Lakeville City Council — Transcript

Monday, October 19, 2026

Annual Finance Department Review

Local Affordable Housing Aid (LAA) Allocation

Street Light Policy Review and Funding

Proposed Enterprise Fund Budgets and Utility Rate Projections

Liquor Fund Financial Outlook and THC Sales

Annual Fee Schedule Review

Votes (7)

Annual Finance Department Review

No action taken; presentation only.

Finance Director Julie Stall presented the annual review. Key achievements included the 37th Certificate of Financial Excellence and a AAA Moody's bond rating. The city issued $36 million in bonds, with $28 million allocated to Fire Station #2. Utility customer e-bill adoption reached 58%, and autopay reached 41%, reflecting significant growth and efficiency. Discussions highlighted the city's financial oversight for multiple entities and challenges with increasing electronic payments for accounts payable, which saw a dip after consistent growth.

Consent Agenda

5-0 Approved

Moved by Council Member Burmel [00:16:51] · Seconded by Council Member Walter [00:16:55]

The Mayor requested Mr. Miller to highlight any items from the consent agenda. Two items were specifically mentioned: item 6E, the acceptance of the US Department of Homeland Security Staffing for Adequate Fire and Emergency Response (SAFER) grant, which supports additional full-time firefighters; and item 6G, a professional services agreement with RJM Construction for construction manager services for the new Fire Station #3. No items were pulled for further discussion by the council.

Discuss Local Affordable Housing Aid (LAA)

Input requested; no action taken.

Community Development Director Miss Goodro presented an update on LAA, noting significant allocations for 2024-2026 totaling over $1.5 million. Funds are used for emergency rental assistance, operating facilities, and housing projects (construction, acquisition, rehab). Council members, particularly Council Member Lee, expressed concern about the slow utilization of funds, with over $260,000 remaining with the CDA from prior years. Staff suggested continued collaboration with the CDA for their programs and a senior affordable housing project on the former Fiser property. Discussions included potential support for Lewis House and the city's role in infrastructure for the Fiser property, as well as the three-year timeline for expending funds.

Street Light Policy Review

Informational item; no action taken. Staff to return with a new policy for consideration.

Public Works Director Paul Omi and Finance Director Julie Stall presented a review of the city's street light policy, last updated in 1991. The city maintains over 8,000 lights, primarily through Excel Energy (25-year prepaid program, all LED) and Dakota Electric (maintains in perpetuity, no proactive LED upgrades, no new installations on trails). Challenges include aging Excel infrastructure (218 lights beyond 25 years), inconsistent light types, and the high cost of replacement. Staff proposed funding trail/parking lot lights from the street light fund, auditing and standardizing street light fees for all properties (addressing 1,700 currently uncharged accounts), and updating the policy. Council discussed the fairness of fees, the term 'street light' vs. 'city light' or 'lighting infrastructure', and the potential for smart LED lights, though providers do not currently offer them.

Proposed Enterprise Fund Budgets and Utility Rate Projections

Informational item; no action taken.

Finance Director Julie Stall presented the proposed 2027 utility enterprise fund budgets and rate projections. The plan includes a 6% water rate increase (8% for high users), 2% for sewer, 7% for environmental resources, and 2% for street lights. These increases aim to meet financial targets and fund the $44 million water treatment facility expansion, with $39 million from bonds. The strategy emphasizes pay-as-you-go for water infrastructure and utilizing fund balances to keep rate increases gradual and reduce reliance on debt. The Met Council's 6.7% increase in sewer processing costs is not being fully passed on to residents due to a healthy fund balance. Street light fund debt will be paid off in 2026. Council appreciated the philosophy of affordable rates for basic users and encouraging conservation.

Liquor Fund Financial Outlook

Informational item; no action taken. Final budget review scheduled for November 16th, Truth in Taxation meeting in December.

