This transcript appears to be from a City Council meeting in **Lake Elmo, Minnesota**, occurring in December 2024. Based on the context provided and the dialogue, here is the formatted transcript with speaker names. *** **[00:00:00] Mayor Charles Cadenhead:** If you'd stand with me for the Pledge of Allegiance please. 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, with liberty and justice for all. So, Item B on our agenda is to approve the agenda for this evening. Can I get a motion on the agenda? **[00:00:30] Council Member Jeff Holtz:** Motion to approve the agenda as written. **[00:00:35] Council Member Nick Dragisich:** Second. **[00:00:40] Mayor Charles Cadenhead:** We have a motion and a second for approval of the agenda. All those in favor please signify by saying I. **[00:00:45] Council Members (In Unison):** I. I. I. **[00:00:47] Mayor Charles Cadenhead:** Is hereby approved. We had the minutes from our November 17, 2024, meeting and our special meeting for December 3rd, 2024, in our packet. I'll entertain a motion for approval of those minutes. **[00:00:55] Council Member Matt Hirn:** So moved. **[00:01:00] Council Member Nick Dragisich:** Support. **[00:01:05] Mayor Charles Cadenhead:** All those in favor of approving the minutes from November 17th, 2024 and December 3rd, 2024 special meeting please signify by saying I. **[00:01:10] Council Members (In Unison):** I. I. I. **[00:01:12] Mayor Charles Cadenhead:** Minutes are hereby approved. So, we don't have any public comments tonight. I don't see anybody that's going to make public comment. Not aware of any presentations we have. We do have a consent agenda item F, number two. Item is: approve payment of disbursements; number three: approve liquor license renewals; number four: approve Code Red joint powers agreement; number five: approve communications coordinator hire; number six: approve landscape security reduction for 173 Jade Trail Enterprise Rent-a-Car; number seven is approve security reduction for ME Lake Elmo LLC, which is the Milestones Daycare Center; number eight: approve pay request 8 final for the tapestry sanitary sewer extension; number nine: approve pay request five for the Stillwater Boulevard trunk water main improvements; number 10: award contract for Well 2 PFAS Water Treatment Plant, Resolution 2024-132; number 11: approve Bolton & Menk contract renewal; number 12: approve Bridgewater Village first amendment to the development agreement. I'll entertain a motion on the consent agenda. **[00:02:30] Council Member Jeff Holtz:** Motion approve the consent agenda as written. **[00:02:35] Council Member Nick Dragisich:** Support. **[00:02:40] Mayor Charles Cadenhead:** We have a motion and a second for the consent agenda. All those in favor please signify by saying I. **[00:02:45] Council Members (In Unison):** I. I. I. **[00:02:47] Mayor Charles Cadenhead:** Consent agenda is approved. Item G, regular agenda. Number 13 is Truth and Taxation hearings for the 2025 budget. Are the presentations under your log in or mine? **[00:03:00] Clarissa Hadler (Finance Director):** Logged in. You can log in. They're just under something when you're like... you just put your email for username. I think it wants to prepare Windows. You want to just go through the whole thing? Give it the unhappy face. It just wants to close. Can you just log in? Talk yourselves... throwing me off my game as if I wasn't nervous enough, man. Yep. Message. **[00:03:30] Mayor Charles Cadenhead:** So who went to the Vikings game? Anyone? Chief? **[00:03:35] Fire Chief Dustin Kalis:** Mary. I'm a Packer fan. **[00:03:40] Mayor Charles Cadenhead:** Yeah? Are you? Are you a Bears fan? Making me do authenticate. Was it 22? Yep. Is it working? **[00:03:50] Clarissa Hadler (Finance Director):** All right, well after all that, get started. We're here for the... dude, it's not centered. Let your OCD happen later. We're here for the 2025 budget and levy discussion. Some quick objectives this evening are to just do an overview of the discussions of the 2025 budget and levy. We're going to hold the Truth and Taxation hearing and then adopt the resolution setting the 25 budgets and levy. So, you will all recall that we started this process this summer. So we've had a couple of meetings, both discussing the budget and setting the preliminary levy. These numbers have not changed since the preliminary levy was set in September. So we are looking at a total levy of $10,840,849, which is a 13.02% increase to the levy itself. The tax rate will be increasing by 2.14%. And I just want to draw attention to the change in practice again, that we've set aside a separate levy for