This transcript has been processed to identify speakers based on the provided city official list and the context of the dialogue. **Note:** Timestamps are estimated based on typical meeting progression as the original text did not include them. *** **[00:00:00] Charles Cadenhead:** Good evening. Uh going to call the city council workshop for August 14th, 2025 to order. Um really the the main thing here we're talking about some budget stuff is is uh the first thing is a 2026 budget information general fund utility funds and tax levy. Uh finance director Clarissa Hadler will be nice enough to bring me one if perfect. **[00:00:30] Clarissa Hadler:** Okay. Well, thank you, Mayor and Council. Um, obviously, we're here to chat about the 2026 budget. Um, we're going to go through some objectives for the workshop. So, we're going to learn about our proposed changes to operations and the budget for fiscal year 2026. We're going to look at how the budget and levy changes or going to think about how the budget and levy changes fit with our high level and long-term goals. And then um we would really appreciate direction for us as staff to make any revisions that council seems feels appropriate um in preparation for the adoption of the preliminary levy in September. Uh the levy certified in September cannot be increased um but it can be decreased uh before the final certification in December. I just realized I have to be closer to the microphone. Dustin, I'm not sure this chair is going to work if I— **[00:01:15] Dustin Kalis:** We can move the mics, too. **[00:01:20] Clarissa Hadler:** All right. Um, so you will recall we had our fabulous strategic planning session back in was that late January, February, and we came up with these uh core strategies and objectives at that uh meeting. So there's six listed. Um, so we have our normal operations, but then as we're going through our goals and and setting um uh setting up or going through our budget and setting our goals for next year and how to implement those, those do have uh definitely an effect on the budget moving forward. So um which of them most of them I have them listed here. So we have a lot of planning for development goals. We have a lot of financial strategy goals. staffing levels and service delivery are sort of an ongoing um issue here and then as well as some facilities planning within that. Our total levy for proposed levy for 2026 is 12,25,453. That is over a $2 million increase from last year and a 21% increase. Um we are projecting the tax rate would go from the current the 2025 rate of 26.84 up to 31.72. Those are estimates at this point and that is 4.88 percentage points um higher than uh 2025. So um this is my intro to city budgets slide. So just to kind of get an idea of where money comes from and where it goes. So under governmental funds, you can see we have the general fund service uh debt service funds and then our capital funds. And we'll get to the right column later. So, we're going to start with the the governmental funds. Our general fund expenditures are broken up. General government, which is like admin, mayor, planning type stuff. Public safety roughly 50% of our budget. Public works roughly a quarter. And then we have some contingency built in. So, here is that essentially that by the numbers. So an overall oop sorry overall general fund expenditures of 8,977,154 which is a 12.9% increase over the prior year. So what is driving this increase? Here's kind of a quick rundown. Um we have some new positions proposed. There are memos in your packet. So, three fire chiefs which would be um scheduled for half of 2026 and then the full year 2027 and then one additional public works me uh staff member. Salary and benefits is kind of our standard. We assume a 3% colo cola as well as uh steps were appropriate. Some projects for this year um we have an election year so that every other year that budget swings up and down. Um we have the second year implementation of our financial software. have our comprehensive planning process which is a three-year process um and and it just takes up a lot of our our contract services so engineering and planning outside planning and then some facilities planning so for the fire station 180 acres and then some ball field planning we have some increased engineering costs because we switched from focus to Bolton and mink those we are seeing those costs rise we have the costs of maintaining our new city center. We're getting a better idea of what those costs are and planning for future maintenance. Health insurance, we have tenatively planned for 10%. We did the same thing last year and it ended up coming in significantly lower. We just want to be safe because we don't know what that looks like year to year. We'll have those numbers in November. And then 2025 is a computer. Sorry, 2020 than 2025. 2026 is a computer year. 2025 was not. So we just have the more um hardware costs than we had last year. So uh this is the breakdown for general government. Um again I kind of reiterated some of the changes in the projects. So 18% change overall and due to those uh items that I previously listed for public safety. We're looking at just over 10% largely due to the fire captains and some additional paid on call fire hours and then just getting our animal control budget where uh closer to actual public works. Um our streets department is actually looking at a decrease because we shifted the allocations of some staff members and then parks is looking at the increase largely due to those wages. Um and then there's a an additional staff member proposed that would be split across all of the those public works departments. So again overall general fund expenditures of 8 point oh just under 9 million. So that is largely operations. So we do then need to just kind of question how is that funded right? So we have our revenue um our earned revenue which is licenses and permits charges for services intergovernmental and fines. So licenses and permits were highly subsidized by building permits as well as plan review which falls under charges and services and then after that earned revenue we need to fill that gap the remaining gap with property taxes. This is the breakdown of those general fund revenues. You can see that taxes makes up roughly three-quarters of our revenue sources and then licensing permits and charges for services which is again plan reviewed related to building. Um I want to just point out the intergovernmental section has a decrease of almost 78%. That's because we're shifting some activities away from the general fund into these capital funds. And so it used to be that our MSA dollars were deposited into the general fund and right now I have them proposed going directly into those project funds. So we have the street maintenance fund um which is a portion of that and then the inner uh uh infrastructure reserve um which is where we pull the money for those reconstruction projects. So those MSD dollars will go directly into those funds. Um, so then property taxes, you can see up at the very top, uh, increased from 5.6 million up to 6.7 million. So, next up, uh, debt service and capital funds. Our debt service increase, we have that new issuance, um, this year. So, that added roughly $200,000 to that increase of almost 7%. And then capital levies. Again, this is kind of a new process for us. We just started doing this in 2025. Prior to that, it was um there were a couple of transfers from the general fund or things were getting paid directly out of the the general fund and it was just we want to steer away from those transfers and um the big swings in the general fund expenditures. So, we've increased the infrastructure reserve up to half a million dollars. the city center CIP up to 120. I created a very rough um estimation of what our depreciation would be on this building and trying to get that CP CIP dollar or levy dollar up to to that amount um or a portion of that amount. Park CIP um is just for uh future replacement of park uh facilities. The ballpark fund is for that interfund loan for the new um property, the ballpark property that we purchased this year. So that's $250,000 over 10 years. Vehicle and equipment has been um in existence for a few years. So we've again just kind of getting that up to the level where we're we're able to replace things with cash. And then the street maintenance um is the roughly $600,000. I increased it this year because of inflation. Um, but the estimation created a couple years ago was $600,000 per year in street maintenance. So, that is not necessarily what we were will spend. That's what we're levying so that we can levy at a roughly uh steady amount and spend when we need it. So sum of all those debt uh sorry that should say capital levies $2,50,000. Total levy again is the sum of the general fund levy debt levies and capital levies. So we like to look at the tax rate and the impact. Again we're looking at a tax rate of 31.72%. And so the tax impact on a median value home would be a little over $300. So from 1616 up to 1926. Our tax rate uh compared to other Washington County cities, we're still fairly low. I tried to draw that little line across there. So we probably move up a few points within the county overall. However, if you look at the cities our size, we'd probably uh just move one step up possibly in front of Scandia. Obviously, depending on what happens with every other city uh and their their levies and and rates and such. Um these are 2025 numbers except the green bars are 20 26 proposed. Just a note on tax rates. Tax rates are really just one measurement that we use for comparison. It does not nearly tell the whole story of what is going on with cities. We don't know what their debt levies are. We don't know what their capital levies have been or will be um in the future. Um some of the reasons that Lake Elmo is has been able to maintain a relatively low tax rate um is that we have uh pretty high property values. The tax rate is just a comparison between our tax capacity and our levy. um we've been subsidized by development. So, a lot of our operations have been funded by our um some of our plan reviews and such. And then we have not been levying significantly for future CIP projects. Briefly, uh we'll touch on the proprietary funds. We do have the long-term um financial plan that we do for the utilities each year. So we try to sort of base some of our assumptions on that as well as look at our expenses um in in more real time. So kind of mentioned study assumptions. So the rates um is kind of the main thing that you know we base our forecasting for the budget on those rates. Those are not adopted until the end of the year or early next year actually possibly. And then one change in process for the capital planning. I'm working on separating the um capital revenues and expenses into new funds. So we have the 601, 602, 603 right now. Um and so we're looking at having capital funds of 611, 612, and 613. So uh each uh water, sewer, and storm would have its own capital fund. And so we would put the more capital related revenues into those and take out the expenses just to kind of clean it up a little bit, make it a little more obvious where the money is going and coming from. Um, one point about um uh enterprise funds, they're they use full acrruel accounting, so it includes depreciation. um the the um the way that we budget in Excel kind of takes into account like some of the bond payments and stuff. It's really not clear. So what you're looking at here is includes depreciation. We're not losing $13 million in cash every year. So um a little bit of a change and then sorry it also takes into account capital purchases. So if we had significantly higher capital purchases last year than this year, then that that's going to change our end numbers. So net overall in water of3 million again largely due to depreciation. Same thing depreciation wasn't included in 25 but is in 26. **[00:10:45] Charles Cadenhead:** It is included. So, under operations, it— **[00:10:50] Clarissa Hadler:** Yes, it— Well, you know what? I'd have to verify that, but I believe I— I believe it was included in that budget. Yep. It gets a a little weird just because these systems that we have set up. I'm hoping this gets a lot better with new software. Thank you, by the way, for— again. So, this will become a lot easier for us. We're sort of trying to move between systems constantly with these and and this is not an ideal system by any means. **[00:11:15] Charles Cadenhead:** So in this scenario, you have added water treatment at well two. Um you say potential for grant reimbursement, but I thought we were okay with the grant reimbursement on that. Do you know where we're at with— **[00:11:30] Nate Stanley:** We've applied for a three-year operation and maintenance grant and we expect it's just a matter of being reviewed by the MPCA. **[00:11:40] Clarissa Hadler:** We did budget for it. So it's incorporated in the budget—budgeted for the grant. **[00:11:45] Charles Cadenhead:** Right. Okay. Good. **[00:11:50] Clarissa Hadler:** So um and again these are this is the preliminary budget. We are going to be fine-tuning this as we go and as we get more information. This will change between um now and December slightly. Um, sewer netgative -2.4ish. 4ish storm net negative one. So that's it for the numbers. Our next steps, if we need a follow-up workshop, we could certainly do that. We adopt the preliminary levy in September. The county mails notices in early November. We'll be fine-tuning our budgets between now and December. And then the truth and taxation hearing um we plan to schedule for December 16th and that would be the time of the final budget and levy adoption. And now we have time for questions. So our questions really um are where do we go from here? Um are there changes and priorities that we need to make? Are there specific questions about expenditures that council has for staff? Um should we continue with the proposed levy amounts or should we change that in some way before that September 16th meeting? and if changes are needed um some very direct uh specific direction as far as priorities and strategies that we should revise. **[00:13:00] Jeff Holtz:** Questions, thank you for all that because that is a ton. Um with animal control, can you clarify bring it up to what the actual costs were? What what's happening there? **[00:13:15] Clarissa Hadler:** Um our we we budgeted around 14.5 I think. Um, and when I when we were looking back at um the actual last two years, sorry, in 2025, we budgeted 14.5. Um, but when we actually looked at the last couple years actual expenditures, they were higher, closer to like 19 and 24. So, we picked sort of a middle ground happy medium type thing. **[00:13:45] Matt Hirn:** You look in the spreadsheet, 23 and 24 were closer to that 22,000. It's just good to add if you have cats, you know, keep track of them because it costs us like 300 bucks if somebody has to go look for your cat. It's true. Or your dog. **[00:14:05] Jeff Holtz:** So, because it's because obviously we contract out, we can't predict how many instances we're calling them. **[00:14:15] Clarissa Hadler:** Correct. **[00:14:18] Jeff Holtz:** They're not necessarily increasing their rates. It's just can't predict the quantity. **[00:14:22] Clarissa Hadler:** Yeah. I don't I don't know about the rates specifically. **[00:14:30] Nick Kragness:** Heard the and I might have missed it and maybe it's actually in the 2025 budget. Is the RFP revenue factored into for the the firehouse factored into the revenues at all? **[00:14:45] Clarissa Hadler:** It is. Um I I believe I would have to look at the line item again. I believe I settled on roughly 150, maybe a little higher for the general fund and then I assumed um we we've been talking we think it's going to be significantly higher than that. I'm hoping that we can put the balance of it in to one of the capital projects or the the city center CIP for future use. that it's a a building that we're selling. I'm hoping we can put it into a building um and not again subsidize the general fund more than we need to by a sort of you know occasional revenue that we can't count on in the future. **[00:15:30] Nick Kragness:** Okay. But it it's the 2026 revenue correct. **[00:15:35] Clarissa Hadler:** Okay. **[00:15:40] Nick Kragness:** Y awesome. Then I saw the investment earnings up 110%. Is that just because of significantly more money that we're investing? **[00:15:50] Clarissa Hadler:** Is that—it's because I budgeted low. I was trying to budget a little bit more towards the actuals moving forward. Yeah. **[00:16:00] Nick Dragisich:** Council Member Dragisich difficult um budget but I just don't see that we can increase our tax le 20%. I think that would be we would get such beat beating we'd have to hide in our basements for a month. I think we have to find a way to get that uh a better number. Um, as I thought about it, I I've looked through everything and and I certainly could expound on some potential changes, but I think that's what our staff is for to look at and say where can we reduce in some way that gets us to a more reasonable amount of a tax levy increase. um our you know if we put on 20% and school in a county put on something I mean our we see such a huge tax increase that we would all be hiding. **[00:17:00] Charles Cadenhead:** I guess one thing to look at when I when I look at this, I did see a large increase, but I also know when we start looking at the depreciated value of things that haven't been accounted for in the past, uh, it gets a little lumpy, right? So, um, in the past, our city, our residents, taxpayers have been, for lack of a better term, getting off pretty inexpensive relative to the cost for water sewer storm sewer operational costs. And now that we're getting a better handle on what those things cost and actually trying to cover those costs like a like a business would need to, which is what you need to do. You can't operate in a deficit and it is um often times government's looked at as uh wanting to remain static. Well, we can't remain static because the price of milk and eggs and everything goes up uh regularly. Gas vehicle cost. So, if if there's something to trim, I'm I'm willing to listen to it. But I'm also an advocate of listening to the staff and seeing what they what they believe is needed for the budgets that that they have to take care of the residents and the and the city assets as a whole. **[00:18:15] Nick Dragisich:** Remember, the 202% tax increase doesn't include anything for sewer, water, or storm water. That's a separate item. **[00:18:25] Clarissa Hadler:** It is. **[00:18:30] Nick Dragisich:** And so, you know, we we but a lot of that in the past, if correct me if I'm wrong, have been somewhat covered by I don't know, they they've been at a negative right? **[00:18:45] Clarissa Hadler:** Yeah. They're not covering their operating expenses. Um, and we talked about that last year. We raised our water rate 20%. We had a plan to 20 2020, which after five years got us to where we were, where we need to be. If we get the operational grant for the new plant, that will allow us to not have such big increases because it'll cover some of that big increase was due to the new plant projected coming online. We still have, you know, storm water and sewer to deal with. Um, but I I think that, you know, those are somewhat easier to work out. If we have a 20% increase in our tax le and 20% increase in our utility rates, Yeah. I mean, we're going to have a fairly large burden in one year on our citizens. **[00:19:30] Charles Cadenhead:** Okay. I I think though that this workshop's for trying to iron some of those things out and I'd be interested in hearing what you areas that you think we can cut to bring that levy down and we should talk about those. **[00:19:45] Matt Hirn:** Maybe I'll I'll talk on that a little bit too. So, I'm going to I do agree a 21% increase in the total levy um in my mind is too much. I agree obviously um if the numbers were too low in the previous years like that can obviously be a part of why it could be a big jump this year. Um but in my mind it's too big of a jump. Last year I took more of the approach of coming into this session with you know line specific line items of you know these are my suggestions and reflecting on that I don't think that was the right way to do it. Um I think