This transcript features **Mayor Luke Hellier** presiding over the Lakeville City Council meeting, with reports from City Staff and an external auditor. Note: While the provided list identifies Julie Stahl as Finance Director, the transcript clearly identifies the speaker as **Geralyn Erickson**, who notes it is her final day before retirement. The City Clerk, **Ann Orlofsky**, is referred to phonetically as "Ms. Rolowsky" in the original text. *** [0:01] **[Background]:** foreign [0:21] **[Music]** [0:31] **[Music]** [0:49] **Mayor Luke Hellier:** Thank you. [0:59] **Mayor Luke Hellier:** Good evening and welcome to the July 17th city council meeting. If you'll join me for a moment of silence and the Pledge of Allegiance. [1:20] **[Crowd]:** ...indivisible... [1:36] **Mayor Luke Hellier:** All right, Ms. Orlofsky, roll call please. [1:38] **City Clerk Ann Orlofsky:** Michelle Volk? **Councilmember Michelle Volk:** Here. **Ann Orlofsky:** Luke Hellier? **Mayor Luke Hellier:** Here. **Ann Orlofsky:** John Bermel? **Councilmember John Bermel:** Here. **Ann Orlofsky:** Dan Wolter? **Councilmember Dan Wolter:** Here. [1:47] **Mayor Luke Hellier:** All right, moving on to item number three. Citizens' comments is an opportunity for citizens to raise any issues that they may have. You have up to three minutes, so if you'd like to be recognized, you can raise your hand. Okay, seeing none, we'll move on. Any additional agenda information, Mr. Miller? [2:08] **City Administrator Justin Miller:** Nothing tonight, Mayor. [2:10] **Mayor Luke Hellier:** Okay, now I'll move on to item five, presentations. The first being the National Night Out Proclamation, and I believe the Police Chief will give an overview. [2:20] **Police Chief Brad Paulson:** Good evening, Mayor and Council. Just a quick update on where we're at. I believe you're going to read an official Proclamation momentarily, but we are approaching the big night of Tuesday, August 1st: National Night Out. This year, I would just point folks to our web page. We do still have time to register for neighborhood parties—we have through the end of the week, so July 21st is our cutoff date for official registrations. Folks can go on there, find out where to pick up materials, get questions answered on the website, and find points of contact. They can also request police or fire presence, and we will get to as many parties as we logistically can that evening. I looked earlier today; we're at 107 registered parties, so I'm sure we'll add a few more throughout the week. But we're looking forward to seeing as many folks as we can out there on August 1st. Thank you. [3:07] **Mayor Luke Hellier:** Very good. Thank you, Chief. And I'll now turn it over to Councilmember Wolter to read the Proclamation. [3:12] **Councilmember Dan Wolter:** Proclamation: National Night Out 2023. Whereas the National Association of Town Watch is sponsoring a unique nationwide crime, drug, and violence prevention program on August 1st, 2023, called National Night Out; and whereas the 40th annual National Night Out provides a unique opportunity for Lakeville to join forces with thousands of other communities across the country in promoting cooperative police-community crime prevention efforts; and whereas the City Council plays a vital role in assisting the Lakeville Police Department through joint crime, drug, and violence prevention efforts in Lakeville and is supporting National Night Out 2023 locally; and whereas it is essential that all citizens of Lakeville be aware of the importance of crime prevention programs and the impact that their participation can have on reducing crime, drugs, and violence in Lakeville; and whereas police-community partnerships, neighborhood safety awareness, and cooperation are important themes of the National Night Out program. Now, therefore, we the City Council do hereby call upon all citizens of Lakeville to join the Lakeville Police Department, Lakeville Fire Department, and the National Association of Town Watch in supporting the 40th annual National Night Out on August 1st, 2023. Further, let it be resolved that we the City Council do hereby proclaim Tuesday, August 1st, 2023, as National Night Out in Lakeville. Dated the 17th day of July, 2023. [4:38] **Mayor Luke Hellier:** Very good, thank you. We look forward to seeing everybody on the first. Okay, we'll now move on to the Finance Department mid-year report, and we have Director Erickson. [4:54] **Finance Director Geralyn Erickson:** Good evening, Mr. Mayor and Councilmembers. Okay, maybe I don't have to look at that screen. All