[0:53] Mayor: All right. Good evening and welcome everyone to this uh November 25th, 2025 Apple Valley City Council meeting. Welcome everyone. Uh as we get started this evening, if you have signed up to speak, when your name is called, we'd ask you to address to approach the podium and address the council. The very first item on our agenda is our pledge of allegiance. And this evening, we have a couple special guests to help us in the pledge, and that's Marcus and Liam, uh local cub and boy scouts. Would you guys like to come forward and help us with the pledge? He's the only one. [1:25] Mayor: All right. Well, we got one of you. We'll take that. Everybody, please rise and join us in the pledge. Whenever you are ready, please get us started. [1:38] Scouts/Audience: I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, for liberty and justice for all. [1:48] Mayor: Thank you. Our next item on the agenda is to approve the agenda. And Tom, do we have any changes this evening? [1:54] Tom Gillaspie (City Administrator): Good evening, Mr. Mayor, members of the council. Yes, we have one suggested revision to your agenda tonight. This would be on your consent agenda. Item 4H, which is a purchase order with Weber Recreational Design. We're recommending that that item be removed from tonight's agenda. It will come back to you at your next meeting. That would be item 4H on the consent agenda. [2:18] Mayor: All right. So, we'll uh look for a motion to approve the agenda with the removal of item 4H. Do we have a motion? [2:25] Council Member Grenall: So, moved. [2:27] Council Member Bergman: Second. [2:28] Mayor: Motion from council member Grenall, second from council member Bergman. All those in favor indicate by saying I. I. Opposed. The agenda carries. The next item on our agenda is the audience participation portion of our meeting. This is for items not on the agenda. I did not see anyone on the signup sheet. Is there anyone who would like to speak at this time? All right. Seeing none, we will move on to our consent agenda. These items are routine and will be enacted with a single motion unless a council member or a citizen request to pull an item. Council members, are there any items you would wish to pull? Members of the audience, any items to pull from consent. All right, seeing none, do we have a motion to approve the consent agenda? [3:07] Council Member Mander: So moved. [3:09] Council Member Bergman: Second. [3:12] Mayor: Motion from Council Member Mander, second from Council Member Bergman. All those in favor indicate by saying I. I. Opposed. That moves us onto our regular agenda and that brings us to 5A which is our introductions and oaths of office of office office of two police officers and I'd invite Chief Francis up to do the honors. [3:31] Chief Francis: Good evening, Mr. Mayor, members of the council. Uh proud to stand in front of you tonight and um introduce two of our newest members of our department and our community. Um, I'll start with Officer Christa Ericson here. Maybe a familiar face to uh to you. Uh, we'll get into that a little bit later here. So, um, Christa grew up in Lakeville. Um, she spent time between Minnesota and Montana through her, uh, through her early years. She has a bachelor's degree in criminal justice from Winona State University and a master's degree in police leadership from University of St. Thomas. She started her career back in 2001 with the Rose Mount Police Department and she was before uh some of you back in 2013 when she came to work for the Apple Valley Police Department. Um she spent from 2013 to 2020 here in uh in Apple Valley with Apple Valley PD. And um during that time she served as a patrol officer, retail crime liazison, school resource officer. Um and through her entire career she's been very active in the SRO world. um the through being an SRO and with Minnesota's um school resource officer association. Um she moved to Florida, something many of us would have liked to do right around the pandemic time um and um and managed a wellness center uh while she was down there. And in 2025, um she came back here to Minnesota. Um to her credit, she said, "I still have a lot more to give. I love the community of Apple Valley. I love this department. I want to come back and work here." and um we made a split-second decision that took about two seconds to say absolutely, let's get you back here um and get you on um and so we're happy to have her back here. And she's hit the ground running um after a short FTO process um outside of work. Um she likes CrossFit training, hiking, traveling, and spending time with family and friends. Um and I'll let her if you want to say who's here with you tonight. Maybe there's too many to mention, but if you want to Yeah, she's got a big group. a big group too many dimension here with her tonight. [5:24] Mayor: And chief, if any of those too many dimension would like to mill around, come up behind us and get good pictures this evening, you you can you're in charge at the moment. I think you can make them do whatever you want. [5:46] Chief Francis: Um, next we have Officer Royce Funvong. Um, he grew up another thing we would all like to do. grew up in Maui, Hawaii. Um, and so he received a bachelor's degree in criminal justice and human services at the University of Phoenix. Um, and prior to coming to Apple Valley PD, he worked as a trainer for Dakota County public assistance workers. Um, and in that capacity, he u trained new and current employees on public assistance programs, policies, state, and federal federal regulations. So, um, very well knowledged on um, county, state, and federal uh, programs. Um, outside of work, he likes to spend time with uh his wife and their two dogs. He also likes to fish and train jiu-jitsu. We got a very active jiu-jitsu group in our department that he uh uh fit right into well, and he also enjoys Mu Thai. Um, and I will let him introduce anyone with you tonight. [6:35] Officer Royce Funvong: Yeah, I have my wife Sherry, mother-in-law, and her boyfriend. [6:39] Chief Francis: Welcome. All right, with that, I'll welcome them to come over and take their um oath. And again, if anyone wants to come up and take a picture, feel free. [6:56] Mayor: Absolutely. [6:57] Chief Francis: Please raise your right hand. Please state your full name. [7:04] Officer Christa Ericson: Christa Ericson. [7:05] Officer Royce Funvong: Royce Funvong. [7:07] Chief Francis: And repeat after me. do solemnly swear [7:09] Officers: do solemnly swear [7:12] Chief Francis: that I will support the Constitution of the United States [7:15] Officers: that I will support the Constitution of the United States [7:19] Chief Francis: and of the State of Minnesota [7:21] Officers: and of State of Minnesota [7:23] Chief Francis: and faithfully discharge the duties [7:25] Officers: and faithfully discharge the duties [7:28] Chief Francis: of the office of police officer [7:30] Officers: of the office of police officer [7:32] Chief Francis: of the city of Apple Valley [7:34] Officers: of the city of Apple Valley [7:36] Chief Francis: in the county of Dakota [7:37] Officers: in the county of Dakota [7:38] Chief Francis: and State of Minnesota [7:40] Officers: and state of Minnesota [7:42] Chief Francis: to the best of my judgment and abilities. [7:45] Officers: to the best of my judgment and abilities. [7:48] Chief Francis: So help me God. [7:50] Officers: So help me God. [7:51] Chief Francis: Congratulations. [8:17] Chief Francis: All right. We will welcome their uh selected chosen ones to come up and uh pin their badges on. Uh yeah, you can go first. Yeah, Roy can go first here. Yay. Come on up. Look at that. Congratulations. So, we're thankful that they've come and joined our community and our family and our department. We want to thank them for coming um and taking a leap of faith and and working for Apple Valley PD. But also want to thank the council for your uh continuous support and um I guess encouragement as we uh continue to build our ranks up in our department. And we also want to thank everyone that came out to support these two. It takes um not just a family at work but a family at home to do that to to make sure u that the support is there. And so all these folks here who I'm going to ask to be excused very shortly to uh to go out and take a picture. We want to uh make sure we acknowledge and appreciate everyone that comes out and supports our staff and want to thank all our staff in the back row too for coming out and welcoming our new new department members. [9:12] Mayor: Thank you, Chief Officers. Welcome. Glad to have you here or have you back I guess as the case may be. And uh it's great to see the support in the back of the room. Every time we do this, right, we fill up the room and uh you feel that support and you have to feel it every day when you're out as well. So, uh I'll just say it cuz I say it every time we do this. We're exceptionally proud and I speak for all of us of our police department here and the work you do every day. And one, keep it up, but two, we couldn't be any luckier to have you. Go enjoy your time. Thank you. [9:59] Mayor: We'll ask if our folks can jump out. We'll we'll give everybody a couple minutes to uh make their way. But the lawyer got involved with her already stuff down over there. So she was SRO when my daughter was at Valley. [10:20] Council Member Bergman: Yeah. Yeah. [10:23] Mayor: No, I didn't place it when you first started talking. You said the girl used to be here in Florida. That's when I went back and I said, "Yep." Sure enough, she's fixing her badge. The deputy chief missed. Just going to let those doors shut so we keep some of the noise out there and we'll get started. All right. Thanks everybody. Our next item 5B on our regular agenda is to uh an action to consider an ordinance amendment to plan development number 290 zone 4 to exempt cannabis retailer from the special use setback buffer requirements set forth in city code and Carter. Why don't you take us away on this one? [11:33] Carter Schulze (City Planner): All right. Good evening, mayor and council. It's nice to see you all. Uh so what we have before you tonight is a text amendment request of PD290 zone 4 to exempt cannabis retailers from the prescribed buffers uh in section 155320. Uh the planning commission did hold uh their public hearing on November 5th uh with no public comments received and they did unanimously recommend denial of the request. Uh PD290 zone 4 is intended for limited business and community scale retail. Uh current uses uh in this zone include restaurants, retail shops, and personal services such as a hair salon. Uh for our cannabis uh regulations, these were adopted October 24th, 2024. Uh they regulate cannabis businesses, hemp businesses, and temporary cannabis events. Uh within this uh it also designates buffer requirements in which cannabis businesses cannot be located within 1,000 ft of schools and existing cannabis businesses and 500 ft from parks, daycarees, and residential treatment fac. As for the location of this PD, uh the entire PD is generally located on the northeast corner of Cedar Avenue and 150th Street. Uh, more specifically, zone 4 uh is located near the corner of Cedar Avenue and 147th Street in that cross-hatched area there. You also see a pin that denotes the proposed cannabis business location uh in connection to this amendment request. Uh so, the nature of this