HomeMy WebLinkAboutCity Council - 08/20/2024 - Workshop
APPROVED WORKSHOP MINUTES CITY COUNCIL WORKSHOP & OPEN PODIUM
TUESDAY, AUGUST 20, 2024 CITY CENTER
5:00 – 6:25 PM, HERITAGE ROOMS 6:30 – 7:00 PM, COUNCIL CHAMBER CITY COUNCIL: Mayor Ron Case, Council Members Kathy Nelson, Mark Freiberg, PG Narayanan, and Lisa Toomey
CITY STAFF: City Manager Rick Getschow, Police Chief Matt Sackett, Fire Chief Scott Gerber, Public Works Director Robert Ellis, Community Development Director Julie Klima, Parks and Recreation Director Amy Markle, Administrative Services/HR Director Alecia Rose, Communications Manager Joyce Lorenz, City Attorney Maggie Neuville, and Recorder Sara
Aschenbeck
Workshop - Heritage Rooms I and II (5:30) I. 2025 BUDGET
Case stated Council discusses the budget multiple times per year before final approval in
December. Getschow noted the City prepares a two year budget which is driven by the quality of
life survey results. The goal of the budget is to maintain a high level of services at a reasonable
tax impact. Almost 70 percent of the budget is related to wages and benefits as the City is a
service organization. Revenues are budgeted conservatively, any revenue generated over budget
is added to the capital maintenance and investment fund. The City targets expenditures to be
between 98 and 99.5 percent of budget. The City plans large capital projects years in advance.
Discussions on the upcoming Police remodel began in 2017. The City prioritizes retaining
employees and investing in professional development.
Getschow detailed goals of the budget. The Administration department has administered four
elections, with one election remaining in 2024. Narayanan asked if the State reimburses the City
for election administration costs. City Clerk David Teigland stated the State partially reimburses
the City for the presidential primary. The County partially reimburses the City for the two special
County Commissioner elections. Other goals for the budget include evaluating the fire
department staffing model, preparing for the Police station remodel, exploring Police recruitment
initiatives, and investing in trail extensions, infrastructure, and sustainability initiatives.
Enhancing sense of community is another budgetary goal. New events include the third of July
drone show and Picnic on the Farm.
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Getschow explained General fund revenue is budgeted to increase 4.1 percent. Property taxes are
the largest source of general fund revenue at 70 percent. Charges for services is the second
largest revenue source and is comprised mainly of community center memberships. Licenses and
permits, the third largest source of general fund revenue, is budgeted conservatively. Getschow
displayed the 2024 and 2025 general fund expenditure budget. The general fund expenditure
budget has a proposed 3.5 percent increase in 2025. Most of the increase is due to wages and
benefits. Investments in sustainability efforts has resulted in cost savings. The City emphasizes
zero based budgeting. The tax levy for 2025 is currently proposed at a 4.5 percent increase,
compared to last year’s 5.6 percent.
Getschow stated the 2024 market value of residential properties is essentially flat. The market
value of commercial properties and multifamily properties has decreased, offset by a substantial
value increase of industrial properties. The combination in proposed tax levy and changes in
property market value results in a City tax rate of 30.35 percent, an increase over the prior year’s
28.47 percent.
Getschow explained the Homestead Market Value Exclusion (HMVE) increased from $30,400 to
$38,000, meaning more value is excluded for taxable purposes. As more Tax Increment
Financing (TIF) properties open in the City, a portion of their City tax must be refunded per the
TIF arrangement. Additionally, the City’s fiscal disparity amount increased in 2025. The
combination of these three factors resulted in an adjusted net tax capacity decreased from $154.1
million in 2024 to $152 million in 2025. The decreased tax capacity results in an increase to the
City tax rate.
Case asked how the City’s tax capacity has grown steadily in the past three years, and then
decreased this year. Getschow answered the main factor is HMVE changes, in addition to a 2.9
percent decrease is multi-family property market value. Nelson asked if the City can do anything
for low- to mid-valued homeowners who have not made significant property improvements but
have still experienced unprecedented value increases. Getschow confirmed the City has no
control over State class rates. Case asked if ten years in the future Cities will receive an influx of
money as houses appreciate past the HMVE ceiling. Getschow displayed a map of the impact of
the HMVE calculation change. Residents of cities like Richfield and north Minneapolis benefit
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more as they traditionally have lower valued properties. Nelson stated it seemed reasonable that
the lowest value property owners benefit the most.
Getschow noted the Council indicated it would like to hire more firefighters as recommended per
the fire staffing study. Getting to the recommended staffing level could be accomplished with an
additional 1.3 percent increase to the levy over a period of five years. In September the City
Council will vote to set the preliminary levy ceiling, which can be lowered at the final December
vote. The currently proposed 4.5 percent levy increase, in addition to the 1.3 percent needed to
accommodate full time fire staff, would result in a 5.8 percent tax levy increase in 2025.
