2027 Proposed Fees and Utility Rate Study Presentation

Jenny Roddy presented the 2027 proposed fees and an overview of four enterprise funds: AIM Center, Ice Arena, Golf Course, and Street Lighting. The AIM Center is projected to face an operating deficit and cash balance issues by 2029-2030, driven by capital projects and expiring naming rights agreements. The Ice Arena and Golf Course funds were noted to be in good financial health, largely self-sufficient, and capable of covering operational and minor capital expenses. The Street Lighting fund recommends a 0% fee increase for 2027, with potential 5% increases in subsequent years. Dan Tintner from Ehlers then presented the utility rate study for Water, Sewer, and Stormwater. He emphasized the goal of self-sufficiency for enterprise funds and the balancing of cash and debt for capital programs. The study revealed significant capital needs across all three utilities, leading to recommended rate increases. Water rates are projected to increase by 7% annually, Sewer by 9.5% for 2027-2028 and then 4% annually, and Stormwater by 4.25% annually. The increases are attributed to substantial infrastructure improvement programs and the rising costs of capital projects, and charges from MCES. The Council and staff engaged in a broader discussion on the city's philosophy of making necessary capital investments now to avoid higher costs and reactive solutions in the future, acknowledging the short-term impact on ratepayers but emphasizing long-term benefits.

City Clerk's Office 2027 Departmental Budget

The City Clerk's office presented its 2027 budget. Key investments include $10,000 for a technical update to the election judge dashboard and contingency funds for a potential 2027 special election, prompted by a Dakota County notification regarding a potential gubernatorial run by Senator Klobuchar. Achievements from 2026 include a record 29.1% turnout in the primary election and processing over 300 business licenses annually. Challenges highlighted were public awareness for new cannabis registration, increasing complexity of data requests, adapting to new voting equipment, and compliance with new election laws (e.g., balanced election judges for early voting). The department is also focused on building voter confidence and dealing with the trend of increased early and mail-in voting. Staffing includes three full-time employees plus seasonal help for elections, and reliance on 175-300 election judges including student judges. Revenue from licenses is projected at $314,000 for 2027.

Community Development Department 2027 Departmental Budget

Jeff, Community Development Director, presented the 2027 budget for his department, which includes Building Safety, Neighborhood Services, Economic Development, and Planning teams. Strategic investments focus on community health/safety, supporting development, and exceptional customer service. Key achievements in 2026 included $143 million in private building investments, inspecting 3,500 rental units, completing Phase 1 of the Zoning Ordinance update, and improving the development review process. The department successfully completed two land sales (Costco, Maintenance Center) and relaunched housing programs (senior deferred loans, home rehab, down payment assistance). A significant new service for 2027 is electrical plan review for large projects ($75k+ electrical work), aiming to proactively identify code issues. The department faces workforce challenges, particularly in attracting building inspectors, but is planning for succession. Major budget requests include operational assessment and implementation, and rebudgeting for the multi-year Comprehensive Plan and Community Vision projects. Housing Fund revenues are supported by state local affordable housing aid, with plans for expanded programs. EDA fund expenses increased due to insurance costs for EDA-owned assets and administrative costs for housing programs.