right, so this is our mid-year report—an opportunity for me to bring you up to speed on some of the projects that we've been working on and some that we've completed. First of all, I'd like to announce that I had received the Certificate of Excellence in Financial Reporting for our 2021 Annual Comprehensive Financial Report. We've received this for the past 34 years, so that was an honor. Some of the projects that we've completed: with the presentation tonight, we will have completed the city audit as well as three other audits that we are the fiscal agent for: the Lakeville Fire Relief Association, Dakota 911, and the Lakeville Arenas. We've also worked with Dakota 911 on the preparation of their 2024 budget. Probably about eight or nine months ago, we worked with Dakota 911 to come up with an allocation of their fixed costs so that Dakota County would be responsible for fees to cover the fixed costs. They were at 16% the first year, this year they're at 33%, and next year they'll be at 50%. We sold bonds in June; they will be closing this Thursday for 9.2 million. This is to cover the street reconstruction projects this year as well as Park Referendum funding for multiple projects, and we maintained our AAA bond rating with Moody's. Some of the current projects staff is working on is the 2024 budget for the city as well as the Capital Improvement Plan (CIP). You'll see those items come to the City Council CIP at the next workshop in July, and then in August, we will have the preliminary budget as well as the final components for the CIP. We're also working on the ERP; the Council approved a contract with BS&A back in February. Laura City, one of my senior financial analysts, is the city project manager working directly with BS&A and our consultant, BerryDunn. We anticipate a go-live in September of '24 for financials and HR/payroll, and for utility billing in October of '24. Also coming up will be the delinquent certification that will come before you in October for utility, code enforcement, and false alarms. One other project part of your consent agenda is our Financial Metrics Report. I've been working with the Finance Committee for the last year on putting that together. We anticipate that report coming back on an annual basis to provide feedback on the various policies—fund balance, financial sustainability, and resiliency. On Utility Billing, you can see we've increased our customers by about 26% since 2014. About 50% are paying by electronic check or ACH. We have about 7,700 customers signed up for e-billing and autopay. We have quite a few accounts that turn over; year-to-date, we're already at 1,841 move-ins and move-outs. That is significant and on track to exceed 2021 and 2022. For Accounts Payable, we generate about 42% electronic payments and have processed about 13,000 invoices already year-to-date. And then we have some upcoming retirements in the department. David Lang, our senior financial analyst, will be retiring fully in September. And I am retiring tomorrow. So I had to put a little fireworks there. I do want to take the opportunity just briefly to thank all of you as councilmembers and former councilmembers for my time here the last eight years. I've really enjoyed it. You've been very open-minded and trusting. I also want to thank Justin and the senior management team—they've been very workable. My finance team is excellent staff, and the other department heads have been great to work with. It's a great organization; you should be very proud of it. Do you have any questions on my presentation? [13:21] **Mayor Luke Hellier:** Okay, but you can stay there for just a moment. So as you said, tomorrow is Geralyn's last day. Throughout your tenure, you have exemplified dedication, expertise, and commitment to the financial well-being of our city. Your leadership has steered us through times of economic challenge and prosperity. Under your guidance, the department has become a beacon of excellence, known for its transparency and accountability. I want to express our gratitude and bid farewell to you. Your impact will be felt for many years to come. So, on behalf of myself and the Council, I extend my deepest appreciation. May your retirement be filled with joy. Thanks again for all the years of service to the city. [14:38] **Geralyn Erickson:** Thank you very much for those kind words. Thank you. **[Applause]** [14:43] **Mayor Luke Hellier:** Anybody else? Okay, we'll now move on to item six: the Consent Agenda. Mr. Miller, any items that you wanted to highlight? [14:51] **Justin Miller:** Thank you, Mayor. Two