I'm going to call the city council meeting for the city of Lake Elmo to order here on July 7th, 7 p.m. Please stand with me for the pledge of allegiance. Pledge allegiance to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible, with liberty and justice for all. >> So, we have the agenda this evening. I'll entertain a motion to approve the agenda. >> So moved. >> Second. We have a motion by council member Holtz, second by council member Hearn. All those in favor, please signify by saying I. >> I. >> And then we have a presentation. Washington County, Middle St. Corey Valley to Failing Keller Regional Trail Long Range Plan. Washington County planner Andrea Rim. >> Yes. >> Presenting. >> Yes. >> Uh thank you, mayor and councel. Tonight we have Andrea from Washington County to present the Failen Keller Regional Trail Plan. They've been currently doing some um community engagement with this uh project, but she's here to give us the long range plan of that what that looks like for the city. Sorry. >> Thank you. >> Mayor, council members, thanks for the opportunity to present this evening. Um as mentioned, my name is Andrew Rim and I am a planner at Washington County Public Works. And um in my presentation this evening, I'll be introducing the Middle St. Croy Valley to Failen Keller Regional Trail Longrange Plan and Process um including a project overview, updates about community engagement, and I'll end on next steps. We like to begin these introductory presentations with a couple key definitions. Uh the first one being what is a regional trail? A regional trail is distinct from other types of trail in that its purpose is to serve a regional audience. Um, so it should attract users from across cities and counties and connect regional destinations such as state and county parks, uh, downtowns and things of that scale. For that reason, we often describe a regional trail as the tree trunk or the highway of the wider trail system. Um, in that it acts like an arterial road that local routes, local trails can feed into. And it also comes with an elevated experience with higher amenities. The county's design standard wherever possible is a 10- foot wide paved trail with a 10-ft buffer from the road. Um, and amenities including things like trail heads, kiosks with with interpretive opportunities, bike repair stations, and things of that nature. A long range plan then is the um high level planning document that we are developing currently um and that will include guidance on a future trail alignment as well as the location, development and operation of trail facilities. Uh long range plan is important because a proposed trail project must be uh consistent with an approved long range plan to be eligible for certain types of funding from the state and met council. Um likewise a trail with a regional trail designation is eligible for um annual um operations and maintenance reimbursements. And then last but not not least, a long range plan is an important opportunity to connect with uh the public and partner agencies so that they have an opportunity to participate in the development of the regional trail system. Um that way our partners and the public can have a clear expectation of how the trail will develop and um that helps them plan their own projects accordingly. One other key um point about a long range plan is where it falls in the overall timeline of a a trail um coming to fruition. A long range plan is often what we call a step zero. It's a high level plan to document the vision of a future trail and before it comes to fruition there go there are three additional phases including a feasibility study and preliminary design final design and then lastly construction each of those coming with additional opportunities um for engaging the partner agencies and the public at this time um preliminary design or the next step for This trail is not specifically programmed in the county CIP in the next 5 years. The uh light green shape on this slide is represents our search area for this trail corridor. Um the ultimate goal is to develop an east west arterial trail to link the communities of Bayport, Baytown, West Lakeland Township, Lake Elmo, Oakdale, Landfall, and one day Maplewood in St. Paul in Ramsey County. Um once fully developed, it will connect trail users to regional destinations including the Middle St. Croy Valley Regional Trail, the Central Greenway Regional Trail, Lake Elmo Park Reserve, um and then one day into Failen and Keller Regional Parks in Ramsey County. This Washington County led study pertains to the searcher within Washington County. Um the eastern portion of the trail corridor and a separate future study read led by Ramsey County will make that final connection uh to the Ramsey County parks. It's important to note that for this long range plan, we are uh planning in an area that has a lot of past planning work already completed, both um the county and the city. And um the project team is reviewing those documents and referencing them um throughout our process. This long range planning effort was set up with a three- tier engagement structure. Um this graphic represents sort of the relationship between the different tiers. The first and smallest group, the project management team, um which includes a representative each from Washington County, planning, parks, engineering, and our consultant. Um this project management team executes all the day-to-day work and acts as the center of information for the other stakeholder groups. The second tier extends to include key stakeholders organized formally into a technical advisory committee. Um that's where other staff or other county staff, state and federal agencies and representatives from the cities and townships um fall into. The technical advisory committee is asked to weigh in at key milestones, share their ex um their technical expertise and to act as a liaison with their agencies. The final tier covers engagement with the general public. There we seek input from residents, trail users, um residents and trail users at a variety of engagement opportunities including open houses, um pop-up engagement, um and online opportunities. As for the timeline of uh developing and completing or developing this planning document, um the project team mobilized this past winter and spring beginning with visioning, insight analysis. Uh this summer, our focus has turned to stakeholder engagement. Um, in the fall and into the winter, we'll work on route development and evaluation. And ultimately, we are aiming for uh to have a preferred route and a final draft of the long range plan to bring through the approvals process in summer of 2027. This plan will build on the findings of community engagement both uh with the public and with partner agencies for public engagement. The p the project process will offer a mix of opportunities including open houses, pop-up engagement, online opportunities. Um our first open house was held on June 24th here at Lake Elmo City Center. Um, and those materials are still available on the project website for folks that weren't able to attend. With that openhouse, we also launched our project survey. Um, and that survey will be open throughout the summer as an opportunity to gather feedback from people who might not be able to make an in-person event. Throughout the summer and into the fall, we'll be hosting a number of popups at events throughout the search corridor. In Lake Elmo, we are tentatively planning to uh table at the National Night Out event and the Bluegrass Festival at Lake Elmo Park Reserve, but we'd also be interested in additional events if folks have other suggestions or other groups that we should be connecting with. As the project continues, we'll continue to work with our technical advisory committee um and the staff from Lake Elmo who serve on that committee on when to engage this council and and your commissions. Uh next, turning to next steps, the project team will continue to conduct public and agency engagement. Then in the fall, we'll be pulling those engagement findings and other analysis together to develop and evaluate route alternatives. Um further down the line, looking a little bit further down, um we'll return to this council with with those results of the evaluation as we work towards a route recommendation. And that is the end of my prepared presentation and I'm happy to stand for questions. >> Questions for Miss Rem. >> Rain sorry. Uh just curious how was the attendance at the open house? The first one you had >> the attendance um was as a summer open house sometimes is a little bit low. Um we will be repromoting some of the online opportunities to try to make sure that those materials are as widely available as possible. >> You mentioned a survey. Where is that located if people wanted to find that? You can access it via the project website >> and that's in the on the planning on the Washington County website or >> is it under public works or where is it under >> the the parks and I I'm happy to follow up with a direct link if we want it >> because maybe that's something we could also get posted or put out in some of our flyers for people that may be interested as well. Okay. Anything else or is it just me? All right. Thank you very much. All right. Uh do did we have anybody that wanted to have any public comments or inquiries today? >> No, we did not. >> All right. With that, uh, we had the minutes in our packet. I'll entertain a motion to approve the minutes unless somebody had something that needed to be changed or updated. >> Motion to approve both minutes from June 2nd and June 16. >> Is there a second? >> Second. >> We have a motion by Council Member Holtz, a second by Council Member Jagasich. All those in favor, please signify by saying I. >> I. >> I. Those uh minutes are approved. In our consent agenda this evening, we have approve payments and dispersements. Appoint 2026 election judges. Approve full-time firefighter hire. Accept donation to the fire department from Dairy Queen. Approve Lake Elmo Elementary development agreement first amendment. Approve Oakland Middle School site improvement agreement first amendment. Approve pay request number one for test well six. Accept quotes and award a contract for the 2026 crack sealer project. Accept quotes and award a contract for the 2026 striping project. Approve release of warranty security for the Eerts Edition Drake Motor Parters LLC. Approve cooperative agreement payment number one for trunk highway 36 Lake Elmo Avenue improvements. I'll entertain a motion for approval of the consent agenda as presented. >> Motion to approve the consent as presented. >> Second. >> We have a motion by council member Holtz, second by council member Kragnness. All those in favor of the consent agenda, please signify by saying I. >> I. >> Okay. Okay, we'll move into our first regular agenda item which is presentation and acceptance of the 2025 annual comprehensive financial report. All right, get my presentation loaded up here. All right, there we go. Okay. So, my name is Ryan Schmidt. I'm a partner with Schlenner Winter & Company, and I'm going to walk us through a PowerPoint presentation to basically summarize the high points of the audit and the financial results from the past year. But feel free to interrupt me at any time if you've got questions. As in the past, going to start out with just a little bit of a reminder of, you know, what exactly is the purpose of the audit? What is it that we do during the audit each year? Um so just at a really high level an audit essentially consists of us obtaining your financial records and information from the past year 2025 and performing various procedures over this kind of as laid out on the screen here. Um really the the majority of it is the sampling and the detailed testing. You know, we're looking at the individual transactions that are in your accounting system and we're looking at the support behind those, whether it be supporting invoices or bank statement activity or reports from the county or the state for the funding you receive. All for the purpose of verifying that information because that's what comes together and makes up the the financial statements. So then we express an opinion on those financials and whether or not we feel that they are accurate. The opinion we've given this year is what's called an unmodified opinion which is the best you can achieve. The next slide here uh just kind of walks through you know some other required communications. So yes you got the clean opinion but how did the audit process go? Did we have any difficulties getting the information we needed you know did we see any unusual transactions anything strange with accounting policies etc. As you can see from the slide here nothing along those lines. everything went smoothly and um as expected as part of the audit. We also have to look at uh your controls and and the processes that are behind the numbers and we generally have a few findings or items to report here. Um one that's very common in our audits is an audit adjustment finding. That's the the topic on the left hand side here. Um in your audit, we actually don't have that finding. Um which is great to see. Basically, what that means is although we do assist with maybe some certain year-end adjustments or some cleanup, none of those journal entries, none of those audit adjustments uh were significant to the point where we needed to put a finding in the report. So, that is a good thing to see. Uh the next item here, the center bullet point, this is by far the most common thing that we report. Uh this is just a lack of segregation of duties. Um most of the accounting functions in the city I would say are you know there's oversight in place. There's there is good segregation of duties but there's just a few areas whether it be with you know the bank reconciliation or or certain other areas where there's just people who have kind of complete access or um the ability to see the whole accounting system or modify the whole accounting system. So that's something to be aware of and just implement oversight and ask questions wherever you can. And then on the right hand side as part of the audit, we also have to review your compliance with Minnesota statutes. The state gives us various checklists. You know, how did you go about contracting and bidding for your projects? Where do you keep your cash and investments? So on and so forth. We did not identify any legal compliance issues. Everything looked good there. the next page. Get into the numbers a little bit here. I'm going to start out with a big picture look at the general fund. Uh we have a trend analysis here 2021 through 2025 and then we also have the 2025 budget on there as well. Uh so just a really big picture look for start compared to the budget. Uh revenues did exceed budgeted amounts by about 2,282,000. uh expenditures however were below budget by about 97,000. Um so overall you had budgeted for just a slight increase in your fund balance of about 35,000. Your actual increase in the general fund balance for the year was a little under 2.3 million. Now the next two pages still looking at the general fund we break down those same revenues and expenditures into a little bit greater detail. Um so the first page here focuses on revenues. Um just compared to the budget going across some of the bigger categories here. You can see of course the majority of your revenues in the general fund do come from taxes and assessments. Very close to budget in this category. Uh the next one over licenses and permits. This is probably where you had the the one of the larger uh deviations. You had additional permit revenue about $676,000. Next category, state grants uh caused the intergovernmental category to be over budget about 434,000. Charges for services over in that category about 406,000. And then investment earnings uh up from the prior year about $427,000. Um over budget about 788,000. Next page, same layout, but looking at the expenditure side of things for the general fund. Um, general government, you know, administrative type expenses. Here, you were under budget about 138,000. The public safety category, that's where you had the the largest uh excess of budget, but actually, you know, so looking at the numbers here, you were over budget, 325,000. About half of that is because there's flow through state aid that comes from the state and goes to the fire relief association on behalf of the city. And in the financials, we were required to gross that up as a revenue and an expense because it flows through the city. But that's not included in your budget. So that was about 171,000. That's causing about half of that excess over budget that you're seeing in that category. uh public works very close and culture and wreck about 215,000 under budget. Next page uh looking at the unassigned fund balance at the end of the year uh turned into a ratio. You have a a policy in place to look at your unassigned fund balance as a percentage of the next year's budgeted expenditures. And based on your policy, this uh shouldn't be less than 50 to 60%. And as you can see, you've been on an upward trend and you're well in excess of your policy at the end of the year. And the next page just shows cash. You just want to see your cash balance trend over the past five years. Um quite a bit of a spike here in 2025, up about 9.3 million. Um, part of the cause for that, you know, your your fund balance didn't go up by 9.3 million. Part of the cause is that you have escrow dollars from some of the projects around the city and with those escrow dollars is an offsetting liability. So, you have more cash on hand, but fund balance is assets minus liabilities. So, even though your cash went way up, your overall fund balance didn't go up by that significant amount. All right. that we'll move away from the general fund and touch on some of your other funds here briefly. Uh this page, these are more like fund categories. You know, you have a lot of individual debt service funds. You have a lot of capital project funds for the purpose of streamlining things a little bit here. This is more of a big picture look at your debt service funds and your capital project funds. Um debt service activity was pretty pretty standard here. You have your revenues for taxes and assessments, expenditures for debt payments. Overall, an increase of about $442,000 in aggregate capital project funds. Some of the larger projects or or areas with larger activity here, your ball field project, about 3 million of of the expenditures shown. Um about 1.9 million for the 20 25 street and utility. Uh so on and so forth. Um overall for the year, you had a decrease here of about $4 million. And the next page just shows the cash trend in both of those categories over the past five years. Um you can see debt service has been on a pretty steady slow upward trend. Um and capital projects jumps around a little bit from year to year based on the timing of when you issue debt and then as you pay down that cash um decrease of about 1.3 million in cash there for the year. that we'll move into your proprietary funds, your water sewer fund