All right. So, I'm going to open tonight's uh city council workshop, Wednesday, November 12th. And um I think our first agenda item is Highway 36 Lake Elmo Avenue project update with Mr. Andrew Geon, Washington County Highway Department. Well, >> good evening, mayor, uh, council members. My name is Andrew Gieson. I'm a project manager for Washington County. And as you indicated, tonight, uh, we will be presenting an update on the Highway 36 and Lake Avenue intersection improvement project. Um, I did want to note that we do have a couple members from the project team from MIDOT here, Dimmitri and Matt. Um they're here um or they're also here tonight to help answer any questions. Um and we also have our county commissioner Bethany Cox and a couple other members um from the county. So during our presentation, we will provide an overview of the project background and need, review the project schedule, provide a quick overview of the engagement that occurred on the project, review the preferred alternative and project funding, and recap previous council updates. Um the main discussion item for today's workshop will be to discuss Keats Avenue. So we will spend some time talking about that area. Uh we will also begin discussions related to allowable working hours and close with next steps. So as most folks know this project is located at the intersection of Lake Elmo Avenue in trunk highway 36 located along the border of the city of Lake Elmo in the city of Grant. This intersection has an extensive crash history with about one crash seen here every two weeks. And since the opening of the new bridge that connects Minnesota to Wisconsin back in 2017, traffic volumes on 36 have continued to grow, leading to increased congestion and delays seen at this intersection. So touching briefly on the project schedule, this project kicked off in 2021. The project team has completed the intersection study and environmental document phase. Final engineering and property acquisition is well underway and construction of this project will last two full construction [clears throat] seasons kicking off in 2026 and is anticipated to wrap up in the fall of 2027. So moving on to the engagement portion of our effort uh which included five formal engagement events. The first event was an elected official goal setting meeting that brought together policy makers from the city of Lake Elmel, city of Grant, Washington County, and Mindot. This meeting gave us a great understanding of our partner agency's goals and needs at we as we kicked off the project. Next, a formal purpose and need statement was drafted and shared with the public. Once we formally identified and gained community support of the project's purpose and need, we then started the alternative evaluation process. This was a detailed three-step multi-year process that considered all possible alternatives that could meet the project purpose and need. And through this three-step process, we held a series of public open houses to gather feedback on alternatives being considered. And based off a combination of input from the public, feedback from our project partners in our technical analysis, a preferred alternative was determined. So, this preferred alternative includes Highway 36 being raised over Lake Elmo Avenue and grade separated with bridge structures. This project includes a new furnish road to be constructed on the south side of 36. And there will be direct access to Highway 36 from the furnish road with ramps that include full uh full length deceleration and acceleration lanes. Now, I did want to take the opportunity to provide an update on the proposed full acquisition of River Valley Church, uh, which this preferred design would require. Through state statutes, this church has certain protections that we need to meet. In working with our project partners in the county board, we have made a full final offer to the church, which the church has received positively. We are working through the final terms of a purchase agreement. So this sale is not finalized but we are optimistic that a purchase agreement will be executed soon. So moving on to uh project funding. Overall the project is funded from a combination of state bonds federal grants and funding from mindot Washington County and the city of Lake Elmo. The city of Lake Elmo through your CIP has programmed $5 million for this project. The total costs of the project are estimated at roughly $50 million, which includes all in cost for design, rightway acquisition, and construction. The majority of Lake EML's cost share of this project is from the new frontage road on the south side of 36. And the total cost of Lake Elm's work is estimated to be roughly $12 million. After we apply the three million of mind funding to cover the additional costs associated with the south furnish road extension and closure of Keats and after we apply outside funding, we estimate the city's remaining cost share will be reduced from 12 million to somewhere between four and four and a quarter million below the budgeted city amounts, which should be good news for the city. You will notice that based on the budgeted funding and estimated project costs, we are showing an existing funding gap of roughly four million and Washington County and Mindot are working hard to close that funding gap. So recapping past formal city council updates, when this project kicked off in 2021, we did have held that elected official goal setting meeting. Once the preferred design was identified, we presented an update to city council in May of 2024 and requested and received a resolution of support of the preferred design. And at that time, the design did not include the south furnish road extension in Keats or to Keats or the closure of that intersection. So over the winter of 2024 2025, the design was updated to include that extension of the South Furnish Road to Keats in the closure of the intersection. And then in February of this year, the project team updated city council with this design update and shared that this would be a city-owned roadway and Mindot would cover the additional cost associated with this work. So jumping into access at Keats Avenue uh and starting with background for this area. So Midnot did have a separate project programmed at Keats and through our project uh engagement effort, we did hear from many folks uh from the community about safety concerns at this intersection. This led to the opportunity to streamline improvements to both interceptions with one project. So the project team explored what it would mean to combine projects. We reviewed this from an environmental, financial, property impacts, traffic analysis, and constructibility front. And through our review, we did recommend that the two projects be combined to help streamline costs um and construction impacts to the traveling public. And again, uh this was shared with the council in February of this year once all the details were worked out. Therefore, the project team's recommendation is to continue to move forward with this design that includes the furnish road extension and closure of Keats Avenue. If the city council is concerned with the proposed work at Keats, an alternative option to consider is to revert back to the 2024 layout, which includes a culdeac furnish load and would leave Keats Avenue as is. the additional MDOT funding to cover the cost of this furnish road extension would go away and we we would anticipate that the city's cost share of the project would stay similar. So, we do want to open this up for discussion uh with the council as we are seeking feedback and direction from the council on this aspect of the project uh before we move on to the next topic. So, with that, I will open it up for discussion. Yeah, Council Member Kraus. >> So, for the existing [clears throat] funding gap of $4 million, um is there a contingency plan if this does not get funded? >> Um, yep, mayor, council member. Um, yeah, we are working to close that that funding gap. Um, we have a few alternatives that we're considering. Um, so we anticipate that we will close that, but as it stands right now, we still have that existing funding gap. >> Okay. And how I mean I don't know how much you can say on this, but how close are we to closing with the church on that sale? >> Yeah. Um so as I indicated um we have made our full final offer. The church um did receive that positively. Um and we're just working for the final details of the uh purchase agreement. So the purchase agreement is not executed, but we're optimistic and likely within the next month we will have that executed purchase agreement. >> Got it. Okay. >> Church. Well, thank you for putting this together. I appreciate it. >> Uh, Mr. Geon, would you mind going back to your slide uh given the Keats intersection, please? All right. Can you explain to us what the separate project for Keats was? >> Yeah. Um I know well Midnot may be will be able to come up here and uh answer that better but I know at one point there was a separate pro projectmed at Keats. I think the scope was fairly vague. Um I don't think there was an identified scope but you know options that probably were going to be considered was um do you close at center median? Do you look at closing the intersection fully and extending the South Furniture Road or do you look at adding acceleration and deeleration lanes at that intersection? So, >> does Mr. Tomasovich want to talk to us specifically? >> Sure. >> Sure. Can just provide a quick update your answer, Mayor. Thank you, council members. Uh the separate project that was planned uh several years out was to look at an acceleration lane at Keats. Were you closing the cross in the middle at that time? >> At that time we were not. >> You okay? What did you have budgeted for that acceleration lane? >> Uh, mayor, I would have to go back and review our budget value for the specifically for the acceleration lane. Um, I'd have to check that value, but it's definitely under a million dollars. >> Yeah. I think at the time when you guys were doing resurfacing, I had mentioned to your previous area manager that could probably be included for about $500,000 at the time added to that and I was told that was a no-go. So, could you pull that sheet back up again? I don't know who's in charge of the screen right now. Mayor, >> which slide would you >> Never mind. I'll pull it up on my own. So, you presented this to us a couple years ago and then you came back in February and presented us with a full closure at Keats, at which time [snorts] um at least myself and I think a couple other council members received feedback from people that live well south of this uh intersection uh fully not understanding ing the and just to give you Mr. Tamasovich. A little background on my history of this project. At the at the time that this was brought up, uh, one of the preferred alternatives was a was a tight diamond, at which case that was city of Lake Elmo's preferred alternative because certainly I don't believe that button hooks are a long-term solution to highway speed interaction conflict points at uh, when your speeds are hitting 70 m hour even with acceleration deceleration lanes. However, that was not acceptable to the city of Grant. And so, uh, the city of Lake Elmo, understanding that the seriousness of this intersection was needed to be addressed, we acquiesced that and then we said okay to that uh button hook option. At which point we had no idea that the state wanted to close down Keats, which makes sense. It's not a very good intersection, but nobody, at least in my knowledge, maybe conferred with the city engineer about the closure of Keats and the uh access from eastbound what? Yeah. Eastbound 