This transcript has been formatted with speaker names based on the context of the Lakeville City Council meeting. [0:00] **[Music]** [0:23] **[Music]** [0:47] **Mayor Luke Hellier:** Good evening, welcome to the September 3rd city council meeting. If you'll join me for a moment of silence and the Pledge of Allegiance. [1:10] **Mayor Luke Hellier:** To the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Okay, City Clerk, roll call please. [1:14] **City Clerk Ann Orlofsky:** Michelle Volk? **Councilmember Michelle Volk:** Here. **City Clerk Ann Orlofsky:** Luke Hellier? **Mayor Luke Hellier:** Here. **City Clerk Ann Orlofsky:** John Bermel? **Councilmember John Bermel:** Here. **City Clerk Ann Orlofsky:** Dan Wolter? **Councilmember Dan Wolter:** Here. **City Clerk Ann Orlofsky:** Joshua Lee? **Councilmember Joshua Lee:** Here. [1:25] **Mayor Luke Hellier:** Okay, we’ll now move on to item number three: citizens' comments and opportunity for anyone to address city council for up to three minutes. Okay, anybody online by chance? No. Okay, moving on. Additional agenda information, Mr. Miller? [1:41] **City Administrator Justin Miller:** Mayor, we’re going to be asking that you remove item 6E from the agenda. This is an agreement related to Hasse, and that needs to go to the arena board first. [1:58] **Mayor Luke Hellier:** Okie-doke. And with that, we'll move on to item five: presentations and introductions. We'll turn it over to our Parks and Rec Director, Joe Masiarchin, for the parks and wreck quarterly report. [2:18] **Parks & Recreation Director Joe Masiarchin:** Good evening. Excited to give you my first presentation as the Parks and Recreation Director. We'll start with Administration, talking about some of the things that we've been working on in the department, starting with Grand Prairie Park construction. Grand Prairie Park construction has been running all summer long. The schedule continues to shift though due to the weather. There have been significant soil corrections and grading that’s been completed, and the main building footings were installed last week. We anticipate that the grandstand building footings will go in in mid-September and the field support building will go in in mid-October. [3:04] **Joe Masiarchin:** Staff has been preparing though for the opening of that facility, which will come in phases partially in 2025 and partially in 2026. But in preparation for that, we have been working on policies for the splash pad, and our staff have already gone through some of the training for the splash pad itself—a certification that's required to run that, which is a 5-year certification. So they'll have to renew that every five years, and three of our staff have gone through that already. [3:51] **Joe Masiarchin:** Staff has also been working on the planning and design for Voyager Park. We've been working with SRF on that design for the specifications for the park. That’s a new neighborhood park that'll open in 2025, or we’ll go into construction in 2025, and that’s at the Voyager Farms development. Some of the park amenities being considered would be a small sledding hill, shelter, playground, and half basketball court. All of that is still kind of in review. [4:15] **Joe Masiarchin:** The recreation staff have been doing quite a few park tours this summer. A lot of new facilities have come online in the past few years, so we’ve been visiting those parks and park amenities including the North Creek Greenway, Grand Prairie Park construction site, the Knob Hill Park, Pinnacle Reserve Park, and Spyglass Park. That’s phase one; phase two will be coming online in the next year or two. We've been working to familiarize staff with those park facilities and assets so that they can better answer questions from residents and handle reservations and those types of things. [4:39] **Joe Masiarchin:** Moving on to park maintenance itself, it’s been a busy summer for them obviously with Antlers Park coming online. Staff supported 224 shelter rentals in June, July, and August; 37 rentals at the John Hennen Pavilion during that same time frame. Aside from that, we've been working to respond to the usage of the park, so looking at increasing the number of receptacles for trash and recycling in the park, working on new parking control measures, and then this fall we'll be working on an adjusted ADA access ramp as well as doubling the number of bike racks that are in the park. Needless to say, and as you all know, it's been a busy facility for us this year. [5:24] **Joe Masiarchin:** Summer operations though for the park staff continue to be busy. This year they striped an estimated 101 athletic decks, keeping those maintained throughout the season and also working on quite a number of tournaments including the Father's Day Cup, the Last Call at Kenwood, and Grand Slam. Park maintenance has also been working on quite a few special events including Pan-O-Prog. This year they assisted with prep for Beer, Brats, & Bingo, the ping pong ball drop, the Fourth of July fireworks, the art show, and quite a few other events that are held in the community. They also assisted with site prep for Taste of Lakeville, and in two weeks they'll be working on prep for the Art Festival. [6:09] **Joe Masiarchin:** Moving on to Recreation, again a busy