request, this property is located in PD290 zone 4, which allows retail uses including uh cannabis retailers. Uh the applicant currently operating his business, The Tobacco Shop, is seeking local zoning approval to have a cannabis retail operation at this location. Uh however, the parcel is 272 feet from a daycare and 826 ft from a school, which would make this location ineligible for a cannabis business registration. Uh so the applicant is requesting PD290 zone 4 to be exempt from the protected use buffer requirements uh to allow eligibility for a cannabis business uh registration. Uh so some amendment considerations if approved this exemption would apply to all properties and business four which would be the two multi-tenant retail buildings as well as the Applebee's restaurant. Uh so cannabis retailers would be exempt from the prohibited buffer distances within this specific zone. So as for actions tonight, uh staff is recommending denial as this amendment would conflict with the intent of section 155320. It would create inconsistencies with the zoning regulations and reduce protections for nearby sensitive uses while denial would maintain consistency with our adopted regulations. Uh once again, the planning commission did hold their uh public hearing, received no comments, and uh unanimously recommended denial of the request. So tonight, we have prepared two options for council's consideration. One being the draft ordinance that would amend PD290 zone 4 and the second being the draft resolution that would deny the amendment. Uh you will see on the screen both recommended motion language as well. Uh with that, I can stand for any questions. Uh the applicant is here tonight uh as well in attendance. So the council has any questions for them as well. [14:49] Mayor: All right, we'll start with any questions for Carter from council. Are there any do we have any questions for the applicant for council? Do we have a Do we have a motion from council? [15:15] Mike Malik: speak if I may. I'll make it make it brief. I open this business. [15:23] Mayor: Can you just for just for the record, can you identify yourself, please? [15:27] Mike Malik: Mike Malik, owner of the business uh in question. And kind of this is my kind of first uh into first business of this kind. I opened the store uh in May. start doors open in May and I had high hopes of that I'll be able to uh take advantage of the Minnesota's cannabis uh initiatives and it's kind of kind of came as a surprise to me that um there was it comes in some kind of a the zone restrictions I'm not technically technical savvy in how the zoning works and all that and kind of tobacco license was granted and my understanding was that I would be given some exemption of this sort and I I already have secured the cannabis retail license and all I'm requesting is if you could if you could be kind enough to give me some sort of exemption. So, it's a it's a very nice business area and I'm almost three th 300 feet away from the nearest um Jordan is one of the nearest u it says it's a Spanish uh immersion immersion academy and it's I even personally measured the distance about 300 ft away from that and that's even on the back side of it so I was not aware of it comes as a surprise to me this PD this is zone four so if you could uh please be kind to either amend the regulations or provide me some sort of exemption so I can continue on with my endeavor that I've started. So it's uh I would really appreciate it and by the way I did miss the planning commission meeting but totally by accident and if there's a chance I could go if there I could kind of a revisit uh the scenario with them because they have denied the request but I accidentally totally missed the missed the meeting I would have attended that meeting as well and uh although they denied the request but I would ask you to please override that or reconsider that and if need be I can even go back to planning commission and um kind of uh make my case uh in front of them, but it'll be a big detriment to me and even to the to the area to the business if if if this if this request is denied. So I'm all I'm asking for is either the formal approval of the of the text or some sort of exemption for me to continue. So I would really appreciate it. [17:55] Mayor: Thank you. I can address some of that. We went through a fairly lengthy process last year to set these up. And so the fact this comes as a surprise honestly surprises me. We spent close to nine months on this topic and setting out between planning commission and others and staff um and council hearings and informal meetings. So um those are the those are the the buffers that were set uh at the time. And um with that I think we will turn over to council to see if there is a motion to act one way or the other on the items in front of us or any further discussion after hearing the applicant. [18:32] Council Member Mander: I'd make a motion not to amend the existing uh PD 290-4. [18:41] Mayor: So that is the just for clarity that's the number two on the screen. Uh the motion is do not amend PD 294 to exempt the cannabis retailer from the buffer requirements and to adopt the resolution denying the draft zoning the draft ordinance amendment chapter 155 appendix F adding section A2 to 5C to exempt cannabis retailers in zone 4 of this plan development from the special use setback buffers in section 155 320. Is that correct? [19:11] Council Member Bergman: Second it. [19:12] Mayor: There was a motion to that effect from council member Mander and a second from council member Bergman. Council members, any further discussion? All those in favor of the motion indicate by saying I. I. I. And opposed. That does carry. Thank you for coming to speak to us tonight. Thank you. All right. That moves us on to item 5C, which is our 2026 city budget and property tax levy. And I don't know, kind of bittersweet, Ron, right? This will be your your your last one with us. [19:50] Ron Hedberg (Finance Director): Yeah, this is my last one. And I want to acknowledge that my wife and at least one of my daughters attended their very first city council meeting after doing these for 30ome years. Um, my wife Denise, uh, and my daughter Sydney. Welcome. This is Good evening, Mr. Mayor, members of the council. Uh, this evening we have the uh 2026 uh, Apple Valley budget and property tax levy adoption for uh, for this evening. And we don't have Carter. Did you break this? Oh, no. It worked the first 16 years. You'll be so this evening the truth and taxation meeting uh used to be called the public hearing. It's just a purpose of the meeting is to present the proposed budget to the public, receive public comment and adopt. Following that, consider adopting a budget and levy for the coming year. The purpose of this evening meeting is not to address market values of individual properties. That market value determination is part of the uh Dakota County spring process. The uh I put the county assessor's office. So, if anyone has a question of market value determination or property classification or homestead status, they would uh connect with the Dakota County Assessor's Office. They are located in Hastings. Their number is 651-438-42000. Uh the schedule for this evening, we'll talk about some of the changes since the prior year. We'll do an overview of the budget. We'll talk about some valuation increases with various property classes. talk about the valuation process and then of course this evening the invitation that everyone received in the mail, the statements of the estimated property taxes for the coming year. Talk about the tax impacts, the tax levy and what cost drivers are driving the tax levy increase. And then we always uh will uh include some comparison to other cities and comparable cities in Dakota County as well as the metro area. budget climate, the economic climate is I I would characterize it as unsettled. It uh doesn't seem to be uh heading in any clear direction at any one time. Interest rates have fallen but still remain unsettled. They'll bounce around on a weekly basis. It seems inflation has increased slightly over the past year. Currently, it's about 3% year-over-year from in September compared to last year. We were 2.6% 6% year-over-year through October of 24. Minnesota unemployment rate stands at 3.6%. The state budget uh is weakening since 2004 24. It currently it is experiencing surplus but unbalanced budget going forward. Currently the uh $3.7 billion surplus is projected at the state level for their 2425 bianium and which will shrink to a $456 million budget balance for the 2627 budget bian bianium that does include after taking out a budget surplus of $3.1 billion for reserves. We look even beyond that the state is showing a 2028 29 bianium structural imbalance of approximately $6 billion after you include inflation of approximately 2.2 billion. The net result of all that is likely no change for the city of Apple Valley in any aid. We currently do not receive any uh local government aid like many cities across the state do. Apple Valley is one of the cities that do not receive any local government aid. So on the local budget climate side of things, overall residential property values are rising three 3.71%. The median value home coincidentally is also increasing 3.7% to 371,350 for the coming year. Overall commercial property values and we'll look at this in a another few minutes is increasing overall 5.15% new commercial construction will account for 1.1% of that and then average appreciation in the existing commercial properties of 4.1%. Some of the changes included in the 2026 27 budget really the biggest impact really is the investment in facilities. We've got the 2025 parkbound issue which is part of the referendum, the voter approved referendum in 2023 authorizing up to 73.25 million uh to be issued over a number of years. We did issue 29.4 million in 2025 and the levy impact for the coming year for the the bonds for uh 2000 issued in 2025 is 2,158,000. We also at the same time issued uh as part of the 2025 bond issue, capital improvement bonds, facilities, capital improvement bonds. That plan also from 2023 authorized the issuance of up to 41 million. We did issue just over three million in 2025 and the levy impact for the coming year when Ted service come begins will be 29,500. the budget process. Each year the budget process starts with their city council annual goal setting session in the spring. That's where the council sets the goals for the coming year. At that time we have preliminary values received from the county and we uh we are able at the staff level to prepare kind of an estimate of the impact of the median value home based on the second year of our two-year budget. As we roll forward, we kind of have a peak at that point. It's this impact to the median value home that becomes kind of our target maximum impact throughout the budget proc budget setting process. Following that meeting, staff will prepare a two-year budget to address the goals and operational needs of the city. The city council will dis uh discusses the budget. This year was in August at an informal work session. In uh early September, the city council adopted a preliminary levy and budget. And that is the levy that is used when the county prepares their estimate of property taxes coming for the for the coming year that was mailed to everyone a couple weeks ago. And this year we held our