As an expert transcriptionist, I have analyzed the context provided and the phonetic clues in the transcript (e.g., "Jarich" for Dragisich, "Kragness" for Pragnus, "Hearn" for Her) to accurately identify the speakers. [00:00:00] **Mayor Charles Cadenhead**: Item B on the agenda is approval of the agenda. I'll entertain a motion unless somebody would like to move some things around. [00:00:05] **Council Member Nick Dragisich**: Move to approve the agenda as written. [00:00:07] **Council Member Jeff Holtz**: Second. [00:00:08] **Mayor Charles Cadenhead**: We have a motion and a second for approval of the agenda. All those in favor, please signify by saying I. [00:00:12] **Council Members**: I. [00:00:13] **Mayor Charles Cadenhead**: Agenda is approved. Um, item C is public comments, and we do have somebody who would like to speak tonight. When you come to the podium, please address your your uh please say state your name and address for the record, please. You'll have six minutes. [00:00:25] **Wendy Griffin**: Gee, thanks. [00:00:26] **Mayor Charles Cadenhead**: Sure. [00:00:27] **Wendy Griffin**: My name is Wendy Griffin. I live at 2835 Lake Mo Avenue North. I am president of the Lake Association. We were here a couple months ago to tell you that we had submitted um a grant into the 3M PFOS for the DNR uh for money. Well, they accepted our letter. [00:00:45] **Mayor Charles Cadenhead**: Great. [00:00:46] **Wendy Griffin**: And so we're in the process of writing for that grant and I'm here to ask the city if they would help us by supporting us with a letter of intent. And our intent in doing if we do get the money would be to do a full lake treatment for the lake to deal with Eurasian mil foil and curly pond weed. We had a meeting last night with Patrick from PLM, the gentleman that does our weed removal, and Meg Ratty from Bar Engineering, and we talked about some of the other invasives. We found out late last week or last week that Lake Elmo now has zebra muscles in it, but you know, we're with keeping up with the dry lakes. And we talked about some of the other invasive species and found out that it's going to be a five-year plan out from now for zebra muscles, which me is working on with Valley Branch, bless their heart. And there's another invasive out there that can be dealt with through Washington Conservation District. So, I'm just here asking for a letter of intent with the city saying that you support us in our efforts. [00:01:45] **Mayor Charles Cadenhead**: All right. [00:01:46] **Wendy Griffin**: And one other comment. Thank you very much for Saturday night. What a fun evening. I'm so glad there wasn't quite as many people there that I thought were going to be there that I would know because I've been here my entire life. But there were enough and I really do appreciate it. And I would sincerely hope that the city council would consider possibly maybe might bring back a street dance because that's something that we had when I was younger and and growing up. It would be fun to have some kind of a festival or something going on in Lake Elmo for the residents. I think there's enough people that live here now that might be interested in that. But you guys did a fabulous job. [00:02:25] **Mayor Charles Cadenhead**: Thank you very much. [00:02:26] **Wendy Griffin**: Thank you. No, thank you. Oh, y'all have fun tonight. [Music] [00:02:30] **Mayor Charles Cadenhead**: All right, item D on our agenda is uh approval of the minutes. Everybody have a chance to review? Everybody good? If so, I'll uh I'll accept a motion for approval. [00:02:40] **Council Member Nick Kragness**: Motion to approve the minutes from the 8:1425 city council workshop. [00:02:44] **Council Member Matt Hirn**: Second. [00:02:45] **Mayor Charles Cadenhead**: We have a motion and a second. All those in favor, please signify by saying I. [00:02:48] **Council Members**: I. [00:02:49] **Mayor Charles Cadenhead**: Minutes are hereby approved. Tonight's consent agenda consists of: approve payments and dispersements; adopt resolution for summary publication of ordinance related to trash haulers; accept donations for centennial celebration; approve position and job description for administrative assistant public works fire; approve AT&T temporary cell tower lease extension; approve 3M priority 2 trail grant submittal; approve 2025 street and utility improvements pay request three; approve Stillwater school district improvements pay request one; approve Eert's edition security reduction; approve Wildflower fourth edition security release; Royal Golf third edition security reduction; 2025 mill and overlay accept bids and award; the 2025 street and utility improvements call for final assessment hearing; Number 14, call for final assessment hearing for Stillwater Area School District utility improvements. And that's it for our consent agenda. I'll entertain a motion on the consent agenda this evening. [00:03:50] **Council Member Nick Dragisich**: Motion to approve the consent as written. [00:03:52] **Council Member Nick Kragness**: Support. [00:03:53] **Mayor Charles Cadenhead**: We have a motion and second. All those in favor, please signify by saying I. [00:03:56] **Council Members**: I. [00:03:57] **Mayor Charles Cadenhead**: Consent agenda is approved. Our regular agenda, the first item is accept feasibility report and order public hearing for 2026 street and utility improvements. Okay. [00:04:10] **City Engineer Nate Stanley**: Here we go. We're good. However we're a couple slides in. Okay. Uh yes, Mayor and Council. I'm with you tonight. Uh before you tonight with an item to receive the feasibility reports and call a public improvement hearing for the 2026 street utility improvements. Uh tonight we're going to recap the um a number of items, but I'd like to really take a moment to discuss the recommendations of the report and the costs associated with the project. So, to refresh everybody, the uh project is in uh the Lake Heights and Eagle Creek Point Estates area of town um just off of uh Inwood Avenue there. Uh tonight's uh the the the schedule is as as presented here. Uh tonight we're presenting