and uh storm sewer fund. First page here being your water fund. Uh the graph at the top is primarily focused on operating revenues and expenses um which uh pertains to the table down at the bottom. It's the same information. Um, one extra item I threw on there this year is that green bar. Um, which would be the operating revenues from below plus your connection fees. Um, which I thought was an interesting addition just because your connection fees, uh, t, you know, generally speaking, they're not considered to be an operating revenue, but they are recurring for the city over recent years, and they're quite significant. Um, so you can see how that brings her overall revenues on the graph quite a bit closer and more in line with the operating expenses. But just compared to the prior year, operating revenues were up about 539,000. Operating expenses up about 750,000. And then you have that nonoperating activity, connection fees, grants, and about 4.1 million of developer contributions of infrastructure. So that's non-cash contributions where the developers turn over the infrastructure and it's an asset for the city. So it gets recognized as a revenue at that time. Next page, same layout and kind of the same same explanations for for the most part for the sewer fund here. Compared to the prior year, operating revenues increased about 256,000. Operating expenses up about 292,000 and then significant non-operating revenues again from grants uh or connection fees special assessments then about 4.6 of developer contributed infrastructure. >> Can you just dig into that a little bit more for me? So, the operating revenue plus connection fees, are you saying the majority of that additional revenue that comes from the connection fees is coming from the developers um turning over those assets to the city? >> Actually, those those are separate things. So, so of the in the graph down at the bottom, you see the 9.2 million under nonoperating. >> Um, so about 2.6 million of that is cash from connection fees. >> Um, about 1.4 4 million is special assessment revenue and then 4.6 million is just the infrastructure asset that's being recognized as it's been turned over to the city from the development. >> So that 4 million is not recurring on an annual basis. If we'd stopped growing, but the remainder of it is >> well the connection fees, you know, the connection fees, if you stopped growing, I would assume there wouldn't be connection fees anymore, right? That would that would taper off significantly. The difference is the connection fees, you know, that that is cash that's coming in for the city. Um, whereas the developer contributions of that 4.6 million, it's not really a it's it's not a cash contribution, you know, it's that they've they're taking that infrastructure and turning it over to the city for the city to maintain. In a way, you could almost think of as a liability because it has to be maintained going forward, but it is an asset that gets put on the books and as a result, you recognize a revenue. >> Okay. All right. And then the storm sewer fund here. Uh here revenues were pretty flat compared to the prior year. Operating revenues dropped about 9,500. Operating expenses up about 280,000. Most of that was just an increase in depreciation expense. So a non-cash item. And then the nonoperating there of about 6.3 million. That's almost entirely developer contributions. So non-cash assets being recognized. So with that an overall increase in net position of about 5.5 million. And the next page shows the cash in each of these funds over the past five years. And you can kind of see how even though you had some significant increases in net position on the last few slides, the cash has maintained a lot flatter or the increases haven't been as significant because of the non-cash items we talked about. But the sewer at the top increased about 285,000. Water jumped by about 3.2 million and storm sewers held pretty steady. Just a slight decrease there. All right, with that we'll move away from the individual funds and just take a moment to look at everything wrapped together. Um, so in the financial statements, there's the fund level information that we kind of just went through. Then there's also the governmentwide financials where everything gets wrapped together and put on a full acral basis of accounting where you, you know, infrastructure and long-term debt and all these long-term items. So that's what we're looking at here. Um just big picture compared to the prior year for the city you can see you've had increases in both current assets and infrastructure those non-current assets compared to the previous year. Next page kind of similar layout and similar results here for liabilities increase in both those current and non-current categories. And then the following page is maybe a little more useful um where we take those same assets and liabilities from the past two slides. And the net between the two is that green bar. So you can see on a net basis how things have trended. Now a lot of the reason for the the sharpness of that increase is due to the assets that are being recognized from cap well from your capital projects and from the infrastructure being turned over from developers. And then just two final slides forformational purposes here. Um based on the debt that was outstanding at the end of the year, these slides show the future payments that are due each year. So this isn't the balance outstanding each year. This is the amount of principal and interest that's due each year. You can see how that tapers off as the various debt issuances get paid over the years. governmental fund debt being the debt being financed by property taxes and assessments. And then the next page for the proprietary funds uh being financed by your utilities. >> Any questions? >> Questions for Mr. Schmidt? >> Council member Holtz. Thank you for that. Just quick question on the for both the sewer and water. Are those trends pretty similar for what you've seen in other second ring or third ring suburbs in terms of both the revenue levels, operating costs? I mean, we're not Minneapolis, but we're also not Lichfield. I >> sure yeah, you know, it fluctuates a lot. Um, like almost a very high growth city. So, um, it's just as far as the connection fees and and the uh impact on the financials from those developer contributions. I mean it's it's hard to compare but I would say um financially it seems like things are pretty strong. I don't have any concerns from that standpoint. >> Gotcha. Thank you. Yeah. >> Council member Dragassuchich >> city has a fund balance net position policy they adopted 197 2017 that restricts the net position of water and sewer utilities whack and sack for the purposes of infrastructure and debt service. But I don't see that restriction in the uh net position in the in the statements. I'm confused as to why that doesn't show up. >> Yeah, I guess I I wasn't aware of that. I don't know if Clarissa you have a >> we actually have discussed this because you had asked this question before and I think it had come down to we've essentially spent um consistently spent because it's allowed for capital assets that that there isn't remaining funds that are restricted at this point. >> Can it be used for the debt service payments as well? >> Correct. >> Okay. Okay. use for capital or debt, but so every penny we've collected in sack and whack has been spent for capital or debt. >> Okay. >> I I'd have to like I mean I could I could show that at some point, but that was my understanding. Again, this was a conversation that we had had quite a few months ago and I'm going from some deep recollection. Um so I would have to kind of refresh my memory, but that is my understanding. >> Okay. Yeah. Yes. I I I asked that before, but I I thought maybe it show up in this year's audit that there'd be some of that restricted net asset, but there just wasn't any. >> Sure. Sure. Well, it's something that we could look into if if you look into it and think that we need to dive a little further. >> Can we clarify because I think the restricted was a different terminology we're supposed to be using for that because restricted is for legal stand. >> Yeah. So restrict restricted would be if there's an outside party whether it be a donor or uh Minnesota statutes they're saying it has to be spent for that. Um committed would be if the council had a formal action or a policy in place saying that it it should be used for that. Otherwise assigned is kind of more informal. Those are kind of the three categories. >> Yeah. The city has a formal policy on this. >> Yeah. So it would be a committed balance if the dollars haven't been spent yet. >> Okay. That it. >> Thank you. >> Thank you. >> Appreciate your time. >> Uh second on our agenda here is purchasing policy revisions uh with uh finance director Clarissa Hadler presenting. >> Um if you're okay with me just doing it from here. You didn't wear your standing shoes tonight or what? >> Actually, >> that's fine. >> Um, so this uh is actually a followup to our workshop discussion from May um where we had um talked through some revisions and clarifications within the purchasing policy. Um I did remember to put a red line version in your packet this time. Um so let me know if you have any questions on that again. Um so there's the red line would have been the Oh my gosh, I'm so sorry. Thank you. Um, so the redline version is the the May version essentially and then we made some slate tweaks um after that discussion based on that discussion that I then highlighted. So that's the the two two types of changes within that. Um so just some real quick for the first for the May um those initial changes we made um we were really um doing sort of a a broad sweep to to try and align the um policy with our practices as well as clarify some issues that were um uh just not very uh understandable within that. We also added the quick reference guide to clarify some options for the procurement and purchasing amounts and approvals necessary. Um we consolidated the construction contract services and purchase contracts and the professional services section into one section. Um we clarified the definition of the term contract and the approval authority with um legal's help. Uh we clarified which purchases are delegated to the city administrator. We clarified some lease language and then additional lots of clarifying language. So then at that meeting there were a number of discussions um we uh talked about changing the purchasing threshold. So we changed that purchasing threshold um that uh from the 10,000 to the 15,000 um for the city administrative purchases. Um we also um added a little bit of language requiring the report of the dispersements. Um so council member Dragusich had brought up um the statute that required this report. We technically hadn't been using the delegation um much we so so most you know 98% of the the uh purchases were actually coming through council for approval at the time. We uh have talked about revising um our practices a little bit and utilizing that delegation. So I can get more into that in a bit. Um and then we added some language describing the level of budgetary control and clarifying that and then uh encouraging budget amendments. Um so back to the the the uh approval lists. Um, with our new software, it should be really straightforward, um, for us to revise how we report that. So, um, we have an automated workflow that flows through department heads and the city administrator based on the amount. Um, there's an I added an additional field where we can, um, check a box if it needs council approval. So, you'll have two lists. So you will essentially be reporting these um amounts that are approved to the city admin or delegated to the city administrator and then the council list um as well. Um we had had a discussion about some possible increase budgetary controls. So I can um I wrote a pretty lengthy se section about that. We can discuss that further if council would like. Um, I'm hoping that the language that I added to the policy regarding budget amendments is sufficient at this time. Um, and we can go into that again for uh additional or further if we if we need to. Um, and that's pretty much the gist of it. if you have any questions or wanted to chat about anything. >> Questions from council. >> I also made Ryan stick around in case you had questions and you needed answered from the auditor. >> I don't have any questions. Do you have any questions? >> Council member Dragoich, any question? >> Comments, but no questions. >> I actually do have a quick question. >> Okay. Um, so just to confirm from our conversation earlier, it does say so budget amendments should be submitted for review and approval by the city council is appropriate. From our conversation earlier, I I thought you said that that wasn't necessarily the process that has been followed or wasn't included in this. And I might have just missed that. I guess before I discuss it, I just want to make sure I'm >> right >> understanding what we're putting in here for the budget amendment process. I think we're trying to nudge the bud. So, it's been sort of uh on the to-do list, if you will, for um improved uh processes is to add a better process for these budget amendments for staff. Um so, we we haven't done many if maybe a couple um throughout the years or the mind you've only been here a few years. So, um I think the intent of the added language to was to nudge us forward within that >> to require a budget amendment take place if a department would make a purchase that would put them over their department budget. >> I think the language is a little softer than that. It was uh not sure I have it legal thing should shall. >> Oh, so if you took the the very last paragraph in my memo without the underlined portion is essentially the language that's in the policy draft right now. So if you wanted to strengthen that we could add the generally established department level add the however within any department should a line item oh no wait that's discussing the line item >> and yeah >> sorry >> so yeah specifically I'm just asking about the departmental budget total if that goes I'm sorry that's what I was trying to ask earlier I must asked that, right? >> So, my point is is I think the language maybe doesn't say require. It might say is suggested or should be softer. >> Does it say should >> budget amendment should be submitted? I guess I don't know. Council member Holtz, this is the the you know, I know you always bring up the shall versus should type language. >> Well, in this case, it's saying should it come up, it shall be necessary. So in that case it's saying it shall be necessary. >> Are we looking at the same page? Page three. The level of budgetary control is established at the department level. >> Yep. >> Expenditures for department that exceed appropriations are not authorized unless additional revenue sources. Unspent appropriations or fund balances are identified and available. >> And then the new section should be submitted >> for review and approval by the city council is appropriate. >> Okay. That's stronger language than I remember putting in there. So, >> okay. >> Thank you. >> You bet. >> And to clarify, you had mentioned with the new software, you can then program and and determine based upon thresholds the routing of it. >> Yes, I have I would have to I have to tweak it. Right now, we've just um added a manual process where department heads and um our AP clerk will essentially manage that for us. >> Gotcha. Thank you. >> Okay. If there aren't any further questions, I believe I'll entertain a motion. Motion to adopt revisions to the city of Lake Elmo purchasing policy. >> Is there a second? >> Second. >> Have a motion by council member Holtz, a second by council member her. Discussion. Council member Holtz. Uh thank you for getting this all together. Um it was a thorough workshop discussion, but I mean the things are all in there. I appreciate the work that was put in. I also appreciate that uh the discussion did overall lead to things that I I think are a value gain. Um, I I certainly want want anything to be that's have anything that's overly cumbersome, but I also think it's worthwhile to have things that are in there that are a value gain for >> both for staff, for the city, for uh constituents. I especially appreciate that we're making sure that thresholds are being updated to what current costs reflect. Um, so that that to me is a is a very good value. I do enjoy the fact that the software has the ability to do that. That to me is one of the reasons why we went with that software to begin with because if it makes lives easier and the workflow easier for staff, that is why we got it. Um, above and beyond that, uh, I don't have anything else original to add. >> Council member Jich, >> I'm going to go back to my discussion about the change orders. You know, this policy again allows a city administrator to approve a change order, a change order of up to $100,000. My concern at first, I don't like a change over $100,000 being approved administratively, but secondly, it's an individual change order. So, you could have a number of change orders on a project as long as none of them exceed $100,000, they could all be approved by the city administrator. If you look at our project list and talk about you know the project budget is the bid plus a contingency an average contingency is 10%. They r have ranges but on the average 10% is a pretty reasonable number. So, in any in over the course of our 10-year CIP, this would authorize a city administrator to approve change orders, you know, running from about $400,000 a year to $3.5 million in 2026 as long as any one change order does not exceed $100,000. That concerns me, you know, first of all, because our city administrator does not have formal education or experience in construction management or construction finance. She has to rely on someone else to make those or whatever she relies on. But the other thing concerns me is our government is built on a principle of openness and transparency, allowing an appointed city manager to approve individual change orders up to 100,000 and change orders in total at in excess of a million or more without any public discussion or specific council approval puts these expenses in the shadows of government where citizens and elected officials only find out about it after they're made. I cannot in good conscience look our constituents in the eye and tell them this is good government and supports the concept of openness and transparency. I'm sorry. I just have a hard time saying an appointed official could approve up to a million dollars in change orders as long as any one doesn't exceed $100,000 and we have no input into it as elected official. The public has no discussion of it. We find out about it when the next pay request comes in. That just seems wrong to me. Didn't didn't we have discussion about that as far as for the the accumulation? I thought that came up. >> This policy says a change order >> as long as doesn't exceed the bud the budget for the project which is a contract