summer. This year in total there were 3,383 registrations; that’s 27 new programs. Some of the most popular programs though include RevSports with 783 participants, the tennis program with 247, pickleball lessons at 81, and then the Puppet Wagon, which is not represented in the registration total—over 3,000 attend. We track that at every stop each day and it's been quite a summer for that program. [6:35] **Joe Masiarchin:** The nature programs at Ritter—there's been quite a nice increase there as well. This year there were 20 new programs at that site at the ELC; that's a 35% increase over 2023. There were 449 registrations, and some of the new popular programs that were held this year included Nature's Classroom series, Raptors: Hunters from Above, and Herbology: Not Just for Wizards. [6:55] **Joe Masiarchin:** Speaking again about the Environmental Learning Center, we've been working with the communications staff and environmental resources staff on a new campaign on social media to help boost the visibility of that facility, focusing on the fact that it is now a year-round facility. There's a whole new series of programs that are being developed, and right now that's being marketed towards people 30 and older. The first month that campaign ran, we reached 23,000 views, around 610 clicks to the website. The second month had around 26,000 views and 572 clicks to the site. It's one of those ways that we're trying to track connection to registration. It’s a really nice way for us to be able to get more advertising out for those new programs in the facility and be able to track how our marketing dollars are spent as it relates to registrations. [7:42] **Joe Masiarchin:** For adult athletics this year, a total of 306 teams, up 204% over 2023. That increase is primarily due to the return of sand volleyball, which was on pause last year while Antlers Park was being reconstructed, as well as an increase in pickleball. This year though: 232 teams for pickleball, sand volleyball 51 teams, Bocce nine, and softball 14. [8:29] **Joe Masiarchin:** Moving on to the Art Center, as you know, the Art Center staff oversee the Live at the Lake series, the concert series that's held at Casperson Park. That series ran for 12 weeks starting on June 12th. There were 12 performances—actually 24 performance groups as there are two per day—15 food vendors, and in August this year, they did a test run on a new beer and wine sale. That actually went quite well; they were pleasantly surprised on how that went. The intention is to run that as part of the series for all 12 weeks next year, and ultimately the funding for that goes directly back into the series as a way for us to increase the quality of the performers and offset additional performance fees. [9:14] **Joe Masiarchin:** Program numbers for the Art Center were really phenomenal this year. 30 new programs were offered this summer, a 157% increase over 2023. Total participant registrations were 1,298, and they ran programs like Gap Care, providing care between programs so you could drop off in the morning and pick up in the evening. The pottery programs continue to be incredibly popular with 48 sessions—that’s an all-time record—and 441 participants. The performing art programs, those are the theater programs, had 418 participants. [10:01] **Joe Masiarchin:** The summer program trends though are quite impressive as well. I'll point out the 2023 and 2024 figures. In 2023 there were 750 unique participants—the previous number was taking into account that multiple families register for multiple sessions—with 75,000 in revenue in those three months. In 2024, 847 unique participants and 177,000 in revenue, so a decent jump. This was really all contributed to the fact that we now have the Fine Arts Building; they were able to increase the amount of performances and the number of classes. This was expected, but it was good to see that it came to fruition. [10:35] **Joe Masiarchin:** The Art Center also manages the Operational Support Grant through the Minnesota State Arts Board. They just completed the third year of reporting on that grant from July of 2023 through June of 2024. According to those numbers, 658 teachers and performers—that counts every youth and adult that participates as a performer in our series as well as all of the instructors—and 24,000 participants in the Visual Arts and Performing Arts programs. An estimated 5,500 of those are ages 0 to 18. This year's grant award, which started in July, was the highest that we've received from the State Arts Board at $9,969. [11:34] **Joe Masiarchin:** The Art Center staff also oversaw the installation of three community art pieces: one at the Fine Arts building, one in the Antlers Park roundabout, and one on the John Hennen Pavilion. Those are up and visible for the community all year round. There is an interactive art map through the Art Center's website that you can view all of Lakeville's public art. [12:10] **Joe Masiarchin:** We'd also ask you to save the date: the Lakeville Art Festival is coming in two weeks, September 21st and 22nd. That again features more than 100 juried artists, a community art project, youth art tent, art instructor demos, live music, and food and beverage vendors. That’s always a great event to see Lakeville showcase its support for