the feasibility report um and calling for a hearing on the improvement. Um if if council moves this forward, I'll be back before you in October to conduct that public improvement hearing and look for direction on moving forward the project. [00:05:05] **City Engineer Nate Stanley**: Okay. So what did we find out? Um pretty good news actually. Um the geotechnical investigation supports a um pavement reclaim existing roadways in the project area. This is very this is identical to many of the similar past projects including the 2025 project that we're uh finishing up right now. So we want to reconstruct the streets to more or less existing grade and width matching geometrics making minor adjustments as necessary uh necessary for drench improvements. um installation of B418 concrete curb and gutter. I didn't have that stated explicitly, but I did want to bring that up. Um posting of no parking per city policy. Uh in this case, it's it's just around those cul-de-sac bulbs of the neighborhood. A replacement of storm sewer as necessary. Um as well as grading out any any sort of ditches, clearing ends, making sure the systems work. [00:05:55] **City Engineer Nate Stanley**: The neighborhood is served by existing public water that was installed approximately 20 years ago. It's anticipated there's many many decades of life left in the system, and no improvements are proposed at this time of the water main system. Uh the streets or the project areas are outside the existing Musa boundary and there's no proposed extension of sanitary sewer into the neighborhood at this time. This is kind of just it's a little hard to see. Um just kind of a recap. I mean I'll draw attention to the orange dots. Those are storm sewer improvement areas. Uh like I said, the water main exists and we're proposing curb throughout the entire neighborhood. These are larger lots um with significant frontage. Again, the parking restrictions we're just proposing to cul-de-sac bulbs um per city policy. The width of the streets is adequate so that we don't need to restrict uh one side or at all. [00:06:50] **City Engineer Nate Stanley**: So in our 2026 capital improvement plan budget we have a little over 2.7 million estimated. The current project estimate all in is just under $2.4 million. Of that, we're estimating um $1,665,000 to be paid by the city and $727,000 to be assessed to benefiting properties. Um there's a kind of a breakdown below listed. You can see um I want to draw attention to the Lake I've got two Lake Elmo Heights neighborhoods indicated here. And that was how it was in the report. Uh the well while in the same plat they're not contiguous streets. So we did separate out the Insdale Avenue cul-de-sac with access off Stillwater Boulevard. Um that cul-de-sac you you'll notice the assessments are are quite a bit less per unit and that's just a matter of those lots actually being a little bit smaller and having a greater number of units on the cul-de-sac. [00:07:45] **City Engineer Nate Stanley**: Otherwise, these these assessments are generally in line with what we've seen for recent past projects. There's a map to illustrate that. And like I just said, the the you can see the two cul-de-sacs um on the top of the page here. The uh Eagle Creek Point Estates cul-de-sac, which is actually Old Avenue, has four properties fronting it. There is a side uh driveway one property that's actually fronting Stillwater Boulevard. That was that one assessment that was half of the original half of the uh the folks that front the cul-de-sac. The Lake Elmo Heights neighborhood, the larger of of the areas, is accessed off Inwood Avenue by 26th and 27th Avenue. So tonight, I'm asking council to consider approving a resolution receiving the feasibility report calling for a public hearing for the 2026 street and utility improvements. [00:08:35] **Mayor Charles Cadenhead**: Questions for Mr. Stanley? Kragness? [00:08:37] **Council Member Nick Kragness**: So it looks like on August 13th you had a neighborhood meeting. Can you explain how that meeting went? If there was any feedback about that? [00:08:45] **City Engineer Nate Stanley**: Absolutely. Thank you for the question. It was actually uh the week after I think it was the 19th, we kind of lost a week there schedule-wise, but it was fairly well attended. I'd say we had 35 to 40 folks show up and it was informational. We didn't talk about we didn't at that point we didn't have the feasibility report to a point where we were ready to share um preliminary assessments for instance which is >> [00:09:05] **Council Member Nick Kragness**: And did you have people from each neighborhood attend as well? [00:09:07] **City Engineer Nate Stanley**: Yep. [00:09:08] **Council Member Nick Kragness**: Cool. [00:09:09] **City Engineer Nate Stanley**: We did. Yeah. So it was it was informational. People were generally happy to hear that the streets are being done. Um there was some discussion about concrete curb and gutter and the benefit which which um I went through uh everything why it's proposed, why it's a city standard, and I I think most folks um accepted in the end that it is is the best strategy to go but um it was um it was I think it was generally appreciated the fact that we had this public meeting at that time to provide information in advance of the next public meeting we're having which is going to be between now and the improvement hearing. [00:09:40] **Council Member Nick Kragness**: Got it. Okay. Thank you. [00:09:41] **Mayor Charles Cadenhead**: Council member Hirn? [00:09:43] **Council Member Matt Hirn**: There's a question with the financial side of it. So, and and maybe I just maybe this is how it works, but I see like at the bottom of um the 2026 street improvements document, it says that project proposed to be paid from a combination of special assessments, general funds, and issuance of bonds. A little higher up in the document, it just says the remaining 70% after the 30% special assessment is going to be paid through the city general fund. And and maybe that's just how maybe there was a mistake there. I guess I was just wanted to clarify that. [00:10:15] **City Engineer Nate Stanley**: Yeah, I would I would uh I'd review that with you. I there there could be some some miswording there. I apologize for that. Um but yeah, generally the and and I can if there are more specific questions about financing, I'm happy to step aside and let Director Hadler um hear you out. But generally the project come, you know, we we estimate it at 30% it's assessed. 