plus a contingency. >> So, and I'm just asking because I don't disagree that an accumulation of a million dollars in change orders is a large concern. I I thought I I can't remember what we came to in the discussion because I I thought this topic came up as far as the sequential change orders, you know. Yeah. Each individually being under 100,000. Am I rec Did we have that? >> Yep. >> What was our Do you remember what we got to on that? >> I thought we were Was there a review of other C's policies on how they handle change orders or how that typically is? I would ask maybe Jack since he's been with the city for a while and deals with change orders has dealt with change orders on projects in the past capital construction projects because I know that our engineer does review balance those out for cost scope time equipment material those get reviewed by our engineer correct >> correct Mr. I'll I'll let Jack speak. >> Mayor, council. Yeah, it's historically we've been I think some of those numbers went up when you um we had those busy seasons with the grant agreements and we were doing we had five $5 million projects at a time, things like that. And there was a lot of change orders and you're trying to keep these projects moving and giving answers to contractors on a quicker basis. So the other the other part of that is when we come to the council to award a contract, we present a total project budget, not just the contractor's costs. And we have a contingency budget in there. And we're and what we're looking for is direction from council when we kick the project off of a a total project budget. And that's what we're managing to. So all those internal and cumulative things also the the other part of that maybe it doesn't say it in the policy or not but it all you have to manage that budget. If you're if you're going over that budget you have to come back. So that that's always been the criteria when we're when we're managing these projects regardless of what your policy is. Um that authorized budget is what we're looking at all along the way. So is that in our policy written that if the budget exceeds the authorized budget at bid that that change order would come back? >> Yes. >> Okay. >> Yes sir. If the budget would be exceeded which includes a contract award plus the contingency >> then it have to come back to the city council. But let's take a $5 million project with a 10% contingency $500,000. This C this policy authorizes $500,000 to be spent without any public discussion or council approval as long as any one change order doesn't exceed $100,000. Do do you contend then that I mean when you say well because we know the administrator doesn't have a background in construction or engineering but I all those are reviewed by the engineer on site prior to that and the authorization comes on um director level um review and concurrence that that's not sufficient. No, that's not sufficient not to spend that kind of money without public discussion or council approval. >> Even if it's under the budgeted amount in the contract. >> Yeah. Even if it's under the budget, we're talking about hundreds of thousands of dollars. >> Is your primary concern and and maybe it could be both. Is the primary concern just the money being spent itself or that the money isn't being spent on the appropriate applications? uh if we're going to spend the on that contingent, we have to spend $500,000. Do you feel like the council needs to be more involved with what exactly are we getting for that additional five? And again, I'm just trying to understand. >> I want to Yeah, I think the council should be involved in in those level of spending discussions and the public needs to know why there should be some openness to the public with this. It's, you know, like I said, we we could end up spending a million dollars in change orders if the project was big enough and there would be no discussion and no the public would have no knowledge of it until we get the bill. >> So, is your ask that >> seems wrong. Is there is you're ask there to be a cap on how much can be approved or just is it the $100,000 per change order or is it like a maximum amount? You don't want to see anything more than 100,000 approved by the city manager in total per project. I would I would be agreeable to a cap total per project and change orders but not at $100,000. >> Right. I would be I would be we have other caps the city administrator can you know authorize spend up to $15,000 on things without coming back to the council. I realize we have to uh have a process for running dayto day but millions of dollars without without any discussion or approval just seems to rub me the wrong way. >> Sure. from an engineering perspective and Jack maybe this is for you and the engineers sorry Jack I should >> where you think you're going >> uh with these change orders is it technic is it usually pretty technical information where um the engineer is going to know better than than I is a a non-engineer council member would know >> a lot of times it's very construction related and very detailoriented and yeah there's a lot of there's a lot of trust that goes on in there um a lot of it's timing The other reason to have an administrator type of authorization is to keep contractors moving and and >> a timing mechanism >> ideally not having projects cost more because of >> Yeah. And sometimes you're getting those approvals and and you can still bring it back to council at a later date, you know, and pass it through the council. But you getting that direction out into the field on a timely basis is pretty important. I would I mean part of my contention is that we have professional engineers that have a code of conduct that they need to perform. So, I'm really not that concerned about uh change orders not getting the full um view and and review from our engineering staff and making educated decisions on that in the field based on if we have contingency in there, if it's covered. Um, a lot of the projects that I've seen actually come in under budget where we we're not even using the contingency that's that's available at times and that leads to good management in the field. The other thing is I want to be careful with how many change orders come to council. Um there are timelines and when we have a construction season that is essentially from April to November, you know, when the daylight's on, you need to be able to keep that machine moving. And if the contractor's on hold on a change order and we don't meet for two weeks, we'd have to have a special meeting just for review of a change order. that has some I have some concerns about how often that happens um and at what level. I've heard that council member Jackson says she has a problem with the $100,000. I haven't heard a what do you think is acceptable? >> Well, I'm open to that. Um 2550 at max total in a project. Council member Holtz. >> I mean so yeah we we did have the conversation and it and it went exactly like this. there's about the thresh is the threshold an amount or is a threshold only when it's over what we budgeted and that as I recall we overall said with not full agreement but we overall said the threshold should be we we care as a council when the change order puts you over the budget because we already allocated that budget. I I don't support going down to that threshold. I fully support the concept that the public needs to know and they do. Not everything goes through a formal council vote as the way of we have stuff in our packets. We have our financials. The things are known. I do not see a value gain for me as a resident or a council member for change orders at a 25 or 40 or $50,000 threshold. when it's within the budget, when it goes through the licensed professionals who have ethical and legal obligations to go through it and they're doing their due diligence through our staff to an administrator that I have full confidence in being an administrator, not an engineer that then I would need have a need to have a special meeting to review it. I to me that is there's no value gain in that process. I care about process efficiency as much as the transparency standpoint. Um I don't I don't disagree again with the concept. It's about where do you draw the line and I think the line is appropriate here. It is we care when is now becoming over budget. I have full confidence in our administrator and our city staff and our engineering staff. Um and may and maybe this is just an issue where we might not agree as to where to draw that line, but that that's where I draw the line >> based on that logic. Once we adopt the budget, why have to come back to us for any approval? >> I mean, it's in the budget. >> We budget a million dollars for a firet truck, fire chief ought to just be able to go and spend it because it's in the budget. >> That logic just falls apart. >> Um, I don't I don't see that it does. >> But usually when we're approving these projects, we have a pretty thorough detail of what that project entails, you know, and same thing like and so I'll just say this. I I agree with your concern and the premise of I'd prefer this to be more transparent of what's going on for those individuals as well. Now, trying to balance that with we need to keep the project moving. I guess where I'm leaning towards this is I don't think we I rather not change the the change order amount. I'd rather um come with maybe a little bit of a stricter pen when we get to what is the contingency amount on these projects of what we're going to allow. So then if it does exceed that amount then it does need to come back. And so that's where we're getting involved as a council versus if it's the middle of the project and a change order needs to occur. I I I understand those concerns if we need to keep the project moving so this doesn't become more expensive. a million-doll project, 10% contingency seems to be pretty typical for what I see on most of our projects. Correct. For a contingency. So, I mean, that puts us at that $100,000 mark on a million-doll project. If we're talking about a a $500,000 project with a 10% contingency, right now we're talking about a $50,000 change order. Anything above that, it would still have to come back to us. >> What about a $50 million project? We have one in our CIP. And so this I so this is where I don't disagree. Then on a project like that instead of saying a 10% contingency I think as a council we have to make that argument of we want more oversight over this project because a 10% on a $50 million project is too too much for us. Um we're going to put a 5% contingency on it. We're going to put a 2% contingency. I'm just saying that's where I prefer to put the checks and balances from my perspective. >> This concept of we we have to get this change appro. whole project is going to come to a stop and cost us more money. How many times has that actually happened on a project? I' I've been in this game, too, and I can never once recall that I had a change order that if we didn't get this approved in the next 24 or 48 hours, we're incur additional costs. When I worked for Spokane, we had a half a billion dollar budget and $300 million construction >> going on. And I never ran into these problems. >> We never had a change order for a million dollars. We never had this type of change orders that that's a hypothetical, >> but it's a $100,000 change order. It could be cumulative. >> I've got a question. Um, in our in our contract language, Jack, I think there is a time frame in which change when the contractor requests a change order. Change order has to be submitted and returned within a certain time frame, does it not? >> Um, they have to Yeah. I mean they have if they identify a change they have 30 days to submit their request >> right >> so there's time frames for that >> you also have work order issues where you do have to direct the contractor on the spot which does cost you money and then the change order comes at a later date sometimes sometimes the things that are coming before council have already happened in the field and >> yes >> you owe the contractor that money >> yes exactly Um, I just don't I don't I don't know that um I guess I I I haven't typically dealt with citysized projects. I've dealt with larger projects in which in which you have to make decisions on change orders in a timely fashion or it could make a larger snafu when you're talking about concrete pores and things like that. you're running into weather delays or things of that nature. So, um I guess again I'll just point the the thing that I I hear that is important is the transparency of making sure that people understand what a change order is for. To my knowledge, when I've seen change orders before, they do come in the consent agenda as I've seen those. >> Correct. >> Yeah. Yeah, unless there's a unique circumstance or a change of scope. If we're if we're proposing to change the scope, we'll probably >> we're changing a certain type of valve that's more expensive, a pressure reducing valve or something like that, or we have to have two of them instead of one that was >> engineered in. Correct. >> Right. >> Okay. Uh change of to change it here a little bit. Um that's right. Uh just to go back to my questions and um about the budget amendments themselves, um you know, when I was talking to staff earlier on this, I I just want to be clear that when I was originally bringing this up about um with the line items specifically, again, I think this is a great compromise. I I agree with some of those points that um trying to manage the line items could be very tricky. I I don't know if I love the idea that that might lead to um overbudgeting or overpredicting on those. I I didn't love hearing that, but I I guess I can understand how that might be an an issue with it. But I do think it's a a fair compromise where if we just look at it from a departmental budget standpoint, if we go over that budget amount, that's where we come back to the budget amendment for this. I think it's important again this kind of goes back to what the discussion we're just having where you know this is something that city council through the budget we do set a lot of our priorities we're setting a lot of direction with that so I do want to really honor that document now that doesn't mean it can't be amended it doesn't mean it has to be perfect it doesn't mean that we're you know or at least from my standpoint that we're trying to um uh really overmanage every single expense, but I do want it to be a tool that encourages our staff, if we're getting close to that point, to think outside the box, think, is this something that can be pushed to a later year? Is there a better, more efficient way we can go about doing this, just like any other business would have to do? Um, versus just saying, hey, we're going to take this now from the general fund. And I know that's what's happened previously from again my discussion with staff is on those department budgets where we've went over budget in the previous years. We've had excess revenues in those years. We've been able to draw from that which is great. Um I don't want to rely on that. Again, I'd rather I'd rather have us be challenged a little bit more to make sure we're making as accurate a predictions as possible. If we're going above those predictions, then giving every effort we can to come up with alternatives, decide if it's really something that's necessary this year or can it be pushed off to next year. And if it absolutely can't, then that should be brought to council and it should be explained. You know, we tried X, Y, and Z. This is why it's essential that we do it this year, not next year. So, I am I'm fine with that. And I just want to be clear that it's not the incentive. I don't trust the staff um with their budgets or if they feel like they need to go over Again, I think it just goes back to we set that direction and I want to make sure that we have some accountability to that direction. >> Mayor, what if we compromise on this change order thing and say change orders can't exceed the maximum of $100,000 or 10% of the project cost without approval of the city council. So, if we had a $3 million project, we could administrative approve change it up to $100,000. If we had a $50,000 project, it would be $5,000. So, it' be 10% not to exceed $100,000. The the lesser up. Well, I I think again our our budget Well, a $50,000 budget with contingency wouldn't have more than $55,000 budget. So, in the case of a $100,000 change order, it would come to council. >> Right. >> So, I think that's that's the way it's laid out the way I read it now. Um, I have a thought on the the department budgets. I'm going to say something that might catch some people off guard, but just hear me out. >> Because I've worked in state >> I've worked in state government. I worked in county government. Um I think sometimes government budgets can be governments can be inherently wasteful when the trust is not given to the people that manage those budgets. In other words, I'll say this. Let's say director X puts in the budget for $5,000 for computer hardware in 2025, right? and she has a council that has been pretty hard on on budgets before. And she's getting towards the end of the year. It's getting to be November. She says, "Well, I haven't really spent that money. I don't really need to, but I know that if I don't spend it and I asked for it next year, I didn't spend it. I'm not going to get it. So, I'm going to spend it just because I need to to show that cost that I met my budget, right? That I used the budget they gave me to spend." And I think oftentimes at least some experience where I saw there was some inherent waste just trying to use the budget so that when they went to ask for the budget the next time somebody didn't say well you never used the budget so we're just going to take that away you don't need it. I think the encouragement is to just like hopefully most of us do with our budgets at home. We say I don't really need to spend that money even though I had it budgeted. I can tuck it away for a rainy day fund when my roof does need help and I can save that. So I guess to that extent you know I think that when we've had existence when assistance when um I think Chief Kalis came to us we were he was asking for going over the budget for capital expenditure presented that as I'm going to buy it now if the money wasn't in our budget this year it'll be next year but if If I buy it next year, it's going to cost us an extra $60,000. >> So, I'd like to encourage that line of thinking with our directors and give them that flexibility to do that within the realms of what we have for a budget and bring those items when, as you said, council member Hearn, hey, we've tried different things to move things around. We're in a bind. we need this now or our water system's going to fall down or our sewer system's going to fall down or, you know, this road's in really bad disrepair. We've had multiple water main failures or things of that nature. Those are the things as a council we should be concerned on. And um there's not to say that the councils we have directors with their expertise