the staff has a better idea of what specific line items could potentially be cut versus what could be reduced versus what can't. Um, so in my mind, I I think my preference would actually be to say more like, hey, I think we need to cut this number to a 10% increase. And, you know, how we go about that, that's up to staff to bring back to us. And I think that's just speaking from last year. You know, I I I brought up a lot of the the individual line items and I I I understand that like it's frustrating, right, if I'm asking about a $10,000 item. Um, you know, my my idea last year with doing that was more just to to bring to light of like, hey, like we—well, if we have a hundred items that we're paying $10,000 that we don't need for, um, that's significant. Um, but at the same time, some of those things absolutely were needed. And so I, you know, to your question of like what specifically should we focus on? I mean, yeah, like as I was looking through, there were certain things again that raised questions for me, but I I don't know if me giving those is the right approach. Um, I I personally I'd like to see this come down to the total levy increase to 10% I think is the max that we should aim for. Um, I mean, again, correct me if I'm wrong, this was before I was on on council, but I I believe the goal was the 3% increase in the tax rate year-over-year. **[00:21:45] Charles Cadenhead:** Yeah, I I don't know where that came from. I don't recall that exactly. **[00:21:50] Matt Hirn:** So, it was—it was brought up. So, the first year I was on council when we were reviewing the budget, that's what was brought up um of why to to not keep it the same. **[00:22:00] Charles Cadenhead:** Yeah. Was the the 2% increases what was—Yeah. The hard part I have with that is sometimes as we experience we're a growing city, right? Yeah. And um there's different expectations from the residents revolving around the services that the city gives and how they give it. And I sometimes I see companies say we're going to hit a 20% profit margin. Well, what's that based off? Well, that's what they want to do. So if somebody said, "Let's keep it to a 3% increase." What's that based on? I have no idea. Sure. Sometimes it's just an arbitrary number that maybe it doesn't fit. So I think you know and I was trying to find that Aaylor's financial plan. I didn't see anything in there about—Yeah. **[00:22:45] Matt Hirn:** So I I I think when we look at numbers that you know if things don't make sense as far as where the council would like to see the city spending its money. Um, you know, when you're talking cutting that in half, you're looking at over a million dollars in cut. **[00:23:00] Clarissa Hadler:** Yeah. It would be about little just a little over a million. Yeah. **[00:23:05] Charles Cadenhead:** So, it's not—it's not a small ask. **[00:23:10] Matt Hirn:** It's not a small ask. It's not a small budget item, but it's also not a small ask for, you know, a million dollars for the taxpayers. **[00:23:20] Nick Dragisich:** You could cut down some of the some of the capital um pockets that you're putting money into. um maybe slowly increase those as opposed to starting out at a large number. I don't know. **[00:23:35] Clarissa Hadler:** Um, that is a slow increase compared to what we need actually. **[00:23:45] Nick Dragisich:** Right. Right. Because you end up you end up at the end of the day big ticket item comes up and then you have to bond for it and then you're adding to your debt. **[00:23:55] Clarissa Hadler:** Correct. **[00:24:00] Charles Cadenhead:** So, I mean, I'm I'm open to listening and yeah, if we think staff needs to put a sharper pencil to the paper, we can ask that. But I think what I heard uh Director Hadler ask is um if we have, you know, maybe it's not specific line items, Council Member Hirn, but maybe it's areas, right? Um, you know, one of the large items, not to pick on Chief, but, you know, for running a fire department and you have 24-hour shifts, you know, the three captains, uh, is it's a—it's not a small number, but if you want to run your fire department for the city at that level, and then then that's—that's kind of what it takes to run it from a staff level. And that does increase, right? And I mean it's only half the year next year. It'll be the whole year in 27. So keep that in mind. **[00:25:00] Nick Dragisich:** Um just some thoughts that I had looking at it. you know, um, this one's a little more painful there, but the but if we reduce some of these levies, let's say the infrastructure levy, we go to, you know, 350,000 because we did add the franchise fees of 250 to that. So that was 600,000 there. I think concurrently we can reduce some of our capital CIP expenditures to bring that more in line as well. Um maybe we can reduce the CIP levy from 120 to 100. And um you know just kind of looking at those th those different type the park CIP levy. We have a new levy. Um we have 100,000 in there. Um I guess we're just we're also putting some of the franchise 250,000 in there. Is that a is that accounted for franchise fee in there? **[00:26:00] Clarissa Hadler:** include directory handler in the—well there there really isn't any expenditures coming out of the park cip right now so I I didn't really create a budget for it per se but it just kind—ideally we have a ballpark number that we'll be getting in in the franchise fee to support both infrastructure and parks the franchise fees are included in the infrastructure reserve budget they will but again it's—this is such—these are all kind of new processes Right. And for this particular meeting, I didn't do a lot for that, but you will recall from our CIP discussion that we have these reports out of our um CIP planning software planet where we can kind of pencil in what these revenue amounts were going to be. And so we have that sort of roughly planned out. Um, and we'll—we'll again we'll kind of revisit that later in the year. But, um, I could—I mean I could hear that discussion on if those franchise fees would allow us to cut back on some of the capital levies for those areas. I've already worked the franchise fees in to the modeling that we have for the CIP. Obviously, everything changes if we change, you know, what—what we're spending on our capital project. So, everything is essentially good for about five minutes until we change something and then we have to redo it or whatever. **[00:27:15] Nick Dragisich:** But yeah, but I think those are the things we look at. What can we do with the CIP? What can we do with the CIP to get this down to something more manageable? I I think that, you know, the ongoing maintenance things like, you know, the street maintenance levy and that are important that saves us some long-term money. I think, you know, our infrastructure reserve, we're going to have to maybe creep a little slower than we're anticipating to get there and combine that with a little less spending to make that make some sense. And maybe, you know, with the franchise fee going in part going to parks, maybe we can, you know, hold back on the park levy a little bit. But I'm trying to make some suggestions, but we have a staff that's very talented that knows everything a little bit better than we do. I I agree with the chief. It's, you know, we need we need to staff our fire department as public safety. You know, you don't want, you know, you don't want your—your loved one laying on the floor and and not having enough staff to get there. Um, we—you know, we exist for health, safety, and welfare of our of our residents. So, we have to take a look at those kinds of things and prioritize them. But, I think we got to get this down to a little more manageable number. Um, that's just the thoughts of one crazy council person. **[00:28:30] Matt Hirn:** Well, I I agree. I think the capital expenses is is a good place to start. Um, Council Member Holtz, you brought up the the cola. I guess I'd be interested to hear your thoughts on that. I I think that's an area. I mean, we do have the rate increases factored in. Um, I think that's an area to look. Um, I do think that—Oh, sorry. Is that all right? Um, I it's one of the questions tonight obviously with the—with the the three captains for the the fire department. Um, that's obviously a pretty large expense that could factor into to getting towards that decrease of a 10% total levy versus a 21% increase. Um, you know, I don't know how it factors in. Um, and I want to be careful, you know, the—the the summers, right? the Fridays off in the summers. Um, you know, what happens if if we get rid of that and does that mean we don't need to hire as much staff as a result of that because there's more hours that are being worked? I don't know how those hours are account—accounted for during this. **[00:29:45] Clarissa Hadler:** Everybody still works 40 hours. Let's just shift it. It's fourth and a four. **[00:29:55] Matt Hirn:** And so this I mean but I think this is I guess that's my point is you guys understand that side of it better and you're going to know where to find these areas that can be decreased although it may be difficult and it may be hard um and it would be maybe necessary and and if it is necessary then okay then I guess you know then bring that back and say so um but as of right now I just I'm—I—I—I—I can't go along with it until I see it get lower. **[00:30:15] Jeff Holtz:** I didn't want to bring up the uh the the captains were just an example of—that's—that's a large increase that I think is important for the city and the residents to have that. So those are the kind of numbers that—that increased the total levy, right? So it's just trying to find if there's any uh fat cut off the meat really um in that and— **[00:30:45] Nick Kragness:** the hard one of the thoughts I have with all this is if our levy rate was 28% this past year and pre—prior year is 27 prior years because we had a a history previously of 10 15 years ago of actually planning and doing depreciation and knowing our long-term cost. I the—the change would be I think what many are asking for a manageable change. So on—on one side of the coin it is a substantial increase. I don't like it. The other side of the coin is is that the cost? If that's the cost that is the cost. I I mean you mentioned it. If we have to invest a certain amount of dollars into our capital funds to actually save money in the long term by maintaining properly, yeah, there is a front-end harm to that. And I I don't want to necessarily bring up what has happened in years past because it doesn't matter at this point, but that also impacts then how we see it. We're—we're seeing it as a jump from of several points that—I don't—I remember those conversations but I don't—I still remember it was Christina who brought it up. **[00:31:45] Charles Cadenhead:** Right. Yeah. **[00:31:50] Nick Kragness:** Y and I can never recall was it 2% or two points and part of her calculation also presumed a certain rate of tax capacity growth which was a shot in the dark because there you can't predict but yeah I fully remember those because that was what we were trained on when we started as well. We were trans—but the final, we never saw the final details. The the tax capacity growth piques my interest because we're seeing the tax capacity, the amount of increase slow because we know the economy is slowing. We whether or not we have a recession in the next year or two is a realistic conversation. And so I'm very hesitant when we—it's the way it's always been for years now a decade plus you know our building inspection—inspections the permit area that's a source of revenue that's going to continue to slow it might slow more than we're you're even projecting and I know you're conservative with it to begin with but my underlying point there is tax capacity the amount of increase is going to continue to slow which affects that underlying formula from 10 years ago of we're going to do two points every year. I I can't—I can't go down that road. **[00:32:45] Charles Cadenhead:** I fully concur. There's a—a strong desire to find those areas, chief. Sorry, this is the easiest one. But I think that's also a prime example to say here is we're looking through it like there are multiple ones where it's a change here, a change there. Uh an additional employee for public works that we all know is necessary. It it's absolutely necessary and it costs money. The captains are absolutely necessary and it costs money. So I at the end of the day if the costs are the costs yes if there is are things here and there that you able to see in the lines that we're not necessarily seeing yes absolutely let's find those things I in looking at it I don't see those but yeah we all support finding if there's something here something there yes absolutely I don't know if I support trimming a couple levies here and there because it's it's a shot in the dark. Let's do 20,000 there, 20,000 there when it's not necessarily based upon the future modeling. You already indicated we're not going—we're not investing as much as would be helpful to begin with for some of our long-term for our capital needs. **[00:34:00] Clarissa Hadler:** Actually, I ran some numbers earlier uh today. Um you know, we—we have our—our uh documents for the audit that show what we have for assets and what we have for depreciation. And so I rounded like a lot, but we have roughly $20 million in buildings. So if every building lasts 50 years, it's $400,000 a year, we're loving 120 just right now, right? That's the proposed. We have um improvements other than buildings at 4 million, machinery equipment at 10 million. So if the average machinery piece of machinery equip and equipment lasts 10 years, that's $1 million per year. We're at $450. Uh we have infrastructure. This is just general fund, not water and sewer. Infrastructure of $100 million. So if all of our infrastructure averages 50 years, it's $2 million per year. And I'm proposing 500,000, right? and and so this is—now we have 25 million in assets we've already depreciated so we've already spent that asset and we have a couple million dollars in the bank reserved for CIP stuff right so this is that—when I think we did just a little bit of a comparison for the utility funds we were looking at like what is our cash relative to our depreciation and it's very very low um and so we're trying to kind of the same thing here with the general fund is like how much cash do we have versus how much we've already depreciated. And this is just again just a really rough gauge of you know where are we sitting with cash versus needs long term. **[00:35:45] Matt Hirn:** So what happens next year? Do we have to increase it by this much again next year to to get even closer to what we're going to need to do to match this amount of depreciation value? **[00:36:00] Clarissa Hadler:** Yeah. Um, in the CIP plan, um, I have penciled in what those increases look like to get us up to an amount where we're—we're actually setting aside enough. The goal being that we're not taking out debt, you know, that's setting aside enough for our current assets, the depreciation of our current assets is what you're saying. Or you seem to get to a point at some point in the next 20 years of setting aside enough where we are well well behind. This process should have been done 20 years ago when the city started to develop, right? And so, you know, we're—we're significantly behind where we should be today. And the more we put it off, the worse future Lake Elmo—the bigger that delta, right? **[00:36:45] Matt Hirn:** That change from 2025 to 2026 with the capital expenses and how much we're spending. Is there going to be another jump like that, that significant of a jump next year? **[00:37:00] Clarissa Hadler:** Absolutely. if you if you want to and this is this is again this is a policy decision. My job is to just do the math and try and get us in a position where the city is sustainable long term. That's all this is. So your policy decision is how aggressive do we want to be? Is the money going to come from somewhere else? So hence the franchise fees discussion or the other end of it is—decrease the capital improvement plan budget as well. **[00:37:30] Matt Hirn:** Correct. Yep. Yep. Obvious. Yep. Absolutely an option. I think again I mean I know that kind of leads into the next one, the next item on the agenda, but I still do feel like the largest area that we could cut back is the capital expenses as a result of relooking at the CIP and and knowing and working backwards, right? If we can—if—if we want to budget X dollars into the uh capital expenses, well, what can our CIP total amount be over the next 10 years then? **[00:38:00] Clarissa Hadler:** Sure. I would just point out that the—so the CIP is essentially a—we call it a longer term plan, but it's—it's only 10 years, right? We're looking at roads that are—how long does the road last, Jack? 50 years, 100 years so—so we're looking at portions of the road are redone in 25. Not the whole road, right? So, so we're when we're talking about um our capital exp—decreasing our capital expenses, you're talking about decreasing that capital expense in the next 10 years, but the revenue that we're trying to set aside is long-term. It's only a portion, by the way. So, we're trying to decrease the amount of debt. I still have—I don't recall exactly, but my debt projections were we might have half the amount of debt that we have if we set aside a um something like 30% with cash. Pay first 30% of our projects with cash will be at half in 20 years and that wasn't decreasing expenses. **[00:39:15] Nick Dragisich:** Right. Right. But so so soon so again it's this like we're—we're trying to—to build—we're—we have the tax revenues as set aides but it's not really the instant win that you think that it's going to be necessarily if that makes sense. So again, we're—we're like—we're way off between capital and depreciation. **[00:39:35] Charles Cadenhead:** It does. I think it's the right call that we're being proactive with trying to increase the revenues to get there. **[00:39:45] Clarissa Hadler:** Yeah. **[00:39:50] Matt Hirn:** But the issue is often times as revenues increase, you just spend more. And so we need to be looking at that side of it as well. Um, I mean, that's budgeting. It's it's a tough thing, right? Somebody gets a pay raise. What's—what's the first thing you want to do? **[00:40:05] Charles Cadenhead:** Yep. You want to spend more of it. **[00:40:10] Matt Hirn:** And if we're trying to decrease the debt, well, yeah, let's bring in more revenue, but let's spend less. And I know that's obviously challenging with a growing city. But there has to be some sort of move in that direction. **[00:40:25] Nick Dragisich:** Remember, the growth in the city for a lot of the infrastructure isn't paid for by the city. It's paid for by the developers. We're spending money on is re—rehabilitating existing infrastructure. But I don't think we look at—I don't think five million a year in streets is sustainable unless we're—unless we're we're just going to continue to raise taxes 20% every year which I don't think our citizens are going to you know accept. **[00:40:50] Clarissa Hadler:** If I remember correctly, um, the expense, and Jack, you can correct me if I'm not remembering this right, but there's an expenditure for roadways that get us—get gets us to a point where we are primarily only doing rehabilitation as opposed to any full reconstruct or heavier types of uh fixes. And that capital expenditure does go down after—like four years or something like that. Like how many? **[00:41:20] Nate Stanley:** 40 years. After four. Sorry. **[00:41:25] Clarissa Hadler:** Well, not in the CIP. We currently have the—I I thought spending 50 million on streets over 10 years. I think mayor I think it was it was after the 2035 point with what you're talking after. Okay. **[00:41:40] Charles Cadenhead:** But it's near is—it's on the—it's not on the 50 side. Yeah. within the next 5 to 10. Yes. Okay. **[00:41:50] Matt Hirn:** Well, what happens if can we still get to that same point in 20 years versus 10 years or is it you have to be that aggressive with it in 10 years to get to the point where— **[00:42:00] Clarissa Hadler:** probably not again it's just how you how you can make that more gradual. **[00:42:05] Matt Hirn:** Sure. I I think maybe that would be the approach then is okay well let's let's let's work