capital transfers. These used to be transfers out of the general fund and we've moved them to a separate capital levy. This is both easier from an accounting standpoint as well as, I believe, more transparent. It's setting these dollars aside for a particular use outside of the general fund. So when we're talking about changes to each fund or to the general fund or each department, we're going to see some decreases, and this is the major reason why—is that we've moved those transfers out. Going into general fund expenditures, we have a few different categories that we use for those: General Government, Public Safety, and Public Works. You'll see in this graph we use about a quarter of our budget for General Government, about half for Public Safety—and just to clarify what Public Safety is, it does include Fire, Police, and Building Inspections, all of which are three of our largest departments. And then the green is Public Works. Some overall changes to the general fund budget: we're looking at a 2.3% decrease, and again that's because we took out those capital transfers. We did add a couple of new positions in Admin and Public Works, and then we revised a couple of vacant positions in Planning and Building which ended up saving some money. Salary and benefits increase across the board assumes the 3% COLA as well as steps where appropriate. General Government is looking at an increase of 24.3%. Public Safety, decrease. Public Works, also a decrease—again, because of those capital transfers being moved out. And then transfers and contingency also taking transfers out of there, so that decreases. So again, overall decrease of negative 2.3%. If we did have those transfers in there, it would be an increase of 10% just to give some perspective there. For General Government, again, this includes departments that manage overall administration, financial management, and development of the city. Major changes include... there are actually quite a few sort of large one-time/occasional purchases planned for 2025, including strategic planning, goal setting, a new communications position, and new financial software. So that's actually going to be a two-year investment; we'll spread those costs across two years. Comprehensive planning will start next year, and then we have some work for on the Fire Hall and 180 acres needs an EAW and an RFP. Those are a couple of new items from Planning that have been requested here towards the end of the year. Public Safety: Police, Fire, Building Inspections. Sorry, I might have to skim these a little bit so I don't start coughing again. Decrease because of the change from the vehicle transfer. With the vehicle transfer, it would have been a 3.8% increase. Public Works includes Streets and Parks. They will be looking at a 16% decrease because we moved both the vehicle levy and the street maintenance out of that department. Moving into revenue, this revenue is for the general fund only. We're looking at tax revenues in this fund decreasing by almost 7%; they're just getting moved over to a different fund. Overall revenues in the general fund are looking at a decrease of 2.3%. We did change since the last time—we added the sale of the old Fire Hall. Again, this is a request from Planning, and that just kind of balances out the EAW and the RFP for the 180 acres on the Fire Hall. Jason's here if you need any more details obviously. Moving on to the debt service funds. You've got the general fund levy that goes into the general fund, which is the majority of our operations. Excuse me. Debt service levies are levied separately, deposited into their own funds, and their sole purpose is to pay for existing debt. We're looking at an overall increase to those levies of 11.2%. And Capital Funds: these are the new separate levies this year. So I have it broken down right now between Infrastructure Reserve (which would go towards street improvements), City Center CIP (which is kind of a preemptive—we just built a very expensive building and we know we're going to have maintenance to do on this building in the next decade, so we're just going to start setting aside funds for that), Park CIP (intended to fill in any gaps that the park dedication fund fails to manage), and then we have the vehicle and equipment fund which has been existing and the street maintenance fund which, again, we're moving out of the general fund. The overall increase... you'll see the existing transfer actually stayed relatively the same. We used to be at about a million dollars and now we're at 1.25, so roughly a 25% increase in our capital set-asides. Total levy: here's the tax impact on the median value home. Median value home