HomeMy WebLinkAboutCity Council - 11/18/2025 - WorkshopApproved Minutes
Eden Prairie City Council Workshop
5:30 p.m. Tuesday, Nov. 18, 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 and Liquor operations Manager Jaime Urbina
MEETING AGENDA
Heritage Rooms
I. Enterprise Funds: Water, Wastewater, Stormwater, And Liquor – Finance Manager
Tammy Wilson and Liquor Operations Manager Jaime Urbina
Getschow introduced Finance Manager Tammy Wilson to present the annual enterprise funds
update. Wilson explained the goals of the utility system including a safe and reliable water
supply, the safe removal of wastewater, a storm water system that protects property and
environment, a reasonable rate structure allowing for services and capital improvements, and
promoting conservation. Each year a company conducts a study comparing utility rates for
water, wastewater, and stormwater. Eden Prairie has the tenth lowest utility rates of the 36
cities surveyed, an improvement from 2023 when Eden Prairie was twelfth.
Case asked how the City’s Sewer Access Charge (SAC) and Water Access Charge (WAC) fees
compare. Ellis answered the City had competitive SAC and WAC fees the last time fees were
compared a few years ago. Case noted he would be interested in an up to date comparison.
Narayanan asked if an increase in water consumption could cause the City to lower rates. Case
noted that would hinder the sustainability goal of improving conservation. Nelson added the
City’s lawn watering ordinance allowing irrigation every other day helps water conservation.
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November 18, 2025
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Toomey asked if violators are ticketed. Ellis confirmed the City issues warnings and tickets in
drought years.
Wilson explained Eden Prairie is one of six metro area cities that softens water. Adding in the
cost to soften water to Cities that don’t soften, the City would still have the second lowest
rates. Case noted the good investment of building the water softening system back in the 1990s
as the current cost to build would be over $100 million. Wilson displayed a graph of cumulative
water pumped in gallons since 2021. The ten year average continues to decrease as residents
conserve more and appliances become more efficient. Narayanan asked what happens if
residents consume more water. Ellis answered the aquifer would be stressed. Surrounding
cities all pull water from the same aquifer. It slowly recharges, but multiple drought years
combined with excessive use will cause problems. Nelson asked if all cities pulling from the
aquifer have ordinances mandating every other day watering. Ellis confirmed larger cities do,
but smaller communities may lack conservation ordinances.
Wilson explained Eden Prairie commissioned a rate study in 2017 to project necessary rates to
meet the fund balance policy for the next decade. The study recommended a three percent
rate increase annually, which the City has followed. The rate study also projects revenue, and
operating results are consistent with projections. Narayanan asked if rates could be reduced.
Ellis noted if rates are reduced, capital maintenance projects must be eliminated. These
projects are necessary to support the system.
Wilson explained the Water budget has a three percent proposed revenue increase. The
proposed expense increase of 4.8 percent is mainly due to chemicals to treat water. Income
before depreciation is positive. In the Wastewater budget, revenue and expenses are projected
to increase three percent. The majority of the wastewater budget expense is the Metropolitan
Council Environmental Services (MCES) fee. Narayanan asked how much the MCES fee is
increasing. Wilson confirmed the City’s MCES fee is increasing two percent, but the average
increase across all cities is 5.8 percent. Toomey asked if a 5.8 percent rate increase is average
for MCES. Ellis confirmed MCES has aggressive rate increases. The City completes preventative
work such as lining manholes and repairing bad joints to prevent inflow and infiltration into the
CITY COUNCIL MEETING AGENDA
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system, keeping Eden Prairie’s rate increase low.
Wilson explained Stormwater fund revenue is projected to increase three percent in 2026 and
2027. Narayanan asked if the City charges for water on a linear scale. Case answered the City
has a tiered price system. Wilson explained the Enterprise Fund’s fund balance policy. 90 days
of operating expenses, next year’s debt service payments, and two years of capital expenses
are maintained. The water, wastewater, and stormwater funds are all currently in compliance
with this policy. Fund balance fluctuates year to year with capital projects. A few upcoming
projects include Dell Road water and sewer, geothermal heat at the Water Treatment Plant,
and the purchase of 7955 Wallace Road.
Case pointed out the enterprise funds are self-sufficient, insulating the general fund from tax
levy impacts. Getschow gave an example of a nearby City who previously transferred additional
liquor revenue to the general fund. When the liquor store performed poorly one year, the tax
levy needed to be raised. Instead, Eden Prairie transfers excess liquor revenue to the Capital
Improvement and Maintenance fund so the general fund isn’t reliant on the enterprise funds.
Narayanan asked if the City could raise the price of water by two percent and push two percent
to the general fund. Case answered if there is a high precipitation year and water usage goes
down, it would leave a gap in the general fund. The tax levy would need to be raised to backfill.
Liquor Operations Manager Jaime Urbina explained the operational goals of Eden Prairie Liquor
including controlling alcohol sales within the City, maximizing profit and supporting the City’s
Capital Improvement Plan, providing excellent customer service, and engaging in the
community. Year-to-date sales are down 1.5 percent, driven by a decreased customer count.
People are consuming less alcohol and more THC nationwide. EP Liquor is still outperforming
surrounding cities municipal liquor, where sales have decreased three percent or more.
Urbina explained sales have increased every year for the past eight years, with a small decrease
in 2025. Gross profit of 30.1 percent has increased compared to 28.8 percent last year, mainly
due to THC introduction. Gross profit has increased nine out of the past ten years, mainly due
to changes in purchasing and inventory management. Narayanan asked how tariffs affect sales.
Urbina answered tariffs are projected to begin next year. Narayanan asked what percentage of
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sales are from imported products. Urbina stated while those percentages aren’t readily
available, wine will be the most affected. THC sales have increased 23.8 percent over last year.
Narayanan asked for the margin on THC products. Urbina answered THC has a margin of 50
percent, the highest in any category. Edibles and single servings are driving the high sales.
Urbina explained the key priorities of Eden Prairie Liquor including the GUEST customer service
model, prioritizing tastings, inventory management, good selection, and increasing gross
margin. The ecommerce site is getting revamped. Toomey asked if EP Liquor offers delivery.
Urbina confirmed EP Liquor does not deliver. Urbina next detailed community events including
sip and learns, arts in the park, prairie brewfest, happy hour for hunger, and the PROP annual
dollar drive.
Urbina displayed the 2026 and 2027 budget, which is projecting sales to increase one percent in
both years. THC will be a large driver. Narayanan asked how much effect THC has on sales.
Urbina noted THC sales are roughly $750 thousand. At the current growth rate, they will likely
be over $1 million at the end of 2026. Personnel costs account for 56 percent of the budget,
and building rent is 11 percent of the budget. Nelson pointed out the convenient locations of EP
Liquor stores. Urbina confirmed all locations are next to grocery stores in high traffic areas and
set up for customers to quickly find what they’re looking for. Urbina displayed results of the
customer satisfaction survey. The perception of high price continues to decline. EP Liquor has
had five years with a positive net promoter score, currently in the 50 percent range. The
Council members thanked Wilson and Urbina for their time and efforts.
Council Chambers
II. Open Podium
III. Adjournment