in their certain areas because at any given time councils don't necessarily have that experience here. We have you know a couple engineers that like to expound about their experience or whatnot. >> We know we know and >> so so but but the reality is that's not always going to be the case. So, we need to try and have systems in place that let the staff that are hopefully here the long term to make investments in them with the training and things like that so that they can prepare their budgets appropriately and then carry those out throughout the year and put the put the city in a in a better financial spot. >> You know, Mayor, I I agree with you completely and I think the budget really is our best guess. Yes, it's >> not etched in stone. And I think the concern is at what point if we're going to exceed the budget should the council make a budget adjustment. I don't want us to make budget adjustments at every meeting. Me I'd be just fine with, you know, making a budget adjustment at maybe at 6 months and 12 months. >> And we really don't honestly I don't know that we get that a whole lot. for the most part things have been in line and and the staff that we have make a really concerted effort to to use that judiciously. So for my part I I not so concerned of the amount because we do have budget sets for capital projects. We do have engineers that oversee those project managers uh inspectors that do that that are professional at it. I do get your point on the transparency level. So with that, I mean, I'm I personally I'm good with the policy change as you have done on this one, I'm okay with it. Um, but if there was some if if we could get some thoughts on if there is a large change order for something, um, maybe how we let that be known to people that are interested in it. And, you know, I'm going to be really honest with you. There's a very small percentage of the people in this city that really pay attention to what's going on overall with with city projects. they just want them to be done so they can get on them and and start driving again or or using their water again or whatever. But that that would be the one thing I can take out of this discussion that I think maybe could use some highlight. >> Well, I think if we're assessing them for that street project, they're going to be very concerned about the amount of the change orders. >> Right. Again, I have not seen a city project that's come in over. Usually when we approve them at the end there's still it it their their assessed value their assessed cost is reduced from again it can't go up from what the original assessment was it can only go down and I think I could be wrong and I don't want to put a number to it but typically it it feels like it's less than the uh what do you the feasibility study shows >> correct? Yeah. >> And so if it did go over, it would just be 100% the city's responsibility. >> It would be. Yes. >> Or say when I say the city's, it would have to come from the general fund. >> Over fund. Yes. >> Yes. >> Which is the taxpayers's money. >> But again, >> I mean, I' I'd like to throw a number at it, but I don't want to because I'd probably be wrong. Um, but I think it's very s I I I can't in my memory recall a time that happening. It has. >> Well, I mean, in the six years I've been here, I I don't recall it. >> Yeah. In general, we're doing a pretty good job, but there's things that happen. Um, >> there are, >> but yeah, for the and in particular on the assessment projects, there is always a final assessment hearing and a detailed presentation that budget. So, if that project did go over, you're seeing that increased cost to the city line item. >> Yeah. >> In that presentation and and as the mayor said, that the assessment's not going up, the city cost is going up at that point. But it's typically within the budget or the contingency amount. >> Yeah, it it's usually Yeah. The problem is you're comparing it to feasibility before design. So sometimes that gets that it's a little different. You sometimes you already know you're going over by the time you're done designing it that you >> I've spoken enough. >> Correct me if I'm wrong. wasn't a part of the change order discussion also that sometimes a change order is something we have no control over because it's a county project and we just simply have to sign off on it like say we this was part of our discussion is that is true >> like say with Lake Elmo and 36 we we literally have no choice in the matter and this and the change order needs to occur period >> you won't you won't see the change orders for approval you just get invoiced >> the change order share of that cost. >> So in this case this it's not even applicable because it's not a change order. >> All right. >> And again that project is overseen by the project man engineers or inspectors that are out there working at the behest on the county and the county certainly does its best job to u make sure that everything is accounted for appropriately. >> Did you want to say something council? >> Yeah. Switching back again. So just I don't know if I completely followed what you were saying about the department budgets. I thought it was going one direction then I thought it went the other. So I just want to confirm that you are comfortable with how it's written in here as far as if it does go over the budget for the department. That is something that we do want to look at as a council. >> Sure. >> Okay. >> Yeah. I mean >> on bracing >> I'm comfortable with how it's written as well. I think we just I I have trust in our licensed professionals and engineers and our staff. I just I don't want to create more red tape and more steps that because even if it got past Nicole to me, I'm not an engineer. I wouldn't. She would have just as much of an idea of what I'm looking at, I would go to you, Jack, be like, "What am I looking at here? Should we approve this?" And I use your expertise for this. So, I'm okay with how this is written. I I don't have anything else to add from what else has been said between the mayor and everybody else here. >> All right. >> Well, I'll respect the difference of opinion. I just go on and say I think authorizing an appointed official to be able to spend a million dollars of public money without any public discussion, without any council approval is is a dereliction of our duty. And I'll let it die at that. >> I'm going to vote no on this policy. >> I think there are guard rails on on that. um that are in there for for budgetary reasons. Um where is that motion? >> It was already made. >> Yeah, I know. All right. I'm going to call a question on the motion to adopt revisions of the city of Lake Elmo purchasing policy. All those in favor, please signify by saying I. >> I. Those opposed, same sign. >> I >> All right. uh passes 41. Next on our docket is High Point Crossing Final Plat, Mr. First. All right. Uh good evening, mayor, members of the council. Bring up this presentation for you here. So, uh, hopefully I can knock off not only this item, but the next one on your agenda, uh, with this presentation should be pretty short. So, the city's received the final plat application for High Point Crossing. Um, you will remember this project having recently approved the preliminary plat and some variances. So, uh, the the subject property, as you as you well know, uh, located just on Inwood Avenue, just under 80 acres. We have an 18 unit uh rural residential subdivision. This would be served by city water and individual uh septic treatment systems. And so we are looking at a final plat and development agreement this evening. Um here's the project plan uh that came in with the final plat uh and plans generally consistent with the preliminary plat as it has been approved based on the or I should say revised based on the city's conditional approval. Final plat is included in your packet as well. So that's broken out into several insets. I've kind of arranged them on the screen here. Uh generally again this is consistent with the conditionally approved preliminary plat. As a refresher the city also did um approve three different variances for the development. One to front yard setbacks, another to the number of trees uh to be planted per lot and uh that sidewalk requirement as the budding streets do not have a sidewalk. Uh the city staff has reviewed the final plat. This is really that kind of dotting of eyes, crossing of tees, making sure that the plans are meeting those conditions of the city's approval. So the city's fire team uh has reviewed the plans. Valley Branch Water District has issued a permit for the project. Uh the city's landscape architect and city engineer have uh reviewed the plans. There are memos from the city's landscape architect and city engineering team uh that will require certain I would say minor revisions in some cases to the plans uh as as we move forward. Uh in the staff report um we have proposed findings that would approve the final plat because it's consistent with what the city's previously approved. Uh we also have 14 conditions of approval. These are largely uh standard conditions things like conformance with the engineering and landscape architect memos uh making sure that various agreements fees etc are um are either entered into or paid and then we have uh certain I would call them unique conditions here. one requiring wetland buffer signage and another requiring that the city review the power line corridor easement for those terms and conditions that Excel would apply to the city infrastructure in the area. So uh that brings me to the recommendations. Got one uh recommended motion for approval of the resolution uh that would approve the final plat and then another for the development agreement. Uh that would be a resolution to approve that. Um the development agreement, this is in the city standard template is drafted by the city attorney and and development review team and really there have been very minimal changes to that standard template really to fit the context of this particular project. So with all that said, happy to stand for questions. Paul with Rachel Development is here if you have any questions for him as well. So >> any questions from council? Any questions for the developer? Hearing none, I'll entertain a motion. >> Move to adopt resolution 2026-048 approving the final plat for High Point Crossing requested by Rachel Development on the subject property based on the findings of fact and conditions therein. >> Second. >> We have a motion by council member Hearn, a second by council member Kragnes. Uh discussion council member Hearn. Uh just this is uh I think this has been my favorite development uh to provide the the final approval for here. Um but in in all seriousness uh thank you for the resilience working through this. I again this actually has been I think a really good process. It I think it uh was a believe it was the major driving force behind our op discussion. Um I think this is going to be a beautiful development. I think it's going to show other other land owners, other developers that this type of development is possible. Um, and that really excites me for Lake Elmo that that we can do a development like this. Um, and I hope others see it and I hope there's more of them in the future. Um, and you've been very pleasant to work with. I know we've had a lot of things that have had to work through and things that didn't quite go your way and you've been very uh positive throughout it, always working with the city to figure out how to move forward and I'm just really appreciative of that. Any other discussion? If not, I'll call a question. Uh the motion to adopt resolution 2026-048. All those in favor, please signify by saying I. >> I. I. >> Resolution is adopted. >> Move to adopt resolution 2026-049 approving the development agreement for High Point Crossing based on the findings of facts findings of fact and conditions therein. Second. >> All right. Any discussion? Hearing none. I'll call the question. All those in favor to adopt resolution 2026-049, please signify by saying I. >> I. >> I. >> Resolution is adopted. >> Thank you very much, Mr. Robinson. All right. Number five, mayor and council member salaries. >> Yes, good evening, mayor and council. Uh, city code uh states that mayor and council members shall be paid salaries as determined from time to time. The last time that was reviewed was 13 years ago with an effective date of 11 2013. Um at the June 9th uh council workshop, council reviewed information on council salaries from neighboring communities and communities of similar sizes. Uh before you is the ordinance 2026-08 which includes a salary increase effective 112027 and language to include an annual cost of living increase uh starting 112028 uh that reflects the discussion at the 69 workshop. questions for Miss Doyle Hearing. None. I'll entertain a motion. Move to adopt ordinance 2026-08 setting the salaries of the mayor and council. >> Second. We have a motion by council member Holtz, second by council member Hearn. Discussion. Council member Holtz. >> Appreciate the discussion we had on this at the workshop. It is uh long-term wise, short-term wise, it it was something that was necessary. Uh I don't think it's going to change obviously any of our our lifestyles, right? We're not that's not what this is about. This is about making sure that adjustments are made that are reflective of the work that we expect from each one of us, but also the work we expect from those who come after. And that to me to me is going to be the more important thing. There's going to be a time not too shortly when all of us are gone. And I want to make sure that we're setting up a a place where it's it's setting up a place where they are almost earning what they deserve. And this still is not it. And it it never will be, right? elected sir never will. >> Yeah, it's not meant to the we do salaries for our staff. You all are the ones who manage the city. We are here as a residents who uh try to give the guidance and the direction. But you know this yeah I don't have any that's that. >> Council member >> originally I was against this. I was uh more in favor of I I don't think it it's necessary. you know, we're doing this from more of a volunteer standpoint. Uh, this was brought up at the discussion, I think, by mayor, you brought this up, that, you know, one of the things to think about is um if if we don't have a a reasonable salary that's provided for this, that might really be prohibitive to certain individuals. Um, and I did some digging on that and, you know, give yourself a little pat on the back. a lot of the founding fathers kind of that was the reason that they, you know, looked for paying salaries uh for government in the first place. And I I think that's a very valid point. Um again, you know, is this the most ideal paying job if you're looking for an extra job? No. But at the same time, if you have an opinion and you want to be involved in the city, it shouldn't be prohibitive uh of of spending your time because it is it is a lot of hours out of the week, out of the month, out of the years. Um, and so from that standpoint, I did change my mind and I I think this is fair, you know, and honestly, after kind of looking at that from that perspective, it it it is something that I think we need to be more consistently looking at and making sure that we're staying on top of rather than um every 13 years. So, thank you, mayor, for bringing this up. I know it's always a tough one to bring up because you don't want to appear that you're asking for um something that um I I understand the concern of of not wanting to appear like we're asking for more. Um but from that standpoint of >> it makes it more accessible of an option for somebody who maybe isn't in a position otherwise um to do this from a financial standpoint, it makes it more um of a reasonable decision for them. So I I have changed my mind. I I'm in favor of this. >> Okay. >> Yeah. I think one of the things that I like the most out of this as well is the the cost of living adjustment included as well. So, we don't have to wait 13 years to have a quote unquote awkward discussion about how much we should be paid. It'll just annually go up and up and hopefully won't have to be addressed in the future because of that. So, I like it. >> All right. I'll call the question. All those in favor of adopting ordinance 2026-08, please signify by saying I. >> I. >> Ordinance 2026-08 is adopted. Thank you. Um Mr. Griffin, engineering services for Southwater treatment plant. Yeah. Thank you, Mayor, members of the council. Um tonight's item is just for discussion. There's no action items being requested, but been some changes with the engineering um personnel that that's been working for the city. So, I wanted to get before the council and give you an update on on where things are at uh and my recommendations of where I think what's in the best interest of the city. Um so, just to give you some background, um going back, we have as your water modeling um engineer. They did the water tower design. So, they've they've done a lot of the distribution system engineering and they're our go-to for that. Um, and we at were at a time when we weren't doing treatment in town and when uh the PAS issue came up and then we started having to look at water treatment plants um we started to look for the best expert from the best interest of the city for that. Um and we turned to Stantech and so Stantech uh we retained Stantech in 2023 for two projects. um the well number two um water treatment plant which was a fasttrack project get that well up and running um quasi temporary treatment facility and then we were pivoting and starting to look at uh the southwater treatment plant as well. Um we chose Stantech at the time um because of their experience in in uh Cottage Grove. They've been doing all the work in Cottage Grove. Um they were they they've done multiple temporary treatment plants on a fasttrack basis there. Um and they've been doing the permanent water treatment plants there as well. Um the other the other engineering firm that's in the east metro is A2S who's done the word the work for Woodberry. So there was Stantech and A2S. Um so we're not looking at what I would say just a water there's a lot of firms that provide water treatment expertise. What we were looking at at that time is someone who had specific expertise with PAS and experience with PAS and more particularly experience in the east metro working with the 3M settlement funds because there's a lot of nuances about what's grant eligible dealing get and everything you recommend you have to get the buy in from the MPCA and the co-rustees on what you're proposing. So having those interactions and knowing those relationships were were pretty important. So, so we brought Stantech on to do those projects. Um, your well number two project is completed and that contract's been closed out. The South Water Treatment Plant um project, we are just wrapping up preliminary design. So, we did preliminary, we're doing a preliminary design, a footprint of a of what the water treatment plant building would consist of. And we