36 to southbound Keats being closed. So, when this was shown, I got several comments from residents. some here um expressing that disappointment that that can't be. Do you have any crash data that shows any uh instances from that southbound turn lane off of 36 to Keats having any crashes? >> Mayor, not specific to the right turn lane. We we have some general crash data, Keats, um but not specific to just the right turn lane. I would imagine that those are more related to backups from Lake Elmo Avenue in the evening when traffic backs up or more specifically probably in the winter when people aren't expecting it and hit the brakes. Um I I haven't found any crash incidents from that right turn lane from 36 east to southbound Keats. Secondly, when the button hooks were involved, I did ask Mr. Geon to do a traffic analysis at the Button Hooks to see what the what the traffic would act like. And I was told that 20 years out, what what'd you end up at? Traffic level C. We're talking A through F level C, >> maybe a little worse on the north side if I remember correctly. >> Yep, I believe that's correct. >> So, what I asked was that we maintain a movement from 36 eastbound to southbound Keats. And I just made that aware to the other council members that haven't been in those meetings to avoid open meeting law violations. so that they're aware of what the request was. Request is still there. I don't understand why you would eliminate the frontage road while maintaining that um because it it doesn't show any crash data. It's not any harm to that intersection other than past experiences that the state has had and where they have eliminated that right turn lane. different instances, not here specifically where I have a lot of residents that use Keats southbound off of 36 to access their residence. And it goes much further all the way down to 47th where they access in neighborhoods even in the Lake Jane area. Um, furthermore, that access would allow the continued it would decrease the number of conflicts that would happen at the button hook for people that would have to double back to Keats to go southbound. So, you're eliminating potential conflicts at an intersection that will increase with traffic as time goes on, whether it's people going eastbound or westbound or coming off 36 from the front road 236. I think that's pretty clear. Another alternative, you've had two alternatives. I'd like to offer a third alternative. Third alternative being that you keep the right turn lane to southbound keys, but have a performance measure in there. If it doesn't cause any problems, fine, you've solved it. You moved away. If it does cause problems and it is an issue, then we close it and move down to the button hook. If we're at a disagreement where we think one is better than the other, I think that if we have some performance measures in there to justify either it being left alone or being taken away seems like a logical answer to me and I would ask that Mindot would contemplate that or at least review that and see if that's something that's acceptable to them. Um, mayor, I should address a couple of your questions. Um, one was specific to at the time of the payment preservation project. Um, I don't believe we had any funds programmed uh for Keats at that time, which is why it wasn't installed with the payment preservation. However, the concern that was raised at that time triggered the look at Keats and the opportunity for an improvement. And that's one of the reasons the acceleration funding was programmed as an independent project. Um big picture, there's a couple of things considerations. Um first of all, Highway 36 is a high-speed um over 50,000 ADT traffic roadway. Um Keats Avenue is about 1,200 AD those those daily trips. Um and really it's it's more important to take a step back as to um through that extensive public outreach with the Lake Elmo project. We've heard a lot about additional concerns at Keats and at the time as I mentioned there's only just the acceleration lane um planned. So we really looked ahead and what is that long-term solution? Um Keats at some point it's already experiencing the volume on 136 that's giving it issues and functioning today and the opportunity of the Lake Elmo project provided the opportunity for something more long-term um improvement. Um Washington County is uh so looking ahead uh Mindot looked under its cost participation policy for the opportunity to pay and provide funding for the extension. Um, under the cost participation policy, improvement is funded under this cost participation policy where Mindot will participate in local frontage cost, including rightaway costs when access to the trunk highway is being eliminated. The improvements provide safety and operational improvement benefit to the trunk highway. So that's directly out of the cost participation policy, meaning we can participate in a local frontage road construction and pay for those improvements with the elimination of of an access point. Um, also the new interchange construction um at Lake Elmo will provide that good reasonable access. The reason there's uh direct access from Keats to 36 today is there's no alternate reasonable access with the opportunity of 36 on Lake Elmo, there will be that reasonable and convenient access. Um, again, it's consistent with the highway design of this type of facility and speed. uh meaning when other interchange projects are construction, we look at opportunities for direct access uh closure along Highway 36. Um really this is one of the first opportunities to be proactive. um not wait until there's a major issue at Keats, but really look at that proactive opportunity to provide uh function to Keats Avenue with that final construction under the cost participation policy in good faith with no cost to the city and with Washington County leading all the design work and all the rightway acquisition and all the wetland mitigation associated with that roadway. And then with regards to Keats today um versus the frontage road while it may appear that um the existing right turn Keats function similarly to Lake Elmo um there's certainly several key differences perception of low crash frequency today doesn't reflect the future condition risk. Uh something important to note is that the traffic signal of Lake Elmo will be removed. Highway 36 traffic will be flowing and there will be no more stopping compared to the condition today. Um vehicles traveling will be at higher speeds uh compared to the intersection today and traffic volumes will only continue to increase. Drivers who avoid the stretch of 36 today during the light will come to this area and forecasted growth and increase in development pressure will continue. Um Keats Avenue lacks the geometry, storage space and design controls necessary for a safe and consistent operation uh particularly as speeds and volumes increase. no design that there's no design that will prevent direct access to Highway 36. Um and then the short intersection spacing um between the two interchanges is um out it's less than one mile outside of the typical um interchange spacing intersection spacing we would have. And I would also anticipate unintended consequences of highway traffic on residential roadways. Um there's also some snow and maintenance considerations with a one-way um right turn lane. So the new interchange ramps and the frontage road, the geometry there at Lake Elmo is designed uh that's being shown today. It has the geometry, the signage and the merge lengths are all designed to accommodate modern traffic and volume and the speeds. Um they safely operate uh operates uh excuse me they safely um separates turning traffic from high-speed um roadway and it really just puts the local trips on the local front ofage road and improves that emergency services access along the front of road from Lake Elmo to two to two keys compared to today's condition. Um really as I mentioned the closure aligns with Mandot's cost participation policy. The funding for the frontage road, as I just read, is is contingent upon the Keats closure, meaning Mind can participate in the local roadway frontage road construction with that trunk highway benefit of the closure, which is directly out of the cost participation policy. Um, it align with excess management guidelines, particular where Keats is today, and the new major investment at Lake Elmo and really safety first goal on the project. Um, this is a chance to proactively prevent crashes rather than waiting for them to happen. Um, certainly strongly believe that the design reflects a responsible and forward-looking commitment to safety and system performance. Um, bottom line, Minda can participate in the local south front construction under the cost participation policy because of the full closure access at Keats. This is opportunity to deliver a safer and more efficient corridor with a full state funding and no city cost participation. One of the biggest things we've heard also from the city is the amount of funds towards the project and this is where MDOT has come to the table and found an opportunity to fully fund that uh that frontage road including that rightway acquisition and final design. Um the the closure of Keats, it's not just a design decision. It's a strategic investment in safety, access, and the future of Lake Elmo. >> That's all well and good. I know that was a scripted comment. Um, this is a mindot corridor. Washington County is doing the design. They're doing the heavy lifting. I see that time and time again where MDOT's taking a backseat and letting the locals pick up the lift. You saying, "Well, MDOT's going to pay for the frontage road." Well, they should pay. It's their corridor. You want to talk about wetland mitigation, they should pay. It's their corridor. We all pay state taxes. We pay gas tax. We pay wheelage tax. All those things go into it. So all these things you're saying we're benefiting from should be done on Mandot's corridor. Access is reasonable, consistent, and proactive. Mr. Tomasovich, last time we met, you did say reasonable several times and I mentioned you that to my constituents that live in that area is probably not reasonable. And you mentioned there's many people that go beyond their exit to double back. Well, many of those people haven't had to do that for teen years. This is not a high turnover area of apartments. This is long-term living residences that use that road consistently. You mentioned that there's no design to prevent access to Highway 36. I'd like to think in my 30 plus years of experience, I've seen engineers do some amazing things with design to make sure that things don't happen a certain way. And I'd for one second believe that it can't be designed so you don't have access on the 36. So, the alternative is to culdeac the frontage road, at which case you're going to leave the access on to 36 from Keats. You can't put a uh acceleration lane on at that point because you run into the deceleration lane for the for the um button hook. So then you're just going to leave something that that does absolutely won't work and is not as safe when the option of and I have heard nothing yet. You say um improves emergency access taking away an access to southbound directly. I don't know how that improves emergency access off of 36 to southbound Keats for those residents. That doesn't make sense to me. Um, so I brought up a third option. What I heard you just say without taking that back and maybe conversing with other people in mind is that that's not an option. I would suggest maybe that you do take that back to MDOT. Have a conversation before you say that's not an option. >> Thanks, Mayor. I appreciate the feedback and I will do