I'm sweating a lot for September. >> Oh, you should be able to see it, too. >> Let's give it a sec here. Let me see. I might have to just reboot the >> You want to give that back, Mary, or whatever. >> Thanks. >> Give me Can I just >> get under here just for a sec? Sure. >> Of course. >> Yeah, that's fun under there. >> Yeah, lots of fun. There's >> a lot of things just No, I mean he's working. I know he left there for a long time. >> He's just like doing some fixing ATMs or I don't know. >> Oh, totally out of >> Good luck, man. >> Talk to you about >> maybe having a little Son's gonna ask his girl question like a little familyiz [Music] >> depends on motion how expensive it is per person how many people he's going to be nine after the meeting to see if they have anything Okay. >> Check. All right. >> The light works or not. >> All right. I'd like to call to order the September 16th, 2025 special meeting of the Bayport City Council. Um, can you um call the role for us, Matt? >> Yep. Uh, Council Member Bliss >> here. >> Council member Gilmore >> here. >> Council member Do >> here. Council member Hill >> here. >> Mayor Hansen >> here. All right, we are here because we need to um adopt a resolution for our preliminary budget. And first we're going to hear from Matt kind of going over it so everyone can hear where we're at. >> Thank you, Mayor Manson, uh members of city council. Um >> this uh is the uh presentation for the 2026 preliminary budget. Um, as you know, we've been working hard at it for the past several months. Um, so budget preparation starts roughly in June. Um, where we start handing out um to the department heads, getting acclimated to how much we think we need for the next year, different things like that. Um, department heads tried their best to get uh budget material back to me sometime in July. Um and then um this year on August 4th, we held the first very preliminary workshop um on the uh budget. Um really the bigger discussion occurred on September 8th um with our second uh workshop um that really went over all the components um including the levy um the actual budget and then capital improvement projects related. So and then here we are today with the uh uh resolutions that are required for the uh preliminary levy capital improvements and also the uh um full budget. So the requirements um for the preliminary tax levy and also the final tax levy include us uh deadline of September 30th to get the preliminary tax levy to Washington County. um that gets certified by them. At that time you can after that point you can decrease the levy but you cannot increase it. Um December 1st would be our um our meeting our first meeting in December, our only meeting in December where truth and taxation occurs. Um so there the city council um could do it a different time but the city council tends to do it the that first Monday. um adoption of the final tax levy budget in CIP much in the same fashion, same presentation if nothing changes as what the preliminary um occurrences. So then uh December 29th is the final day to certify the tax levy, final tax levy in the budget to Washington County. So as everyone knows, um we're a full-ervice city. Um we provide a number of services. um that are somewhat unusual for a city our size. Uh that would include uh fire um and also police services um and then we also have a library that um is kind of unusual for our size city. So with this though comes um significant cost. So that's reflected in the current budget. all of those items um as discussed and of course all three of those items uh do play a somewhat major role um in how much our budget is. So for 2026 some of the major expenditures um include um putting more money aside for capital improvements. So, the 2024 financial management plan um that we completed um indicated that we had been spending down our general fund to help fund capital improvements, purchases um and recommended creating what what could be considered savings funds essentially for different departments um such as police equipment fund, fire equipment fund, and then also a street reconstruction fund. So those types of items um that'll get shown later in this uh presentation. Um so the 2026 budget continues that effort and actually increases those numbers so that we do have money set aside for future capital improvements. Um another component um this year is there is the potential sal potential salary implicate implications um due to the pay equity salary study. there is a contingency in place within the budget um that um is set aside just in case there are increases to any salaries um that that study might see. So there's also a 37% overall increase in the city portion of health insurance. Um part of that is an increase in insurance rates and a part of that is additional people or additional employees coming on along with additional members of some of the employees families who who weren't on before. So, some of the revenue factors that we're seeing in the 2026 budget, um we are seeing an increase, a fairly good increase in fiscal disparities distribution of almost $30,000. So, um that is essentially a it's a pot of money that the Twin Cities metro cities puts in um and combines and it has to do with um commercial and industrial um tax base growth. And so what it is is all the cities contribute to this and then it's redispersed um on a basis of need. So, cities