actually decreased slightly this year, so the median value home would have been paying $1,495 in taxes this year (obviously this is city taxes only). And next year, the new median value home would be at $1,612, or an increase of $117 per year. Here's our tax rate relative to other cities. I did narrow this down to the cities of the most similar population within Washington County. We are 9th out of 10th. Moving on to the utility funds, your full budget is in your packets. Overall decrease because of fewer capital projects. Other minor funds: we're slowly moving some of these higher investment items out of the general fund so that we can kind of even out the expenditures within the general fund a little bit more. We set up the Fire Equipment Projects fund this year (largely funded from State dollars), the Street Maintenance fund, and the City Center shared expenses. Rather than divvying up all of these City Center expenses to the departments within the general fund, we're going to account for it in a separate fund and then just bill those departments once a quarter. That is all I have for you and we do need to host the Truth and Taxation hearing, and I'm happy to answer any questions. **[00:10:00] Council Member Matt Hirn:** Yeah, just one question here. So I feel like in the past when we were talking about the increase in tax rate, I feel like we were calculating it differently. So like tonight you're showing that it's a 2% increase—absolute increase—where I feel like in the past we've been kind of aiming for that relative 2% increase. So like for example, last year the taxes went from 24.064% to 24.545%. I might have that wrong, I'm looking at the budget discussion, but either way that's... that was a 2% change where this year if we're calculating it the same way it'd be an 8% change. **[00:10:45] Clarissa Hadler (Finance Director):** We did... I don't know if you recall that we talked about this at—I don't remember if it was the budget workshop or the meeting before that—and I kind of addressed that with the council and asked if anybody had... if there was sort of a perception. So I tried to gauge that in advance. I understand the concept of the 2% over, but I don't think that that's sustainable. Our rate is so low relative to other cities and relative to the services that we provide that we're just not able to do the long-term planning that we need to do and creep up at that 2% over the prior rate. **[00:11:30] Council Member Matt Hirn:** So from the long-term financial planning where we originally said kind of aim for that 2% increase per year, you're saying that that's probably not feasible to stay at that level? **[00:11:40] Clarissa Hadler (Finance Director):** Not from my studies of it, to again accomplish the things that we are trying to accomplish. **[00:11:45] Council Member Matt Hirn:** Okay. But I think so... at least if I'm thinking of how we've calculated in the past, it's really more of like an 8% increase compared to last year if we're calculating it the same way we did previously, right? I guess it depends on how you speak to it. **[00:12:00] Nicole Miller (City Administrator):** I guess it's all how you... how you read the sentence, right? I mean if we're saying we're increasing at 2% over the 24%, you know, I guess it wasn't a policy per se. I would say, you know, we couldn't really even find anything in writing. I thought it was an odd way to actually interpret it when I first heard it, but I was instructed to do it that way by [previous staff], and so that is why I brought it up to council earlier this summer to have that discussion and kind of preempt this discussion. **[00:12:30] Council Member Matt Hirn:** Okay. Maybe I'll bring up my concerns in the discussion with that. But yeah, just to clarify on that, so you're looking at it at the 2.4 because really it's an 8% increase if we calculate the rate... the rate of increase is 8%. It's two percentage points increase, but it's an 8% increase rate in my understanding. And again, maybe I'm moving more into discussion, I'm just trying to understand if I'm looking at that wrong, or if it is actually an 8% increase relative to how we've done it in the past. **[00:13:00] Clarissa Hadler (Finance Director):** It is. You're looking at it right. **[00:13:05] Mayor Charles Cadenhead:** Any other questions? I have to open a hearing, right? I'll entertain a motion to open the Truth and Taxation hearing. **[00:13:10] Council Member Jeff Holtz:** So moved. **[00:13:12] Council Member Nick Dragisich:** Support. **[00:13:15] Mayor Charles Cadenhead:** All those in favor in opening a Truth and Taxation hearing please signify by saying I. **[00:13:20] Council