in that direction. Let's go there more gradually, you know. This is usually like more my styles. Rip off the band-aid and go. But from the taxpayers' perspective, I I don't know if that's the right way to go. **[00:42:25] Nick Kragness:** That's an interesting analogy. It it because it—and you said it too, mayor. For years, we have not been paying for the costs. And I don't think no one did it intentionally, but we also have qualified staff in place throughout the throughout the enterprise right now who are telling us these are the costs. Is that ripping off the band-aid? I I also agree at this next conversation. Maybe it's more of a transition, but as an example, maybe it means this there's not a a parks shade shelter every year in a row for multiple years. Maybe it's one every 10 years because that that's literally what can be afforded. And that's one example. And I love those things and people have been asking for them. Well, maybe you can't do like you said, you can't do them as as quickly as maybe projected. **[00:43:15] Clarissa Hadler:** Yeah, I what I do appreciate is that we're having this conversation on a very hard topic and it's actually to me this has probably been one of our better budget conversations in recent years because we're all in agreement. It's how do we get there? And I I'm very glad we have competent staff in place to inform us on the behind the scenes things that not one of us can can do. So, I appreciate that. **[00:43:45] Charles Cadenhead:** So, it sounds like council's asking to come back workshop in September and asking to see if we can't—what it would take to bring down the levy and if it can't then the reasons why and and uh the explanation thereof I—Yes. Is that—Did I encapsulate that? **[00:44:05] Matt Hirn:** Yeah. And again, I just—I—I—I don't want it to feel like I'm just putting this on staff to come with those specific items. I just think that they're going to know it best. So, you know, I think it could be challenging for the staff to come back and have to say specifically why unless they want to go through every single item. **[00:44:25] Nick Dragisich:** Well, there's a lot of things in here that I recognize like—um, you know, because and I—I talked with director Hadler this—this afternoon. You know, you look at the IT support and if you look at that and the line items, it's in every department, right? It's parcelled out. I—seems like it's a lot. What—what's the total of that? And some—some of the—some of the areas you'll see it—it decreased a little bit because then it's—it's increased a lot more than somewhere else. But we spend about—und—was it 144—142—I think $142,000 a year on IT support for—for the city for all the departments—the computers—the software—you know, things like that to keep that up to date. So, um, some of the things—that's just—that's the cost, right? And that's—I mean, that's actually one I had highlighted is, you know, when I was thinking, "All right, let's go through this line by line. Why is this $14,000 more for this department $10 more for this department?" But it all balanced up to that total of 142 that we pay Metro Inet. **[00:45:30] Jeff Holtz:** What are—Sorry. No, go ahead. What are council's thoughts on the cola? And the only reason I asked that is because the largest contract in the state is going to be doing a cola almost half of that. **[00:45:45] Clarissa Hadler:** So you're talking about—ask me. Yep. MAPE. Oh maybe. It's at 175. **[00:45:50] Jeff Holtz:** Um I guess we could look at the you know because beyond the cola there are step increases for annual. Um but we could look at the what was the index you you brought up? **[00:46:05] Clarissa Hadler:** There's two different CPIs. There's overall CPI which right now for the year is at 27 and then core CPI is at 3.1. So—but core CPI excludes certain things. **[00:46:25] Jeff Holtz:** Overall CPI is at 2.7 because I—yeah, we—we do have the bumps in there as well. If you earn it, you get it. I guess then it's the question of the cola. I don't support zero—costs are increasing. Um, but is there a drastic savings by matching it to CPI? It's not going to change significantly, but I I think it's a worthwhile conversation. Yeah, take a look at it. Yeah, I think it's worth taking a look at. Again, maybe I—I don't know how it was factored in when the steps were—were determined with the rate increases. Was the cola factored into that? **[00:47:15] Clarissa Hadler:** Was it not factored into it? It's not factored. **[00:47:20] Jeff Holtz:** So I I think that's a conversation worth having. It's tough. **[00:47:30] Nicole Miller:** But and each—and each step can vary within the grid. Um, just a little bit of information from um HR group um that our HR coordinator attended. The colas they were talking about in that group were 3 to 4.5%. That's just in one group of city officials in addition to the step annual they're just talking. **[00:48:00] Nick Dragisich:** I think—I think sometimes we do just—or at least I don't know over the past 30 years of my career we've—it's just that 3% number has always been just kind of thrown out like a nickel, right? It's like ah there's 3%. **[00:48:15] Matt Hirn:** Well, I guess it's worth taking a look at but how do the is the step it's a 3% increase every year or is it based off of a promotion? **[00:48:25] Nicole Miller:** It's based on years of service and meeting if you have a a performance plan right? Yeah. Meeting your performance for the year that your supervisor believes that you've—you go on to the next level. It's—it's—it's—it should be an a merit increase. **[00:48:45] Matt Hirn:** And how often should could those steps be earned? **[00:48:50] Nicole Miller:** They're once a year except for when you're first hired. It's six months. Six months and then it's every year after. **[00:49:00] Matt Hirn:** So we're talking a 6% increase between cola and step. **[00:49:05] Clarissa Hadler:** No, it's—it's—it's—it's they're different percentages, right? So it's not straight six. Like could it—actually it ends up being like six point something point something, right? It's 3% of that and now 3% of the new number. **[00:49:20] Matt Hirn:** New number. Got it. Okay. So not quite 6% but four to five% increase annually. **[00:49:30] Clarissa Hadler:** No o—over six—over six%—over okay so over 6%. Yeah. **[00:49:40] Matt Hirn:** I guess I mean I guess that's what I was trying to ask is with that example you know if if the—instead of steps it's the annual increase is based off of 3 to 4% cola. I think that's different than if it's both occurring. **[00:49:55] Nicole Miller:** Um, we do have a compensation plan and we could look and see what that is, but that's what guides us as well for um which the council reapproves every year which has the steps. So, um, I don't have it pulled up in front of me right now, but perhaps that sheds some light on this as well. **[00:50:15] Clarissa Hadler:** Yes, maybe it'be a good conversation. Um I actually I can find it but I did send um council another email and I attached that actually recently. **[00:50:30] Nick Kragness:** Okay. So well and the hard part with that as we saw this past week our grids even with our our comparison studies recently our grids are still oftentimes less than many neighbors depend upon which comparable city we do. So I I I am not in favor of saying either a cola or a step increase. Uh that's we can't do that if we're going to continue to attract and maintain quality staff. Um but I just brought up the 3% just because that is above CPI. **[00:51:00] Charles Cadenhead:** Clear as mud. **[00:51:05] Clarissa Hadler:** Clear as mud. Um, I think—I don't know if you want to speak to this at all, but I I think I um speak for everyone if um if I say that staff would actually appreciate more direction with regard to certain priorities that should take higher priority than others. Um we essentially base our our budgets on on the direction from council. Um these are estimates. It's just a budget. We'll have a finer tune, you know, better numbers later in the year. Um an actual may not be what what we're—what we're budgeting. Um but you know, my idea for cutting something might be different than somebody else's. Um some budgets have more room. My budget doesn't have a ton of room other than—So if you said cut your budget, everybody cut your budget 10%. Mine's coming straight out of training. that's just like I just don't have other spots to take it from, right? And so when—when we're given this sort of broad scope, it's not—gets a little tricky. Um because if I'm cutting my training budget and another department is not, then it becomes this, you know, sort of equity issue across the board and such. Does that—Does that make sense? **[00:52:15] Matt Hirn:** It does. I mean again if we focus on the capital expenses though and and looking at the CIP items reducing those reducing the capital expenses if we can get the majority of the decrease from that. **[00:52:30] Matt Hirn:** Well, I think it goes back to again, right! like yeah there's areas that we can cut—parks it's 5 million over the next 10 years—but the public works is 55 million—by far the most—the water—it—that's not going to be 61 million—that some of that's going to be covered ideally by the 3M most all of it—most all of it—right so although it's on this chart showing that it's the second highest public works is 50—over 50%—I think that's where we focus. **[00:53:00] Charles Cadenhead:** Right. That's where and and the roads seem to be a place that we can potentially do that. Yes, that might mean a road has to make it two more years and maybe not the greatest condition. Um, but I think that's the balance we have to have. I'd love to have perfect roads for for every single road, but it's just we have to balance that with what's the cost of it? **[00:53:15] Nick Dragisich:** And you know it's tough—but well that 55 million—about 30 million is tax levy—or either debt or direct spending—and so it's a—it's a big number. I just think that we have to—I'm with you. We think we have to take a look how can we tame that down just a little—and not do significant harm—but on the other hand try and keep our tax less to something manageable. And I'm not opposed to raising the levy, but I just want to—I just don't think we can go the amount we're talking about. We had a discussion month ago or so where it came up where there was a possibility where some things were coming from the levy when it could potentially come from utility funds. And you were calling it out and you were surprised. Do you remember what that example was? **[00:54:00] Clarissa Hadler:** was well the storm water we had a portion of of storm water being funded by levy rather than the storm water fund right and the sewer was being funded by the sewer fund on the Hudson Boulevard right that was the discrepancy looking at those projects and maybe maybe there's some additional funding could come from our enterprise funds you know understanding that the people who pay utility fees are not the same people who pay property taxes because we have exempts that you know pay those fees and to the extent that we subsidize with property taxes we put a bigger burden on our property taxpayers and in all transparency I understand it's it's shifting from one place to the other it doesn't actually decrease a cost but at least to try to make sure that it is originating in the correct place. **[00:54:45] Charles Cadenhead:** So, you know, if you look at specific lines, and I'm I'm not picking on anybody's—I scroll down quickly in in the line item budget. So, in the finance department, $50,000 increase for a long range financial plan. Is that an area where maybe we could delay that for a year or do that differently or we have a discussion about that? **[00:55:15] Clarissa Hadler:** That is an excellent point. Thank you. I mean, I just kind of—your budget's near the top of the line. That one jumped out quickly. I'm not saying for or against but those are kind of things the department looks at and says what can we—do we absolutely need in 2026 to function effectively or to provide you know services we need and we could go through line by line and do that but we don't really know you know enough detail to say that's a—I would hesitate just to cut something out of the department just because I think it's crazy. **[00:55:45] Nicole Miller:** I was just going to add, um, and, um, Clarissa was on the same page as me. Perhaps, um, if you want to look at, if we're looking at our operating expenses, um, in the beginning of her slides, she had that the majority of your short-term goals are what is included staff working moving forward on in 2026. So, of course, I always carry around our strategic plan, which has our short-term goals. So that would be probably if you want to get into that—helpful for us to go through them and like—which one do you want to slow down on and we can look at that. I mean it's not going to be big—not like the capital expenses—not bigger chunks—but we do um need a little bit more direction because we are taking forward your goals and trying to make all your dreams come true. **[00:56:45] Matt Hirn:** Why does the cable franchise revenue basically get cut in half? Like I see what it says, "extra reimbursement in 2425, not expecting 26." What was the extra reimbursement in 2425? **[00:57:00] Nicole Miller:** So I'll try to cover this, but maybe you can help me. um the cable um commission after they did their audit, they had some additional funds and they did a one-time dispersement throughout the cities. And when I talked to them, they said, "Don't count on that again." So, and it'll probably stay that way. Yeah. She said actually um not surprising people are not using cable as much and so the expected revenues she said for city should be planning a decrease each year. **[00:57:45] Nick Kragness:** Where are we at in terms of because we—there's revenue for permits and expect—inspections that's then used to pay for salary for permits and inspections and there's some legal aspects to that to make sure they're aligned. Where are we at in terms of cost versus revenue for that area? Are we raising amount that's pretty dang close to what we're spending or is there the ability to—because I know we—we approved months ago the the fee schedule but in terms of the cost versus the revenue. Are they closer aligned now than they were in the past? **[00:58:30] Charles Cadenhead:** Several years ago they were not close and cities were warned and they were threatened with lawsuits. Yeah. We got some letter from the building some Minnesota building group, right? Whatever they're called to say you can't have these be so out of alignment. You need to basically only collect what you're going to spend. **[00:58:45] Clarissa Hadler:** I guess I don't have that off the top of my head. We do fill out a a fee report to the state. I could get you a copy of that via email later if you'd like. **[00:59:00] Nick Kragness:** ju just as an opportunity because it it's not we're not in a position where we're laying off inspectors or laying off people in that area. But if we are presuming there's a decrease in new permits, but we still have other activities we need to continue to do, does that mean we need to make sure the revenue is still coming in in other ways for that department as an example? **[00:59:15] Clarissa Hadler:** Sure. I do know that a number of cities have been sued in the last six months on those permit fees. Yeah, because they're collecting too much. **[01:00:00] Charles Cadenhead:** Collecting too much. Yeah. Yeah. I don't want that with—with the goals. Just so I understand what you were asking there. So you were saying look at the the go—the first—the first slide I think it was where it had the goals listed. **[01:00:15] Clarissa Hadler:** Yep. **[01:00:18] Charles Cadenhead:** Can we—could you pull that slide up again actually please? **[01:00:22] Nicole Miller:** Yeah. It's not—her slide didn't have the actual goals. It just—goals—but I have them. **[01:00:30] Charles Cadenhead:** I thought it has the numbers. **[01:00:32] Matt Hirn:** We can pull it out—the numbers of the goals. It'll still be helpful just as I look through it. Yeah, we can. **[01:00:45] Clarissa Hadler:** So, the number of goals. So, look through and say, "Hey, of these 15 goals, which ones do we want to prioritize?" Yeah. Which ones are maybe lower on the the the the priority list for next year, the next couple years? Two, five, and 10. And and again, I—I—I like—I'm happy to do that. I I just I'm I'm very charged in our cost from last year. I mean, I came with over a hundred single line items and that did not go well. Mostly because they weren't the right ones. It just it didn't make sense and I wouldn't know. So, I'm I'm not going down that road again. I just I think it makes more sense to look at, hey, like, you know, for the taxpayers, 20% increase in the total levy, 21% is is going to be very hard to swallow. We need to get that down. how we get there. I think that's going to have to come from the staff and I again I—going through line by line. So, I think this is going to be helpful. I'm happy to do that. Yeah. I I don't think we can pull up our—our goals, you know, we have a—a list of them in our—we can access it and display it. **[01:02:15] Nicole Miller:** Yeah. Or if like—for time purposes, I can just send that after—or if we want to do it now. I mean I could pull it up and you can continue having the discussion on the next item and if you have time—if you want to revisit it—it'll be there. **[01:02:30] Charles Cadenhead:** Okay. Is that okay? Yeah. **[01:02:45] Clarissa Hadler:** Okay. All right. Let's move into the CIP. So I—we didn't prepare a presentation or anything. This is a request from um council members Disich and her to revisit the discussion that we had July 9th. Does that sound right? Um, so we essentially just sort of gave you a link to the to the packet. So we would—we're happy to answer any questions. Let me pull that up. Ready? Sir, are you able to pull up the July 8th presentation from the CIP just so they have—the ninth or eighth that way. Word search does not work. Pull up the—Sure. Is there a particular slide or discussion that we would like to have on this? Nick, you want to lead it off? **[01:03:45] Nick Dragisich:** No. No. I mean, I can try. You'll probably say more elegant than me. **[01:03:50] Matt Hirn:** Well, I'll start it off. I mean, unless—Yeah. I—I—I get we've kind of had the conversation with the last item here again. And I think looking at the levy for this year, knowing—and for me—feeling like that's too large of an increase. Um, again, I was reflecting on last year and I'm looking at these $1,000 $500 $1,000 line items. And I still think it's important to not be spending $1,000 when we don't need to be spending that $1,000. And especially if that's happening over and over again, it makes a big difference. But I think we needed to look at the bigger projects and this is where obviously the—the bigger spend is coming. This is going into those capital expenses. Um, I think working backwards might be a better—um way of going about this—of okay if council member Dragoich you know was helping me understand from this standpoint too—as far as like I think it's 50% or $5 million a year that we're putting towards roads—and again to the conversation we had in the about—with the levy where yes, if we could get to that point where instead of having to be doing these large reconstructions, it's more—um the maintenance side of it. And I—I—I—I want to get there and I think that's really good that we're being proactive about getting there. I think maybe we need to get there slower. I I think we need to say, "Okay, well, what are—again using the projections, knowing where we want to get to. You mentioned that, hey, if we're increasing these revenues that we can get it down to a $35 million debt load in the next 10 years. 20—20 million, better yet, right? 20 years. 