first uh informal budget open house inviting property owners and residents to come in on an informal basis and discuss the budget and taxes and basically any anything they wanted to discuss. County then sends the notices to the estimated of estimated tax impacts again received a couple weeks ago by the property owners and then as required by statute the city council was required to adopt a final budget and levy but by and certify it to the county auditor by the end of December. The total budget includes a number of different operations or funds. The biggest uh one of the biggest ones is a series of enterprise funds. This includes our water and sewer and storm water utilities as well as the municipal liquor store operations and our ice arena operations. So the total total this is on the expenditure side for all funds totaling $130 million enterprise funds is 50.5 million of that. The road fund is another um significant capital capital intensive investment uh fund. The expenditures for the coming years 18.3 million approximately 14% of the budget. Um we have uh a number of special revenue funds that make up approximately 10.4 million. And then we have uh the general fund which is our largest fund and is the uh let's say the general governmental operations of the city. So that'll include everything from police and fire to administration and city clerk and uh community development and building inspections, engineering, park and rack. All of those activities are included in the general fund and that is 50.7 million for the coming year. Again on the revenue side total total all funds the total all for all funds on the revenue side is 115,375,000 the user and franchise fees and again this is all funds so this will user and franchise fees included 40.9 million that is uh the revenues from the water sewer utility storm water utility the operations of the liquor store are all included in that we have intergovernmental revenue 16.9 million for the coming year. This is uh the predominant amount that makes up that is u municipal state aid for our annual street and infrastructure replacement program. We have licens and permits which include building permits and business licenses. We do have uh some transfers and a use of reserves for the coming year administrative fees. Um the use of reserves is the use of public safety aid that we received in 2023. We is recognized at the time we received that and as we are using that we will recognize the expense but we already uh you have recognized the revenue. So this is really a a use of fund balance or a use of reserve for the coming year. And then property taxes 38,8,660 approximately a third of the budget. This is predominantly for the uh well this is this tax levy is u predominantly for the general fund operations general government operations. We'll notice that the revenues here 115 million were less than the total revenue or total expenses and the the difference is our investment in capital capital infrastructure. The biggest uh component that we mentioned earlier was the general fund and again the predominant share of revenues for the general fund is property taxes that makes up approximately 74.7% of the total general fund bud budget. Uh again we have the licenses and permits intergovernmental revenues for the general fund which is police and fire aid uh park and recreation charges and other charges for services. We do have uh expenditures. We have a balanced budget of 15,752,97. And again, this is the expenditures by department. Our largest department uh is the police department at 16.3 million. Park and rock uh activities 7 just under 7.7 million. Public works 8.5 million. Fire department 3.9 million. general government that would include every the administration city clerk f not finance but uh all the administrative activities we do have a large component is the street maintenance program at 4.6 million and again this is the levy supported portion of the annual street and infrastructure maintenance program have governmental buildings which is this facility and and others uh the community development operations of that department the finance department and the IT department totaling 2.9 million. Unallocated is approximately 915,000 that for the most part is uh property insurance and then we have legal at 644,000. The property valuation that everybody that the whole property tax system is is based on is a two-year process. that uh value will the values are based on what the county assessor determines the value is on January 1st. In this case, on January 1st of 2025, the property is reviewed by the county assessor all through 2024. And on the first of the following year, January 1st, 2025, the county assessor needs to determine the value that starts the estimated uh uh valuation process. In March, the county assessor will send property value notices to each of the property owners. And then the following three months, the county assessor holds various appeal is an appeal period. They hold various meetings, various uh open book meetings. people can come in and talk about their values. And then there is a board of equalization that meets in June to hear any valuation objections by the property owners or the public. And it's that value that's determined as of uh the board of equalization is what's used for preparing the parcel specific notices for taxes for the following year. In this case, 2026. Property valuations for the coming year. Overall property values are increasing 3.19%. That includes all property classes. Residential is increasing from 6.4 billion to 6 point just under 6.7 billion for the company and valuation 3.71%. Commercial industrial increasing from 741 million to 780 million approximately 5.15%. There is one one class there that apartments down towards the bottom point out that the county is uh valuations as determined by the county assessor for apartments are declining for the coming year from 817 million to 796 million a decrease of 2.56%. In total um 8 billion68 million64,000 is increasing to 8 bill326,28,965 approximately 3.19% for the coming year. We do uh one component and we'll look at this in a moment when we show an example of a calculation of a property tax uh statement. The overall tax capacity which is we convert the apply some factors to the estimated market value to arrive at a term that's called tax capacity and that for new construction is up uh point4% versus 1.39% last year. So it's a little bit new construction is a little bit down for the coming year of 2026. On the appreciation side overall tax capacity is going up 2.9% versus what we experienced last year tax capacity even though the values went up the there was a negative uh appreciation or the overall existing properties actually went down in tax capacity last year. that was related to the implementation or the uh extension or expansion of the homestead credit evaluation uh exemption. So that reduced our overall tax capacity last year. So we don't have that occurring this year. So residential uh and uh well we have one property classified as a cabin but residential is going up 3.49% for the appreciation is going up 3.49% 49% commercial 3.96 utilities 1.6 and again the department classification in tax capacity is going down.67%. In total the total preliminary tax capacity heading into the coming year is showing an increase of 3.37%. When you in combi combined with new construction and appreciation, the medium value home is going to be increasing 3.7% to 371,350 recovering the slight decline in estimated market value that we experienced last year increasing from 358,100 to 371,350. Commercial valuation increases we looked at till moment ago. The commercial value increases is 38.3 million. New construction is just over 8 million. Uh in appreciation is 30 million with a total valuation increase of the 38.3 million. This is uh less than what we experienced last year in commercial valuation increases. Last year we experienced a lot of commercial for the most part down in the orchard place or orchard uh orchard place down near cobblestone. Um the new construction added this year of 8 million is for the most part made up of just these three parcels, three properties, health partners. The finishing of the clinic, Cha and Vet Clinic and Chase Bank location out by uh out Orchard Place. The uh statements of estimated property taxes payable for the coming year 2026 have been delivered. Of course, that's the invitation for folks to come this evening. Uh the notice looks like this on the right. I don't expect anybody to really read this. We'll drill down into a little bit. Includes both uh the valuations for market value and taxable market value as well as notifications for contact info for each of the jurisdictions. We look in the upper right hand corner is the where your property values and your property classification. So the most important one that everybody look homestead if you have a residential property that you consider that you believe homesteaded look for the property classification. It should the abbreviation here is HSTD. So if you're seeing that then you have homestead credit status classification. If you don't see that you want to contact the county assessor. The next uh piece of important information is the estimated market value. And again, this is from the notice that was sent in the spring uh resulting through the uh the estimated uh uh the assessor's hearings during the during the summer, which then if you are a homesteaded property, this is the homestead market value exclusion. So, as the value of the property increases, your exclusion decreases. So um in this case the the property estimated at 371,100 received a market value homestead exclusion of 13,151 resulting in a taxable market value of 357949 for tax purposes. And again, this down in the lower right hand corner of the of the truth and taxation notice shows the total increase in in taxes as well as a percentage increase for the coming year. Uh, also included on the notice in each of the uh contact information for each of the jurisdictions including the county, the city, the school district, and the Met Council um making up the the share of uh of the property tax bill. Which brings us to the property tax levy for the coming year. Property tax levy is a number of different components. We've got the general fund uh and uh which is increasing from 30,232,000 to 32,825 for the coming year. approximately 8.58% the facilities uh funds which is a transfer out of the general fund into the facility facility maintenance funds uh declining approximately uh 25,000 approximately 7.14% the levy for the general fund continues the ICE arena support at 121,000 as well as a delinquent property tax delinquency allowance of approximately 100,000 for the coming year. So call it general subtotal for general operations uh increasing 2.5 2,568,000 approximately 8.34% to 33,371,000. Another uh significant component making up the property tax is our annual street and infrastructure maintenance program which for the coming year is down slightly 70,000 from 4,670 to 4,600 for the coming year decline of 1.5%. This is just the levy support of that program. There is in addition to this within the general fund, the um support or additional uh resources the city council has committed out of the gas and electric franchise fee fund which is approximately a million dollars. Uh that would also go to support the annual street maintenance program. Then we have debt service and this is the fac first line is the facilities capital improvement bonds. We had previously issued some in prior years. So that debt service is increasing from 1.6 million to just over two million increase of 350,000. This for the most part the two major projects completed so far are the fire station number two rebuilding of that one as well as improvements at station one and three and then the police operations facility along Flake Staff Avenue. We have uh another significant component is the debt service on the park referendum bonds. We had previously bonds issued with a debt levy or a debt service requirement of 2,389,000 that will be increasing to 4,682,000 to 2,292,880 for the coming year as a percentage. That's a very large increase, but it is all related to the uh the increased debt service needs with the issue of the 2025. And we'll look at more of the impact on the individual property tax bill in a moment. The levy for 2026 will be increasing from 39,24 to 44,666,000 increase of 5,142,000 for approximately 13.01 01%. We look at what is driving the increase in the uh in the levy for the coming year. We've got a new levy increase of 5,142,000 that we just saw. The increase in voter approved debt service 2,293,000 increase facilities capital improvement bond debt uh existing and new for approximately $351,000 increase. And those were both as part of the uh 2025A bonds. 