looked at the site, geotechnical engineering, wetland delineation, um, everything it takes. And then we did a test well to verify that the site works. We've just recently received a memo from Stantech saying uh that the site is works for what we're trying to do that basically the go go ahead to begin acquiring the site. Um we're still waiting on the final test results which would be PAS and iron and manganesees are the critical ones. Um they and and we have to get those results and then a memo has to be drawn up of what we actually are recommending for treatment. So the actual treatment plant, while we have a footprint laid out, we're not exactly sure what goes in there yet until we have those that that chemistry. Um, we have to determine whether it's going to have pre-treatment or not, which is a a big debate with uh 3M and big debate with the co-rustees of whether that's grant eligible. it it's a big deal to the city from the standpoint uh that if you can do pre-treatment and get that into your capital costs uh your on&m goes way down and we all know that the on andm costs are likely to be paid by the city the capital costs are not so um you want somebody on your side going to bat for you um in those negotiations of whether pre-treatment is going to really be required required and beneficial and then there's the uh whether we go with ex or go with gak. So there's couple different decisions that need to be made um at that we're have yet to do right now. Um so we've been working on that and I just learned a couple weeks ago that Bolton Mink hired the two project managers or the the the key project manager and then his his right-hand man. Um and so one started June 22nd, one started June 29th. This is all coming very quickly. Um, so now Bolton Mink has those expertise. Um, I have yet to be contacted by Stantech with anybody else that they they have to backfill. I know they don't have they have plenty of water system experts around the world. I don't know that they have anybody else that's worked in the East Metro area and has that experience. Um, and so, you know, it I wanted to get in front of the council because I I didn't like the optics of this, but um, I do think it's in the city's best interest to retain these two individuals, which would be moving the remaining portion of this contract over to uh, Boltman Mink to wrap this up. And the next phase because really the next step is to get those water test results, make those final recommendations of what that treatment plant needs to be and now start a series of negotiations with 3M and MPCA to get um get their buy in approval of what that treatment facility would be and then we move to final design and we start to do the final design of that project. Um so that's that's where we're at in the project. Um and so the the money is grant funded. We have about 60,000 left in the preliminary design budget um from that grant. We won't use all of that by any means to get to design, but the way that works is they'll just keep using that money into into final design, too. So, we'll have the city will have a grant agreement that we'll just continue to use that budget and that budget will get added on to once once the scope of the treatment plant's been done and we have final design services, then we'll uh do an amendment for that grant to increase that budget and then begin the final design. Meanwhile, we got to acquire the site. And so, that's the other the other thing that I I'll be working on myself. So, um, so that's I I wanted to get this in front of the council and and let you know that this is where things are at. That's my recommendations are to not lose time, to not lose anything. Um, is just to move that work over to Bolton and Mink to finish that preliminary design scope and get that buy in from the MPCA and co-rustees. >> So, I'll stop there and >> any questions for Chad? Council member Jay, just >> couple of questions. Do the former Sant employees have any legal restrictions from their employment with Sant that will prevent them from being fully engaged on the project as both the Mink employees? >> Um, as I understand it, they have something. I don't I have not seen it. I don't know. I didn't want to dig too far into that until um till I got in front of you and found and and verified this direction. Um I do know Cottage Grove has already um made the decision to move over to Bolton Mink and they wrote a letter to Stantech and requested that they use those and and Stantech agreed to it. So I know they did that step. Um don't know exactly what that looked like yet. Okay. Do um do we have a current contract with Santech we would have to terminate? >> Um we they've actually kind of wrapped it up and finalized it. I I have emails from their staff um basically indicating as soon as they send over the test results, they'll send the final invoice. So they're we're we're closing out with them. >> So the design the future design is not under contract with them. There's no contract for that. No. >> Okay. Thank you. >> Um I I am still considering using them for drilling of well six. They did the test well and you know that's that's a different >> a different thing. So there's still some work we might use them for. >> Okay. Thank those are the two questions I had. >> Anyone else? Thanks for bringing that to our attention. I get it. Happens in the industry. Thank you. >> Thanks. Storm Water Utility Code Review. Mr. Stanley Thank you, Mr. Mayor and Councel. Uh, with me tonight is, uh, Tim Olsen. He's going to assist in this presentation. Tim, um, is a principal engineer in our water resources group, and he and his staff, uh, did a lot of the technical analysis and, um, review here, too. So, I'm going to kind of kick things off and turn it over to Tim, and then I'm going to jump back in. So, as council recalls, we were uh asked to look into doing an equity review on the stormwater utility ordinance um earlier this year. And so, what I have is a presentation summarizing the memo that we put together here. Um, and some of the items we're going to talk about tonight are a summary of the existing ordinance, um, an assessment of the current methodology that exists in the ordinance, um, options for, uh, changes or options for various utility charges, um, a storm water utility uh, appeal process was also asked to be reviewed. So, um, we've I've done some research on that. Uh also a storm water maintenance agreements in homeowners associations where um there may be um overlapping or or misalignment between um public maintenance and something that uh this um homers association is being act as asked to do was looked at. Um we have some findings and some recommendations uh after discussion with staff and then um we have some questions for council. So, just to kind of kick off a summary of the ordinance here, the there's a Minnesota statute 444.075 provides guidance for u municipalities to develop a storm water utility ordinance. Um, and it, you know, has things in there like that, you know, this the funding collected through this ordinance, uh, is for, you know, is dedicated for maintenance and improvement of the storm water system. Um there's an existing rate methodology that provides the base rate for um residential properties that is determined by cities. Um ours uses uh utility factors across different uh property types and land uses. Um our ordinance also allows for appeal of the fee and there are specified fee reductions uh for residents who install stormwater BMPs currently. Um there's also exemptions within the ordinance that are specified such as um rightofway areas, um public parks, lakes, and railroad property. Pardon me. So, um just to kind of get into the assessment of the current methodology, I'm going to just kind of go through this quick and then I'm going to turn it over to Tim. But the current methodology um is based on assigning uh like a a residential one residential unit is one residential unit regardless of um size or um zoning or land use. Um and that is consistent with uh many other communities. And I'll I'll get into this a little later, but we I did do a lot of research when it came to looking at what other communities are doing in the area, not just east metro, but ones of comparable size. And um we'll talk about that a little bit later. So, the existing structure is, you know, straightforward. It's widely accepted. It's administratively uh or it's it's administratively and legally defensible. Um and it can be considered generally fair. Um, and again, Lake Elmo has a very wide array of residential, single family housing types in several zoning districts. So, it's it can be difficult to group them all into one category. Um, but a lot of the other cities I looked at also fall into that same situation. So, at this point, um, I'm going to turn it over to Tim. Tim's going to kind of go through some additional, um, points on the methodology and talk about some of the technical details of the report. >> Yep. Thanks, Nate, and good evening, Mayor and Council. Um, as Nate had mentioned, you know, your your current ordinance, the way that it's structured, it really is is, you know, pretty widely accepted and defensible. Um, but as we dug deeper into that program, we just uncovered a few, you know, a few items for um for um discussion here for sure. The the current program uses a comparison of of residential values um to other land use types. This is pretty uh standard across the board. We'll talk a little bit more about some other options here coming up, but um the one thing that that we noticed that you know that are residential properties are considered a single unit regardless of their of their lot size and land use classification. Um there are a pretty wide array of not only land uses but residential land use types in the city of Lake Elmo. Um and those land use categories don't always match directly with the ordinance. um that can maybe pose a challenge or you know some some potential lack of of transparency. Um this table just summarizes you know directly from the ordinance how the current utility charge is set up um the varying land uses that are you know that are currently utilized within within the ordinance. Um so we'll we'll keep going here. One um we looked at a couple of things. We looked at this curve number methodology which I'll talk about here now and then and then looking at some direct calculations of imperous values. Um curve numbers are used in storm water modeling um to really represent a land use and a soil type. Uh we we use that single value then to calculate runoff potential. So after the water falls on the land and it runs off um how how much of that water actually runs off. So we use a curve number um as a as a surrogate to to describe those things. Um, a a good example here is that a parking lot might have a curve number of 95, um, which would indicate higher amounts of runoff. A an open meadow might have a curve number of 50, which would indicate more infiltration into the soil and therefore lower runoff value. In looking at the standard imperous values that are defined um nationally and probably internationally for curve numbers um we can look at a ratio of those impervious values to a standard say medium density residential value. Um in this assessment the ratio of the residential impervious to other land uses actually does align quite well with your current utility factor. They're not exact. Um again these land use categories can be widely variable in in how much impervious they have but in this minor assessment of you know some of these standard practice values um at least those utility factors were within range. Okay. We did a a similar took a similar approach with directly calculating imperous values for a variety of land uses. Um this is pretty standard practice too when it comes to other options for how uh storm water utilities might be structured. Um so we use some GIS and did some spot checks. I think it's important here to note that um this wasn't necessarily meant to be a representative sample across the entire community, but rather just to look at a few example land uses, calculate those ratios and and double check against the utility factor. Um the next series of slides just show what that assessment looked like. Um these are commercial industrial properties here. There are actually, I believe, four parcels on this page, but you can kind of see how the impervious density might change on a parcel to parcel basis. Um, even when those land uses are really close to one another. Um, this would be an example of an institutional property. Um, this we see this pretty typical high values of imperous surface uh but also coupled with a pretty high value or a high um density of um of non-imperous surface or permeable surface. Um, we start to look at residential. I think this is where the complexities start to expose themselves a little bit here. Uh this is an example of a lowdensity residential parcel here, 2 and a half acres. Um these lowdensity residential parcels in Lake Elmo have shown to have higher uh values of imperous coverage, but their percent impervious might be low generally based on the size of the lot. Here's another example of that same condition where you have a 1acre lot versus a quarter acre lot. And you can really visually see here how those impervious densities change. And then finally, in a high density residential, you know, attached town home condition like this, you're almost purely impervious. Um, and so how do those factors, you know, change um, you know, as you as you calculate those new utility factor rates. Okay. Um, to summarize that impervious area calculation, we again looked at percent imperous lots. You can kind of see here the land uses that we chose um to to measure and how many of those parcels were measured. Um and again, you know, when we calculate the ratio of uh of impervious percentage per lot, we can get pretty close to the current utility factor table. So that was another validation point here. Um looking at impervious as a surrogate for for what those utility factors might be um seems to align with the current methodology. So, I want to talk a little bit about some options to um to build in some more transparency uh and equity into the current system based on the number of land uses that Lake Elmo has. Um we do believe that there are some opportunities to improve the proportionality within the storm water utility rate structure currently. Um each one of these systems does take some time uh you know and some ongoing maintenance to uh to keep those systems in place. Um and so we'll we'll talk about that here. But one one methodology is called the residential um equivalency factor. It's very similar to what you have now. This would be an expansion of of a similar structure. So we're we're directly measuring impervious surface from a sample set of different land uses. We would want to try and cover as many of the land uses or all of the land uses defined in the comprehensive plan um or within your ordinance itself. Um and then the residential equivalency factor is based on a ratio amongst those land uses. So again very similar to the current system just an expansion into some add some additional uh land uses. The um the a high level estimate to complete a study like this would be in the 25 to $35,000 range and take a few months to complete. Um let's look at those numbers and just in terms of scale in these next couple of options here too. Um this direct imperous area method is one of the more complex options available. This would physically measure imperous surface on every single parcel in town. Uh both residential and non-residential parcels. Um it's not based on any ratio of to those residential parcels, but rather you charge a rate based on the amount of impervious that's on site. Um and again that impervious can be correlated uh almost directly to the amount of runoff or storm water that has to be managed in a system. So this is a more complex approach. Um it would require a lot more maintenance to longterm. Anytime you have a new construction on any parcel, you'd have to measure the impervious on that and track it and store it in your database. So um a little more expensive to to generate a database of this size and a little longer to do so. Okay. Uh finally, the equivalent residential unit is is really one that I've seen probably the most. Um in this case we measure directly measure impervious in all non-residential parcels. You do a collective sample of all residential parcels to create what one eru value would be. So if you measure 100 residential parcels and the average impervious surface is 3,000 square feet that represents one residential equivalent unit and then everything else is based on a factor of that. So all residential parcels have a have an ERU of one and then everything else is a multiple of that based on the amount of impervious. Hopefully that that was clear. But this is sort of a mid-level assessment in terms of time and um and time to produce and and cost to produce. Um it's it's really again one of the more widely used methodology methodologies out there. I think this one does take a little more maintenance as well. So if we summarize all three of those and I apologize for how red that red really is. it's not meant to uh you know elicit danger uh but rather just that it's maybe the more challenging of the options. So think of think of that as kind of a 321 situation but um the direct impervious method more time to create uh more cost to create and and more cost to maintain long term. However, it's the most accurate. It's direct measurement. It's the um the easiest to defend and and likely the most equitable. The ERU methodology kind of runs right through the middle. And then that ref uh which which I think is a good methodology you know is a little less time to um to create that less less time to maintain it but the accuracy starts to go down the defensibility starts to go down a little bit and so so does the equity. >> Okay. All right. I'll turn it back over to Nate. >> Thanks Tim. So, um, once we had, uh, a draft of the reports, we sat down with city staff to talk because, you know, while we're do while we're presenting some findings here, um, there was really that's really what we were presenting, you know, and I wanted we wanted to talk to staff and and drill down and see what, you know, what direction we wanted to take. you know, we just presented some potential um expenditures really for the city and do we do do we feel that that's necessary right now, you know, um where we feel that we have a an existing structure that's that's generally equitable, you know, and generally fair. Um it's been in place for a while. Um it it comes from a straightforward and widely accepted uh place and it's administratively defensible. So, uh, after discussion with staff, we actually have a recommendation, um, among from city staff that, um, the we'd like to maintain the current storm water utility rate methodology as currently established in the ordinance. Pardon me. So, um, I did a fair amount of research during this process on um, appeals process. Um, and again, just to reiterate, um, the statute