20 years. Okay. Well, great. Let's—let's still increase the revenues, but let's also decrease the expenses." Um, and—and this is—so I know this is challenging to decrease expenses—again, right? I was just looking at my personal budget a week ago and it—you want to spend every dollar you have right and it's really challenging to cut anything—despite hey knowing 10 years ago I lived on that and it's fine right and it's challenging though but I do think we need to look at these capital expenses I think the roads is—is—is probably the—the biggest one that I think needs to come down on an annual basis which—um, yes they still need to happen but I think we need to probably look at cutting that in half. $2.5 million to roads per year versus 5 million. And I'm sure there's other areas as well throughout the—the CIP. But again, just trying to instead of picking the smallest items in a bunch of them, well, okay, if that's really challenging to do, then what's the biggest thing that's costing us money and and what can we do with that expense to make the biggest impact right away? And that's where I, you know, with roads, that's where I'm kind of going with that. And um, that's why I want to bring it up. I I wish I would have brought it up during the the first discussion. Um, I I did have it written down in my notes even. I just didn't bring it up of, you know, "What is the number that we want to get to? Let's work backwards from there. This number is too high for the CIP for 10 years. Let's bring that number down and then let's figure out what we need to do from that." Prioritize, which again, which is—is hard. It's going to mean there's certain things that we may need—um, that we're going to still get, but maybe we can't get them right away. **[01:07:00] Jeff Holtz:** Question, and I I agree with pretty much all of that. I should know the answer, but now I'm questioning myself. Say park items that were listed in the CIP, these aren't coming from the general fund. They're coming from the parks fund. Say—uh, the shade structures. That's coming from the park fund, park dedication. **[01:07:30] Clarissa Hadler:** Correct. Which—the levy itself of 30—the 31% levy is not affecting—not the park dedication. So park dedication comes from development. We have started levying for park replacement with the assumption that park dedication funds will end in the future and we will not be able to meet our need our replacement needs. So certainly that would be one of the kind of one of the quick fixes uh to decrease the levy is to just get rid of that secondary park IP. Now, that just—it just—it again it's—I'm—I'm looking out 20 and 30 years for some of this stuff. And so, some of—some of this stuff will—will look be a little bit more clear when we do get to that long-term planning stuff, but absolutely. Yeah. **[01:08:30] Jeff Holtz:** So, that was confirming my—for some reason I just had a a pause there, but in—because it really is then—I'll stop. **[01:08:45] Matt Hirn:** Well, I think it goes back to again, right! like yeah there's areas that we can cut—parks it's 5 million over the next 10 years—but the public works is 55 million—by far the most—the water—it—that's not going to be 61 million—that some of that's going to be covered ideally by the 3M—most all of it—most all of it—right so although it's on this chart showing that it's the second highest public works is 50—over 50%—I think that's where we focus. **[01:09:00] Jeff Holtz:** Right. That's where and and the roads seem to be a place that we can potentially do that. **[01:09:15] Matt Hirn:** Yes, that might mean a road has to make it two more years and maybe not the greatest condition. Um, but I think that's the—the balance we have to have. I'd love to have perfect roads for for every single road, but it's just we have to balance that with what's the cost of it? And you know it's tough but well that 55 million about 30 million is tax levy or either debt or direct spending and so it's a it's a big number. **[01:10:00] Nick Dragisich:** I just think that we have to—I'm with you. We think we have to take a look how can we tame that down just a little—and not do significant harm—but on the other hand try and keep our tax less to something manageable. And I'm not opposed to raising the levy, but I just want to—I just don't think we can go the amount we're talking about. **[01:10:15] Charles Cadenhead:** Council Member Hearn, I I don't disagree. It the hard part is over the last couple years, the the roads and the investment in the software and trying to get us back on track has probably been the to me the biggest improvement the council has been able to make for the city. Um, so I I very much have a—it pains me to to slow down on that. Um, on the flip side, if a majority says that's what's going to happen, that's what's going to happen. I understand why. Um, but we also know full well we're not even investing the amount necessary right now. **[01:11:00] Nate Stanley:** If I like to just talk a couple minutes here about the CIP and the history of where we've been and it feels like we're coming a little bit full circle from my tenure here. Um but you know if you the county comes out with a CIP like this every year and right in the beginning the first thing they say is the only projects that matter is the first year those are the only projects that they've identified they're moving forward with. Everything else is a planning tool. So everything beyond 2026 is a planning tool and next year we'll come up with a revised CIP and some of these projects will be off the list and some of the projects or they'll be moved around based on what we're seeing out there. So it's a moving target. It's a planning tool. Um and so then it's more it becomes more because it's a of the planning tool becomes more of an art than a science of of what you're doing. We we just recently went to a 10-year CIP and especially when it comes to the streets um projecting out 10 years of what project you know when council member Hearn says you know maybe we can drag it out two years absolutely we're not going to come forward and you know when we get within two years of a project coming out and we're looking at it and it's going to give two more years in that year of the recycle it's going to get backed off. There might be some project that's deteriorated faster that has to move forward, but there'll be a project that you push out because it's not it's not needed. So, um, and when I presented this and when you know when I presented this before, the first three to five years are if you look on the ratings, they're they're roads that are in need of reconstruction right now. Not—and and those are street street improvement projects. Some of those street improvement projects, they're in need right now and they're not being addressed for another five years. But you get beyond year six and seven and I put projects on this list based on age of pavement and when the road was built. If you go out there and look at the condition of it, it doesn't look like it needs to be redone right now. And maybe it won't need to be redone in the year I programmed it. Alls I did was look at the year it was built and the age of that payment and projected, you know, because we wanted to do a 10-year planning document. It was like, well, that road likely will be one we're looking pretty closely at at that point in time, but as we get closer, will we need to do it at that point in time? Will it have deteriorated or will we, you know, so so it becomes very much of an art like that? So, can we push especially those later projects out or or off the list for now? Certainly. There's—there's projections like that. Um the other thing we've got in there, um we have 10 to we have $8 million in just three projects that are collector roads that could be done by developers if development comes into uh the Fifth Street area that could get paid for by development or partially by development or something like that. And we got—that's something in the next few years. Let's see. Yeah, we—well I put it at 2030 $4.6 $6 million to build portion of Fifth Street. If development comes in before 2030, the developer will have to pay 100% of that cost. It's—it's I put it in there in 2030 because that's when that o—area opens up as a planning thing. And if nothing's happened in by 2030, it's likely because developers aren't going to stomach that cost—that portion of the road—and the city might need to build that road uh to jump start development in that area. So there's—there's real—there's a lot of uh guessing going on of you know like I said there's $8 million in road projects in just three projects that very based on past practice will get built by developers and you won't see any of that cost. **[01:14:15] Matt Hirn:** Could you—but it's hard to but it's hard to leave it off the list when you want a 10-year CIP and you want a planning document because you want to understand you don't want to miss it and then suddenly you do need to do it and well why wasn't that on the list? Why weren't we identifying and I I think that is the challenge right and I guess like you mentioned it it—this is not set in stone—these are going to change—so so one my my first inclination would be—well then let's go the opposite way with it—let's not put it on there and then if we need it then we can do it **[01:15:00] Charles Cadenhead:** I think well the future stuff isn't impacting the current tax levy so really what you want to look at is is 2026 and even if like I said in the street projects like if you take what was that what's on the list high was what's that heights of Lake Elmo uh Lake Elmo Heights yeah I mean those roads are absolutely destroyed right so you look at 2.7 2.9 3.3 and then it drops back down to two right so as we get to a place where the roads are in better condition we take I mean there's a couple roads off what is that 38th and 39th a jamica. Those are in horrible condition. Yeah. **[01:15:30] Nate Stanley:** If you want to look at something that might be able to get pushed in discussion would be this south frontage road Keats to Lake Elmo Avenue. **[01:15:40] Matt Hirn:** So I think I mean that—that—that's the discussion that I think needs to happen. And I—I said it poorly with those future ones. Maybe another way to say it is I think if we're planning for those numbers, it's more likely that we move forward with that versus if we're planning for something less and then it comes in higher, we're going to look a little bit more stringently at it versus if it's if it's already there. It's like, all right, we're ready to spend that. And yeah, as I'm listening to this conversation over the course of this year, it's been a couple of them. I I almost—it's like I want to keep two sets of books because I don't want to lose sight of projects that we might have to do. But when when you're translating into a long-term financial plan, there's maybe a not a 100% of these projects are 100% going to be needed at the time they are. So it's almost like when compiling the totals—because we do have a priority name for that. It's "future consideration." It's "priority five." It's almost as if when all the numbers are being compiled, it's like "here's the price tag for priorities one and two." "Here's a price tag for priorities three and four." Over here is the f—the what you're talking about—the placeholders, the ones that you know they're—they're fives. **[01:16:45] Nate Stanley:** Yeah, the county projects are a classic example where we know the county's talking about those projects. They're programming their stuff, but we have no idea. If you go back two years, you'll find the Manning project that just started construction. We had 500,000 in there. Our our cost share turned out to be $2500, not 500,000. We have no idea what the cost share is going to be because we don't even know what the scope of the work is. What is the Manning and Hudson stop—like? Can you remind me of that? **[01:17:15] Nate Stanley:** That's if they—that's if uh that could be paid to Hudson. Manning is if they—Liur comes in. So if Limmer comes in—that will get funded by Li. So that's $300,000 in 2026. Yeah, that might not happen, right? And I think I mean that's probably where the conversation go here is like okay well what about next year and you know back to your—your point maybe if you could just elaborate on a little bit as far as like okay some of these roads that are getting done in two to three years that like you mentioned hey they're ready now they're scheduled three years out what happens if it's five—four years. Um, right and there's if it's already needs to be reconstructed it just—higher higher costs in the next year based on construction costs going up and like so the increase of material labor increase of cost but there's some projects as you know we—we try to do a lower cost reclaim and sometimes if the road deteriorates to a point where a reclaim is viable now but if you wait five more years it's no longer viable and now you're doing a reconstruction which is three times the cost. So there's—there are certain improvements you want to tackle within the right time frame or they be—they escalate really quickly in more cost. **[01:18:45] Nick Dragisich:** What was the total for 2026? **[01:18:50] Clarissa Hadler:** It was—for roads—6.7. **[01:18:55] Nick Dragisich:** So I get again—going you're going to have a much better idea of which road needs it versus which doesn't. I'm trying to balance both sides of it, right? Like from your perspective, you're thinking obviously the financials too, so I want to be careful about that. But well, I would need how the whole 10 years is playing into the—Well, I'm just thinking just next year, this year, what can we do next year in the year 2026, 2027, maybe 2028 with those road projects that are scheduled out in the next three years? **[01:19:30] Nate Stanley:** How can we actually make that happen over five years? You just—you just tell us to do them over five years and we do them over five years and as residents complain what—what your added cost is going to be pothole repair, public works staff. Uh sometimes they're patching roads and the patches get bigger. So there is some expense. It's not sure it's not horrendous but it's okay. There's some—open to hearing other thoughts on that too. I guess that's just but the next the next three to four years are all if you look they're all in the pavement ratings they're all failed roads they all they all need the recommendation is to reconstruct them there was one other po—point I wanted to talk about when I mentioned full circle because when I came here what happened was a financial number was cited of how many how much we can do in capital improvements per year and that's kind of what the city had been doing every year there was a limit it you know, 10 million total projects. If there was a two million fire truck and a backho or, you know, dump truck or something like that, a plow, you'd back all that out and this is what you got left for roads or whatever. And we for years, most of my tenure here, we backed into that number and we just did what we could with the amount that we were given. We we overdid it that way because we fell behind quite a bit. **[01:20:45] Matt Hirn:** Sure. **[01:21:00] Charles Cadenhead:** The it was kind of this council and the mayors coming on board and stuff. It's like we can't just keep backing into this. We need to find out what do we need and what and so that was part of the pavement management plan which was mostly maintenance and and keeping up on the maintenance and and not forgetting that. **[01:21:15] Nate Stanley:** I I remember specifically one council member or one council meeting during budget watching it with my popcorn and my beer on a Tuesday night. They went through all the items. not on council at the time. I was not on council quite a few years ago actually. And they went through and they got all the line items then and they said, "Well, how much do we have left for roadways?" And they said, "Jack, what can you do for $400,000?" Well, we'll figure it out. And that's literally—that is like in my opinion the worst way to plan for your your infrastructure. And I think uh director Handler mentioned something about the assets of the city and the infrastructure being 100 million. I wouldn't be surprised if it's higher than that. I don't know if you use Gazzy 34 modified method or straight line method. I'm—I'm guessing straight line. Um, but it's a financial way to—uh, figure out what your investment is in your city relative to your infrastructure. It takes lengths of miles, includes curb and gutter, catch basins, manholes, uh, inlets, all that stuff, right? **[01:22:45] Nick Dragisich:** So, I mean, there there's some—like when I look at this, there's probably $1.3 million next year. I mean, I've driven on Hudson the South Frontage Road between Keats and Lake quite a few times just because I I want to go see if that—that grass is started over there by the the water tower or whatever. But, um, you know, that's something that could probably get pushed. It's not in very good condition, but it's—not. We're trying. **[01:23:15] Clarissa Hadler:** And if you again, if you go back previous years, you'll see that that's been programmed earlier, and we keep—we have pushed that a couple years. We keep pushing it because the longer we can push it and get away with pushing it, the more likely Valley High comes in and redevelops—that gets done by a developer. **[01:23:35] Nate Stanley:** Yeah. **[01:23:45] Clarissa Hadler:** But there's going to come a point where we can't push it anymore. **[01:23:55] Nick Dragisich:** Right. Yeah. So then it becomes our cost. The only thing I would say is the path that we've been on has pushed a six into $60 million outstanding debt and a debt levy each year to property tax. That's 35% of our levy goes just to pay principal interest on bonds. That's just not sustainable. We if we keep down that path, $ three and a half billion dollars goes just to pay—we have $5 million to operate the city and $ three.5 million to pay principal interest on debt. I'm not going to argue with you on that. I mean, that just doesn't seem to make sense. **[01:24:45] Nate Stanley:** So, to—to highlight where we're at because we're talking about streets in this case, which we do have a specific levy. If we're talking about South Frontage Road, Keats to Lake Elmo, which is programmed for a million in 2026, and we don't know if it's happening or not, that would be coming from the road levy or from the general levy. **[01:25:00] Clarissa Hadler:** It would be coming from the infrastructure fund. Um, but largely actually bond proceeds. So, we still depending on—now again long-term planning, more discussion to come. Um, but there's this, you know, how do we get from A to B? So, my formula that I've kind of worked into the CIP planning is that we're trying to spend 30% of—of our total projects with—with cash and then we supplement—uh, sorry, let me clarify. Depending on the type of project, it's a percentage of cash. Some of it I was able to do sort of straight off—30% some of them where we're working up to 30% over the next 10 years. And so it's—it—I—I had to make some assumptions, but because we don't have a lot of cash on hand, the assumption is we're going to continue to take out debt until we have that fund built up um and and are able to, you know, to to move away from that. **[01:26:00] Nick Dragisich:** So bond with some cash. So the the biggest impact that I think that moving that project back a year would be—just lowering that $300,000 future debt—that new future debt. **[01:26:15] Clarissa Hadler:** Right. And 300 of cash. **[01:26:20] Nate Stanley:** Yeah. Which project were you? **[01:26:25] Nick Dragisich:** The Southage Road. **[01:26:30] Nate Stanley:** So—that likely—to be paid by grant right now as it stands. Mindot's coming in to pay for that. **[01:26:40] Charles Cadenhead:** Oh, that's what that is. I misread that. Sorry. **[01:26:45] Nate Stanley:** So, those two projects that—those two—half in a millions together, two and a half is the five million contribution they're looking for us to trunk highway. So, this is going to be done by Mindot. **[01:27:00] Clarissa Hadler:** I mean, there is a city contribution. They're expecting a large city contribution toward that. **[01:27:15] Charles Cadenhead:** I'll give a dollar. **[01:27:20] Clarissa Hadler:** 5 million. No, four million in the CIP for CASA 17 as our cost share, right? **[01:27:30] Nate Stanley:** Yeah. And it's been five million from the beginning. And now the south frontage road is part of it. So we're—we're still paying the amount, but we're almost getting a big road improvement added in there since that all happened. Right. **[01:27:45] Charles Cadenhead:** I I was looking at it and thinking it was referring to what you