6.7% of the upcoming levy is related to to the existing or increase in debt service for the coming year on those two uses. In addition to that, we have the increase in salaries and wages including any cost of living and step increases 983,000. The general fund or general governmental operations that are supported by levy. We are a service provider. twothirds of our budget is wages and benefits. So that uh new levy supported positions for the coming year include a mechanic, a fire inspector, and a forester for we've got an increase in in part-time wages and part-time hours, 257,000. We have increased health and dental insurance uh costs as well as workers comp 457,000. increased uh Medicare, FICA, PARA mandated uh programs 184,000. New this year is the paid family medical leave and this is the statewide program that every uh employer and employee must participate in. 95,000 is the uh support for the uh the employer's share of that program for the general fund is 95,000 supported by property tax levies. The employees also pay 50% of the cost of that program. So each employee will make up a share of their own portion of that 95,000. Got an increase in utilities 102,000 increase in capital outlay 453,000. And then in 2026 we have an upcoming general election. So approx 150,000 for the coming year just to operate and per uh conduct the elections in 2026. We do through the whole process we compare our levy increases as a percent with other communities and trying to get a uh uh a comparison with other larger uh cities in we'll see that Apple Valley as we uh just looked at is an increase of 13.01%. We are on this graph of course on the high end of that. Rose Mount is the only one in this comparison where that would be higher. In shown in orange here is the the percent of the levy increase that is related just to the new debt for 2025. So over half of the levy increase for the coming year is the debt on the uh on the park referendum bonds as well as the facilities capital improvement bonds that we just looked at a moment ago. We do since uh one one year is a just a snapshot. We do also take a look at comparisons over the past 10 years just to see how how we've been comparing on on a long-term basis. Same cities. Uh we're in the middle of the pack over the past 10 years. And these are certified uh levy amounts up through 2025. 26 hasn't been certified to the state yet, but for the last 10 years we averaged 5.6% 6% which is the middle of the pack for our comparable cities. Uh we do same comparison with uh certified levies through 2025 but just the Dakota County cities again we're in the middle of the pack slightly on the lower side of that and again this is the average over 10 years. Uh Apple Valley at 5.6%rove Heights at the high end at 7.6 and everybody else in in the middle there and Farmington is the lowest at 4.2%. 2% over the past 10 years. We look at the uh the tax impacts to the median value home. Again, the median value home, the property value was 371,350. We looked at the market value homestead exclusion which is uh for this property 13,128 giving us a taxable market value of 358,222. That times the state classification rate for residential prop homestead residential property is 1%. Gives us a tax capacity variable of 3 million or three 3,582. And it's that times our uh property tax capacity rate extension rate 45.98% for the coming year. gives us tax capacity, gross taxes paid based on tax capacity of six $1647. We do have a former park referendum that has market value based uh tax levy calculations and that for the medium value home is $52 for the coming year equaling property tax dollars paid to the city's portion of the tax bill of $1699 or 2026. Do that same calculation or comparison to the prior year. We'll see that uh last year the this median value home that experienced an increase of 3.7% which is the median increase uh or the increase in the median value home. The uh tax bill in 2025 was $1,488 increasing $211 to uh 1699 for the coming year. Of the 211, we'll look at this in a moment, over 111 is related to just the park bond or the park and facilities debt service breakdown of the U tax impact. We take that tax bill and we'll break it down by the various uses of the levy. the general operations which we looked at just a moment ago uh increasing $98 to $1,217 for the coming year and percentage increase of 8.77% but of the total levy increase of 14.1% or the total impact to the media value home increase of 14.18% 6.6% 6% is related to general operations street maintenance program. We basically kept that flat for the coming year. And the facilities capital improvement bonds. Their portion of the u uh is increasing $15.58 of the uh increase is related to those bonds makes up just over 1% of the levy increase of 14.18%. park referendum bonds uh increasing from $102 to 200 just over $200 for the coming year, $98 increase in the medium value homes tax bill, but makes up 6.6%. So in total 7.65% of the 14.18% increase in the total impact on the tax bill of the median value home 7.65% 6.5% for that or over 50% of that is just related to the increased debt service requirements on the ex the bonds issued in the prior year as well as 2025. We break the the annual property tax bill down again and just another different way to look at it. We'll look at uh departments. If a department has revenue that isn't generating a a reliance on the property tax levy, they would be excluded. An example would be building inspections. They have pre revenues that cover all of their expenses. So, they would not be included in these departmental breakdowns. We'll see the largest share is the police at 467 of the tax bill, city tax bill on the median value home of $1699. Park and recreation, $191. Public works, $171. We'll go around the these are all the same uh departments that we looked at a moment ago. Of the the tax bill, the oper the annual cost to the meeting value home for the street maintenance program is $195. Debt service for the facilities capital improvement bonds $85. And the total debt service impact for the park referendum bonds is uh $200 on the medium value home for the coming year. We do a comparison each year. We do a comparison of uh our taxes on the medium value home with other communities in the metro area. And the way this chart works is the very first uh uh well we have the city on the left but the very first percentage there that is that city's estimated tax capacity extension rate for 2026 as they've reported uh to me anyway. Um so and then the next one is the value of the median value home in that community. So for example the median value home in Edina is 735,000. Their tax rate is 32.6. The median value homes city taxes in Edina is $2,589 for the coming year. We do that same calculation for each of the cities. And we see that Apple Valley generally in the past few years anyway has been right in the middle of the pack. We are creeping up. And we do uh will point out that of the $1689 $285 that we just saw for the park facility or park uh referendum bonds impact on the med home and the facilities capital improvement bond is the debt service levy for those two. So, um, if we did not have that debt this year, our taxes on the medium value home would be approximately $1,400. Certainly towards the lower end of this comparison. But the other item we want to point out that we also do not levy for special assessments in Apple Valley for street reconstruction or seal coding or overlays. Uh, that's all handled through the property tax levy that we saw. So that would be included in that $1414 dollar amount that's listed on this table. Brings us to the remaining component is the enterprise funds. Just a summary of the of the revenues and expenses. We see the liquor fund and of course this is operation of the three municipal liquor stores. So this would be all their revenues from sales. Expenses would in their case would include cost of goods sold, everything in there. they do have some capital outlay. So in total of all of the uh enterprise funds 39,785,000 in revenues, 33 million uh 463,000 in expenses including debt service. Uh we do have storm drainage and water fund have uh debt service. Then we see capital outlay for the enterprise funds of 17 million. That is the utilities share of capital investment in our for the most part other than the liquor store all of it would be in the related to the annual street and infrastructure maintenance program. The utilities will pay their share of any of the costs for that program. So revenues and capital outlay will exceed the revenues for the coming year but again this is the investment in the infrastructure for the coming year. The cost of the capital outlay will be recovered through via depreciation over the useful life of the assets. Utility rate assumptions uh for the coming year. Utility rates are going up. Uh water and sewer are going up 5%, storm water rate is going up 10%. And the street light is going up 5% in total 5.9%. Approximately $12.58 per quarter or $4.19 per month. And again, this is on a typical user. And uh this would be a non-watering, non- irrigating quarter or month of 25,000 gallon 25,000 gallons of water use and $15,000 of sewer um estimated use or calculated use. So far, the truth and taxation notice, we've re uh Candy has received four calls so far. One related to the homestead market value exclusion program, one uh related to the disabled veteran market value exclusion program, one about a question of assessed valuation and the history of the valuations as well as another property owner requesting an update to their property tax autopay account information. All of those four questions have to be directed to the county property tax uh uh department and the andor the county assessor and again their county assessor's office is at 6514 38-4200. The state of Minnesota offers a number of property tax refund programs. The first is a homestead credit refund program. This is uh updated. The state just updated these uh uh last week. So