the arts. [12:20] **Joe Masiarchin:** And on to our active adults. Current membership really hit an all-time record this year; to date, we're at 1,520 members at the Heritage Center. For those outdoor groups and clubs, that includes Bocce ball, bean bag, the bicycling club at 73 participants, golf club at 178, motorcycle club, pickleball, and walking club. Again, though, you can see the popularity of pickleball with 258 participants registered. As far as other programs and events at the Heritage Center, that would include the Diamond Dots, Paint and Take, Puzzle Palooza, the Lakeville Luncheons, Ice Cream Social, and Peach Perfect Comedy Hour. There is quite a variety of activities being offered at that facility at all hours of the day. [13:07] **Joe Masiarchin:** And just looking ahead, make sure to keep an eye out for the Belgian Waffle Breakfast fundraiser, which will be October 13th and is managed by the Heritage Center staff. The Haunted Forest Festival is October 26th, managed by the Recreation staff. And then the annual Holiday Art Sale is December 5th through the 7th, run by the Art Center staff. And with that, I'll stand for any questions. [13:38] **Mayor Luke Hellier:** Council, any questions or comments? Yeah, Dan. [13:42] **Councilmember Dan Wolter:** Not a question, just a comment. I'm just astounded by the numbers, so kudos to you and the team there. You know, for me, these programs were kind of a hidden treasure when I started on the Council because I didn't know much about them, but clearly with thousands of people participating, they're not that hidden. So, good work. [13:58] **Joe Masiarchin:** Thank you. [14:02] **Mayor Luke Hellier:** I just had a quick question about the advertising and marketing. Is that just focused on Lakeville or are we trying to reach people outside of Lakeville? And if so, have you talked to Visit Lakeville about partnering on doing some promotion? [14:15] **Joe Masiarchin:** We haven't talked to Visit Lakeville; that's a good thought. We started by partnering with Environmental using some funds that they have available. It is set to a 25-mile radius from the facility. The marketing is really geared at this point to females 30 and above. We thought in these next few months we'd continue to keep an eye on how that's going and if we're reaching residents outside of the area. [14:48] **Mayor Luke Hellier:** Very good, thank you. Appreciate it. Exciting! [14:50] **Joe Masiarchin:** Thank you. [14:52] **Mayor Luke Hellier:** Okay, moving on to item six: the consent agenda. Is there any comment about any issue that we want to address? If not, I'll take a motion to approve the consent agenda minus item E. [15:02] **Councilmember Joshua Lee:** I move to approve the consent agenda minus item E. [15:08] **Councilmember Dan Wolter:** Second. [15:10] **Mayor Luke Hellier:** Any further discussion about the items on the consent agenda? Okay, seeing none, all those in favor say aye. **Councilmembers:** Aye. **Mayor Luke Hellier:** Opposed? We have passed the consent agenda. Now move on to item 7A: public hearing and resolution adopting assessments for unpaid special charges. And that is our Finance Director, Julie Stahl, for the presentation. [15:35] **Finance Director Julie Stahl:** Good evening, thank you Mr. Mayor. The first item here is something the city does to minimize our losses due to bankruptcy, and that is assessing the unpaid special charges. This is allowable by State Statute and therefore we do have to follow those procedures. Part of the procedures is public notice of the hearing, so that was mailed to the customers who were delinquent, posted on the city website, and also published in the newspaper. [15:58] **Julie Stahl:** The certification process this year was a little different. We had to move it up a month, which created some issues, but it also saved a lot of manual processes. What drove this was our ERP software implementation in October. To minimize the amount of manual labor in between, we had to move the certification process up. What that meant for a lot of utility customers is more people received the letter. For instance, Cycle One, which is the largest portion, had bills mailed out May 31st and they had until June 27th to pay the bill. In order to get the letters out by July 15th, there was less of a grace period. They could be late just a little bit, but in order to get those letters mailed out to do this whole certification process, we had to be really tight with our time frame. [17:09] **Julie Stahl:** So that did create a little bit more—the number of accounts that got certified for utility billing is up. We are up to $97,300 for 1,180 utility accounts compared to last year, which was 893 accounts. It is up and represents about 6% of the utility customers. However, they did have until August 16th to pay the bill and be removed from this list. These lists that are in the packet are the ones that had not paid before the August 16th date. [17:55] **Julie Stahl:** In addition to the utility bills, we've got the false alarms and the nuisance charges. Those numbers are also a little bit up—well, the nuisance abatements are up. We're at $2,078 with eight accounts. The false alarms are actually down a little bit from last year, a total of $424 with four accounts being affected. After