The liquor fund budget was reviewed, with a significant challenge posed by federal legislation impacting THC sales. The budget assumes zero THC sales for 2027, leading to a projected $665,000 gross profit, 10% less than 2026. This is considered a worst-case scenario. Transfers out include $400,000 for police station bonds, $348,000 for Kia Cook store bonds (last payment in 2027), and $1.2 million to the equipment fund. Council members raised questions about industry-wide trends, the possibility of continuing Minnesota-specific THC sales, and the implications of the League of Minnesota Cities carving out THC coverage from municipal liquor liability insurance, prompting future discussions on cannabis sales strategy.

Fee Schedule Review

Informational item; no action taken. Public hearing scheduled for December 7th.

The council reviewed proposed changes and additions to the city's fee schedule, which will be subject to a public hearing on December 7th. Key highlights included adding existing fees (franchise, tax abatement, tax increment financing application) for transparency. New fees included a 'Scout troop rental' fee due to increased usage of city facilities by youth groups and associated cleaning costs, prompting discussion about broadening the category to 'youth group fee'. A 'potentially dangerous dog designation hearing request fee' was added to cover staff and attorney time for appeals against dangerous dog declarations, an issue that has seen a recent increase. Council also briefly discussed reviewing park dedication fees and capacity for renting First Center classrooms.

Notable Quotes (23)

So um we did get our 37th year of the certificate of financial excellence in financial reporting for our 2024 annual comprehensive financial report. Um, we did maintain our AAA Moody's bond rating and we issued the $36 million of bonds in May...

Annual Finance Department Review

And a lot of times obviously it's it's safer with your emails if you've got those firewalls and such on your computer versus the mail that um is not very safe these days. And uh it's an issue reliable.

Annual Finance Department Review

This is the first time that we've we've seen a dip in the electronic payments as you can see in the bread bar going up and up and up and so it was increasing. Um and it's again 2026 is just three quarters worth. So, and this is the number payment.

Annual Finance Department Review

Item 6E is acceptance of the US Department of Homeland Security staffing for adequate fire and emergency response, more commonly known as a safer grant. This is our second round of that is going to help pay for our second round of full-time firefighters, and we're very grateful for that grant award.

Consent Agenda

And then item 6G is a professional services agreement with RJM Construction. And this is for construction manager services for their new fire station number three which is currently under design.

Consent Agenda

Um, yes. So, this is part of legislation that was approved back in 2023. It established the regional sales tax that provides um allocates funds to metropolitan communities across um over 10,000.

— Community Development Director Miss Goodro [00:18:24]
Discuss Local Affordable Housing Aid (LAA)

I don't have a question. And I have a comment that um [clears throat] with the slower uptick in the use of funds, I guess I just I I wonder if we should allocate a lesser amount this time around. Um and the the number of impacted residents is is fairly low.

Discuss Local Affordable Housing Aid (LAA)

I would say that I think we could probably improve our outreach on this. Um, I think we've relied a lot on the CDA. Um, but I think there are obviously certain areas of the city that are have older housing stock that would be more uh likely more eligible for some of these um rehab loans and I think we could look at doing some more targeted um publication and notice to those areas to hopefully try to increase the participation.

Discuss Local Affordable Housing Aid (LAA)

So the last time this policy was reviewed was back in 1991. So that's about 35 years ago. The policy was originated uh originally um approved by the city council back in 1978. So that's about 50 years ago.

Street Light Policy Review

Um the the good news there is Dakota Electric their policy um they maintain their lights in perpetuity uh while Excel gives us a 25-y year life expectancy. So they do not um um proactively switch out their lights to LEDs.

Street Light Policy Review

staff's perspective at this point though is that the from a public safety standpoint, no matter whether or not you have one in your neighborhood or not, the entire city benefits as you're driving or you're going through the rest of the city that does have street lights. And so that is why we're proposing now that everybody be be charged the fee.

Street Light Policy Review

I would just can't remember who's on the liquor committee. you and John >> and John. >> Yeah. I mean, I think we have to think about, >> you know, may next year's is a good time to have a conversation about cannabis in general. Um if if this does go through and are we missing out on

Street Light Policy Review

Um, we are looking at for the water rates a 6% increase, a 2% increase for sewer rates, a 7% increase for environmental resources, and 2% for the street light.

