[music] Heat. Heat. [music] [music] >> [music] >> Heat. Heat. All >> [music] [music] >> right, we'll get started. Um everyone um tonight is uh Monday, November 17th, 2025. This is a city of Minnetonka study session. Um I'll call the meeting to order. Um a note that Mr. Funk will address is that there is an addendum to the u to the agenda. But um with that, let's uh let's just do introductions. And Miranda, we'll start with you. Bernard Donovan, assistant city manager. >> Sarah Donovan, HR manager. >> Good evening. Eric Nelson, city attorney. D >> D D D D D D D D D D D D D D D D D D D D Darren Nelson, finance director. Mike Funk, city manager. >> Nancy Foster, Walden, Ward One. >> Kimberly Wilburn at large. >> Rebecca Shack, W two. >> Brad Russo, mayor. >> Kyle, w Calbert, at large seat A. Paula, w three. >> Will Manchester, public works director. Julie Wishn, community development director. >> Kevin Fox, fire chief. >> Kelly ODay, recreation director. Scott Borman, police chief. >> Sarah Westy, assistant recreation director. >> Siraki, senior management coordinator. >> Joel Mary, assistant finance director. >> Derek Mezer, deputy fire chief. >> Jason Tate, deputy police chief. Naria Pu Minaka resin res >> Tom Stalker Mitaka resident. >> Thank you all. [clears throat] So um we've got that done. So next items are business items and the first item is I don't know Mr. Funk if you have anything you want to add otherwise we'll we'll jump right into the next item. Yeah, just real quickly, uh, mayor and council, just related to the agenda, there is an agenda for item 3B, which is a 2026 [clears throat] budget related related items. There is a sheet in front of you explaining that. It's also accessible on your I legislate. Uh, staff did receive an additional email correspondence after the package is published. The other thing that we want to note is that um, Mr. Nelson and the assessing team also tracks phone calls uh related to [clears throat] the budget especially after truth and taxation statements are are mailed. Just want to put on the record um as noted in the agenda that we did receive as staff nine phone calls uh related to the budget. So those are kind of documented as just phone calls. Uh we'll also note later in the presentation that uh in addition to the one email noted here this evening there were four comments in Manitanka matters and we'll cover that public engagement process later but as of today as of right now this is covering the one email uh that we received earlier. >> All right very good and [clears throat] then just just to add to that um we will take more uh more comments between now and the um when the budget has to be approved. So, um that opportunity exists for our residents. So, with that, um the first item on the agenda is the city manager review process. And so, um Miss uh Miranda, Miss Don, uh you have that and uh and please take it away. >> I [snorts] do. I'll get I'll I'll get started with this. I do have our HR manager, Sarah Donovan, with us tonight who will help facilitate the conversation with me. So tonight um we are going to establish a shared understanding of the city manager review process. It's our third conversation around this topic and hopefully we're reaching really close to the finish line. Um we'll confirm competencies and performance areas to be assessed and align on rating definitions and [clears throat] expectations which came out of the city council retreat um back in July. So review of current evaluation framework. So um each year the city manager under goes a performance review um based on the contract. It requires to have it in the fourth quarter of every year. Um currently um council completes a document and our directors complete the same document. I collect all of that information. I put it into a spreadsheet. Um take all of the names off so it's all um no names are on there. And then we send it out and then we go into close session for um the city manager review. Over the past couple of years, I've heard various complaints of this form being outdated, not very clear to understand. We had five rankings. So last October when we discussed this, there was interest from the council to revamp the form to make it better understandable, a little bit clearer. Um and then at July of this year, we were trained on um performance reviews at the retreat. [snorts] And then I heard from council that we do wanted to continue updating the document. Um maybe condense it a little bit, get clearer expectations, more definitions involved, a better rating scale with better definitions underneath it. Um coincidentally this year, and Sarah will talk about it, um one of the HR massive projects on their desk is revamping our entire non-union [clears throat] performance management system. So, this is a project that Sarah has been working on all year with all of our directors as well as city manager Funk on the director's [snorts] performance review. So, um with that, we're to the point now where we're now aligning what she's been doing with all of us now with council. So, she'll help work with council this evening to go through her recommendations on updated form, provide options on a scaling system, go through the definitions, um, and then this year we would just use the paper document. And then hopefully next year we would do a full training with council to move it into a system we're calling NEOGV, >> um, which is what the non-unions are using. So hopefully no more after this year, that clunky spreadsheet. Hopefully we can do it in a better system that's easier for everyone to complete and understand. So um and then in article three of the city manager contract, I just wanted [clears throat] to state that um it does say the evaluation must be based on criteria developed jointly by the city and the manager and um with the options for revisions as determined by city council in consultation with the manager. So Mike may get to jump in tonight um because an updated form does constitute in his article that he does get a say. And then of course under state law um we can go into close session at the city manager's review during that process. Um tonight will be all open. I'm hoping to do that review the first or second meeting in [clears throat] December. Right now it's slated for December 15th, but all of our December meetings get really busy and so hopefully we can find the meeting that um maybe we can get into close session a little bit earlier. So, um, at this point, I'm going to turn it over to Sarah. And this is going to be more of we'll go through a section and then turn it back to the mayor and help facilitate the conversation. Then we'll move to the next section as well. So, I'll turn it to Sarah. >> Welcome, Sarah. >> Thank you. Okay. So, first we'll just kind of maybe cover what we've done to date with the employee performance. As Miranda indicated, we've been working on this since early 2025, my team and I, with the work that we we are doing with the employees. So, we kicked off an in 2025 initiative to improve our performance review process. We had a lot of inconsistency across um the city, different forms being used or different um time frames being used. And so, we're just looking to improve that for all employees, full-time and part-time. And we want it to be meaningful and obviously legal sound, legally sound. Um so, we began by gathering feedback from department leadership. Again, as Miranda mentioned, um we talked with our directors and gathered a lot of feedback. Um what works, what doesn't, what tools or structure they need to make to make the process more effective. Um and then their inputs shaped several core components which includes the timing of our reviews, um training needs, and then how we ensure accountability and follow-through for our performance reviews. Um and then again, as Miranda mentioned, we are doing all of that in NEOGV. we're in the final stages and final refinements of what that form and process will look like in the system. So, we're getting super close and hope to be rolling out um the form and the trainings here soon. And then alongside the form, we drafted a performance review policy and that outlines the purpose of the evaluations which is supporting professional growth, aligning employee goals with the city mission and values and then ensuring a clear and fair process for feedback. So obviously we think that um this is a good timing for uh aligning the city manager performance evaluation and having this discussion. You'll see it is intentionally aligned with that citywide work. Um and we approach this as an extension of our overall performance philosophy. Um so just a quick kind of uh overview of what is include included on our employee review. So again, all of our reviews are going to be in NEOGV perform, which is the software we use. Um, our employee self-evaluation uses open-ended questions. So we'll send employees an evaluation to evaluate themselves. [clears throat] Um, and we have these as open-ended questions rather than numeric self-ratings. We designed it this way to encourage employees to share meaningful narratives about what they consider their key accomplishments, priorities, and needs rather than focusing on trying to justify a score. Um, so this approach gives supervisors a richer conduct uh context and it reduces rating disparities um and supports a more authentic development focused conversation. Sometimes if an employee rates themselves a certain way, a supervisor rates themselves another, it can can cause some tension. So um and then we kind of dive in after the self eval to a couple of different areas where employees are rated. Currently we're using a three-point scale. We're actually possibly changing that to a four-point scale. That's one of those refinements that we're working on. Um you'll hear more about that later, but the areas that employees are rated on are our shared values. [clears throat] So for each of our shared values, um directors, managers will rate on a scale of one to three. We also have department division competencies. So that was the conversations we had with our directors at really fine-tuning what competencies they wanted to measure employees on in their areas. And then if you are a supervisor or manager or a director, there's a set of supervisor manager and then director competencies as well. And so again, all of those are rated on that those three-point scales, potentially a four-point scale soon. And then the last um part of our employee review is the short-term and long-term goals. So that's kind of a quick overview of the employee process. So, I just wanted to showcase that before we jump into maybe more of the discussion piece on Mike's stuff. So, um All right. Actually, so the city manager current competencies, hopefully this works pretty well here. I'm sure you guys are very familiar with these because this is the same form that you've been using. And I won't go through and read each of them because I know you're very familiar. But um financial strength and so basically it has all of our strategic priorities individually. And then if you go down below again this is the current form. There's um some more competencies listed here. So leadership, organizational management, mayor and council support, fiscal management, community relations, strategic planning, and then shared values. So that's the current form. I'm sure that looks familiar to all of you. minimize that and then okay and then we here are the new ones. So basically what we did we took the um initial I think there were how many were there like 12 maybe? >> Yeah. >> Um of the competencies and we kind of tried to just streamline them and combine them a bit. So, um, we paired them down and then combined the strategic profile into one reading. >> That's a good question. >> Yeah. Is there any way we could make that bigger? >> Yes, absolutely. >> Yeah. Let me see if I I can't even see that sign. [laughter] >> Great. Thank you so much. >> Yeah, absolutely. >> Thank you. Thank you. >> Okay, so um and after I'm done with this section, I will stop and there'll be um time for obviously you guys to have a conversation. So um previous the previous evaluation form had quite a few separate competencies. So some of them were very detailed and we felt that several of them overlapped and so we looked for ways to simplify and streamline the framework work without losing the substance. So it's now we're down to five. So there's five competencies listed here that we're hoping capture a wide range of what those are. Um and so the outcome is just a more focused set of five competencies that cover the same responsibilities. So I'll just go through these [snorts] new ones and I will read each of these five and then open it up for the council to discuss and with some questions that we have. So um leadership strategy and results provides clear direction advant advances council priorities models ethical leadership and ensures policy decisions are executed with measurable effective results. Competency two, council relations and communication keeps council informed, builds trust and navigates governmental and community dynamics effectively. Organizational management and staff development builds effective teams, develops staff and ensures accountability across departments. Uh community engagement and public trust, communicates effectively with residents, promotes transparency and maintains credibility. And then financial management and stewardship overseas budget, ensures fiscal responsibility and aligns spending with priorities. So those are the [snorts] five competencies that we um took and we kind of streamlined them from the prior form. And so I guess our questions to you would be do you feel like these are the right areas? Are we covering enough of what the council feels is important? And are there any competencies that need to be added back in um combined, etc. All right. Well, thank you um and council, your thoughts um on on this approach with five competencies and uh um and and I guess the the three um uh rating >> you can we'll get to the ratings next. >> Okay. Okay. So, the competencies, pardon me, I'm jumping ahead. >> So, thoughts. Mike, go ahead. >> I haven't seen the presentation. >> He has not. So, I'm not sure what is coming next. Um, one of the things that I talked with both Miranda and Sarah about is just different section, excuse me, sections of the form. Competencies is one section. >> Then there'll be open-ended questions is another section. And so, I didn't know if you wanted to go through just kind of show the totality of the form and go back to competencies because that might >> No, I think that provides provides for perspective. So, I think that's a good suggestion. >> Sure. Thank you. >> So, yeah, just I'll start from the top. So yeah, >> I have the overall rating scale, which >> we'll get to this in a little bit, but I am going to be recommending a four-point rating scale. >> And [snorts] then each competency listed, and under each competency, I've actually provided a definition for, for example, exceeds expectations, what that would look like with this particular competency, if that makes sense. >> So they're specific right here. These definitions are specific to each competency. Um, so it goes through each of the competencies, goes all the way down to our open-ended questions. Um, and we paired those down to three open-ended questions. Basically, comments related to performance across the above competencies, examples of any areas of improvement, and then provide examples on this was one that was on the prior form and we carried it over. Please provide examples on how this employee makes a difference in the organization and our community. And then to end we have our goals section. So this is the city managers kind of area to talk about you know these were the goals that were established last year. Um here's the progress towards each of those goals including key accomplishments, challenges, measurable outcomes. Um and then what the city manager would identify as most significant impacts or lessons learned. And then we get into looking ahead. So, upcoming year goals, um, goals that are being proposed for the upcoming year, any support or resources needed, and then long-term goals. So, longer term, multi-year goals, and then how do these long-term goals align with the city's broader vision? And then here is where the council kind of would weigh in with their goals and any feedback they have on the city manager's goals that they have presented. [snorts] >> Does that help? >> It does help. >> Okay. So I think the the question is the same initially. Let's talk about the competencies and any any thoughts on uh from the council on these or Mike if you have a comment you want to make as well. >> Go ahead. Well, thank you, Mayor Councel. If you look at those competencies and I did again, I think for full transparency, we talked with Miranda and Sarah just about how this would look because as they were noting, we want to align, you know, separating myself personally out of it, just having making sure that the city manager role is aligns with the other staff members and how we look at different competencies. And so in talking with them, I think it does make again this the conversation we have is is pairing that down a little bit to streamline it. Certainly want to make sure that these competencies reflect what's important to the council. That's ultimately what that I want to hear from you and certainly they need direction from you is are these the right competencies? Because on the one thing I'll just note and then I'll turn it back over to you is in the current form that Miranda pointed out there's we list the six strategic >> priorities >> priorities noted in there and I think here we just combined it and that is >> do we need to rate each strategic pri in it totality are we meeting the city strategic plan so that's kind of one of the big [snorts] pairing downs otherwise a lot of the others are very consistent with the other ones just worded better >> better better verbiage is similar just really kind of streamlining that again strategic plan elements. Is that fair to say? >> Yep. I think the one that maybe overlap would be the fiscal management. Um however we felt that was such a large part of what Mike does alongside council. So we did that one is again separate but otherwise they're all in the the first. >> Good. So council comments on this Rebecca. >> Thanks Brad. I think overall to me this makes a lot of sense. I think streamlining it. Also, you know, as much as our strategic priorities are important, I'm not sure they lend themselves always to great analysis from a review perspective. And I always thought that, you know, we as a council [snorts] bear some responsibility on the um ability to meet some of those strategic priorities. So I think this is a better more focused on the job at hand approach and I do also only because I think it does make a difference seeing the explanations within the ratings will be really helpful I think as we try to give consistent feedback across the seven of us. That's really my my hope is that this lends to more concrete feedback rather than this wide chasm of responses. >> Other comments, Deb? >> Yeah, I agree with Rebecca and I also It's one of those things where um I'm glad we paired it down and also when you when you put a lot of things in one bucket then you're you know, these are a lot of um things that deal, you know, we have ethics over here and direction over here. It's it's a lot of uh stuff that's sort of all over the place. It makes sense because it really is leadership and and you know, which goes along with strategy and results, but it's also, you know, to quantify all of that. Um, I think you know the open-ended questions to me it's always about the narrative >> and how to you know tease it out because there might be you know fabulous on one aspect of this and and meets expectations you know on another. Um so that that that's my only thought. Is it better to to lump it together or break it out? Um, I think we can get at it, but I think that's what we're going to find is that the it hopefully it'll there's a way to tease things out in the narrative. >> Other comments, council members, thoughts? >> I was I was going to say I like the fact that it was narrowed down. However, for me, um, for me, even though, you know, yeah, we've seen the other document, you know, plenty of times, but it's like for me, I have to have it like together so I can do comparison what makes, you know, what the difference are. Um, and so I can't really say yay or nay. It's just, you know, I heard what you said that you streamlined it and, you know, you kind of grouped it together, but for me, I have to like really see it hand in hand, like face to face where I have both documents and been able to compare it that way versus just knowing that or hearing that you, you know, kind of combined it together. >> So, >> other comments? Thanks, Kizzy. just have a question. Is it possible to scroll down and see the other competencies because >> this is the first time unless this was somewhere that I missed that I'm seeing it. >> Okay. Thank you. >> And also thank you for putting so much work into this because >> this is this is hard to do. Um, >> yeah, organizational management and staff development. I don't know if we're as as capable of I mean, if that's something that we really have insight into. I don't know, maybe other people feel that they do. So, that's just a question. I don't know that I feel >> I know we have a pretty incredible staff. >> Right. Right. But it's not since we >> I was just thinking the same thing that I don't know that we can >> really evaluate that well because we're not here >> we're not Yeah. >> But don't you think it bring the directors are going to do this as well? And also I think our engagement with d the directors reflects on this d pretty directly not to use the word too many [laughter] times but >> say direct again. >> Yeah exactly. I mean that's where we've got I I feel like quite an intimate knowledge about how that interface goes. If I will, if I could, mayor, to bounce off that later in later in the slides, we get to this, but it one of the slides is what does the council want to hear from directors? Um, I know a lot of times when director completes the same document as council, many of us leave a lot of the sections blank that are really council decisions. So we we could if the council wanted take that one and then maybe our shared values and the directors fill out that form for council feedback. Um if that would be helpful to complete the same and or maybe a slightly different form depending on the needs that council would like to hear from the staff side. >> Okay. Other um other thoughts and let's let's just kind of roll down so we see all the competencies. Um >> there's the four. >> Yeah. >> Because I I think that as I listen and I I think about this, I mean, yeah, clearly the um organizationally city manager reports to the council, doesn't report to the mayor, doesn't report to any individual council member, reports to us collectively. And so, yeah, it's our job to evaluate the performance of the city manager. At the same time, um, we have one view of the city manager because of where we sit organizationally. And so, you know, it's probably not likely or it's not