Lakeville City Council — Transcript
Thursday, May 8, 2025
Story
Lakeville Approves $48.8 Million Tax Levy and New Utility Fees
Parks and Recreation Quarterly Report (September-November 2024)
2025 Fee Schedule Adoption
2025 Property Tax Levy and Budget Adoption
Utility Franchise Fees Implementation
Votes (7)
Citizens Comments - Short-Term Rental Regulation
Joseph Myers, owner of an Airbnb in Lakeville for 3.5 years, addressed council regarding short-term rental regulation. He presented arguments for responsible regulation rather than prohibition, emphasizing economic benefits for property owners, affordable housing options for visitors, tourism opportunities, and successful operation without safety concerns. Myers noted that other cities and regions have developed effective regulatory frameworks over a decade and urged the council to find a modern solution rather than simply prohibiting the practice. He expressed concern that regulation without proper framework would simply push the practice underground.
Parks and Recreation Quarterly Report (September-November 2024)
Director Joe Macy presented comprehensive quarterly report covering Grand Prairie Park construction progress, facility rental revenue, website improvements, strategic planning, park maintenance initiatives, recreation programs, art center activities, and heritage center operations. Grand Prairie Park construction delayed by weather but on track for partial 2025 opening and full 2026 opening. Facility rentals generated over $100,000 from park shelters and buildings. Website improvements added 67 new park pages. Recreation programs showed strong participation with 21 new program offerings (41 sessions, 25% increase). Art Center hosted record-setting Art Festival. Heritage Center reached all-time high membership of 1,597.
2025 Fee Schedule Adoption
Moved by Council Member Burmel [Item 7A] · Seconded by Unknown [Item 7A]
Finance Director presented annual fee schedule establishing all city fees for 2025. Two minor changes from October 28 work session: (1) John Henon Pavilion rental minimum increased from 4 hours to 5 hours (cost unchanged); (2) Lakeville Youth Athletic Association participation fee increased from $200 to $250 per field per season reflecting market rate adjustments. Permit fees increased for first time following comparison with neighboring cities to ensure competitiveness. All increases reflect cost of living adjustments and service delivery costs.
2025 Property Tax Levy and Budget Adoption
Moved by Council Member Lee [Item 8] · Seconded by Unknown [Item 8]
Finance Director presented 2025 budget with total tax levy of $48,815,000 (12% increase over 2024). General fund levy $32,977,000 (8% increase). Key drivers: Public Safety investments ($22.8M, 53% of general fund including new fire and police positions), park referendum debt service ($9.9M), and infrastructure maintenance. Lakeville maintains lowest tax rate among Dakota County cities at 32.6%. Median home value $450,000 with $110 annual tax increase. Fund balance projected at 48.7% for 2025, within policy target of 40-50%. Council discussion highlighted health insurance premium increases remaining low, enabling more competitive staff contributions. New positions include 15 firefighters (SAFER Grant funded) and 4 police officers (2 cadets partially grant-offset).
Utility Franchise Fees Implementation
Dissent: Council Members Vul and Burmel voted against the franchise fee ordinances. Vul cited fairness concerns and preference for bonding. Burmel cited concerns about fee continuation beyond the intended 20-year debt service period.
Moved by Council Member Walter [Item 9 - Ordinances] · Seconded by Unknown [Item 9 - Ordinances]
Assistant City Administrator Kennan presented four ordinances implementing utility franchise fees: $6 per residential household for each utility (gas and electric, totaling $12/household) with variable commercial rates based on usage. Fees designated for fire station renovations/construction ($60-68M) and First Responders Training Center ($22-24M, with $7.9M in state/federal funding already secured). 90-day notification period required by statute; implementation scheduled for April 2025. Extensive public outreach conducted August-November through social media, website, newspaper articles, newsletter, and multiple council/committee reviews. Council discussion focused on fee equity, fairness relative to property tax system, long-term sustainability, and impact on seniors and low-income residents. Council Member Vul opposed citing fairness concerns and preference for bonding. Council Member Burmel opposed citing concerns about fee continuation beyond debt service period. Council Member Walter supported citing public safety priority. Council Member Lee supported citing equity analysis favoring lower-income residents. Mayor supported citing public safety priority and expanded tax base.
Summary Ordinance Publication Authorization
Moved by Council Member Joshua Lee [Item 9 - Publication] · Seconded by Unknown [Item 9 - Publication]
Following approval of franchise fee ordinances, council voted on separate motion to authorize publication of ordinance summaries in newspaper rather than full ordinance text. State statute requires publication; four-fifths vote allows summary publication instead of full text, reducing publication costs. Full ordinances remain available on city website.
Consent Agenda Approval
Moved by Unknown [Item 6 - Consent Agenda] · Seconded by Unknown [Item 6 - Consent Agenda]
Finance Director highlighted two items from consent agenda: (1) Item 6E - Two-year extension of facility use agreement with In Health System for ambulance housing at fire stations; (2) Item 6H - Extended/expanded mowing contract for county and city boulevards with county reimbursement for more consistent maintenance.