70% we're just calling city cost here in this and and how that is distributed is through a combination of bonds or whatever other funds we have available. [00:10:45] **Council Member Matt Hirn**: Okay. And are I guess are we digging into the general funds for this project? We're not to that point. That's kind of the point of the funds that we're creating now is to be able to draw from the infrastructure fund for these types of projects in the future. [00:11:00] **Finance Director Clarissa Hadler**: Correct. If I may, uh, mayor, uh, that is correct. So, I would say the end, the final funding is still to be determined because we're sort of piecing together sort of the strategic plan and the levies and such. Um, so we'll have a little bit more information, but yes, the goal of those infrastructure levies is to fund these capital projects, which have largely been funded only through bonds for the for a number of years. [00:11:25] **Council Member Matt Hirn**: Yeah. And and that's helpful. Well, I guess I as I was reading through that just because I know we've kind of um used some of the general funds as we're looking at the budget. So, I didn't know if maybe that was a strategy that was being implemented, but it doesn't sound like that was the intent. [00:11:40] **City Administrator Nicole Miller**: No. And I I would kind of go back to this like we've got a lot of work to do with our strategic planning. And so, part of I mean certainly in my in my mind and part of the the strategic plan that I'm working on is is talking about moving some of the general fund over to the infrastructure fund to sort of jumpstart that. But but for this particular project um I again we'll look at it next year. In my mind it's more about like what are the new levies that we will be implementing. So for right now it's tentatively at that 400,000 for next year plus those franchise fees that we'll be um receiving from the utility companies. And then um for whatever um projects are uh for other projects not this particular project there will be MSA dollars available as well. [00:12:25] **Council Member Matt Hirn**: Okay. Thank you. Thanks for clarifying. [00:12:27] **Mayor Charles Cadenhead**: Mayor. Yes. Council member Dragisich. [00:12:30] **Council Member Nick Dragisich**: Yeah. This is another project. We have storm water utility improvements in here and we should be using our storm water utility fund to pay for those improvements. Um because that's why we have the fund. Uh we went through this on a project earlier this year where we had storm water improvement funds. We use bonds to pay for them and not going to the utility. So, I'm hoping that when we get to the end of the financing options for this that the storm water portions will come from the stormwater utility fund and not our infrastructure fund or our or bonds. [00:13:00] **Mayor Charles Cadenhead**: That's something we can look at right now. Here, we're here for the uh accepting the feasibility report, but yeah, duly noted for finance and public works to look at that. Anything else for Mr. Stanley? Okay. And I'll uh I'm open to uh a motion. [00:13:15] **Council Member Jeff Holtz**: Motion to approve resolution number 2025-059 receiving the feasibility report and calling hearing on improvement for the 2026 street utility improvements. [00:13:25] **Council Member Nick Kragness**: Second. [00:13:26] **Mayor Charles Cadenhead**: We have a motion and a second. Any discussion? Hearing none. I'll call the question. All those in favor, please signify by saying I. [00:13:33] **Council Members**: I. [00:13:34] **Mayor Charles Cadenhead**: Motion passes. Man, is it just me or is it stuffy in here? [00:13:38] **Council Member Jeff Holtz**: That's really hot. [00:13:39] **Mayor Charles Cadenhead**: Wow. All right. Number two is 2026 preliminary budget and levy brought forward from our workshop last week. Oh, Julie, I broke it. Nice. I had it open. [00:13:50] **City Clerk Julie Johnson**: It's I tried to escape out of Nate's and the whole thing just went black because we can't get it to appear in both places. I realized um that's not what it was actually the minutes of and I said that it was the 9/2. Oh, but that's what the minutes were. Okay. [00:14:05] **Finance Director Clarissa Hadler**: Well, this is our third, I think maybe fourth discussion on the budget and levy for next year. So, it'll be a little bit uh abbreviated. So after um our discussions last last week, we um have landed on the current proposal. Uh so I'll just kind of review this quick. Our um uh for the general fund budget, we're looking at a total tax revenues of 6.3 million. Uh non-tax revenues of just over 2.2 million. For um expenses, uh we are looking at a total expense of 8.8 million, which is about 11% increase over the prior year. [00:14:45] **Finance Director Clarissa Hadler**: Um, some changes from 2025 that have added to that or sort of caused those increases are um added public works staff, the addition of three fire captains for half of the year next year, that'd be full year in 2027, and then we have a lot of projects on the books for next year. So, we have a multi-year comprehensive planning process. We have some planning for the um future source sports complex and the 180 acres. We have the second year of our finance software implementation, market wage analysis. Um we are still getting a handle on our city center expenses. So a lot of the maintenance and repairs. Um we have a team that that goes through all of those. And then 2026 is of course an election year. [00:15:30] **Finance Director Clarissa Hadler**: So, our um goal tonight is to adopt the proposed levy. Um the proposed levy, as you may know, may be decreased um at the at its final adoption. It may not be