requirements for the homestead credit refund program which you claim on your uh M1 PR property tax refund form maximum household income of 142,490 and maximum refund to be 3,400. Generally, the refund is based on property taxes that exceed one between 1% and two and a half% of income as determined on the form M1PR. Um, you have to have owned and lived on your home on January 2nd of 2026 as well as 2025. Must be classified as homestead property. There's also a renters's property tax refund which is now included on your state income tax form. So, it's a little bit easier for renters to claim that the maximum renter refund is 2640 and the income for a household income for the renter credit is 75,390. In addition to that, those two programs, there is a special property tax refund and that is for a um a property residential property that increased by more than 12%. The increase had to be more than $100 and there's a uh no income restrictions on this uh prop special property tax refund and a maximum refund of $1,000. More information you can get on the state of Minnesota revenue department's website. Got that shown here or you can just look on the form M1 PR instructions and it'll lay all these programs out for you. In addition to that, there is a senior cities citizens property tax deferment number requirements. Household income must be 96,000 or less. You have to be homesteaded property. There has to be a mortgage balance less than 75%. And it's the portion of your property taxes that exceed 3% of your net income that become deferred. It becomes deferred as a low income interest loan which is a lean on the on the property and the state pays the difference or pays the amount that's deferred and then the unpaid tax and interest becomes a le lean on the property and when the property is sold that lean is is paid off at the time of sale. So again, more information on the state department of revenue website. Uh just search on property tax deferral for senior citizens. There is a disabled disabled veteran property exclusion. There's two exclusion levels either 150,000 or 300,000 depending on your disability status. And veterans qualify. They must be honorably discharged, have a service connected disability rating of 70% or higher. and again uh homestead property that they own and occupy on December 31st. This program is administered by the counties and uh we have a number of uh residents that participate in this program. Summarize the budget uh we feel addresses the city council's adopted goals. The 2026 budget does include a significant impact of capital investment. As we looked at the park bond levy for the coming year, 4,682,690. The facilities capital improvement bonds levy. The levy, this is the debt service requirement 2,1,957,000. And again, the annual levy support of the street and infrastructure uh replacement program, 4.6 million. residential property taxes on the medium value home will rise $211 per year or $17.58 per month and again $113 of that $211 increase results from the capital investments above in the debt service alone. So with that uh there is additional information on the city's website at applemn.gov. So the action items for this evening is conduct the truth and taxation meeting inviting public comment and then following that uh if the council would consider adopting a resolution adopting the 2026 budget and 2026 property tax levy. If the city council does not uh feel the uh finish this evening, we can carry it final action over to the next city council meeting as well. So, with that, I'm available for questions or we turn it over to the public. [1:01:38] Mayor: Ron, thank you. Take a deep breath, sip of water. That was a lot of information. Let's start with council members and questions and then we can open up for public comment. Council member Bergman. [1:01:50] Council Member Bergman: Really no no questions other other than a couple of observations. the budget book for people that haven't seen one and mine isn't with me but there's a couple that have it that's 429 pages looks about like that okay and out of that 429 pages you break it down any way we as elected officials look at it and in looking at it yeah you start subtracting things and I'll just use the the recent ones you can't worry about the school district that's totally separate you can worry about the levy referendums that have passed for the park and recreation but were well welld deserved and well overdue. So that adds to the equation of the taxes. When you look at that and go line item by line item, which a lot of us have done over the years looking at it, you realize that it's just those dollar amounts are there for to make the operation run efficiently. Now, my past predecessors and ourselves currently are very cognizant of everybody in the city of Apple Valley as far as their taxes. Um, I would say that, um, I say that wholeheartedly and sincerely, um, when we see these kind of things and as Ron has explained to us, um, I'm sure he went maybe a tig over these his slide presentation. He's usually at about 80. I think we were told he's doing 70 today. Um, so, um, to the residents of this city, I think we've done a a due diligent. I wrote some notes down in in the future. Um, or presently, we have the new police um, building that we've we've always been cognizant of public safety that had to be that took place. The fire station um, that was cognizant of us. Um, one that we've always been key on was streets and the improvement of streets and that's a big budget and that will continue. Um, some of the things that when you see these things and there and this is kind of for the future, you will h we will have discussed uh what was which one where did I go on this one? Um, one was uh a central maintenance facility that actually was in our plans earlier to be done before the police and the fire um buildings were done. It's our understanding and by our direction um that that will take place um and they're working on it right now. One thing I think all residents need to know in the future and how we go about it um and how we are helped with funding is the PIFA's situation that's out there for the drinking water. So when I when I look at the whole entire budget um go line by line which a lot of us have done and looked at um I I I I have to 100% support it because there's things that are out of our control that we have to maintain to have our AAA bond rating to have good streets good whatever and have a have a phenomenal city. So, that's my comments to to you, Ron, and thank you. [1:05:08] Council Member Heert: Uh, thank you, Mayor. Uh, Ron, I just want to say, you know, thank you so much for your very detailed presentation and I know it is your your last one with us and and my first one is council member, so I I won't take it personally that you're you're leaving. Uh but um you know I just I just really wanted to you know say that you know the first thing when I when I joined my first meeting was with you and with Tom and we talked to the budget and I really have appreciated all the time over the last year really working with all the directors um to really understand our budget and and understand where the money is coming in how it's being used and and again with that goal setting process in the at the beginning of the of the here. That's really important for all of us and working very closely with all the all the directors and and Tom. So, just again, thank you for all that work. I know that this is not easy work. Um, I think the other thing that people um don't know is that or maybe don't realize that Apple Valley does have good strong fiscal management. And I think the fact that we have two AAA bond ratings, which I think we're less than a dozen cities or something like that in the in the state that are able to say that. So again, uh really really appreciate the due diligence and um you know, watching all of this and um and and when I look at this, I think that I I look at this as a theme of investing and investing in in Apple Valley in our facilities. We talked a lot about them, but also with twothirds of the of the budget really going to the wages and benefits. It's our facilities, it's our people and our programs. And and again, I I I don't think we can highlight enough the fact the the uh streets and that we do not assess for streets and putting in that 4.6 and then the extra million. That's a that's a huge thing that most cities don't have as well. So, and again, no LGA. Um, so again, I know that double-digit levies are not uh they're not taken lightly um here or you know, with council members and and with staff. Um I know that that is tough for people who are especially on the fixed incomes. Um but I am proud to say that I think that this is a a really solid budget and is looking forward investing now and into our future. So, I also am in support of the budget. [1:07:45] Council Member Grenall: Thank you, Mr. Mayor. Well, first of all, um I appreciate everybody's comments and I know that we um passed out all of our our own tax um increases at our last meeting and I know that some of them are much less than what mine is. So, when you're talking about the solid budget, I'm not going to pick on John, but I think we all know yours didn't go up hardly very much at all. And so it's very easy to very easy to say I support this budget and like I say it's public information what it all goes up. Um but anyway my last two years have gone up way more than the 2.3 or 2.5 that we were talking about. Um and I'm always looking at the budget and I always think that there's areas that we can do better. Um I I brought up that we were selling property. We've sold some property for like $2.5 million. Can't we buy down some of the uh park referendum money? I mean, I understand investment, but not at the expense of people having to move out of their houses. Um, also naming rights. I don't know where the naming rights, if we're getting $60,000 off of one of the park, um, buildings, where's that money going to? So, um, I still think we can do better in this budget. And one thing that I do find interesting though, if you, and you don't have to go back, but our medium value is only 371,000 compared to the other cities. I mean, we're at the low end. I mean, but we're still up the third highest for the median for um what what you have to pay for the median. So, does that I think we should analyze that. Does that translate into that we are housing stock we have more for first-time home home buyers? I mean, if we're only at 371,000. I don't know if you want to flip back to that one um slide that shows I mean we're on the bit right there. Right there. Yeah, cuz look I mean obviously take you dine out of it Minnetonka probably Eden Prairie I mean we're at 371 when we start going down I mean Lakeville's at 468 Egan 405 Woodbury 451 Rosemont 422 I mean we're at the low end of the medium value I mean so that would that would translate to me that we have more housing stock for firsttime home buyers and and I don't know you called it affordable housing at 371,000 but you know I think that's something we should analyze I would suggest uh Lakeville, Rosemount, [1:10:03] Ron Hedberg: well, Woodbury. Um they're all experiencing rapid current residential growth and houses being built now are much more expensive than what our existing housing stock is. We have as far as affordable or more affordable housing, we probably do have a larger share than some of