we do this public hearing, if there's any comments, we will ask the Council to adopt these assessment rules. Residents still have until October 3rd to pay the assessment off and not incur any interest. They would still pay the $50 administration fee, but after October 4th and before November 30th, they would pay interest up to the date of payment. At that point, we're having to certify it to the county and it goes onto the property taxes. With that, I'll see if there's any questions from Council and then open it up for the public hearing. [19:18] **Mayor Luke Hellier:** Okay, any questions? This is a public hearing, so if you have a comment, now is the time. Seeing none, I'll take a motion to close the public hearing. [19:24] **Councilmember Joshua Lee:** I'll move to close the public hearing. [19:26] **Mayor Luke Hellier:** Is there a second? [19:27] **Councilmember Dan Wolter:** Second. [19:29] **Mayor Luke Hellier:** All those in favor of closing the public hearing say aye. **Councilmembers:** Aye. **Mayor Luke Hellier:** Opposed? Motion prevails. Any further discussion about this? Otherwise, I will take a motion. [19:35] **Councilmember Joshua Lee:** I move to approve the resolution adopting assessments for the unpaid special charges. [19:42] **Mayor Luke Hellier:** Is there a second? [19:44] **Councilmember John Bermel:** Second. [19:46] **Councilmember Joshua Lee:** Thank you for walking us through the timeline, because I think at first glance, the move a month early seems like a lot, but the opportunity to pay these without interest is helpful to know. So thank you for outlining that specifically. [20:17] **Mayor Luke Hellier:** Okay, and with that, roll call please. [20:18] **City Clerk Ann Orlofsky:** Volk? **Councilmember Michelle Volk:** Aye. **City Clerk Ann Orlofsky:** Hellier? **Mayor Luke Hellier:** Aye. **City Clerk Ann Orlofsky:** Bermel? **Councilmember John Bermel:** Aye. **City Clerk Ann Orlofsky:** Wolter? **Councilmember Dan Wolter:** Aye. **City Clerk Ann Orlofsky:** Lee? **Councilmember Joshua Lee:** Aye. [20:29] **Mayor Luke Hellier:** Okay, and now we'll move on to Item B: resolution approving the preliminary 2025 property tax levy and preliminary 2025 budget. Ms. Stahl is still on deck. [20:38] **Finance Director Julie Stahl:** Thank you, Mr. Mayor. As we went through with Council at the work session last week, we have got a budget and levy that we are asking to be adopted at this preliminary setting. This is the budget that would then set the amounts that are on the notices mailed out to property owners in November. Keeping that in mind, tonight we can only decrease the levy from this point forward; we cannot increase it. [21:10] **Julie Stahl:** We are looking at our overall levy increase going up 12%. So the amount of the total levy is $48,815,550. The general fund portion of the levy increase is 8%, which is roughly $3,032,977. We do have our debt and our park referendum levies, and the park referendum debt alone was 2.4% of the 12% increase. The amount of those levies is $12,773,000. The remaining 3 million that makes up the rest of the levy is for our trail improvements, pavement management, technology, and our park improvement fund. [22:04] **Julie Stahl:** Touching on some of the key points of what drove the budget this year: we are meeting our growing city's demands. We have the fire department model changed to adding more full-time, so we were adding another six full-time firefighters. We had added three captains and three full-time firefighters last year, so we are recognizing that full year now in 2025 and adding now another six full-time fire positions. Also, continuing to support our police department in those patrol positions, we did add one cadet. We got a grant for $50,000 to help pay for the training of that cadet, who would then move into a patrol position after they complete all their training. [22:55] **Julie Stahl:** In addition to the public safety costs—and just a note that those total public safety expenditures were a 13% increase from the 2024 budget—it's quite a significant investment in those services and much needed. Other than that, we had a 3% cost-of-living adjustment on wages. Overall, our general fund expenditures went up 3.3%. We are using zero of our fund balance reserves—no transfers out or supporting use of fund balance to have a balanced budget. We are also keeping our fund balance ratio at the top level. At the end of 2024, we're expected to have a 50% fund balance ratio of the 2025 expenditures and then forecasting at the end of 2025 at 48.5%. So, still very high; our policy is 35 to 50%. [23:58] **Julie Stahl:** Just another note for something that's new this year that a lot of our homeowners will see: the median value home in Lakeville is $413,000. That falls right in the middle of what used to qualify for the Homestead Market Value Exclusion. The limit used to be $413,800 for the market value for that exclusion, but now the state has bumped that up to $517,000. There's nothing anybody needs to do; if their house falls within that range, they'll just see that market value credit on their tax valuation. It just brings down the taxable market value of the property. There's just going to be more people realizing that again. [24:55] **Julie Stahl:** If we're adopting the