increased. So, we're setting the high bar for the levy. So, um part of the levy that we've discussed a lot are the capital levies. Um the numbers shown are the ones that we have landed on after that discussion last week. Um it's decreased from the initial proposal. So um we have these are all uh the capital levies are all uh new as of this year. We haven't done um a lot of the separate capital uh levying for capital needs in the past. [00:16:10] **Finance Director Clarissa Hadler**: So infrastructure reserve is specifically for um larger street uh reconstruction, the reclamation as well. City Center CIP is just getting a jump on um those uh future uh repairs and replacement of this building. The park CIP we uh brought down to zero. Um we have the ballpark fund which is an interfund loan that is repaying the sewer fund and that's for the purchase of the 76 acres for that sports complex. Our vehicle and equipment levy covers all of our vehicles and equipment um in all general fund uh departments. Those are also funded by the utility funds. And then we have our street maintenance uh which is uh all of the major street maintenance such as mill and overlays and chip seals. So a total of 1.78 million. [00:17:00] **Finance Director Clarissa Hadler**: So, our total levy uh currently proposed is 11,497,785, an increase of just over 1.4 million, which is a 14% increase over 2025. Um the per our uh estimated local tax rate would be 29.57 which is a change of 2.73 percentage points. Our median value home uh increased just slightly this year. So we can see that the increased tax rate would have an impact of about $179 which is less than $15 per month on that median value home. Here's our tax rates relative to all other Washington County cities. So, we're very much on the low side of those. And then this is in comparison to the cities in Washington County that are most similar to us in population. So, we are ninth out of 10. And there's our proposed—the recommendation for the motion and I'm happy to answer any questions. [00:18:05] **Mayor Charles Cadenhead**: Any questions for director? [00:18:07] **Council Member Matt Hirn**: Um yeah, thanks for the presentation and thanks for answering my questions. Um, I I know you sent me the some of the CIP scenarios and some of the questions I had as far as um how it would impact the debt projections if we did change some of the numbers with the um the how much we're funding each year with it. And you sent some numbers and I guess I think it would be helpful to maybe talk through those. Um the one you just sent me it looks like if I'm understanding it correct that if we decrease that infrastructure reserve fund amount 200,000 less than what we are planning this year. Is that what I'm seeing in the one that you sent? [00:18:45] **Finance Director Clarissa Hadler**: Yep. That was the proposal that you had asked me to. [00:18:48] **Council Member Matt Hirn**: And I don't—I'm the only one looking at this right now—but if we had 200,000 less, that in 2038 our debt projection would be at about 23 million versus as proposed I think our debt projection would be at 20 million in 2038. Am I seeing that right? [00:19:05] **Finance Director Clarissa Hadler**: That sounds right. Now, and I would just remind you that we talked about that this is just these are just modeling at this point and like this discussion is going to change quite a bit as we go through that strategic planning process and— [00:19:20] **Council Member Matt Hirn**: And thank you for for doing this. you know, like what? Well, I guess yeah, I'll wait for discussion, but I just wanted to make sure I was seeing that right. That it would be bring it down to $23 million of debt versus 20 million if we drop from $400,000 in that infrastructure reserve to 200,000 and then work our way up. [00:19:40] **Finance Director Clarissa Hadler**: Correct. I would just also point out that the debt is just one of a number of factors that we should be looking at. So the um total balance of that infrastructure fund over time is going to be really important for the long-term sustainability of our infrastructure and the city and finances. [00:20:00] **Council Member Matt Hirn**: Thank you. [00:20:01] **Mayor Charles Cadenhead**: Any other questions at this time? Okay, I'll entertain a motion. [00:20:05] **Council Member Jeff Holtz**: Motion to approve resolution 2025-060 approving 2026 proposed general fund budget, 2026 proposed property tax levy and setting the public hearing date for the 2026 budget and property tax levy for Tuesday December 16th—reading is hard—2025 at 7 p.m. [00:20:30] **Council Member Nick Dragisich**: Second. [00:20:31] **Mayor Charles Cadenhead**: We have a motion and a second. Discussion. Council member Dragisich? [00:20:35] **Council Member Nick Dragisich**: I think that the presentation um has been good and we talked a little bit about comparison of tax rates with 10 cities closest in population and with all the cities in Washington County. However, if you look at other data and you look at the amount of property taxes paid by a median valued home in those same communities, meaning half the houses pay more property taxes, half the houses pay less property taxes. For the 10 um most comparable population, our property tax on our median valued home is higher than six of those and lower than three. So, we're much more to the high end than we are in the tax rate. [00:21:15] **Council Member Nick Dragisich**: And part of it is because we have very high values in Lake Elmo. If you go to all of the cities in Washington County, um you'll find that 19 cities of the 27 have a lower property tax on a median home than Lake Elmo and five had a higher tax. So, we're on the high end of property tax, actual property taxes paid by median valued homes in the county, even though our tax rate is on the low end because of our high values. And so, as you look at increasing the levy by 14, 11, whatever percent, keep in mind that from the taxpayers point of view, we are a fairly high tax city. [00:21:55] **Mayor Charles Cadenhead**: Thank you. Anyone else? Council member Hirn? [00:21:58] **Council