items of note: 6G is a proposal for professional services for the final design of Avonlea Community Park. We are still moving forward with the Park Referendum projects. Item 6O is the approval of a purchase agreement of the Alternative Learning Center property from ISD 194; that’s the building right next to the Arts Center, which has been a long-time strategic priority for us. [15:15] **Mayor Luke Hellier:** Okay, very good. Any items those in the Council wanted to pull for further discussion? If not, is there a motion to approve the Consent Agenda? [15:24] **Councilmember John Bermel:** I'll make a motion to approve the Consent Agenda. [15:28] **Mayor Luke Hellier:** And is there a second? [15:29] **Councilmember Michelle Volk:** Second. [15:30] **Mayor Luke Hellier:** Is there any further discussion? If not, all those in favor say aye. **Councilmembers:** Aye. **Mayor Luke Hellier:** Opposed? The Consent Agenda is passed. We'll move on to item number seven: Acknowledge receipt of the Comprehensive Financial Report. And that is Chris Knopek, Principal at CliftonLarsonAllen. Oh, and Geralyn, you're back? [16:03] **Geralyn Erickson:** I came back. That was a very short retirement. I wanted to mention Chris is coming up with the results. We included draft copies, and we made a couple of minor changes, but we will send out the final documents tomorrow. [16:11] **Mayor Luke Hellier:** Very good. Welcome, Chris. [16:14] **Chris Knopek:** Thank you very much, Mr. Mayor and Council. I am here tonight to present the results for the December 31st, 2022 audit. The city is receiving an unmodified or "clean" audit opinion. That is the highest level of assurance any entity can receive. As far as internal controls go, we had no items identified this year that rise to a material weakness or significant deficiency. We also looked at the Minnesota Legal Compliance Guide and identified no compliance issues. The city also required a single audit this year because you expended more than $750,000 in federal awards, specifically the ARPA funds. We did not have any comments regarding controls or compliance regarding that grant. Looking at your general fund, total revenues and expenditures are growing as the city continues to grow. Your property tax proportion decreased slightly, but that was due to the one-time $5 million ARPA award. Regarding interest income, you will see a negative number for interest income this year due to fair market value adjustments, but this is a temporary reduction because the city holds investments to maturity—no actual losses were taken. The general fund was under budget by $159,000. Regarding fund balance reserves, you are at about 56.4% of expenditures. Your policy is 40% to 50%. When projected against the 2023 budget, you are at 44%, right in the middle of your policy. Your liquor operations continue to be strong, with a gross profit of 26.9%. You transferred $1.3 million out of liquor operations to fund capital projects and general operations. Finally, new auditing standards for 2023 will involve deeper looks into IT environments and subscription-based software. I want to thank Geralyn and all the city staff for helping us through the process. I am open to questions. [38:35] **Mayor Luke Hellier:** Thank you so much. Questions, comments? [38:40] **Councilmember Michelle Volk:** I do have a question. On your last statement that you're going to be auditing the IT environment... most entities already use technology to produce hard copies. What is it that you're looking for? [38:49] **Chris Knopek:** Right now, auditors often rely on manual controls, like someone signing an invoice. With the new standards, we have to start relying on the controls built into your IT systems—who can cut a check, who can access files. We'll likely have an IT specialist sit with your IT department to get a better understanding of that environment. [40:07] **Mayor Luke Hellier:** Other questions? If not, I'll take a motion to accept receipt of the report. [40:17] **Councilmember John Bermel:** Mr. Mayor, I move to acknowledge receipt of the City of Lakeville Annual Comprehensive Financial Report for the year ended December 31, 2022. [40:24] **Councilmember Dan Wolter:** Second. [40:25] **Mayor Luke Hellier:** Is there any further discussion? All those in favor say aye. **Councilmembers:** Aye. **Mayor Luke Hellier:** Opposed? Very good. Thanks a lot. [40:41] **Mayor Luke Hellier:** All right, we'll now move into item eight: Antlers Ridge. And I believe the developer, Mr. Herman. [41:00] **Nate Herman:** Good evening, Mayor and members of the