Loading...
HomeMy WebLinkAboutCity Council - 05/06/2025 - WorkshopApproved Minutes Eden Prairie City Council Workshop 5:30 p.m. Tuesday, May 6, 2025 City Center Heritage Rooms, Council Chambers 8080 Mitchell Road Eden Prairie, MN 55344 ATTENDEES City Council Members: Mayor Ron Case, Council Members Kathy Nelson, Mark Freiberg, PG Narayanan, and Lisa Toomey City Staff: City Manager Rick Getschow, Public Works Director Robert Ellis, Community Development Director Julie Klima, Parks and Recreation Director Amy Markle, Police Chief Matt Sackett, Fire Chief Scott Gerber, Administrative Services/HR Director Alecia Rose, Communications Manager Joyce Lorenz, City Attorney Maggie Neuville, and Recorder Sara Potter Guest Speakers: Audit Shareholder Caroline Stutsman, Finance Manager Tammy Wilson, and SouthWest Transit CEO Eric Hansen MEETING AGENDA Heritage Rooms I. 2024 Audit Report and Financial Statements 5:30 to 6 p.m. Getschow welcomed BerganKDV Audit Shareholder Caroline Stutsman and Finance Manager Tammy Wilson. Case noted financial transparency and resident trust is of utmost importance. Getschow stated an independent financial statement audit is required annually by law. Stutsman explained City staff are responsible for the preparation and fair presentation of the financial statements. BerganKDV was hired to provide an opinion on the City’s financial statements. BerganKDV issued an unmodified or clean opinion, meaning the financial statements are fairly stated in all material respects. Additionally, BerganKDV audits internal control compliance in accordance with Government Auditing Standards. There was one internal control finding and no compliance findings. Case asked for detail on the internal control finding. Stutsman stated there was one accounts payable entry above threshold that needed to be reclassified, not an uncommon occurrence. Stutsman explained General Fund revenues increased four million dollars in 2024. Most of the CITY COUNCIL MEETING AGENDA May 06, 2025 Page 2 increase was in taxes and special assessments from the levy increase. Intergovernmental revenue increased from the school liaison officer reimbursement, and charges for services increased from rising registration and memberships. General Fund expenditures increased $3.3 million mostly due to increased wages in police, fire, and parks and recreation. The facilities user charge also increased. Stutsman displayed General Fund budgeted revenues and expenditures compared to actual results. Revenue was $3.8 million over budget due to conservative budgeting in licenses and permits and interest income. Additionally, more police and fire aid was received than expected. Total expenditures were under budget by $800 thousand. Naryanan asked if funds can be carried over year to year. Getschow answered it depends on the fund and fund balance policies. Most years excess revenue is transferred to the Capital Improvement and Maintenance fund for capital projects. Stutsman explained General Fund cash and investments has steadily increased over the past five years. The City is in compliance with its fund balance policy. Stutsman next covered enterprise fund. The Water Operations fund has an operating loss of $1.8 million due to the meter change out project. The Water Operations fund is covering 40 percent of depreciation expense. Narayanan asked if funds are accrued for future projects. Getschow confirmed Narayanan was correct. Funds accumulate for a few years and then the balance is spent down. Case asked if the high expenses in 2022 was due to the water meter change out project. Ellis stated $8 million was invested in a ground storage reservoir in 2022. Narayanan asked if funds were borrowed for that project. Ellis confirmed debt was issued for the project. Narayanan asked if common expenses are allocated to this fund. Getschow confirmed common expenses such as IT and facilities are allocated to funds. Stutsman explained the Wastewater Operations fund had an operating revenue increase due to a rate increase. Expenses were higher due to Metropolitan Council environmental Services user fees. Operating income is covering 77 percent of depreciation expense. Narayanan asked how residents are billed for wastewater and asked if there was a meter. Ellis confirmed winter water usage is used as a wastewater charge as there is no irrigation or other outside water during winter months. Narayanan asked if commercial and apartment complexes are the same. Ellis CITY COUNCIL MEETING AGENDA May 06, 2025 Page 3 confirmed those properties have separate meters for in-building use and irrigation use. Case asked if the depreciation expense will eventually catch up to the City. Ellis confirmed Capital Improvement Plan (CIP) projects are budgeted for 10 years, the CIP is fully funded based on projected revenue and cash balances. Stutsman explained both revenues and expenses increased for the Stormwater Operations fund from the prior year. This fund is fully covering depreciation expense. Narayanan asked if we receive any grants for the