Member Matt Hirn**: I guess I'll I'll just kind of reiterate then you know my feeling is with looking at those projections again my goal with this has been I understand that the taxes do need to go up. I understand that we need to be able to support the spending and the growth of the city. I think if we can approach it in a slower approach versus—and again I know like you said it's not ripping off the band-aid—but I think this projection, again I know it's a projection it's not perfect but neither is the other one then right? But if that's the data that is presented in front of us and I can see that in 12 to 13 years we would improve from being at $60 million of debt lower that down to $23 million of debt versus to $20 million of debt. I think that that shows that that slower approach could work just fine. [00:22:45] **Council Member Matt Hirn**: And so this is where I still do feel strongly about if we can look at those funds decreasing how much we're putting into those funds. Again, for if anyone's watching it, we've had a lot of discussions about as far as the general fund. I don't think that there's a lot of things that can change there. If we want the tax rates to stay lower, if we want to think about how we're spending this, I think that's where we need to look. Um, and I think this shows that that is an option. Right? If this would have been presented, it would have showed that our debt continues to go up, or maybe our debt dropped down to 50 million after 13 years. Maybe that's not feasible. But again, with what I'm looking at now, like that looks like we're getting to a very good position from a debt perspective. But that's only one point. If you look down is there—I don't remember how many pages I sent you but— [00:23:35] **Finance Director Clarissa Hadler**: Well okay so I guess so what other perspectives then should we be looking at? The fund balance and the infrastructure fund that's going to be really important. [00:23:45] **Council Member Matt Hirn**: So, so why don't we present that? Can we get the information on that then? And that's what I've been looking for. And I guess my concern is through these discussions is I feel like maybe I'm concerned—I was told that we're as a city that we potentially would have to work towards 50 to 60% tax rates. That's very concerning to me. And if that's what I'm being told, then I want to make sure that this is something that we're looking at and that we understand why we have to get there. If that truly is the case, we need the information. [00:24:20] **Council Member Matt Hirn**: And again, a lot of this idea of starting the funds stemmed from the objective of lowering the debt to put us in a better financial position. And so like when I look at it, if there's other factors that we should be considering, like I'm open to hear that. But that's the data that I've been looking for of that comparison. We had scenario one. Thank you for putting together the second scenario to show that delta of what happens if we change it. If there's other factors, then you know, I'm open to hearing that and understanding that, but I haven't been shown that information yet. [00:24:50] **City Administrator Nicole Miller**: These are all going to be fabulous discussions when we get further along in the strategic plan discussion. [00:24:55] **Council Member Matt Hirn**: So, when when will that be? [00:24:57] **City Administrator Nicole Miller**: Uh we're working on a timeline. I'm hoping to have sort of a touch point um with the council later this year. I'm having to kind of build these models from scratch and um lay out the discussions and stuff. And you will recall we're in the middle of a software transition as well. So that's my goal. [00:25:15] **Council Member Matt Hirn**: Be able to talk about it before December 16th. [00:25:18] **Finance Director Clarissa Hadler**: Not to answer all of the questions that council member Hirn has. I can give you—like we've done some really rough um had some really rough discussions—like during the CIP I had mentioned um what our fund balance is relative to our depreciation. Um we are working on this discussion with engineering about like how do we get a better feel because depreciation doesn't necessarily represent what we have in today's dollars. It's what was given to us at the time those streets were built. And so to get a really a better understanding of where we need to go, we kind of need a better idea of where we're at. And that's part of that process. [00:25:55] **Council Member Matt Hirn**: Okay. [00:25:56] **Finance Director Clarissa Hadler**: Again, it's sort of, you know, we can sort of—I can get us headed in the right direction, but some of these questions really need a lot more information before I can get good answers. [00:26:05] **Mayor Charles Cadenhead**: All right. Council member Holtz. [00:26:07] **Council Member Jeff Holtz**: Well, and again, this is to set the hearing date and to propose an amount that we can reduce at that time. With that said, I appreciate number one that staff is putting it together, that you are answering questions, and I also appreciate that council is taking the time to discuss in-depth questions beforehand. I see many institutions and boards where that doesn't happen, and it turns into mass chaos at these meetings. So, thank you for doing that. [00:26:35] **Council Member Jeff Holtz**: Um my my two cents would be on the premise of the rate of essentially savings. No matter what you have to pay the piper and whether you start the savings at a faster rate now and then there's a smaller hit down the road—for the projections that we cannot have for certainty what the exact cost will be in the year 2039. We cannot—it can be projections. Or you do the approach of some neighboring communities where you don't and then as we've seen there is a substantial one-time hit and I I don't want to see that for residents down the road. [00:27:10] **Council Member Jeff Holtz**: And and the phrase is not correct about pulling off the band-aid at this point. We are trying to wrap a wound and trying to determine how much wrapping is needed on that wound because these discussions