that don't have a lot of growth in commercial industrial get more money. Cities that have it um get less money back. So, >> and just to clarify, Matt, the pay into that is from commercial industrial property taxes, not residential property tax. >> Correct. That is accurate. Yep. Um we're seeing a very small increase in local government aid, only about $1,800. Um, of note, potential revenue from the Baytown development um is not factored into the 2026 budget. >> Bay Haven, you mean you said Baytown. >> Sorry. >> That's okay. >> Um, so that growth potentially is property tax that we would see from uh houses being built there. Um, also um funding for parks and different things like that. That's not accounted for. and building inspection fee is um not accounted for within this current budget although a likelihood that we will see some impact from that development. So um we did see an increase in interest income or have estimated an increase to that um based on what our investments is and what we're seeing interest rates return at. So um excuse me. And then finally, excuse me, a 1.7% increase in the residential housing market value. So essentially housing prices um median value went up about 1.7%. >> Is it median or it says average >> market value overall average? Yep. >> So it's the mean versus >> Okay. Um, two items I did want to talk about that aren't directly rated related to the budget but do have an impact on people's um cost of cost of living essentially and um affect um different things in town. So a couple rate increases in our enterprise fund. Um one would be the storm water rate which was just implemented last year. It's going from six, and this is for residential, it's going up from $6 a unit to $9 a unit. So essentially, if you have a single family home, you're going paying $6 a quarter in 2025 to $9 a quarter in 2026. So this does help us offset some fees associated in the um in the general fund that we had been using for storm water. Um, and but it also is a dispersement that we can have out there. So instead of just using it as property taxes, we're able to also um implement storm water fees onto places like churches, the school, prison, entities that don't pay property taxes. So the fees are also weighted towards commercial, industrial, and institutional properties rather than specifically towards residential properties. So um the other rate that we're going to see increase is the sewer base rate increase. So that base rate will include the uh minimum fee that we pay or that um residents pay and also the usage rates. So um that is a 5% increase onto what the increase was in 2025. Um, as I had mentioned previously, our um, funding for capital outlay projects. Um, and that could be a a multiple of different things, right? So, um, for this year 2026, you can see the list. We're putting $18,000 $18,500 away for municipal buildings. That could be anything from a re- roof um on the um on the library building to um something um at the public works building. So that's kind of a universal one that covers municipal buildings. And then all the other ones are pretty self-explanatory. Um down the line, police equipment, public works equipment, street reconstruction. Um, wanted to note the fire department equipment one. So, that's a shared cost with our contract partners. That's all um within the current budget that's shared with the other entities um that we have a um contract with. That would include Oak Park Heights, um Baytown Township, and West Lakeland Township. Just for clarification on that one, Matt, that that 179 is not just our our portion. That is everybody. So, we're a percentage of that 179. Correct. >> That is correct. >> Okay. Thank you. >> Yep. So, next I just want to go over the capital projects for next year. Um there's not a huge list, but we're doing a couple things next year, which is all included in the budget. So, um the first item is the safe roads to school project on Fifth Avenue North, which includes sidewalk construction um along the park in Fifth Avenue from 8th Street, 8th to the um to Barker's Alps. So, that total cost of that project is estimated at about 411,000. Um 300 roughly 300,000 is from the Safe Rout School grant. 100,000 is going to have to come from city um components which we set aside money in the um street reconstruction fund and we will be drawing about $100,000 or thereabouts from there. So um next item is the a new police squad car. Um same thing we've been setting aside these last two years um for police equipment and our um replacement fund. So, we have the ability to draw $80,000 um for the replacement of that vehicle. Um there is potential for land and water legacy improvements. Um we are currently working through a grant um that may fund the entire amount um but likely not. And so there are some parks funds that we could potentially use there. I didn't list how much specifically um and we are potentially seeking other grant funds or grant opportunities um with the with the major fund that we're looking at. So um and then finally there's some water and sewer uh improvements. These are not technically part of the budget. They are get paid for by enterprise funds. Um, but those, um, just, uh, to note them in the capital outlay portion, I'm not going to go real in depth about those. Um, most people don't know too much about programmable logic controllers, so unless