were just—I was on the wrong frontage road. My mistake. Sorry. But but as an example, the 300 for the the stop light Manning and Hudson—like no. If if Limmerch does it, great. But I'm—we don't need to be—we just don't know when it gets done if it—there's some—the county will—either Limmerch will lead that or Limmerch will provide cash to the county and the county will do it and they'll charge the city something, right? So there's a budget in there for the city. It could be that thing where it turns out to be $2,500. I I don't know. **[01:28:45] Nate Stanley:** Yeah. **[01:28:50] Nick Dragisich:** But so there's a project we're aware of. It's ready to go if Limmerick goes and we don't know what our cost share is. Anything in the green is highly speculative in terms of the dollar amounts. In which case, because it again, no matter which fund it comes from or if it's bond and then there's a portion of cash, there's still no matter what could be some impact to our final levy rate. It's just it's going to vary depending upon what the type of project is. Um I I would suggest the stuff in the orange the I mean the Hudson Boulevards and the Fifth Street just come out. I mean the other thing the city could do with Fifth Street if you have to do it is you you you could move that project forward and assess it 100% to those neighboring those properties and force development. **[01:30:15] Nate Stanley:** I mean 429 it yeah you can do you know you you have the powers to do it that way and do it differently many others do that's a that 4.6 six and Hudson Boulevard ones are ones that could essentially come out of the financial plan if that's what's wreck—if that's partly wrecking havoc. **[01:30:45] Charles Cadenhead:** But I don't want to lose sight of those projects being on the rise. You want to—you want to keep track of them. I get it. So either way, there are many possibilities here for things that obviously we're—in the 2026—where dependent upon how it plays out, we may already have set our levy, but we're going to end up spending less. But the levy and what we collect is already coming in. **[01:31:15] Nick Dragisich:** Set it set. **[01:31:20] Charles Cadenhead:** Yeah. Because that's the hard part. Some of these things may not happen. We— **[01:31:30] Clarissa Hadler:** But we've already set the levy. Well, except for it's not a—it's not a direct payment. So we are—we have an infrastructure fund which we are planning for to pay for a portion of of future road projects. Right? So—and so think of your $500,000 next year—could pay for $100,000 for the next five years or something. You know, it's not like this 500 is going to go for this project. And then the assumption is because we don't have cash that we would be taking out debt. And so that debt wouldn't affect the 26 levy. That would actually affect the 27 and beyond levy. So it's not a—you're not getting a one for one. It's not at all. **[01:32:15] Nick Dragisich:** It's not immediate impact. **[01:32:20] Clarissa Hadler:** Correct. So our the predictions that we have our death service levy and our infrastructure levy in 2025 was 3.3 million. in 20 in 2032 is projected to be 5.9 million. We're going to double if we keep on the path that we're on. **[01:32:45] Nick Dragisich:** What are you looking at—at in the CIP? We have our debt—our debt service levy and our infrastructure levy. What page are you on? **[01:33:00] Clarissa Hadler:** I'm on the—the 2026 to 2035 capital improvement plan. Yeah, we near the other end. I don't know what page it is. It's—Let's see. It's page. Does it say page? Uh—A170. **[01:33:30] Nick Dragisich:** Letter thing is throwing me off. **[01:33:35] Clarissa Hadler:** Yours just says numbers. There we go. **[01:33:45] Nick Dragisich:** So if you look at 2025, we have $3.3 million in levy and debt service and infrastructure 20—and you go out to 2033 and you got 6.1 11. I'm sorry. Can I just look at your computer? **[01:34:00] Clarissa Hadler:** Yeah, just make sure you guys are looking at the same thing. **[01:34:15] Nick Dragisich:** Yeah. So it's almost double. You're talking 25 to 32. We go from 3 point something to almost. **[01:34:30] Clarissa Hadler:** You're talking about the debt service levy or the infrastructure. **[01:34:45] Nick Dragisich:** The combined debt service and infrastructure levy. **[01:35:00] Clarissa Hadler:** Sure. The debt service is the biggest portion of it. So you go from 2025 to 2033 and it pretty much doubles over eight years. Yep. before it starts to go down in 2034. Yeah, I would just reiterate the reason that that is is because we did not have capital levies in the past. **[01:35:30] Nick Dragisich:** It—it dips down, but if—if—if you go out—when you get to—Yeah. then it goes back up gets over seven and a—seven and a half—eight million dollars. **[01:35:45] Clarissa Hadler:** Actually, you're still talking theoretical when you get out to that point in my opinion. **[01:36:00] Charles Cadenhead:** Right. It's a—It's a best guess. **[01:36:05] Nate Stanley:** It's a best guess. But you know, we—we talk— **[01:36:15] Charles Cadenhead:** But you're also talking about probably having—I don't know—what's our road miles in Lake Elmo now? **[01:36:30] Nate Stanley:** 110—99—99. **[01:36:45] Charles Cadenhead:** And what was it 10 years ago? **[01:37:00] Nate Stanley:** Uh—it was—it was still like 70 or something. **[01:37:15] Charles Cadenhead:** Yeah. So that's project probably projecting out in those years where you have more lane miles of road in developed areas. You're going to have to take care—more take care of more. Even if developers build it, you still have to maintain it, right? So some of that increase is going to be based on just having more. **[01:37:30] Nate Stanley:** This is construction. This is a maintenance. This is—we—we have another 600,000. **[01:37:45] Charles Cadenhead:** Are you even going to—So you're still— **[01:38:00] Nate Stanley:** So then when you get out to 2040, you're looking at roads that you've—you're doing full depth reclamation on roads that you did in 2020, right? when we get to—when we get to say—the the Savona roads—two built in 2013. So you get to 2033—that 20 year—20 or 2033 to 2038. So that 25 year period you're not going to be rebuilding that curb and gutter. You're not going to be replacing the base. You're not going to be replacing the drain tile. You're going to come in and you're going to do a a lowcost either mill and overlay or a reclaim. Right? So for many many years then those new roads are going to—they're not going—you're not rebuilding those and replacing those full roadways. You're just replacing the top for another 25 years. **[01:38:45] Nick Dragisich:** I see what you're saying council member Dragas is that increases but the increase isn't just as you—can't think of that as it is as as things are stated as they are currently that has to account for increased amount of roadways that will have that the city will have to take care of. **[01:39:00] Clarissa Hadler:** Right. Understand. But I'm just saying the tax property tax impacts are going to be—in my view our say won't Stanfield's level of impact increases. **[01:39:15] Nick Dragisich:** Well, I'm not—I'm also not sure. I would have to—I question whether or not the numbers include basically a leveling out of uh the tax base number. If that was also increased along with that is like how many people are how many households are paying into that tax or is it—has that been also increased and stratified by year? **[01:39:30] Clarissa Hadler:** That would come more in the long-term planning—yeah, process. Um, so if—I mean I can't—I can't answer that question. **[01:39:45] Matt Hirn:** So, if—I mean I can't—I can't answer that question. So, I mean the intriguing part with because we saw this data before—but the—the intriguing part is the debt—the debt service levy for that portion basically is remaining between three and four million for a 20-year span. **[01:40:00] Nick Dragisich:** It's the infrastructure levy. **[01:40:15] Matt Hirn:** Yeah. Because we'll be continue to be adding infrastructure. **[01:40:30] Nick Dragisich:** But take the infrastructure every way and you're going to have to fund it with debt and pay interest. **[01:40:45] Clarissa Hadler:** Correct. It's—we're still spending the money. **[01:41:00] Matt Hirn:** Yep. Yeah. **[01:41:15] Nick Dragisich:** because like in in 20 240 our population will be between 18 and 20,000. So there's additional households there. There's additional roadways, additional cost. There's we don't know what the tax capacity. We don't know how many businesses will be in here. I—All right. **[01:41:30] Charles Cadenhead:** So the proposal is—what—do we know what the total CIP is for 2026? **[01:41:45] Clarissa Hadler:** I'm trying—Sure, I do. 25 million sound, right? Oh, that's just water. Handy charts. Hold on. uh 34 million, but that includes the uh water treatment plant of 24. **[01:42:00] Matt Hirn:** So roughly 10 million—10 million. I I mean I guess—so my thought on this is I guess it's kind of like a similar to what we've mentioned with the levy is again I guess we could go through this line by line and say what I think from the capital improvement plan—that does maybe needs to get cut. I don't know if that's the right way to do it. I think I—I guess it's interesting that you guys have had an issue with that in the past where, you know, you kind of have a—hey, this is the limit and I get that, but I I feel like we have a lot more we have the pavement um plan in—in—in place here where we're able to make sure we're looking at this and and and make a shift. If we see, okay, hey, 10 million for CIP isn't enough this year, we need to increase that limit to 12 million this year. Um I I I don't know if that flexibility was there in the previous councils when they had that back—stop limit where it was 10 million and it stayed that way for 10 years and it never changed. I I don't know. **[01:43:15] Nick Dragisich:** But again, I'll re—So the street rating and payment management plan is programming out your maintenance dollars. So that's that 600,000 maintenance dollars and that's making sure you stay on top of that to to extend the life of the pavements. That's that's trying to work toward your goal of not doing these these uh reconstructions—major improvements—back—was for the budget or was it for the CIP budget? **[01:43:45] Charles Cadenhead:** I'm sorry. I thought you before you were talking about the back—stop for the CIP. **[01:44:00] Matt Hirn:** Yeah. **[01:44:15] Nate Stanley:** And so then for the CIP, as I've mentioned, I can tell you the first five years in your CIP right now. From an engineering perspective, all need to be reconstructed today. Even though we're not doing them, we're doing them over the next five years, but they all need to be done today. **[01:44:45] Matt Hirn:** I guess again my question is, well, what happens if we do it over seven years? What if we do it over eight years? I I know that means there's some—maybe, right? You just keep—and so comes that balance that you said. So, I guess that's my ask—one council member—is I'd like to see as we look at the CIP in general—that number come down. Again, if you want me to give a number, I think it should come down closer to probably 25% from what we're at looking at in 2026. And then I think in general over the next 10 years—even though it is like you said an art and there—there is a lot of fluctuation to those—I rather air on the side of it being too low and having to make a decision the year before that we need to increase that CIP as we get closer to it rather than the opposite. I I I'm concerned that if it's—we keep it at this—the higher limit—that it's going to be easy in future years to say well maybe we need a little bit more. It's just going to bump up from there. I don't see it coming down by any means. So that's my feeling on it with the CIP. I I would like to see that number come down. I think it's going to be the opposite end of—or it's going to be the other part of the equation of getting to that 20 million or to 30 million of debt in the next 20 years is—instead of just increasing revenues, we have to slow down the increase of expenses. I think that's a big piece of it and I think that needs to be a portion of it and I think the easiest way to go—the most efficient way to go about that is—looking at these capital improvement projects and decreasing that because again I I don't think going through the budget line by line is going to—those are that's the the sand right these are the rocks this is going to move more move us it's going to move the needle more for us and so I think focusing on this and the CIP is going to help a lot with so we don't have to ask for 500,000 for the the capital expenses in the levy. We can drop that to 300,000 for the parks. So we don't have to have $100,000 levied for parks. We can levy 50,000 and so we can maybe still get there in 20 years but it's because we're working from both ends. **[01:47:15] Nick Dragisich:** So essentially cliff—note you would—your suggestion would be—you know our 600 that is set aside for road maintenance reduce it by x amount— **[01:47:30] Matt Hirn:** not maintenance not the maintenance so only for the capital improvement side correct which most of that is debt **[01:47:45] Nick Dragisich:** yep and some is cash most of it is debt I think remember is—that you know in our newer developments where people bought homes homes. The cost of all those improvements are included in their lot. And so the streets, whatever you have, right, they pay for in their lot. The improvements now, and that's where the bulk of the value is in the community, in the new developments. The improvements now, 70% are paid by a tax levy. And so the new—the people who bought new homes are paid for theirs in their lot and they're paying for everybody else's in their tax levy at a higher rate because the homes are higher valued. **[01:48:45] Charles Cadenhead:** That's just that's just the circle there. I mean, we could exactly talk about that in the development that I moved into or you moved into, right? I've been paying for other people's roads in my tax levy while my road turned into street Baghdad until it was uh rec—re—reconditioned a year ago. And it it's—was severely under maintenance. It didn't get chip sealed. It didn't get what it needed. Could have probably—well it didn't you didn't have the uh you didn't have some of the drainage or pertinances in there to to make it last that long. So, um, but it could have lasted longer if it would have been maintained appropriately. **[01:49:45] Matt Hirn:** I'm not talking about the maintenance site. I'm— **[01:50:00] Nick Dragisich:** No, I'm I'm telling you that when I moved in that house, my streets were great. And so when you're doing an infrastructure levy and you're—you're—you're paying for all these other roads to get done—that I was paying part of that even though my road was great. That's just part of being society. That's part of being a community. **[01:50:15] Clarissa Hadler:** It is. I understand that. But when we're talking about raising levy 20% and then and a good piece of that 30% is going to fix streets, it's it seems somewhat disproportionate. **[01:50:30] Nick Dragisich:** Have you—have you gone out and looked at the streets that are in the 2020? All right. Well, I I would ask you to go do that. Maybe we need to raise the assessment levy to cut down on the amount being tax levied. **[01:50:45] Nate Stanley:** um go from 30% to 50%. uh in the—in the start of my career assessments were closer to 75—80% was the average city. They were assessing like that. In my opinion, the—it's—it's the fact that they—you have to prove out the assessments through appraisal values that that's the part of the process that's broken. **[01:51:00] Nick Dragisich:** Yep. **[01:51:15] Nate Stanley:** And cities found—the reason everybody dropped significantly and many cities went to no assessments at all. Um, the reason they did that is because they were spending way too much money on every project doing appraisals. I mean, the appraisals, if you have to do 10—12 appraisals, they—they—they're 15—20 grand a piece. Um, they're more than the feasibility studies. They were—um they—they become very high cost and you were spending more time fighting those off. So, that's when you if you look if you pull the cities now, you're seeing them all around the the 30% or 25% assessment rates. **[01:51:45] Nick Dragisich:** But they were—they were much higher when I started my career. **[01:52:00] Charles Cadenhead:** So would—would your idea have the five—the next five years be done in seven? **[01:52:15] Matt Hirn:** I mean I think that's again I I want to—it's more asking staff to come back with—that may be the idea. Again I I don't know if that's feasible and I'm kind of asking the same thing for the the budget is I'm not comfortable with this number. I'm comfortable with half, you know, 10% increase for the levy. I think I'm comfortable with maybe 7.5 million for 2026 instead of 10 million for CIP. I think I'm more comfortable with maybe like half as much being spent on roads. I I don't know I don't know how which specific items to take out. **[01:52:45] Nick Dragisich:** Yeah. **[01:53:00] Charles Cadenhead:** Well, I think—I don't know if this is a policy decision, but I just think from the financial perspective, if anything, that would be the policy of—like this is how much is available to spend. And and if that means doing it over seven years, what we had planned for the next five, fantastic. Um, if it can be done over eight, great. I I don't know what that looks like, but I I think we do need to decrease that number. And there needs to be some—and and maybe it can't be 25% decrease in 2026 and maybe it can't be um a half as much on—or spreading what we have planned for the next five years over seven years for roads. But I we need to at least move in that direction. **[01:53:45] Charles Cadenhead:** Well, I I—so here's a policy idea to overwork staff. Maybe suggestion one. What would be the impact to the levy if the next five years of CIP roads were done over seven? Option two, is it possible to somehow decrease it? You said 20—25% for 2026. And it doesn't have to be from roads, but again, if we're looking at, well, what's the biggest chunk of it? Yep. Okay. That's a large chunk. So, I think roads is a—is a—is a place that we can look. I want to be very mindful of—there's been a lot of great work done with the pavement and that's why I feel a little more comfortable doing this as well is because we have the pavement index. We have a—we have this plan where we're reviewing constantly and we're using to make these decisions where that wasn't happening 10 years ago. And you know it's easier to fall behind when you we're not constantly seeing those numbers. **[01:54:45] Nick Dragisich:** I mean the hard part for me is that index is telling us these roads suck and they need to be replaced now that—that's that entirely true we have that but I I think yeah they can come back when we do our next workshop if five years and seven what does that look like and if it looks great great **[01:55:00] Charles Cadenhead:** we're gonna be warned Jack isn't going to tell us here's the consequences and the risks one of the roads might turn into a full reclaim we have—four, five, $600,000 in park play equipment to be redone next year. So, do you straddle those out? Maybe do two instead of three. I mean, stretch that out over this four years at the parks meeting. I that's a big item that I'm going to bring up. I don't know if we spend that at all. **[01:55:30] Matt Hirn:** I I think we have to look at—is what's getting used. This is the discussion for that. But I—Yeah, I I think that is an area that could potentially be lowered, but I get nervous about going line item by line item again. I mean, for—for my value, I mean, I've used the the pup park. I don't know that, you know, that's $50,000 of paving. **[01:56:00] Charles Cadenhead:** You got a new park pavilion at $80,000 for the next five years. Do you do one every other year? Maybe that's something to look at. So, I think there's a lot of items like that and and that's a perfect example of yes, it would be very nice to have, but our city is still going to survive and thrive without that. And so, this is where—hey, maybe the roads isn't the right place to focus, but we