didn't happen years ago. And it's not the fault of any specific individuals or any staff—like we just didn't have these conversations. We didn't have the institutional abilities. We didn't have enough staff on hand. The questions weren't being asked. I am glad we are having these discussions now so we can start to determine how much. I would prefer to do it in this way now to try to not have a substantial jump five years or 10 years or 15 years from now where all of a sudden you need to go out for a bond for 15 million bucks because you are that large of a shortfall. [00:27:50] **Council Member Jeff Holtz**: And I mean when it comes to stats, yes, Council Member Dragisich, you are entirely correct. Our median is higher than the median of other households. That's entirely correct. I could also look at, say, as an example, a house in Stillwater where their value is 533 and they're paying almost twice as much to their city than we are. The medians are one thing, but if comparables because of the rate itself, you pay more for the same house in another city. West Lakeland, you pay less except for the recent bond. So, it comes down to to me, are are we in that happy middle place? I think we are. Does anyone like taxes? No. Do our constituents want services? Yes. So, that's I mean, that's where I stand. I don't—again we're going to have this discussion further in December 16th and honestly we want public feedback as well. The good, the bad, all the above. Um that would be my two cents. Um, if if my dad's watching, I'm just going to apologize now because he really hates property taxes. [00:28:55] **Mayor Charles Cadenhead**: Sorry, Dad. [00:28:56] **Council Member Jeff Holtz**: Yeah, he's he's got that. So, um I I appreciate the idea of extending it uh extending the um you know the decreasing the amount in the savings account and extending that debt out there. I think that some of the things that we've done in recent history like I think the bond for this building was something in the $14 million range. Even though we knew it was coming up, it really wasn't accounted for in any sort of savings, if you will, it was just paid for via bond, right? So, we're paying for this building just like you would a house over the course of however many years. [00:29:30] **Council Member Jeff Holtz**: And I guess I've seen too many of my friends and my cohorts colleagues in other cities that have run into issues where the—I'm just coming at it from an infrastructure standpoint. That's that's what I know. That's that's what I think about. And if we look at the amount of infrastructure that we have, I I think that cliff can get higher if it's not taken care of appropriately at the time. You know, the right fix at the or the the right road with the right fix at the right time, right? And so I I believe in all those things and I I think this—and I'm maybe I'm being a little conservative—but I'd rather have that in the bank than saying, "Oh, we tried to stretch it out. Now we now we can't do that, so we had to add some more bonding to take care of that down the road." [00:30:10] **Council Member Jeff Holtz**: Or we're continually adding infrastructure to our city with every development that comes in. And at the current rate, the residential housing in this city is primarily what we need to keep the operations running. And I think I've said this from when I first ran for mayor five years ago was what we really need is a stronger commercial base, a different tax base to help balance out some of those operational costs within the city. And I think we're getting some businesses. So even the picture that we look at now given future development if there's commercial and business it can change. So that strategic—I mean a lot of this is speculation, right? And I would rather speculate on the conservative side and hope that things turn better rather than thinking things will be great with housing and building and all that and then not have it happen. So that's that's where I'm at right now. So, um I would like to talk more about these scenarios, uh and some of the questions I think are are good. Um questions that I didn't have that enlighten me to, you know, a different way of looking at things. So, um as far as the resolution we have on hand, I plan on supporting that. [00:31:15] **Council Member Matt Hirn**: One little follow. So I just want to—I do want to clarify that I don't think again looking at these projections that I necessarily would say that that still isn't conservative with with what we are doing. If it was less, again I mean if you look at the the debt projections, the debt projections are going down to 23 million from 55 million. The infrastructure fund balance would go up to 8.5 million versus at the current amount shown up to 11 million. So if we do get in that situation, we've improved our debt load enough where if we do have to bond, we're not getting back to where we were today. We're still in a good financial position, right? We still have a good rating. So it's not that. And again, you know, so I'd even be cautious of saying we're, you know, we're trying to wrap the wound because again, I think we're in a in a good financial position, but if we don't make this change, we're going to get in trouble. And so I just—I don't see it as being um aggressive and risky. It's just maybe a little less conservative. [00:32:15] **Mayor Charles Cadenhead**: I agree. I think one thing that we don't have is comparisons. Sometimes you look at the—how do I make an analogy here—on expenses of maintenance, right? I mean that's kind of what we're talking about. Let's say we're taking care of our car. Um oil changes and and tire rotations and brakes, those all cost one thing, but when the computer chip goes out, all a sudden it's a $5,000 deal, right? Um and maybe you compare those is uh versus a a car that's worth $20,000 and a car that you buy brand new and it's $50,000. I I truly think if if we had the GASB 34 information on the investment that the city has in its infrastructure and a projected cost of that infrastructure into the future, that would show a different picture than what you're