Council. My name is Nate Herman with Terra Land Services. The application before you is for a preliminary plat, rezoning, and a conditional use permit (CUP) for a 54-unit twin-home development called Antlers Ridge. We believe this provides a nice transition from the townhomes to the south and single-family to the east. We have a grading permit that allows us to import material once the preliminary plat is approved. We plan to grade the site in one phase but split utility work into two. Due to a tragic accident, the original builder can no longer build the homes, but the developer is in conversation with other parties. [42:55] **Mayor Luke Hellier:** Very good, thank you. Any questions at this point? If not, I believe Mr. Moore has a staff report. [43:18] **Planning Director Kris Moore:** Good evening, Mayor and Councilmembers. This includes a preliminary plat of 54 twin-home lots and rezoning from RM-2 to RST-2. This project includes the extension of 203rd Street, which was stubbed 30 years ago. This will provide the Marion Village neighborhood with a second access point. The developer will also construct turn lanes on Kenrick Avenue. The Planning Commission unanimously recommended approval. [48:42] **Mayor Luke Hellier:** I just had a question: when the Shoreland Impact Plan is looked at, how do we ensure we aren't having excessive runoff into Marion or the Watershed? [48:58] **Kris Moore:** The Shoreland Impact Plan is required because this is a twin-home development rather than single-family. The DNR was notified and had no comments. Our engineering staff and consultants have reviewed the grading and erosion plans and signed off. [50:07] **Mayor Luke Hellier:** If there are no further questions, I will entertain a motion. [50:13] **Councilmember John Bermel:** Mr. Mayor, I move the Council approves: 1) An ordinance rezoning property to RST-2; 2) A resolution approving the preliminary plat of Antlers Ridge; and 3) A CUP for a Shoreland Impact Plan. [50:35] **Councilmember Michelle Volk:** Second. [50:37] **Mayor Luke Hellier:** Any further discussion? Ms. Orlofsky, roll call please. [50:44] **Ann Orlofsky:** Volk? **Councilmember Michelle Volk:** Aye. **Ann Orlofsky:** Bermel? **Councilmember John Bermel:** Aye. **Ann Orlofsky:** Wolter? **Councilmember Dan Wolter:** Aye. **Ann Orlofsky:** Hellier? **Mayor Luke Hellier:** Aye. [50:48] **Mayor Luke Hellier:** All right, very good. Look forward to working with you guys. Now we'll move on to item number nine, and Mr. Moore is already on deck. [51:02] **Kris Moore:** I'll be as brief as I possibly can. This is "round two" of our annual subdivision and zoning ordinance amendments. Key changes include: extending the deadline for recording final plats from 100 to 180 days; changing shared frontage requirements from a CUP to an administrative permit to reduce red tape; and adjusting directional sign setbacks from 15 feet to 5 feet to make them more visible. We are also clarifying density language for affordable housing and updating home occupation rules to allow up to three children from the same household for instructional classes. Additionally, we are adding "cosmetic tattooing" as an accessory use in barber shops/salons to align with state statutes, and allowing car rental agencies in the C-2 district. Finally, we are adjusting commercial kennel setbacks to be measured from the outdoor exercise area rather than the property line. [58:41] **Mayor Luke Hellier:** I want to thank you and the Planning Commission for reviewing these. I'll take a motion to approve. [58:53] **Councilmember Michelle Volk:** I'll move to approve an ordinance amending titles 10 and 11 of the city code. [59:05] **Councilmember John Bermel:** Second. [59:06] **Mayor Luke Hellier:** Any further discussion? Ms. Orlofsky, roll call please. [59:12] **Ann Orlofsky:** Volk? **Councilmember Michelle Volk:** Aye. **Ann Orlofsky:** Bermel? **Councilmember John Bermel:** Aye. **Ann Orlofsky:** Wolter? **Councilmember Dan Wolter:** Aye. **Ann Orlofsky:** Hellier? **Mayor Luke Hellier:** Aye. [59:15] **Mayor Luke Hellier:** That passes. Items 10 and 11, unfinished and new business? None. Announcements: Next regular meeting is August 7th. Next work session is next Monday at the Water Treatment Facility. National Night Out is August 1st. I will take a motion to adjourn. [59:55] **Councilmember John Bermel:** Moved. [59:55] **Councilmember Michelle Volk:** Second. [59:56] **Mayor Luke Hellier:** All those in favor say aye. **Councilmembers:** Aye. **Mayor Luke Hellier:** Opposed? We are adjourned. Good night. [1:00:26] **[Music]**