really feasible for the council to do a really thorough and objective evaluation of the city manager because we're looking at at his role from his or her role from, you know, a given perspective. So, so I think it's important that we also hear from um the directors and other people their the input so we get we get the complete picture. Now, so then we're kind of faced with okay, what's the best way to do that? And my my view on this is um I think this does a nice job, but I think you need the open-ended questions because that's where you kind of fill in the gaps and also fill in the the difference in perspective. Now, some people are going to spend a lot of time with those openended questions and some people are not. And so you're that's going to be a bit of a mixed bag, but I think it's an issue that okay, you don't have to answer all the questions, but if there's an issue that you're concerned about, this is a place, get it in there. And I and then I think as as you said, Miranda, um as staff fills this out, if um if there's something that they really or if council doesn't have a clue on, um if we go back to the one, go back up and and talk about um um organizational um well, next one down. Keep going. Let's see. So, and then and okay, organizational management and staff development. um you know I probably wouldn't have as great a view on staff development as I would on organizational management. I mean, you know, when an organization is working well and when it's not. >> And um and so, you know, again, I think uh you know, I mean, um I don't want to make that rating. I think there should be um a uh an opportunity to just say not applicable or, you know, do not have the perspective or experience to to comment. But, you know, I think I think this is thorough. So that that would be kind of my quick >> kind of summary critique, but I don't want to shut other people comments off. I just wanted to say that that's kind of the way I would look at it. But really use those um open-ended questions. Paty. >> Yeah. And I I also think though that that the that our dealing with staff reflects on um the city manager's job to organize, you know, I mean, and so and how um so we do have a we like you were saying, we do have a certain perspective, you know, where we sit, but it's but also where we sit, we have um sort of a like a holistic view that that that we can we can understand. I mean, like having conversations with Julie, you know, like going through the chain of residents coming through me going through, you know, if that if that was an experience that I didn't understand or wasn't getting stuff or, you know, was too whatever, that would reflect the city manager. >> You know what I mean? So I think we um we we can determine in in a certain way his organizational skills and the way and not him in terms of but the city manager >> right >> in general do you know what I mean? And also I I think that it's really important that we you know that we can say look this is we're we're we look at this as a city council when we hire the next manager like we look at how we're we're dealing with the staff >> and that reflects on the city manager if that makes sense. >> So >> it does. >> Good point. >> Other other thoughts or comments? We don't >> want I just can I just quickly add um and this this is an important one for me for me I think in this role >> because and you already said it you see a snippet of what I do and then there's lots that happens on a day-to-day basis and so as a city manager you want to make sure the council has the full picture of all the work that happens and so for a city manager that's an important one because there's that's one of I think personally that's one of my strengths is that that competency and I think what Miranda will get to and Sarah will get to is then the the sequencing of this because in the past I think Miranda already touched on this the directors would fill out the report simultaneously the as the council was filling it out >> and so perhaps switching that batting lineup up in the sense of having directors fill out the form and getting that to you >> prior to you filling out the form so at least get sense of >> um what directors um have to say. >> Yeah. Yeah. I think that would be helpful >> because I think you're right, Pat. You do get a flavor of that but not the full breath, >> right? >> So having some feedback from directors might help you in answering that question. >> Other thoughts? >> You know, I'll I'll add to that from the perspective that I mean the um I mean certainly for the council um we want to do a good job of this. This is an important part of our job description of our role and the sec success of the city um is very dependent on you know having an effective city manager and holding that um city manager accountable for you know how things are running in the city and I think that you know so I think that perspective having having a little better understanding of um the staff's perspective is helpful again you know organizational management I think I get a pretty good sense for that staff development. I mean, you know, [clears throat] I know we're, you know, I know we do things. I mean, we do insights. Um, we, you know, I know um staff members attend conferences and um, you know, um, seminars on, you know, how to how to improve their skills. And I think I think there's good um, support of that, but but I don't think we as a council understand the nitty-gritty of that. We don't know, you know, what what conferences Mr. Nelson or is um Darren going to or what's Julie or or or Scott or or Kevin? I mean we you know we and and I don't know if we need to know that detail but I think when you consider staff development that's relevant and the staff knows. So you know it's just you know it's kind of having that more that more complete perspective because we're not necessarily going to get it as a council. So that's kind of what I think I think the approach you've described makes sense. Any other thoughts? I mean, our goal is to get it right. All right, I'll turn it back to you. >> Thank you. I'll move to the next section. All right, so now we're going to talk about the Oh, yeah. Can you bring back up the um >> Did you see all the competencies again? >> Yeah. Well, we can It never hurts to roll through them. And I would say, you know, I I appreciated what what Ky said. You know, I always like to see new versus old. I mean, I I like to know what So, what I would what I would recommend coming out of this meeting, we're going to have a good conversation here tonight, but I would not mind having the old form and the old the new form next to each other and, you know, say council, if you have any further feedback based on looking at these side by side, please provide it because I think I think that does make you know that's hard to do on a PowerPoint and so forth, but but if we had that and could use that for further input, I think that would be useful. Okay, we can add that as an additional agenda so it's in the package and then email that out. >> Great. >> I think we have to be sensitive to time. >> Yeah. Yeah. We don't have >> We already the form the directors are going to fill it out first. We have to fill it out. So, everybody's probably going to have to be pretty >> timely >> on the ball this year. >> Yeah, good point, Rebecca. Thank you. >> Okay. Um, so we'll just run through the rating scale really quickly. So this is again the current rating scale that you see on the team manager form. Um it's currently five point scale and has a wide range of ratings. What often happens when you have a lot of ratings like this so up to five is it can cause clustering where most ratings tend to fall in the middle. People avoid lower or higher scores. Um sometimes the like the difference between exemplary and outstanding can be kind of gray. it's not really clear. Um, and definitions just tend to overlap. So, when you've got this many choices, it can just make it more difficult when you're um doing the ratings. Um, and it just causes inconsistency a lot of times. So, um, this is the three-point scale that I talked about a little bit earlier. I'm going to showcase this, but then go to the next slide that has the four-point scale because it is this exact scale with one thing added to it. So, um, so this is the four-point scale. So, oh yeah, it is kind of small. Yeah, you can even bring up the form, too. That might be easier, um, to see the word form. So, really, the reason why we kind of tried to pull this down, some of the the things I just described to you is to make the definitions a little bit more simplistic. Um the four-point scale adds the growth opportunity category in there. So if you can see we have exceeds expectations, meets expectations, growth opportunity, and needs improvement. So on the threepoint scale, what we saw is oftent times there's this in between where maybe you really see a growth opportunity meaning, okay, they're they're not quite where they need to be. they're not necessarily getting a one, but we want to have that area to call it out as like a focus area, right? And so you can kind of see it in the definition there um of growth opportunity generally meets many job expectations but falls short in one or more areas. Shows potential and willingness to improve with additional focus, support or development performance is expected to reach full competency. So it's kind of just like a in between when they don't really fall into needs improvement doesn't really fall into meets expectation. It just kind of gives you that in between. Um, so this is our recommended rating scale. Um, and again it just kind of prevents you, you know, council from having to choose between needs improvement and meets if if there's that in between that is needed. Um, the other thing is this will be using the same skill for the staff and the city manager. So it just provides organizational alignment, simplifies training, communication, all that all that. Um, and then we have provided council with better definitions. We showed that on the form a little bit and I'll show that again. Um, in each of the competencies so you can see how does this rating scale or what does this look like for each competency. Um, and see this and just kind of scroll down a little. So again you can see here competency one I'll just read through this one as an example. Um, leadership strategy and results. So exceeding expectations looks like anticipates issues and presents strategic data-informed options. Drives major initiatives ahead of schedule. Meets looks like provides clear direction and ensures progress on council priorities. You can kind of see the other two there. Growth opportunity. Some priorities move forward while others lag without sufficient follow-through and then needs improvement. Lack of strategic clarity. Priorities stall or misaligned. because I the feedback that I heard from um Miranda was you know the the definitions that that was kind of the hardest part and maybe across a large group when you're rating one individual to make sure it's consistent and you guys are rating the same things. We figured maybe providing definitions for each of the competencies would help with that. >> Absolutely. >> So our recommendation is this four-point scale. Um again this is what we are leaning uh towards now as staff as well. We initially created that three-point scale, but like that gobetween for managers to be able to choose that. Um, and so this is our recommendation >> council comments. >> I think it's good. >> I really like it. >> Thank you. >> I'm um I got a couple of thoughts if I may. Um I mean I like it. I think it's a significant improvement. Um, and I I go back to um, you know, when we evaluate our performance against our strategic priorities, you know, basically it's a stop stoplight system. It's red, yellow, green. >> And, um, and so a three-point scale is red, yellow, green. Simple. Um, you know, I I suspect, but it makes you make some tough decisions. Um, you know, giving somebody the red a one um, is a big decision. And you know, it's got to be pretty clear that it's a one or you're gonna you're going to probably round up because, you know, to be considerate. I think, you know, I think the um I I think that having the um the fourth does it does create a little wiggle room, but but I would that one change I would suggest um is that you know it says, you know, may fall short on one or more >> and more is is too too much as far as I'm concerned. one or two, >> you know, you're close, but you know, you're Maxwell smart. You missed it by that much, you know, um otherw because I think >> um you know, I think one or more well, you know, one person's more could be two and another person's more could be 10. And so I think bring a bit more specificity to that rating I think makes it more valuable >> would be my my comment. >> Yep. make sense. >> And council, you're welcome to disagree with me. I'm not saying that's right. It's one person's opinion. >> Oh, I think that that's a good point. >> Okay. Anything? Anything else? Or >> Sarah, you've got more. Okay. >> I'm I think I'm Yeah, I'm >> Okay, keep going. >> Almost done. >> No, it's good. Thank you. Yes. Okay. So, um again the frequency. So, we're almost done. So, evaluation process logistics frequency would stay the same. It's the December of each year we do the evaluation. I usually start sending the form [clears throat] right after um the Thanksgiving break. So, we'll we will be tight this year, but we're going to make it work across the board. Um again, role of the council and then directors in the process. So, that's where we're going to discuss too. Um it sounds like there's flavor to have the directors complete it first. I will give them a really tight timeline. We'll get it done, I promise. And we'll get that um to council when I send the evaluation forms. Um and then again, process for compiling. I will continue this year to compile all of the data and then summarize the council feedback in the same format we've been using. We will do a paper this year. The spreadsheet will look the same. Again, we'll move into that electronic system next year and do training and um for that as well. And then confidentiality and transparency considerations. Again, um kind of what we've been doing in the past. This won't change um for this process. And then next steps, um we will finalize the evaluation form based off based off of today's input. And then the new form and process will be used for Mike's review coming up. Right now, we have it slated for December 15th. Um so we'll kind of work backwards from there and use this form. And then again, we will do the we'll make the edits, we'll do the agenda and allow council um opportunity to weigh in. Um I know we're most of us are flying to NLC. So um we'll we'll get feedback in and then um send this out right around the Thanksgiving time frame. So thank you mayor and council. And then I think the question was is if there's any additional things we're not thinking of or considering. >> Great. >> Yep. Go ahead. So, and I I've been hammering this every time we talk about it, and it just has to do with making sure that on the day of that we have sufficient time to have the discussion and finish the discussion properly. So, um >> very good. >> Yeah. And I mean this is I mean this is one of the more important things that we do every year. I mean th this and the budget are, you know, I mean really key to the performance of our city. So this is important. So um I I think these improvements are um really [clears throat] good. >> Yeah. >> And uh very much needed um because I think the old form just was it it was it was hard to fill out and you know I just think this will be it's much cleaner, much clearer and um I think that's really good. I think it'll be interesting to see if the scoring comes more into alignment across the council or if we still have sort of a different phil philosophical >> approach because you can keep defining and there's always room for interpretation. But >> as someone who HR, thank you because that was a lot of work. Yeah. >> And I really appreciate. >> Yeah. a lot of work and and thank you for that. And I you know to your point Deb I think that um I think the clarity of these ratings um will make it um I think we will have more alignment because you know it takes the philosophical aspect away which I think is really >> you know you know I mean when when it says fully proficient oh well um and that's that's like the the the third lowest score you know I mean you know that to me that was really difficult. I mean, basically the highest score in the old said you walked on water and I really don't know people who walk on water. So, with all due respect, Mike, I mean, you know, [laughter] I I mean, I think >> sounds like I need to breeze myself. >> Yeah. No, I I mean, I think that I think that's I think that's a challenge. So, I think this is much clearer and much easier to make quality ratings. Anyone else comments? All right. Okay. So that uh city manager review process that was uh worthwhile. Thank you both. Nicely done. Um so then the other big topic for tonight is the 2026 um budget related items, the the proposed budget um uh utility rates um annual cellar antenna issues schedule and um grant applications update. So that that's a mouthful. Um I'm going to Mike, I'll turn it over to you and you can uh you can lead it off. >> Yeah. Thank Thank you, Brad. Council u the PowerPoint. >> Got it. >> Okay. All right. Well, thank you, Brad. I'll kick us off here tonight again to our guests here as well, Mike Fun, city manager. So, I'll start off tonight's presentation. I think I'll go through the first 12 slides and then we've got another few after that as well. Um so we'll try to streamline it. We tried to streamline this tonight and so some of the slides that you might have seen in earlier study sessions even back in the September council meeting where we adopted the preliminary levy. Some of those slides are out of tonight. It's really kind of we the mission vision some of the depths of the strategic plan. Um we want to streamline it tonight because I know you've seen those before. We'll weave those back in at the December council meeting when we get to the final adoption. So, we'll have more of a public facing um explanation at that point. So, you'll see that those slides aren't in here tonight. Tonight, we're just kind of going to kind of dive right into it and get really to the core of tonight's conversation. So, that's why you'll see some of the slides that you normally would see not in here. Um really just kind of kicking things off. And again, I'm going to kick things off. I'm going to stay at a higher level and then I'll hand it off to Darren where he'll get more granular as the conversation progresses. Uh so first off, overall city budget. Now, this is a newer slide you haven't seen before. Uh really what we're trying to do in this slide is capture the city's budget. Um because oftentimes I might get asked, maybe you are asked from a constituent, well, how much is the city's budget? Because oftentimes, and there's so many different, we're going to use the word buckets a lot tonight. Um so there's a lot of different buckets regarding the city's budget. So this slide just really tries to illustrate what is the entire all funds city budget. It is roughly 124 million. So I am kind of using rounding numbers and Darren will as well uh speaking rounded numbers here early on. So all of our funds combined is about 124 million. Thally really falls into five categories or buckets if you will. Four of those buckets are on the left hand side of this slide. Those are called or defined as in our audit are governmental funds and those are the four buckets if you will, four funds where they are supported by some level of property taxes. So governmental funds, the four that are noted there, and I'll just go around kind of clockwise starting at the top with the yellow circle is our special revenue accounts, our special revenue funds. Um divisions that you'll see in special revenues would be our cable TV fund, the ice arena, the marsh, our affordable housing trust fund, electric franchise, and a few others. The other going around again clockwise in the green colored circle is what we call our capital project fund. That's our CIP in essence where we find our streets, our technology, equipment, parks and trails, all sorts of cars to radios to everything in our CIP. Uh then moving around in the brownish colored circle is our debt service and then our general fund. And I should have noted and I'll just back up real quickly. uh of that 124 million total city budget special revenue accounts is about 7.3 million in the yellow circle back to the capital project fund that's 24.2 2 million debt service is 1.5 million and then our general fund 60.1 million. So those are our governmental funds those four buckets. The other one is our enterprise funds. That's the fifth bucket. Um that is water and our sewer, storm water, environmental recycling, uh the Williston or Willis Grace Bay Marina that those funds total about 30.9. >> Can we get something like this? um add it to um for the future like kind of break it down kind of like how you did that broken down that way. >> Would you like to see that shown, Gizzy? >> Um maybe in a document um that we can get sent to us um because it's just helpful the way you just broke it down. >> Okay. Yeah, we'll um I'll think of I'll work with Darren. We'll we'll see how we can communicate this through some of the current budget documents. Um, so I'm glad you find it helpful. >> Yeah, that was that was good. >> All right, any questions with that? >> I see the mayor over here writing stuff down, so it looks like he might like it, too. >> Oh, good. All good. No, it's a good this this good representation. >> So, so the next slide I'm about to show you is a revisit revisit our timeline and keep those it's colorcoded, so kind of keep keep those colors in mind. All right. So, really, how did we get here? And so, on the left hand side of this, you've seen these dates before. Uh, as we often uh describe, our budget process is eight months. Uh, we start in the spring. Again, I say this more, you've seen this before, council, but again, I think just want to rehlight for our guests here this evening. We spend eight months in our budget process. Uh, going back to March 24th, we have director presentations. And I'll go through this list real quickly, but just keep in mind on the right hand side of this are those five funds. So we've got our special revenue funds, general fund, debt funds, capital project fund, and enterprise funds. And we tried to highlight in here each time that this has been in front of you, which which of those funds have you been um that we've talked about and you've been exposed to in those conversations? So in March 24th, director presentations, those are high level budget presentations by directors, but [clears throat] they they briefly touch on all those funs. uh noted in one shape or another. Granted, they're not deep dives, but we're starting that budget process talking about it in its entirety. April 28th is when we had our community and business survey. Uh then again on May 12th, we had our official budget kickoff where we talk about our general fund, debt service