Stormwater Operations fund. Ellis confirmed there are multiple revenue sources including grants and investment income. Stutsman next covered the Liquor Operations fund. Sales were down slightly from the prior year, a 0.8 percent decrease. Cost of sales decreased 1.8 percent. Gross profit percentage increased from the prior year, and is higher than two comparable cities and the metro municipal average. Stutsman displayed a chart including the City’s tax capacity, the certified tax levy, and tax capacity rates. The tax capacity increased more than the tax levy, leading to a decrease in the tax capacity rate. Case noted it is excellent news signaling a growing tax capacity and a healthy economic environment. Narayanan asked if tax capacity is the value of the City real estate. Getschow confirmed tax capacity is real estate value multiplied by the individual tax rates. Compared to homes valued at $500 thousand in ten cities, Eden Prairie has the eighth lowest City tax. The Council thanked Stutsman for the presentation and Wilson and finance staff for the work preparing the statements. II. 2024 Southwest Transit Year in Review 6 to 6:30 p.m. Getschow introduced SouthWestTransit (SWT) CEO Erik Hansen. Hansen explained SWT offers three services: Transit (bus routes), Shuttle (special event shuttles), and Prime (on-demand rideshare). The most popular Prime pickup location was Fountain Place Apartments, followed by SW Station and Arrive Apartments. The most popular drop off locations were the EP Mall, followed by SW Station and Fountain Place Apartments. 84 thousand of 140 thousand Prime riders started or ended their trips in Eden Prairie. Narayanan asked how late Prime is offered. Hansen confirmed it is available through 6:30 p.m. Total ridership in 2024 was almost 538 thousand, an increase of almost 21 percent, mostly due to special event shuttles. The shuttle CITY COUNCIL MEETING AGENDA May 06, 2025 Page 4 service provided transit to new events in 2024 including the renaissance festival. Hansen explained SWT started a new 686 route with service from SW Station to the MSP terminals, which has doubled ridership month over month. 1,800 riders used the 686 route in April. Narayanan asked how long the route takes. Hansen confirmed the express route is 35 minutes to the airport. Overnight parking at SW Station is $5 per night, considerably cheaper than other airport parking. The route is served with 12 passenger cutaway busses with bucket seats and luggage racks. Narayanan asked how much the 686 route cost. Hansen confirmed during peak hours the route is $3.25, off peak hours is $2. Narayanan noted SWT will have difficulties recovering money. Hansen confirmed SWT does not make money on any services. The 686 route is 80 percent grant funded for the next three years. Hansen stated SWT is looking at how to serve a larger service area. SWT is anticipating expanding Prime into new service areas such as Carver County. Carver County is allocated 17 percent of the new sales tax, about $1.8 million in the first year. This sales tax can be used to fund a few categories including transit. Southwest Station is the most significant mobility hub in the area, increasing with the lightrail in 2027. SWT has received a $60 thousand grant for an electric bike rental program. Additionally, the autonomous vehicle pilot program may be expanded in 2025. Hansen explained a new sales tax was instated two years ago. 83 percent goes to the Metropolitan Council and the remaining 17 percent goes to counties. None of the tax goes directly to any transit agency. There are limitations on what can be charged for a fare. SWT is constantly trying to determine how much money they will have and does not have a sustainable source of revenue. Toomey asked if the Metropolitan Council provides revenue from the sales tax to transit providers. Hansen explained most of SWT’s funding is from the motor vehicle sales tax. The Metropolitan Council has historically allocated funds to SWT, however it is within their control. In theory, the Metropolitan Council could choose to not provide funding to SWT and there would be no recourse options. Additionally, SWT receives federal funding, however instability at the federal level may affect the funding. Narayanan asked if SWT has any electric vehicles. Hansen said four electric coach busses will be in service later this year, bringing the total up to 11 electric vehicles. Narayanan asked if there is CITY COUNCIL MEETING AGENDA May 06, 2025 Page 5 enough range for the electric coach buses to go downtown. Hansen explained weather performance can have a large effect, but theoretically the coach busses should have enough range to make it downtown. Hansen explained SWT is positioned as a leader in the industry. They will soon be the transit agency in the country to install an automatic passenger counter system. Freiberg noted SWT was voted top public transportation in the State last year. The Council thanked Hansen for his time and presentation. Council Chambers III. Open Podium IV. Adjournment