said scenario D 10 assumes no bonding and no shift in PMP expenditures. The levy is increased by $300,000 in 2026 and annually, thereafter. This would achieve a positive Fund Balance of $12.1 million through 2035 and would result in a $300,000 or 4.98% levy increase in 2026. The 2026 levy would start at $550,000 and would end in 2035 at $3.25 million. Finance Director Yang said scenarios El and E2 are very similar. E2 assumes we're excluding the prepaid special assessment portion. The levy increase will be slightly lower in E2 vs E1. Scenario El assumes bonding for the 2026 PMP project and shifting the PMP project expenditures. The levy is increased by $163,000 in 2026 and annually, thereafter, to help cover the debt service. This would achieve a positive Fund Balance of $2.1 million through 2033 and would result in a $163,000 or 2.7% levy increase in 2026. The 2026 levy would start at $413,000 and would end in 2035 at $413,000. Finance Director Yang said scenario E2 assumes bonding for the 2026 PMP project and shifting the PMP project expenditures. The levy is increased by $134,000 in 2026 and annually, thereafter, to cover the debt service. This would achieve a positive Fund Balance of $1.7 million through 2033 and would result in a $144,000 or 2.2% levy increase in 2026. The 2026 levy would start at $384,000 and would end in 2035 at $384,000. Both scenario E options only get us to 2033. Finance Director Yang said scenario F assumes bonding for the 2026 PMP project and no shift in PMP project expenditures. The levy is increased by $163,000 in 2026 and annually, thereafter, to cover the debt service. The levy is then increased by an additional $100,000, starting in 2026 and annually thereafter. This would achieve a positive Fund Balance of $3.4 million through 2035 and would result in a $263,000 or 4.36% levy increase in 2026. The 2026 levy would start at $513,000 and would end in 2035 at $1.413 million. Finance Director Yang said scenario F1 assumes bonding for the 2028 PMP project and no shift in PMP project expenditures. The levy is increased by $75,000 starting in 2026 and annually thereafter. The levy is then increased by an additional $216,000, starting in 2028 and annually thereafter to cover the debt service. This would achieve a positive Fund Balance of $2.7 million through 2035 and would result in a $75,000 or 1.24% levy increase in 2026. The 2026 levy would start at $325,000. The debt service would start in 2028 and the levy would be $691,000 and would end in 2035 at $1.2 million. Finance Director Yang said scenario F2 assumes bonding for the 2028 PMP project and no shift in PMP project expenditures. The levy is increased by $100,000 starting in 2026 and annually thereafter. The levy is then increased by an additional $216,000, starting in 2028 and annually thereafter to cover the debt service. This would achieve a positive Fund Balance of $4.1 million through 2035 and would result in a $100,000 or 1.66% levy increase in 2026. The 2026 levy ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 12 would start at $350,000. The debt service would start in 2028 and the levy would be $766,000 and would end in 2035 at $1.46 million. Finance Director Yang said scenario G assumes bonding for the 2026 PMP project and shifting the PMP project expenditures. The levy is increased by $163,000 starting in 2026 to cover the debt service. The levy is then increased by an additional $50,000, annually to build up the reserves. This would achieve a positive Fund Balance of $2.7 million through 2035 and would result in a $213,000 or 3.53% levy increase in 2026. The 2026 levy would start at $460,000 and would end in 2035 at $913,000. Finance Director Yang said scenario J assumes bonding for the 2028 PMP project and shifting the PMP project expenditures. The levy is increased by $216,000 to cover the debt service starting in 2028. The levy is also increased by an additional $50,000, annually starting in 2026 and thereafter. This would achieve a positive Fund Balance of $3.5 million through 2035 and would result in a $50,000 or 0.83% levy increase in 2026. The 2026 levy would start at $300,000. The 2028 would be $616,000 and would end in 2035 at $966,000 million. Finance Director Yang said depending on whether we shift the PMP expenditures or not and depending on if we bond now, Staff is recommending scenarios D1, D10 F2 or J. Councilmember Holden said there is a section in the charts called General Government Administration. Under it there is a category called Long Range Comprehensive TCAAP planning. She asked why that's not under General Government TCAAP. Finance Director Yang said TCAAP does fall under the General Fund. Councilmember Holden said it's in its own category. She is wondering why part of TCAAP is under General Government Administration and not under the General Government TCAAP. Finance Director Yang said it is based on history and how the funds were developed. This was before her time at the City. A separate fund for TCAAP was added. At some point it was decided that we weren't going to utilize that fund anymore. It would all be rolled into the General Fund. Councilmember Holden doesn't remember that. She said we were trying to keep track of the costs of TCAAP based on reimbursement and everything. She asked how much of the $544,000 was TCAAP-related. She wants to make sure it's in the right category. She doesn't need to know today. It will be under General Administration no matter what, but she wants to make sure if we're supposed to be getting reimbursed, it should be under the General TCAAP. Finance Director Yang said there are personnel expenditures being allocated to that TCAAP department and contractual services. Councilmember Holden is wondering why it isn't all under General because it should be. We were keeping track because we were supposed to be reimbursed. Finance Director Yang will look into it. Mayor Grant said there were just ten minutes left before the Regular City Council Meeting. ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 13 4. COUNCIL/STAFF COMMENTS City Administrator Jagoe gave her Staff Comments at 6:50 asking Council to discuss the Gateway Funding until the work session is recessed prior to the council meeting. The 2026 CIP & Operating Budget Discussion will resume after the regular meeting. City Administrator Jagoe said she reached out to Al with Twin Cities Gateway on use of the funds. He said they give the City the authority to determine the recipient of the funds, as well as the amount of funds to be granted. It does not need to be a 501 c3. He confirmed the $20,182 is the amount allocated to Arden Hills in 2025. Of that amount, we are able to carry over 10% of that into 2026, which is $2,018. The City needs to spend $18,100 in 2025. Previously Council had given direction to use $2,000 towards the Norwegian Foot March and $4,000 to Ribfest. The Foot March would occur in April of 2026. That would be the carry over. The other $18,000 would need to be disbursed in 2025. If we do the $4,000 to Ribfest, it would leave the City about $14,100 remaining to spend in 2025. Staff reached out to Snow Globe Public Relations to see if there were different marketing strategies for Ribfest or the Foot March. Council can change the allocation dollars. Staff has not heard back yet. Last year the City granted Ribfest, almost $10,000. Mayor Grant said the Norwegian Foot March is transitioning from the ROTC University of Minnesota to the National Guard. It will be an event for the National Guard, in addition to Ribfest. City Administrator Jagoe agreed. The event will be in April 2026 so we can only put $2,000 of this year's dollars towards that for next year. Councilmember Monson wondered if they might start marketing it in 2025. City Administrator Jagoe said she would have to ask the organization. Gateway has confirmed that when it comes to the 75th Anniversary, it must be used towards advertising, marketing and promotional efforts that increase participation and attendance at an event. It's intended to bring people into the community. He said we can use the money to hire a graphic designer to produce a commemorative logo, as well as purchasing items with the logo on it, to promote the event. It could be a reusable bag but it would have to specify the actual date of the event, rather than just the City's 75th Anniversary, in general. Staff is looking for direction from Council on how to allocate the funds differently or to come up with ideas on how to use the funds for the 75th Anniversary planning. Mayor Grant asked if we can grant it to the Norwegian Foot March in December, knowing the event is coming up in April. City Administrator Jagoe said you have to show receipts that the funds have been spent in the calendar year. Councilmember Holden said we could print postcards. We can get things ready for marketing. It can be a save the date mailing to zip code 55112, which would include New Brighton. That would reach people outside of the boundaries of Arden Hills. There are different ways to spend the money for the 75th Anniversary. ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 14 Assistant to the City Administrator/City Clerk Hanson said that may be one of those gray areas. The question would be, would that reach far enough to be considered promoting to outside the City. Councilmember Holden said we have residents in 55113, as well. That would include the south side of Roseville. City Administrator Jagoe said they are open to consider ideas that the City comes up with. We can bring it to them and they can determine if it meets the criteria. Mayor Grant said the 75t' Anniversary Committee needs to figure out how much it's going to spend. Councilmember Holden said we meet again in October. She thought at one time, we were told we could carry over $4,000. City Administrator Jagoe said we asked several times and he said it's 10%. Councilmember Monson said we can spend it on the 75tn City Administrator Jagoe said on July 29t', Council directed Staff to send a letter to the County regarding the Lake Johanna Boulevard tube delineators. Public Works Director/City Engineer Swearingen drafted a letter. Staff wanted Council direction on who the letter should be sent to. Council agreed it should go to our County Commissioner with a CC to the Public Works Director and the County Manager. City Administrator Jagoe will use the Council electronic signatures and send it out. Councilmember Rousseau thought we needed to talk about a second rep role at Gateway. Mayor Grant said that's not in our control. There is a new employee at a hotel. If that person chooses to be our second person, so be it. We don't get to choose. Councilmember Rousseau said it was on the agenda and we didn't get to it. She thought she would mention it since we were talking about Gateway. Mayor Grant said he thinks that person will choose to join. He said he would like to send a Thank You note to some of the people he worked with at Ribfest. He just wanted to let Council know about it. He didn't know if anyone would have a problem with that. Councilmember Monson asked if it would come from the entire Council. Mayor Grant wasn't sure. Council agreed a thank you note from the entire Council would be appropriate and Mayor Grant can send a personalized one, just from him. Council recessed the Work Session at 6:58 pm. ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 15 Council reconvened the Work Session at 8:52 pm. Councilmember Rousseau and Councilmember Holden were not in attendance for the reconvened Work Session. Both were excused. Mayor Grant said we don't know a lot about our Capital needs because if we are delaying projects until 2027, we don't know what the cost share agreement will be with the county. That will affect our PIR. He doesn't think we should bond when we may not need that. We can reassess all of that a year from now. He thinks it makes sense to shift the projects. He doesn't think they should have been combined in the first place. That shift will even out what we spend. We need to choose an amount to increase the PIR by in 2026. We may end up increasing or decreasing it in 2026 when we go through this process next year. By then we will know what the County cost participation policy is. He said we're in a year that may have a school board levy. There may be a reasonable increase in County taxes. The operating costs as a City are going up. We need to increase the amount of money going into the PIR. Councilmember Monson said we need to figure out our preliminary number that we want to set next week. Then we may have some more information to be able to come down from that number. Councilmember Weber said the other information we need to decide is whether or not we are pushing those projects. We can decide to do that in December. He asked Staff at what point it becomes detrimental to the programming of projects. Public Works Director/City Engineer Swearingen said the most basic way to break it down is that the City has 30 miles of street. He has the system set up on a 20-year rehab cycle. Councilmember Weber said he understands the program. He is asking how late, in this process, will be too late to do it in 2026. Public Works Director/City Engineer Swearingen will begin doing site inspection for the next PMP next year. It would be good to know which streets we're doing so he knows how to set up the workload for next year. That information that we gather will set up how we scope the project and design would be the following year. Councilmember Weber asked when that process starts. Public Works Director/City Engineer Swearingen said site inspections will start next year. It would be in 2027 when we would do design. Mayor Grant said the portion being pushed out is mostly commercial. They pay at a 70% rate. We can handle the capital needs in 2026 and 2027. If we push the projects, we have a longer runway to have meaningful contributions to the PIR fund, over time. Councilmember Monson said when we look at all of these scenarios, we have a range of 15.9%- 20%. Discussion ensued regarding how much a median value household would pay and how much impact the different scenarios have on the PIR Fund. Finance Director Yang pointed to the information in the packet. She said it is taking a look at the 15.0 plus any incremental. She said it is the third column is what we are looking to increase it by. ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 16 Councilmember Monson said scenario D2 is 17%. She asked if that's the total. Finance Director Yang said that includes the 15% in the general fund, which is not a balanced levy. We still have to consider that $122,000 from the 2025 deficit. The 17% includes the $100,000. Councilmember Monson asked if it was 17% and if we want to balance the previous fund, it's another 2%. Mayor Grant asked if Councilmember Monson was looking at the 20% under D 10. Councilmember Monson isn't recommending 20%, she's just saying that was the top she saw for trying to set the preliminary. She sees now it's 22%. City Administrator Jagoe said we received an update from the Ramsey County Sheriff's department on their proposed 2026 budget. She will forward the information as we learn more from the Sheriff but it appears their amount for 2026 has gone up. It is a preliminary levy increase of 1.7%, or $105,000. Councilmember Weber asked if that was for our portion. City Administrator Jagoe confirmed. The $105,000 is our cost share. Discussion ensued regarding the other Contract Cities have already set their preliminary levies. We are actually at an advantage by not having set ours, when we learned of this increase. It's not good news but we can still consider it before setting our Preliminary Levy. Mayor Grant asked where the $165,000 franchise for the fire department is, in the budget. Finance Director Yang said that is sitting in the Fund Balance. Mayor Grant said we're getting that on an annual basis but he didn't see it accounted for, anywhere. Finance Director Yang said it is accounted for in the Public Safety Capital Fund. It is sitting there to cover a portion of the debt service. Our revenue is $435,000. We're paying down debt service. The additional $165,000 sits in the Capital Fund. Mayor Grant said it is sitting in the Capital Fund, but he doesn't see it acknowledging the $165,000 overage. Finance Director Yang said it may not be in this presentation. Mayor Grant said the $165,000 could be used to cover a fire truck, something in the fire department, or to increase staffing levels. Finance Director Yang said that would be up to Council direction. ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 17 Mayor Grant understands that. We haven't decided if it's Capital or Expense. There is $165,000 sitting in a pot that we need to think about that could cover some of the fire department. Councilmember Monson asked for clarification. It is already in the fund. Staff assessment on if the amount we have in there is sufficient, would take into account the $165,000. She asked if we are $165,000 plush, that we could move somewhere else, or is that being eaten up by other Public Safety needs. Finance Director Yang said there is the incremental amount that can be used on other things. Councilmember Monson asked if we could transfer that for the operational costs of $159,000 for the fire department. Finance Director Yang confirmed we can do a transfer from the Capital Fund. Councilmember Monson asked if that would hit the Public Safety Fund in a negative way. Finance Director Yang confirmed. Councilmember Weber is concerned about the change order that is coming and what impact that will have. The goal of those funds is to future -proof. He thinks using it for personnel is in the spirit of the original assessment of franchise fees. We need to know what the change order will be for the amendments that had to be made for the soil, to make the lot buildable. Mayor Grant said we can say the $165,000 goes to the change order, then we don't have to worry about that. Councilmember Weber said that doesn't help our budget since those are additional costs. Mayor Grant said we wouldn't have something coming in, without a revenue source to pay for it. Councilmember Monson said that shouldn't hit the budget. That is built into the contingency. City Administrator Jagoe confirmed. The contingency was used for soil corrections. The fire department doesn't need to come back to the Cities, at this stage. Councilmember Monson said there is $52,000 for Public Safety. If we put the $165,000 in there and we're still trying to save the money for the full-time employees. In theory, the $165,000 has been accounted for. Are we using a $52,000 increase, even with the $165,000 in there? Finance Director Yang said the $52,000 does not account for the $165,000. The $165,000 would be incremental. She said the $52,000 will perpetually grow, whereas the $165,000 is an annual amount, with no growth factor. Mayor Grant said we will have $165,000 positive revenue, every year, for 20-years. ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 18 City Administrator Jagoe asked if the City were to use that $165,000 from the franchise fees, would it change the debt service payments or the schedule we had looked at for paying off the amount for the fire station early. Finance Director Yang confirmed. Mayor Grant said there isn't much value to pay it off early. Councilmember Monson said these are the things that can be ironed out between Preliminary and Final Levy. She thinks we should look at how the $165,000 can help support fire, in some way. She thinks we all want to keep that earmarked for the fire department. We don't have to decide what we are doing with PIR fund today. We have the possible range, to set a Preliminary. We have to add the Sherrif s cost. Councilmember Weber said we need to leave today, with a number for next week. Councilmember Monson said she wants to cut the maintenance worker. Councilmember Weber agrees. He doesn't think we have a choice on that one. Council agreed. Mayor Grant said we need to figure out the $159,000 and determine if we want to use the franchise fees for that. We've turned a few of the financial dials. Finance Director Yang will tell us what that means. He still thinks we need an annual incremental amount for the PIR Fund. He said this is a heavy increase. There needs to be a time when we take care of our own business but we need to be cognizant of County increases and the possible School District Levy. Councilmember Weber said the only way to avoid that is to bond next year. We are going to have a large levy increase. No matter what we do, it's still going to be a double-digit number. It will be difficult to keep it under 15%. We need a maximum levy increase number today, so Staff can prepare for next week. He thinks it falls in the scenario D8 and D10 as a maximum. That would allow opportunity for the Councilmembers who aren't in attendance, can share their opinions. Mayor Grant said he thinks we're looking at D 1-D 10. The numbers will change after the shifts discussed tonight. He said Staff can get back to us. Councilmember Weber thought we needed a number today. Staff needs to know the number to have things prepared for next week. This is the last work session. Mayor Grant said on September 29 we will set a number. City Administrator Jagoe said we can come back with a couple of options. She said last year there were three options and Council gave direction from the dais for which one to adopt. Coming back with 1 through 