Minnesota statute 444.075 075 provides guidance to establish uh the stormware ordinance but there's no requirement in the statute that municipalities allow appeals or credits or or anything like that. Um obviously you know we know that we currently allow um appeals and then you know another point to consider is that a credit system well it can you know be it can incentivize a property but we don't have any teeth in the ordinance for it. So right now in the ordinance, you know, we say, you know, there's there's a review by the public works director if somebody puts in a rain barrel or a rain garden and they they can they're can potentially have a reduction in their fee, but we don't have any sort of um annual inspection requirements. It's it's an ongoing credit. So um does that is that maintained long term? Is that does that resident sell their home and somebody comes and fills in their rain garden? You know, we don't know. But that property would be on the books still getting a credit, you know. So widespread rebates actually could become detrimental from not just a a revenue to the fund standpoint but from you know um kind of granted an error standpoint. So you know the question is does the city want to maintain the you know existing appeal process you know and in my research not all municipalities uh they don't all entertain credits or reduction um especially when you know the fee is assigned on a unit basis like we have in Lake Elmo um for a single family home anyways you know so um there are opportunities like I was kind of talking about earlier to improve the program through clear application requirements, eligibility criteria, and guidance for determining fee reduction. Right now, it's it's kind of it's a little squishy, you know, it's it's percentages, and you know, we're not actually asking somebody to show the amount of runoff that they're taking off the city system, you know. Um, and also, you know, it's it's important to consider staff time in this. You know, there's a companion uh memo to this one. that is part of the item that's prepared by director Headler and director uh Dolan kind of detailing you know the existing um credit process what how much uh we're we're currently uh taking off the books and um how many properties are are getting in credit. So, so I'm going to talk now a little bit about stormwater maintenance agreements and homeowners associations which you know it's not necessarily part of the ordinance but it was part of the the review task. So, um I looked at like I say I suppose a dozen cities in the east metro of comparable size and um I didn't see anything regarding addressing you know this issue. you know, I guess I didn't really expect to, but um I kind of verified it. There's no um there's no allowances for fee reductions or view mechanisms that I saw in any of the codes researched. Um and the other thing to note is, you know, Lake Elmo, we are a very unique community. You know, we have a wide variety of residential housing subdivision types and the agreements are very tailored and individualized to the, you know, situations within those. um neighborhoods. So this makes developing like a a credit system um pretty difficult and and you know I think it'd be difficult to administer as well. So, you know, store maintenance agreements are a very effective tool for defining maintenance responsibilities, right? Um, the agreements again are tailored, you know, to the to the developments, you know, but, you know, that kind of like says to me, well, if if there is a problem, you know, we can't just lump them all together. This has to be done on a case- by case review. if if there's a neighborhood that thinks that they're um they have an HOA uh that that has um a stormwater maintenance agreement that they feel is maybe misaligned or improperly assigning public what would normally be public storm water maintenance to the neighborhood. Um, so I guess the best that we could come up with thinking about this is that if those situations exist, we would encourage the homeowners association to approach the city to see if some amendments if there could be an amendment upon review of the agreement, you know, to kind of dig into the spirit of the agreement. What was the intent? You know, is it is it a preservation area? Is it flood storage? Is it, you know, a natural feature, you know, that's just been memorialized through this this mechanism of a stormwater maintenance agreement that could maybe be um another another tool could be used in our in our toolbox. So to talk about, you know, just summarize some of the findings and conclusions of the review, you know, Lake Elmo has a vast array of different land use and property classifications making it difficult to represent all single family properties uh within one category. Currently, all single family residential properties are charged as a single unit, which is a widely accepted approach to assigning storm water utility fees. Um, and I keep coming back to that because that's that's an important part of of the ordinance. Um, if you look at the statute, you know, 444.075, you know, it it says in there, you know, that just equal fees have to be assigned based on a a widely accepted methodology. You know that's part of that that or that statute that our ordinance is based upon. Our ordinance currently uses utility factors to differentiate stormwater utility charges among non-residential land uses. The high level review suggests that the existing UFS are reasonable although a more data-driven methodology could further refine the calculations. So that's what Tim was talking about. Well, you know, while we do have a system that is equitable and generally fair, you know, greater transparency could be um, you know, gained through some sort of a more data-driven approach. The city offers rebates through an appeals process. The system is maintained. Opportunities exist to improve the program through clear application requirements, eligibility criteria, and guidance for determining fee reductions. Um, again, I just kind of talked about this with the appeals process. You know, a lot of the language I saw in other ordinances, they weren't even as specific as what what we have saying, you know, a percentage range of reduction. It's either the you can request the fee to be recalculated or um we'll take it under consideration, you know, and at the discretion of the director, you know. So, to me, that's kind of problematic. and makes it very difficult for someone like Pete to, you know, process an appeal. Uh, storm maintenance agreements are an effective tool for defining long-term maintenance responsibilities between the city and HOAs. Concerns regarding maintenance obligations are best addressed on a case-by case review. Opportunities exist to improve proportionality within storm water utility rate structure, but changes will require completion of a professional study, updates to the city systems and practices and practices now and into the future. So, you know, like this doesn't happen overnight. if council wanted to move forward, you know, with some sort of alternative or a new structure, um, you know, as you probably know, anytime you're making, um, changes to a a fee that, you know, folks got to pay, there's there could be some consternation, you know, so that, you know, there there has to be a lot of, you know, leg work on the front end and justification, I think, to prevent, you know, a lot of folks um being really upset. So again, uh staff recommends maintaining the current storm water utility rate methodology is established by the ordinance. Uh the existing structure is straightforward, widely accepted, administerably defensible and generally equitable. But we are looking for feedback uh from the council tonight regarding the current storm water utility fee appeals process and including whether the process should be maintained, modified or even discontinued. >> Questions for Mr. is it Swanson and or Stanley Gregness? >> Yeah. So when you say it's generally equitable, what instances have you seen where it could be more equitable or you've seen discrepancies, things like that? >> So and I'll let Tim feel free to chime in anytime here, but we have a a version like Tim said of a residential residential equivalency factor system. And when you get, you know, when you get to those um utility factors that spread across other property types, ours are different from Oakdales and they're different from Still Waters and they're different from Cottage Groves by a little bit. You know what I mean? So that's where, you know, I think there could be, you know, but but but not by that much. You know what I mean? So when I say generally equitable, I I think you know what I'm saying is we're we're pretty much doing what others are doing >> and based on our our you know review of you know how the impervious particularly how the impervious surface measurements um played out we're seeing that there's some general alignment with those those numbers that are being used. >> Okay. Thank you >> council member Jitch. I started this discussion and and I have some some thoughts and comments. I spent a good deal of time reviewing your memo and and a bunch of other information that you know that I have or have researched. You know, we show a residential parcel. You show um a a high density of 4,519 square feet and you show the low density 11,400 some square feet. So, but they both pay the same fee. That's not equity in in my mind. And I took a look in the downtown old village part and said,"Well, how do those parcels compare to our residential parcels?" And so, you know, looking at from the county maps and that, and I have a list of them there, but one of them is about 12 almost 13,000 square feet of parcel, 100% impervious, and under our current ordinance, that parcel pays $94.23 in storm water fees for 13,000 impervious square feet. Our homeowner at 4,500 square feet pays $103. That's not equity by any shape or imagination. I just did a calculation. You know, if you had a 100% impervious lot, you'd have to have about 14,000 square feet of area to pay the same as that 4,000 square foot 4,500 foot of residential. In my mind, that's not equitable. I know that, you know, the residential equ um and that's true, but that doesn't mean they're equitable. You know, um I look back, Black & Beach does a utility survey study or they used to every year. Their most recent study showed that about a third of the residential charge systems use either a tier or imperous area. Um so it you know there is nationwide there's a more trend towards using a tiered system or impervious area than there here is you know in in Lake Elmo other consultants that do that you know Rafelis a lot of storm water studies um they're speak at national conferences they say a flat rate is easy to administer while taring introduces more equity by placing properties within a tiered basin impervious area on the property. The um US Environmental Protection Agency in their publication funding storm water projects says the same thing. A tiered flat rate structure approaches approach improves the equitable equitability of bill sent to homeowners. So there's two very large organizations that are putting them out there. With regard to the storm water discounts, I asked this the city staff to tell me how many discounts we have out there. We have 25 of them currently. Nobody knows why they were given or the reason behind them. Um and in fact some of them and our stormwater ordinance is actually inconsistent with state law and some of these variances may have been granted in violation of state law but nobody knows but we need to amend our ordinance to take out that inconsistency but that's just a fact that's there and I validated that inconsistency with the city attorney. The storm water HOA ponds is near and dear to my heart. Okay so the developer comes in we see this all the time. we're putting in a development and the city tells them he must put in a storm water pond. The water that goes that storm water pond is the same water that flows off of the residential units in the rest of the city. So if I live in the in a portion of the city without a storm water pond, my storm water runoff goes into a into the utility system, 100% paid for by the system as a whole. If I live in a HOA, part of the storm water utility off of my lot and all of the runoff from from streets goes into a storm water pond that the city's told the developer he must install and that he must maintain. The developer doesn't care. He builds the cost into the cost of the lot and he never pays the ongoing maintenance costs. my research and some other projects I've worked on, you know, generally would tell me that the cost of the homeowners association for the maintenance of the pond and the replacement, you're required to set up a reserve fund under statute in the HOAs for all the assets you own generally run in the area of $50 a year. So, if I'm in an HOA, I'm paying $103,000 fee to the city and I'm treating the same storm water runoff, you know, that other residences treat at another $50 for me. So, I'm paying $153 a year because the city has forced that on me. And residents in non-HOAs are paying $103 and we call that equity. I'm sorry, that's nut. Yeah, the homeowners could come in and say, "We want to you we wanted you to take this over or we want a discount or something." They haven't done it yet, but I certainly can rally them to do that because it's simply unfair that HOA collects a portion of the same of storm water runoff, same as the non-HOA properties, but gets stuck paying 50 bucks more a year for storm water costs while he while the homeowner pays, you know, portion of the storm water cost for the nonHOA homeowners. That's just not a fair system by any stretch of the imagination. You know, I think that I think that we need to look at our system and address these inequities. I can go along with if the HOAs, you know, believe that's not fair, they can come in. I'll pack the place with HOA representatives who are paying 50 bucks a month. Say, why are we getting stuck, you know, why do we have to pay a different stormwater system than the non-HOA members? Um, that's process. Okay, I I'll go along with that. But the way our system is set up by the examples I cited, there is no equity and we should treat our people fairly. You know, the system you set up in a city needs to be tailored to the city that you're setting it up in. In my hometown of Chis where I spent 50 years, the parcels all pretty much the same. You know, if you you had one flat storm water fee for residences, no one would be, you know, harmed in in a meaningful way because the parcels are all the same. But when we look here, we've got home homes with 13 14,000 square feet of impervious area and homes with 2,000 square feet of imperous area. And we charge them both the same. And we call that equity. I'm sorry that's not equity. That's not treating people fairly in my mind. >> Council member Holtz >> Loi. The quicker part I'm fine with actually the yellow one in terms of I do believe we have an equitable system. Do we have room for increased equity? Sure. There's always room for more data, more clarity, but there's always that line of I do not support literally going and find the impervious of every parcel in the city. That's how that no, there's other far better solutions. I'm fine with the yellow one as a as a process, whether it's now in the next year. I'm fine with that. In terms of the appeal process, which is one of the things you're asking for clarity on, and the credits, I I'm curious. So, I go and appeal my storm water fee. What does that process look like? Do we have a SOP for that? Do we have a formula for how that works out when Pete gets to go out and, you know, inspect my property? Like, what does that process look like? Or do you only do the credits or do you get to do both? >> I just determine what the uh reduction is going to be. So the city we have a outline which will list what we'll be given credit for. Rain barrel, rain garden, retention pond, so on and so forth like that. Then I walk the property. I look at the property to see what they have, what percentage of that water in my estimate will come off into that area that they're going to maintain. Some some people have like the ones I had this spring. I had drain tile pond. The water all went to one one area off their off the roof line and everything. Another one said they had rain barrels. There were no rain barrels on the property whatsoever. But then other people will have rain barrels. So that I make a determination off of that. Can you because I can see asking for a credit technically being an appeal, but I assume there's also appeals where it's not because they did anything. They just disagree with the fee and they're going to say, "I I find this wrong, right?" Because there could be both in that sense, but technically a credit is kind of appealing, right? >> Yeah. I only had one, which they were just looking for reduction in credit. Yes. >> And there was nothing on the property that showed that. >> How would that play? Is there is there a SOP for that or a formula to help you to say when you're inspecting where they don't have a rain barrel, they don't have drain tile to say, well, I I see the square footage of the roof. I see your driveway. Like, how does that work? >> I don't do a calculation for that. >> All right. Gotcha. I that helps. Thank you. Um to the third question and Nate, I don't know if this is you or Jack. I know what council member Dragoich is referring to at Royal. I because we've discussed this before. Can you fill in the rest of us because I don't know if all of us are aware what that specifically is. Are there, and I don't think there are, but are there any other storm water ponds in the city where the HOA has a relationship with it where it's in their development agreement? I mean, I know for Northport and Eastn Village, the storm water ponds are all city-owned and they're citymained. We didn't, our developer did not burden us with an ongoing obligation. I chose to move into neighborhood with that. Are there other instances besides this one situation with Royal? >> Um, so Mayor and Councilman Holtz, I am not aware of any other ones than what's been raised by Councilman Dragoich. Um, you know, I looked at a number of parcels, some of the older subdivisions in town, there's not a lot of great records on. Um, but typically if if a if a pond or a storm water that was receiving or or a pond or a wetland that was receiving storm water existed, it was covered by a drag and utility easement. And there was also like some sort of maintenance declaration that put public works on the hook for it. So, um, conversations with, you know, Pete and Adam, um, you know, more or less Adam because he's been here longer, I've asked questions. What do we do over here? What do we do over here? He said, "Yeah, we're we do the inspections. of the maintenance. So, um I don't want to, you know, I hope it's just an anomaly that, you know, council member Draguchets is talking about as far as storm water ponds, but you know, uh in my brief time here with the