need to—we need to do some—in my perspective, I—something needs to happen to decrease these numbers. **[01:56:45] Clarissa Hadler:** Sure. I would—I would be—play around with—with any of them really. It's just where you want to—where where it kind of makes sense for the short term and the long term of the city and you just you got to make that balance, right? So, and I don't—I mean—is that something that we need to decide right now? **[01:57:00] Matt Hirn:** I mean obviously the CIP gets brought back. I think my thought again is if we give staff direction of 10 million is too much, 7.5 million is more on track. We have this initial CIP. We're going to be able to contrast it with a CIP at 7.5 million. It can be highlighted what was taken out and and then it—you know—then if it's like ouch—that really hurts that we don't have those items. **[01:57:30] Charles Cadenhead:** So what we also ask then is when we start looking at fleet and stuff do you do it every—you know—the recommended years stretch out another one two years or whatever what so then you get into some of the the swag stuff right where you're saying well yeah I'll put that many more miles on it and our maintenance will go up a little bit but we won't have to get a new but then the new vehicle three years later is going to be x amount more right So, I don't know even know if you're going to catch up with that number or even when you delay some of the construction stuff. Um I don't know if you catch up with that number either sometimes. Um so it can be—I know that when a lot of these bonds were taken out in the mid teens, right? I don't know what bond rates were, but they were really freaking low, right? I don't know—like 2010—2012 they're like one—one and a half%. I don't think in 10 quite that low but there was a period where they were fairly low. **[01:58:30] Nick Dragisich:** Yeah. I mean we were doing as much construction as we could in the county that I worked because it was like—I mean it wasn't free money but it was darn close compared to the rates of—of oil going up and mix going up and and hourly wages and stuff. So, um, yeah, it's it's not an easy answer. **[01:59:00] Charles Cadenhead:** No, it's not, mayor. But we have to find a balance that's sustainable. **[01:59:15] Nate Stanley:** As an example for the—I mean, as I mentioned, the 2026, the first year is the year that you're giving direction to go forward with. So, you're talking about that 10 million. We're already working on all those projects. So, we would need to know very quickly if we're not supposed to be working on them, but they're—they're basically spoken for. You got the storm water pond is in a contract with GE, so you're going to pay them when that's done. And that's the biggest bang for your buck you're getting. Um, the water treatment plant is going to be reimbursed by grant. And then you have the trunk highway 36 is a two and a half million dollar one. So, that's your biggest one. You can't back that one up. So, it's really only your street project for 2026. pausing that is really the only on the infrastructure projects. I'm not I'm not talking about parks or equipment or things like that. But really, it's just the 2026 street improvement project is the only one you could defer. And if we defer it, then next year we have to defer that one as well. So everything gets pushed back here. **[02:00:30] Matt Hirn:** So—like again, I want to be clear that I understand that. And if that's just a no-go—I—that's all right. I if it's possible I want to move in that direction though. You know, I think it's important to point out that we talk about CP CIP being a long range plane documents. It's not etched stone all and all that is true except in 2025 we said let's go ahead with the 2026 improvements and so you know or we have you know like in the case of our fire truck we moved it up and so and every time we talk about what was in the CIP so we kind of play both sides of that CIP but you know it's not etching stone but it was in the CIP. **[02:01:00] Charles Cadenhead:** I would also say that those weren't just because it was in the CIP. I think we had a fairly good discussion related about the future costs and waiting on that and how much that increased the cost of those vehicles by waiting to order. **[02:01:15] Matt Hirn:** Right. **[02:01:30] Charles Cadenhead:** So, it's—it's not—just because it was in the CIP—I don't feel as as it was stated. So, um, I—I—I—I don't remember—what are the other roads in the 2026 street improvements? **[02:01:45] Nate Stanley:** I—I—I know I've driven the ones at the—the Lake Heights. **[01:02:00] Clarissa Hadler:** Lake Heights. That's the only neighborhood. **[02:02:15] Nate Stanley:** That's the only one. Yeah. Yeah. And you know, if I encourage council members to go take a look at that—that development and if you think that can be pushed, then bring it forward. I certainly will not be—I—I—I been on those roads and I would not concur with any uh delaying that project at all. I mean, do you feel like—within the next two years—we can get to a point where we're moving more in this direction of slowing down? **[02:02:45] Nate Stanley:** It will be. I mean, there are some roads—like just go drive it. I swear. Um, you'll understand—there's that roads—like 38th and 39th off of Jamaica—that they're in disrepair. And not only—not only are they going to cost the city more the longer you wait—well actually those roads are just going to cost—because they—they were waited so long and so we—we will be at full reconstruct on those. Um, but I think when we get to some of the ones that are maybe—uh might have a little bit more of a question mark, that's when you get to say let's—let's push that, right? Because you—because you can and that's like in the 5 to 10 year window. It's not next year. It's not—Hudson—Hudson Boulevard we pushed two years now already. We've pushed them both. So they've been in the closer windows and we've been pushing them back each year. We keep looking at them where we—you watch the freeze thaw cycle over that winter when it's in that next year and then you look at it right away in the spring and if you can push it—we've—we've pushed it. **[02:03:45] Matt Hirn:** So it's—and I mean I guess when I'm looking at it—like the roads—the two that I mentioned—it's not just the roads themselves are—are really bad—but then you know our maintenance vehicles have to go try and plow that. Well, then you're tearing up roads and you're beating up your plows. You get your belly scrapers in there. Um, it's not good if they're hitting manholes or whatever could be in the roadway at that point. Um, so that—there—there—there's potential cost. **[02:04:15] Nate Stanley:** They're not saying that there is specifically, but like the um yeah, some of the frontage roads and stuff when I drive them, seat of the pants, if if it came up, I'm like, well, it's drains out to the ditch, it's fine. Doesn't need to be done, right? It's not a lot of resident traffic on it. It's, you know, there—there—there are going to be those instances come up. This next year, I don't believe is one of them. **[02:04:45] Charles Cadenhead:** I think no matter—no matter what, because this is a workshop, we're not making any decisions. But either way, between now and the end of the year, we also all, I think, have a responsibility to make sure we're communicating with the public about what the costs are because I think for years and years that has not been done, which is why there is sticker shock when it increases, right? There's this expectation that taxes can be low and all everything's hunky dory and that that's simply not true. things cost money, especially services that people expect. People expect police and fire. They expect roads that don't suck. They expect to have parks that are maintained, where trash are taken out, where the—they actually drain properly, where they have amenities. These things cost money. **[02:05:45] Nick Dragisich:** So I we again we're going to continue this conversation as to what the final percent will be but I think we all have an obligation to make sure we're communicating because there is a—a city finances are a career in of themselves that require higher levels of education and smart people to do it. And I—I—I—I think we all have an opportunity because of what we see day-to-day, what we now are aware of. I think we have an opportunity to make sure that we're communicating that to the public to help ensure that everyone's on the same page as to what the costs are. Why does chief need these additional people is—to protect people's lives. Why are we investing in these roads? Because it saves money in the long term. It's those conversations I think we do need to have. But I—is there anything additional you need for this yet? I I feel like we've given a lot of feedback, but I don't know if there—you've been informed. We'd like to reduce cost, but we've also been clear as mud again. You okay over there, Adam? Stop laughing. How do you really feel? **[02:07:15] Clarissa Hadler:** So to recap, I heard you say—um look at the street projects over the next five years and see if you can stretch them to seven as an idea, not not—because I agree with it, but as something we can come up with and and see what does this look like as—as one possible idea. **[02:07:30] Matt Hirn:** Yeah. Just for direction for staff for the next time we meet. **[02:07:45] Nicole Miller:** you mentioned something about the parks and so I was just pulling up, you know, uh we have this parks master plan which has recommendations and obviously then the parks commission reviewed it and came forward with their recommendations. So, are you—you just mentioned it, but are you asking um for us to relook at um like the park replacement or the shelter additions or—we need a little— **[02:08:15] Nick Dragisich:** I think it's worth looking at if we want to reduce capital costs to reduce levy and future debt—that we need to look across the board. You know, as—as it was said, things that are nice to have versus things that are needed, and maybe push the things that are nice to have, maybe space them out a little bit to make that less of a—uh stark contrast to—uh increases. **[02:08:45] Charles Cadenhead:** The playgrounds to me are—are that prime example. **[02:09:00] Nicole Miller:** So, it seems to me that that—would—you probably kick it back to the parks commission with some direction because you don't probably don't want just Adam and Marty just deciding, right? I mean, we want to include them. They can make the right decisions. **[02:09:15] Charles Cadenhead:** Well, we have a workshop with them. **[02:09:30] Nicole Miller:** We do. I just—That wasn't—exactly We can—That'll be a—a specific item—that wasn't—sure, you know, so we can have more specifics. **[02:09:45] Clarissa Hadler:** So, that's something that we would include at that workshop with them, the joint one. **[01:10:00] Charles Cadenhead:** Okay, that's I think that's big. **[02:10:15] Nick Dragisich:** I think the goal you hit on the head is—what can we do to minimize that? Understanding if those streets—you—even if they're in that bad condition, we need to do them. **[02:10:30] Charles Cadenhead:** Yeah. You know, we don't want to cut things that we need to do or—um but we have to find a way to massage this and get it to a little bit better number that is more financially sustainable. **[02:10:45] Clarissa Hadler:** Well, I I think if—one—if we can't do it through the CIP, then it goes back to the—the budget and then it has to come out of there somewhere else then. And again, my goal is if—if—if we can decrease the capital expense levy, the $500,000 that we have in the—the budget, if we could decrease that to 300,000 or 250,000, if we could decrease the parks levy to 50,000 or 25,000, those are some big chunks taken out to get to that $1 million less in the budget. **[02:11:15] Nick Dragisich:** So, so just a question, just trying to understand So you indicated what—what was the percentage increase this year is 20—20% was that it—so the—the tax amount was 20—21% increase the amount tax and so or the—um, and this is just a—so you said, "I'd be more comfortable 10%." which was—so—so I'm just wondering how you get to—what makes you feel comfortable at 10%? What what makes that decision? I guess is—a—number. **[02:11:45] Matt Hirn:** I feel—I'd feel more comfortable with the 3% of a tax rate increase—which would be closer to you know that'd be increasing our—our tax base by even more than it'd be less than a 10% increase in the—sure the tax levy. I feel like I'm trying, maybe this is the the bad approach to try to meet in the middle, but I'm trying to balance. Yes, I I understand that we're a growing city. I understand that maybe we've undertaxed in the past and we have to do some catchup for that. I have a really hard time stomaching a 20% increase knowing that we're also probably going to have to do that again next year and it's going to keep on going in that direction. I'd rather more gradually work there. um, there isn't an exact science where it's going to get us to a specific dollar with the 10%. **[02:12:45] Nick Dragisich:** So when we do that gradual—and director Hadler you can correct me on this. So if we do the more gradual then that takes us longer at reducing the debt which is what your hot button seems to increase the—I think we have the franchise fee and if we have a $250,000—I'll just pick up a number right infrastructure levy we can take $500,000 off of debt for the 2026 roads you know because we have that $500,000 in those funds we have the levy and the franchise fee so we can reduce that which will help and maybe next year we can get the infrastructure levy, you know, up another 100,000. And so I think we kind of work our way. We're not going to get there as fast as we'd like to, but we do have a plan and maybe in 2027 we can raise it even more. **[02:13:30] Charles Cadenhead:** I we don't know enough about it. I just think that I'm with counselor. I think 21%'s a real hard pill to swallow. It's a big number. **[02:13:45] Clarissa Hadler:** Don't disagree. **[02:14:00] Charles Cadenhead:** So then when you said don't look at the CIP, but I think the CIP works in concert with the budget to a degree. **[02:14:15] Matt Hirn:** So I don't think you can look at one without—you can't look at the budget I think without looking at the CIP. Yes. **[02:14:30] Clarissa Hadler:** Or I was saying if if we can't change the CIP for 2026, if it's just, "Hey, there's nothing to be moved there, everything's on contract and then there's not moving much moving in the in the budget," unless you you're looking at those—what I would call nickel and dime line items cola. **[02:15:00] Matt Hirn:** So the capital—if you go cola to from a three to a 2.7 which I think is fair and—and you know—um you're talking again smidgens—that's not going to get you that—take the 500,000 down to 250,000 take the 100 down to 10,000. **[02:15:15] Clarissa Hadler:** So then—so then—it's just a question of—would you—you lengthen that time to try and play catchup to where you have the money to pay cash for things, right? **[02:15:30] Nick Dragisich:** I just don't know how much it would lengthen it because if if we look at it—if we also look at the CIP at the same time and say we—we can't spend $5 million per year on or 11 million on public works per year over the next 10 years. We have to decrease that. If we can decrease that amount, we're not acrewing as much debt. Yeah. We're increasing revenues. **[02:16:00] Charles Cadenhead:** So, we're going from both ends, right? **[02:16:15] Matt Hirn:** Yes. If we didn't decrease expenses, it's going to take longer. Yeah. But if we increase revenues, not as much as was shown in the budget, but we also decrease the expenses. Yes. From the budget—if possible, but also looking at the CIP and saying, "Okay, we can't spend this much. We have to decrease that somehow." And roads are a really big portion of—of that every single year and and with the debt. And so is that the easiest place to go? Maybe, but maybe not, right? Maybe it has to be somewhere else. Maybe it's the parks and the playgrounds, but it needs to happen from both. **[02:17:15] Charles Cadenhead:** Well, it could be fleet. It could be a lot of things. **[02:17:30] Nick Dragisich:** 100%. I think you look at—first you look at some of those, you know, one-time expenditures that are in the budget. Can we—can we postpone them or put them off? Do we really need to have that one-time expenditure? I think the thing we talked about, you know, the firefighters and and the public works staff, I think we need to do those things because that's—that's the core of our operation. But—but if we can take a look at—capital's a one-time expenditure. So we take a look at those one-time expenditures—um and if there's some increase in operations that we say, "Well, you know, do we—can we trim this a little bit or do—" it's not an easy task. I don't disagree, but I think there's a way to get it down. And 10—10's a okay number. Maybe 12. I think 21's a little more than we should bite. **[02:18:45] Charles Cadenhead:** Um, but I don't want to make stupid decisions either. And my thought was, you know, the staff knows this better than we do. We can give guidance and I can look line by line and say, "What about this? What about this? What about if we have five—five people doing it?" All we're going to do is inundate the staff with—what about this and what about that questions, right? And so my thinking was they're smart people and you know what—what can we do? What what would you suggest we could do to bring this down to something more palatable? **[02:19:30] Nicole Miller:** So, that would be my suggestion to be looking at the goals because we don't know um which goals you want us to slow down on. And we can, and I know I—I know it's—it's long, but I don't think it would take that long as a group of staff if we went by goals and we could kind of blurt out what we've included in our budgets working on this goal. And then just so you know, and they say, "No, let's not do that this year." Right? I mean, a lot of it's contract services to be honest with you. **[02:20:15] Charles Cadenhead:** We're right, you know—so—pull it up. **[02:20:30] Nicole Miller:** Okay. It's—It's on the screen. How do I get it up there? I—That's a good question. I'm going to ask for a point of privilege for a restroom and uh water refill. Five minutes. Okay. While you guys are figuring that out, just—shows—whatever. Get a hold of yourself. Oh, I want water. I will. We have to close. Does this thing do something? Everyone was thinking—maybe the the playground conversation I think is more for the parks. Yeah. the council meeting of like—what do we want to prioritize with that money is probably—but that's a good point that—like again—that's not going to be something that's going to really change the budget or the levy amount or how much debt we're acrewing in the short term potentially in the future because it's more parks. Okay. Okay. So the first one I just—the develop—the master plans including community engagement for the 77 acres and the existing 180 acres. I'll say um for um the community engagement for the 77 acres. I did get a price from that national community survey. We've talked a lot about doing statistically sound survey when we get to the point of having some—something to ask the community about. And so that is that um since I'm not there, I don't have the exact number, but it's like 20—between 20 and 30,000. Okay. So if you wanted to slow down and say, "Let's slow down on this process and not think about doing a survey," we can push that away. **[02:22:45] Charles Cadenhead:** But also—go ahead—to clarify. Yeah. A statistically significant survey for the 180, not for the ball fields. **[02:23:00] Nicole Miller:** No, for the ball fields. **[02:23:15] Charles Cadenhead:** Okay. But it's—it's—it's a whole survey to get um a statistically sound survey that talks about 10 facets of livability. So you get a whole bunch of other information and then we would customize questions specific to the 77. **[02:23:45] Nicole Miller:** So—multitasking, correct? But I know that um in community development's um budget, they have a lot of stuff for u contract services for planning um for this. And I have to have Jason help me for what about approximately for the 77 acres and the 180 that we should