budget as it is tonight and the levy, the residential impact on that median value home would be an increase of $132 a year for the city portion of their property taxes. With that, I will gladly answer any questions that Council may have. [25:22] **Mayor Luke Hellier:** Council questions or comments about the budget? Joshua. [25:28] **Councilmember Joshua Lee:** Thank you. Again, a lot is packed into this. Last week at our work session, we asked for a decrease from that proposed budget by a percentage. Could you walk us through what changed from what we saw last week and what we see this week? [25:46] **Julie Stahl:** Yes, it's quite easy to identify. We looked into the liquor fund as far as what it could help transfer in instead of levying for. So we increased the transfers from the liquor fund by $400,000 and reduced the levy ask by $400,000. We are taking $200,000 out of debt service reserves available just to help instead of levying. Again, it's not jeopardizing any debt service fund balances; they're still well above their 105% required minimum for the next year's principal and interest. Then we reduced the building fund levy by $100,000 as we saw some ability to have some savings there. That $700,000 was the decrease in the levy amount from the work session. [26:30] **Councilmember Joshua Lee:** Very good, thank you. [26:34] **Mayor Luke Hellier:** Well, I just like to say I want to extend my gratitude to all the directors and to the administration for putting together a very thoughtful budget. Obviously, with a challenging economy, things make it certainly difficult between COLA and the cost of health insurance going up, all while still maintaining all the critical infrastructure in our city, public safety, and then also thinking about the future. So I appreciate that. And I also thank the staff for taking the feedback we had at our work session, as Joshua mentioned, on scaling some of that increase back. With that, I will take a motion to approve the resolutions—and as a reminder to folks, this is the maximum, and we will set a final that cannot be greater than the 12.05 later this year. Joshua? [27:42] **Councilmember Joshua Lee:** I move to approve the resolution establishing the preliminary 2025 property tax levy and preliminary 2025 budget and setting the budget public hearing to be held on Monday, December 2nd, 2024, at 6:00 p.m. in the council chambers. [27:50] **Mayor Luke Hellier:** Is there a second? [27:51] **Councilmember John Bermel:** Second. [27:52] **Mayor Luke Hellier:** Okay, any further discussion about the preliminary levy and budget? Yeah, Dan. [27:57] **Councilmember Dan Wolter:** To me, this is still too high. I understand that this is the process—you set the high part and then you work for a couple months to bring it down and hope things align so that we have more liquor fund or other things happen. Just talking to people, people are struggling with the cost of living, and I'd like to think that the City of Lakeville would not add to that through this. However, as Julie pointed out, to me the public safety costs—which for me is a top priority—those costs are significant. They are a meaningful investment. At the doors that I'm at, that's what I hear from people—that it is a priority for the public as well. So I think this is appropriate. Thank you. [29:08] **Mayor Luke Hellier:** Thank you. John? [29:10] **Councilmember John Bermel:** I just... this really presents a tension between wanting to keep it as low as possible—I appreciate the drop down to the 12.05 and you guys did a lot of hard work to meet that—but public safety is also a priority. So I look at this and it's always "is this reasonable?" and I do believe it's reasonable. I believe a number of our citizens that I've talked to understand that investment and that it's a worthwhile investment. People appreciate the transparency. I really appreciated hearing how the different parts of this live; when you hear one number it's like "whoa," and then you hear what that consists of and it starts to make a little more sense. I wish it were lower, but I think there's an economic reality at play here. So we appreciate the hard work to keep this reasonable and to also help to preserve our cash balance, as that impacts our bond rating and all that. So I think you guys have done really well. [30:16] **Mayor Luke Hellier:** Other comments? Okay, with that, roll call please. [30:18] **City Clerk Ann Orlofsky:** Bermel? **Councilmember John Bermel:** Aye. **City Clerk Ann Orlofsky:** Wolter? **Councilmember Dan Wolter:** Aye. **City Clerk Ann Orlofsky:** Lee? **Councilmember Joshua Lee:** Aye. **City Clerk Ann Orlofsky:** Volk? **Councilmember Michelle Volk:** Aye. **City Clerk Ann Orlofsky:** Hellier? **Mayor Luke Hellier:** Aye. [30:29] **Mayor Luke Hellier:** Thank you. We'll move on to items eight and nine: unfinished and new business. Seeing none. Announcements: the next city council meeting is Monday, September 16th, and our next work session is Monday, September 23rd. And with that, I will take a motion to adjourn. [30:57] **Councilmember Joshua Lee:** So moved. [30:58] **Councilmember Dan Wolter:** Second. [31:00] **Mayor Luke Hellier:** All those in favor say aye. **Councilmembers:** Aye. **Mayor Luke Hellier:** Opposed? We're adjourned. [31:11] **[Music]**