that. >> Thank you. That's all I have to say. Council member Jraich, >> I have a question looking. So this intersection is constructed in the city of Lake Elmo in the city of Grant and the the state highway. So why does Grant have no financial commitment to the project, but Lake Elmo's 5 million in? >> Yeah, mayor, council member. Um so the the majority of city of Lake Elmo's cost is for the new frontage road on the south side of 36. Um, since city of Grant does not own or maintain the frontage road on the north side today, um, and they don't have any costs. There's no like added elements along County Highway 17 that would trigger cost participation from our county uh, cost policy. They don't have costs in the project. Bottom line is they don't have infrastructure that they own and maintain this area. Is it a matter of population or the size of is MDOT owns that frontage road still on the north side of 36? >> That comes into play. Yeah. Um just with Grant being a smaller um city with with less resources. But um the majority of it is just the new frontage road being added. That's where city costs are are um coming in for the city of Lake Elmo. >> So what is the total cost of the frontage road? >> Uh 12 million. >> Just the frontage road is 12 million. Yeah. Yeah. For that one one and a half mile frontage road. >> Okay. >> I don't have anything further. I mean, absent of having additional feedback from MIDOT based upon the mayor's insights, which I fully concur with, I don't know if I have additional feedback for you, Andrew, because I unless we know what the final stance is. I fully agree it there's no discernable data to show there's a safety issue going eastbound to south. I see no reason for any tax dollars from a state, county, or city level to be used to eliminate something when the number one goal of this project is safety. I it I cannot explain to a a constituent, to a resident that that is rational. So, I I don't have additional feedback at this point other than number one, thank you for the work that you are doing. Thank you for trying to find a way to ensure that safety is occurring at this intersection and trying to make sure all property owners involved understand that situation so we can get this moving forward. Um, but I I I think it is more than reasonable to have in place some type of a an objective measurement tool to say if like safety crashes occur down the road then fine, close it. But these are our residents who are being injured right now. So I I I find it hard to be told we need to close this for a safety reason when the safety issue is the one that we are fixing down the road. Uh this is not where the safety issue is. We just had a person lose their leg a couple weeks ago. So that's our first priority. Do >> you have some other things you want to talk about? Allowable working or hours, things of that nature. >> Yeah. So, I'll move on. Um, so allowable working hours. Um, so moving on to the allowable working hours. So, city code allows construction Monday through Friday, 7:00 to 7:00 and then Saturdays from 8:00 a.m. to 6:00 p.m. So, uh really to help ensure that this project gets completed by 2027 and does not continue into 2028. We are requesting an extension in allowable working hours for this project. Um, so I do want to note that if council ultimately approves extending working or extending allowable working hours, it does not mean crews will be in this area area say every Sunday working on the project. Um, by extending hours, it simply creates flexibility uh for extended hours or weekends as needed. Really just to help ensure um the project is completed on time. So you can see the hours on the screen there that we're requesting. Um we're looking for feedback on that. It's not an allin. So if there's things that the council would want to see tweaked on that um we're open to that. Um but we are we are requesting I guess that those um extended allowable working hours. Has your consultant done an analysis with a like a P6 schedule to say that those hours are needed to make sure and probably use some rain delays and things of that nature weather related that Sundays are needed. That's kind of a atypical request and I Saturdays are pretty normal. Sundays are a little atypical in my experience. >> Yeah, mayor. Uh we have done that analysis and really the first year of construction is a little tighter um just with the project schedule that we have when we're when we are going to acquire all the rightway and when we can get started that first year construction season is is tight and really how the staging is on this project is we need to get um that eastbound bridge completed in the first year of construction. Um, and so again, having maybe even some Sundays available during the year, during that first year would help. Um, so that's kind of the baseline of how we came up with this request. >> Has the county considered putting something in the proposal that allows X number of Sundays throughout the construction season as opposed to every Sunday in the construction season? We would be open to that >> because I think that would seem like it's um gets a little more complicated, but where you can even have the contractor rent Sundays for schedule expediency >> or have 10 total Sundays or eight Sundays >> during a given period. You know, I know MDOT's used lane rentals and things of that nature um to help benefit traffic as it moves through areas of high congestion, which I'm assuming this will be during construction. >> Yeah, we're definitely open to that. Um some creativity on that contract language. So looking at next steps um so to close we wanted to highlight some of our next steps. So um I guess between the county and mind we'll follow up on the Keats Avenue discussion for that request um for the eastbound right turn lane keeping that open. Um so we'll come back to the the city with that. Um you know we will be seeking um approval of a cost and maintenance agreement um and come back for action on allowable working hours. So, we'll work with um city staff on that. We likely would come back in the December or January time frame on both of the both for the agreements and for the allowable working hours. And then we plan to advertise the construction bid package this spring. Um and then we will seek city concurrence of the bids received prior to construction contract award. So, be another uh kind of touch point with the city. Um once we receive bids on the project, uh we do plan on hosting a public open house in the spring um to share um kind of the construction staging and contacts and kind of what to expect during construction. And then again, construction is anticipated to begin next year. >> So, uh there's just some general. Do you have a better idea of when the county is planning on putting this out for bid? >> Yeah. Yes. instead of just next over winter, spring. >> So, our current schedule, we're looking at advertising this project in March, opening bids in April, and then awarding the contract in May. >> That's all I had. I'm happy to stand for any final questions. >> How will that work for the hours? because this isn't a development agreement. It's not a CUP. >> It's just the generally the contract administ I'm assuming well actually I know but Washington County will be uh consulting out the contract administration right and so then it is up to the contract administrator to make sure that the contractors within the hours of operation for the contract. But as in for us, it's a city code and we're we're not being asked to alter our city code for one project. we would have to make an exception which I would think in this area given the limited amount of residential and I mean the only thing that's really going to be what I would consider a noise nuisance is when they're I'm assuming this is a pile driven supported bridge. So this is a sheep pile bridge. We do a piling retaining wall on the north side of the project. >> So that's that's the primary driver of noise, >> right? >> And I don't have an issue with the hour changes. It's just the curiosity of we're not it's always been through a DA before without changing the city ordinance. >> We can be creative and work a way around it if we need to. Right. So >> yeah, >> this isn't this isn't the first time this has been >> I believe in the city code the city administrator has the authority to >> right >> kind of I guess grant variances to the um allowable working hours. >> You're correct there. It's just um my ability to grant it can exceed three days. So we'd have to >> So that's alter this be a long term. Um, guess my only request would be to see if we could somehow maybe limit the Sunday amount just because that is a I don't know. It's a um we do have a fairly sizable church still in that location. Um, I want to be cognizant of of them and their their services on Sundays. Um, but I understand that, you know, sometimes if it rains on Thursday and Friday, it's nice to catch up Saturday and Sunday if you need to. Um, but other than that, like the Yeah, a lot of hours. contractor works that many hours, he's going to burn his guys out. So, but um I don't I don't see a major issue from my point of view, but welcome to hear from others. >> Yeah, [clears throat] I don't see an issue with it either. Um I think limiting the amount of Sundays as well would be would be beneficial. I don't know that exact number, but I think limiting those Sundays as much as possible would be my opinion. Anybody have anything else? Thank you much, Mr. Geon, and thank you much, Mr. Masovich, for coming tonight and talking through those issues. Very much appreciated all [clears throat] your efforts and work thus far. >> Thank you. >> Thank you. Next on the agenda is short-term rental discussion. Mr. Stoa. All right. Good evening. We're here today to talk about short-term rentals in the workshop. Um just a quick overview. We introduced short-term rentals um through a text amendment um earlier through housekeeping the planning commission in January. So from time to time, let me take a step back. Currently, we have bed and breakfastes that are um allowed, but they have to be owner occupied. So we don't get too many requests, but we do get requests from time to time to people that want to essentially apply for a bed and breakfast, but they don't want to live there, right? So that was brought up in January. And then there were some concerns by planning commission. So they asked to remove it and they put it on their work plan. So we're looking at this at the end of the year to get direction from the council before we start if we were to start um on a text amendment to amend it. Just uh so you know the current status is that the city does allow um bed breakfast in the city. There are, I believe, six active permits at this time, licenses. They have to be owner occupied. They're single family homes. The lodging rooms cannot exceed five. Um, there are certain parking requirements and insurance and they're valid for two years. So, the issue before the council is, uh, should the zoning code be updated to allow short-term rentals? If you do believe so, then where should they be located in terms of zoning districts, lot sizes? Should there be a conditional use permit? Should there be a limit? Kind of very high level conversation. And we brought up also should they be regulated as an R1 or R3 occupancy? I'll talk about this more just so you understand. This state fire code allows a short-term rental to operate in a home and not be altered. But um the building code, the state building code basically pushes all the short-term rentals into hotel classifications that require R1 occupancy. So, we're going to have to continue to do that research to