funds, and capital funds. In June is our CIP and EIP. That's where we we touch on our special revenue funds, capital funds, and enterprise. In August, it's really that August study session is dedicated to our operating budget where we really highlight our general fund and debt funds. In September is when we had our preliminary levy and budget adopted. We touch on all the funds except for enterprise. Uh and then on October 27th, last study session, you had a conversation on utility infrastructure and presentations from staff that was really enterprise fund focus which is really more over utilities. Uh here we are tonight. So it's our operation operation budget study session where we are going to touch on all those funds here this evening. And then looking ahead to December 8th, I apologize if I said December 4th earlier, but December 8th uh council meeting, that's when the the final budget and levy will be presented to you for your consideration for adoption. We do have an alternate approval date than on December 22nd, just depending on sometimes weather might cancel a meeting or if there's something that happens on December 20, excuse me, December 8th, we have an you have an ability to come back on December 22nd for any finalization. Now, um, again, just kind of I apologize on my computer. This looks really good up there. It doesn't look as clear. Uh, this is all funds. So, think of that 124 million uh that I just showcased for you on that earlier slide. This these pie charts really break down all of those funds, all those five buckets, if you will. In terms of revenues, on the left hand side, again, I apologize this doesn't show up as well on the TV screen. The blue part of that pie on the lefth hand side is taxes. And I mentioned uh in our in that first slide, just going back to that quickly, when you think of property taxes, they fund those four buckets, if you will. And so we look at those revenues. Uh property taxes is roughly 49% is what that illustrates. U I'm just going to pop ahead to the next slide, but I'll come back to this one. When we look at just the general fund, because we do spend a lot of our attention on the general fund, looking at the general fund, that is more property tax reliant. More close to 78% of property taxes goes towards our general fund operations. But if you pull yourself out of the general fund and look at all of our funds, property taxes represent about 49%. Going around that wheel clockwise, user fees and charges is that orange section. That's roughly 37 and a half million or 33%. Next is the gray piece which is license and permits at 3%, intergovernmental revenue at 5% and then finishing up with that that blue box of other income at 11%. So that's the revenue side of things and then we categorize what we try to do is um break out the c break out the expenses two different ways. The first way is looking by program and then by category. So it's the same expenditures but slicing it just a little bit differently. So that middle pi graph starting again we'll start with the orange that's street utilities at 38%. That may that percentage may seem different to you because oftentimes we we speak in terms of general fund where we have general fund is a certain percent different percentage and we'll get to that here in this next slide. So again kind of shifting or slicing this a little bit differently. So I'll go around quickly expenditures by program. Again, that orange is street utilities at 47 million, 47.5 million at 38%. The gray is parks and environment at 11% or 13.392 million. Recreation is at yellow at 11,100,000 at 10%, development at 6.9 million or 6% and then general government at 13,678 or about 11%. Again, the last pie chart is in really by category. This is where we look at instead of kind of more department, it's then within the department, how do you break those expenses out? Um personnel is I'll start with the blue. I'll start with orange. I've been starting with orange. So capital capital outlay is 27%. Service and charges are 18%, supplies is 4%, the darker blue is debt service at 6%. And then personnel is 45%. And so that's different. You think about personnel, you've heard us say that personnel is 80% of our general fun. That is true, but when you look at in the totality of all of our all of our budgets, personnel is 45%. So again, it's just a matter of what lens you want to apply it and and how you want to break down the numbers. Uh the next page really then looks at the general fund that usually tends to be our hypers hyperfocus fund that we look at because that's really where all of us in this room live in terms of our operations. So really just strictly looking at the general fund. Uh I'll start on the lefth hand side. Revenues, property taxes is that major piece, 78% of our general fund, uh which is around 47.6 million. The rest of it makes up for user fees. There's license and permits, intergovernmental transfers, uh other incomes, and transfers, etc. And then we do again same slide, expenditures by program and then by category. So by program, this is where in the general fund, public safety makes up 46%. So So will yes, you're lesser on this one than on the other one with streets and utilities. But in our general fund, police and fire make up 46% [clears throat] which is 27.7 million. Street and utilities again at that 5 point excuse me 8.754 million which is 15% parks and environment 8% recreation 8% community development at 7% and then general government [clears throat] at 16%. By category it's the same categories again. So again as we kind of look at general fund only this is where you've heard us say or Darren and I say that personnel is the largest component of our general fund and it is. It's 78% which is 46.975 million. Supplies is 4% and then service and charges is 18% or roughly [snorts] 10.8 million. >> I'll pause there. Any questions on these two and how those are illustrated? >> Paul, >> I just wanted to say I thank you. I think this is really helpful to have kind of the talking about the overall budget for our discussion today and then also then scoping in in terms of the general project. So kind of having that panning out. So thank you for that. >> Welcome. So that's our goal here tonight is to start start out a little wider and keep working our way narrower. >> Anything else? Any other questions? >> Thank you Paul. Appreciate that. >> All right. Good. So, what this represents, and again, council, you've seen this before, and I think just something personally I think we should be proud of at the city, and that's our commitment to long-term planning. We put a lot of effort into not only looking at today and tomorrow and 2026, but really looking out years in advance. And that's part of being fiscally responsible is understanding commitments today that we have as a as an organization, but what is on the horizon and what's going to be happening in the next decade. what feeds into uh in that bottom which is our economic improvement plan. Again, for those that EIP, we use a lot of acronyms. So, the EIP is our e economic improvement plan, our CIP, which is our capital improvement plan, and then our operations budget. There's just a lot of of planning that happens within our planning. It's kind of planning within the planning. Again, kind of going around this wheel. We have our trail master plan that comes into consideration. We have our climate action and adaptation plan or cap. The the community business survey is an important document that gives us information uh in making these decisions. Our public safety master plan, our strategic plan, our natural resources master plan or NF NRMP and then we have our post plan which is our park open space and trail system plan, our comprehensive plan and then our facility planning. So, a lot of planning documents. We do put a lot of emphasis in looking at all sorts of areas of the city because we know our operations are complex. It's one of the things I I think about in business terms is that we're you think of a business that produces widgets. We don't produce widgets. We have different business models, whether we're an enterprise fund, a special revenue fund, a general fund. So, the way that we approach business is is a lot different than per se like in the private in the private industry. Why does that matter? Um is then looking at some of our historical levies. And the reason that we show this to you is not to justify what we do, but to give you a sense of what what's happening in other cities and what other cities have been doing in the last 20 years. So this is a comparable city historical levies graph. Uh so this goes back to 2006 through 2025. And so what SAP has done is looked at what we call our comparable cities. Um those are noted across the bottom. And then looked at all those the last 20 years and really kind of stacked up each city's levy to look at what's happened in cities the last 20 years. What's happened in cities like Minnetonka the last 20 years. When we look at that aggreate average the the increase and that's noted up there in the right. The 20-year Aggreate average is 99%. Our acre to average is 96%. So what that tells you is that that and I hope your takeaway is that as a city how we stack up against our comparable cities is we're in the middle. We're not, you know, we're we're kind of in the middle that we're not the lowest taxed city in the last 20 years, nor are we taxing at the highest rate in the last 20 years. Um I think that falls in line with uh the Star Tribune article that came out was that this weekend there's an article on comparing property taxes around the metro. here we kind of fall in the middle uh in that article and if you notice I kind of scrolled through all the cities in the seven county metro and we we fell in the middle there as well. So it just gives you a sense of where we are again comparing to other cities. Really the heart of um our conversation here this evening and throughout our whole budget process is our our levy analysis or what we call our budget drivers. What are the key budget drivers impacting the 2026 proposed levy? So, I'll just spend a few minutes on this slide. Uh because this is where I think this is the well where where the where the rubber meets the road, if you will, in terms of our proposed levy increase for next year. Is there a mouse I can use? Yep. Yep. That one. Is this one? That one? Y. Thank you. So, just to walk through the budget drivers for next year. I'm going to come back to this first line item and just start with the second one listed here. Uh we look at at staffing and so our staffing which really represents our cost of living adjustments and our market analysis. I have a couple slides coming up that Miss Domin will speak to in terms of compensation and how that's calculated and our goals in compensation. But in again in terms of starting out a little bit wider here in the early end of the presentation, our cola and market next year is estimated to be 1,457. There's my mouse, which is an add to our levy of 2.6%. So compensation 2.6%. The next line item is health insurance. As you know, council, this last year, our insurance went up, it's around 9% on health insurance. That's a cost share with our employees. for the city share that's representing 480,000 or just shy of 1% for the tax levy. The next line item is a what we call a state mandate. So this is required by the state of Minnesota. Last year, as you know, the state legislature passed the Minnesota Paid Family Medical Leave Act. Doesn't matter if you're government or private industry, every business in the in the state pays this. Uh for the city of Minnitankka, this too is a cost share with our employees at 50%. Uh for the city, our share is 150,000 or.3% of our levy proposed levy increase. We do have a position requested for next year and it's a parallegal position in our legal team. Mr. Nelson is here and we can ask him questions later about that. That's supporting our our legal team. One could argue that is really public safety uh because that parallegal is supporting our police department. Um it's not coded as a public safety initiative, but more or less it's included in our general fund. Well, it's both in the general fund, but we're not coding it as per se investments to um where is it? >> Right there. >> Right there. >> Right here. Public safety investments. So that wasn't specifically tied to our public safety master plan, but it is a position that is supporting again police efforts. So with those parallegal position with that parallegal position that sub subtotal is 4.7%. Um and again I want to come back up here to this top line item. So this number here and so this is our base levy from 2025 of 55,124. this increase of a levy increase of 0.8% 8% and if you do the math and subtract these two numbers it's about 400,000. What that represents is two things. It is the city's own cost of living incre I say cola but inflationary increases. So just like anyone at home the city also has seen inflationary increases. We see those in dues that we pay. We see that in technology subscriptions. We have a lot of software that we use and in those contracts there's inflationary factors built into those. Uh it might be dues paid to League of Minnesota cities. It's to the watershed district. It's so it's dues in its expenditures that we're incurring including heat and electricity is all built into that first line item. The other thing [snorts] that it builds into is kind of the the gap in revenue streams. And what I mean by the gap is as we analyze other revenue sources and go back a couple slides. I'll do that here. I'll go back a couple slides. As I noted in our revenues, not all of it is property taxes. Whether you're looking at all of our funds or even in the general fund. So, as as a staff, as we look at licenses and permits is a big one. We're really dependent on building permit activity. If there's a decrease in building permit activity, then we rely more on taxes to fill that difference. And so, Going back to this slide. So again, this $400,000 and levy increase are contributing to two things. The inflationary factors I mentioned and also accounting for if there are shortfalls in other revenue streams that we we had relied on in previous years. Maybe it's a grant we got, it's no longer going to be there. And so it becomes part of the tax levy as well. So, I'm going to pause there at that 4.7% and because I think that's worth noting in that this is pretty much business as usual. It's taking into account again staffing in terms of compensation, benefits, our own inflationary costs here at the city, um the paid family medical leave, and then one new position. So it's really as we'd say if the city was doing nothing different other than adding that position we would be really around that 4 and a.5% levy increase. [clears throat] Then moving on these are then other items for again council consideration and the ones that are driving the levy higher than 4.7%. The next area is the ice arena and the marsh. And so this had been more of a number that had been in the general fund in previous years and it had been a transfer out. And so what we want to do is make sure we're transparent in terms of to the council and also to the community that we do have part of our levy that pays for supplementing the ice arena. So it cash flows positively and for the estimates for the marsh operating next year. So 200,000 for the ice arena, 200,000 for the marsh. That's at 400,000 which increases levy by.7%. For capital improvements, we're actually proposing a decrease in the levy of 513,000 from 25 to 26. That's actually a levy reduction of.9%. How we're able to do that, if you recall, council, is that when we do after our audits and we end up with to the good where our revenues exceed the expenditures. Per the city's policy, we're transferring that excess revenues over to the capital improvement fund. That helps then offset the levy that might be needed for capital expenditures. So, that was a good year for last year was a good year for the city. We're able to have a healthy transfer, thus requiring less of a need for the capital improvement levy. So, we're able to reduce that levy by 513,000. Then we get into the public safety investments. So, according to the public safety master plan, even though we've been on a 5-year trajectory, uh with that plan, next year in 2026, that investment is 1.464 million or roughly 2.7% for of the levy. And then last, um just noting that again, council, I know you're aware of this, but for those that are listening, um looking at long-term, how do we fund long-term capital needs? And so, what the strategy is and Mr. Nelson will will get into greater greater detail in a few slides. We have 400,000 in current levy dedicated for a future bond issuance. Adding another 400,000 to that kind of steps into what you call kind of transitioning into a future debt issuance. Uh that has a point 7% levy impact. I'm going to get ahead of you and ask, well, what if we don't do that? And what if we don't do the 400,000? You can do that. We could not do that. Um, and save 7% on the levy. You can reduce the levy from 7.91 to basically 7.2%. And then it becomes a trade-off. And what I mean by the trade-off is this is a transition into that future debt service. If you decide not to do it, it just means at some point when you do that debt service levy, you're just going to have a greater hit uh at that time. That number would be double that at some future some future year. So it's just a matter of your comfort level of planning for that future debt service for facilities. So that gets us to the 7.91%. We take in consider H levy and that's a mathematical calculation. And so our time final levy is 7.87%. That's down a little bit from the preliminary levy. Mr. Nelson will get into later slides of some of the activity that's happened in the last few months on some of the line items that have gone up, some that have gone down. Uh, and what staff is presenting here this evening for your consideration is 7.87% which is slightly less than what was presented to you in September. So, I'll pause there. Any questions on the budget drivers? >> Questions? It's not like we haven't seen it before. >> All right. I'm seeing no question. I know you've seen it. Just taking a extra time on it um this evening. >> I appreciate it. >> Okay. All right. Next slide, and I'll speed up here um from here. You've seen this before. This is our tenure ley history. Um it doesn't have all of the um the five buckets, if you will, on the bottom. This really highlights the the big ones, and that is our CIP, our operations, and debt. That's really mainly where the tax levies fall are in those three categories. Yes, it's excuse me, we [clears throat] know it's going up. Um, and that's illustrated here on that graph. Uh, this is again one you've seen before as we do some projecting and we think that's good fiscal management is understand where we are, where we've been, where we are, and where we're going in terms of trying to manage the tax levy. Uh there's a distinguishing the distinguishing piece in here is between that orange and blue line. Uh the blue line represents rewinding the clock a year ago and we were projecting our future levies and the orange line represents where we are today. And so after again it's always changing ever ever flowing. And so what really what this represents again is a change in our projections. And you know a year ago we were projecting in 26 around 8% projected in 27 over 9% projecting in 28 7%. Those are those are slightly lower. So again 26 is very kind of where we where we thought we'd be in 27 projecting 7.62 versus a 9%. We're projecting a 28 an 8% 7.4% 4%. And this kind of gets us through our public safety master plan. That's really what that's illustrating is our commitment to public safety, knowing that our levy is going to be higher the last couple years, knowing that we're going to make those investments the next couple years. And then as that investment is is made, our levy leveling back out to more what we call normal increases. Last night I have before I turn over to Mr. Nelson is again this is another snapshot of our comparable cities. So I showed you the 20-year history. This just takes a look at going [snorts] into 2026 as both Mr. Nelson and I have talked to our colleagues in other cities as we've been watching what other cities are doing. Again, this gives you a sense of where Minnetonka kind of stacks up against our peer cities. Again, kind of referencing if we were to just look at general fund alone and business as I call kind of business as usual, we would be at about four and a half%. Which would put us at the lowest of our peer cities. However, we are we've had a commitment to our public safety master plan, which is the red bar of that 2.7% [snorts] and then looking to be proactive in terms of our long-term debt service planning with that 7% for future debt, which gives us again right at that 7.9%. So, it gives you a comparison of where other cities are. As we know, every city has a story. Every city has a narrative of where [snorts] they're at. I think anecdotally I would just say to you as I've talked to many of my colleagues in in these cities that are higher than us as I understand their cities what's driving their levies is staffing. Um, you've got Edina for example, why they're at 11% is they're hiring, I'm going to turn to Chief Fox Box, I'm understand like 12 or 13 firefighters are being hired in ED. That's what's driving you up is they're they're taking a big bite of an apple with with fire personnel and they're bringing them all on board in one year. So that's but and that's true of a lot of those cities. It's it's adding generally public safety staff is what I'm hearing. All right. I think with that we're now ready to get a little more granular. I'm going to turn it over to Mr. Nelson. Again, pause real quickly if there's anything questions for me before I turn it over. >> Thanks, Mike. Um, anything council or just keep plugging a lot way. >> Okay, >> Mike. I mean, Darren, go ahead. So, >> thank you, Mayor. Um, >> so I'll keep cruising here as well too, but I just kind of want to throw out a reminder of kind of the our kind of the detailed budget drivers that are um within our budget for 2026. Um, we saw these back in Septemberish time frame as well too, but just kind of want to highlight them again as well. So, as we talk about the public safety master plan, uh, we did hire nine firefighters last year in 2020, not last year, well, 2025 is this year. We hired them as mid-year hires. And so, hiring them as a midyear, we then have an impact to the 2026 budget with um, funding that second half of that. And I think we've talked about that that quite a bit. U, but just so you're aware of that impact. Um, also included in the 25 and 26 budget was the firefighter compensation as well too. And I think we took care of that with their MUN contract that was um, taken care of and that's accounted for in the 26 budget. Then we look at the Axon service agreement. Um, there was that 10-year um, agreement that we entered into about a year ago at this point in time for about 600 the 2026 impact is about $615,000 or so. in the first year for 2025, we took care of that within the CIP and now we transition that over to the general fund. So, we have to um