Members (In Unison):** I. **[00:13:22] Mayor Charles Cadenhead:** Truth and Taxation hearing is open at 7:28. I don't think anybody's going to be here to talk about it so I'll entertain a motion to close the hearing. **[00:13:30] Council Member Jeff Holtz:** So moved. **[00:13:32] Council Member Nick Dragisich:** Support. **[00:13:35] Mayor Charles Cadenhead:** There's a motion and support to close the Truth and Taxation hearing. All those in favor please signify by saying I. **[00:13:40] Council Members (In Unison):** I. **[00:13:42] Mayor Charles Cadenhead:** We're going to close the Truth and Taxation hearing at 7:29. With that, I'll entertain a motion on the property tax levy and adopting various 2025 budgets. **[00:13:50] Council Member Jeff Holtz:** Motion to approve Resolution 2024-134 setting the 2025 property tax and adopting various 2025 budgets. Is there a second? **[00:14:00] Council Member Nick Dragisich:** Second. **[00:14:05] Mayor Charles Cadenhead:** We have a motion and a second. Discussion? **[00:14:10] Council Member Jeff Holtz:** Before we even get into the topic, I mean, thank you to staff number one for coordinating us putting us together. It's multiple meetings—I mean this is a year-long process. So thank you for that. I have confidence in sitting up here and knowing that the job is being done well and that matters. Property taxes stink in that regard; they are not the same as income taxes... it's the way the levy is calculated, it is vastly different. So I appreciate that it's able to be brought up in this manner because that helps for those who are watching. In regards to where the budget itself is, I plan on voting for this. This budget aligns with the priorities that we have discussed throughout the year. Over half of our budget is for Public Safety and I think that's something all five of us have said throughout our time on here. I also appreciate the month-long discussion about separating out the levies. I think it adds transparency. I think Council Member Hirn, to your question... I understand what you're asking. I agree with what has already been stated—there never was a policy per se. When I came on Council it was said "Hey we have a 2%, that's our goal." I was never shown any financial analysis to show here's why we think that's sustainable. Now we have a 10-year CIP plan. I don't know where that 2% statistic came from honestly, but it is a very good goal to have. 2.14... I think this aligns with where our community is at for providing the services that they expect. **[00:16:30] Council Member Matt Hirn:** Yeah, so I'll just start too, thank you for all the effort. I know there's been a lot of questions that I've had at the previous meetings. I do really like that graphic that we've been sharing in the [newsletter] where it breaks down dollar for dollar where things go. My concern with the rate question is my understanding is we were aiming for that 2% increase year-over-year with the idea of avoiding a year where we all of a sudden had to jump from 22 to 30%. When that was brought to my attention, my initial concern is... well, if we keep increasing this 2%, 100 years from now that doesn't sound so nice. So now if we're changing it from 2% to 8% if we're calculating it the same way and we're planning on increasing two whole percentage points year-over-year, I don't think that's sustainable. **[00:17:30] Clarissa Hadler (Finance Director):** If I can just clarify one thing? The tax rate is really just the ratio of our levy to our tax capacity. And so when we're talking about maintaining that tax rate, it's really just sort of a useful comparison to where we were. It's really only as good as today's market. In a recession, if all of a sudden values crashed and we wanted to maintain our services, our tax rate would jump significantly. So I like using the tax rate as a comparison, but I do just want to kind of temper that expectation that we maintain it because we're juggling all these different pieces of the puzzle. **[00:18:15] Council Member Matt Hirn:** I think for me, I want to make sure that moving forward we're calculating it the same year-over-year. I just feel like there's maybe it doesn't look as transparent to me. It looks like we had an 8% tax rate increase this year versus a 2%. **[00:18:30] Council Member Katrina Beckstrom:** I would agree. I think it's misleading to the public. It's not a 2% increase, it's a two-point increase. I know Council Member Holtz says that he knows nothing about a 2% or any planning around that, but I know that with the previous administrator we did go through the long-range planning and had a document that shows exactly what the