see exactly what other cities are doing specifically, but we know Still Water, for example, requires someone to convert from an R3 to an R1, but we'll talk about that. And that's >> they have to sprinkler and ADA it. >> It's ADA. It's not a sprinkler. So, it's it's a high cost for someone who wants to speculate maybe and say, you know, this could be a good idea. I want to try a short-term rental. The cost is pretty much prohibited to do that. um is what we're looking at. >> Okay. >> So, the Washington County requirements uh meet the definition of a hotel motel per state statute. So, hotel motel means a building structure enclosure or any part thereof used as maintained as advertised as or held all to be placed where sleeping accommodations are furnished to the public and furnish furnishing accommodations for periods less than a week. Um, so essentially a short-term rental, if you follow that statute, is a hotel, even if it's a house. So Washington County licenses um short-term rentals. They have food, pools, lodging. Um they also license bed and breakfast. Um they perform inspections too on the license. Fire classification. This is just talking about this is a quote from the website for the FA uh state fire marshall. So, like I stated before, if you follow state fire code, it could be treated a house could be treated under the short-term rental as a typical house. And where it changes is less than six guest rooms. So, if it goes above six guest rooms, then it would be considered, I believe they're called lodging houses. And then that gets pushed to an R1. So, just real quick, our R our three is your typical home um with and then it's certain other uses like um group homes and and those sorts of things usually based on beds when it's an R3 and like we just talked about it gets moved to an R1 and then that's when you have to add all the ADA compliance which becomes very costly. So, what are neighboring cities doing? So, Stillwater is uh changed. They adopted their short-term rentals in 2017 and they uh they also provide licenses for hotels, Airbnb uh I'm sorry, BNBs and other facilities. They require city council approval. They're good for three year three years. Um they're both inspected by the fire and building inspector. So, the short-term rentals are only permitted in specific districts, uh, like the central business district, but there you can also have they [clears throat] have 50 licenses outside in residential districts. Their website states that there's only two currently available, but if you want to have a short-term rental and not owner occupied, you do in Still Water have to convert it from an R3 to an R1. So, some of the performance standards, and this is important to note because when you start to add performance standards, typically that would mean the city would have to license because you would want the ability to pull back the license if they're in violation. So, we'll talk about approaches in the future in a little bit later, but um they can't host private events with more than three unregistered guests. There's maintenance standards as parking requirements. And then the nuisance issue is the three strikes you're out policy. licenses may be suspended or revoked. Um, and you can read here, it's the third substantiated and re relevant complaint or violation with a 12-month period. This is where it gets pretty tricky. I've done this in the past where where I used to work um outside of New Orleans, we had a lot of short-term rentals. So, just trying to make sure that those are substantiated complaints and not someone just calling on their neighbor. So typically for us it was making sure there was a noise complaint and the officer went out and verified that to it was too loud. Like we don't work on the night on nights and weekends so it would be very difficult for our code enforcement to even track this. So occupancy regulations are three categories. They must be owner occupied and then also if it goes over the five guest rooms it has to be of five or fewer and has to be in a single family home. for Stillwater R1 category, no permanent resident or greater than five. And then you know condos and mixeduse buildings. This is more popular now I think in the last few years that you see short-term rentals in apartment buildings where some of the units are vacant and used for short-term rentals. Oak Park Heights also allows them. They call them transient lodging and but they're a conditional use permit. um they're not necessarily required to be owner occupied, but it must occur in a single family home. And then they al also have to comply with fire and building code. And then they also have uh excessive noise complaints and nuisances written into the code. Woodbury, on the other hand, is a city that has a bed and breakfast ordinance but not a short-term rental. And Hugo is the same way. They're similar to us. We have bed and breakfast ordinance, but not a short-term rental ordinance. So, this is a high level discussion um just in terms of if this is something that the city would like to move forward with, if the city just wants to keep it the same and if it is something you want to move forward with, just a little bit of information around where you think they should be located, should they be limited? So, currently short-term rentals are prohibited. >> They're prohibited. Yep. >> But we have but we have some in the city. >> I looked on Airbnb and there's 11. >> Yeah. >> Yeah. >> Now, some of them may also have the bed and breakfast license. It's unclear. >> Do we have a list of those that have the licenses for bed and breakfast? >> We do. We do. And are they owner occupied? >> I don't know. We don't check that. We don't. So, we license it. They sign that it will be owner occupied and then um they also were supposed to get a license from the county. So, >> okay. Have we ever cross reference those to make sure they have a license from the county? >> We haven't done that yet either. This is all new. This was something that [snorts] we pretty much discovered and started looking at like how should we change the process. What do you guys think? >> I'm I do not support that any change. I think we should avoid short-term rentals as much as we can. We're a quiet residential community. That's part of our character. And I don't see what we get from benefit from short-term rentals as a community. Personally, >> I'd be curious to know as a data point for the ones that do exist what the level of compliance is. >> We don't have any compliance to check against. >> Well, but again, have they gotten what they need from the county? Are they indeed owner occupied? So, we left that from the property tax records if they're claiming homestead. There are certain things that we can do with with public records. I think that would help me to know number one with what we currently have are the rules being obeyed and then based upon that then a different decision. I I personally don't have an an issue itself with short-term rentals within a itself. But obviously in terms of scale and scope that's another thing. I don't want it everywhere. I would want it a specific limit, specific zoning. Um, and there are 20 different ways to do it. Uh, because the what it does have the ability to do is it actually can cause home prices to go up because you are restricting the supply of available housing stock. That that's one thing that's been shown is it can cause that and our housing prices are high to begin with. On the flip side, I think there's a reasonable argument that a property owner should be able to in a reasonable manner rent out their own home. But again, what what's that reasonable manner? I don't have an issue with that bed and breakfast concept. I don't have an issue with it not being owner occupied. I don't if I want to do that to my home, I feel like I should have that right within a certain boundary. It's not a party house. It's there's not 42 guests there. There's obviously with noise regulations, with maintenance, but on the flip side, do I want the city then investing in time and labor to ensure those rules are being obeyed? That's a that's then to me the harder question. I I guess the first thing I'd want to know is for the ones that do exist um based upon easy lowhanging accessible data, are they obeying the rules would be my first thing. I I think we could allow them in zoning in Oakdale and Oak Park Heights and Still Water and Woodbury. I have no problem with that. >> So, essentially, we have 11 short-term rentals operating that are prohibited. >> That's correct. >> And so, if they're prohibited, what do we do with those if the if we do not take on a sort of zoning code on short-term rentals. >> Well, they're different. We usually respond to complaints and we haven't received complaints. I've been here for almost two years. So, >> yeah. So, I I guess mine is I um I know that they exist, right? I know that there's one behind where I live. I personally don't have a problem with it unless it became a noise nuisance or there were large gatherings and parties. So I guess my line of thinking is that um I'm also a person that says you should have opportunity to do with your property as you see fit as long as it's socially acceptable. Right. We have things that regard around lawn height and you know taking care of your property so it's not a nuisance to your neighbor and things of that nature. So I kind of like to have some guard rails on it. But I also think sometimes that government should just stay out of some of those things. Mhm. >> Um but you know we have government so that society can be for everybody. Um if we are going to allow it then we should have some some guard rails that make sure neighbors and locals around there um are protected. Yeah, I agree with that. think [clears throat] like mayor was saying, Councilman Holtz, that I feel like you should have the right to do, you know, what you want with your property if you want to rent it out, but like you were saying, Mayor, there needs to be guard rails on it where it's not becoming a nuisance to the community either. So, I guess I I I would need more information about this. I'm not set in stone on where I'm at right now, but I think uh I'm not against it, so to speak. I think people should have the right to do with their property that they want. >> Council member Holtz, >> it's a question. See, like I make audits for a living. Like this is what I do. If I >> creating a hypothetical just just curious. >> It's a hypothetical. I'm just wondering where I'm where we're going with this. I >> if you were to go and say, "Look, this is now in violation. They are not a bed and breakfast, but they're acting like it because we just successfully rented out an Airbnb." What is in code right now the consequence >> in terms of operating a short-term rental? >> What is the What powers does the city have currently in the ordinance to say you are doing this in violation? >> It's the same thing as if you're not following it the use chart for any other use. So if someone is operating a business and [clears throat] single family, it would be processed like that, but this is considered a short-term rental licensed by the county. This is not permitted in your land use in your zoning district. >> Do we send them a cease and desist? Then in that situation, >> I think eventually the challenge with that is because I've done this in the past is it's hard to tell when they stop, you know, so it's hard to tell where they are because typically not listed their addresses. So you're like, do you send it to three people or because a lot of times they don't put exterior pictures? So then it's all interior pictures. So if we were just to go and look at the 