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HomeMy WebLinkAboutCity Council - 07/15/2025 - WorkshopApproved Minutes Eden Prairie City Council Workshop 5:30 p.m. Tuesday, July 15, 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: Finance Manager Tammy Wilson MEETING AGENDA Heritage Rooms I. 2026 – 2027 Budget Case explained the City’s two year budget cycle. The budget represents the City’s values and priorities. Getschow noted the preliminary levy is set in September. After the preliminary levy is set it can only be lowered, not increased. The long-standing practice is to adopt the preliminary levy as the final levy in December. Getschow described inputs influencing the budget including the Citywide Work Plan, Council goal session, Quality of Life survey, and financial audit results. Goals for the 2026 and 2027 budget include providing value to citizens, maintaining the current strong financial position and bond rating, and sustaining current levels of employee morale and engagement. Nelson stated the City has many long-tenured exemplary employees. The Council is appreciative of the staff development City leadership provides. Getschow shared a video highlighting 2024 Quality of Life survey results. Getschow explained Citywide budget highlights including investment in and promotion of historic properties, enhanced community events and increased community engagement, race equity efforts, and investment in technology and facility maintenance. In Public Works, all street CITY COUNCIL MEETING AGENDA July 15, 2025 Page 2 maintenance costs have been removed from the General Fund as they are now funded by franchise fees. Administration has budgeted for 2026 elections. Narayanan asked if election costs are reimbursed. Getschow confirmed some primary election costs are reimbursed by the State, however the City bears the majority. Police is budgeting to maintain staffing and enhance recruitment and training, in addition to the remodel project. Fire has budgeted for the new full time staffing model. Gerber explained the Eden Prairie Fire Department (EPFD) standards of cover staffing study was presented to Council at the July 2024 workshop. The study outlined many positives of the EPFD and made recommendations to bridge service gaps. One recommendation is staffing all four fire stations 24 hours a day, seven days per week. The EPFD has continued adding full time staff to meet this benchmark. Gerber thanked the Council for approving the necessary funding for additional full time staff, and the Finance and HR teams for their partnership in implementing staffing. Gerber detailed the internal promotions and explained the new 24 hour shift model. The EPFD is moving to a four platoon model which will lead to better work life balance, consistency, and operational effectiveness. A full time EPFD member will work 740 hours less per year compared to a three platoon model. Toomey asked Gerber to elaborate on the four platoon model. Gerber confirmed full time employees will work one 24 hour shift, then have the following three days off. Eventually, the inspections division will be transitioned out of call response. The EPFD has applied for a Staffing Adequate Fire and Emergency Services (SAFER) grant for $3.8 million. If awarded, the EPFD will hire eight full time fire fighters. The grant would pay a portion of their salary for three years. Gerber thanked the Council for their support of purchasing a new fleet of fire apparatus in 2022. Five of the trucks have arrived and are expected to be in service by autumn. Narayanan asked if the City could implement a sales tax and use the proceeds to pay the new fire fighters salary. Getschow clarified sales tax proceeds can only fund capital regional assets, not general operations. Case asked if the sale of the old fire truck and the purchase of the new fire truck occur in the same year. Gerber confirmed the City pays for the truck upon delivery. Toomey asked how many additional full time firefighters will be hired. Gerber answered 32 additional full CITY COUNCIL MEETING AGENDA July 15, 2025 Page 3 time firefighters. Getschow added the hiring would occur over six to nine years. Getschow stated the City will not levy the $400 thousand Capital Improvement Plan dollars next year due to previous conservative budgeting. Workers Compensation Insurance premiums have reduced. Utilities costs are expected to decrease due to sustainability initiatives. Health insurance, a large cost driver, is expected to increase 22 percent in 2026 and 16 percent in 2027. Getschow lauded Rose for negotiating those increases as the original proposals were much higher. Wages are expected to increase approximately six percent in 2026 due to additional fire full time employees and increases in base, merit, and step increases. Narayanan asked if City wage increases are comparable to surrounding cities, and noted his interest in learning why or why not. Getschow stated he expects they’re comparable and