6:30 we will call the Monday, August 11th, 2025 city council meeting to order. If you could please join me with the pledge of allegiance. >> 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. >> Thank you. And with that, do we have any additions to the agenda tonight? >> No additions tonight. Mayor >> hearing none. I'll look for a motion to approve the agenda as presented. >> Motion. >> Second. >> We have a motion, a second. All in favor say I. I. >> I. Post same sign. And motion carries 4. With that, we will move to public comments. And with nobody in the audience, I guess we will um just close public comments then and move to consent. Um, is there anything on the consent agenda that needs to be pulled for further discussion? Hearing none, I'll look for a motion to approve the consent agenda as presented. >> Motion. Second. >> We have a motion, a second. All in favor say I. I. >> I. Same sign. Motion carries. 4 Z. That will take us to our business items for consider approval of gambling exemption permit for the Mayor Lions Club on November 1, 2025 for fall bingo. Not much to discuss there. Um, as this annual uh by annual, they do this twice a year, correct? >> Yep. Twice a year. >> Twice a year. Uh, request from the Lions. So look for a motion to approve the permit for the mayor's lions on November 1st, 2025. >> Motion >> second. >> Have a motion and a second. All in favor say I. I. >> I. Post same sign. >> Motion carries 40. And second will be a temporary uh consider approval of temporary intoxicating liquor license from Mayor Lutheran High uh celebrating its Harvest Gala event on December 5, 2025. And again, not much to discuss there. It's a >> yearly >> a yearly event for Mayor Lutheran. So with that, I'll look for a motion to approve the liquor license for December 5th, 2025. >> Motion. >> We have a motion. Do we have a second? >> Second. >> Motion second. All in favor say I. I. >> I. Oppos. Sign. Motion carries 4. With that, we will move to council reports. Council member H. Anything to report on? >> Nope. I haven't had any meetings since. >> Have we? >> No. No. >> Council member Fouch, any report? I didn't think so. >> Have nothing. >> Council member Jackson. >> Nope. Meeting smoke. >> And I have not had any meetings. We will be doing our uh interviewing for uh public works candidates this week. So, um all goes well. We hopefully will have a recommendation for the next meeting as we discussed at our last council meeting. Um that's all I have. So, with that, I'll look for a motion to adjurnn. >> Motion. Second. Whoa. >> All unanimous. >> All right, we got a motion from council health secret. How about that? >> All in favor say I. >> I posting sign. >> We are journ with that. We will jump right into the work session and call to order and start out with the 2026 budget update. >> Thank you, mayor. Uh, I don't have any substantive updates to the budget itself. actually have no changes to the budget itself. But one thing I would like to quickly talk about uh last year and this this year uh we have been well last year I'll go back to we saw a revenue shortfall in the water fund and that was due to less irrigation usage than had been normally predicted in the past. So we're watching that again this year. It's been another wet year. So, we've put together some data for uh you guys just for consumption purposes to keep you guys informed on where we're at. So, right on the left here, we organize it by year and then residential water is normal residential water usage on the main meter and then we have residential irrigation. So, if they have a separate meter for irrigation, we track that as well. If they don't have a separated meter, it's all under here. And then under here is commercial and their usage. for 2025. I've extrapolated the numbers. So, this is not year-to date. This is year-to- date divide by 7 multiplied by 12 to get an idea of what year end would potentially look like. So, in looking at that, uh you have the figures there and then shrink that to look at the graphs. So for residential water uh going back to 2019 um I think what you this was probably normal usage for that year 2020 that's COVID so everybody's at home using more water and then this trend line here I think it's a combination of work from home working less from home as people transition back to the office and then also probably the inflationary years where people are tightening their belt and trying to spend less where they can. Even though we've been building houses, the water usage trend on that has been slightly going downwards. I we can't say for certain that speculation, but it stands to reason those are probably the causes on that. For irrigation, this tracks pretty closely. If you look at total uh total average rainfall that you re Minnesota receives in a year in the Minneapolis area, high water or high rainfall this year, high rainfall this year. We're having high rainfall this year. And these are lower lower rainfall years. And when we were looking when I when I was looking at doing the 23 budget, I was looking at these three years of revenue on the water end. So that's why revenues numbers are the way set the way they are. Those having been drier years. Um we saw more revenue on the irrigation front. That's why in 2024 we saw the hit there because this was far less rainfall. These are revenue figures, not rainfall figures. Um, so we had higher rainfall, less irrigation in those years. And we're trending about this direction as well. Now, if it dries up and it becomes real wet and people start irrigating again, we'll see that number go up. But that's the deeper dive into what we're seeing at the water usage level. Now, with less irrigation usage, we're using less water. We're producing less water at the plant. We're using less chemicals, less electricity. But you still have other that's a portion of the total overall cost of running the water fund. You still have other hard costs that are involved that don't change regardless of how much water is used. So we'll see some expense decrease on that but not dollar fordoll on that. And on the commercial end things uh 2021 there's a fluke in there where I