account for that as an operating expense moving forward on that end of it. Um, and this is we have a kind of an implementation window here over the next couple years with that. And so, we'll see a little bit of a decrease in the out years in years like four and five. that'll get back down to kind of its base level of about 600,000 I think it is um on that um continuous for the for the next five or six years after that point in time but we will have some additional costs coming up in the next couple years for um some of the records management implementation those types of things but u we are going to see some savings though on some elimination of some software applications that we currently have we'll be able to eliminate those as this um contract comes completely on board on that end of Um, we're also looking at input uh requesting a community engagement officer which also was part of the public safety master plan and that's at a cost of about $140,000. And then our drones first responders that uh was a new program that we entered into this year in 2025. Um are paying for that program. It's $300,000 a year for 10 years. Paying for that program in 26 through the CIP. We funded that. And then in 27 we'll plan to um bring that into the operational budget. So that'll be a cost for the 2027 budget that um we have accounted for in that chart that uh Mike showed you a couple slides ago with the future projections and whatnot on that end of it. So, also included in the budget, um, and Mike talked a little bit about this was the non-union class and compensation study. And so, the budget is built with, as Mike mentioned, a 3% cost of living increase in there along with a 0 to 2% market adjustment for um, non-union employees on that end of it. Union wages are all set by contract at this point in time, and those also have market and cola adjustments in there as well. Um, health insurance, Mike might might touch base on that. That was 8.9%. um 5050 share between employees and the employer. Um and then the MA Minnesota Pay Family Medical Leave Act which is going to be effective here on January 1st which has an impact of about $150,000. Um then one additional FTE request in the legal department that Mike touched on as well too. So that's a parallegal or similar type of position to assist with uh the case load um and for both prosecution and civil cases in the legal departments. And then a couple things that we have uh I mentioned in the in the council report for this um study session is that since September there have been some es and flows in the budget on that end of it. Some things have increased, some things have decreased. Uh we saw some a nice increases in our public safety state aid in both our police and fire state aid amounts. And so uh we were able to project that and that um those savings would have went in and would have reduced the budget. On the flip side of it, I found a couple other items that um I had miscalculated doing the initial budget run on the preliminary levy with some of the axon agreements and such like that. I had doubled up um accounting for some of the software applications that were going away in in two different spots. And so, um I didn't notice those until after the fact, which they ended up being pretty close to the same amount as the public safety state aid that we were getting. So, um, so we had that and then within our cable television fund, we had over the last number of years, several years on that fact, uh, we've been moving some of those expenditures out of the cable TV fund. Uh, we've moved all our personnel out of there over the last couple years, I think we're now, um, it's just literally it's just our our part-time employees that, um, do the the video recording that are there and the rest of those employees have been moved over to the general fund. Um, but we also have in that cable TV, we have fund, we've had a number of expenditures that aren't necessarily cable TV related. And so the cable TV fund had always funded those because it had franchise fee revenue to support that. And so a couple examples of those are Summerfest and Spooktacular and the farmers market um were were functions or programs within the cable television fund. And so we've been trying to find a way to get those over to the general fund because they're really truly recreational programming type of programs and so they should be supported by the general fund. Um we haven't found a way yet, but what we did is we included the expenditures in the general fund, but then um we're going to do a transfer from the cable television fund to the general fund in 2026 to to equal those expenditures. And then the plan is is to try to wean ourselves off of that transfer over the next several years on on that end of it. So now at least we have the expenditures in the right category or right area and then we'll work on on getting rid of that transfer u over the next several years on that end of it. So So those are kind of some of the things that have been driving the the budget um prior to the preliminary budget or preliminary levy and then since the [clears throat] since the September date. Then we also have the facility improvements as well too. Um that's that additional 7% um that we're talking about as well too. And so um this just talks about the community facility study that we had back in May of 2024. Um and initially we had added some dollars last year's levy to to kind of take on some of those um projects and we decided to to kind of hold off and wait on that. And so um so we're looking at now what we're looking at is in the preliminary levy we have that some dollars set aside to kind of as Mike mentioned to step into a future debt um issuance to help pay for the community center improvements andor um fire station 2 improvements um as well there too. Um community center improvements we've estimated about $4 million or so based off of and the bids that came in in 2021 which were you know they're in that 3 million $3.2 $2 million range somewhere in that ballpark. So just off the cuff math of thinking, you know, when something might happen and what the cost of that may be on on that end of it. And then uh looking at the fire station improvements, I know Chief Fox, we had the um facility improvement study session earlier this year as well too on some of that. And um obviously station two is our priority at this point in time. Um the remodel that is is two and a half million to full rebuild is a little over 9 million or so on that end of it and such. So, um, trying to find ways to make that work and trying to find financing is is difficult at at best on on that end of it as well, too. Um, last year we did put in a state bonding request for the Marsh and for Opus. Um, those there was no bonding bill last year, so that kind of went um by the wayside at that point in time. Uh, we did submit another bonding request for this upcoming legislative session. Um and we kind of shifted our priorities over to a fire station, hoping that um maybe public safety gets a little better or harder look at a bonding successful bonding um campaign on that end of it. And then that would help us with this other projects as well too if we can get some state dollars on that end of it. And with state bonding dollars, there is a 50% match requirement. And so we are requesting $5.33 million from the state to help us uh rebuild that facility um over at Fire Station 2. And so um so that would help on that end of it, but um we are a long ways to go on that. We did have a bonding tour last week with the um the House bonding committee, so that was good to have them out. Um and so what else? And obviously sales tax is always up in the air as well, too. There was a two-year moratorium in place. That moratorium is now over. There's no new changes to laws or anything on sales tax. So, you still have to receive legislative approval before you can bring it to a referendum vote on on that end of it. And so, and who knows, the legislature may change something during session this year as well, too. So, lots of things that are up in the air on that end of it. So, that really leaves our financing option at this point in time with a property tax levy and a traditional bond issuance at this point in time. So, looking at what we're doing, that that $45,000 would be kind of that first step. um but trying to save enough money. $45,000 times two would be about um the principal and interest payments on a $10 million bond issuance which would cover theoretically $4 million for the community center, $5 million plus for um fire station two on that end of it. So, um a little bit of a savings account anyway to start with here to see what see what happens moving forward. So, and then we did call um you're probably aware it was council action earlier this fall, this fall, >> late late summer, early fall where we called one of our park bonds with our last remaining park bond. >> Uh we called that and we had enough principal or we had enough um fund balance reserve in place to call that bond. And so we were able to save we didn't save a whole lot, but we saved probably $10,000 in interest payments over the next um two years. That was was maturing pretty quickly. But um uh we were able to realize some savings there anyway. >> Oh, and then I'll kick it over to Miranda. >> Thanks, J. Mike asked me, it's been a couple years since we did our compensation study. So, he asked if I could um touch on how we do compensation and how we changed the method a few years ago. So in 2023 um the city hired a consultant um David Drown Associates we call they go by DDA um to conduct a compensation and classification study. Um for those of you who were on council that year we had just come off of a pay equity um report and we passed by one point from the state. Um, so that was kind of what drove us. A couple other factors to do this, but um, a classification and compensation study reviews internal equity. So it's a pay relationship between positions internally and external competi uh, competitiveness, pay relationship with our labor market competitors. And our labor market competitors are our 10 peer cities that we use for our labor unions and many of our research studies. So as part of the process the study um consult consultants and HR um Sarah came at the very tail end of the project review job descriptions and assign points for each classification as required by um Minnesota pay equity law. So Minnetonka we went under this study for a variety of reasons. Again be competitive in the market ensure pay equity at one point was really close for us. Um and then create a formalized pay structure. So prior to this, every single employee in the city of Minnitonka outside of our unions, all of our non-union were on different pay ranges. So we had zero consistency across the organization. So this was a significant um um project and a great improvement. Next slide, please. >> Oh, sorry. >> So compensation, what does this mean? Um so the implementation took effect for 2024 wages. So the end of 23 is when it went implementation. So we did the initial market adjustments and cola for the employees. We then from there had our scale developed with our grades in it and then where the employee was on that initial mark adjustment in cola. We went to the next closest step in their new grade is how we adjusted every single employee to get them into the pay grade. From there, annual percent market adjustments for the city's overall pay structure is a four-year plan. So 2024 through 2027, which Darren just hit on. The COLA is approved by council each year. And then we knew this transition is [clears throat] very, very expensive and takes time, which is why we are spreading it over a course of many years for the non-UN pay structure. So again, we adopted a new non-UN pay structure. It's a grade and grid system. results of a compensation study by the external consultants. Again, we use external consultants to do this process for us and the study for us. Um, the positions graded based on education, experience, budget, responsibility, hazards, and more. So, through this process, we had a lot of employees say, but but I work extra hard. And it was a lot of the conversations of it's [clears throat] not about you and the job, it's about the job. Take the person out of the job and focus on the job description. So, and what it requires. and then considers market rates and expands the step system from five to seven. So prior we had a fivepoint step grade system, we now have a seven grade system over a course of five years. Next, please. Again, our compensation goal at the end of this was the new pay structure is the outcome of the citywide compensation study that aims to ensure employees are compensated fairly and equitably for their work across the organization. include a compensation review of our Manka's previous pay structure and comparison to the market. Um, alignment with our local government's pay equity act. That's every three years we have to submit that report that does go through council prior to submission and we do have to pass that. So, it requires a city to establish a policy that all jobs are evaluated given points according to level of knowledge and responsibility required to do the job. and we did we passed with flying colors this last time under this new plan which was great and then to stay competitive in the market. So Manka has always sat at the 50 percentile we are trying to move that needle a little bit forward. So um we do do um every year even though we're still in the middle of this implementation over the course of four years. Um this year we took a job out of each grade and we did compare it to the market just to make sure we are staying where we want to stay as a salary cap was removed the year after we did that and we know the significance that that has caused throughout our peer cities as well. So we although we are still implementing we are checking where we are at in the market and we're in a really good spot with most of our positions. So we don't want to lag behind again to have to do a catch-up. So, we are staying diligent about making sure we check those and making sure the plan is affordable along the way. I have compensation. >> Okay, good. You want to just pause there? >> Well, just I'll just ask for council any any questions that you have on this. I mean, it's big clearly a big area. I think um as Miranda indicated, we've kind of reset the bar and we're we're in a good spot, but um it was a big deal. So, any questions anyone has? I don't have any questions, but I I would just say that um you know there's some people in the community that have been paying close attention to our budget and I think the point that Miranda made about how um we passed we passed by one point because the system that we had um wasn't consistent across um the staff. And I'd say also [snorts] that um where I work, we also just went to a sevenstep um system and it's a it's a huge adjustment. I you know it's a lot of work for payroll and just to keep track and sort of learn how pe like when you're hiring and things like that. So, it's a lot of work and um but it but it is so good to be consistent and I know that this is going to serve the city really well in our recruitment efforts and um you know what people in the community often don't understand is you have to be competitive. You know, we always strive for excell excellence here in the city and that means we need to have good staff and to have good staff to attract good staff to even get people to apply. You you have to, you know, meet a certain um compensation level. And so, um just the fact that we're in the middle still, it that's a good thing. And so, I'm glad you're keeping an eye on it. It's a lot to juggle finding that sweet spot. Paul, did you have a comment? >> Oh, yeah. I was quick follow up. Um, that's pretty much what I was gonna say, but I did want to um say one thing is that, you know, we want to be competitive and draw people. Luckily, we're it seems like to me, others can agree or disagree, but um we're able to attract really high quality staff because we have a good work culture, but we can't rely just on that. We do have to you know, kind of have consistency and um kind of like you said that equitable compensation package across the board so people know that they're getting into a process for a system that where they're going to be compensated fairly um for their growth and development in the long term. So I think this will do that. So, you know, kind of providing for this to attract people and then luckily we have a culture even if we're not the highest paid um going in if we're mid pack. Um they know that the there's room for growth and then also just kind of the culture here in our city is is luckily something that I think helps retain people. >> We're not gonna put him on the spot. Rebecca. >> So, thank you. Thank you for that. I know a lot of work, >> Rebecca. >> Thanks, Brad. um my want so back as Perry was leaving we had a big pay recalibration at that point >> and you know and and it's so that was about what six or seven years ago and not that things don't change and obviously we've been in a really wages have been um very flu up have gone up a lot in that period of time over the across the board. So, I recognize that. Um, there's a I I worry a little bit about like I mean I agree paying people that are good the right amount so that they stay is far better than turnover 100%. there is a little bit of like a a dog or tail wagging the dog scenario if we're not I mean are we I mean to the point that came up in one of the comments in Minnetonka matters which is you know if we're kind of if every city's doing something different and how they're dealing that with this and I think probably the clearest example is some of what we're seeing in police hiring and bonuses and you know it's just going to be this inflationary pressure that wears the where's the ceiling on that? Are we communicating with our peer cities and kind of trying to we don't want to collude with them but emulate make sure that people are kind of managing because you see the school districts often have steps and and they have a lot of similarities but is every city just doing this a different way and is that kind of putting pressure on wages? Can you thank you can [laughter] you >> I think what do you can you clarify what every city doing a different way? Well, I mean, is there any consistency in how we see this maybe even when we look at the greater budget, how pay structure is or a budget is developed is different in Eden Prairie than it is in Minnetonka. and different um employees are classified under different categories and it's very hard to kind of understand um compare apples to apples. It's oftentimes like apples to bananas in how a position a city planner position might be looked at. Right. I I'm just curious. I mean I I don't expect you to have the answer, but I do think about that in that is wage pressure being created by Blaine is doing something completely different than us and that is driving our wages up across the board and I don't want to be critical of wage people deserve to be paid for their work. I just, you know, I having in mind that we made this huge levy increase as a result of the wage study just six or seven years ago and then we're kind of revisiting it again. I am a little worried. I don't want to be three years from now and say, "Oh, yep. We need to take this hit again." >> Thanks for the clarity up the Yeah, I wasn't here in 20. It was I started in 2019, so it was before then. So, whatever 20 2017. >> It's a while back. >> Yeah. So, you're right. There was for those that were not on the council, there was a shift um when that happened, I think 2017 or 2018 rings a bell, maybe somewhere in there where the way that the city was calculating wages is much different than the process we went just went through. Um we're we're what I would say today is we're actually in alignment now with cities. uh the way that Minnetonka had been compensating compensation was drastically different than the norm. >> And so what we've so what happened back then was an adjustment. You're correct. Was an adjustment. Um what this did is actually do a full-blown compensation study because the way that wages were calculated previously was the city staff >> the city staff was in essence doing our own in-house um calculations. And so our in-house HR staff every year was doing what I'd call a a mini extremely time consuming mini salary survey. So we were reaching out, our staff was reaching out to peer cities, pulling data from other cities, data practice requests, um trying to do and we were fairly good at it in some ways because we were meeting our pay equity law and I'll come back to pay equity here in a second. And so the way that we were doing it was not we didn't have a compensation plan in place. It was we were doing a compensation research and trying to determine what the city clerk in our 10 pure cities was getting paid to our city clerk. And then there was this backend spreadsheet that if a job title would differ from a job title because some cities >> um had different job titles might have a nothing comes to mind here on the spot. we have in think of a staff member like a GIS technician might be called something else in another city and so our HR staff was like well we don't have a GIS person in this city but they have someone that's called this and it's similar job descriptions here's their pay and so there is this real >> um difficult way of trying to calculate comparable wages and so the adjustments that were done back then didn't address a compensation stud uh uh system, putting a real system in place. It was mainly doing research and trying to position ourselves at the 50th percentile as best as we could. And we did okay at that. Part of that adjustment back then, Rebecca, was when we say we're at that time the employees were being placed at the 50th percentile is the 50th percentile of the actual employees wage, not the max of their range. Meaning, I'll use a city clerk as example. So that's an easy position because every city has a city clerk. And so >> if a city clerk was in Plymouth, was there for two years, That's different than a city clerk that's been in a position for 10 years. Their compensation would look different. So, we were making some calculations at that time where the city was making calculations based on the pay of that person on that given day. And so, we shifted away from that back in 2017 18 which did have yes some investments made to the city. That was helpful because we would be in a much worse position if we had not done that. What this did is brought someone in an independent set of eyes to do what we call a full-blown compensation study where they the consultant spent six months. I mean it was it's a heavy project to really understand every position in our city, compare those positions to our peer cities, come up with a point system, put them in grades that wasn't done before. >> So this should keep us from having this sticker shock. >> Yes. This is this gets us on a trajectory where you won't hear from me again saying we've need to make some big adjustments because that's what's happening now to make sure that we're positioned long term. >> Paty. >> So, okay. And and so because a lot of it is well the cost of living