those other the newer building uh the currently rapidly building is a positive for our city I would say for people moving in here. [1:10:36] Council Member Mander: uh Mr. Mayor, it's always tough to see taxes going up and uh this slide in particular is is illustrative because, you know, 285 bucks is stuff that was approved to tax ourselves. So, in terms of what the city has increased the taxes, it's not nearly as as large as it appears versus what we've done to ourselves. And and uh Council Member Heert mentioned the uh the road assessment. I don't think that could be understated. I've seen examples of folks that get uh uh $16,000 bills for a 40 foot lot. We see none of that. And that's that's a huge advantage living in Apple Valley. So [1:11:57] Mayor: There no other comments. One of the other purposes of this evening is for public comment and we have any members of the public who would like to speak. I'd like to open that up and then we can get on to the the uh budget actions this evening. Anyone who would like to speak? Anyone? All right. Well, let's I'll just add a couple comments as we go. And I think we right we there's always room to do better in in many areas and the word that kept coming to mind especially the last few weeks as I went over and over this are just priorities right that the taxes is are how we pay for our priorities and we made some decisions that things that were priorities uh no no assessments right park bond referendum while the voters voted for it we're the ones who decided to put it on the ballot so we own right part of that as well we can't all just say the voters made that decision we made a decision to bring that forward Um, we made some public safety investments, uh, both in a a police operations facility and a new fire facility. Um, you know, we made a priority decision and good benefits and pay for our employees and giving them a good place to work. Uh, everything down to how well we clean our roads in the winter, right? I can go to other cities and figure out our roads are pretty passable in the winter and we probably could save a few bucks if we maybe didn't plow curb to curb or maybe went to three inches instead of two, those kind of things. Um, you know, when I think of all of that and while I don't like the tax increase and I look at, you know, 20 bucks a month as an increase to support those priorities, that's kind of the way I have to to look at it as well. And so I I do agree with Tom's comment that um the tax increase is one thing with my sudden assessment shows up and now I've got $300 or $400 additional on top of that to pay for that that those hurt too. So I don't like the increase. I think like the increase, right? We'd prefer to have that be a lower number, but um I feel like the value is still there for what we're getting and we're kind of honoring what we decided were priorities when we went through our goal setting session back in spring, whenever that was, March or April. So, those are kind of my comments. We could spend a lot of time on individual line items, but I feel like we've also already done that um several times. Okay. Um so, with that, let's move on to our action item here this evening. Um, and that is the resolution approving the 2026 budget and property tax levy. Uh, also start with a motion. Does anybody have a motion to approve the 2026 budget and property tax levy? [1:14:27] Council Member Bergman: So moved. [1:14:29] Council Member Heert: Second. [1:14:30] Mayor: We have a motion from council member Bergman, a second from council member Heert. Any further discussion from the council? All those in favor indicate by saying I. I. And opposed. That budget carries. Thank you all and just you know Ron we always thank you but we know it's not just you it's every bit of staff right I've seen the uh the line by line work that goes into starting with all the things that uh each indivivividual department wants to do and where we we cut and slice and move things ahead years and decide as a group those aren't the priorities and I don't know how many hours Tom and Ron spend together just hashing that thing out every year uh to get to that point so um a lot behind the scenes to get there So, Ron, Tom, all the staff, thank you guys for for the work to get us here this evening. Uh, with that, let's move on to 5D, which is our 2026 fee schedule approval. Christina, [1:15:30] Christina (Finance Staff): good evening, mayor and city council. Part and parcel of the budget, you saw Ron um providing an over revenues that are associated with our 2026 budget. Um and that budget includes um increases and amounts set for various um services, licenses, um development related costs. Um and so this is the formal approval then of those fees and that fee schedule. And so um those fees are set each year to recoup the costs for providing that license, for providing that development review, um for providing that service to um businesses and to community members. Um, and so each year we hold a public hearing to um allow public comment and um ask answer any questions that um community members may have about those fees. Um and then adopt a resolution approving that fee schedule. Um some highlights for our fee schedule. Again, Ron went over the the utilities and the services. Um but those fees are really uh reviewed with the thought that you know our consumer price index increase for the last year was about 3%. um increases in employee wages and benefits exceeded about 6%. So depending on what that service is, we're looking in the 3 to 5% range for um those increases that you see in the fee schedule. Um I would also like to point out that um the fee schedule was reformatted this year so that it it meets more ADA accessibility requirements um that will be coming next year. So if it looks a little different, it it is very different um than it has been in the past. Um but with that, I am available for questions. Staff are as well. Um or we'd ask that you hold the public hearing and consider the resolution to adopt that fee schedule. [1:17:15] Council Member Bergman: I went through this 20page um fee structure and when I looked through it, I made a comment to my wife. I says, "So, better look at something." So, the last few days I've had the opportunity to deal with um Wendy over in uh in cemetery and in public works, I believe it is. Um and had some good dialogue. Um what I found was interesting um in general conversation about the cemetery itself. And during that time frame, we were told at the end when we left the set morning um from that office that this is the first time during this time frame in the last six weeks that the city has um benefited from the people coming and wanting to use the cemetery. We were we were told that this um time frame has exceeded um staff's expectation and uh it's been very busy over this time. To the person that helped us today um she did a wonderful job. The cemetery looks really great. Um and when you think you go and look visit the cemetery, the maintenance is impeccable. Um, but when you see walls that have don't have names on it, we learned that they're full that there people have purchased these um items um for themselves, but they're looking forward to expansion to the east um soon. So, I appreciate everything on on this fee structure stuff. So, thank you. [1:19:02] Mayor: Thank you, John. Any other questions for Christina? If not, let's go ahead and open the public hearing on our fee schedule. Anyone who would like to speak to the public hearing. Anyone who would like to speak. One last opportunity for the public hearing on the fee schedule. All right. Seeing none, we'll close the public hearing and we'd look for a motion to adopt the resolution approving the 2026 fee schedule. [1:19:22] Council Member Bergman: So moved. [1:19:33] Council Member Mander: Second. [1:19:34] Mayor: Motion from council member Bergman. You better after all of that. We have a second from council member Mander. All those in favor indicate by saying I. I. opposed. And that takes care of the fee schedule. Do we actually have to move on to 5e or can we just um if we don't do if we don't do it, do we get to keep Ron? Maybe that's the question. So um you what a what a appropriate evening I guess to uh to do this right after um everybody got to see Ron's work and now we'll get a little chance to uh to recognize him for uh for that. Um, we have some family uh in the audience and friends. You all feel free to come forward wherever you can get a good picture. You absolutely aren't going to be in the way or offend any of us. And so, Tom, why don't you uh start us off? [1:20:17] Tom Gillaspie: Mr. Mayor, members of the council, I'm happy to do so. As you say, this is a bittersweet night. Uh, the last official city council meeting for our finance director, Ron Hedberg. Uh many of us have had the opportunity in the last couple of weeks to uh tell Ron how much he means to us and all of the work that he has done on behalf of our community. The hard transition uh after 16 and a half years, that's a long time to to be anywhere and uh it's only fitting that we spend some time here at this city council meeting uh to let him know again and his family as well uh the great job that he has done on our behalf. So, um, a couple of things that I will go through as part of the presentation. Uh, as I just indicated, uh, he's been at this a while. He has been a municipal local government finance person for a long, long time. Um, 39 years total in the amount of time that he has spent uh, serving local governments. Most of that in service to actual cities. He's been to four different cities. uh has also worked in the public accounting side of things serving municipal clients. So u someone who picked a career path early and stayed on it for a very long time, 39 years, 16 and a half here with the city of Apple Valley. So as we looked at uh for that amount of time that he has spent in the profession, how long would he actually have how many meetings city council meetings would he have covered in that course of time? We're estimating about 760 meetings that he's attended. Of course, our city council meets twice a month. Um, if you just look at the Apple Valley piece of that, probably about 400 meetings alone with the city of Apple Valley. So, again, quite a commitment and a lot of evenings away from home and uh again thanking his family for the for the commitment of uh the nighttime hours that we have taken from Ron over the course of that time. A few other things, this has been mentioned a little bit tonight about the uh kind of the the reputation of the city of Apple Valley uh in the world of finance and the things that we do and the things that Ron has led us to in the course of his 16 and a half years uh to get a certificate of achievement in excellence in financial reporting. This is from a group called the government finance officers association. Uh very strict criteria that you have to go through in order to win this award. Uh once Ron got on board, it was a couple of years. We uh got our first award back in 2011 and every year since uh for the duration of Ron's time with us. So um that's a big deal in the world of municipal finance and it's great to have that kind of professional recognition of a job well done. The same GFOA also has something called an award for outstanding achievement in popular annual financial reporting. Uh this is intended to be a document that's a little