it's John. So from there, the 2026 budget revenue summary. So revenues are increasing about 15.9%. So a significant portion of that is either grant money that's being brought in or has been received um or transfer in from those savings funds essentially. So what we're seeing is the street portion of it. We see a big increase in the street portion. Um that's from the safe routes to school grant. And then we're also seeing a um a fairly increase in the transferin line item. So we're transferring in money from police equipment. Um also we're transferring in money from two other funds that are going to get phased out. That includes the non- major permanent fund and the tax stabilization fund. So those two funds were part of the 2024 MA financial management plan. And essentially what we intend to do with those is bring those down to zero because currently we're setting money aside in these other funds um for future savings and the thought is that we don't need those funds at this point in time. >> Does this transfer in take those to zero or >> it takes good question council member Bliss. It takes one of them to zero. It takes the tax stabilization fund to zero. Um there still is approximately probably 280,000 in the other one. So you'll see this probably this transfer in from the non- major permanent fund over the next couple of years. Okay. Um what our what our intention is to kind of soften the blow to potential property tax increases by using these funds to offset some of that increase. So the longer we can hold out the better for that. So um yeah the projected incur the projected input the last two years has been less than what the 2024 financial management plan called for. Okay. So >> we can we can push that out a little longer. >> Good. Thanks. >> Yeah. So then the we have budget expenses summary. So again, um obviously if revenue increased by 15.9%, expenses are likely to increase by the same amount. So um some of the bigger ones here, police you can see is a a fairly decent increase. Uh a big portion of that is um union wages, but a larger portion is the purchase of the squad car. So some of this have you have to remember that the way we report this is you have revenue and you have expense. So some of this is not necessarily an increase to property taxes. These expenses are being offset by us bringing in money that we have already saved. So which is the intent of of those savings that we're doing. So um the other project or the other big increase is the streets and lighting. So, as indicated before, the safe routes to school project is approximately $400,000. So, that accounts for a fair amount of that. So, I will note to that the um uh there's two line items specifically for the fire department. One is our contract portion, which is what we charge back, not only us, but the other cities. It's just shared cost. And then there's a non-contract portion which is the cost that exceeds that agreed upon budget from the other cities and that we the city of Bayport is paying outright. >> Yeah. Just to clarify, we are held by that contract to a 3% increase in our budget each year and things cost more than that. So the city of Bayport has to cover that. >> We pick up the check. >> Yes. So that's why we're eager to renegotiate our contract when that comes around. >> Yeah. So just to note that that non-contract portion currently includes the full-time fire chief that we intend to hire and also a bond repayment to the water department um that was used to uh purchase the pumper from last year. So >> and those two alone probably make up most of that. most of that >> those two those are the only two things under the non-contract portion >> we had been setting aside more money like we as a city were putting more into like a capital outlay or something didn't we have another line item that we we zeroed out this year? >> Yes. So >> okay >> in previous years we set aside extra money um in for the uh fire equipment replacement. This year we did not include any of that in the non-contract. >> Okay. That's not as bad as it first looked. >> Right. Okay. >> Yes. >> All right. This uh slide is just a a budget comparison essentially. Um you can see that our budget is increasing um from 2023. Again, a big portion of this is how it gets reported also, right? So, um, last year we didn't specifically put our, um, and I'm I'm learning as we go too here. So, um, we didn't specifically put all our capital improvements in the 2025 budget. We had saved for stuff, um, but they didn't get included in the budget here. Moving forward, um all capital improvements will get included in the budget and all expenses that are coming from our transfers in um from our savings funds will also be included. So >> did that start sorry that started this year? >> So it's it's been on again off again. Adam had started it. Adam Bell, the previous administrator, had kind of started doing that in 2021 just to make sure that it's being seen how much we're really spending, right? And then I didn't include it last year just because it was the first year of our savings funds and it was kind of like a transition year. Um but moving forward, the intent is to at least to the best of our ability and to without any emergencies happening to put any expected um capital improvements or equipment purchases into the budget. >> Okay. >> Um so just uh moving on to the property tax