numbers look like over time with that 2% increase. So there was work put into that and there was a logical explanation for that. Again, I wish I could put my hands on that. In full transparency to the public, this is an 8% increase in our taxes. It's not a 2% increase, it's a two-percentage point increase, which is not the same. So I agree with Council Member Hirn. I don't think it's being very transparent with the public. **[00:19:40] Council Member Nick Dragisich:** You know, I think all this discussion... we have a very complex property tax system for most people to understand and I think what really matters is, you know, what did the average home pay last year to the city for its services, what will it pay this year? A lot of work went in by the department heads. If we don't want to see our tax levy go up 2% from 24 to 26% [rate], we have to go back and say what are we willing to give up? I think we did a pretty good job of the budget quite frankly. Some of the levies that we've put in, the capital levies, will reduce borrowing going forward which will save us money on interest costs. So it's a longer-term view. I think everyone sitting here doesn't want to see taxes go up in the City of Lake Elmo; on the other hand, we have to balance that against what services we need to provide. **[00:20:45] Mayor Charles Cadenhead:** I concur. I'm going to call the question. We have a motion and a second to approve the resolution 2024-134 setting the 2025 property tax levy and adopting various 2025 budgets. All those in favor please signify by saying I. **[00:21:00] Council Members (In Unison):** I. I. I. **[00:21:02] Mayor Charles Cadenhead:** Those opposed, same sign. Hearing none, passes. Thank you for all of that. Item number 14 is a 2025 to 2034 Capital Improvement Plan, and this is a 10-year look. **[00:21:15] Clarissa Hadler (Finance Director):** Thank you, Mayor and Council. Moving on to the 25 to 34 CIP. A CIP is a multi-year capital expenditure plan. We just moved from the 5-year to the 10-year CIP in the past year. We also upgraded our software this year which has been a huge improvement. The Minnesota Land Planning Act requires implementation of the comprehensive plan to include a CIP for major infrastructure needs. Our Capital plan includes anything that is $25,000 or more and has a useful lifespan of five years or longer. Here's an overview of the current plan. We're looking at just over $162 million in projects. I would note roughly 50 million of that is Water Treatment Plants that are funded through MPCA. The graph is a really nice view: red is building and finance, then Fire, and everything starting at light yellow all the way around to blue is infrastructure (Streets, Parks, Water, Sewer, Storm). Admin and Finance: we did leave the possible land purchase that the council's in discussions about in Admin for now because it hasn't been reviewed by the Parks Commission. Fire has a number of vehicles and equipment. Public Works accounts for 3.5 million in vehicles. Parks and trails, almost 5 million. Infrastructure is by far the largest group, 69 projects totaling almost $150 million. Within Water projects, we have the water treatment plants to address PFAS; that accounts for $50 million and those will be funded by the MPCA 3M settlement funds. That's my quick recap. **[00:24:30] Council Member Katrina Beckstrom:** I wonder if for the general public who is watching, could you speak to the ball field fund information in here for 2025? I think we've got that in the interfund transfers. Could you speak to the nearly $3 million that is in here for potential ball fields? **[00:24:50] Clarissa Hadler (Finance Director):** The CIP again is a plan. So this Council adopts it annually and then right now the practice is anything within the plan gets addressed at individual Council meetings. So for that land purchase, obviously you're aware that we came out of a meeting discussing that, so we penciled it into the plan. The final decision is up to City Council. **[00:25:20] Council Member Katrina Beckstrom:** Can you just talk to the interfund transfer? **[00:25:25] Clarissa Hadler (Finance Director):** The tentative plan if Council moves forward with the purchase of the land for the future ball fields would be to do an interfund loan, likely from the general fund. We would borrow money from ourselves and then pay it back over time through a planned separate capital levy. **[00:25:45] Council Member Jeff Holtz:** Couple more specific questions. Like page 135, that's with the Village Crossing for the railroad. **[00:25:50] Clarissa Hadler (Finance Director):** Jack, are you talking about the Infrastructure