don't know who but they used a million extra gallons. Yeah. Okay. Uh so yeah there was a fluke in here. there was a million extra gallons used one month. Uh otherwise, it's been fairly stable in there >> in one month. >> In that year, sorry, in that year, I was going to say >> 2021, there was an extra million gallons used. >> Holy moly. >> I did not delve into the details. >> You're looking a little guilty. >> No, that was the post office. >> He left his pocket on. >> Been selling it out the back. Yeah. Oh, This is live. >> So when it comes to budget purposes, if we're starting to see more of this and less of this, we have to start looking at taking into account for for that because we're assuming revenues are for this, but if we're seeing more of this, and we'll see as years go on. So when we look at the budget itself, um I won't go to that but so I'm updating our utility rate study for 2025 to 2029 period because we looked at it two years ago. So I'm giving that a thorough update and right in so we have 25 26 for water rates in here. We're holding those steady because we're anticipating the debt drop off in 27. So 26 is our last year of the big bond payment. We'll only have a small one after that. Originally, we're looking at dropping. So, this is our base rate change factor. Uh, so we're looking Originally, this was at 75. We're looking at the drop off happening there. If we're looking at more wet years than dry years, just taking quick look, that just go to 85% because our revenue, we're looking at 494 just off of revenue generated. the way it's trending for this year, you're more in that 419 420 range. So, you wouldn't drop it quite as much, but you're still dropping in 27. Now, what that means is in your 25 and 26, we were looking at deficit spending of, I don't know, 10 to 12,000. you're more looking at um this year, I was looking at it earlier today, we're probably looking at a $40,000 deficit overall in the water fund on the whole for the year um approximately. And we'll we'll shore that up as the year goes on, but uh so in terms of what that means for fund balance, the water fund sits at about 400 to 500,000 in uh liquid cash and investments. So taking a $40,000 hit, you never want to, but the fund can certainly absorb it. It's doesn't put it in the critical levels or in healthy levels. It's still doing all right. So if the trend continues with another wet 26, you could see another $40,000 loss, but you're still doing okay because then everything gets corrected in 27, >> right? with the rate adjustment since the debt's falling off similar to what happened in sewer because on the sewer end of things for 25 and 26 our surplus generated is north of 150. The idea being we'll make the big rate adjustment with when the treatment happens treatment facility happens and then this extra funding simply goes towards less debt service we need to take out. So the decrease just might not be as favorable in 2027, >> right? And so this so all this modeling then plays down into here uh an estimator. So we have by thousands of gallons here and what your total bill would be if you're residential user in each of these years. So we're holding it flat and then you can see how that changes. So we'll take that. We'll look at 5,000 for example, 113 113 to 118. That's based upon the 85. But if I go up here and say go back to the original 75, that then adjusts it, you know, back down to 114. >> Mhm. >> So this manipulates with it. So that being said, we look at the bill and this jumps, but when you actually look at the y-axis, scale matters. So yeah, that looks like it jumps, but in the grand scale, you're going by $2 increments and this is on a monthly basis. >> Y >> So before you were at like 120, 119, 120 at 75, but now it's at 124. So you're talking $5ish difference per month. with the right adjustment. So, and again, as time goes on, we'll keep a closer eye of this, but this is where we're seeing some of that trending shift. >> Yeah, long as we keep an eye on it. And I like the approach of just limping along now. It makes no sense to raise them in 2026 to have come, you know, to try to hit that 75% >> reduction. Again, it just makes no sense. So, I think this is great >> and a great tracker for us just to keep an eye on. Yeah, I recommend we hold steady deficits, plan deficit spending, so it's not like reckless deficit spending. We know that the debt's falling off. We know that's going to then produce >> uh well, not a revenue surplus, but an expense decrease that will then allow us to put things back in line, >> right? >> And the fund can hold it. And so there's no concern there from a financial liability standpoint. We'll still be good with cash to make sure we're making payments and everything. So no concerns there. So, any questions on any of that? >> None for me. Thank you. That's what I've got on the budget update on that front. And then, uh, moving on over, talk about the statewide volunteer firefighter fund review. So, if you recall from earlier this year, uh we got the audit back for 2024, it showed about showed uh roughly $287,000 revenue over expenditure surplus in the general fund. And then we had also been looking at uh the pair SPF for the fire department showing a deficit funding deficit. Uh the required minimum contribution for this year is $35,10. We had looked at paying that up and getting that up to 100% funded so that we didn't have any future uh li we didn't have any future required contributions. So the idea at that with time is like well we want to look at paying it off let's move forward with it. We got the surplus. Um so PAR produces their SVF reports by the end of July every year. So early August they will email uh me with the updated report and I'll get that so it'll show what the actuals were. So I got the update this goound and so it went from 218,000 we thought back in March to 111,000 because of two two factors. One you had good market performance which allowed the assets to grow and market value bouncing back and then two projected liabilities decreased on our end as well. So you had assets getting better and you got you had projected liabilities not being as bad as