with um the city about a year and a half, the developments that I've seen go through are all all the storm water ponds have been public ponds, you know, contained in an outlot, you know. So, um, >> so no one in the city is aware of any other storm water management agreements in any other development. >> Well, no, I'm not saying that. I'm just saying the particular situation that you've described. There are storm water maintenance agreements, you know, for folks whose development has like a a storm water reuse system for irrigation, for example, you know, that's covered in a storm water maintenance agreement. But um as far as what has been described, you know, down in Royal Golf, I and and again, this was a pretty high level review. I worked with staff to see what we had on file. I did my own research, you know, through the GIS system defining ownership um and conversations with others and and I didn't come across anything quite like that. >> Interesting. >> Yeah, because re really they're outs that start as HOA and then they transfer over to the city. uh has been at least my understanding ever since being on planning commission that that one at Royal I believe is an outlier. I can't speak to how or why, but I >> the one in Royal actually isn't a storm water pond because the engineer tells me the former engineer Jack says there's no storm water that goes into that pond. It's a protected wetlands on the federal wetlands inventory and it's um uh also it's a protected wetland under Minnesota and federal law for the downs lake overflow flood or whatever. >> Yeah. My I don't remember remember when this came up a little while ago and I didn't look into it too closely but if I'm if I'm right about the area you're talking about it's a flood plane area. Y >> and it's a it needed to be it was Valley Branch that required it that they were going to fill area they were filling flood plane which would raise the flood elevations elsewhere. So they needed to replace that. So it's not >> in in the engineering world you're differentiating function. You know a storm water pond you're usually thinking some sort of treatment. This is simply a flood plane area. It's not it's not designed to they're not taking credit for it for phosphorus removal and nutrient removal and things like that >> and having to maintain it from that aspect. And so we do have from that standpoint, you do have storm water features throughout the city. You have wetlands, you have wetland buffers, you have um shorelines, you have lakes, you have uh ponds, you have that are natural ponds. um you have other features that are are located that are in other neighborhoods that are being maintained by HOAs those areas. It's usually a vegetation maintenance. It's not a maintaining a treatment functionality. >> Yeah. Yeah, because the agreement with with the HOA says storm water management agreement and there's you know it has it it requires things that are would be a violation of the wetlands act >> and I believe that's why um engineer Stanley was suggesting maybe changing the agreement. I think that might be more out of simplicity from staff of not having >> 25 you know a wetland agreement, a flood plane agreement, you know, um it was just you have to have an easement over it, >> right? >> And that was >> I I was just under impression there were more than we we were not the only HOA with a pond that re had a pond storm water maintenance agreement. >> Yeah, there are ponds associated with Fields of St. Croy Sanctuary. um whether or not they have a agreement or not. They're more of a flood plane issue. I know that the one in Sanctuary um if it rises a certain level, there's a 100redyear I think we had somebody try to come in. They wanted a pool. >> Yeah. >> And it was within the 100year flood zone. So, I can only make an assumption that that pond is somehow reflected to uh the previous instance of a flood water. >> Yeah. Gel Gel Pond. Yeah. >> Backing up to the store, you know, in my mind, a tiered residential system would bring wouldn't be that complicated. We could break it. You put on up to a half acre, greater than a half acre to like an acre and a half or and greater an acre and a half like a three tier. They be simple, operate, maintain, and would introduce more equity into the system. >> Is that similar to the yellow tiered MR system? So that would be no that would I'll let Tim chime in here. He's more of an experiment. >> No. Yeah, I think I think so. But you can you can structure, you know, even a even a tiered residential system in any one of those three methodologies. So I'm I'm with you. I think that's that's what's unique about the land use in Lake Elmo is is that the the the um I guess the characteristics of residential properties are are pretty widely variable. So, a three- tiered system, low, medium, high even to just match the the land uses identified in the comp plan. Maybe there's a rural rural rural residential condition, too. Um, you know, you can still do a either a representative, you know, number of of residential parcels in each one of those tiers to define the ERU or the ref. Um, I I think there's there's plenty of ways to, you know, to define that. And I think you know your your your um situation on on the commercial the downtown's a little bit different than the other areas but you know maybe maybe we have a different system for those concentrated commercials. Those are the two changes in my mind that would make the system reasonably equitable and not allow people to point fingers. Guess one thing I'd like to avoid is is um something that has to get updated with every right every house. I mean I don't think we want to get into that sort of I mean that's >> I agree >> throwing dollars and picking up pennies right >> that's why based on acreage makes it straightforward and simple. >> Yes, Miss Handler. Um, do we not also then lose equity if we're doing it solely on acreage given the different areas of town because the structures required in the rural area are much less. The structures required in the urban areas are more. And therefore, wouldn't the rural people sort of use less? >> They probably do use less. So if we're if we're talking about straight up acorage and increasing equity, it feels like we're going in the wrong direction with that particular analysis. I have a second >> that's going through my head with this as well. My other >> the real people paying out. >> My other concern is that when we're talking about storm water and we're putting all of the weight on runoff and not contemplating what a base fee might be within the system. So in sewer system and water systems, we have a base fee and then a utilization charge. And so the base fee is ideally intended to look at like some you know there's there's general overhead there's the system itself and so when we're talking about rainwater the same thing exists we have a system that we have to maintain and then theoretically each property has a varying amount of usage or rainwater that comes with it. the fee is only $100 $100 right now for for a residential property. And and so back to the mayor's point or whoever said we're we're going to make these changes and if we contemplate a base fee and then look at runoff from there, I I think we're not going to be seeing that much of a change that warrants the amount of staff time, the costs for analysis changing. um yet again another system within the city, our our billing systems, financial systems, our collection systems, all of that. So those are my concerns. >> So I'm not opposed to a base fee. I understand the concept of a base fee, but you can have a base fee and then build on top of it. But right now, if I have a residential home in a on 10 acres, what's my storm water fee? >> $103. >> Oh, so we're already in that situation. But I mean I think because of the the the way our community said we could find a system that would be equitable and we could have a base fee because I agree a base fee should be a portion of it because we have these fixed costs as terms of it takes some time and effort and cost to set up a fair system. I think saying well we're not going to have an equitable system because we don't want to spend the money to do it is a really inappropriate position to take in my mind. We should make sure our system that we build people on is fair and treats them equitably so people pay their fair share. And if it cost us some money to set that up, it cost us some money to set that up. >> So who's not paying their fair share currently between the 10acre rural lot and the quarter acrele quarter acre moderate density? In your opinion, who's not paying their fair share right now? the the homes that have 12,000 square feet of impervious area pay the same fee as a home with 4,000 square feet of impervious area. So that higher impervious area parcel is not paying its fair share as much surface that the water is going into. >> Not necessarily, >> but it's not necessarily running off. So my concern is we go and do this whole process and then there's just going to be another variable that somebody can come back and say well now this is un inequitable because of I have 10 acres all this water is going into this imperous surface I'm not using the city's resources for my water runoff. >> The impervious surface is the where it doesn't go into >> so I'm sorry pvious. So if they have if they have 10 acres and the 90% of it is pvious versus a quarter acre lot where 10% of it or 60% of it is pvious. I think the the argument could be made the opposite way. I I I would love to make this more equitable as well. I just I don't think that there is a realistic way of doing it. I don't think the cost I to your point and I guess maybe we just disagree on this. I don't think the cost of what it would take to make this truly equitable is feasible at this point. Now maybe five years from now with AI and imaging, you know, this is something that can be done for significantly cheaper, but asking staff to go through and look at image by image or property by property and figure this out, I I don't know if that's going to create equity. I think it's going to create other issues as well. Well, I mean again to my fact my point of if there's a property with 90% pvious surface on 10 acres how much of that water is actually running off and having to be managed by our water treatment systems. >> The system doesn't doesn't include pvious. It's the impervious area. >> So then okay so it's 10% impervious. So just flip my numbers. So if that if the majority of the water is not even going as runoff >> where does the impervious surface water go to? impervious to the run. So if like in a neighborhood like yours, it would go towards the curbs and it would go into the storm water. >> Exactly. And that's why we base it on the impervious area >> and you're saying and again I guess where I'm confused is you're saying the 10acre lot is the person that's not paying their fair share right now. >> No, I'm not saying the 10acre lot isn't. I didn't say that. I said if I have a 12 an area a house and I have um maybe an acre and a half. Okay. or twoacre lot and I have 12,000 square feet of imperous area. That water runs off in as storm water. If I'm in the old village and I have a small house on a small lot, I have 2,000 square feet of imperous area. My runoff goes to into the street as well, but I generate one6 as much runoff, but I pay the same fee. Well, >> but how much of the runoff from that 10acre lot is going >> into their >> into the into their yard >> out of their yard and into the into the streets? >> I guess that's my point is I don't know if it's >> but our whole system right now is based on impervious area. Our whole system is based on that's way every system is based on imperous area. There there isn't a system I imagine there's something somewhere but 99 and 4,400% aren't based on impervious area. That's the way they're calculated. I guess my thought on this is the only way to make it than completely equitable would be you'd have to go out and evaluate every single property. I think anything short of that we're just creating an inequity probably in a different direction >> but less of an inequity to ask someone with 4,000 impervious square feet to pay the same as someone with 12,000 impervious square feet is three times as much runoff and they're paying the same fee. Well, now now to be fair, you're that assumption is that all of the 12,000 ft runs off to the street. It >> doesn't. >> What's the same assumption with the 4,000, >> right? So, it's not really a you I don't know that you can really make a direct correlation just using the impervious square feet. You take into account the surrounding area, do you not? >> But but we do it now. Our system does it this way now. And I'm just saying by moving to a we can reduce the inequity. >> So, >> Mr. Olsen, um, do you you work with other communities with this issue? And I mean, I'm sure you weighed in on the discussion with Nate regarding what Lake Elmo is using. And certainly we've heard that the process now and I I hear council member Jagus is just argument. It sounds like there could be a lot more detail in there. I guess I'm just I'm questioning the and I hear you if it it makes it more equal and then so the question is to what end? >> The ultimate end is you measure the impervious on every single parcel in town. That's the >> But is that reasonable? >> I think the the conversation that you're having we're here smiling because it's it's fascinating to hear you talk about um that that exception where every utility assumes that every square foot of impervious makes it into your MS4, right? >> The municipal separate storm sewer system, right? That's what you're funding, right? >> Is your MS4. >> It could be um it could be based on pipe size. It could be based on pond size, uh, treatment requirements. Um, other goals for, uh, for things like waste load allocations and impaired water bodies, all of that and every every calculation we do at the engineering level goes back to an impervious area number. And at the state level and even at the the Valley Branch wershed district level and other watershed district level, you're assuming that the water hits that impervious surface and instantaneously makes it to the system that you have to treat. And that's not how it works, right? It's not. And so that conversation about Yeah, you might have 12,000 square feet of impervious, but does all of it make it into the MS4? The answer is likely no. That it doesn't all make it there. But the structure of the utility is based on the fact that your impervious surface generates a volume of runoff that has to be managed somewhere. And the assumption is that it has to be managed in the MS4 and the MS4 has to pay for ongoing maintenance. >> I mean, so it's just a false assumption then, correct? I mean, >> it's not always false. So, like a house that's on Lake Elmo where it slopes down to the lake, the majority of that water is going into Lake Elmo, not to the street. >> I would I would say, if I may, that that might be part of the appeals process. If I'm a homeowner and I have a a beautiful home on Lake Elmo and I've got a buffer distance of a thousand feet between my house and the water and I can calculate that my runoff doesn't make it there. And we can prove that through engineering review and defensibility with modeling and so on, there might be a basis for an appeal. But foundationally, the inherent assumption to make sure that you're managing that lake the way that it's that the state wants you to is that all of the pollution that hits that impervious area, all of the volume that comes off of that impervious area does make it to the lake. >> Is the there's a situation you could have a 4,000 square foot of impervious on 10 acres that has the same impact as that same amount on a half acre based upon where it's located, based upon the slope, based upon that parcel. It could have the exact same impact or it could even have less and to I fully agree. I don't know what that's where to a similar conversation earlier where is that line of reasonleness that that's the ultimate discussion here. I fully agree if there was a way for AI to do this have at it. I don't think it's not there yet. We know that um >> and otherwise just the number of hours to do this is going to be >> correct and it still could create false positives. >> That's my biggest >> it's it's valid but it can create false positives. That's my concern. >> Is it better than what we have now? >> I don't I don't think it I don't think it would be because I think it would just create inequities in a different >> in a different area. I mean, we still have this problem that >> this reminds me of discussion with um with um wreck fees >> buildings. Who somebody >> I'm old enough for that, but I don't know if others were. >> The wreck fees for for a building, let's say when they they're getting hooked up to the sewer, right? The Met Council says, "I'm going to charge you the amount for your building at maximum capacity." and building a guy says the number of people that come into my establishment use the bathroom. One out of every 100 people that come into my establish and my establishment by the way does not have 100% capacity during all my hours. But yet I think the me council had something said we have to go by something that's consistent across the seven mount county metro area. And so like that as a city we have to come up with something that's consistent across 24 square miles for all the residents. So I again I get to the question of uh I understand that it can be more detailed but when does that become burdensome and over maybe um too too much detail that you know it's it there there there's some gray in there, right? I don't think everything's just black and white. >> I agree. But that's why you try and strike a reasonable balance. If you say divide it into lot size half acre or less two acre half acre to 2 acre more than two acres you find something that makes sense based on the type of development you have in your community but not overly complicated. >> So you're talking a like a tiered system. >> A tiered system. Yeah. >> Where we have just a one flat >> one size fits all. Okay. >> The 4,000 foot impervious space is the same as a 12,000 square foot, >> but the 12,000 square guy might have everything drained to a pond in his >> and the 4,000 might too. >> Might >> I mean that's where you know you you look at >> I just I don't know that >> it doesn't I I don't understand that we gain much by that exercise. >> A third of the systems nationwide do a tiered or astral impervious area. >> A third. >> A third do okay. When I was in Spokane, I I I set up the storm water utility. In 1998, I went to my GIS department and asked them if they could tell me the amount of impervious area on every one of 78,000 parcels. And they said, "Yes, we can, Nick. We're 2026. This isn't rocket science. I mean, I'm not asking to go to impervious area on the per parcel basis, the most equitable system, widely accepted as the most equitable. that would be very ownorous unless we had a very detailed GIS system here that we could use and I don't