bit easier for the public to consume to understand uh the municipal finance world. Started that in 2017 have continued to do that and it's important. We know that this is complex. We kind of experienced that tonight with all the the slides that you've seen. Uh we need to do what we can to help our public understand what's happening in the municipal budget world. This is one way to do it. Uh also this year you've noticed the budget in brief document that we have put onto our website. There's actually a stack I think in the back of the room. Again, trying to do all we can to make certain that uh the public understands the municipal finance world and Ron has been a true champion in trying to make that happen. This also was mentioned uh the city of Apple Valley carries bond ratings from two agencies, Moody's and Standard and Poors. And this is something that we strive to do anytime we go out for municipal debt to to fund park improvements, to fund uh the new police station um that we have at Galaxy and 140th Street, uh the new uh police facility that we have over on Flagstaff. The city, as Ron has explained earlier, we go to the market and we take our bond uh ratings with us and we attempt to get the very best, the very lowest interest rate that we can for our public. One of the ways we do that is we work with these rated agencies. We prove to them the financial stability of our community and we're proud to say that we have carried the highest possible bond rating from both of these agencies. Uh Moody's beginning in 2010 and uh standard and poor since 2014. Again, testament to Ron and his ability to take that information and present it in such a way that makes it very clear of our fiscal stability. So this is a a word cloud. Many of you have seen these before. And basically uh these are adjectives uh related to the character of uh of Ron. And what we did is we asked our staff, both Ron's department, the people that work for him, also the leadership team of the city, and just give us some adjectives of the words that uh that really describe Ron. And I see so many of them on there that uh you know this is a an employee of the city who has the dedication, is hardworking, absolute high ethics, um just patient to get the job done. Uh the exact type of character that you want in a city finance director. On the top line there, you see the word thorough. I think we pretty much experienced that tonight with the presentation and the slides that he went through. U but yes, Ron takes his job extremely seriously. He is dedicated to a positive outcome for our city and just the the highest caliber of individual that you want working in a in a position like director. So we thought it was only fitting that as part of this uh this passing of the torch finance world that we come to you tonight with a proclamation uh honoring Ron in Apple Valley which be happy to read I'd be happy to read this. I have a copy right here because there's no way I'm going to read that one on the screen. [1:25:46] Tom Gillaspie: So, uh, this proclamation says, "Whereas Ron Hedberg has served as the finance director for the city of Apple Valley for over 16 years, beginning his service to the city on April 17, 2009. And whereas prior to joining the city of Apple Valley, Ron also served the cities of Cottage Grove, Savage, and St. Peter and spent time serving Minnesota cities through his work with two private accounting and auditing firms. And whereas all told Ron has devoted more than 38 remarkable years to serving the public through the provision of extraordinary financial management. And whereas during his time with the city of Apple Valley, Ron has quietly and competently led the finance department through countless financial transactions handled with the utmost integrity, transparency, and accuracy. And whereas each year, Ron was instrumental instrumental in the development of the city's annual budget and capital improvement plans totaling over 1.22 billion dollars during his tenure which helped to ensure the city's long-term fiscal stability. And whereas in the spirit of transparency and accessibility, Ron led the city's efforts to be recognized by the government officers finance association with the certificate of achievement for excellence in financial reporting award from 2011 to 2024 and the award for outstanding achievement in popular annual financial reporting from 2017 to 2024. And whereas Ron's financial acumen played a pivotal role in having the city recognized with AAA bond ratings from Moody's investor services since 2010 and standard and poor since 2014, the highest bond ratings possible, ensuring our residents and b businesses benefit from the lowest possible interest rates. And whereas Ron's value to the organization transcends the provision of quality financial advice as he has served as a trusted and wise member of the city's management team and a true friend to all of his co-workers. And whereas during his career, Ron has contributed greatly to the community of government finance officers, having served as president on the Minnesota Government Finance Officers Association Executive Board, served as the MN-GFOA's state representative, served on the social committee for over 20 years, and served as a mentor to new government finance officers. And whereas he and his wife Denise moved to Apple Valley in 1999 where they raised their family and became strong supporters of Apple Valley schools and youth athletics, especially cross country, track and field and Nordic skiing. And whereas throughout his career in public service, Ron has demonstrated character, integrity, and leadership and has played a pivotal role in making Apple Valley the highly desirable community it is today. Now therefore, the city council of the city of Apple Valley, Dakota County, Minnesota, hereby recognizes Ron's extraordinary public service career and hereby proclaims November 25th, 2025 as Ron Hedberg Day in Apple Valley. [1:29:52] Mayor: Mr. Mayor, would you like to vote on the proclamation? I was going to say I was uh that's why I kept this out so we couldn't forget to do that. Uh all moved. [1:30:04] Council Member Grenall: So moved. [1:30:05] Council Member Mander: Second. [1:30:06] Mayor: Thank you. So, we have a motion from Council Member Grenall. Do we have a second? Second from Council Member Mander. All those in favor indicate by saying I. I. Thank you. The motion is now officially approved. Uh Ron, Tom, [1:30:11] Tom Gillaspie: Mr. Mayor, Council, thank you so much for for that. Uh before we let Ron take the podium and say a few words, we have a few more things that we'd like to do. It is our custom and our routine in Apple Valley that when we have a retiring uh employee, that we present to them a momento of their service, in this case, a marble apple inscribed inscribed with the city's logo as well as their name and dates of service. Um I know you all know that Ron has tried to leave for a while now which really been something he has been at and again his patience and his dedication to our city he's extended his time with us over the course of this past year to get us to this point. Uh the plaque reads from 4/17/2009 when he started to 1/20/2025 which would be next Monday which will be his official date. Uh we actually ordered this a long time ago and on the bottom we actually have the old plaque that said he was planning to leave on January 10th, 2025. So we again appreciate the time that you have spent. You've been a a terrific member of our management team. You're not just the finance guy. You are a valued voice and a voice of reason and a voice of wise counsel and we couldn't thank you more. So thank you Ron. Much appreciate. [1:31:35] Mayor: I'm gonna come down there. Okay. God, my keys that don't work no more. There's a key that don't work no more. I tried to call this the key to the vault earlier in the week and I still have that or something like that. So, uh, but I I truly can't think of a more appropriate gift for you, Ron, than a key considering how key you have been to the success of Apple Valley. You were here when I got here. um you and the rest of the staff, you know, 2011 made me feel super welcome, got me up to speed quickly. Uh your skill in getting us through meetings like tonight and then everything get out that gets up to here is really key to our success. Uh you can take really complex concepts like this and we will say Minnesota's property tax formula is probably one of the most complex I have seen, boil them down into something that is easy to understand. But but a skill you also possess is an ability to have a one-on-one conversation with somebody and help them. That's been so key. I experienced it firsthand. Everybody who's ever called your office has experienced it as well. And so for all you do, but for all the people skills you brought to the job, thank you. And we are thrilled to present you this key to the city of Apple Valley. So, thank you, Ron. [1:32:46] Ron Hedberg: This is the part where I'm uh I would say that my wife wants me to keep wants to know if the city will let me keep my key card so that I can come in on weekends. And [1:33:04] Mayor: he was here a lot of weekends. I saw his car. [1:33:05] Tom Gillaspie: Probably find you a broom or something. [1:33:06] Ron Hedberg: Um but thank you for that recognition. I I think it it's great. Um, it's uh uh it's been a little while coming, I guess, but uh couldn't have done it. I Well, I I probably could have done it, but it it's been a um an enjoyable place to work for over 16 years. I really do enjoy working here, and it really comes down to the support of not just the city council, but um all the other department heads and all the work that everybody puts into it. It isn't just one person and we talk about the budget uh and that is everybody understands that's of course all the departments but there's so many interactions that happen almost on a daily basis that that really make uh the the job more enjoyable more fun challenging at times but that's part of the fun I've always liked solving problems I guess that's uh part of it sometimes you have to think about it And sometimes I tell folks, well, come see me tomorrow. Let me think about it. Then we'll we'll figure it out. And I've told members of the council all many times is, you know, hey, can we, you know, the question will be, can we do the can we do this? We're like, tell us what you want. We'll figure it out. We may not have the answer today, but we'll figure it out. And that, I think, does take everybody working and pulling in the same direction. And that really is what uh I've experienced here in Apple Valley. And I have worked in other places where that is not the case and it uh it is a little more uh difficult and and we do not experience that in Apple Valley and I've told a number of people not young people in the profession that as I tried to get them to apply here this is a great place to work. We've got a supportive council. We got awesome department heads and awesome city administrator. This is a great place to work and we do uh uh and it's actually a good profession as well. I've been trying to convince uh a number of uh younger folks whether through the mentor program or even high school folks that I've mentored uh that this is a good profession not just governmental finance but finance in in total is a good profession. It's uh it's been I think uh maybe maybe it's because it came kind