11, they didn't have exterior pictures. We'd be guessing kind of where they are and then we would have to send the notice. The notice works sometimes, but then >> just book it and cancel it. >> What's that? >> Book it, get the address, and cancel. >> Yeah. Yeah. >> Yeah. That's what I was just going to say. >> That's there's your work. Well, honestly, in many governments do that. You do the secret shopper. Like that's how you do the cigarette tax. That's how you do a couple other things in that area. You do secret shoppers. Now, whether what how does Still Water do like what do what's their enforcement mechanism? I don't know the details of it, but they're pretty strict in terms of issuing the permits and following following >> because I mean what I don't want to be in a situation of is where we're then allocating a a substantial amount of labor for something that as of yet we haven't received a complaint of but obviously there's a disconnect here because we know things are are not aligning right now with what code requires. So, we do have to make a decision, but I I don't want it to become something that's ownorous for staff. >> It becomes a lot of work, honestly, when you start licensing and then you have people that aren't following the process. A lot of times you would have to take them to court. Airbnb is hard to work with, too. I've worked with both platforms in the past. So, if you have a hotel motel tax, they have a division that's great to work with. They want to get you the money, right? But the compliance side, it's a different group and they're very difficult to work with. So just trying to shut them off on the platform, especially um a smaller city, it's hard to work with them to say like we want you to disable accounts. And this was a couple years ago. This is probably like four years ago. Just for context, we were dealing with short-term rentals during COVID. So people would basically get party buses and use like houses as bars essentially, right? because all the bars were shut down in New Orleans. It was so we've had a lot of we we dealt with them and they're very difficult to deal with um in terms of the platforms. Now, if you're a larger city, they they do work with larger cities, right? Because >> they're really important. These large tourist cities are important to them. Like here, >> it doesn't really matter to them. So, they're they're it's challenging to work with. >> So, okay. So, how's this different than running? This is a business. I have a I have a bed and breakfast. I have a business in my house. Yeah. >> How's that different than I can we let other businesses come in? I'm going to have a little bakery in my house. It won't be real big because I got a small kitchen and not a lot of people come and go or I'm going to have a a a widget shop. Um so opening up businesses in residential districts where people bought a home for residential use. We say, "Well, this business use is okay because it's a bed breakfast, but you can't have a bakery shop in your house. You can't have this. You can't have that." How do we differentiate? Business is a business. That's why you have residential zoning. >> I guess I would I would to be devil's advocate on that. Council member Dragus, I would say uh if you're renting out rooms for lodging, yes, it's a rental house for business, but it's not any really different than having a long-term rental other than it's for two or three nights at a time. I'm not operating woodworking machinery for my widgets at whatever hours that I want to run or I'm not having customers come in and out to deliver baked goods or things of that nature. So I maybe it's a a difference that's not that distinct, but I I think there's a little bit of a difference there. >> I'm a chiropractor shop in my office. People come from time to time. I'm only going to be part-time two hours a day. So, it won't be a lot of traffic coming in and out. >> But you yet you would have more coming in and out than say if you have it a short-term rental. >> If I if I have three rooms, three short-term rental rooms and each room seats two people, I got six people coming and going. >> I just I just rubs me the wrong way that we allow a business use in a residential district. I bought a residential home in a residential district for residential uses and activities. You're parking on the street. You additional people coming and going, additional traffic coming up and down the street. Have additional garbage. You have additional noise. It's everything that's it's not it's not the same anymore. >> I don't know that you have additional garbage. Well, though people generated >> additional well, but not additional from what you normally have on a weekly bas I I guess my experience staying at VBRO's and different places is they act in as normal as other houses and they have rules there that say, you know, don't be out, respect your neighbors, don't be outside, you know, there's general conditions in there. Don't park in the street. Um, some of them say you need to park inside the garage. Um, you know, that's why I'm saying if you have it and there's some guard rails, I don't think it's unreasonable to do that. Um, [clears throat] >> could the bed and breakfast be for dogs? I got a bed and breakfast is for dogs. >> We have dog limits right now for residential anyway. >> We have we have bed and breakfast currently in our code >> in residential. in residential. >> Yeah. Just I'm not a supporter of it. I'm sorry. >> All right. >> One one thing to mention, too, I believe the HOA could uh not allow them to. >> Right. If your HOA rules don't don't allow that, >> right? >> So, that's something to consider. Anything specific about zoning districts or areas? Because it's come up. >> Yeah. I mean, I guess it kind of comes down to that, you know, I don't know. I've seen when I've looked for places for skiing, per se, right? And they'll hold 16 people. Maybe a little crazy and maybe some of those houses that way, but that that's why I'm kind of talking about what what is reasonable. Is it six guests? Is it eight guests? Is it, you know, no loud noise beyond 1000 p.m.? Is it? Um, >> so so we're talking about short-term rentals, not bed and breakfast. Well, currently bed and breakfast are allowed and by I think they are considered not by definition but by not by code but they're typically somebody that's going to stay at a bed and breakfast is [cough] not a [clears throat] long-term rental, right? >> Because at the end of the day, I mean, help me to clarify. To me, a short-term rental is literally a bed and breakfast without the owner occupied requirement. >> Right. >> That's yes. >> That's that's literally what we're So I number of lodging rooms does not exceed five. >> I mean you can put another thing in there to say cannot exceed five and or a maximum number of guests of eight, nine. And I mean if you have a family room sometimes people might sleep two or three people in there but I mean >> I believe it's five and 10 in the code the state >> like I I think those are both reasonable as it is and I have no issue just simply eliminating the owner occupied aspect. We already have sound noise ordinances in our code for everyone. >> Do we want it do you think that there's a like Still Water has a three strike rule? Let's say the sheriff gets called there and they're known to have, you know, maybe the owner isn't being as attentive to their property as they should be and parties are happening. The owner doesn't really care. He's making money on it because he's renting it out. Um, but the neighbors are all poed because the sheriff's been there three times in the last two months. And that's not fair to the the neighbors or the neighborhood. I you could say substantiated >> complaints or notices. So then does that fall under I guess in Still Water they're under a cup? >> I believe they're under the license. So there's a licensing section aside from zoning as part of the license. >> But then you get it then you get back into your uh question on cost to staff. >> Yep. which is ultimately a cost to the residents, right? >> I mean, I guess that's where you start to discuss the maximum within the city, right? I mean, if we have 11 that are no one for bed and breakfast, let's presume that maybe there's 20 to 25 total because with between Airbnb and VBO, I mean, I I don't think there's a need to have it be any higher than that. No one's asking for a hundred. No one's asking for 50. I I just I want to make sure our our policies and procedures and our ordinances line up with what's occurring right now, which no one's complaining about. We're not getting complaints based upon the bed and breakfast that are occurring. And and we've had a thorough discussion about owner occupied. I I don't have anything additional to to add. So, >> you mentioned CAP. What about zoning districts in terms of apartments? um you know there's rural the the divide between rural and low density residential and subdivisions. >> I mean the hard part with that is because there's also a market demand for different types of places like someone might want to have that type of a an ability to rent out in the fields of St. Croy because they know that people think that's gorgeous and beautiful and want to have that for a week's stay over Christmas. Meanwhile, the family is is out and they were like, "Hey, here's a way to generate revenue for our trip." I I think that would be when beforehand, I was starting to think, God, we should just make this all anywhere south of 10th Street and in the village. On the flip side, I don't maybe limit by quantity by neighborhood. But I don't know if I would want to say because you live in this neighborhood, you are not allowed to do something with your property that others are. I don't think that's something that I would want to go down. >> I think to to Director Stoopa's comment is probably most HO8 >> documents probably prohibit that from happening. I haven't looked at mine in >> since I moved in. Yeah, I would imagine your yours isn't. >> So, how how do you prevent how do you where you get these corporations come in and buy up these and they're absentee owners? >> That's a good question rentals. >> That's a fair question. >> That's a fair question. Now you got an owner who lives in Tuscaloosa, Alabama and owns five short-term rentals in Lake Elmo. Nowhere around to be found when there's a problem. >> So is the problem that they are having bad guests and they're not resolving the issue or is the problem based upon the ownership type? >> Well, historically with where they've come in and done this, there's been problems. There's a track record that's not good for absentee owners of short-term rentals. >> Well, we we currently have short-term rentals that are abiding by the prohibited and we haven't had any complaints. >> But they're bed and breakfast. They're owner occupied. >> No, they're not >> on Airbnb or VBO. You can find 11 places within Lake Elmo at different times. >> I misunderstood. I thought there were 11 bed and breakfastes. No. >> Okay. Well, then we should shut them down. [laughter] >> They're violating our ordinance. >> They are violating the ordinance. That's true. I don't know that that in and of itself is a reason to do that. Even though I think that the question should be addressed. Um I feel it's maybe a little more it's a little complex. It's it's also complicated with the state and county regulations too with >> um with the licensing. One thing to just put out there is we don't get very many requests to do this, right? So if there's 11 that we know of on Airbnb and um there's not that many requests like you stated, the cap that's something to consider. I I I see that as a way to