Getschow displayed tax rate comparisons of 17 surrounding cities in 2024, the City had the
fourth lowest rate. Even if the City set a tax levy increase at 5.8 percent, the City would have the
third lowest rate increase for 2025. Case noted Plymouth has a 24.5 percent tax rate while
Hopkins has a 60 percent tax rate and asked why similar cities have vastly different rates.
Getschow stated the difference is largely related to differences in tax base.
Narayanan asked how much it costs to hire a firefighter. Finance Manager Tammy Wilson stated
the City could employ four full time firefighters with $450 thousand. Narayanan asked if the City
has monetary reserves. Getschow confirmed the City does has reserves in accordance with
policies set by the State auditor and City policy. Narayanan asked if the reserves could be used
for a capital project. Getschow stated it would be against City policy. Case asked the Council to
give input on adding the additional 1.3 percent tax levy increase to hire additional full time
firefighters. All Councilmembers answered in the affirmative.
II. CANNABIS DISCUSSION
Klima explained she’d provide an overview of State legislation, how the Council can choose to
legislate, and how comparable cities are legislating cannabis. The State Office of Cannabis
Management (OCM) classifies four types of cannabis projects and will offer 16 types of cannabis
licenses in 2025. Klima provided a brief overview of the types of products and licenses. The City
can impose a cap on the number of cannabis retailers but must allow a minimum of five or six
per population requirements. The City can also choose to implement buffer guidelines so
cannabis retailers are not operating near a school or daycare. Narayanan asked what the current
buffer requirements are on gun stores. Klima answered adult orientated businesses have a one
thousand foot buffer from churches, schools, and other adult oriented businesses. The City can
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choose to impose a buffer between cannabis retailers to not create a density. Lastly, the City can
exclude cannabis retailers from specific zoning districts.
Klima summarized staff recommendations including imposing a cap on the number of cannabis
retailers in the City. Staff is not proposing to implement buffers. If the City were to implement
buffers, 58 percent of commercial and 63 percent of industrial properties would be allowed to
conduct cannabis uses. Staff is not proposing distance requirements between cannabis retailers or
revisions to zoning districts to address cannabis uses. Getschow asked how implementing buffers
would affect parcels zoned neighborhood commercial. Klima stated most neighborhood
commercial properties would become unavailable if buffers are imposed, the TJ Hooligans and
the Tavern 4 and 5 strip mall areas would still be available.
Case noted the Council has time to consider and noted he is interested in how many properties
remain available if the City chose to implement buffers around schools. Narayanan asked if gas
stations could begin selling cannabis. Getschow noted cannabis licenses would likely be obtained
by standalone dispensaries, not gas stations. Toomey added the City does not implement a buffer
for stores that sell liquor or cigarettes. Freiberg noted there are no liquor stores within one
thousand feet of a school. Toomey asked if the City would be vulnerable to litigation imposing
buffers on cannabis use and not liquor. Neuville answered the City is specifically permitted by
law to impose buffers on cannabis locations. Narayanan noted it is better to begin with a buffer
and have the option to remove it later.
Case stated he would like to cap cannabis locations at the minimum required by law. He would
like staff to research implementing buffers for schools and other cannabis retailers. Case asked
where the five or ten preferable cannabis locations in the City would be located. Freiberg asked
when the City should have legislation in place. Neuville noted the City should have legislation in
place by the end of 2024 as the OCM is granting licenses in 2025. Freiberg asked if a municipal
retail location would count as one of the minimum required locations. Neuville confirmed the
City can operate a municipal location but it does not count as one of the minimum required
locations. Nelson asked if smoking cannabis is treated the same as smoking tobacco, and if it is
disallowed in parks and other public areas. Getschow confirmed they are treated the same and
are both disallowed in parks and other public areas. Nelson stated she would not like the retail
locations clustered together to create a cannabis district.
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Open Podium - Council Chamber (6:30) III. OPEN PODIUM
a. JOHN MALLO, 14000 FOREST HILLS ROAD, NAMING STREETS AFTER EDEN PRAIRIE VETERANS, ELECTRIC FENCES IN RESIDENTIAL AREAS
John Mallo, 14000 Forest Hills Road, stated the City should consider naming new streets after
deceased Eden Prairie veterans in remembrance. Case stated the names of deceased Eden Prairie
veterans could be reviewed by the Heritage Preservation Commission (HPC). The developer has
naming rights over new streets but often discusses the area’s heritage with City staff prior to
naming. Mallo stated his neighbor has an electric fence, which should be disallowed in
residential areas as it poses a danger to small children. Case asked staff to research electric
fences in residential areas.
IV. ADJOURNMENT