is 3% but the city staff budget is going up 5 to 8%. So in order to explain that then I would say well what what like what so what I understand I mean because that's the thing like seven stages so so I I feel sort of stupid about it but um like simply what does that mean sort of are are we catching up I mean does even that question. I like I'm so stupid. I can't even qu you know like ask the right question because I know it's more complicated than that but how would you explain it more simply or is there a way other than you know my understanding is we're so we're we're all adjusting to the different stages right so if if I work a certain amount of years then I'm going I I progress to these different stages and so the the the the [clears throat] budget for that has to accommodate that change. Do you know what I mean? Feels like I'm not getting it. >> No, these are Well, that's good question. Um, can we pull up the should we pull up that grade? >> Yeah, we can. Sorry. >> No, no, this is I want you to make sure you understand because it is there's a lot of moving pieces to compensation. before I pull up a a graphic just to give you an illustration of what that means. First, so first let me just go to this again. Oops, too many mouses. So going back to what what we had shared earlier. >> So even so we say well before let me say it this way. There are three components to compensation to an increase in compensation. Right now there are three pieces. There's what we call cost of living. That's I think everyone's familiar with cost of living. >> And so there's a cost of living component that's recommended at 3%. Right now with our union contracts, we have an obligation with our union employees in 2026 of 3%. That generally then drives what we pay non-union employees in terms of cola. So whether it's union or non-union, we are looking at a 3% cost of living adjustment for union and non-union employees. That's one component. The second component is called this market. So how does then staff how does the staff fit into markets into the external markets? That's the second piece. And then the final piece is this positioning within the marketplace. as Miranda mentioned, a four-year process to go from the 50th percentile, >> right? >> Because we have been as a city philosophically positioned at the 50th percentile, >> right? >> Which is similar to average, you know, it's it's a different calculation, but 50th percentile is in the middle of our peer cities. So half our peer cities would be less and half our peer cities would be more. and so trying to be in that competitive state moving to the 60th percentile. We're seeing our neighboring cities moving to the 75th percentile. So if we weren't able to if we don't do that moving to the 60th percentile, we will then we will be continuing to fall behind. So that's a challenge. So those are the three components right now. Once we get move move move move move move move move move move move move move move move move move move move move move move move move move move move move move move move move move move move move move move move move movement to the 60th percentile which Miranda explained it would be after 2027 then there's two components to then wage increases it's cost of living and then >> market slash kind of that step increase and let me explain what that looks like in this illustration might be the most >> so I'm going to pull out of um we had this ready to go without thought maybe this might come up so It's at the very end, Miranda. Okay. >> Should have right there. Oh. Um. Oh, can you pull up maybe or can you maybe just pull up the like the fire the unique like the firefighter contract? >> Oh, yeah. I can do that, too. I'll pull this up while I get that up. >> What's that? >> I'll grab it quick. >> So, we'll just pull up a union contract to give you a sense of what we mean by the grade system. the wage system and rate system. While Morant is doing that, this gives you a sense in 2026 that base increase of 3% plus market and the market is calculated depending on the employee group that external market comparables. So with police officers in 2026, their compensation is 4.68 68 because of again base is that blue piece of it and then the market comparables. So for example in the union contract for police officers there's a formula that determines what market is. So we're very [snorts] prescribed in compensation for police officers. We're also very prescribed in police sergeants based on that calculation in the union contract. Their base is 3%. The market increase for police sergeants is 2.2%. >> It's 1%. I don't know why I didn't change. It's 1%. >> 1%. >> I was gonna say those numbers didn't add. Those numbers don't add up. 1%. So error on that apology. So four so 1% is the market increase. So total percent for police sergeants of 4%. Uh local 49 is basically our public works staff. Uh based on their union contract, the 3% again cost of living and for their market is 2.08. 08% so a factor of five point a total adjustment of 508 firefighters I don't need to walk it through that specific you get the math 5% for firefighters and then non-union average is about 5% why is there nuances why is it just an average not one employee gets the same increase every year that's why every employee is going to get the base 3% cola but then there's the other factors that determine exactly what that increase will And Rebecca, I would say the three unions up there, so the officers, sergeants, and 49ers, they are still on that method that was implemented in 2018. >> I'll pull this back up. >> So, we'll pull up the just give an example of like how steps come into play and I'll just I'll start to verbalize it as earlier. >> Sorry, Kevin, but I just I just mentioned that just mentioned fire. And this holds true. It doesn't matter which union it is or if it's a non-union. This gives you a sense of what we mean by a step system. [clears throat] >> Thank you. >> I was we've seen this too. >> Can you go to like just fire go up? >> Oh, sorry. That's what I meant to do. Here's your text. >> So fire technician. So this is your a fire technician is a firefighter. So in so in practice we get a sevenst step system. How this how this plays out is a fire technician or firefighter is hired. They start at step one. After six months on the job, there's a performance evaluation. If they're if they're meeting satisfactory performance, they would go to step two in six months. on their anniversary date, they would land at step three. And then every sub every year after that, they would move up a step until they get to step seven. So looking at that as an hourly rate for a fire technician, they would start at $41. We go up three decimal points, $47.374. After five years, they would be at uh $49.40 an hour. And so now, how does the cost of living come into play with all this? So cost of living comes into play basically January 1 of every year. So when we we turn the page to a fiscal year, which is a calendar year, that cost of living increase would come into play. So, for example, if it's a brand new firefighter, u they start in, uh, let's say they just started today, they would be paid $41.37. Flip of the calendar, that whole grade, that whole thing shifts 3%. That's the cost of living. So, in the beginning of the calendar year, they're going to go from $41.37, add 3% onto that. That's the cost of living shift. That's the shifting of the whole thing. It also shifts because of the 2%. Um, as we go from the 50th percentile to the 60th percentile in four years, there's a shift of also 2% because we're trying to position ourselves higher in the marketplace. So, there's a shift there. And then um six months, if they're hired today, six months from now, they would go to $4261. Now, it's not 42.61 61 cents because you've already >> because everything's shifted%. >> So they're going to get the cost of living, they're going to get the market, and they're going to get that step increase. >> And that's how it plays out with all employees with a grade STEP system. Now what's what what's important to say in this is that the theory of all of this is that [snorts] when a new employee is hired and we'll use firefighter again as an example, they're at the greatest point of their career. They're coming in with little experience. And so the idea of progressing them up the scale is that after five years that employee should be at their highest proficiency. So that doesn't matter if they're a fiveyear employee at that point or a 20-year employee, they should be at their greatest proficiency. So after five years, let's say let's project five years from now and the city does a cost of living of 3%. That's what they would get is 3%. But if it's an employee that's been with the city less than five years, there's greater advancement, greater percentage increases until you get to the top of your range. Or the terminology we use is you get to step seven, you're at the top of your range, >> you're not eligible for any other adjustments other than a cost of living. >> Thank you. This is helpful. Thanks a lot. Mike, if you don't mind, I'm gonna, if I can add a little color to where we were before we there were a couple of things happening before we did that that significant um increase a number of years ago because we had a very experienced workforce. Um, we had people who've been here a long time and um, we have had a good culture. People liked working here. So when you get to a certain point in your career, um if you like working where you're working and your job is secure, you're not really looking around for other work. You realize, okay, this where I'm going to retire from probably. And so we went through a lot of a number of retirements and then we went to hire in the marketplace and we found we were not competitive >> and we found that our employees stuck around because it was a good place to work and they didn't have any complaints and yeah maybe they could have gone to they weren't going to leave to go get paid more and so we for whatever reason I mean we saved taxpayers quite a bit of money in doing that but it wasn't intentional but we did get behind And the point that I mean it's really important that we've done the work that we've done because one there is no free lunch. I mean you do have to catch up at some point and when you have to do a big jump in a year you wonder why you get a big levy increase. Well, it's when you when you you haven't been I don't want to say you've been asleep at the switch, but you've you haven't stayed you haven't kept pace and you're going to have to catch up at some point and that's expensive and it's and you know and so all of a sudden you have a double-digit you know levy increase because all of your employees need to be caught up and so you know being objective now admittedly I mean if you had some of those years where you were underpaying your people and getting away with it you were saving taxpayer money there's no question about that, but you're really kind of stealing from the the um from your employees to do that. And most employees don't uh won't stick in their their head in the sand that long. So, you know, I mean, staying current is is really in the best interest not only of the city, but of our our residents and taxpayers because it keeps things more consistent, more projectable. So I think I'm largely correct on on the analysis, but but we we discovered a problem because we had a lot of retirements and we were not competitive in the marketplace. >> We had a lot of retirements and the generation following that generation of people has fewer people. >> That's true. >> So it made it even more competitive and um you know working for another municipality it's it can it's very challenging if you're if you don't have competitive wages and you know there were and I know that we still have the same issue here in certain um job titles it's just very hard to find people that are qualified and specialized you know I think assessments and um building inspectors and you know that kind of thing and you know or even in accounting it got really competitive to find good accountants or um and there was a there was a short time where it was really hard to find um good mechanics. Um that can be really hard because you're competing with the private sector for some of those things as well. So um what the mayor is saying is is important and you know a lot of people that are just looking at the numbers and the bottom line you know there are other dynamics at play which is not just not just the the financial numbers but you know sort of how do you build human capital if you don't have the financial capital to pay them. So, >> so, um, Darren and Miranda, take us to a point where we're at a good spot for a break because we're two hours in and I thought maybe a break would be good. >> Yeah, we can take a break here. I would, if I could make one more. >> Go ahead. >> I hope this will resonate. Go back to that firefighter example. I think these breaks >> and I would submit to you councel >> in a way this system while it does in the early years of an employes's career here at the city yes there are bigger increases if you want to just do an analysis by percentages absolutely there are bigger percentages for an employee in the early years of their time in the city I would submit to you that that actually is money savings. If you step away from that and apply what often happens, I think in the private sector, and that is they're going to hire a firefighter, you hire a firefighter. It doesn't matter if it's six months worth of experience, 10 years of experience, 20 years of experience. You hire someone and you just pay them $49 an hour. We're not paying $49 an hour for >> inexperience. >> For inexperience, we're actually paying them less than that. and they step into and they advance into that pay grade to get to that full experience. And so in a way our compensation system is set up that we're not treating all employees equally in a way. We're we're treating them based on experience and we pay them and compensate them as such. >> All right. Any any questions quickly? Yes. Um >> so in some ways this is kind of reminding me of the civil service you know the steps and levels and things like that. It's not similar. So in some way like said it's kind of systematizing instead of a much more ad hoc system which I think sounds just a couple of quick questions. Is there room in this step system for like you know you said after seven years you kind of thought about retention issues beyond that and also is there a merit pay element to the system? >> There is I'm sorry I'll just start and chime in Miranda. Um to that point when we get to union negotiations the union there has been requests when we get asks of the unions to consider longevity. >> So like a longevity type component. um from a management perspective, we um advocated against that. Um but yes, that that does become a point of conversation and especially union negotiations to recognize because you're you're correct. After after five years, you get c an employee would get cost of living. That's what you're eligible for. And so long-standing employees will say, well, you've been here for 25 years and so yes. Anything to add to that? No, you're right. [clears throat] >> But you get that nice pin. >> I was going to say you get a watch or something. >> You get a watch. >> We don't do watches, but we do nice >> coffee maker. >> But there is because beyond the five years there, to answer your question more specifically, there's there's not a compensation element beyond [cough] the five years. >> Okay. And then the merit, you said that part of the system as well for nonun. So, we have a merit we have a merit system um here at the city. Um for non-union employees, they're eligible to up to a 2 and a.5% merit pay element. So, we have a whole policy on it. Um for non-units up to two and a half% and then it's different for each of the unions that was negotiated separately uh for the unions. >> And then I'm sorry, just one last quick question. Is is there um you said that you know compared to tier cities and now hopefully we're going to be I'm sure that's there will still be an element of that in there. Um [clears throat] do you ever do comparisons to similar work in the private sector? >> We do not. >> Okay. Just curious. >> All right. Anything else? Um or a break. So let's take um it's 8 o'clock. Let's let's take about seven minute break and uh I'll visit what we need to visit >> everyone. >> We're going to start back up. So um you got the recording on. All right. Uh Darren, take it away. Very good. Thank you. Um so that was great conversation on on that piece of the budget. I want to get back to a little bit more of the of the of the funds talking a little bit about this. So these are a couple slides you probably haven't seen before. I've kind of put these in um to kind of look at the fund types here and look at the um actuals to budget um and then do a little bit of the comparison here just specifically here for the general fund as well. Um so if you look at the general fund and we look at the 2026 budget column and these are pages out of your budget book. Um you look at the 2026 budget we have revenues of $60.2 million or so. Um expenditures equaling that at about $60.1 million. is we have a little bit of a surplus there of 78,200. Um if you follow that down, we have a transfer to other funds of 78,200. That's kind of an accounting deal that we have to do for um a transfer over to the community investment fund for payment of the uh Minnotonka music facility over at the high school that we purchased a number of years ago on that end of it. So, uh, so basically is a balanced budget within your general fund. The $2.5 million transfer to capital projects. That's what we talked a little bit about earlier where that's your transfer out to your, um, CIP related funds, um, using the the excess reserves that we have in place. And so, um, that was a substantial substantial number that allowed us allowed us to reduce the CIP levy for 2026. Uh just highlighting a couple of the the numbers over on the right on the changes from 25 to on the from the 25 budget to 26 budget. On the revenue side of it, um everything's fairly consistent on that end of it. The user fees are up a little bit there. We have some additional um I know we had some additional recreation programming that we increased that we were seeing some good um um numbers in and so we increase the revenues on there and obviously we have some expenditures and like that offset that as well too on that end of it. We're expecting I'm talking with Julie and we monitor these very closely as she's will adhere to is that we look at the license and permit revenue on a on a very regular basis and try to make sure that we have a a good calculation for 2026 or not we're conservative on it but we don't not we don't want to be ultra-conservative on that. I want to make sure that we got a realistic number in there because that all goes into plugging what the right >> the levy is on on that end of it. >> Looking a little bit at the expenditures I'll just touch on them quickly there. So looking at your general government expenditure. So that includes that'll include city administrator or city manager, finance, assessing, um HR, those types of of services there. There we're seeing an increase of about 828,000 or 9%. Um there's some things happening there. So we had a the public information officer over in the police department. Uh we hired that position in 25 or 24 25 I believe it is. And that was housed in the police department. And so we're transitioning that employee over to um the communications division on that end of it. So there's no new employees there, but we are transitioning um that employee over to the communications division, which is under the general government um category at that point. And then also in 26, we'll have a general election as well too. And so we'll have an increased election expenditures related to election judges, those types of things. That's about $175,000 or so on on that end of it and such. And so, um, between those couple things, um, I think there was one other adjustment staffing wise that I can't remember, but it was, um, those kind of main things that were just a reclassification that was causing a little bit of an increase there. Obviously, public safety, the 3, my eyes are getting goofy here, $3.3 million. Um, that's really is the public safety master plan there. Along obviously, the uh, we got the one new community engagement officer. We got the second half of the nine full-time firefighters being hired in there and so that accounts for the rest of it there and the rest of them are all kind of fall into that kind of a normal uh 2 to 5% six to 7% increase on on that end of it. Recreation is a little bit higher obviously related to the recreation programming mentioned above with the additional um programming happening. So, so that leaves us then. So, that's a little bit of the general fund and then I'll quickly go into um the special re the special revenue funds and kind of highlighted in these gray highlights here. I want to highlight the ice arena and the marsh. And so, this is the first year that we're setting a levy for those funds. And so, we want to kind of draw those out and show you kind of the bottom line of what we're looking at for um both of those funds. And so if you look at the Ice Arena fund, we got $1.2 million of revenues coming in, 1.22, and then we have expenditures of 1.284 going out. And then uh we have another transfer out of about 36,000. Leaves us about $100,000 short of our kind of a deficit for 2026. Um, we are expecting that to occur for 26 because we are replacing the refrigeration [clears throat] system in rank B and so our revenues will be down slightly. Um, that'll be out of commission for three, four, five months on that end of it. So, we'll miss out on some um revenues associated with ICE rental, those types of things. We'll probably have some savings on some u temporary staffing, those types of things on that end of it. But, uh, we are expecting a little bit bigger of operating loss for 26 [snorts] um with the ice fund on that end of it. And then looking at the marshm there, we also have $200,000 budgeted as a general as general property taxes. When we purchased the marsh, we purchased it for the purchase price and then we also allocated a $2 million kind of operating subsidy to help us get through the first couple years we thought of operations on that end of it. Um this when we look at the revenues coming in, we got about $2.1 million and we got about $2.3 million of expenditure. So, we're even with that general property tax levy there, we're about $230,000 or so short of of making that break even point. Um, if you follow that down further, you get to the very bottom line, there's a negative $1.5 million. So, that's where we will be at projectedwise at the end of 2026. That says, okay, of that $2 million, we got about 1.5 that we've used up of those that of that operating subsidy. And so, um, as we continue to look forward for potential renovations, improvements, you know, increased operations at the at the marsh, we'll continue to work on on that on those numbers at that point in time as well. So, so just wanted to highlight those couple funds there. The