thinking because we don't have that. How much does a city have? I mean, we're we're talking about numbers that we don't have a comparison to as to the the value that we're trying to take care of. Would you agree? [00:33:15] **Council Member Matt Hirn**: I don't know if I agree on that because to the extent of the cost— [00:33:18] **Mayor Charles Cadenhead**: So, hold on. I asked you if you have a number that you know that the city system is valued at. [00:33:24] **Council Member Matt Hirn**: No. [00:33:25] **Mayor Charles Cadenhead**: Okay. [00:33:26] **Council Member Matt Hirn**: No. [00:33:27] **Mayor Charles Cadenhead**: But without that, then a number is just a number. It's not it's not attributed to anything of value. You're just—it's just a number. [00:33:35] **Council Member Matt Hirn**: Maybe to the car example because I agree, right? We want to be doing maintenance on our car, right? You budget for maintenance. [00:33:40] **Mayor Charles Cadenhead**: Yeah. [00:33:41] **Council Member Matt Hirn**: Now, in an ideal financial situation for an individual who's making enough money, yeah, probably putting enough money away so you can just completely pay for a new car when that car is ready for replacement would be fantastic. But that's not what 99% of people do, right? They do their maintenance and then they know that they're going to have to take a loan when it comes time to purchase that new car. Now, they're able to push that loan off to 12 years, 13 years, 14 years versus seven if they don't do any maintenance. So that's where that share or the savings comes in. And and so I guess and this was a question I asked as well about like the depreciation. I mean if we're trying to fund 100% of the depreciation, which I realize when we're doing this that that's in today's dollars. It's going to be different down the road, but we're not trying to fund 100% of these projects in the future. So trying to fund 100% of depreciation just doesn't it doesn't quite make sense to me, right? We we know we're going to have a special assessment for it. We know that there's we're planning to have some bonding for it and we're not saying we're going to pay for it 100% cash, right? [00:34:45] **Mayor Charles Cadenhead**: So I do—I mean I'm glad I'm glad that we're having this conversation. I'm glad that we're doing the financial planning because I think maybe for me more than anything, it's just I don't have the data to show me otherwise that we can approach this slower. And if we do approach it slower, you know, I don't have the data to show me that we're going to be in a catastrophic situation. I I shouldn't even say that—I don't have anything shown us that we're not going to be in a still a much better situation if we increase at a slower rate. And conversely, I would say that we don't—I don't have the information that says we are being overly conservative or we're not going to be in a situation. I mean, we're sitting in the same spot on the different side of the boat. Council Member Dragisich? [00:35:25] **Council Member Nick Dragisich**: I think, you know, there's there's a logical balance of setting enough money aside to keep our debt manageable, which we've talked a lot about, and you know, um, issuing debt to finance some portion of those improvements. It's matching benefactors and payers. So, if we tax everybody today to build a new street that's going to last 50 years, people that paid for it, you know, won't be the ones who benefit from it entirely. The new people that move in will benefit from it. So there's this balance between a reasonable amount of debt and a reasonable amount of cash to be paid. I think you know finding that balance along with a balance of keeping our property taxes more affordable or affordable is a tightrope we have to try and walk in some way that makes sense. Um you know as I said we have fairly high tax on our system right now in the city, our taxpayers. And so I think we have to be cognizant of that and try and find a reasonable balance. [00:36:15] **Mayor Charles Cadenhead**: Okay. Going to call the question. Motion to approve resolution 2025-060, approving 2026 proposed general fund budget, 2026 proposed property tax levy, and setting public hearing date for 2026 budget and 2026 property tax levy for Tuesday, December 16th, 2025 at 7 p.m. All those in favor, please signify by saying I. [00:36:40] **Council Members (Cadenhead, Holtz, Dragisich)**: I. [00:36:41] **Mayor Charles Cadenhead**: Those opposed, same sign. [00:36:42] **Council Members (Hirn, Kragness)**: I. [00:36:43] **Mayor Charles Cadenhead**: All right. Motion passes 3-2. Thank you. Council report. Council member Dragisich. [00:36:48] **Council Member Nick Dragisich**: Nothing to report. [00:36:49] **Mayor Charles Cadenhead**: Council member Holtz. [00:36:50] **Council Member Jeff Holtz**: I anticipate the mayor will probably do this as well and others, but it's not only thank you for Saturday. Um it was a great time. You know, we had members of council setting up food trucks, members of council getting the bouncy house. Uh the mayor and myself were out setting stuff up the morning of and Council Member Dragisich tried to get the Air Force to come in. Didn't work but you know we all took steps to do it and thank you all for doing that. But also thank you staff for showing up. You guys came you brought your families—either yourself, your kids, a spouse. Um you guys came and showed up and that also I think shows a value that you're invested in the city as well. So, thank you for that. Um it it is appreciated. Thank you to residents who came out, the many volunteers who helped with it. The band was fantastic. Uh food trucks that I did try were were great. There were leftovers from my wife and kids, so it wasn't choice food that I picked, but food I got was good. So, thank you for all those who attended. [00:37:45] **Mayor Charles Cadenhead**: All right, I have a couple things. Um, did receive a letter from the League of Minnesota Cities that the senator who represents our district at the state legislature um has been selected as a League of Minnesota City's legislator of distinction