Reserve? **[00:25:55] Jack (City Engineer/Consultant):** It's categorized in the CIP under the transportation fund which would be in the general funds, but there is a source where fees have been getting collected to for contributing to that from the developers. **[00:26:10] Council Member Jeff Holtz:** It’s labeled as Infrastructure Reserve Fund and it has 960 coming up for 2025. **[00:26:15] Clarissa Hadler (Finance Director):** There's not a lot left in that fund, frankly. And honestly, the Infrastructure Reserve fund might actually be an overstatement. There's not going to be $900,000 available in that fund for that particular use, so that might be a mistake on our part. **[00:26:30] Council Member Jeff Holtz:** Do we know the next steps? We did just approve the engineering specs for the crossing, but is there... again, this is one of the more common questions that I get. In terms of what that project looks like in 2025, it still won't connect to anything, correct? It's a crossing to farmland? **[00:26:45] Jack (City Engineer/Consultant):** That's correct. It's getting that crossing in for the developer to create the connections. Currently there's nothing in the CIP for the city to finish that connection; the intention is to allow development to finish that connection. **[00:27:00] Council Member Jeff Holtz:** And this might be on the engineering side as well—50th Street with Hill is mentioned twice about a possible sewer connection. At a high level, what is that discussion? **[00:27:10] Jack (City Engineer/Consultant):** The city owns three or four 2011 systems up in that peninsula that are reaching their capacity. There is an opportunity; it would have to connect to the Oakdale sewer system that we put in for those homes along Holton Lake. It's just looking out ahead and thinking that that may need to be sewered to rescue from an environmental standpoint. **[00:27:40] Council Member Jeff Holtz:** And then last question with the Pavilion schedule. Is there any thought thus far as to when the locations start to be selected? Would there be any additional feedback process or communication with the community? **[00:28:00] Clarissa Hadler (Finance Director):** There's already been a couple of parks grouped together that have a need for some of these pavilions, but obviously they're not set. I think it will be discussed definitely more and then determined on a priority of which one gets built first. **[00:28:15] Council Member Nick Dragisich:** It's a very aggressive Capital Improvement program. I would point out that the plan envisions issuing $67 million in new debt over 10 years. We are projected to finish 2024 with about 59 million in outstanding debt. If we adopt this plan, our outstanding debt will end at the end of 10 years at 60 million. We talked about trying to reduce the amount of tax levy we have for Debt Service. It has a very significant effect. Does it make sense for us to approve a plan that maintains us at such a high level of debt? **[00:29:15] Mayor Charles Cadenhead:** I'll entertain a motion if we'd like to, and a second, if we want to have some discussion. **[00:29:20] Council Member Jeff Holtz:** Motion to adopt the 2025 to 2034 Capital Improvement program. **[00:29:25] Council Member Matt Hirn:** Second. **[00:29:30] Council Member Jeff Holtz:** I fully agree with the underlying premise. I would fully agree there's a lot in there and there needs to be a process to make sure throughout the year we are aligning those priority levels. **[00:30:15] Mayor Charles Cadenhead:** I always kind of hold that with a grain of salt. Council Member Dragisich, how would you answer your own question? **[00:30:30] Council Member Nick Dragisich:** Well, I think we have to look at the list of projects and say do we need... are all these projects needed? If we approve the CIP as it is, staff's going to move forward and say "Well it was in the approved CIP." I think we need to take a harder look. **[00:31:15] Clarissa Hadler (Finance Director):** I would let Jack speak to that further. **[00:31:20] Jack (City Engineer/Consultant):** I would just add that not all projects are even the same. We have a pavement management plan that is looking at your pavement condition. But a lot of these larger cost projects you're seeing in there are for growth and development. **[00:31:45] Mayor Charles Cadenhead:** So there's really no discerning factor in the CIP with regards to one through three and then four and five being low priority? **[00:32:00] Jack (City Engineer/Consultant):** We could separate that out. **[00:32:05] Council Member Nick Dragisich:** If we invest $3 million in a new road, when do we expect to see a return on that