other ones across the the border, kind of a hodgepodge of of funds. It's all that's why they call them special revenue because they all got kind of unique funding sources for the most part. So, um, I'm going to skip this one. come back to it and then just point out um the capital project funds is that other group that Mike talked about is that also has property taxes with it. And so if you look at the gray horizontal line across there are the general property taxes. And you look at the very far right column $9.3 million that's the amount that we're levying for our CIP funds. And so each one of those columns makes up um is a different fund type that is responsible for that portion of the levy on on that end of it. capital project funds really eb and flow with looking at their fund balances. You can have a project one year, then you may not have a project for a couple years, those types of things. And so you may have a deficit one year and then you work your way out of it for the next couple years to get enough funds to do the next project on that end of it. So, um, seeing a deficit there isn't the end of the world. We just have a plan to in long range to get that back into a positive state at that point in time. And so, so just going back to the enterprise funds just and these are the ones that act like a business. So these are the ones that if anything was to mirror what a business looked like, these would be the enterprise fund areas. And so our water and sewer utilities, we talked a lot about that at the last study session about the rates. Um kind of what we need for an estimated ending cash balance, those types of things. Um, for enterprise funds, we really like to try to focus and make it simple is looking at the cash balance of an enterprise fund because enterprise funds have depreciation. Depreciation is a non-cash item, but yet you expend money every year for capital outlay. Well, that capital outlay is a cash going out the door, but in reality, it's an asset. So, you you expense it and then you move it over to as an asset, but there's there's no cash associated with that. So try to make it kind of the easiest possible comparison between governmental funds using that available cash balances kind of helps with making that um connection on those there. >> And there you can see we got some of our other um um kind of recreation funds as well to the Wilson Fitness Center. Um you can see our net change in position there. Um we're about $268,000 u kind of short to breaking even. Um, the Wilson Center itself has paid for all of its capital since probably the major remodel back in 2012 that was or 10, somewhere in that ballpark. Um, all the the capital improvements have all been paid for by the Wilson Center itself on that end of it. And Kelly and his staff do a good job of kind of looking and seeing where their cash balance is before moving forward with the capital project as well, too. So if you know they look and see how the year is going depending upon um and what costs come in for a capital project and those type of things but um does a good job of managing that on a on a year-by-year basis as well. And then we will look at when we get into the rates as well too. You'll see the environmental fund there. That's the environmental recycling fund that has a negative cash position. Um there are reasons for that mainly related to organic recycling that we will address here in a few minutes. So um just one favorite topic. >> Right. So, there any questions on any of those funds and I'll keep it moving. >> Um, so just more for Mr. Day. Um, so for the marsh, are we um anticipating membership continuing to grow to where we get to where it's paying for it for itself or are we considering perhaps doing a a slight increase in membership fees? I would say both. Uh I think membership has continued to grow. I think we're seeing membership grow at about two and a half% per month. So we're still adding members, but we're not quite to that break even point. So I think it's a combination of both adding members and also increasing membership fees. We did that here in January of 2025 and plan to do so, you know, every year or every two years. Pricing strategy was that was a tough, you know, when we first started and and we wanted to be affordable and accessible, right? >> Um >> but yes, a bulk Thanks. >> Any other questions? >> Sounds good. >> Thank you for asking that question. >> Yep. Thank you. And I'll keep moving on here. But also part of this um to show you these different fund types and all the funds that are within there and how big our budget is of how many different kind of business units or business sectors there really are within um the operations of the city as well too. So you can see in the special revenue funds we have what do we got there? Eight, nine, 10 of them on on that end of it. So that's just in that in that category. So all right um keeping it moving here. So homeowner impacts um we have we have seen a shift a little bit over the last couple years with um single family homes or single household homes seeing a little bit bigger tax burden um and that being shifted away from kind of the commercial area. Um this last year apartments actually had a overall had a decrease in value as [clears throat] well too. um we're seeing that kind of stabilize again as well too. So I don't know that I would numbers aren't officially out yet, but I would assume that that'll come back a little bit and be a little bit more closer to um showing some growth there, I would think, um versus um being a negative number at this point, but um still preliminary. So um we are seeing what the impact of our tax levy is. Um we did reduce the preliminary the proposed tax levy is going to be slightly smaller than the preliminary levy. um that didn't change our numbers a whole lot. Um it really changed the medium home value that went from like $169 to $168. So it really didn't change it much, but um it did change it a little bit. Um this is all information you've seen before. So you let me if you had any questions, otherwise I'll kind of keep moving through here. I would say that our commercial sectors are in better shape than what we are seeing in in some of the the bigger metropolitan like Minneapolis St. Paul area on that end of it. We're sitting in u a good position. We're not losing not losing um occupants to that that end of it and our values are um >> hanging in >> hanging in there as best as they can on [clears throat] that end of it. you're not seeing 20% 25% decreases on that end of it, but um we're seeing some of the smaller um maybe subdivided a little bit on some of the major class A properties and those types of things. So um so overall pretty pretty solid still. >> And you know just a quick comment on that. I mean, you know, other than Lakeshore, um, and, um, and and to a lesser degree, uh, single family, I mean, it's it's pretty consistent across the board. I mean, there there aren't there aren't huge swings in our property classes. And, um, but I do think that some of our single family and like they're feeling it a little bit more because they're they're picking up an increasing piece of the burden. So, when we talk about a levy percent, there's a lot of homeowners um single family and lakeshore home owners are going to the the um the levy increase is going to be felt greater by then because they're um taking on a greater share of the um the tax burden >> for sure. And even if you're just a percent or two on on that side of that, say if you're that 4.1%, there's a big difference between being at 3% even compared to being at 5%. you'll see >> um you know quite a bit less of that increase on the 3% versus you at the 5% on on that end of it. So >> every property is unique on that end of it. These are the averages across the city, but um yeah, it's really dependent upon each one of those those properties on on that end of it. So, and here's just another chart of how that um shifting is happening. And we can see the residential the blue section there is increasing um over the last couple years and you got that gray part that's the commercial industrial that's that's shrinking and so really that's that tax burden shifting um away from that sector and moving it to the um to the residential and to the the apartments to a certain extent as well too and such. So >> um H levy that is still a status quo $300,000 that hasn't changed all year long on that end of it. So, and I think we have our programs identified and and plans for those dollars. Um, our communication and feedback. Um, so we, this is a project on the Mitanka Matters website as well within the city. Um, we regularly put this out in the Minnitankka memo. Um, social media, those types of things. Um, are all out there and and trying to get our budget message out there as best as we can. Um, Minnetonka Matters is one of our main areas to send out um, information on the budget and so we've had 425 site visits this year. Last year is the first um, year that we did this and the number was very similar. [snorts] It was 416 or something of that nature. So, it was very similar on that end of it. Um, the number of comments that we received this year so far is is down compared to last year. Um, I would expect that we'll probably get some more in between now and December 7th or eth on that end of it. We'll make sure to share those with the council as well too. So, um and then just with that, um public meeting for the budget. So, that'll be the opportunity for the public to weigh in on the budget will be on December 8th at that 6:00 city council meeting on on that end of it. So, um those are just some of our different communication channels. And that brings us to the end of the budget portion of tonight's uh presentation on that end of it. got a few more to follow on this one, but um this is the budget piece of it. So, >> all right, >> those are the those are the questions that are posed in the council report on the levy and the support and look for any feedback you may have. So, >> all right, council, these this is our opportunity and you saw these questions as part of the packet, but um you know, I mean the big question at on the top is um okay, our base property tax levy increase of 7.2% 2% um of which includes 2.7% for the public safety master plan which we've talked about numerous times in the past. And then there's the extra.7 which takes it to 7.9% um um in total and uh and those are for um improvements to our facilities um both the community center and the and fire station number two. And then finally, the HA levy, which has been flat for um quite a number of years. So, your opportunity to comment or ask questions and and it's not the first time you've seen it, but go ahead, Rebecca. >> You know, I think that we we always say makes us uncomfortable, right? This number makes me uncomfortable. I prefer not to see it. I think the tough question and and I'm supportive of the budget as it stands. We've worked hard to get to here, you know, what if we want to look at in the future how and talked to Mike about this a little bit this morning. Um how to bring that levy increase down in the outy years. we as a council have to and as a community would have to be considering what we're willing to give up in a concrete way, you know, so potentially and we don't have to get in into it now, but potentially that involves, you know, community engagement if that is our, you know, if that is ultimately our goal is to bring this bring the levy down. Do we want slower plowing efficiency? Do you I mean the real meaningful ways that affect people? Do we want [clears throat] lessen senior services? Do we want to, you know, eliminate programming? Those are the ways that we would bring the levy down. This council doesn't, and rightfully so, have an appetite for that. So, with that, you know, our choice then is to is to support the levy, and I'm prepared to do that. >> Thank you for that. Um, Deb, >> thank you, mayor. I I agree with all that. Also, I know that we are shifting to priority based budgeting and I have high hopes that um that new system will help us um find efficiencies that you know that were the reason >> that we even are considering migrating to that kind of budgeting. I mean, we went to presentations at the National League and um made a lot of sense and it seemed like it might be a way to find those savings um in an atmosphere where it it's extremely hard to um stop the sort of onslaught of of inflationary pressures. So anyway, that's you know, I agree with everything that Rebecca said. I I too, you know, in spite of the pain and you know all of us here are we are levying ourselves [snorts] along with everyone else. Um and my husband is a retiree. Um so uh but I do I do really hope that the new budgeting system um will help us um keep things uh at adult roar. >> All right, other comments. Council members, anyone? >> Paula, first of all, thank you. This was a really helpful presentation. I think you know both council recording later. Um, I guess the only thing that I would is that um echoing my colleagues comments is that the only way that I can see to significantly reduce this budget would be to forego the public safety master plan and we've already committed to that. So I mean I think everything else would be shaving along the margins. Um that's just you know where we're at. There are other cities who are a couple of cities pure cities or surrounding cities who are lower than us. they are probably going to be moving into public safety master plans as we've talked about in the next couple of years. So, they are going to be going through this. And I think another mitigating factor that we don't talk about um or we didn't talk about tonight that we've talked about um other times is that we are you know what we're facing in terms of capital expenses for term for our streets and our water and sewer as an as an aging city um an older city than some of our um you know Maple Grove or or Eden Prairie or some of the newer suburbs. Those are things that we're having to invest in and we'll continue to have to invest in. So while you know hopefully priority based budgeting will help us um you know find efficiencies and things like that I you know I just think we also have to be kind of cognizant of the fact that you know we are going to have to continue to make investments in in the city um you know just based on on having to replace so many systems and we've talked about that at other previous study sessions and elsewhere that we're looking at that um for the long term. And um so I think you know having combed through this budget um really over the last week um like I said there's not there's not a there's not fat in here. So um you know I appreciate that and uh and it it's uncomfortable but you know this is this is where we're at. Well, I was talking to Mike about uh how uh there is another state that does things differently in that uh and I'm not I'm not advocating for this in Minnesota from from put taking off my city council hat and putting on my resident hat. Um I think it's Michigan and a few other states that as long as you stay in the home um your your property um taxable market value is capped at either at inflation or some other number that it can't go higher. It's not exactly rent control, but kind of a similar thing and then it resets if you move. Um, and you know, whether you do that or whether we have some of the programs, I don't know. But this could be something that we have to start thinking about talking to our state electeds about too in terms of how property taxes I hope residents remember that the state kind of imposes the classes. um you know whether you're lakes shore, whether you're single family, that's imposed at the state level. That's not something that the city council has the ability to influence, much less the fact that we are about 30% of a homeowner's actual tax that there's um other governing jurisdictions who are also out there um raising their levies as well. So, long way of saying thanks for the work. Not a lot of fat. not thrilled with it, but you know, not jumping on my uh jumping up and down to pay more taxes, but this is where we're at if we're going to sustain our convenient day. So, thanks for the work. >> Other comments, anyone? >> Um, seeing no one before [clears throat] go ahead. Yep. >> Sorry, I should have mentioned I'm remiss both I think you and I are remiss in talking about priority based budgeting. And I think I've had a couple conversations with folks today on that. This process will look a little different next year. When I say this process, meaning the the rewind or fast forward and we turn the page into 2026 and we start as a city working on our 27 budget and even though that doesn't seem that far away, it'll be before you know it, we'll be in our budget season next spring. We will be bringing in and weaving in priority based budgeting. Um, I think we're proud of the fact that we're one of right now, I think only two cities in Minnesota that are going through this process. Bloomington is the other one. They're a little ahead of us uh on that front. Um, behind the scenes, I can tell you that we're working on that and we're gearing up for this conversation with council next spring. What's happening, excuse me, [clears throat] behind the scenes right now is we're working with directors. um directors are identifying those programs because it's a new approach to really dissecting our budget a different way and and council I know you know this but again for those that will be listening in when we talk about priority based budgeting is going to take a look at our expenditures as they exist today we'll have a similar budget as it exists today because there are budgeting principles that we have to adhere to in terms of our line items and how it's laid out all part of GFOA requirements and best practices so that won't change, [snorts] but we'll be reshuffling the expenditures in a way that puts expenditures into a a program. Uh, an example that I've maybe used before and I'll say it again here tonight is um let's see, we've been not talking about police today, so we'll talk about police. Hi, Scott. Uh, if so, if you look at the police budget, we have a police budget and with the police budget, it's like every other departmental budget where you have a line item for salaries, you have a line item for insurance, you have a line item for all the expenditures for that department. What it what priority based budgeting will do, for example, will take a look at police and be more specific on how much do we spend on patrol, how much do we spend on investigations, how much do we spend on, you know, kind of fill in the blank. So, it looks at programming that way. Um, another example is public works. How much do we spend on snow plowing? How much do we spend on road repairs? So to really kind of break down the expenditures in a more cohesive way where then we can really reflect those um programming to our um to our strategic plan and really just to understand exactly where the dollars are going, be able to make I think more intelligent decisions on what's important to the city. Do we need to shift funds um from one to another? Maybe we maybe there's something we need to end. I think that's always a conversation that we have at a staff level. you've brought it up as well, council, in terms of are there things we're doing today that we shouldn't be doing and I think through that process, we'll be we'll be be able to better identify what that looks like. So, we're excited about that and this will be part of the conversation next year. >> Thank you. >> So, thank you for letting me jump. >> No, no, that's good. Um, again, anyone else want to comment? Otherwise, I'll try and comment briefly um on the discussion questions. Um, first of all, thank you. I mean, you know, we've been working on this for a long time. A lot of time and effort goes into budgeting. We don't take it lightly. And um and I, you know, I think I think we all have a good we've had the budget book for a while. We've got we've had the resources to to understand what's going on. Um, you know, as I talked to Mike as we in anticipate of anticipation of this meeting, um, yeah, we're talking um, uh, you know, I would love to say, well, gee, between now and, um, um, our open forum, um, in December that we could maybe knock off, um, you know, a a few tenth of the budget. I always I always hope to do that. Um, but I will say that I I observe what happens in other cities and you know there's some cities that come in with a preliminary levy of 12%. And everybody's hair is on fire and somehow someway they [clears throat] managed to bring the budget in at 7%. And uh, you know, they they cut 30 or 40 or 50% of what they said they were going to levy. And that's in in my time here, that's never been the way we've done it in Minnetonka. Um, we've always been quite realistic. When we when we put a preliminary levy in, it comes down a little bit. The, you know, the the new numbers come in, the pencils get a little sharper, and and we knock it down by, you know, a tenth, maybe 15100s. I mean, you know, and and we do it tightly. And I think that's intellectually honest. I'm pleased that that we do that. We don't we don't fudge the numbers to make to so the council can look like it's really demanding of staff and then and then have a 30 or 40% drop. And I I think that's bad. I think it's disingenuous. And so I like the way we do things. Now, I'd love to say, gee, I'd like to take that down to five and a half% if we had a path. But I think as my fellow council members have indicated, our public safety master plan is something that we've committed to. I think I I know that I believe in it and we believe in it and it's not just smoke and mirrors. Um there are things that definitely have to get done. Um it's not easy to recruit firefighters. We need full-time firefighters because we don't have enough paid on call firefighters. Um a big part of the public safety master plan is the um improvements that we're going to have to make to our satellite uh fire stations because they do not have housing for overnight staffing. and our public safety master plan says we need over overnight staffing. That stuff isn't cheap. It's real and we have to do it. So, um you know, I'm supportive of the 7.2%. You know, if um if between now and December we could say, well, we could get away with 7.05% or or whatever, I' I'd take that, but but I'm not really expecting that. A couple of areas that I've asked um Mike and staff to look at is we provide services to other cities and we charge other cities for some of the services we provide um some of our neighboring communities. And you know, I'd like to maybe take a harder look at that and say, is there any savings or should we be charging more? We're not going to save it for this levy, but um but we as we look ahead, are there are we charging enough for what we do for other cities? Um because if we if we're not charging enough, essentially we're having our taxpayers pay for services to other cities. I don't think we want to do that. We want to pay for our we want them to cover their costs or we want to cover our costs. Um I know one for example that I think we do not charge enough for is for election schoolboard elections. I believe we do not charge very much to the school