levy. Um just a definition here. So the levy is the total amount of money that local governments intend to raise through property taxes um in a specific year. So um you can't really compare that to your tax bill which has all of the taxes included in it. But if you look at your tax bill, there will be a city of Bayport line item and that's the specific amount that you are paying in for the city tax levy. So um so this portion is the actual tax levy summary. Again this is not necessarily what your tax levy will increase. This is the city's um tax levy increase or that's what we're propos proposing for our levy increase. So um the general fund is expected to increase about 1164%. um our general obligation debt service. Currently the only thing we have for debt service u we actually have two items. Um one is the fire hall um which is included in the property tax levy and the other is for um Minnesota state 95 which we did water and sewer in 2000 or 2020. Um that does not get included in the general fund budget line item. That's part of the water and sewer fund. So, um, and then the library is increasing, um, the levy portion 4.66%. So, overall there's a 9.83% increase to the property tax levy. So, as you can see, kind of similar to the um general fund or the overall budget, property tax levy is definitely increasing, right? Um, so some of that is is due to increases inflation, increases to cost of purchases. Some of it also has to do with the fact that we're trying to save more now so that we have the ability to um pay for things in the future, capital improvements, vehicles, things like that. Um so this uh this slide just indicates uh kind of where we are um in our property tax levy increases um from 21 to 25 um kind of a comparison to um surrounding cities right so if you find Bayports um we're kind of middle of the road uh 26.4% 4%. Um obviously you have um cities on the far end of each end, right? So um I know Lake Elmo, it's hard to compare Lake Elmo to anything. They're growing really fast. So they're um levies are going to be very high, but they also have property tax increases or revenue coming in offset that. You have Afton who and Grant who aren't growing at all but they also don't provide any services and so their property tax liies are very minimal. So >> and West Lakeland is that for all the street reconstruction they need to do that they just want saving for >> I believe a couple of years ago they bonded for a significant amount of street reconstruction and I think like probably 100% of that occurred in like one year. So >> um yeah. >> Is that is that growth too though? West Lakeland. Um, well, that's their levy inquiry, so it could very well be offset by some growth. Yes. Um, but a huge part of it was having to reduce roads, I believe. >> Mhm. >> So then the city property tax rate, um, that's the city's rate, um, as a percentage of your tax bill essentially. So, um, if you look on your tax bill, you'll have the school ISD834, you'll have Washington County, you'll have the city of Bayports, and probably a couple of other items on there. And so, the our percentage, um, you take what your line item is for the city of Bayport, divide it into the whole thing, um, and that's the city tax rate. essentially >> it's meaningless. >> So finally, whatever the obvious question um that's on everybody's mind, right? How much will my property taxes go up? So um for a median value home, if you go across the top line item here, um a median value home currently in the city of Bayport is $390,000. So that same home was valued last year at 383,000. So that's roughly about a 1.5% increase. Um your 2020 t 2026 taxes are going to be roughly $1,230. Um and then the actual increase over 25 is $5689. Um there are comparables here for $250,000 home, $450,000, 600,000 and $850,000. So um the actual increase on a percentage basis is somewhere between 4.8 and 5% for this range of homes. >> So it actually is I think that parenthesy on the bottom, which I didn't catch before, I think it actually should say 1.7%. for the median. Yeah, I don't remember. >> I don't know if that's last year's percentage or No, last year it went down. >> Last year it was a negative one. I think this year it actually happens to be a positive 1.5. >> Yeah, but it is 1.7. I just did the math. >> Oh, is it? Okay. >> And I think that's where that one came from the front, too. You might have just mistyped. Yep. Yeah. >> So, either way, there's a slight increase to the median value home. um we're asking for a slight increase to um the city tax portion of of everybody's property. So again, even though >> our overall tax levy is increasing 9.3% the um residential portion of it is somewhere between 4 and a half and 5% for individual residential properties. Um part of that reason is um we we don't do a good job or um mostly because it's difficult um to estimate the commercial and industrial um property tax levy impacts. Right? So, um, it's likely because of you that discrepancy there where our property tax levy, the city overall one is 9.3% and we're seeing residential ones at only about four and a half to 5%. Is that the commercial industrial uh tax is seeing a very good increase or their value is seeing a better increase. So, their portion of the levy is more than residential. All right. Um that's uh all I have for the budget summary. I'd like to thank city council and