of easy to me you know in in high school is where it really all started and I took an accounting class and I thought it was very like everybody else was struggling with it maybe that actually that is when I decided well if it's look at the daughters are back there laughing. We've heard that on the golf course. So but they don't uh they don't think it looks all that fun, but it it is fun. I Anyway, I uh just want to say thank you for the proclamation and all the kind words uh just this evening as well as last week and leading up to this and people have been stopping in, other co-workers and stuff stopping in and sharing kind words and I really I do appreciate it. I um sometimes I kind of would be off in the corner and I could go I could go days without seeing anybody. Usually it's on a weekend, but paperwork. Well, that that helps. That helps. Anyway, I just want to thank the city council for the for the proclamation and Tom for the uh kind words over the years and all the support uh that I've experienced over the years. It's been enjoyable and made for a uh a great career. Very good. [1:36:54] Mayor: Thank you, Ron. Thank you, council members. Um before we before we let Ron step away, um anybody else have any comments they'd like to share publicly here with Ron or or do you want to say them privately and yell at him for leaving behind the scenes? I'm not sure. Councilor Mander, why don't you kick us off? [1:37:11] Council Member Mander: Uh, I've always been a big proponent of of liking what you do and enjoying your life. Um, there's a lot of folks that kind of trench through their working years in anticipation of two weeks of vacation and retirement that they hope they can live to enjoy. Um, having been through a few of these presentations with you, you don't get to see Ron's face when he's talking about numbers, but he gets absolutely rapturous. I mean, two people that enjoy numbers, and I'm certainly not one of them to the extent that Ron does. uh and and you really the detail it's uh there's times where I think is is there a reader digest version of this and I don't think there must be but but uh to see the the true joy you have in doing your work and it's reflected in the in the excellence of the work that you've done for the city and we really appreciate Ron and my best wishes for a long and healthy retirement. [1:38:20] Council Member Grenall: Thank you Mr. Mayor. Well, I still remember when you interviewed, I think John and I, we you were there, right? Just pat ourselves on the back. I was so glad when you accepted the position. Um then, um you always bet, um I could always trust what you said. Never played any games and sometimes that can happen, you know, with numbers and elected officials, but you I always trusted your word. And I want to thank your wife for letting you stay with us for the last 11 months. Oh my gosh, I was petrified. She wants to thank you for keeping me. Yeah. No, it was um so so it didn't rush us in making a decision. So, thank you. I mean, I just every time I saw you, I think I said, "Thank you, Ron, for staying." So, anyway, enjoy your golf. [1:39:26] Council Member Heert: Oh, well, Ron, um, municipal finance and accounting is not for the faint of heart and, uh, you have a ginormous heart and I think that you are a shining example of what it truly means to be a public servant and, uh, do public servants, public service. um your demonstration again, your heart and your caring of of serving all of us in the Apple Valley community is um priceless and and again I think you've done an amazing job of building the trust and the transparency between government and our community and sometimes at a time when it's at an all-time low. So again, I cannot say enough uh thank you for helping us um build a strong community and building that trust and transparency with our residents, with our businesses, and making Apple Valley one of the best places to to live and wish you all the best in your retirement. And you will be truly missed. And in your words, um I'm going to say we will figure it out. So thank you very much. [1:40:28] Council Member Bergman: First of all, I'd like to thank your family, Ron. I can recall the time when your wife was in a store and uh said he can have an extension to look at you're smiling right now. An extension um to stay on a little longer. So, we for the family's sake, thank you. Um now you get him and other than when he goes golfing or when you go on a travel trip somewhere. Ron, thanks for everything. I can't say enough. Um, everybody said it and I'm sure we'll see you around. So, thank you, Ron. [1:41:26] Mayor: Right. All right. Thank you. Do we want to uh grab a quick picture with Ron and council while we have everyone here in the chambers before everybody ducks out? Is that all right with everybody if we pause for a second? Do that. Hand that card when you're done. Here you go. You give it to him. Where we going? Oh, you're supposed to be in the front. You're supposed to be in the front in the back here, but there's one on the other side. Here, Ryan. You want to hold You want to hold something? I don't get We had to hold something in order. I don't know what we're doing here. We don't know if you got the camera that works. We good? Everybody got one? All right. Thank you. [1:42:38] Council Member Grenall: Well, I was um asked by the president of the National League of Cities to serve as the um as the chair of the fair committee, the finance administration intergovernmental relations committee, which is um a very important committee. Um I was on it this past year and um the committee and the National League of Cities was um instrumental in protecting the tax exempt municipal bonds. And so it's a things of that level that um that um affect our residents. And so somebody says to me, um do you ever say no to anything, Ruth? Do you know what that word means? Mhm. No, because I have a bunch of colleagues up here who do the same thing, take leadership roles and um I just, you know, in the beginning of the year, we all have a uh the sheet where we all are um approved appointments beyond our basic basic thing what you do for city council and we just do it on the consent agenda. And I really think I think it's a consent agenda and I really think we should point out how much more time we all do in leadership. And when we take on leadership roles, it um reflects the city and it reflects our staff, the responsibilities and the added responsibilities that they take on to help us do this. Um but anyway, sorry, we talked for about the last six days at National League of Cities. So, um so our mayor, first of all, um MVTA board commissioner, I did that. I know how much time that takes. Um, suburban transit authority. Um, you do the mun municipal legislative commission board of directors, metro cities board of directors. So once again, Apple Valley is out there as leaders. Um, all of us. Um, John, I don't know how you can do the knock committee, the met the Metropolitan Airports Commission noise oversight. Um, what it does for the um residents of our cities that city that has issues with the noise. you also represent us on the Elf Ambulance Board and the Dakota 911. So, we all step up and we all do what we need to to make this a better city. So, it's going to be a big commitment for chairing this committee. Um, but anyway, I said yes. [1:45:08] Mayor: Ruth, thank you. I just want to touch on a few of the pieces, the priority pieces, right? And this is federal level advocacy and you know we spend a lot of time about budget here but when we don't advocate for those things they make their way very quickly to things we need to add to that budget right to maintain those priorities but um I'm I'm looking at their stuff here right uh uh municipal finance pensions census federal funding intergovernment relations and more and I'm sure the and more is the part that should scare you more than uh any of the rest tariffs was brought up so I'm hoping the courts settle the tariffs thing so that isn't number one on agenda, but just just thanks for doing those. I don't know if that was on your plan when you showed up to the conference, but uh it was not, but um thanks for for being willing to step up there and bring those back. Um council members, anything else? We I normally start with staff, but we'll just do this in the other order tonight since I started with Council Member Grenall. Um, the only other thing I'll quick mention, Tom, we talked about last week when we pulled the slides up, but the League of Minnesota Cities is still running. Are maybe you're ready for it. Of course, you're ready for it, right? Running their uh mayor of Day essay contest. Fourth, fifth, and sixth graders can jump on the MLC website and uh answer the essay question Tom has on the screen. I actually got to talk to one of our local fourth, fifth, and sixth graders via a Zoom call two days ago who had a lot of questions she wanted to ask me about being mayor so she could respond better to the essay question and might have been the best 15 minutes of my week so far. Um December 12th is the deadline. Four winners will get a cash prize and they'll be featured in what I'm sure is the most widely read magazine in Minnesota, uh which is the Minnesota Cities magazine. So, uh, look forward to those submissions and we'll highlight those Apple Valley submissions that that, uh, we get back from the league and, uh, recognize them here as well. So, thank you for that. Tom, any other items for staff communications this evening. [1:47:02] Tom Gillaspie: I would just, uh, remind everybody that uh, the Apple Valley Municipal Center is a drop off location for the open door food pantry. We have a very large box in our lobby. We would welcome people in uh during our great hours to make donations uh to the open door pantry. Uh on our on our website, apple valleym.gov, uh there's a page that lists all of the things that are the high priority items that they would like to receive. So uh perhaps uh during the course of the holidays, this is a great thing to do. We will be accepting donations through the end of December. [1:48:02] Mayor: Perfect. So when you get home and find out that everybody at your house picked up green beans and peanut butter on their way home, you can drop some of the extras off here. or is that just our house that that happens? I'm not sure. So, thanks uh thanks for the updates everyone. Thanks again, Council Member Grenall, for saying yes when maybe no was uh your first choice. Um our next item is our calendar of events and our next informal city council meeting is Thursday, December 11th at 5:30 with our next regular city council meeting on Thursday, December 11 at 7:00 p.m. Do we have a motion to approve the calendar? [1:48:11] Council Member Grenall: So move. [1:48:13] Council Member Bergman: Second. [1:48:14] Mayor: A motion from council member Grenall, a second from council member Bergman. All those in favor indicate by saying I. I. Opposed. The calendar is approved. And just a reminder that city offices are closed on Thursday, November 27th and Friday, November 28th in observance of Thanksgiving. Do we have a motion to adjourn? [1:48:33] Council Member Grenall: So moved. [1:48:35] Council Member Heert: Second. [1:48:40] Mayor: Motion from Council Member Grenall. Second from Council Member Heert. All those in favor indicate by saying I. I. I. Thank you. We're adjourned. Thank you everyone.