districts for which we do elections. So, so essentially we're subsidizing the school districts. Now, as far as our taxpayers go, you can either pay the city or you can pay the school district. So, we're not really saving taxpayer money, but I would rather I would not rather not take responsibility for school district costs. I'd rather have the school district do that and they have to levy they or the way they levy and we have to levy the way we level levy. So, you know, I think there are some opportunities there that we could take a closer look at, but is it going to amount to a lot? No. So, enough said on that. Regarding the 7% of new debt, Mike knows I was going to say I'm going to say this. I would prefer that new debt go to fire station number two improvements and not to community center improvements. Um, I believe that community center improvements are something that need to get done at some point, but I would put these two expenditures in two different categories. The fire station 2 improvements are musthaves and the community center improvements are nice to haves and my personal view is I don't want to take on debt for nice to haves. I only want to take on debt for essentials. So, you know, I would argue the 7, we could either cut it in half and say, "Okay, we're not going to um take on debt for the community center. Well, we can we can reduce that. That would be a savings." Or we can just say, "No, we're going to just focus the 7 um on fire station number two improvements." And that I I would like that better. But again, I'm not falling on a spear on that. I don't know if I have other council members. Just because I want it doesn't mean my fellow council members are going going to agree. But I think I think that must have versus nice to have is an important um uh separator for me or um it's an important um way to segre segregate these expenditures that I think is important. And then finally the 300,000 um um for the HR levy. It's been at 300,000 for a long time. Um I think close to 10 years. And I know that in that um is $75,000 that the council voted on a long time ago, 10 years plus 10 plus years ago um to help contribute to some of the costs for the Southwest light rail. And I believe that our our commitment of 7 $750,000 $75,000 a year expires next year. So unless we re um so we could say that expenditure is going to go away and so if we didn't redeploy those funds our H levy could could be $225,000 rather than $300,000. I'm not recommending that but I did want to point out that we do have an expiring expenditure that we could go away and reduce the levy a little bit. So those are my comments. Just comments for staff to consider. not um you know if council has any thoughts on those that's fine but if not I wanted to make those comments and I'm done. Mayor, just a clarification, >> the 75,000 is done this year. >> This year >> it's >> so we've already redeployed that. Okay. So it it was done last year. >> Next year you have >> you put 175 in for pathways. >> Yep. >> And you put 100 into the home enhancement and welcome to Minnetonka loan pro loan programs. And then >> 25 >> homes within reach for 25 ongoing advent. >> All right. Thank you for the clarification. >> You're welcome. So, we already spent the $75,000 that I was talking about. >> It's funny. It's funny. It's funny how funny to know where you are. >> No. Okay. Well, thank you for that, Rebecca. >> Very, very briefly, just regarding the debt service. I'm a bit of a realist and I know not because through any fault of our own, but what's going on at the state that the likelihood of bonding for fire station 2 is mid, I'll call it. And so, I think it's important that we have flexibility on those funds. if the heavens open up and we get bonding on that, you know, I I wouldn't then be necessarily opposed. But this gives us the flexibility to make that decision if we need to and and gives us the money to do fire station 2, which we know we need to do. >> We need to do. Yeah. >> And I would say that as regards the community center, you know, our needs in the community center have changed because some of some of what we were going to do here we don't need to do because we have office space over at the marsh blah blah blah but um it's almost like to me again it's an investment um that that will pay dividends because it's getting dated enough that we can't rent it out the way we might be able to do if it was updated for instance and so I think that there's there's a return on the investment if if we if we make it. That's my personal opinion. >> I agree with you. There's there's a difference in degree of how much we need it, >> but we have been deferring that the improvements in this building for since I've been on the council. So, that's starting to be a long time. So, you know, those are the kinds of things, you know, we've done some things and not others. >> Yeah. No, I think those are values questions and I think they're legitimate questions and I wanted to raise them. I'm not um I don't want to debate them. I just thought I'd throw my perspective >> and I agree with you. I think there's a there there's a difference. It's a different category of need for sure. >> And I think the point has been made and and that's the one I mean I think this is a tight budget that doesn't contain any easy decisions. And so to reduce it, we have to cut, you know, I mean, what do we want to stop doing? What do we not what do we want to not do or what do we think we can get away without? I don't think it's a fat budget. I think it's a budget that realistically reflects our priorities and our values. And if we're if we're looking to save, you know, a few hundred,000, there might be some ways to do it, but it's not I just throw that out as a comment and we'll leave it at that. [clears throat] Anyone else? >> All right, Mr. Funk, I think it's back to you. >> All right. Thank you, Brad. Um, >> I think we covered them all. We did I do we have enough on question two the seven is um am I correct in hearing >> yeah I'm sensing general general support for that yeah >> okay >> thank you we'll move on time sensing do a time check it's 8:50 we have >> still another another wave of budget conversation I know at this point there's some directors Maybe the non the non-utility folks if you want to >> you want to depart you can >> give them [laughter] the pass. >> No no no no pressure you can do it. >> If we have to stay they have to stay. [laughter] >> Thank you to our staff. They were here to answer questions. >> Thank you. >> Bye. >> Good night. >> Bye Tom. >> Okay. All right. Well, we'll keep it we'll keep it moving here. Um so this is looking at the utility rates. So we're looking at water and sewer rates and the rate structure, the storm water fund itself for the um the fee amount there as well. And then looking at the recycling rates, the environmental recycling rate as well too. So um these are kind of the questions that we'll pose at the end. Um should have seen those in your packet. >> Yeah. >> Um there's a strategic plan relatability. So it's obviously infrastructure and asset management is important piece of this and finding the resources to uh continue to keep that infrastructure in high quality um service is is key. All right. So looking at the 2026 utility rates and we'll try to get through this as as quickly as we can here. Um and you just did see this at your last study session on on in October, October 27th where we went through the asset management um study along with the rate study provided by E2S at that point in time. >> Um so there were a couple goals of that rate study and the first one was to support the long-term fiscal health of the utilities. So really >> in conjunction with the asset management plan looking out over that 50 70-year plan time frame to make sure that we have um a game plan in place to address the needs that the city will be feeling. Um and most importantly was looking at that one bar chart where we saw you know most of Minnetonka developed in 1970s and then needing replacement in 2040 and 2070. And when I did went back to my desk and did the math on 20 240, it's not as far out there as it it used to be. So, um, it's kind of not right around the corner, but it sure feels like it when you start looking at the CIP and and some long range planning on on that end of it. So, >> it's important that we address that and and are prepared for that and start to position ourselves. And then we want to look at this the rate structure review. And so, our rate structure has been in place for a number of years. there's some nuances to it that are a little bit confusing I think to rate payers on on that end of it and so I wanted to kind of have the them take a look at that and they came back with some recommendations as well too and then part of it is the um to integrate and begin funding this renewal and replacement plan that AE2s mentioned and that's kind of planning for that that big hype in down the road and making sure that we start paying attention to that um obviously that we're not going to be able to save the dollars needed today to to make that um way down the road, but making sure that we start um doing what we can to to some save some pennies here and there on that end of it. Um so this is just a the long-term um fiscal health of the utility. So A2S provided a 20-year um perform on our on our water and sewer fund along with our storm water fund. Um that included all the the CIP, the current CIP, the infrastructure asset um assessment that will and his group was working on looking at growth in the city as well. Um all those types of things that we took into consideration doing that 20-year forecast um to make sure that we addressed all of our capital needs, operating needs, those types of things on on that end of it. Um looking at the rate structure review, we really wanted to simplify the residential rates. We want to move from four tiers right now, which we have down to three tiers. um and kind of make those in align with what normal water usage is nowadays compared to what it was 20 years ago when those tiers um first went into place. And then we want to institute uh a waterbased fee and a sewer base fee. And right now we have we have what's called an infrastructure fee on our utility bills. Mhm. >> Um it gets classified according to our utility billing system as basically a sewer fix charge because it goes into that little bucket behind the scenes on on that end of it. And so in reality it's for both water and sewer. It's one fund. The infrastructure fee is supposed to fund all of that. Residents get very confused. We get questions very regularly on what is the infrastructure fee. And I got kind of a spiel for my staff on can I tell them what that's for? But it's still hard for them to kind of comprehend what that is. And so really looking to make it a little bit clearer on the bill what the infrastructure fee is. So we want to have a water infrastructure fee or a charge and a sewer infrastructure charge per se on on that end of it. We really want to look at the language as well too and work with communications to maybe change some of the words from fees to charges or something to that nature to make sure that they kind of understand that the utility bill is not just the water bill, not just the water portion of the bill. It's a lot of things. We got seven, eight different charges on there that fund a number of different projects and programs within the city. So, um and then we look to uh the irrigation rate improvements as well too to um kind of align them with our current or um current process as well too. And obviously the communication piece of that is is huge. We're going to plan if all this goes forward and as approved, we would have a big communication presence in January when new rates would go into effect towards the end of January potentially. Uh we would put uh basically got one page dedicated in the Minnitanka memo for the explaining the whole utility bill and then we would do other social media campaigns as well too to help explain um and make it as transparent and as clean as possible on on what that new bill may look like and and the reasons why we're doing this as well too. It's not just the change the bill to collect more money, but it's really the planning piece of piece of it from the long-term uh sustainability need on on that end of it. Um and then obviously that integrating that that renewal and replacement plan um understanding that there's that intense pressure coming down the road in the next 15 to 25 years on on that end of it. Um the performant does add um some contributions to that to that kind of that savings bucket per se. Um and that ranges kind of from zero within the the water fund um or was was the sewer fund I think it was zero basically over the next five years maybe in that year five we started adding some dollars to it versus the water fund had some ranges where it was negative the one year and it was positive a couple hundred thousand the next year and so it kind of es and flows given the the projects in place on that end of it. And what we did find from the studies that the storm water um fund is sitting in a in a fairly decent spot. uh they recommended just a continued kind of 3% increase in our rates there on the storm water side of it. Um talking to to Will and to to Phil on that end of it. I think the storm water fund could use an additional percentages there as well too, but I think we got to get through this water and sewer piece first and then we'll look at as look at this down the road as additional storm water projects come into to play as well too because there are I think there's a 200 storm water ponds and we do one a year >> and so you know, it's a couple years before we get to them years, >> we'll have a lot of job security there. >> Great. Great. [laughter] >> So, here is u one of the slides from the presentation from the uh October study session where A2S presented. And so, here's the the existing rate structure and the projected one for 26. And so, tonight we're recommending that same uh no changes from that that presentation that night. It would change it from the four tiers down to the three tiers. Would actually reduce the water usage in that first tier because that's that kind of that critical usage that need for water at that first tier. And then um in that second tier increase u um more so and then obviously in that third tier is that conservation tier where we want um to try mitigate water usage as best as possible given a certain extent as well too because there are a couple big commercial water users in town as well too and so we can't go astronomically high otherwise it may be detrimental on that end as well too and it's a little bit of a balance on this as well with um A2S recognized that the water rates there is a a relationship there is as they go higher you are going to have see reduced usage which is you know good to a certain extent but then we also have to make sure we have enough dollars coming in as well too and so um I think that's where we look at both the combination of that of the variable rate along with the fixed rate rate as well as as well too making sure that we have a consistent flow of revenues coming into the fund throughout the number throughout the year and so we Um, at the top you got the residential water, the three tiers there. Commercial, you would still have just the two tiers. We have a summer rate and a and a winter rate where we charge a little bit higher for the the summer rate, which is we're assuming there's some probably some sprinkling going on that for commercial businesses that don't have a separate irrigation meter themselves. And then currently on our uh utility bill, we break out the mech council portion of the bill. So there's another charge on there says MCES charge or or fee or something on that end of it end of it. And so that's our basically our pass through amount for me council providing water treatment services for the city. And so that's about $5.6 million a year. And so we break that down into a a number a rate based off the number of gallons that we um sell each year on that end of it. So um looking at that rate for for next year is 4.5 or $4.50. And something new that would come out of this rate study is that we didn't have a sewer um operations and maintenance line items like we did on the water side of it. And so we do have sewer costs. I mean we have sewer maintenance costs, operating costs, we have staff, we have >> um you know routine maintenance things that we do as well too. And so breaking those costs down >> um it's about 666 cents per thousand gallons on that end of it and such. And so that would be another line item on that utility bill as well. And so you'd have your water variable charge, your sewer variable charge, your water and sewer fixed charges, and a mech council pass through charge as well, too. So I don't know if I'm making it simpler or not, but um it's it's kind of showing exactly where those dollars are are going to or what they're allocated for. >> Yeah, it just seems to make sense. I think if you compare it to like either your phone bill or your electricity bill, there's always basic charge is what they call it and they seem to be you know really similar to this you know it's the infrastructure that no matter how much or how little you use >> right >> it has to you know a certain portion of that cost has to go and so I think you know having the explanation and having those additional line items will help people understand >> I guess these are and this is the volumetric side of it so these are the variable costs And now here would be the fixed >> the fixed charges on that end of it. Sorry about that. So >> and so the fixed fee would be going up. Right now it's right now it's what? $78 $79 a quarter. Um you know in totality it would be going up. So it's going to be more than that. It's going to be broken up between sewer and water fixed. Um but that's there again is that's where we're looking to try to get that that revenue that's needed to make sure that we have a need there for all that infrastructure in place. And so A2S mentioned that, you know, they'd like to see that what was it like 40 to 50% of their of your fees be fixed fees and we're sitting at about was it 28% or something to that nature. Um so they with this adjustment we'll kind of get back into a little better alignment on on that end of it and such and so so that is a tougher piece of that especially for those low volume users is that they're going to have some bigger fixed fees on on that end of it which or fixed charges I should say on that end of it. But you said that I'm sorry but you said that the usage fees though kind of go down a little bit lower volume. >> Yeah the usage fees on that on that low volume. So if you are a low volume user your rate is going to decline but it's >> not much on the grand scheme of things on that compared to the fixed the fixed fee. So >> um one one quick question. >> Yep. Do our residents broadly understand that um all the waste water that we generate is treated by the Met Council. >> I would I would venture not probably. >> Yeah. I mean I'm just wondering if there's should be an explanation. I mean if there's a Met Council charge then I'd think we should provide the context of why that would be. Otherwise people have such a negative view of the Met Council right so what are they charging us for? they have no, you know, I think having them understand that they provide a service and they're getting paid for a service is important communication. >> I I Yeah, I bet it's interesting to see how many people know that they provide wastewater services treatment is probably >> Yeah. So, I think just clarity on this because I mean this is a big this is a big change and that's fine and I think it's well intended and and well thought out, but let's just make sure that it's understandable to the people who are going to be paying it because I think that just protects us a lot. Yeah, and we do that currently. We do break out the Met Council charge on the bill right now, but >> yeah, >> it'll save you a lot of phone calls. >> I don't know if it's going to save us a lot of phone calls no matter what we do, but that's okay. We'll get through it. >> We got the right people on those. >> Yeah. So, and so on the storm water side, there wasn't recommended any changes there. So, we're staying status quo. They agreed with our kind of our rate structure, our different property types, those types of things on on that end of it. And there again, um just kind of the smaller 3% increase is what they're projecting for next year on that end of it. On the outlook then obviously we're going to have a bigger increase in 26 for the water sewer side of things. Um and so here's kind of the projections going out for 27 through 30 on that end of it. I really wouldn't see things changing a whole lot from that. I you know we got our projects are in the CIP right now that we know that are taking place. So unless something blows up or projects come in, you know, significantly different, I I would assume that our rates for the out here should be fairly similar to this on that end of it. So, and this is tough to see, but this is um similar. This was one of the slides they presented as well, too. So, the yellow highlight in the middle there or middleish area, that's Minnetonka, and that's uh kind of where we're at. They do a kind of a regionwide um utility survey every year and this is the the Minneapolis metro area here with the cities that participated. So these aren't necessarily comparables. These are just the the cities that contributed to the survey that they do. And so they do this free every year. If you contribute to it, you get the information. It's they have a nice service that they they've offered over the years on that end of it. So, so even with our rate increases where they're at, >> um we'd still kind of find ourselves kind of in the middle of the pack, even though it feels like we're um our rates are going higher and higher, it it they're kind of still kind of where we're at. We're a you know, second ring suburb on that end of it that's been developed for a while and then things are >> um needing replacement and needing maintenance and those types of things. So, >> here was just kind of our some of our peer communities. This isn't necessarily all of our comparables either. This is uh kind of cities around the area per se on on that end of it. Compares the 25 and 26 Minnetonka rates in there as well too. Um so you can see we're obviously a little bit on the higher end. The other rates for the other cities are their current rates, not necessarily their 26 rates. So those would probably adjust a little bit as well, but um we would be a little bit on the higher end or on the higher end for those those cities, but kind of the comparable city ages in Adina or St. park, those types of things on on that end of as well too. Whereas Maple Grove and Prairie are a little bit newer development, those types of things. Any questions on water, sewer, storm water? We move it to environmental recycling. We'll keep it moving. >> Keep her moving. >> Okay. So, if you recall last year, we entered into a three-year extension with Republic um Republic Services for that was for 25, 26, and 27. Um the 2026 in that in that contract were, you know, increases for each of those years. 