Notable Quotes (16)
short-term rentals have become a modern solution to evolving travel economic and housing needs and there are legitimate concerns about their safety housing prices increases and all the like that you hear on your nightly news...we have run ours in the city for over three and a half years and had no concerns
I urge this Council and this city to not just say no and to say what is the opportunity here how can we position our citizens to thrive...this is a modern problem for a modern city
I think we need a modern solution for a modern technology...I don't think this regulation stops it I think it just moves it to the corners to the sides
the project has been delayed a little uh this year or substantially due to the weather earlier this year but it has allowed us to get the grading completed the Retention Ponds are in all the storm water and um and water has been added so uh heading through nove or December here we'll be getting work completed on two of the buildings and then the site will go dormant for a few months we'll be picking it back up in Spring um but still on track for us to be able to um open portions of the park in 2025 the bulk of the park will open in 26
we are working on uh a new strategic plan for the uh Recreation Department um so that is um be the first strategic plan for the rec department in over 20 years we're excited about that process
current membership for the Heritage Center has reached all-time high um breaking last year's record uh so 1,597 memberships sold to date last year's record uh high was 1,322
we annually review this to make sure that we're U matching the cost that it it is that we incur to provide the services for these um items and that we're also keeping things in line with what our budgets are set for
in the Dakota County cities Lakeville is still the lowest tax rate um and what this chart is showing you is what the city taxes would be at any of these other cities um with that median value home so for instance Lakeville the $450,000 home the taxes are $1,400 a year um you go to Egan that same home would cost you $1,600 a year so roughly $150 more
I think in making the decision on any kind of new tax or fee um you need to look at the rationale for the revenue...we are in a good position in terms of our Public Safety resources but with the growth that we've had as a community I think we need to make critical Investments uh to keep Pace
I asked staff to run numbers and models on um not only what our median in home values are but those that are in that first quartile um and and still over that 20-year period this this becomes uh U lesser or or is a lower cost than that than if it were on property taxes
I think um this is a community that has a strong history of supporting Public Safety um and and and to me that is the overarching issue uh here we are in a good position in terms of our Public Safety resources but with the growth that we've had as a community I think we need to make critical Investments uh to keep Pace
I'm not convinced as a matter of fact I think it's more than a possibility I think it's a probability that this fee could continue on uh way past the uh amount of the uh life of the debt that we're issuing...I'm not going to be here in 20 years I'm not convinced...that this fee could continue on uh way past the uh amount of the uh life of the debt
I'm not for um this fee and the reason being is a couple of things is that um now it's another burden on um churches that didn't have this burden and they're already strapped for funds in a church um it's kind of like a double tax to the citizens of Lakeville
I think that is as as transparent uh and clear as we can get um from a a tax perspective um one thing that I'll add about um kind of what I was wrestling with in in terms of what is more appropriate property tax or franchise fee um is is how much this may impact our seniors or low-income residents
if for me perspect for my perspective if the franchise fee was just something that we're trying to add in build revenue just to pad the coffers I would have not been suppor of I continue to believe that Public Safety is this City's top priority
we're required to publish these into the newspaper our legal newspaper um if you if we're allowed to do it in a summary form and a shorter form with a four fifths vote of the council um if it's if it's if this particular motion of just the publication does not pass we would need to ENT publish all four of the ordinances in their entirety into the paper which would be a added expense
Ordinances & Resolutions (10)
Annual fee schedule establishing all city fees for 2025, including park facility rentals, permits, and administrative fees. Minor updates to pavilion rental minimums and youth athletic association participation fees.
Resolution adopting total tax levy of $48,815,000 for all funds, representing 12% increase over 2024. Includes general fund, pavement management, park improvement, trail improvement, technology, and debt service allocations.
Resolution adopting 2025 city budget with total general fund revenues of $44 million, 75% from property taxes. Includes allocations for Public Safety (53%), Public Works (15%), General Government (18%), and Parks and Recreation (14%).
Resolution authorizing ordering of fire and police vehicles and equipment for 2025, supporting new staffing positions including 15 firefighters (SAFER Grant funded) and 4 police officers.
Resolution authorizing purchase and disposal of vehicles and equipment for 2025.
Ordinance implementing $6 per residential household electrical service franchise fee on Xcel Energy and Dakota Electric Association, with variable commercial rates based on usage.
Ordinance implementing $6 per residential household gas service franchise fee on Centerpoint Energy, Minnesota Gas, and Minnesota Energy Resources, with variable commercial rates based on usage.
First strategic plan for Recreation Department in over 20 years; utilizing same consultant as Art Center; includes two day-long workshops tentatively scheduled for February with implementation plans for both Recreation Department and Heritage Center.
Two-year extension of existing agreement for In Health System to lease space at fire stations for ambulance housing; part of consent agenda item 6E.
Extended/expanded contract for mowing county and city boulevards with county reimbursement; part of consent agenda item 6H.