staff. Um so obviously with that high level of services um we sometimes have very difficult decisions of of making increases to the tax levy um and having that impact on our residents. Um I I believe that this uh budget is is resulting in a pretty moderate or modest tax impact. Um and so and still allows us to put money away for for future projects. So um I think it it ensures the high quality of life and the amenities that are expected in the town um and that um hopefully the impact isn't isn't felt um too harshly by residents. With that, I will stand for questions. >> I I don't have questions. I just I want to thank you again. I know that you put a lot of time, you and the department heads in coming up with all these numbers. You specifically, I know, spend the most time. Um, and I feel like it's a good mix of, you know, being pretty conservative with, you know, not hiking it up too much, but still being able to save something since we hadn't, we've been just drawing down our savings these last 12, 15 years. So, however long it was, it's been a while. So, um, I think it's time we need to do this or we're going to be in a tough spot soon if not. So, but I don't think that's a huge hit. Median home is over a 12-month period increasing their city portion of their taxes by only about not even $60. That's the median. Um, houses that are valued lower than that, it'll probably be slightly smaller increase. And as it goes up in value, um, so does the increase. So, um, I think it's palatable for our residents. I hope. We'll see what they say at the >> Truth and Taxation here. No one's here complaining right now, I guess. Did they see this? >> December 1st will be the >> Yeah, I know. That's their first time, right? Okay. >> So, I'd also like to point out um this is obviously a small portion of a the whole presentation that we always do at a workshop, right? Where we practically go line item through line item. So, um to do that at a city council meeting would take three, four hours, right? Um, so obviously the city council puts in more work than just standing up here and listening to a 20inut presentation also. So >> definitely >> um >> and our residents can see that >> sheet that you gave too. So >> yeah, absolutely. So this presentation is online and available in in the minutes or in the agenda packet also what we had at the workshop totally available for for residents to see. I just maybe something I wanted to mention and and I appreciate this presentation and every year I sort of pick up new things and >> understand it a little better, >> able to glean a little bit more. >> Um would it make sense to rather than have people search this out kind of this your presentation tonight feature this in social media somewhere or something so people could click on it and watch it. It's a pretty nice little tidy snapshot of the city finances and levy versus your, you know, when you see the the bar graph, you know, how much the the budget comparison for 25 to 26 is, somebody's going to look at that and get really scared. >> Yes, that may be a little, >> you know, it's it's hard because this is only sort of a snapshot in time and and it's always sort of a moving target in a way. So, you know, some of this stuff, you know, people I think people tend to look at it as, oh, we needed to buy a new fire truck. We paid for it all in one year, and that's this is how much it affected me. Well, it doesn't even come close to working that way. You know, it's much different than that. So just throwing that out there to see what you guys think or staff or >> I will say John we've thought about posting other big topics on like Facebook and different things like that and I think we've shied away from that because um mostly because the expectation might be then that people can just go there and whatever we decide is is worthy of having that. Um, I could see the argument on the other side, especially for the budget, right? I mean, this is a once a year thing. This is a known um cause that happens every single year. So, I don't know that I would have those same feelings of um of posting it there. So, I think I'd be open to that. >> And you're suggesting posting the actual presentation like, you know, uh you could have this >> Yep. Um, yeah. Slideshow and you could have literally This is YouTube I think, right? Yes, we could easily cut all this part out. I'm just kidding. >> Yeah. No, I think it's not a bad idea really. Um, >> Matt, I can tell the the city's worked hard to to minimize what we have to pay here. Yeah. >> Um, is there anything notable that our department's requesting that we're deferring or >> Um, I don't I don't think so. We're probably still shorting ourselves a little on the savings side. >> Sure. >> Um, >> just an example with the fire equipment fund. Um, we're definitely not setting enough money aside so that in 20 years when the ladder truck needs to get replaced um out of our budget or even the savings fund that we're putting aside, we will not have $4 million or whatever it takes to replace that piece of equipment. So, um, sometimes those big purchases do require funding and so I think that would occur. some of those bigger fire department purchases. Um, you know, when a pumper tanker, not tanker probably, but pumper becomes two $3 million in the future in a ladder truck, right? >> Um, >> I haven't calculated out how a bond payment