safeguard against some uncertainty because at this point there doesn't seem to be much demand but there could be and I've been told anecdotally that a lot of people will stay because the proximity to Still Water is the attraction. >> Sure. So, um it's just something to consider and if there isn't really a question of multifamily, rural or single family, if no one really has an opinion, I the plan is to take this to the planning commission. >> Yeah. >> So, so I just want to get some information. Um >> man, there's a lot of questions around that. >> M if we have an ordinance that we choose not to enforce, let's get rid of the ordinances. How do you how do you have a book of ordinance say, "Well, we're going to enforce A, but we're not going to enforce C and we might enforce D, but then we might not." >> Well, that's that's why it's being brought up, council member. >> Yes. >> Is because it is noticed that it's not being addressed. So, how do we let's address it one way, shape, or form? >> We got those guys that wear uniforms, you know, and we send them out, >> right? Typically, they [snorts] go if there's a cost. So educate me then there's additional things with licensing done with the county when it becomes owners providing food and additional services is that one of the thresholds >> it's mostly bed and breakfast are much easier to permit right and then when you are not owner occupied that's the challenge so the challenge is you know basically converting it to the R1 occupancy I mean typically you wouldn't be sell you're serving food in a >> if you're not there short-term rental right you know >> right >> there are different classifications where health department gets involved and we're not talking about those but I don't know enough about them but I think they're called like lodging establishments and there's it's a different classification than a short-term rental >> I guess my experience you know when I've used a VBO or Airbnb it's been like for lack of a better term going to my own house you know, a place to stay while I'm visiting somewhere um comfortable and has some amenities as a kitchen that I wouldn't find otherwise in a hotel. And um I guess I guess that you know to me I don't see any reason that they have to be sprinklered or anything like that. Um, I mean, we're not requiring all houses to be sprinklered, just certain >> places that have whether they're apartments or nursing homes or things of that nature. Right. >> That's correct. So, >> I don't know that doesn't give you a whole lot of direction there, but >> Well, it's good to ask because I, you know, I just don't know. It's on the uh planning commission's work plan. Yeah. >> So, we can take it to them. >> Kind of had the same conversation with them. >> Let them know because if the council doesn't want them, >> yeah, >> we need to know that if you do want them, you don't have to know that also. >> If we have one council member that doesn't want them. >> Yeah. I you know, >> wait till I get to councelor Hearn. >> Well, well, I think you might get a different answer on that one, but I you can talk about that with council member Hearn. Um I I mean, I'm going to have to tune in to the planning commission meeting because there's a whole lot of questions I I certainly don't know the answer to. >> Thank you. >> Thank you. >> Thank you. And because our next discussion is about finance, I was going to suggest that if these current ones are operating, you know, and they're not paying as an appropriate permit fee, will you send a finance director to collect it? >> Sure. Uh, finance director Hadler. I >> mean, I'd be afraid if she came to my door. >> Do you do you need a a chair for this discussion? >> I might. All depends on you guys. >> Do you wear the appropriate shoes? No, never. >> Not. [laughter] >> Always a never. >> Okay. None of those are mine. [whistles] That's Pia. >> [snorts] >> Where are the presentations living? >> In the packet folder. We >> always do VBO for go for football trips. Yeah, packet folder. I just give you the PDF. It's just the CIP. Oh, I'm looking in the wrong CIP thing. Oh my goodness for the love. Okay, I'm on it. Promise. So this is um our initial touch point on um our strategic financial plan. Um we first talked about the strategic financial plan um back when we were doing the whole city strategic planning in what was that January or so. Um and so this the idea is to look at city finances holistically and come up with I'm going to call it a plan but it's really more of a a a guiding document. So, we're going to have scenarios and we'll have some strategies, but it's not like a locked in plan. So, um I like to um sort of describe this process um and a lot of what we do in government finance as a puzzle. We've got a [clears throat] number of different issues that we deal with on a daily basis. So, we've got um expenses that might be in streets or administration or parks. And then we have different revenues like um taxes and uh fees and we have debt and we have um infrastructure projects and other projects. And so, this process is really meant to take all of those puzzle pieces and bring them together into our uh an overall look of the the city as a whole. So tonight we really just want to touch on what those puzzle pieces are very briefly and how they fit into our process. Um so the policies, our budgets, some of our assumptions. I did create some scenarios and run some really quick reports on um specifically the infrastructure um uh fund, but uh we're not going to look too closely at those just yet. So, our existing city policies um and plans that will go into this include our capital improvement program. So, we adopt that on an annual basis. It's a 10-year plan. Um the intent of the CIP is really to to, you know, sort of roughly plan out what we think we're going to need. Um and the farther out it goes from the current year, sort of the the looser it is. Um and then also to think about what the funding strategies are for those items. Um we have our vehicle and equipment replacement policy which is formalized for the public works department but the um planning and fire use something similar and so we will be working with um them to sort of formalize that that process. Um our pavement management plan and street CIP a portion of that kind of feeds into the overall capital improvement program. We have our annual budgets. We have our 2025 2026 strategic plan again that we talked on about um earlier this year. So we'll be taking some of those concepts and creating annual budget items from those. So just sort of one thing that feeds into another. And then we have other policies like our fund balance policy that will kind of dictate how much um money we want to have in any particular fund. We have some other a number of other financial related policies that might not they affect how we work but maybe not necessarily how um this plan is drafted. Another [clears throat] uh some more of our assumptions revolve around staffing and service levels and our organizational capacity. As you guys are well aware the city has been growing um very quickly in the last decade and so we've been addressing staffing issues um for a number of years. Um our compensation plan is is a policy that we have adopted that sort of guides how um we pay our employees. We also have union contact contracts. Um we recently did a public works staffing study. Um so we will be referring to that. And then um our uh most recent admin and finance staffing study was done in 2022 and we've essentially um fully imp implemented that. We will also be taking um department head input and projections um to sort of you know look out beyond um what any of these uh studies are looking at. Other assumptions revolve around um major city projects and capital scenarios. So these are things that are sort of in discussion or in the works that we think might occur in the next 25 years. Um and the idea is again not to necessarily plan for these things but plan for the possibility of these things and the impact that that would have on our finances development re and revenue projections. Um so we went through this process of revising our development projections last year as we were taking over the um uh the update of the water and sewer or the utility study. Um, so we will be revising that on a regular basis. That plan um or that uh spreadsheet projects out water and sewer revenues, park dedication funds. We're going to try and um project out permit revenues, tax capacity growth, etc. Um other assumptions are are we use our our debt and financial uh sustain. Okay. So, we will be looking at debt and s uh financial sustainability. Um, we've had a lot of discussion about decreasing our debt moving forward. We're sitting at about $60 million um right now. Um, and then just talking about sustainability, when I'm talking about sustainability, it's not for the next 10 years. I want the city to be sustainable 25 years, 50 years from now. And a really large portion of that is going to be making sure that we plan ahead for those financial investments that are needed um especially for our infrastructure. And again, the strategic financial plan is really a decision support tool. We will be able to hopefully [laughter] um be able to take a look at any um discussion that you guys are having and plug it in and kind of see where that might take us in years uh down the road. So, I had sent out an email about um some of the scenarios and I discussed it a little bit in my memo, but um we're working in Excel for this right now. Um and just given the number of different factors that affect our work and our finances, we're going to be able to do a limited number of scenarios, there's no way to do an infinite number. So, we're just going to have to kind of pick and choose um where sort of what we want to look at and do some comparisons. So, I I listed a few here. So, that we'll look at the street CIP. So, maybe we adjust some of our funding um policies or our averages, our um street project expenses within our operating budgets. we'll be able to incorporate some department head projections or maybe if we um want to look at changing a service level for something we could do that. Um development obviously is going to depend um a lot on the market um the housing market and demand. Um so we can model some baseline growth and then maybe you know what happens if there's some market stagnation and then of course our large capital projects. So, you know, what happens if we I never know what to call this project, the 77 acres of this ball field or sports complex or the big park. Uh, so, you know, taking a look at that, what that does both from a debt perspective and then future replacement and operations. So again, I I included some projection scenarios just to kind of give you a taste of what this might um what this will sort of look like and and when we're um trying to to sort of plan out some of these scenarios. Um so this was my current and again this is more most specifically for the 409 um the infrastructure reserve uh fund. So I took engineering's um CIP and played around with some various funding. Um so the percentages that you see there um I'm going to highlight those to the first two orange columns. Um are the percentage of cash on any of those projects in those years. So I sort of arbitrarily said let's let's shoot for this maximum of 35% of cash. Um, you might recall that I talked about, you know, our current dollars, uh, past dollars, current dollars, and future dollars. And so that's where that that 35% came from. So, building up to that 35% for residential construction projects, setting a set transportation project cash amount at 30%, and then we should be able