2026 calls for a 4.6% increase to recycling to the the old school or the general recycling pieces of that. Um but we also included um citywide organic collection last year as well too. So we took that in-house and providing it um as a service of the city versus each hauler charging the charging the residents for that. Um that was due to Henipin County ordinance law change that required every resident to have organic recycling charged to them no matter if they're using it or not. So all the private haulers were charging their res or their customers that fee. um and may or may not have been utilizing organic recycling on that end of it. The city took it in-house. We were able to negotiate a contract and say, "Okay, rather than pay what you're paying your hauler, your private hauler, we would do it for $310 per resident across the entire city based off of your assumed organic collection rates at that point in time, which we were kind of in that range of 0 to 10% participation." And the assumption was that as participation increased, which is good, getting more people to participate, that increased the cost to the hauler because they're having to haul. They have more staff time, more equipment, more um disposal costs, those types of things associated with it. So, as more residents sign up for it, our costs are going to increase. And so, in 2025, we've already gone up. We're in the third step by second set or third step, Joel. We're in the I think we're in the third now. >> We're in the third now. >> Just barely in the third. >> Okay. So, we're in the Yeah. So, we were in the zero to 10. We're in the when we went through the 10 to 15 and now we're in the 15 to 20% range on on that end of it. So, right now, um, Republic is charging us $410 per resident. We're collecting $310 per resident per month. So, that math doesn't work well for our cash balance in our environmental recycling fund. remember back to that summary chart. Um, we have a negative cash balance in there and so, uh, we need to probably increase those rates. Assuming that we kind of continue on this this increase of of trajectory of of increased participation, we're really projecting us that we should probably shoot for that 20 to 25% um, factor for 2026. And so that rate um, does this not get changed? 627. >> That number isn't the the right number, I don't think. Um, >> a big jump from 410 to 64. >> What, Joel? What was that? >> 481. >> Okay. >> Yes, it was. Okay. >> All right. For some reason, that didn't get saved. We were working on that later. Um, so that this next year will be $481. It'll go from 310 to 481. and that'll keep us in that 20 to 25% range and that would then go into effect um in January as well too. So that'll help us kind of hopefully get caught back up a little bit and then maintain through that that tier for 2026 on that end of it. We only change rates once a year because they're done by ordinance. But if we see that we're continue to escalate with participation, we may have to look at doing additional increases for um the organic recycling piece of that. If uh we get to a next tier sometime in in mid26 or something of that nature, we may have to look at adjusting rates because we can't fall too far behind on that end of it. Otherwise, it'd be tough to catch up. So, >> I have to ask question. Do we have any letters to this was kind of something I recall during our discussion about adopting this and going with republic um that you know getting to the point where they were the only ones that they would I mean that's a significant increase um but the you know but percentage wise that they've increased the cost then just you know do we have any way to negotiate now those increases or they're just already set in stone >> I'll defer that one to Will but I would assume it's a cont three-year contract so I assume >> yeah the contract We had uh you know the escalation based on participation. So since it went up they charge us you know we went up I think it's 6 or 700 residents sign up which is great. So they're set until the contract expires or we could certainly do an RFP at that time. >> Okay. >> But we didn't have anything to negotiate further. >> Right. Got it. Because we couldn't negotiate. >> Yeah. >> Okay. Thank you. And also, isn't there something from the state legislation that starting in was it 29 that we're going to get reimbured for some of this recycling? >> I don't news on >> it was in the budget. Sorry, >> we get, you know, we do have a small reimbursement from the county. >> Oh. Oh, for the score grant funds or something to that nature. >> Yeah, it makes more sense. >> Right. Go ahead. >> Okay. Okay. Um, and it should be kind of noted as well too that um, these residents were paying for organic recycling beforehand and I don't remember what those rates were beforehand, Will, but they were probably paying even when we go up to the next rate, they were probably paying more than that >> before we went to the the organized collection piece of that, I would assume. So, um, so I think we're still coming out, it's still coming out as a beneficial deal for the residents on on that end of it. So, here was that the 481. I had a duplicate slide in there that um got in there by accident. So, >> it happens. >> It happens, right? So, with that, so with the environmental recycling, so we would look to increase the rates to $12.90 per month, um which that includes the 4.6% contract in increase by Republic. And then the assumption that we're at that 20 to 25% here at their um monthly organic charge of $481 a resident. And then that also would include the cost to operate the brush and leaf drop and also the special events that we that we do out at public works as well too. >> I was I was at the leaf drop today and there's there's a lot of leaves there. [laughter] >> Quite it's quite it's quite it's quite impressive. >> It's uh it's it's like 30 feet high pile of leaves. I mean it's impressive. >> So climb the top. >> I did not climb. I did not climb. >> You tended to jump into it. >> I did not. Just want you to know that I've, you know, observed these things. Very good. And so here's just a comparison of kind of an average volume user of water and a kind of a low volume user of water as well, seeing what they would see on their utility bill with all of our fees with their environmental recycling, water and sewer, storm water, um, all of those types of things. I didn't, the slide is a little bit small, so I didn't break out the infrastructure into water and sewer. That's just it's combined in there. But you can see um that monthly impact or quarterly impacts about 13 to 14% based off of your usage on that end of this and such. So it's not a small increase for this next year, but it's um a needed increase to kind of get us set in a good spot uh moving forward and to begin planning, not begin planning, but continue for our future >> future needs on that end of it. That's >> Kimberly. >> Um I'm just wondering what was the communication with residents around the organic recycling fee. I mean I know we said during meetings and stuff that the more people that signed up the more it would cost. But as as far as like what was in the Mitaka memo and what was on the website and like how aware are people that fees will go up as participation increases? or how aware did we try to make people I know we can't make them read but [laughter] >> I think we >> it was I mean I'm sorry it was so there's been communication to your point Kimberly in the memo through our social media channels that this was coming I'd have to look back when that's when that was done but it we have pushed that out certainly there's a lot more that we need to do been looped our communications team has been looped into it >> I wonder if What Kimberly's asking is are people aware that that they're not just requesting organics just to request it that if they're they should you request it if they're going to use it but if they're not using it that maybe they should return there >> you know is there I don't know if there is that what you're asking >> no but that's a good point actually. Yeah. So I I was just wondering like you no one likes surprises. Right. Right. [laughter] >> And um like I know we try to communicate to people so that they aren't surprised but and I don't know I just wanted to know >> I remember >> how good a job we've done I guess. >> Well and I know I got an email shortly after the meeting saying what's this about organic waste? Do we have to sign up? I mean and so whatever happened people >> Yeah. And I know I've had I've had conversations with people saying, "Well, you should, >> you know, you're paying for it already. You should you should you should sign up for it and use it." Um, >> but it is kind of it's one of those counterintuitive things because usually you think, okay, as quantity goes up, prices go down because of the quantity discount, but in reality, um, as as usage goes up, they have to expand their their capability and expand the amount of equipment and the number of stops. So their costs go up and so their charges go up and so it is it I mean it's I think I mean my recollection is we did a pretty good job of communicating it but I also think that did people really embrace it and get it? I'm not sure they did because it is counterintuitive. >> Yeah. Do you remember we'll make a note. Thank you for bringing it up. We'll make a note. I know communication is has pushed out information. We have to make we'll take a look and eval that cadence looks like this. to push that out. >> Y >> that's a very good point. >> It might be interesting to see tonnage as well too that of of what >> Republic has you know on the organic side if that's possible to we could track that maybe along with our new res or increased participation is is tonnage actually going up as well too. >> I I can I can speak to this a little bit because we did sign up. We do have the bin in our garage. Um but as we used uh collected our organic stuff and all the fruit flies that it attracted really diminish the popularity of uh the program at [laughter] at my house. >> And and so now I think true >> now I think I've got two banana peels um you know a week in my in my bin and I don't feel like I'm really taking full advantage of organics recycling. But you know there there are accompanying problems that make it more difficult than one would like. I mean my intentions are good. My execution is poor. Just so you know confession's good, right? >> Good. [clears throat] >> All right. We're good. We'll keep on moving until if there was any other >> Okay. If anybody really disagrees with these, let us know. Otherwise, we're going to keep moving. >> Are we good? >> Keep moving. All right. Great. >> We talked about it. >> All right. So, we are good there. >> Okay. Um I need So, next one is the >> Are we the antenna lease schedule? >> So, this is in your >> is it the >> packet? It's in It's in your packet, but it's part of uh our requirement each year to show you this. >> Okay. and a lease schedule because the city manager has authority beyond his $175,000 purchasing policy piece of that. So you need to see the schedule every year or approve it or be aware of it anyway. So >> so it's it's required by ordinances or >> and rightfully so and there's there was authority assigned to the city manager role to manage these contracts. We do negotiate you turn to Mr. Nelson here. It is quite often and I say often monthly or more frequently. Will Will's involved too. Julie's involved. We get requests all the time from these carriers who want to renegotiate contracts. [snorts] They want to put new antennas up. So >> the mayor gets requests too. >> There's generally some quite there's quite activity. >> Just so you know. >> Okay. >> They're repaired. There it is. >> There it is. So it's required by ordinance because that authority is granted to the city manager role that we report to that activity. >> So this is a summary of that activity that's in your packet. >> Eric, do you want to add anything to it? >> Just echoing the city manager's comments that we do get regular requests to renegotiate. Um at this point toward the end of the year, it seems that they come in once a week at least. uh city policy is and I don't know if this is actually written policy but it's certainly practice and consistent practice is that we don't renegotiate until we're in the last year of the lease term >> um or if there is a certain modification that they're requesting where we might entertain um some discussion about extension of term um but otherwise we usually decline those requests and they they of course can can renew them when they're approaching or in the final uh year of the lease term >> and a Fair point is that that $633,000 of revenue that we do not have to ask our taxpayers for. >> Correct. Yeah. That goes straight into the general fund. So, yes, that is tax reduction revenue. >> Right. >> Right there. So, >> and I get these emails every once in a while from from providers that act like I own the property. Well, the lot you own is uh maybe under consideration for an antenna, and I don't spend too much time with those. >> So, Okay. >> Great. Good job, Mike. >> Thank you. >> All good. Thank you. I'll sleep better tonight. All right. Do >> you have anything to add to that? >> I think like Eric was saying, I mean, we get a lot of requests to lower fees and we don't negotiate that. So, we're locked in. >> Why would we do that? [laughter] >> What happens is these carriers hire third party vendors. >> Sure. And it's usually a third party vendor that's negotiating on behalf like an AT&T or Verizon. >> They're like collection agencies. >> So So it's a third party vendor. They, you know, it's >> it's no lost cause for them to ask. We always say no, but they're out there if they can try and >> get a better deal. That's what they're trying to do. But we we >> do we have a form letter that say we are willing to raise your rates 10%. Right. >> Thank you. >> Thank you for writing to us. >> Okay. >> All right. Last thing under the budget piece tonight is the grant tracker update as well too. So it's been a little while since we've given you this, but you're well aware of it out there. So I'll let Sissa's kind of been in charge of of this application of it. So we'll kick it over to her for an update. >> Yeah. So I'll just give you a quick update. Um it's okay Darren. You can I'll let you Okay. >> Know when to scroll. Since 2024, we have been awarded 37 grants and we currently have 16 submitted. So, kind of in the pending status. Um, if you see the left side shows departments, we do have one in administration now. Um, Jay submitted a grant and I think he was awarded the grant. And then most of them are in fire, police, and public works. And then on the right side, since 2024, we have been awarded um $4 million in grants. And then with the city match, it's just slightly over $5 million. And then the right side is um total across the pending status awarded and denied. So that's what those totals are. And if you want to scroll down, Darren, um the left side's the revenue source. So, I believe a lot of them come from the state dollars. Um, if you go over to the blue bar, >> yeah, >> yep, that's 2025. So, that side is state and then the yellow is local and then the orange is private nonprofit. And then on the right side shows how they how the grants line with the strategic plan. Um the purple's 2024, the blue is 2025. So most of them align with safe and healthy community. The next one is infrastructure asset management. And then livable well plan development and that one must be sustainability. And then the last one's community inclusiveness. And then below just shows um how the grants are at risk for federal dollars. We have none in the red category, which is the high risk. And then moderate is the yellow. Low is green. And if you scroll down a little bit more, we have 40. Oh, if you scroll up a little bit, 43 says NA. So it's not those grants aren't applicable to federal dollars. And then below that are those this is where all the those amounts get pulled from is this report which lists all the grants. >> Are there any questions? >> Nice. >> It's a good summary. >> Good job. >> Yeah, nice dashboard. >> This, as you know, it's been a real focus for us the last couple years and real credit to Sarissa for pulling all this data together and a credit to all of our directors. It has been an emphasis. our directors are continuing to look at opportunities where we can. Um we're very selective on where we apply dollars because it apply for dollars because when you get grant dollars it's yes it's a you take a victory lap but that's when also there's a lot of work >> tied to these dollars and so we're very that's why we're selective in what we choose. We're not asking for every grant that's available. We want to make sure that it's >> something that is attainable. It fits within our strategic plan. it um supports the work that we're doing if it's not part of the strategic strategic plan and it's something that we can manage. We also have to have the staff to also manage these as well because there's there's a lot of effort in that. >> So appreciate that. Thank you Susa. Great work on really pulling that together because one of our goals has been to look at other revenue streams outside of property taxes. So there's been an emphasis to really write a lot of grants and we've been doing that. >> Thank you. >> Thank you. >> Okay. are >> we are done with that item. >> All right. >> Thank you for all your feedback. I appreciate it. >> I know it was long, but I we do truly appreciate your feedback and >> and discussion on it. So, >> well, just thank you all. I mean, it's been a long process. It's been a long night, but um you know um I mean taxing people is hard and um and you know people are pretty open with what they don't like, but you know I think our I think our budget is well considered. I think it reflects our values and I think it's very defensible. So you know well done and thank you thank you all for your efforts. >> I don't know. All right. So, are we up to um 30 minutes of open time? Do we feel like we have do we feel like we have 30 minutes? We can we can vote to bypass this. >> Definitely does not have >> you got an 8:00 flight. >> I'm flying out in the morning. I have to be and it's going to snow in the airport. Anyway, um you're ready to go home. [laughter] >> All right. Um how about December study session? >> We had one item. Okay. One item >> with one item that was submitted. Sarissa has the handout and not looking to backtrack at all. Um just just so you're aware there's an item submitted. Um maybe Deb could just speak very quickly on it. >> I can speak super quick. So I heard from a resident who's an attorney who is very concerned about um the rising trend of cryptocurrency fraud. Um and uh there's a national trend where uh people are urged to go to a cryptocurrency machine that's in a business and put lots of cash into the machine and they are just ripped off of you know tens of thousands of dollars and it is a national I mean it it it's a real problem nationally and he would like there are cities around the metro that have prohibited did them. I think Still Waters one. um maybe Apple Valley there a couple and he would like us to consider that um and so I just wanted to get it on everyone's radar and um I think it's worthy of a discussion um in the future and um I will look forward to staff some of the articles and um uh sample ordinances that he identified and that's say on that. All right, >> good. >> Um, >> what we can do, Mayor, I know we're I know I think we're getting we're at the end of the end of the line here tonight. >> Thank you, Deb, for submitting that. I think as maybe Deb mentioned, we we'll just add this maybe to the list, >> right? >> Because it is November and we have a December study session right around the corner where we'll start teeing up items for next year. So, if that's all right, Deb, I think council just suggest let's >> Yeah. >> Yeah. No, I think it's a good idea. I mean, we we we have a strong interest in protecting our residents from fraud. Um, we want to stay in our lanes, but I think there are things from an information perspective and, you know, um, also looking at maybe some of those other ordinances, maybe Eric can, um, can advise us on, you know, some direction that might be appropriate because, you know, we have an aging population. our average age. I mean, and not not that not that senior citizens are heavily into crypto, but they are very at risk for fraud and anything we can do to protect our residents. I think we want to see, you know, if there's appropriate things we can do. All right. And then >> Eric was prepared to spend any 30 seconds of commentary or >> sounds like we have a schedule to consider it going forward and I won't uh believe her any time right now. >> Sounds good. Thank you. And then council, last thing study session work plan. Again, it is November. You are down to your final month. December will be >> That means more to some of us than others. >> Yeah. Yes, it is true. >> We're gonna celebrate you, Mayor. Uh just to give you a sense, uh December study session is full. I will send out a preemptive email to you maybe the end of this week, no later than early next week, just to start teeing up these items so you're prepared for that December study session. If I get this slide over, so staff is looking to present strategic plan action steps. We want to get those to you ahead of time so we can spend some time talking through action steps. um the study session work plan. So again, I'll part of the email to you is to start teasing this out from you ahead of time. So we want to be as efficient as we can in December. Uh we've got then the legislative breakfast coming up. So we want to start talking about legislative priorities. So again, I'll we'll we'll provide to you some staff suggestions on that. We've been talking as a staff what thoughts we'd have to share with you and we'll certainly want to get those um solidified uh and then your appointments for next year. Certainly with the mayor's absence, we'll kind of move some things around for mayor. Where's some out new mayor in and then moving some juggling of where people will land with different commissions, whether it's MLC or >> league and those sorts of things. So, a lot of stuff there. Again, I'll send out an email to everybody within >> email that list of the positions and then maybe if people have a strong interest because this was a tension I think last year. If people have a strong interest in something, they can let want Mike or me know and then we can try to make sure people feel like they're being used effectively and where they're showing up. >> And and I'll offer that obviously I won't be on um any of those next year. If anyone wants information on things that I've been a participant in, know more about that, feel free to give me a holler, send me an email or a text. I'll be happy to talk about that. Okay. So, heavy December, but again, that email hopefully will help things out and get some things um kind of percolating up so that makes that meeting go quicker. >> All right. Thanks everyone. It was a heavy it was a heavy November one, too. But but uh Kimberly