investment in terms of development? Maybe we could have avoided paying interest on that debt. **[00:32:20] Council Member Jeff Holtz:** And correct me if I'm wrong, Jack—I think with like in Hudson, it's that if development doesn't occur, it's in the CIP because the road is that bad? **[00:32:30] Jack (City Engineer/Consultant):** That's exactly right. **[00:33:00] Mayor Charles Cadenhead:** I think we could adopt this CIP because we always have the right to go back in and amend it. I'm going to call a question. All those in favor of adopting the 2025-2034 Capital Improvement program, please signify by saying I. **[00:34:00] Council Members (In Unison):** I. I. I. **[00:34:02] Mayor Charles Cadenhead:** Adopted. Item number 15 is approve the 2025 fee schedule. **[00:34:10] Clarissa Hadler (Finance Director):** I did not do a presentation for the fee schedule. It was actually pretty straightforward this year. Building permits for a single-family residential basement finishes were split into two segments. We added fence permit requirements, added some flat fees for residential windows and door permits, and there is the new fee for the cannabis license that just references Minnesota statute. Any questions on any of the fees? **[00:35:15] Mayor Charles Cadenhead:** I'll entertain a motion to approve Ordinance 2024-22. **[00:35:20] Council Member Jeff Holtz:** Motion to approve Ordinance 2024-22 adopting the 2025 City of Lake Elmo fee schedule. **[00:35:25] Council Member Nick Dragisich:** Second. **[00:35:30] Council Member Jeff Holtz:** I was just going to thank staff for addressing some of the questions I had beforehand. **[00:35:35] Mayor Charles Cadenhead:** All those in favor of approving Ordinance 2024-22, signify by saying I. **[00:35:40] Council Members (In Unison):** I. **[00:35:42] Mayor Charles Cadenhead:** Ordinance is approved. **[00:35:45] Council Member Jeff Holtz:** Motion to adopt Resolution 2024-135 authorizing publication of Ordinance 2024-22 by title and summary. **[00:35:50] Council Member Nick Dragisich:** Second. **[00:35:55] Mayor Charles Cadenhead:** All those in favor, please signify by saying I. **[00:36:00] Council Members (In Unison):** I. **[00:36:02] Mayor Charles Cadenhead:** Resolution 2024-135 is approved. Item number 16 is approve the employee handbook updates. **[00:36:10] Jennifer Doyle (Administrative Services Director):** Hello, Mayor and Council. I did not do a presentation, but I just wanted to point out that my recommendations deferred slightly from what we discussed at the workshop. We're adding an ESST policy (Earned Sick and Safe Time). I’m suggesting we just cash it out as cash on that last paycheck of the year. For the vacation policy, we're essentially taking the annual policy and separating it out into sick and vacation leave. In lieu of our discussion where we talked about it being 60 hours [cash out], I'm suggesting that we keep it at 40 but put that 20-hour difference into the carryover so that the balance that people can carry over increases to 260. **[00:37:30] Council Member Jeff Holtz:** A question—now that they are separated, the total accrual has not decreased even though we've added in additional hours with ESST? **[00:37:40] Jennifer Doyle (Administrative Services Director):** Correct. **[00:38:20] Mayor Charles Cadenhead:** Motion to approve updates to the employee handbook. **[00:38:25] Council Member Jeff Holtz:** Second. **[00:38:30] Council Member Matt Hirn:** I'm having a challenging time here because with the ESST, it's guaranteeing time for safe and sick time. Originally, when we were giving employees PTO, we were expecting some of it was going to be for that. If everybody was around that 30-day range, I would be more in favor of decreasing the vacation time now that we are offering the ESST. Also, I still would prefer to see the carryover be lower from the financial liability standpoint. **[00:39:40] Mayor Charles Cadenhead:** I'm thinking along the same lines. I'm not interested in carrying more than 240. I'm in favor of keeping that at 240 especially since we're adding ESST. **[00:40:00] Council Member Katrina Beckstrom:** Just a question—can you just in a couple sentences say what changed in May that is driving us to change our policy? **[00:40:10] Jennifer Doyle (Administrative Services Director):** In May, they amended the statute to indicate that if you combined your ESST with your current PTO policy, all of your PTO hours now need to follow the ESST statute, meaning that they can be called in the day of. We were just worried that it opened up abuse because essentially all of your PTO hours could just be "call in." **[00:40:40] Council