they thought they were. So you have both going for you had both going for us on both ends. So historically when we look at our funding ratio back in 2023 our funded ratio was at 76%. And then in 24 that went to 82%. And now sitting in 2025 we're at 93% having well we'll have to make the minimum contribution of that 35,000 but it's steadily going up up there. So I wanted to bring this we haven't made the payment yet to 111. Um wanted to bring it up for discussion purposes. Uh since we're seeing a healthy trend upward, do we put the 111 in there to bring it to square or do we see what 2026 brings? Um because our required contribution for so end of this year it's the 35,000. Well, it's $35,10 from PAR. Our required minimum contribution would be $7,65 for end of next year to make that payment. So, you could say, "Well, let's not make the one-time payment. Things are going well. Um, we just have to pay the 7600 next year." But you also then have the option to paying it off if you want to. But if markets perform and liabilities continue to decrease, it could I hate to use the term solve itself because that's fast and loose. But >> right, >> could come to a point where we don't necessarily need to make a contribution because it's catching up from market deficits from handful of years ago. >> Maybe we should let her ride for another year. >> That's my thoughts also. you know, when that when that number was a lot larger and we had the funds available, it made sense. But now that it's kind of self-correcting or trending in the right direction, I I think we we I'd say we put it off another year and see how that looks and >> we'll always still have that in a balance somewhere if we need to go back and do it. But there's no sense tying it up right now. I don't I I feel just let it ride. >> I agree. >> You know, everything's still in the up and up. All them they'll always have what they need for it. you know, it's just getting those funds up, you know, back to 100%. >> Right. And I think a future discussion point to think I think letting it ride is just fine. See how things do. We're not out anything for doing so. We'll still make our $35,000. >> No downside. >> Yeah, we we still make the $35,000 payment and that's budgeted for this year anyway. It's in our budget for 2025. Then for 2026, we'd put the 7605 in there >> and then that's what our minimum would be. You can always make a contribution above and beyond. This is just the minimum required contribution. >> And so another future talking point is mayor has historically rode pretty so close to that 100% funding. And previous cities I've worked for, we always ran a buffer. So instead of being just a 100% funded, you can be over 100% funded. So usually I ran in the teens over so 110 to 120 and that gives you a buffer so that if there is a market downturn you have assets available that can take that hit so you're not paying in. Uh the upside to that is then as your assets also grow each year we as part of this report they do funding analysis. So right now the firefighters get a $3,200 pension benefit. They will do analysis for 3,300, 34, 35 and whatever you want them to do it on. So you can then that will also pro that will also calculate out what your funding ratio is under those scenarios. So if you're in the teens and you grow into the 20s plus, you can look at increasing that benefit to the firefighters, which then shrinks it back down to go back into the teens. The idea being hopefully good markets grow those assets faster than the liabilities so you can continue to make those. But that being said, if the city wants to put in a contribution above and beyond to get to that buffer status, we certainly can at some point in the future because the audit results of that 287 are still there in the general fund. And I' I'd really like to explore that. I think it's it's reasonable to have a buffer like we do in a lot of our other accounts. It makes sense to me, right? um you know so if you can start getting some of that together for us um obviously nothing urgent but um it makes sense you know my my gut at first just because we've been riding 100 I think 110% seems reason we'll start kind of getting some numbers in there see where that starts fluctuating it'll help from a budget standpoint I mean we might not have to ever put more in for years because of that buffer so it makes it makes sense I think um you know and new for us. Like you said, mayors always kind of stayed at that 100%. Um, so 110 seems reasonable and after a few years of that, if it's trending the right way, you know, maybe we're right on the number. If it starts coming down a little bit, maybe we have to put it up to 115 at at some point. But >> that's the responsible thing to do. >> Yep. So right now the general fund fund balance is sitting in a very good spot. So you got the financial report in there, but this is close that. This is where I draw some of the where I draw the numbers from and not quite as So I track it back to November of 23. So you can see the fund balance starting then was in the 400,000s. Now this is also the time period where we got our LGA and tax payments. So bumped it up. So this is our high point for any given year. And you can see the high point at end of 23 was in the 700s. High point at 24, we're up towards a million now. And then even now midyear, we're bumping back up higher than we were there. So trending upward in the right direction >> while still having a pretty good tax rate on things. So moving some of these funds to create that buffer isn't going to jeopardize our financial position. in the general fund. >> Good. >> Any other thoughts, comments, anything else on that? >> So, I I'm I'm kind of with Chad that I think we just pay pay our uh 33,10 amount this year and write it out next. See what happens. >> Can do. If I brought if I brought us agreement, >> I I'd agree with that. >> Or not necessarily an agreement, but any other thoughts. >> We can Yeah. >> Yeah. >> Like I said, we can always come back to it. >> Right. Right. Perfect. All right. Anything else? No, that is all I have. >> That's all you got. Perfect. Then we will adjourn. Thank you everyone.