expect for next year. **[02:24:15] Staff (Jason):** Right. So we have budgeted 60,000 for the ball fields and that's going through the entire planning process in 2026. Um, we had we've talked to a couple people if we want to do the full financial study, which is going to be important in terms of what type of revenue you can generate and what do you want to replace and we're going to talk about this more in September, but a lot of the associations are talking about artificial turf and these sorts of things. That group will come in. It costs about $50,000, but they'll put together a full plan study, uh, financial feasibility, and get it ready for referendum if you do want to bring it to a referendum. Also, community engagement. So, that's budgeted right now. So, the question is just, do you want to stay on track for that? Because I think the next referendum is 2026 and if we miss that one, it's 2028, I believe. **[02:25:30] Charles Cadenhead:** Right. And then what about the 180 acres? **[02:25:45] Staff (Jason):** Well, that one's going forward. That one is a lot less. That's just 30,000 for appraisals and all the pre-development to get that ready. Um, as you know, we budgeted some this year, but we have a grant to cover half of it. **[02:26:00] Charles Cadenhead:** So, okay, that's—that's the ULI. Yes. Component. All right. Um, uh, number two, I don't think we really had any specific items, but—number three, the comprehensive financial strategy and the multiple long-term goals. That is our next item on the agenda, but Clarissa—can—maybe you might as well just speak to that now if it's okay. Yep. **[02:26:45] Clarissa Hadler:** Um, and council member Draguch had pointed out, I had kind of forgotten that was in my budget this year. So, I budgeted 50 to be safe, but in um discussions with consultants um and staff, we think that we can do that internally and get it down to closer to 10. Okay. **[02:27:00] Nicole Miller:** Okay. Number four, um the future Musa. Well, we all know that we're embarking on a three-year um program starting right now where we're going to need contract services to help us get us ready for the comprehensive plan. So, Jason, do you have kind of a ballpark on what you—total? **[02:27:30] Staff (Jason):** It's about 125. I've talked to a couple other cities. They're around that, too. So, we can't just tell the Met Council to go take a hike. **[02:27:45] Charles Cadenhead:** I'm joking. **[02:28:00] Matt Hirn:** For for the whole three-year process, 125, 125, 150. But right now, we're at 125. But what I'm hearing from other cities is around 150 max. **[02:28:15] Nicole Miller:** Okay. Um, communications, we don't have anything specific to that of develop old fire station site. Can you talk about I mean, we're doing well. We've—we've received u proposals today. Today was the deadline. We're going through them. So, we're moving forward. Um one of the things we talked about is if there's any kind of business um incentive going through that process. So, hopefully we'll close in February just in case it gets dragged out a little bit with environmentals and business subsidy. There's no real expenses in the 2026 budget relative to that. Though, there minor. We budgeted for environmental and we received a grant for the full environmental costs and then um just we should have everything done by this year in terms of—we do need to get an appraisal but nothing in the 2026 budget shown tonight was—hopefully it'll be done by 2026. Um Chief for number seven did you have anything planned for this? **[02:29:45] Dustin Kalis:** And in 2026 budget, we had a GIS response or location study for a potential cell station. That was $13,000. We could definitely defer that as long as we feel like we need to and we could start having conversations. I don't think um you know, if you look at available land on the south end of town of where you could pin a new station, the hypothetical station, there's really only a handful that truly make sense just by looking at a map. I don't know if uh you know necessarily the study is going to tell us a whole lot other difference in that other than give us the actual data to say this is what response times look like this is what things look like. I think that's definitely a cost we could defer or look at. **[02:30:30] Nicole Miller:** Do you remember like—about how much that was? **[02:30:45] Dustin Kalis:** That was 13,000. Okay. Okay. **[02:31:00] Nicole Miller:** All right. Number eight. So—that's—um kind of the next item as well. Um, one of your goals was to assess, analyze and assess water, sewer, and street light fees. So, the street light fees internally we've started working on. Um, as staff has more time, we'll pick that back up. It's not anytime soon, but um been collecting data from other cities how they do it, so forth. But, um, for the other studies, um, we did have, um, Clarissa has worked a lot with Nate, our engineer, about this. So I guess um if you want to add anything else—similar to the last discussion. **[02:31:45] Clarissa Hadler:** So we had initially tentatively budgeted $50,000 as we were pulling together data and um we would decrease that to 25,000 that would be split between water the water and sewer funds. So would not affect the levy by the way. I'm sorry that that would not affect the levy because it's coming out of the water and sewer funds. **[02:32:15] Charles Cadenhead:** Got it. **[02:32:30] Nicole Miller:** All right, I'm going to need some help on this next one. Um, this—well the staffing appropriate for desired service levels. Um, so that's clearly where we're coming from with our captain asks. Yeah. Um and then um uh in the admin budget and again—the email that I sent you all about looking at the public works wages and market adjustments as well as looking at the entire staff as well. So I did uh I think I put in there about $30,000. Now we're getting quotes from um consultants to do that and they're coming in a lot less. Um, we're not looking at throwing away the study that was done by Baker Tilly, but kind of—uh as revamping back in the day. **[02:33:45] Charles Cadenhead:** I don't know that they were very helpful. What was that? I'm just I'm jabbing council member reach out to them for a little refresh and I have not heard back. Okay. I don't know. Are they still in that line of business? Maybe council member—maybe a refund. Do you do you know do they still do the class and compensation? **[02:34:15] Nick Kragness:** My—my knowledge they do they got out of the executive search I know recently but I I—they're—um paying class up—it's actually headed up out of Texas. Um I can touch base with someone there if you need a hand. **[02:34:45] Nicole Miller:** Well so I did reach out twice to see if we could work with them for a little customer service—a little refresh of it. Um but I haven't heard back. So, but otherwise we've been uh researching and having meetings with other companies that do it and it's so far they're coming in a lot less than that 30,000 right to work with what we have now um instead of just redoing it all. So that's—so that's that—do we—have—we didn't say anything about number 10 on the slides? **[02:35:30] Clarissa Hadler:** No, I don't think so. **[02:35:45] Nicole Miller:** number 11. Um, yeah, I guess. **[02:36:00] Staff (Jason):** Thank you. Start development process for 180 acre parcel that we already talked about that improve GIS mapping. You know, it's part of switching to Bolton and Mink. This year, we um are getting GIS. Um, but I—staff will have to help me if there's any other additional costs that they had in their budget for something additional with GIS. **[02:36:15] Clarissa Hadler:** Do you guys—that was part part of the whack and sack um fee study was going to be having them review sort of some of the fixed asset stuff. So there might be a little bit but that would be related to that other Okay. **[02:36:45] Adam Swanepoel:** We did have a 4 thou—or don't quote me—$4,000 for the beehive asset for parks layer that does incorporate um GIS as far as assets management and work orders. **[02:37:00] Nicole Miller:** Yep. Okay. Explore and develop plan for future of old city hall. I don't believe there's anything in this budget that's—uh you know we're going to have a workshop this year still about that in October I believe it is. So I didn't see anything in the budget for that. and then adopt the CIP to include deferred maintenance on city buildings and Clarissa talked about that a lot with our buildings. **[02:37:30] Charles Cadenhead:** So, hopefully that was a little helpful. Do you have any other questions? **[02:37:45] Nick Dragisich:** I guess—someone to say something. No, go ahead. I mean I guess my first thought after hearing that is, you know, I wish I would have wrote all those numbers down that we said because the total is probably under $500,000. So maybe the question is, you know, which of these do we need to focus on? Well, okay, if we're spending $500,000 of 12 million on these goals, well, what about the other 11.5 million? Like, maybe that is actually what it needs to be focused on for where we're looking to cut. I mean, if this was 500,000—and I—I think I'm being conserved on that. I don't think the numbers that you gave as we were going through these was even totaling $500,000. Where's the $2 million increase? Where's the other million and a half coming from of increase from 2025 to 2026? **[02:38:45] Clarissa Hadler:** 600,000 roughly for personnel. I mean actually—you try to—remember where I had—I had like three three different computers going. Was it in your memo or—it's page five of my memo has a table with the personnel changes. So, if you if you wanted to refer to your packets—in my memo on page five, there's—a way down. Okay. The page number not coming up down at the bottom. That's bizarre. There you are. So changes in the expense categories. So you've got over—uh just over 600,000 in personnel. So that includes that 3% cola step increases and the additional staff. So that's a large—and I wouldn't be able to break it out as far as you know what's what. I don't remember. **[02:39:45] Dustin Kalis:** Do you know off the top of your head, Dustin, how much your captains were for the first year? Um, I don't know the number off the top of my head, but the range is 90 to 121. So, I don't know what that equates to with when we add in benefits. I mean, and and that's for the total for the year. If I had to guess, roughly a third, it goes—it goes—from 687—uh for this year to 901 next year. So roughly 11—134,000—um for half a year, right? **[02:40:30] Clarissa Hadler:** Yeah, because they're six months. Yep. **[02:40:45] Dustin Kalis:** Right. U—so materials and supplies—jumped up—I so part of that's it—IT—so we've got computer replacements—so we could certainly look at that but that's a 23,000 charges and services—a lot of contract services in there—so—all of our consultants—so a lot of these studies that we were talking about come right out of there so that $350,000 change most of it is some of these—this—goal. **[02:41:15] Matt Hirn:** And I think I mean just like when you guys were going through the goals there was at least the ones I caught 53,000 of it where just during that discussion you said yep we can cut that immediately. **[02:41:30] Clarissa Hadler:** Y okay so there's 53 and then um contingency we we never use this. I I literally just use it as a often a balancing thing. Um one other thing we need to I need to work into the long-term plan. some of the things like not budgeting as high for for interest and some of the contingency. We need to make sure that we maintain that um general fund policy. So that 50 60 50 to 60% we're well over that right now but in the future we just need to kind of maintain here. **[02:42:15] Charles Cadenhead:** Yes. Uh council method—out we can get that 12%—I mean 21% down—and still accomplish some of these things and maybe for some of these one-time expenditures that we we think we really need would benefit for us. Take it from fund balance spend. We have 12 million in general fund balance. If we were to take 500,000 from there for some of these one-time expenditures, um we could reduce that impact considerably along with some of the other changes we've talked about and still get those things done. Even if we had—even if we had take a million, we're talking about 8% of $12 million. It's it's not a huge thing, but it will allow us to get the necessary things done and not raise taxes 21%. We we could use some cash funds that we have. Um sometimes that—uh, you—would know better than me how that affects your—okay—your rating, right? Okay. Well, you know, we have—we have more in our—we have more than a years of expenditures in our general fund cash. So, we have very very well funded. I know that—I—and it's been over a year since I read the Moody's comment, but they comment on our level of cash. Um, but I think I don't know that that would necessarily drag us down a lower rating. It's because there's a lot of other factors way into it. **[02:43:45] Matt Hirn:** Yeah. I I don't think that's—I I understand that—that could be a solution for this year, but I think it puts us in the same situation for next year. I think this goes back to—I mean, you even said it. We're maintaining what we spent last year and then we're going to add to that. And that's what happens every single year. If we add, we don't take away. **[02:44:05] Nick Dragisich:** Madam—one-time expenditures, not ongoing. **[02:44:15] Matt Hirn:** We didn't decrease our expenses at all. So, we're going to be in the same situation next year. **[02:44:30] Nick Dragisich:** Well, you—No, he's saying so that your—like your contract services that you're paying. **[02:44:45] Matt Hirn:** Our budget for this year is 12 million if it passes, but it's still adding in—the contract services are added into that. **[02:45:00] Nick Dragisich:** Those are the onetime expenses. **[02:45:15] Matt Hirn:** The—one-time contract, a one-time contract, not the ongoing contract. **[02:45:30] Nick Dragisich:** one time our financial plan, long-range financial plan. Um, maybe, you know, some of the things we talk about doing—like the survey. Um, another one would be—what else we have in there? Um, oh, the compensation plan. Those are kind of one-time things that we—maybe do every three to five years and we would pay for those with fund balance to reduce the levy amount. **[02:46:00] Matt Hirn:** But that doesn't change our budget for this year. **[02:46:15] Nick Dragisich:** It does. **[02:46:30] Charles Cadenhead:** And the budget—Yes, it does. Yes, it does. **[02:46:45] Clarissa Hadler:** It doesn't change your budget. It change the source of revenue. So, we're still budgeting to spend that much money, right? **[02:47:00] Charles Cadenhead:** But you're not—you're not you don't have to put it on a levy. **[02:47:15] Clarissa Hadler:** You're both—okay. You're both right. Yeah. **[02:47:30] Nick Dragisich:** The expenses are still happening. Yeah. **[02:47:45] Clarissa Hadler:** But it wouldn't show on—on—the P&L sheet. It wouldn't show as we're spending a total of $12 million. It would be a revenue—It would be a revenue—from—from your fund—to put in—that would balance out the expenditure. So then your total levy need would be less. It's a very good use of fund balance because you're doing one time it for things that are not ongoing for things that come up. **[02:48:15] Matt Hirn:** Yeah, I think—the comp—plan stuff is a prime example for that because no one—I'm not going to—continue—that sentence. **[02:48:30] Nick Kragness:** It is a great way to use it for something that is required of us or the services for—potentially the ball fields. I think that'd be another thing because—that's a—that's a—generational act—like that—is a—going to last far longer. **[02:48:45] Charles Cadenhead:** part of your—act. To me, that's something where number one, that fund balance—is—it's not just healthy, it's beyond healthy. It's like whole foods healthy. **[02:49:00] Nick Dragisich:** I like that idea. **[02:49:15] Charles Cadenhead:** And—and again, you already discussed that multiple of these contracts might end up being less. I do not want to ever use fund balance for ongoing costs—because that is a—terrible idea. **[02:49:30] Nick Dragisich:** Terrible. **[02:49:45] Charles Cadenhead:** But for these—one—and only—because it is so healthy—for some of these one-time costs that are not ongoing, I am—I am—fine—with that. study for the 180 180 acres, some of those onetime things that have long-term implications for us, right? Getting that 180 acres developed would bring big returns for us in terms of amount of taxes. It'll more than pay for itself. **[02:50:15] Nick Dragisich:** Yeah. **[02:50:30] Clarissa Hadler:** And so—if again—I—I—would think that, you know, cler would talk with—with our bond people and say we don't want to do something stupid either. um, Tammy, what—could we—could we take 500,000 out of there and not take a ding in our credit rating? **[02:50:45] Charles Cadenhead:** I mean, we need to be careful about that. But if—again, it's part of how do you balance it all out in a way that makes sense and gets us where we need to be um and keeps the increase in taxes a little bit less than what we're talking about. **[02:51:15] Matt Hirn:** Okay. And just to make sure I'm understanding this, so the example you're give—one example—of one of the one time—comp plan. So in 100—was it 115,000 125 125,000 if we pay for that with the—general fund balance—the general—with—with—the bank account—the bank account—it still is going to show our budget as an expense under administration and—so when we come to—under planning and zoning or comp community development I mean okay and it's going to show there under that department and then when we get to setting the budget for 2027. It's going to show that there was this expense there and that this much was spent by that department. **[02:52:15] Charles Cadenhead:** Yeah. **[02:52:30] Matt Hirn:** And I—I—can't—I—other than the—the—the mayor and city council's department going down this year, I—they don't go down. **[02:52:45] Charles Cadenhead:** But—Der—would—he wouldn't include it again next year in his budget because it's not ongoing expense. It's a one time. **[02:53:00] Matt Hirn:** I mean, technically, we're talking there's been more ongoing—there's been the single expenses every year that we've done this. **[02:53:15] Charles Cadenhead:** But it's never gone down the next year as a result of that. **[02:53:30] Nick Dragisich:** The comp—plan, if if we do the comp plan and it's $125,000, we get to 2027, he's not going to need the comp—plan. So $125,000 will not show up in 2027. Other—granted, his other expenses may go up, but the 12—that's my concern is usually when there's a certain amount budgeted, you find a way to spend that much again the next year because we spent that much the year before. And—that's—I mean, when you look at the budget—like—that's—what's happened. We don't see numbers go down ever. They keep going up. **[02:54:15] Charles Cadenhead:** I mean—I could see—I—I—I think of it as a—you are correct—and I see it happen a lot especially in—in—my job where the difference is is someone's job paid with a grant or is it paid with state funds? And that's a very hard balance because there are certain things where there's expectation of this money is going to continue—all way—is paid with a temporary grant and then we run into issues which is why I—I hate using grants for ongoing cost. That's an ongoing cost. But in this case—and to clarify—when—that time does come are—are—do we pay upfront for all three years and so it is only in this year or is it going to be like 40,000 a year for three years? **[02:54:45] Clarissa Hadler:** We could be paying a little bit this year, next year and then based on percentage of completion. **[02:55:00] Nick Dragisich:** Right. So, for this example, it—it technically is not a single, but it—it's a three-year thing, but the survey is another one where it's a one-time thing. There will not be, hey, let's do a repeat of it every year. Like, that's not happening. I don't—I don't think that Nicole and Clarissa are going to say, "Well, you spent a million dollars last year. Where did I spend a million 300,000 this year?" because, you know, the 3%. They go through line by line when they're doing this and say, "Do you really need that? What's