noted he’ll have a better idea once other Cities set levies in September. Nelson commented on the excellence of staff work and the importance of wages matching their worth. Narayanan noted his agreement. Getschow stated Charges for Services is the second largest source of general fund revenue behind property taxes. Charges for Services is growing quickly due to Community Center growth after the COVID pandemic. Licenses and permits is the third largest source of general fund revenue. Conservative budgeting allows the City to transfer $2 to 3 million from the General Fund to the Capital Improvement Fund annually. Cable TV revenue has decreased since the peak in 2018. Narayanan asked the reason for the decrease. Getschow answered individuals are transitioning to streaming services. Intergovernmental revenue includes school liaison officer revenue and Police and Fire pension aid. The revenue budget is increasing 7.6 percent between 2025 and 2026. Getschow next explained the General Fund expenditure budget. Community Development is remaining flat due to an open position that is not currently being filled. The Police budget is increasing 11 percent due to a large facilities Internal Service Fund charge from the additional square footage once the police remodel is complete. Excluding public safety, the City budget is increasing by 2.1 percent. Getschow described the indirect relationship between the budget and the Consumer Price Index (CPI). Getschow displayed the proposed levy and budget for 2026 and 2027. The preliminary General Fund levy is increasing 5.6 percent, there is no 2026 Capital Improvement Fund levy, and the CITY COUNCIL MEETING AGENDA July 15, 2025 Page 4 Police remodel debt levy is $493 thousand, a one-time 20 percent increase. The preliminary 2026 levy increase is 5.5 percent. Fiscal disparities is currently unknown. If it remains the same as 2024, the total levy increase will be 5.8 percent. Case pointed out the synchronicity of the Community Center pool debt pay off with the issuance of the Police Department Remodel debt. Getschow added this year’s budget and levy proposal is almost identical to last year. Getschow noted the market value of City real estate of growing. The tax capacity has decreased slightly due to lowering commercial property values. Throughout the Twin Cities, falling commercial property values are resulting in residential properties bearing more tax burden. While commercial values are down approximately six percent in Eden Prairie, commercial values in Minneapolis are down approximately 20 percent. Narayanan asked if this means a household will pay more in taxes compared to last year. Getschow confirmed this is correct. Getschow explained home values have increased significantly in the last decade. Home values have increased five percent annually over the past ten years, greater than the City’s annual average tax levy increase of 4.3 percent. If there were a major recession necessitating a zero percent levy increase the City could rely on fund balance, eliminate special contracts, freeze wages, and reduce conferences and training. With a zero percent levy increase, the City tax on a median valued home would still increase $70 due to falling commercial values. The 2025 tax levy increase was second lowest of 13 comparable Hennepin County cities. The City expects a similar result in 2026. Narayanan asked for clarification on how much a $400 thousand house pays in City tax compared to surrounding cities. Getschow confirmed a $400 thousand house in Eden Prairie pays the fourth lowest City tax compared to 18 similar Hennepin County cities. Narayanan asked if a City sales tax would decrease property taxes. Case discussed the indirect relationship between sales tax and property tax. Bloomington has both a City sales tax and a higher property tax rate than Eden Prairie. Nelson pointed out the City’s tax rate has been in the bottom quarter of comparable cities for the past 20 years, but maintains a high service level. Case explained the Mayor and Council salaries are tied to the CPI index and increase after election years. Several surrounding cities are also tied to the CPI index, but have recently passed CITY COUNCIL MEETING AGENDA July 15, 2025 Page 5 salary increases. The intent is not to make Eden Prairie Council the highest paid compared to surrounding cities, but to protect the integrity of the position. The current Council Members won’t be in office forever due to age. Case proposed a one-time one thousand dollar increase to Council Member pay and two thousand dollar increase to Mayor pay. Narayanan asked the last time salaries were increased outside of the CPI index. Getschow estimated it was likely around ten years ago. Case asked for the Council Members’ thoughts. Toomey, Freiberg, and Narayanan noted their agreement. Nelson noted she is neutral on Council Member salary increasing but agreed with the Mayor salary increasing. Council Chambers II. Open Podium III. Adjournment