for 2025. Uh she represents the city, this area's interest overall in a in a very good manner. Um she's accessible for questions and comments. I know at least myself and I'm sure if other council members reach out to her, she is the same. So, just a a little recognition to our Senator Seeberger here. [00:38:20] **Mayor Charles Cadenhead**: I had a blast on Saturday. You know, I said a lot of thanks. Not a lot of people heard me say those when I was in front of the stage there, but um thank you to everybody for their part—getting the fireworks guys set up, for the public works guys getting the stuff out in the street beforehand to close off. Uh Washington County Sheriff's being available and having the camera on hand. Um Administrator Miller to be able to take care of some of the the bands' requests and needs that they had at the time. That's appreciated. Uh all the other council members for for helping set up in different manners. [00:38:50] **Mayor Charles Cadenhead**: I'd like to recognize earlier in the consent agenda, the bouncy houses were donated by Krueger Tree Farm and Lake Elmo Bank. So, a big thanks to them. I I went over to say hi to Council Member Hirn and he was in mass chaos of kids bouncing around all over. He he he did look like he was having fun. And um uh special thanks to the band Tight Fit. They were they were very easy to work with and a joy to to talk to. And I thought a lot of people—we had kids from the ages of five, maybe younger, up to people I don't know how old, you know, 80 whatever—dancing for the band. And I I really—we had former mayors Susie Dunn who was mayor in 1988, Dave Morgan from 1984, and Dean Johnson who was in the early 2000s come and attend. So that was nice to see them and I got to talk to a lot of people that—well we just had the presenter here today that said she's lived her entire life in Lake Elmo. Friends' parents have been Lake Elmo residents for 58 years and they really enjoyed it. So the fireworks were phenomenal. Um there's some pictures out on the website that we had. We had a photographer taking pictures and so please scan through those and uh maybe you're in one or two, I don't know. So um yeah, really enjoyed it. There's a lot of things to go around and uh thought thought it was a great event. Council member Hirn. [00:40:15] **Council Member Matt Hirn**: Yeah, I the only thing I would add to that is just I—Council Member Dragisich for even having the vision I think to kind of bring this up in the first place. I you know I will be honest I was a little concerned when we were a month out talking about this. Um but that was really good vision and leadership to to think of that and so I I do appreciate it and you know obviously we have the vision but then it was implemented and I know staff and council did a lot. So good job everyone on on doing that. [00:40:40] **Council Member Nick Kragness**: Yeah, I mean a second to all the thank yous for the staff and everybody who helped out. Um, and then also thank you to Marty for hearing my concern about the wasps' nest at the pickleball courts at Lions Park. Made a few residents very happy. So, appreciate that. Thank you. [00:40:55] **City Administrator Nicole Miller**: Well, I just will echo what everyone said. Um, without the staff, we wouldn't have been able to pull it off. So, um, department heads as well as, you know, please pass on your, you know, our thanks to all the staff members that were there because council's vision and then you made it happen. You all had parts, too, at the bouncy house, but it was great. Thank you. [00:41:15] **Mayor Charles Cadenhead**: Julie. [00:41:16] **City Clerk Julie Johnson**: No report. Thank you. [00:41:17] **Finance Director Clarissa Hadler**: No report. [00:41:18] **Administrative Services Director Jennifer Doyle**: No report. [00:41:19] **Mayor Charles Cadenhead**: Chief. [00:41:20] **Fire Chief Dustin Kalis**: Our uh annual fire department open house next Monday, the 22nd, 4 to 7, here at the fire station. We'll have plenty of things to keep people busy. [00:41:30] **Mayor Charles Cadenhead**: Bouncy house? [00:41:31] **Fire Chief Dustin Kalis**: No bouncy houses. And then uh are the uh is the senior center doing their—they do donut sherbet last year? [00:41:38] **Fire Chief Dustin Kalis**: Fields are doing whip and mini donuts again for us. [00:41:41] **Mayor Charles Cadenhead**: Nice. [00:41:42] **Fire Chief Dustin Kalis**: Yeah. Come by and get a snack. [00:41:43] **Mayor Charles Cadenhead**: All right. Director Tholen. [00:41:45] **Public Works Director Pete Tholen**: The old water tower disappeared in six hours today. So if anybody got to see that, um it's amazing what that company can come in and do. I've seen them work before. Very professional, kind. Um we took a lot of pictures, some videos, so Kathie will probably be putting that together and we'll share that information at some point. So. [00:42:05] **Mayor Charles Cadenhead**: Fantastic. Mr. Stanley. [00:42:07] **City Engineer Nate Stanley**: Uh just said 10th Street North is open again down by Oakland Junior High. It's been closed for the utility work down there. So. [00:42:15] **Mayor Charles Cadenhead**: Is Hudson Boulevard currently closed by Inwood? [00:42:17] **City Engineer Nate Stanley**: Yep. Hudson Boulevard is currently closed for the lift station 4C. [00:42:21] **Mayor Charles Cadenhead**: What's the expectation on that? [00:42:23] **City Engineer Nate Stanley**: Underpromise, overdeliver. We're talking five to six weeks originally, so probably five weeks out. Yeah. [00:42:30] **Mayor Charles Cadenhead**: Five weeks out. Okay. Thank you. City Staff? [00:42:33] **City Staff/Legal Counsel**: Uh, no report. [00:42:35] **Mayor Charles Cadenhead**: All right. Great. Uh, I think the only notable thing I really have on the future agenda that's not probably um we're gonna—so tomorrow night the EDA's or the committee for the fire hall is getting together to talk about the proposal we're sent in and so then the agenda on the 7th uh we will have the fire station RFP at the council meeting and with that uh we will adjourn the meeting for the evening. Thank you.