the purpose of it?" Um, you know, I don't know any cities that just say, "Well, we spent." The biggest problem I remember seeing is there be budget and we get to the end of the year and department doesn't want to spend that budget done because they're afraid they won't get the same amount next year. My view is always I don't care what you got last year. You have—need to justify what you need next year to me and to the city council because that's the way the world should work. Yet—the money you need to operate your department and that'll vary. year to year. Often times you'll see budgets will be less because there'll be a big capital item. **[02:56:15] Clarissa Hadler:** You know, the fire truck, the chief's going to have—what, a million half dollars in—in—in—a firetr. Well, the following year he's not going to have that million and a half in his budget. It's going to come down. **[02:56:30] Nick Dragisich:** You'd hope so. **[02:56:45] Clarissa Hadler:** And I think—psychologically—that's hard to do though. I I—I don't—think so—at all. The thing that will be in the budget next year is—when you hire somebody and you start running that service—that—will—reoccur, right? That's an ongoing expense. So, I'm—I'm—not—a—I'm—If that's the solution—for getting it down to 10%. Great. **[02:57:15] Matt Hirn:** I'd hate for—that to be the only avenue taken versus—all—these other discussions we've had of—really looking through. **[02:57:30] Nick Dragisich:** It—won't—be—the only—It—won't be the only avenue. It's just another avenue that allows us to get some of these one-time things that we should do logically done without increasing the levy to accomplish them. And if we can get there without it, then we should do that first. **[02:57:45] Clarissa Hadler:** Yeah. if we can, but I'm thinking that's going to be real difficult. **[02:58:00] Matt Hirn:** Well, did you see any of the strategic goals that we identified in February—that you wanted to push back? because I didn't—I didn't find—any. **[02:58:15] Clarissa Hadler:** But I—I mean—my point again—is—as they were going through those, that wasn't that much of the—the budget. It was a very minimal amount. **[02:58:30] Nick Dragisich:** But—but a lot of those were one-time costs in there for studies. **[02:58:45] Matt Hirn:** Yeah. **[02:59:00] Nick Dragisich:** And—things like that, right? **[02:59:15] Matt Hirn:** Yeah. And—some of those things you need to do—to—carry on the business of your city, making sure that your employees are taken care of appropriately—so—that they—don't—abscond off to—some—city that's going to, you know, hope that the grass is greener on the other side of the fence. **[02:59:30] Nick Dragisich:** Well, I mean, like, if you if we go back to them, I think there's only a few of them that we truly can actually say—we can't go—for—the—the—Met Council one. We're kind of—we're not—can't do anything there. not—going to—do—it. I—I—mean—obviously—the—number one, the first one on there—is one—that can—be—adjusted there. The two were brought up—right away. The—from the financial the 40,000 decrease—from—chief—with—the—13,000. I can't remember the specific item—that—it—was, but— **[03:00:30] Dustin Kalis:** GPS location stud. **[03:00:45] Nick Dragisich:** And so—there—was—maybe—$75,000 of items on there that— **[03:01:00] Clarissa Hadler:** How much was it for—item number one—that you were saying—we're going to be spending for the the plan for the ball fields and the 177 acres? **[03:01:15] Nicole Miller:** That next year's budgeted about 90,000. **[03:01:30] Matt Hirn:** I mean maybe that's—it. I mean, I don't know where else to—the other thing I'd point out that—things like in the comp—plan—where we have a—utility component, we could take some from a utility fund balance, a proportion of the comp—plan from those funds. So, it's a matter of—just—being smart—because—we're—we're—going to be protecting—the future of our—parks—and—our—utilities—and—our—transportation. And so, we have funds that are self-sustaining—like water, sewer, storm water. um, we can take a portion of those costs from those fund balance, those cash balances in those funds. And so—it's stepping back—and—saying, "Can we be as smart as we can be to accomplish these goals and and for these one-time take them from some of our available cash and that we can, you know, drive that levy we need down as far as we can and cut out some things we just don't need." It's it's a combination of all those, but it occurred to me, you know, that we did have some cash on hand that we could use to to do it. **[03:02:15] Nick Dragisich:** I would only support cash for one-time expenditures, right? And again, I still go back to—the levies for the capital plant, the—the—parks. I—let's—cut—those down. Let's decrease the CIP—so—we can still achieve the goal of—in 20 years or 30 years. **[03:02:45] Matt Hirn:** 20 years getting to that $30 million debt because—we're—going from both directions, not just increasing revenue. **[03:03:00] Clarissa Hadler:** So, one—one asterisk I I—because Clariss mentioned this—too. It—part—of—that—park—levy—is—to build it up—to—pay for things—that—we—already have—that—are—depreciating—like the playgrounds. **[03:03:15] Matt Hirn:** Playgrounds are one example, but it's the—it's—the—entire—system. And—and we're going to have a conversation next—in September. I think many of us are in agreement that we're going to need to have a a very quality conversation—about—future cost, but it's it's not just for—new—future—items. It's also—for the—entire—system—that already exists—and we—are—playing—catch-up—with it because—de—I—mean—the—reason I—support it—is—because—development—is—slowing down—and we—had—to—have—a—new—source—of revenue—to make up for—development—slowing down. Otherwise, we wouldn't have a parks levy, right? We wouldn't have a parks fund to begin with without—that levy. There's going to be a time when development—is not adding—anything—to it—and—then—we are—in a—very bad—situation. **[03:04:15] Nick Dragisich:** Well, not if—we—put—money—into the levy, okay, or the fund. **[03:04:30] Charles Cadenhead:** All right. So, we have we have a a couple things we've discussed. Five—five year roads into seven. What does that look like? Uh are there a couple one-time things that we could use cash for in a very limited and specific way? Um, are there other limited—not limit—are there other very specific and purposeful ways to help wholeness? **[03:04:45] Clarissa Hadler:** It's a 19% increase. It's not a 21% increase. **[03:05:00] Nick Dragisich:** I think—it—was 21—for—the—rate. **[03:05:15] Clarissa Hadler:** You don't—use the—rate. **[03:05:30] Nick Dragisich:** The—rate—the—rate—the rate is 18%. **[03:05:45] Clarissa Hadler:** But the—rate—itself is—is—meaningless—because—it's based upon—your— **[03:06:00] Nick Dragisich:** I—was talking—about—just—the—total—dollar—spent. **[03:06:15] Clarissa Hadler:** Yes. The actual dollar spent is 19—for—you heard me say 21—21—for—the—impact—to—a—homeowner. **[03:06:30] Nick Dragisich:** Oh, I'm talking about just the total dollar spent. **[03:06:45] Charles Cadenhead:** All right. Well, we're—talking. **[03:07:00] Clarissa Hadler:** Yeah. It's 19%—for—the typical—homeowner. So, what are the other ways we can reduce that? Okay—great. **[03:07:15] Nicole Miller:** Okay. Do you need—to—talk—about—um—the—strategic financial management plan—anymore? Do—you—have any—questions—about—any—of those—documents? We've kind of talked—about—them—all—already, the—different—studies, right? **[03:07:30] Charles Cadenhead:** Okay, we're just—a—little—beyond our schedule in the agenda. What—was—the—last— **[03:07:45] Nicole Miller:** let's—ask them if they want to talk any more about the—strategic planning, the—fee studies, or the the other— **[03:08:00] Charles Cadenhead:** take a look at paying the one-time costs—with—my question. Are we—on board—with—what—I—described and I can— **[03:08:15] Clarissa Hadler:** Yeah. **[03:08:30] Nick Dragisich:** Yes. **[03:08:45] Matt Hirn:** Awesome. Yep. **[03:09:00] Charles Cadenhead:** All right, last item on the agenda for this evening. City center wall art. **[03:09:15] Clarissa Hadler:** Here we go. So, we have the city center and there's blank walls. And so, um, there are blank walls with some lights to highlight art work or something that's not there. So, um, I I just threw this up as a discussion item because I'm curious—what's our plan. Um, and so I had worked with um, architect from Leo Dailyaly as well as an art lady to kind of talk about the common areas and what could be—and just to kind of throw it out there to council to give you some ideas and to see just—any—input—on—where we—go—from here. **[03:10:00] Nick Kragness:** I love—that—this—is—a topic—here is necessary. Uh—my first—initial—thoughts—um, historical society stuff I find to be great. um—my personal perspective is I think most residents when they come in here would think to see that type of stuff. The history of Lake Elmo—the prime examples of gathering spaces—of current parks—of history—of prior individuals. So I think the historical—the opportunities that exist through historical society and finding those enlarging the framing fantastic. Um—I especially—given—the cost—some—of—the—the—paintings—not—my cup of tea. um—especially—given—the—photos—and blowing those up would be vastly cheaper. I—I—I've—maybe—there's—an opportunity—for—yearly—artwork from schools. I don't know what that would consist of, but you know, here's this year's winners for—uh paintings of the year for the fifth graders who are graduating at—at our elementary in this in the district. **[03:11:00] Charles Cadenhead:** That type—of—thing. **[03:11:15] Nick Kragness:** Um—I—I—I—I think there are—many—I don't want to—my personal—thing—is not to have too much where it's everywhere—but there's obviously—there's—it's lacking. So I I—I would—go down—the—historical—route—myself—and—I think this—would—be—a—prime example—of some of those budgeted for 25. **[03:11:45] Matt Hirn:** I—I think this is a prime example to use from the fund. It's a one-time thing for the people's hall within the people's building. I I—I don't— **[03:12:00] Clarissa Hadler:** But—you—Oh, wait. **[03:12:15] Matt Hirn:** This—is—already—in the—25—budget. **[03:12:30] Clarissa Hadler:** So, it's—already there. It—already—exists. **[03:12:45] Nicole Miller:** No, we have—it tentatively scheduled in the—26—budget. Oh yeah. As—a—cap item for 25,000. **[03:13:00] Charles Cadenhead:** Okay. Um, I like—the idea—of—some local artists—but—I—I—thought I saw—something where—one—of—the—walls—you could—like—the—Da Vinci—artfest—to get some winners—or—give them an opportunity to—Yeah. **[03:13:15] Clarissa Hadler:** So, yes, we did um— **[03:13:30] Charles Cadenhead:** Did—I—see something in there? **[03:13:45] Clarissa Hadler:** Yep. So, it's—actually—the lobby mezzanine—that wall. That's where we decided we could get—well not decide—an option of—just—um cable and then you can change—out—like it wouldn't be sculptures—I think—it would be—right—flat art—um and so—that—is—can—be—a direction—do—do—you want—us to—look—at—what a community art program would be—but it was just for that wall upstairs—yeah. **[03:14:15] Charles Cadenhead:** I mean—to—me—like—would—be—an opportunity that everyone's artwork is due by national night out and it's all post on national night out and people come and vote and that painting then is hung up there for the next year. **[03:14:30] Nick Dragisich:** I think—we should—have a—statue—of—the—mayor, you know, chiseled and granite for the representative lobby. **[03:14:45] Charles Cadenhead:** The first mayor. **[03:15:00] Nick Dragisich:** No, the current mayor. It wouldn't take up that much. **[03:15:15] Matt Hirn:** Do we—do—the—thinking—statue? **[03:15:30] Charles Cadenhead:** Hey, that sounded—like—a—cut. um, yeah, I like the idea of the historical stuff and I like the idea of—using local artists. I know there are quite a few artists in the area that sometimes it's a photo, sometimes it's a painting that they're really pretty cool. Uh—we have an employee—that does some pretty cool art, right? **[03:15:45] Clarissa Hadler:** So, we might have some photographers—as well. **[03:16:00] Charles Cadenhead:** Yeah, we do. I—I don't know who they are. Over—that way—somewhere. I haven't—talked—to this—set—at this point. All right. Maybe they retired from that. **[03:16:15] Clarissa Hadler:** I—I—I—I—mean—I—I—don't—I—I—don't—think we—got—to—spend the—the—big—money on—the art—that—may—come—and—go—as—you—know—that you're going to see someplace else necessarily. **[03:16:30] Nick Dragisich:** um agreed. I don't think we should—maybe it's the backdrop of the conversation tonight—but—uh, you know, if we're looking at items for the 2026 CIP that could be pushed back a year, in my mind, this is it. Even though I think it's a great idea, and I think—if we're going to go forward with it—I I think there's a lot of great opportunities to get art in here from the community at no cost. So I I—I—I—I—would—push for the the historical things—is—to have some—on—the—on the—walls—u for people when they come in. **[03:16:45] Nicole Miller:** So—one—one—caveat—for the historical—the real historical society photos. You can imagine the quality. Um—so—they can't be blown up too big. And so—there—there—was—some—displays—on what it would be like. And so, um, we picture the walls in here would be where we would display the historical society pictures. Um, but—what—I'm—hearing—you say is—on the other areas—perhaps you're not into the artwork stuff—but—like real—pictures—of Lake Elmo. It—doesn't—have to be like old. **[03:17:15] Clarissa Hadler:** Could be of a—just—some—sort—of—abstract. **[03:17:30] Nicole Miller:** Could be a sunset of Lake Elmo, right? **[03:17:45] Charles Cadenhead:** Could be—uh—Great—Acres sledding during the winter—with kids smiling. **[03:18:00] Nicole Miller:** um—and—then—obviously—a community art um program. I I don't know that I I haven't researched the programs, but I wasn't envisioning—that that—would be—on—every—wall. **[03:18:15] Nick Dragisich:** Yeah. Right. Right. As—like—a designate—area. I don't know how others feel—but— **[03:18:30] Matt Hirn:** Yeah. **[03:18:45] Charles Cadenhead:** It—doesn't—have—to—be—on—every—wall. **[03:19:00] Nick Dragisich:** No. **[03:19:15] Matt Hirn:** Agreed. Less can be more. I agree. **[03:19:30] Nicole Miller:** Okay. You agree with moving—forward—keeping—it—in—the—plan—for—this—next—year? **[03:19:45] Charles Cadenhead:** Yes. **[03:20:00] Clarissa Hadler:** Yeah. Let me just add—that into—the one—time—as far as I'm—concerned—because those—will be—there—for a long—time. It's—it's history of Lake Elmo. Um, I was a little—when that came around the first time—we discussed—that—I was a—little—surprised—that—that—wasn't—in—the—or—that—that—got—spent—out—of the—budget—when the—building—was done because I I'm certain that was talked about—when—when the building stuff was coming up. So, that's disappointing. **[03:20:15] Clarissa Hadler:** And—prior—to—doing anything, um, bring back—real—costs—and—and—real—ideas—to you—obviously. **[03:20:30] Matt Hirn:** Sounds good. Sounds good. **[03:20:45] Charles Cadenhead:** All right. We—didn't—talk—about—the storm water fees, but let's—do—do—that—another—night. **[03:21:00] Matt Hirn:** Yeah, we're—we're not going to—talk—about—that tonight. **[03:21:15] Charles Cadenhead:** Council—it—was on the agenda. Yep. So, um, city—engineer—Nate—um provided a—memo—about it. **[03:21:30] Clarissa Hadler:** Oh, yeah. It is on there. So, under—the strategic—We've—been—here—long enough. Okay. Well, I think we—should stay—here—till midnight. **[03:21:45] Nicole Miller:** Okay, I have one more question since we're all here. um, for the 100th um, anniversary celebration, we're moving forward with all of your guys' help—securing vendors. So, we're doing—good on the—food trucks. Sounds like we got a ban—maybe. Yep. **[03:22:15] Clarissa Hadler:** And so, um, some ideas—that—have been—brought—up—to—to—add—potentially—um, inflatables—or any—sort—of—city swag. So, I just—wanted to—throw—that—out—there—to—see—how you—feel. **[03:22:30] Charles Cadenhead:** I know—we—have—the—$50,000—cap. So I— **[03:22:45] Nicole Miller:** So—how—do—you feel—about that? Ask businesses—would sponsor—that. Would they? I mean they—sponsored it—for—Can—you take—that? **[03:23:00] Clarissa Hadler:** National—Night—Out. I—can take that—on for—sure. I—think—it's—I—I—think you'd—just be—reaching—out—to—Connect—Lake—Elmo—and—having—them—send an email to everybody—that was—there for—National—Night—Out. I mean—that's—the—group—of businesses—and—I think they had—two—bouncy—houses—this—year—and you—give—them—the—opportunity to—insurance for that. I'm not—sure is that covered—up—there. You know—there's—a larger—you pay a—larger fee. **[03:23:15] Nicole Miller:** I did um—just reach out to insurance today and he's going to check—on it. although—I—don't—know, but I know—when we—because I remember one year we were looking at doing—that—and they—charge a—lot—higher fee—when—you're doing—it—when—they—like—as—a—public event. The fees a—lot— **[03:23:30] Clarissa Hadler:** I—that—might not—be the insurance part—of it, but I I've rented large—bouncy houses myself—and obviously—they're popular and there are multiple—cities that—do it—for events. I've—seen it before. I I—I—support it—as—long—as—it—it fits in the location—like—Yeah. just—I—think if people—come down—with families—and stuff—something to—give—the—the—kids to—bounce—around in—I—guess would is—I—thought would be—actually—I didn't think of it—somebody—else—I—was talking to them about it they said—oh—you're going—to have—bouncy houses—I'm—like—didn't—think—about that—that's a—great idea—and—you—oh—there's a—diversity of bouncy houses—there are ones that just—kids—you—can—just—see the kids are—standard—like this one's dumb and—there are other ones where they—love—so I—would definitely—recommend—not asking—us. We'll—let the the—businesses figure it out. **[03:23:45] Nicole Miller:** Did—you—said—you were looking—to—get—two? Did—I hear that? **[03:24:00] Clarissa Hadler:** I have a couple. Oh, I—I—don't—know what the—right number—is. Yeah. I—don't—have—Just—throwing—out—there. **[03:24:15] Nicole Miller:** And—then—the other—idea was—any—sort—of—city city swag—like—we don't really—have, you know, obviously—um, at Lake Elmo Night—Out, we had our—um compostable—bags, but that—was—paid for—by—a recycling—grant. **[03:24:30] Clarissa Hadler:** So, but—just—I don't know—if there's—any—t-shirt. Yeah. Anything. **[03:24:45] Charles Cadenhead:** Well, I—know that—some—people will be selling t-shirts—and stuff like—that. I don't know that the city—needs—to—bear—the—expense—of—I mean, we're already providing—the—the—dance—and—um, the area—location—and—and—the fireworks. So, I think—we—can—I—I—I—go to a—lot—of—conferences—and—I get—the swag—and then—it—ends—up in—some—drawer. **[03:25:00] Clarissa Hadler:** So, you—know, I guess that's—where—I'm—coming from. I think to defer—the—cost, you should—have a—dance—with—the mayor for $10. **[03:25:15] Charles Cadenhead:** You—put—you—get—a—ticket for—10 bucks, you get—to—dance—with—the—mayor. **[03:25:30] Clarissa Hadler:** My—wife—won't be there, so—you'll be at net zero. **[03:25:45] Charles Cadenhead:** They—say, "Can I run a—deficit?" Yeah. I'll—have to—pay them—not to—dance—with them. **[03:26:00] Nicole Miller:** Okay. So, not—to—not any—I—Yeah. I—can't—see—where—that's a—a—benefit—we're—already providing. I think—I—think we—do need—to get—some—uh—I don't know. We need—to get—some—signs—out—um—maybe—on—the—around—town—or something like—that. **[03:26:15] Clarissa Hadler:** But—yeah, we will—definitely—push our—communications. We just—wanted to—get—stuff—settled. I didn't want to—say—we're going to—have vendors—in a band and—then we don't. **[03:26:30] Charles Cadenhead:** Right. No, we—we've—got a—ban. We have—hard—numbers where we're at—for the—$50,000 budget. **[03:26:45] Nicole Miller:** I—actually—just—um, we're—still—waiting—on a—number—for a—stage—or confirmation of that. But we're—well—under that. **[03:27:00] Clarissa Hadler:** Well—under—tight—fit. **[03:27:15] Charles Cadenhead:** Tight—fit. Yeah. I—don't—know them. But I—was—just—wondering—I—mean—I—No, I'm good. All right. Going to adjourn tonight's meeting at 9:30 p.m. Thank you everybody. Good discussion. So the high school—