would be paid back, but that would be a lot easier to pay out than a huge huge bill at that point in time. So, >> um, other than that, um, I I don't think so. We still need to up a couple of the savings portions. Um, we're pretty thin at the police equipment um of replacing a squad every two years, but there's also other components in that squad, right? You have lights, you have a computer, stuff like that. So, um we made a small incremental increase to that this year um in the hope that a couple more incremental increases to that one um will definitely help um not to depress you, but the street reconstruction fund is also another one that um probably needs more significant increases and that was covered in the financial management plan. So, >> y >> and we didn't really set anything aside for parks in this budget either. kind of assuming that we'll be getting some park dedication fees, which I mean we are assuming because we're going to be getting them for the the new bay having developments and um the school has given us some as well. So, >> we thought we could hold off on separate >> um monies for that for now. >> I read on the revenue looks relatively conservative, right? Like >> Yes. Yeah. Yeah. for the like because the development isn't counted in there and >> correct. Yes, we're not we're not considering any uh revenue increases from um like inspection fees for building inspections and different things like that. Uh roughly we get about 25% of anything that the building um inspection or our third party contractor charges. So um I didn't put a significant increase um in there for that. So >> I've gotten to know them well this summer. >> I suppose. >> Do we have any sense? Not to get super deep on that. Be haven. Do we have any something sort of occurred to me during this presentation any sense where how far it's going to be built out? >> How many years it'll take? >> You know, like at this time next year, do we expect >> 20 homes built? Do we expect maybe none? Do you know? >> That's a good question. I don't know if I I really should even take a stab at it. Right. Their intent is to >> Their intent is to start grading here this year and try and get utilities in. So, um, if I had to guess, there's 35 homes. It probably really depends. I don't know how fast Pratt Holmes builds a home, right? He has his own carpenters, so that's probably fairly quick. And it might also depend on the economy, too. Mhm. >> Um I know that he's indicated that he does have a couple people lined up already that that are very interested. >> So, >> and the multif family will go in concurrently with his >> currently at the same time, but the multif family is probably going to take about a year and a half to complete. So, that'll be a significant time frame. If I had to guess, um Pratt Holmes probably wants to be in and out of there in under four years. >> Sure. >> Seems reasonable. Okay. And the other thing that we should mention is um we did this last year. I'm not sure that it's that was the best practice, but we could reduce this levy >> before the final. Um and that would probably be reducing that contingency that we set aside for right >> in case the salaries >> come back that we're not paying um equal or e an equitable salary for some of our staff. Um, so I don't know. It was I think it was a little confusing last year. We had people come and say, "Well, you're raising our taxes this much." We're like, "No, actually we um reduced that." So, we kind of wasted their time. So, they don't want to a lot of people don't pay attention to the second they see the first one. And I believe the mostly because I think the preliminary one is used for some of the tax statement stuff that come out initially >> and so then that's what they base that off of. Right. Yeah. >> Right. So >> and we had negotiations last year, right? That's we we came out pretty heavy. >> Correct. We also had some of that. Yes. >> Oh negotiations. >> Yep. >> We still ended up with a decrease though. So >> all right. Any other comments or questions from council? Think we could go ahead and make these motions. We have three to do separately. >> I move to adopt a resolution of the preliminary levy of 2026. >> Okay. Thanks, Katie. >> Second. >> Thanks, John. Do we have the roll call? Yeah. >> Yep. Uh, council member Bliss. >> I. >> Council member Gilmore. I, >> Council Member Dah. >> I, >> Council Member Hill, >> I, >> Mayor Hansen, >> I. >> Next. >> I'll move to adopt a resolution of the preliminary budget for 2026. >> Second. >> All right. Thanks, John and Carl. Roll call. >> Council member Bless. >> I. >> Council member Gilmore. Hi, >> Council Member Daw. >> I. >> Council member Hill. >> I. >> Mayor Hansen. >> I. I move to adopt a resolution of the proposed capital improvement plan for 2026. >> Thanks, Katie. >> I'll second. >> Thanks, Ethan. >> Council member Bliss, >> I. >> Council member Gilmore, >> I. >> Council member D. >> I. >> Council member Hill, >> I. >> Mayor Hansen, >> I. Uh so one note too that um public input on the 2026 budget and levy um can be heard at the truth and taxation um session that will occur at the December 1st, 2025 city council meeting. >> Great. All right. Does anyone want to >> I'll move to adjurnn. >> Thanks John. >> I'll second. >> Thank you Katie. All in favor? >> I. >> All right. We're journed. >> Thanks Matt. >> Yes. Well done. >> All right.