to do um, we believe uh, sewer, water, sewer, and storm all with cash. So, those are at 100%. I then took the you'll see the kind of over to the right I assumed for this particular scenario that we were starting the 409 levy at 250,000 and we were increasing it by 10% per year. I then below made some assumptions about like we want to get that up to $2 million at [snorts] some point and then we while we have a 10-year CIP for this particular process we want to make some assumptions about what those longer term projects are because we want to you know really project out so um based on sort of some review of the numbers our current averages and some discussion with engineering I am uh estimating you know roughly 1.5 million million for residential and then 8 and 900,000 for the city and county transportation projects respectively. If we wanted more detailed numbers, more exact numbers on those, we would need to invest a significant amount of money to figure out what what that is and we can talk more about that later. So that's my my scenario one. So I I created scenario one, two and three just for this particular exercise. So in scenario two, I, you know, revised some of the transportation funding. I upped that 409 levy, the levy growth over the years, and then change some numbers at the bottom. And the idea of all of this is really just to examine what happens to our fund balances and our debt over time. Um, sorry, this is the extension of So this is how it all kind of plays into the street CIP. So you guys see Jack's color-coded uh CIP each year. So this is just a portion of that um to try and uh to make the calculations work through the spreadsheet. Um that then processes through a cash flow and funding analysis statement. And in the end we get pretty charts that show us what is going to happen with our or what could possibly happen with our um this one is the CIP totals. I have >> just question. >> Yep. >> Just so I understand. See, residential street improvements, transportation improvements, county, city, cost share, and then so what's the difference between transportation improvement city? What's what's boiled into that? >> Is that like collector streets? >> Is that >> is that like 50th >> county participation? So higher level whereas the other ones are going back into the existing >> talking about like 50th and 20th and Keats and Okay. All right. >> Yeah. Um here's one of the charts that I have currently for our principal balance projections and then in the end we'll be able to do some comparisons. So this particular chart is examining or is comparing um scenarios one, two and three. So we can kind of you know again just compare what happens. So again just an intro to how this works. This is again only for for fund 409 the larger strategic financial plan. We'll look at all funds operating capital etc. Um it's there's going to be charts galore. Um I mentioned in the um in my memo we have a couple opportunities sort of to improve this process. I wanted to just mention them see if anybody if there was any interest or concern. Um we are currently building this model in Excel. Um we've had some experience with um Northland's model. Council member Dragazich has has shared some of his modeling with us. I'm very confident in my ability and Nah's ability to build these models in Excel. My concern is really more for any type of staff turnover. Anytime we're handing off an Excel spreadsheet process, especially with something with this complicated to somebody new, there's a lot that gets lost in that. Um definitely it's an efficiency problem. So there is a um we found one solution um that is promising. I still would have to review it more. It's called Yuna. Um it also has a reporting tool that's kind of cool. um where it would be visible on a on a website. It is a high it's it's a large investment $10,000 per year. >> Is this so you're talking the difference between you know what we have currently and this we just purchased new financial software right >> so the financial software really is for our for our actual like accounting of things. this is a planning tool and so >> unfortunately BSNA has they have multi-year um budgeting but it's not the same as trying to a long-term plan >> and there's no scenario planning available in BSNA at all. >> Yeah, just the layman in me didn't understand the difference there. Thank you. >> Absolutely. Um another investment we could make if we wanted um better data again is the streets inventory. Okay. So, we received a quote from um Bolton Bank to do a streets inventory for $18,000. That that would give us a much better idea about those long-term investments beyond that 10-year plan. Um I believe that we will be coming to that data here in the next few years anyways just through our, you know, the GIS processes. Um I guess I I could go either way. council had expressed some interest in in more fine-tuning these numbers. So, I wanted to present it as an option. Um, and we could always do it down the road also. Um, you know, we're very early in this process and it is going to be an iterative process year after year. Um, okay. So, just looking at some priorities and objectives of this plan. um debt management uh is I would say one of the the larger um issues at hand. Um and then just overall long-term fiscal health, levy strategy and revenue stability. We don't like it when the levy jumps up and down. We know that in a growing community it's going to increase. We would like it to increase at a very very reasonable rate. Um capital planning and infrastructure investment. Um it's extremely important in the short term. I think for this community it's going to be very very very important also to think very long term. Um because everything was kind of built and rebuilt all at the same time. We're going to the community is kind of going to see the same thing in 25 years. We don't want them to have to then come up with again we don't want them to be in the same position we are uh with high levels of debt right if we can avoid it. um budget sustainability and service level levels. We want to, you know, I want to see what happens um to our budgets and our our tax rates um if there is a market stagnation and we don't get the the development that we are used to. You know, what does that do? What kind of decisions need to be made? Um and then just updates and strategic alignment. How do we how are we using this plan in the future? And how do we keep it updated and um make it valid? So my questions for you um this evening are are there any concerns with or changes needed to those foundational assumptions? So are we um planning for our vehicles and equipment based on our current schedule or is that something that council wants us to review that schedule before we put all this work into this this plan? um there's sort of a domino effect that takes place in this modeling. Um if we start making changes to the CIP, it gets really tricky to to shift things around. So, existing cities uh policies and plans, staffing surface levels and organizational capacity, all these things that I touched on, now is the time that if we're going to not use our current sort of what's on the books for us right now that we've been talking about for the last couple years and adopting and and whatnot. If there's something that is sort of not meshing for whatever reason, we probably should have that discussion again before we put all this work into the the modeling. Uh future major city projects and capital scenarios. If there's anything else that council would like us to to look at, we're happy to. Um and then yeah, development and and debt. So, are there concerns, changes that we think we need to make before moving forward? That's a question. I have no new information. Absent of any hearing anything that is an issue with what we're doing currently or how it's planned out. no reason to change course. If somebody else has some reason why we should, then I'm all ears. >> I don't think that really, you know, the development and revenue projections um long-term financial planning is a fairly complex subject as you know, and there's a lot of ways to to approach it. Um on the development side generally you're looking at you know how's our operating costs and revenues affected by new development both in terms of the real estate and the number population growth and employee growth in the city and they drive your operating costs if different perspectives and um you know then of course we have the physical disparities to deal with in our commercial tax base where we making those contributions and we get some back and so it's um it's very complicated very complicated process there's frankly there's just not enough detail to determine whether we need to make any changes or not I'm sure you're still in the process of developing it but um there it's an interesting topic let me just say that with a lot of um a lot of variables that can be played out and you know how does that growth and development affect your capital needs you know equipment fire stations public buildings parks and wrecks you know, two are inextricably intertwined, as the attorneys would say. And so, one drives the other in a way that both incurs capital costs and operating costs. Okay. Hearing nothing more, we'll move on to um council priorities and objectives. Are there any other financial um priorities or objectives that the council would like to consider um that I haven't listed in here? Obviously, we'll I've got a whole list in my office, but I wanted to hear from you guys if there was anything in particular that you've thought of as you were reading this that you've been concerned about as we're talking about strategies moving forward. Nothing came to mind beyond what we've discussed previously in strategic sessions and what council has looked at as priorities. You know, as you know, not everybody will be here forever. So those priorities and strategic initiatives may change in the future. But as far as you know what we've discussed and what has been uh thought up to date, I think that's kind of where everybody's agreed to go. >> Okay. >> I think one thing to consider be thanks for basically saying we're going to die at some point, but [laughter] no, I mean, you know, >> he was thinking losing elections though. >> Yeah. Right. Exactly. you know, you could move I don't know, power balls tonight could happen. I I think one thing to consider because I mean when the mayor and myself and a previous council member joined, you know, we're told at a very high level, well, this is what the, you know, staff has, you know, one staff member has decided is is our fiscal plan, but we really have the plan. and the amount of work that you've done you and and Nina and others have done over the last year to two years to compile this I I don't know what what you have then for moving forward we're all be gone at some point but to make sure that there is something uh an easy to um consume educational feature for all incoming council members to say look this is where we're at this is kind of the the 20 year, 30-year picture. Here's the reasons why certain decisions were made and here's how this affects this. Because usually when when Malise, I didn't run for council to be like I, you know, this topic. We ran on for various reasons for but not necessarily to discuss the ins and outs of this exact topic. It wasn't my subject matter expertise. I'm not Nick in any way, shape, or form. Um, >> that's obvious. >> Thank you. >> I have way more hair. So, I I think whatever you can do as kind of an easy guide or easy resource to help on the the incoming council members and even I don't know if it would be some good for the commission members as well. I