10 is more than we've done in the past. Councilmember Weber clarified that he thought we were trying to leave today, having set a maximum. He said D8-D10 are not his preference. He chose those options because they are on the ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 19 higher side, and that would give us a chance to hear the opinions of the Councilmembers not in attendance. City Administrator Jagoe said this is giving Staff the direction on the percentage range that Council would like Staff to come back with. That will be set at the meeting on the September 29. Mayor Grant said his preferences are D1-D3. He doesn't think we can do F, G or J because they are bonding scenarios. We had someone from Ramsey County here earlier that was saying there may be a cost share policy change that would make bonding for those projects unnecessary. The PIR may not be hit as hard. We won't know that until sometime into 2026. We shouldn't run out and bond unless we know we need it. We would be setting ourselves up for a payment schedule for the next 20 years. The interest is $1.3 million. When we look at some of the upcoming projects, at least one of them is $1.18 million. We could completely pay for that project for the same amount we would be paying in interest. Councilmember Weber said the same argument can be made regarding splitting and pushing the projects. That costs money, too. Mayor Grant said another thing to consider is when we look out to 2030, 2032 or 2034 we are looking at a formula that may or may not come to be. Public Works Director/City Engineer Swearingen said when he is planning projects that are 10 years out, he budgets high, knowing it will likely come down. He would rather have that than to come in too low. Streets that are 10-years out are estimated at the full reclamation rehab. Mayor Grant said some of the numbers in future years are potentially high. When we see the graphs that project the City will be in the red, we don't necessarily know that to be true. Councilmember Monson asked what the $100,000 is in the EDA Fund. Finance Director Yang said last year we transferred $100,000 from the EDA Fund to the General Fund to offset some of the levy burden. We are just reinstating that $100,000. Councilmember Monson asked what is spent out of the EDA Fund. Finance Director Yang said a lot of it is personnel and signage. Councilmember Weber said he remembers the discussion being that money was for a planned gateway sign. Councilmember Monson said we may not get the gateway signs. She is wondering if that is something we can look at closer. She said she would prefer to bond. She is not interested in bonding for 2026. It's too expensive. For today's purposes, we can assume it includes bonding or not. We can make that decision next year. Mayor Grant said for every $2 you bond, you pay pack $3. ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 20 Councilmember Monson understands. There are also advantages to keeping the levy lower. Bonding is a normal financial tool. There are trade-offs. She would prefer to try to keep the levy smooth. Councilmember Weber said if not for today's visit, we may not have had a choice. To that point, it was a good discussion with the County. Given the potential of getting that good news from the County, may solve the problem we're facing. We have to add at least $100,000, maybe $150,000, to the PIR this year. It needs to be on the higher end, if we don't bond. Mayor Grant agreed with the earlier comment that we don't have to make the decision today, but as we look at next year, it becomes easier to see what our options are. We'll know what the County is doing. His view of bonding is it should be reserved for a large project. We should try to levy, when possible, to avoid bonding. The interest will pay for a road project. Discussion ensued regarding the trade off between bonding and completing projects on schedule or increased project costs due to delaying projects. Council agreed the PIR Fund must be built up. Finance Director Yang said she can bring back options showing $100,000, $120,000, $180,000, $240,000 and $300,000. Mayor Grant said $300,000 is out and $240,000 may also be off the table. Councilmember Monson wants to see $100,000. We can do $100,000 this year and we can always increase it next year. Councilmember Weber wants to see the scenarios. He also believes $240,000 may be out of the question. Council directed Staff to provide scenarios showing $100,000, $120,000 and $180,000, to include all of the other changes discussed earlier. City Administrator Jagoe asked Council for direction on whether or not to shift the PMP projects. She said the Old Highway 10 project will be moved to 2027, per Council's direction. She was wondering if there is anything with the Street Projects that would be affected by the PMP shift. Finance Director Yang said shifting the PMP, starting in 2028, won't impact this year. Finance Director Yang will not have different scenarios next time. She will have the rates and what the levy increases would result in based on tonight's discussion. The focus will be on just 2026 and the levy impact. C. Agenda Planning None. D. Rice Creek Commons/TCAAP Discussion None. ARDEN HILLS CITY COUNCIL WORK SESSION — SEPTEMBER 22, 2025 21 ADJOURN Mayor Grant adjourned the City Council Work Session at 9.34 p.m. -- r J stling David Grant Deputy Clerk Mayor