Proposed Enterprise Fund Budgets and Utility Rate Projections

Um, so that's what we and we try not to have these huge spikes. We don't want hills and valleys in our in our rates and because that creates an issue for everyone as well.

Proposed Enterprise Fund Budgets and Utility Rate Projections

Met Council is having a 6.7% increase of their cost. That's what we're going to be paying them additionally. Uh, we are not passing along that full increase to the residents. That fund balance is able to sustain that.

Proposed Enterprise Fund Budgets and Utility Rate Projections

No. No. uh questions, but I appreciate the continuity of the philosophy that we've had about basic water and being able to continue to make that affordable for the the lower water users and basically the daily water that people use and [snorts] uh >> encouraging conservation with the uh tier 4.

Proposed Enterprise Fund Budgets and Utility Rate Projections

So, um, right now we the way we structured the budget is without those sales without those the cost of goods sold as well um in anticipation that this legislation will go through like it's intending to. So that is it does it does affect our um the overall outlook of the fund.

Liquor Fund Financial Outlook

Tana does have a plan to continue to offer some things that we're still evaluating. I won't say on the record that we're doing that yet, but we're still looking at some options.

Liquor Fund Financial Outlook

And just a side note, so the League of Minnesota Cities is carving out THC coverage from our municipal liquor liability. So we are having to get a quote from a different insurance agent just for that piece.

Liquor Fund Financial Outlook

Um, there's been a significant increase in bookings due to schools not being available. So, it's resulted in additional staff time to coordinate the rentals. And I may have to defer to Joe on this one. I'm not sure how

Fee Schedule Review

Yes. So, we've seen uh in the last few years an increase in um dog bites, both dog on dog and dog on human um and an increase in people challenging the dangerous dog designation. So, when that happens, there is a an appeal process that people can go through.

Fee Schedule Review

So it's a court fee. >> Yeah. >> Basically without court. It's a mediation. >> It's a hearing fee. >> Yeah. >> Yeah. It's just it's a lot. I mean we get charged.

Fee Schedule Review

Um, the other question I had was related to youth athletic associations. Um, there's a $5 increase per player on that one, but is there a financial target we have in mind for what those dollars pay for?

Fee Schedule Review

Ordinances & Resolutions (15)

Certificate of Financial Excellence in Financial Reporting for 2024 Annual Comprehensive Financial ReportOther

Award received by the finance department for 37th consecutive year.

Capital Improvement PlanPlan

Adopted plan by the council at the last meeting.

Dakota 911 2027 BudgetOther

Budget adopted by the city for Dakota 911 Communications.

Lakeville Arena's 2027 BudgetOther

Budget adopted by the city for Lakeville Arena.

2027 City Budget (Preliminary)Other

Preliminary budget adopted in September, with final adoption in December.

Long-Term Financial PlanPlan

Update nearing completion, to be presented at November 16th council meeting.

US Department of Homeland Security Staffing for Adequate Fire and Emergency Response (SAFER) grantOther

Grant award accepted for funding full-time firefighters.

Professional Services Agreement with RJM ConstructionOther

Agreement for construction manager services for Fire Station #3.

Local Affordable Housing Aid (LAA) legislation (2023)Legislation

Established regional sales tax allocating funds to metropolitan communities for affordable housing.

Enhanced Single Family Home Improvement Loan ProgramProgram

A program administered in collaboration with the CDA using LAA funds.

Radon Mitigation ProgramProgram

A program administered in collaboration with the CDA using LAA funds.

Street Light Policy (1978, 1991)Policy

Outdated city policy under review, originated in 1978 and last reviewed in 1991.

BSNA ERP softwareOther

New enterprise resource planning software that simplified financial audits and improved efficiency.

Long-Term Debt ModelOther

Used for utility fund projections and analysis.

Park System Master PlanPlan

Currently under editorial review, expected to be completed by end of year/early 2027, will include recommendations on park dedication fees.

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Lakeville City Council - Lakeville Recorder