Member Matt Hirn:** I'd like to make an amendment to the motion and maintain that the maximum vacation leave carryover from one plan year to the next be 240 hours instead of 260 hours. **[00:40:55] Council Member Jeff Holtz:** Second. **[00:41:00] Mayor Charles Cadenhead:** All those favor in the amendment to change from 260 hours to 240 hours, signify by saying I. **[00:41:05] Council Members (In Unison):** I. **[00:41:10] Jennifer Doyle (Administrative Services Director):** I have a question for clarification. Another change was increasing the firefighter career balance from 240 to 300 because they do accrue at a higher rate and are required to take 24 hours off for every shift. If we increase their carryover to 300 it essentially matches the city staff. **[00:41:40] Mayor Charles Cadenhead:** I'm going to make another amendment that the career firefighters carry over 300 hours as opposed to 320 hours. **[00:41:50] Council Member Matt Hirn:** Second. **[00:41:55] Mayor Charles Cadenhead:** All those in favor of the amendment to change it from 320 hours to 300 hours, signify by saying I. **[00:42:00] Council Members (In Unison):** I. **[00:42:05] Mayor Charles Cadenhead:** All those in favor of the underlying motion as amended twice, signify by saying I. **[00:42:10] Council Members (In Unison):** I. **[00:42:12] Mayor Charles Cadenhead:** Motion passes. At the end of the last council meeting, we had a City Administrator six-month review summary. I'll read the statement: "Council is in agreement that the City Administrator has exemplified qualities as expected during the first six months. Nicole Miller's tenure has showed that her leadership and vision will make a positive impact. She has demonstrated good organizational skills and an understanding of both challenges and opportunities. Nicole's greatest strengths has been her ability to communicate effectively with both the public and city staff." Overall, we are very pleased with the progress made under Nicole’s leadership. Thank you. With that, we can move into Council reports. **[00:43:30] Council Member Jeff Holtz:** It's been four years since the election and I just want to say thank you to the residents. I look forward to the next four, not only with Council Member Dragisich, with Mayor Cadenhead, with Council Member Hirn, but also with future Council Member Nick Kragness. And congratulations to Council Member Beckstrom on her four years serving; I wish her well. **[00:44:00] Mayor Charles Cadenhead:** Today I did go to the retirement for our commissioner for District 3, Commissioner [Gary] Kriesel. I just wanted to say thank you to him for looking out for Lake Elmo. One other thing—Council Member Beckstrom, we do want to say in appreciation of your four years as a Lake Elmo city council member and your dedicated service, we want to thank you very much and present you with this plaque. **[00:44:45] Council Member Katrina Beckstrom:** Thank you. It was hard to believe it's been four years. I want to thank the residents of Lake Elmo for giving me the opportunity to serve them. I hope I've done a good job. I tried to bring common sense and fiscal responsibility. Thank you to the staff; I've learned more about water and sewer than I ever wanted to. To my council members, thank you. We haven't always seen eye to eye, but I think that we all are here trying to do the best we can. Good luck to the four of you. I'm going to enjoy my Tuesday nights and not having to read these lengthy packets. **[00:46:00] Council Member Matt Hirn:** I just want to thank Council Member Beckstrom as well. You always bring your opinion and let it be known, which keeps everybody in check. It was very beneficial for the council. Thank you for your service. **[00:46:25] Mayor Charles Cadenhead:** Staff reports? **[00:46:30] Nicole Miller (City Administrator):** On December 5th, I had the honor of thanking the Commissioners and council member that showed up to the appreciation dinner. Tomorrow, staff and Council, watch for an email regarding goal setting. City offices will be closed December 24th and 25th. **[00:46:50] Julie Johnson (City Clerk):** Mr. Mayor, council members, the tentative meeting schedule for the Board of Review for next year is Tuesday, April 15th, from 4:30 to 6:30 p.m. **[00:47:05] Mayor Charles Cadenhead:** I will not be here. I already know that. I've got a conference out of town. **[00:47:15] Pete Tholen (Public Works Director):** I'll be on vacation December 26th through January 3rd. **[00:47:20] Mayor Charles Cadenhead:** Good for you. Use some of that banked vacation time! All right, with that, thank you everybody for this year of 2024. Meeting is adjourned.