mean, potentially because the CIP drastically affects things. So on the park commission, yes, maybe with the the planning commission potentially for the the EDA, but something that's digestible and can be easily communicated would be definitely a help because that saves time for you and staff when maybe there's conversations where you're like, I thought we already were aware of what happened the last year, the last two years, and how we came to the current place we are today. So then at least conversations where there is disagreement can be a bit more informed. >> I like that. Anybody else? Um and then I I you know what questions is kind of the same um same thing sort of redundant but okay um scenario planning and report planning again I just wanted to give the opportunity to uh you know if there was anything that you folks would like us to look at specifically um or if there are any sort of particular lenses as we're doing scenarios. So um I I will be doing some comparisons and so I think I listed some you know there's a debt per capita is an easy one. So our debt per capita is going to decrease drastically as we grow and can decrease our debt you know at the same time. Um or you know we'll take a look at some you know market factors. We'll use population for a number of things. I forget what they listed in there but are there any other lenses? Council member Der said you've done this a number of times. Are there lenses that you would like us to look at as we move forward? >> Okay, >> for me. >> All right, final question for the there was some discussion um at the last meeting about what at that 26 infrastructure levy will be. This is essentially sort of the starting point unless we decide to change course obviously we can make that decision at a later time. Um but this will essentially be my starting point for um that infrastructure fund moving forward. So do we want to change that at all before I um present the levy to be adopted in December? >> Not for me. >> Shame for change for me either. >> Not for me. >> I voted against it. Well, I guess I'll just be sit in the corner and say nothing. [laughter] >> Okay. Well, that was it. Uh, I'm happy to take any feedback as we go, but I did, you know, again, these are um very complicated models and we didn't want to put invest a lot of time um and then have to make changes later on. So >> notice there wasn't a real big difference between scenarios two and scenarios three as that goes out. >> That um is largely because of the I believe it was the change in my estimated costs sort of re uh uh the the costs increased as much as the levy did. I it is what it was. I mean, it starts out almost negligible and then within 10 years it hits like $500,000 difference. >> Yeah. >> Good. >> In terms of the the financial long-term planning tools and with Excel versus that software package, are are there ways you see to help prevent that risk of the staff turnover with Excel being used? I mean, I >> Oh, you mean just within I'm and I'm I'm definitely trying to because if I make it the easier I make it on myself, the easier it will be for somebody else. And so like building in that flexibility and making things really obvious, you know, I I I put things in red like, you know, do this or I make a note um or, you know, whatever. So co because it's it's me right now building it, but at some point Nah's going to be updating it. And so it's definitely has to have have some interchangeability right off the bat. Um so absolutely >> yes >> I would only opine that when you build it carefully you it's becomes a process in and of itself that then someone can pick up and follow. Um we did a go back I don't know 15 years we did a long range financial planning model in Excel for the League of Minnesota cities that the league sold to all its members. And so it had to be something that a city [clears throat] could buy and pick up and determine how to how to put all the data they needed into it so they could use it as a planning tool. And there was, you know, a manual that went with it. Couple pages, but it's as you put it together, you put together a process that makes sense and allows logic to follow and flow through it. >> Yeah. I mean, what you're building is essentially a program itself. It's an out of the box. I mean because I assume there could be certain presumptions that are in there that have to be adjustable. But >> y >> if at some point when you win Powerball and it's not you or Nina, they then are need to know on page 20, hey this presumption here, this is how this is what's taken account if it needs to be adjusted. >> Yeah. And to some degree. Yes. >> Thank you. >> All right. Thanks, guys. Last item on tonight's agenda is CIP future project discussion. >> Yeah, mayor and council. I've just added this um as another opportunity for discussion prior to adoption of the CIP um in December. Um there has been some prior council discussions about um adjusting the the next five years of our CIP specific street projects, but there hasn't been any specific direction given to staff if we are supposed to be making not. So I wanted to put this on here. I think some of that discussion, if I recall, related to some of the projects that were maybe a little further out in in time frame. And um at that point I believe uh Jack made some adjustments with removal on projects that would be developerdriven that showed up in the CIP and maybe gave a little bit of a higher number that you know we don't know if it's really going to be there. So, I feel at least for me, it's more it's more realistic at where it's at now from where it was at the first first blush. Um, that's that's what I recall. If I'm wrong, please let me know. >> Councelor Hearn had a concern about just the overall magnitude of it, >> right? And and I think you know when we talked about that the the CIP's run right you really looking the first three years have a fairly solid stature right where uh owner entities well next year is pretty set year two's almost as much set. three year you have some flexibility if you have a an emergency or something pops up but once you get out in that fiveyear beyond it's kind of a best guess at least in my opinion and things can change and markets can change uh costs of those things as we saw during COVID right they can just rapidly expand so it's really trying to give the best guess that we got and I don't know Jack are you gonna expound upon that. >> Yeah, I I think I can just maybe um add a little more specificity to what you're what you're saying. In your particular CIP as it stands right now, the city has been playing catchup because you had the councils previously have been playing this slow drag kind of skip a year once in a while and things like that. And so we [clears throat] got into this catch-up mode. We were quite a ways behind. that the state grants helped significantly helped us catch up. Um, your current CIP is a 10-year CIP. The first five years, maybe six years are already neighborhoods that need reconstruction as they stand today. The recommendation today would be so not five years from now, but today. So, they're still part of that catchup. When I started when I was challenged a year ago to go to a 10-year CIP, it does start to get a little harder to figure out what streets are going to be next. And we started to those that that second set of five years really was looking at the age of pavements and you're trying to now guess that deterioration curve and which neighborhoods are going to get there. So, you know, five years from now, definitely those roads are going to be in worse condition, but are they going to be ready for a reconstruction or not? We don't know. So, it's b very much just based it was more speculative and very much based on the age of the road. But I also understand with my experience that the more data that we get using the current payment management plan and icon data, the historical data we have, those depreciation curves will be more accurate. >> Yeah. and actually give the city a better leg to stand on in understanding, you know, beyond that five years and really give a better look at where that road's going to be in 10 years, 15 years given certain maintenance opportunities and things that can be done. So, I mean, in that realm, the consistent activity of of checking the oil, so to speak, in your engine will will help that prolong for the city and give a better viewpoint of what those expected expenditures will be. >> Correct. >> Right. I think in my in listening what councelor Hearn was saying and some conversations I had with him you know we're looking when you look at our levy we have almost $4 million in debt service a great portion of which is related to streets we have $4 million a year in street construction that's $8 million for streets and we have $600,000 for maintenance we have close somewhere between eight and n million we spend every year on streets one way or the other and we we have 6 million we spend to operate the entire rest of the city for operating people person. So it, you know, it it seems like there's this imbalance there somewhere. >> There is an imbalance. And part of that imbalance is what uh Jack indicated was in the previous as I've lived here 20 years. It was, hey, let's figure out the budget. We've got $500,000 left. What road are we going to take care of? Which is not any way to manage an infrastructure. in in my my line of speaking. >> I just I think councelor Hearn was saying can we slow it down a little to bring a little less financial pressure. That's that was my understanding of what he was talking about. >> Understood. And also my my two cents were just that again as the mayor mentioned when we are doing the the projections that if it is developer paid for that we're obviously not considering that in any of the the CIP costs but also I would be fine with even all cost for a priority five never be tallied as well would be my two cents because to me if it's number five it's not even something that we've it's literally not under actual consideration is it's a high level placeholder That was just my two cents. That's a that's a good point. >> And we're we're moving to we sort of our reaction was to move to two sets of books. So I'm not removing them from one set of books because we got to keep our eyes on >> Yeah. >> those projects and things like that. But then when we >> are now doing more different analysis with those numbers, we will select to remove some of those numbers. >> Absolutely. Yeah. Not not to delete but yes >> still track. >> Is that the uh discussion you were looking for administrator Miller? >> Yes. Thank you. >> Yeah. All right. So darn it. Is the font really getting that small or is it just me? >> It's you. [laughter] It's me. >> Yes, I got it. >> Yeah. Yeah. Yeah. All right. So, uh, next week regular agenda items, we have, uh, oh boy, acronyms. we get the uh ULI uh Urban Lane Institute tab presentation on the 180 acres which uh hoping people take a look at and look at that. And then we have uh hopefully we get some more information on approving municipal consent for Highway 36 Lake Elmo Avenue improvements. That might be something that needs to be kicked back into December potentially. Um, please remind me what the RLS number 132 is. >> That's the register land survey that we continued from the last time or we removed it from the >> Oh, we Oh, got it. Got it. Right. So, right, some Highway 36 stuff. There's things on the consent agenda. I urge you if you're interested to look at the uh Lake Elmo website future agenda items uh probably on Thursday. That information will be out there for those that are interested. With that uh we'll adjourn this evening's meeting at 8:22.