think we should go there. I just think we have to be more equitable than what we are. And I've given a number of examples. The downtown I got a downtown 100% impervious lot 12,000 square feet and they pay less than a 4,000 foot residential. And we look at residential customer. I say we're treating you fairly. I I got a a mansion in in Whistling Valley, 12,000 square feet of impervious area. And I a picture I sent to staff earlier was a small house in the old village. It was a 900 foot house with a gravel driveway, probably 1500 square feet of impervious area. It pays the same fee. >> The gravel's considered impervious, by the way. >> Yes, it is. For storm water, it is. And so, I'm just saying, can we find some reasonable system that introduces a little more equity into the calculation so that we spread these costs fairly to everybody and not have such a big discrepancy? >> So, you're you're saying something like the ERU in a tiered system. >> I think he's talking about the lower one where >> correct me if I'm wrong. You're talking about ref where you start to split up residential categories. >> I think that's the way you would have to do it. Erus would would assign a single value of of you know impervious coverage to all residential parcels. >> Tearing the res because you got to divide that number by something else for non-residential parcels. So it really would be an expanded ref system. Woof. Now, I I can defend. Again, I have never once had a person complain about their fee, but that doesn't mean obviously there's people that have appealed. I am fully in support of whatever staff and legal and others feel for the appeal process to make sure it's bolted shut. Procedures are solid. There's it's always objective, clear for transparent no matter who is here. I fully that should always be the case, right? That's great. So, I don't know what additional feedback you would you would want for that. I do not support ending it, even though it's not required. I would not want to take away that right when we've established it. Um, I have no problem if we want to go down that route of maybe it's three tiers for residential based upon acreage. As long as there's a sample size to try to determine what's the average impervious within zero, >> that's the way they do it. >> Zero to zero to quarter acre, five to acre and a half. But the hard part is then you could argue there should be seven categories of acreage. So that's where it's just like, well crap, we just did this. Technically, it's still not perfect. Is it better than before? Probably. As long as there's a sample size to determine the average impervious. You could also do it based upon our zoning in our comp plan, too, because those zones per our ordinance all have a specific amount of impervious that's allowed per those zones. So you could also do it by zone as well. I think you continue down that ref path that would be an appropriate way to do it. Match the match the level of detail in the comp. >> Yes. >> And I also think agree with finance director that we should have a base fee to cover those fixed costs of the utility and then the you know whatever the other the volume base fee should be you know on top of that but it would be one fee we would charge. So if I'm if I'm a residential customer on a halfacre lot, it'd be everyone would pay $60 base fee and then you would pay an amount above for the runoff or impervious area. But we keep the residential I would not no more than three tiers. Three tiers would be sufficient I think to provide more more reasonable equity than what we currently have without creating an overly complicated system. And is that tears within the ref column here that we have for the rows >> essentially? Yeah, that's >> and just from the color coding, isn't that the least equitable out of the three >> from >> So that's where I'm read the reason the reason the reason for that discrepancy in equity is that you're still applying an average to that specific land use. you know, you're you're you're calculating a a sample size based on that type on that zone and that land use. So, anybody a commercial property, you know, or a mixeduse property with one acre of impervious and one with 50 acres of impervious, they pay the same amount. So, there there's still a gap in equity from a land use to land use perspective. what you might find and that that red could maybe turn to orange or yellow uh the more you dig into this that is is if we you look at the comp plan and there's 50 different land use categories in the comp plan one of those land use categories only has four parcels in it >> you might get to a pretty exact value of the average or we can take a look at that a little bit deeper but that's where that gap in equity comes into play with the ref system is that you're still it's still an average it's still not a direct calculation >> y yeah I'm not saying it's inequitable there all three of them are equitable. It's just the least of the three is what I was getting at. >> Red's a tough color. >> Director, >> could we talk a little bit about what we're talking about in terms of dollars when we're talking about a lack of equity? Because the fee is only $103. And so if I have a big house and 10 acres and my fee is $103 and I have somebody else that's a a smaller house and it's $103 and now we change that and somebody's paying 98 and somebody's paying 107. Are we are are we really going to be changing the speed that much that it's more I mean because so far that's a cup of coffee >> for if I may res from a residential perspective, maybe not. That's and that's comparing resident to resident. The the way that I've heard this equity conversation happen in front of councils in the past is is how much residents pay versus how much a commercial property might pay and is there a gap in equity between the the amount of impervious and runoff and pollution that might be generated from those larger sites. So, the ERU methodology helps to normalize that where It's based on a factor or a multiple of what an average residential parcel might be. So the the equity isn't I don't think necessarily in a gap between resident to resident, but how a another land use might be paying their utility. That's how I've that's how I've seen it expressed. We've had some additional conversations signed about equity and you know transparency you know maybe is a better word but that's what that's what I've heard from councils and I' and I've seen and we've tried to overcome is saying that if a a commercial site that's 100 acres that's 95% impervious are they paying enough are they subsidizing enough of the repair or is it really all on the residents to to subsidize those repairs? I'm with Council Member Holtz on not getting rid of the the credit issue. I know that it does take time, but it's been enacted and some people have it and maybe it could be some actions could be done to uh uh tighten that up or how that's reviewed in the future. But and do I have an answer for that? No. Um I understand that things in in my opinion I I do agree that things could be uh more calculated more uh change. I tend to think that the uh effort and it's hard to say because I just when we're talking about equity, I hear uh Director Hadler and I hear Council Member Dragassich and in my mind I I struggle with spending $30,000 for something that's going to change something fairly potent I and I just don't know maybe it does make a change big enough maybe it doesn't I don't know if I want to spend the money just to find that out if we have a system in place that's you say 30% or a third of the communities use that does that mean the 67% of the communities are doing what we're doing now and that's that's good enough because then you know I don't want to kind of feel like I'm chasing my tail Again, each community, you have to look at the community and say, what's the diversity of properties in the community that would drive you to make those changes? If the community is really homogeneous, like my hometown of Chisum, it'd be no sense in doing it. The properties are all so similar. But where we have the vast diversity that we have here in Lake Elmo from houses on 10 acres to houses on 210 of an acre, you know, there's just great diversity and trying to find equity in that great diversity. 100% equity, I agree, is not possible. But you can make it as equitable as possible. Um, and while still keeping it fairly simple and improve the equity that we currently have. Again, telling that homeowner with 4,000 ft, he pays the same amount as a homeowner at 12,000 square ft. And that's fair. You know, look at I'm telling I'll tell you what he'll say. >> Well, I I hear you on that point. But there are all kinds of factors that go into the water runoff. >> But the use is impervious. >> But can you agree that I mean even even if you make that change the guy the guy with 10,000 impervious acres may not contribute any water runoff to the street than than the 2,000 square feet. I mean is that is that I'm asking the question. Do you think that that could be the case >> and an individual individual basis? Probably. That's I would agree it's possible but on an aggregate basis I think generally if we use impervious area we're going to create a system that's much more equitable than what we have now. >> Okay. >> I don't know agree I'm I'm open I'm open to looking at a different method of calculating it but I think the method of using impervious surface percentage is fundamentally flawed and I'm just not open to to looking at a method using that. I and again, I know that's what we're using now. I don't want to change from one fundamentally flawed method to another fundamentally flawed method and spend $60,000 in the in the process of doing that. So, if we're going to spend I'd rather spend $100,000 and figure out a different way to do this. Um because I think there's too many too many variables that are just excluded when we're just using impervious surface. So, I'm not saying our our current system is equitable. And I'd love to find a more equitable way to do it, but going from one flawed method to another is just it's I I don't want to spend $60,000 to do that. >> All right. Well, thank you, Tim. >> Actually, it's it's been a really good discussion, but I just feel like we're doing this. Um, in my experience, this takes two or three conversations, not one. So, I'd be happy to come back if we want to revisit this. >> Sure. This is really helpful though. >> Yeah. Thank you. >> So, um, just for some clarification to help, you know, if this is going to continue or if this is going to, you know, do something else. Staff's recommendation right now is to maintain the current system, the current calculation system. What I'm hearing um about the um appeals process is that I'm I think I'm hearing that we want to maintain the pro we want to maintain some sort of appeal, but you're wondering if if we can collectively as a staff come up with some tweaks to >> Yeah. If you can make it better, >> tighten it up. Perfect. >> Well, because we don't know what we don't we don't do the appeals. Like we don't know what the proceed That's why I was asking. But just know that we had five of them come through back in May >> just to make we we presume they're working anyways. Just make sure they're amazing and beautiful. >> There's four of them approved. >> That's right. >> All right. So, as far as Go ahead. >> The other thing I would ask is is for the city attorney to look at our ordinance and we have some problems with the language of the ordinance now and that we should make a correction and make the ordinance consistent with state statute. Can you give uh maybe a little more definition to that, council member? >> Well, um there's a section in the ordinance that provides for uh reduced storm water fee and that section is inconsistent with state law. >> Okay. >> And so we could probably just remove it or I'm not an attorney, but modify it in some way um to bring it into consistency. I believe council member Dragoich is referring to what's in the ordinance. It's a hardship credit is what it's called. >> Now, that wasn't something that we talked about tonight, but it does exist. And I believe that's what he's talking about. >> Okay. >> Sure. >> Yeah, fair enough. >> Illegal. >> Make sure we're on the up and up. I think we need to talk about it future and if we're going to do something, it needs to be addressed for the budget um for next year. >> I'm completely agreeable with that, mayor. I wasn't hoping that I knew we'd probably have to get down and find the funds for it in the budget and >> and probably, you know, another conversation. We >> appreciate everyone's time and thought and and I may have done one or two of these as a consultant in the past, so I probably have some bias. No. All right. >> Right. Well, thank you very much. So, right now, we're gonna we're just gonna we're gonna >> stand pat and we're gonna I'll circle with >> staff and we'll look at uh the appeals process and we'll come back to you at some point. >> Y >> All right. Thank you. >> I read your memo. I said, "Wait till I get these guys up at the stand." You guys did a wonderful job. Thank you. >> All right. Council reports. Council member Dragassuchich. Well, I have about a 4 hour report, so you guys don't want to take I don't have any reports. >> You wake me up when you're done. >> No report. >> Council member Holtz. >> Uh this Saturday, the Young Eagles at the airport will be doing free flights starting at a certain time. Uh it's either 8 or 9:00 a.m., but uh you can find information on the Young Eagles through the EAA. It's for kids up through the age of 17. They do it uh usually the first Saturday of the summer. Obviously, they didn't last Saturday, but that'll be this week. Uh, also, there will soon be purchases coming up for the holiday banner for downtown and the Lake Elmo banner for downtown when it's not the holiday season and it's not the July 4th season. And just kudos and thank you to staff, to Kathy, and to Connect Lake Elmo for their feedback in that process. They will look amazing. Excuse me. >> Um, had a chance to be involved in the kids parade, the Fourth of July parade this uh this past weekend. Big thanks to Pete and his team for even with all the construction that was going on. Very well coordinated. Huge thanks to Connect Lake Elmo for getting the volunteers out there and having a an assortment of activities for kids to uh participate in. I think they did a rough number calculate calculated people watching the parade was somewhere around 21 2200 with a total of roughly a little over 3,000 people. >> They said 3,300. Let's ballpark it cuz people move around and maybe they get clicked once, maybe they get clicked twice, maybe they never get clicked. So, somewhere in that ballpark. Um, we had a great day. It was warm. Uh, I think the kids had a great time. There was even some uh, you know, the parents or grandparents get to pull their grandkids in the the cart and have a good time. and plenty of candies were thrown around. And uh so thank you to the Rotary for providing ice cream for everybody that attended. I know that's a big undertaking. And uh Dairy Queen did I did donate I think 250 dilly bars from what I understand. So, um, a lot of community involvement and and thank you for the, uh, sheriff's department for participating and also our fire department for providing, uh, their trucks and assistance out there. So, um I think it was I think it's very unique that you just have something that doesn't have politicians and commercial businesses and things of that nature where the kids just uh smile and I mean some of them don't even know why they're there, but you know, it was good to have in the 250th uh anniversary of our country and it was um it was fun to fun to see. So, >> I'll just add I have gotten a lot of feedback from the community already about the uh the banners. So, again, thanks for getting that set up. And then uh just second everything with the uh the parade. It was great. And thanks to the mayor for being the dunk tank guy, >> which it was kind of warm. I'm going to tell you, the first time's a shocking thing, but after that, you want the kids to hit that they you want them to hit that target and cool cool back off a little bit. >> Council member Kragnness. Uh >> no report. staff reports. >> Sure. So, we have our Walker art system that was installed on the second floor of the city center for a public art display. Um, we do have that open to the community. We received a couple submissions. Also, our employee engagement committee is exploring uh an employee art project maybe. So, um Lake Elmo related. So, we'll see what happens with that. Um in at the end of June, we had seven staff members and two council members attend the League of Minnesota Cities conference in Rochester where we were able to participate in um some engaging professional sessions as well as networking and then team building with our team. And so just want to thank you for um allowing us to participate in that as well. And then I do think that if we could just do a quick check-in, the city celebration now in September is only a couple months away. Um, and so just kind of to recap so I feel a little bit better about um each individual council member's role or what they're working on. And I'll just start by reminding you that we have the band and the stage secured. And then we city staff uh has created a map that we're going to distribute to the mayor to just see um what your thoughts are. But then for the rest of things uh bouncy house um tents, tables, chairs um and vendors, just kind of take an opportunity to see where we're all at. >> Yeah. Could you send me a map on where you want the food trucks because I've been getting asked that. >> Yeah. Yep. We will. So we're just working on finalizing it. Okay, great. >> I will secure the tents this week. tables, chairs. >> I will test out the food vendors that Nick gets. >> Any taker on bouncy house? >> I Okay, I can do that again. I just didn't from our discussion previously. I didn't know if that was something we wanted to do again, but I can take that on. >> I I think it was well received. >> Okay. Yeah, >> I heard some feedback. A bigger one. >> A bigger one. Yeah. More. >> Okay, that's good to know. How many do you think? >> Just something bigger. >> Just bigger. 30 ft tall. >> Go big or go home. >> Bigger slide. That thing was pretty big. I don't >> I don't know. >> I'm not climbing up there. I'm scared of heights as is. I wouldn't go any higher than that. >> Okay. Anything else for that? >> That's it. M. Doyle. >> No report. >> Okay. Mr. First Norport. >> No report. >> You sure? >> Positive. >> All right. Sadler. >> Um just to let you know, our um online payment system will be um offline on Thursday um this Thursday as they implement my final module of my absolute favorite software and the whole planet. Thank you again for that. >> Mr. Stanley, >> no report. >> Mr. Stlen, >> no report. >> Missala, >> no report. All right, with that folks, future agenda items can be found on the uh meeting packet online. With that, we'll adjourn at 9:52. Have a good evening.