--- ## author: Sue Barry date: D:20260604202021-05'00' --- ## AGENDA ## City Council ## Workshop Meeting June 9, 2026 ## Discovery Center, 4444 Hadley Ave N ## 5:15 PM 5:15 PM Review of 2025 Financial Audit 5:40 PM Police/City Hall Budget and Value Engineering 6:05 PM Wetland Outlots and City Ownership Discussion ## 6:25 PM Administrator Update ## 6:35 PM Council Topics ## 6:50 PM Adjourn ## COUNCIL MEMORANDUM ## To: Honorable Mayor and City Council ## From: Mikaela Huot, Finance Director Date: June 9, 2026 ## Subject: Review of 2025 Financial Audit ## BACKGROUND Minnesota Statutes require that cities issue an annual financial report prepared in accordance with generally accepted accounting principles (GAAP), which is audited in accordance with those principles by a firm of licensed certified public accountants or the Office of the State Auditor. This report consists of management’s representations concerning the finances of the City of Oakdale. Consequently, management assumes full responsibility for the completeness and reliability of all the financial information presented in this report. The City of Oakdale’s financial statements have been audited by LB Carlson, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended December 31, 2025, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent audit has issued an unmodified (“clean”) opinion on the City of Oakdale’s financial statements for the year ended December 31, 2025. The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Annual Comprehensive Financial Report for the year ended December 31, 2024. This was the 35 th consecutive year that the City has achieved this prestigious award. To be awarded a Certificate of Achievement, the City published an easily readable and efficiently organized report. Staff believes this year’s report will satisfy the requirements as well and will submit the finished Annual Comprehensive Financial Report to the GFOA for consideration. Jackie Huegel, Principal, from LB Carlson, will present an overview of the audit process and results. There is no action required of the City Council as this review is informational only. Formal acknowledgement of receipt of the 2025 Annual Comprehensive Financial Report (ACFR) will be at the Regular City Council meeting following Council Workshop on June 9, 2026. The Annual Comprehensive Financial Report for fiscal year ending December 31, 2025 can be found under the City Budget & Financial Reports on the City’s Finance Department webpage. The following documents will be provided under separate cover: ## • Management Report ## • Special Purpose Audit Report ## Attachment ## Presentation Slides ## City of Oakdale, Minnesota ## Audit Report for Year Ended December 31, 2025 ## June 9, 2026 –Oakdale City Council Workshop. Presented by: ## Jaclyn M. Huegel, CPA ## Principal 952-224-1638jhuegel@lbcarlson.com ## A ## UDITOR ’ ## S ## R ## OLE •Fairly presented in accordance with accounting principles generally accepted in the United States of ## America ## Opinions on Financial ## Statements ## •Financial Statement Audit ## •MN Legal Compliance Audit ## Internal Controls and ## Compliance 1 ## A ## UDIT ## R ## ESULTS •Unmodified “Clean” Opinions ## Basic Financial ## Statements •No findings for 2025 ## Internal Control and Compliance – ## Financial Audit ## A ## UDIT ## R ## ESULTS •No findings for 2025 ## MN Legal Compliance 2 ## G ## OVERNMENTAL ## F ## UNDS ## G ## ENERAL ## F ## UND ## Y ## EAR ## -E ## ND ## F ## UND ## B ## ALANCE 3 ## G ## ENERAL ## F ## UND ## Y ## EAR ## -E ## ND ## F ## UND ## B ## ALANCE ## G ## ENERAL ## F ## UND ## R ## EVENUE 4 ## G ## ENERAL ## F ## UND ## E ## XPENDITURES ## E ## NTERPRISE ## F ## UNDS ## S ## UMMARY OF ## C ## HANGES IN ## N ## ET ## P ## OSITION 5 ## W ## ATER ## F ## UND ## S ## EWER ## F ## UND 6 ## S ## TREET ## L ## IGHTS ## F ## UND ## S ## URFACE ## W ## ATER ## F ## UND 7 ## G ## OVERNMENT ## -W ## IDE ## S ## TATEMENTS 8 ## COUNCIL MEMORANDUM ## To: Honorable Mayor and City Council ## From: Christina Volkers, City Administrator Date: June 9, 2026 ## Subject: Police/City Hall Budget and Value Engineering ## BACKGROUND The City contracted with BKV Group for architectural services and Kraus-Anderson Construction (KA) as Construction Manager at Risk under MN Statute 471.63 for the Police Expansion and City Hall Remodel Project. The City Council approved the Guaranteed Maximum Price (GMP) for Bid Package #1 in the amount of $7,940,489 and the GMP for Bid Package #2 in the amount of $22,883,908, for a combined GMP of $30,824,397. Including soft costs, the total maximum project cost is $35,726,283. The project team has completed additional value engineering (VE) resulting in more than $1 million in reductions, with further VE savings still under review. Construction mobilization began June 1, 2026, and the Groundbreaking is scheduled for June 9. ## CURRENT FINANCIAL STATUS & FUNDING GAP Despite identified reductions, a funding gap remains. Additional VE, supplemental funding, or scope modifications will be required. Options to bridge the funding gap include: ## 1. Additional Value Engineering ## 2. Reallocation of Existing City Funds ## 3. Additional Bonding or Debt Financing ## 4. External Grants and Other Funding Opportunities ## 5. Scope Modifications ## COUNCIL DIRECTION REQUESTED Staff seeks guidance and Council intent on preferred funding approaches, VE targets, and any desired scope adjustments. ## COUNCIL MEMORANDUM 1 ## To: Honorable Mayor and City Council ## From: Luke McClanahan, Planning Manager ## Mark Statz, City Engineer Date: Jun e 9, 2026 ## Subject: Wetland Outlots and City Ownership ## BACKGROUND Recent development proposals containing significant amounts of wetland have raised questions about the City’s long-standing ordinance provision that requires wetland to be platted as outlots and deeded to the City. As Oakdale continues to build out, it is expected that future development and redevelopment sites will contain wetland areas, resulting in the City acquiring additional land to maintain. As such, the City Council directed staff to conduct research on this topic and hold a discussion at a future Workshop. Guidance from the City Council is being sought to determine if any changes to the ordinance are desired. ## O n November 9, 1994, the City Council approved Ordinance No. 421 in response to the 1991 Wetland Conservation Act. The amendment introduced a new requirement for wetland areas that are 1) located within a proposed subdivision/plat, and 2) identified within the Oakdale Stormwater Management Plan (SWMP), to be platted as outlots and deeded to the City for ownership and maintenance ( Minnesota Statutes 444.075 and 462.358 grants municipalities the authority to acquire land and easements for wetlands and stormwater ponds/holding areas, but does not require it). The ordinance requirement remains in effect currently under the City of Oakdale Code of Ordinances, Chapter 21, Article 21-04, Section 21-04-602. ## A s mentioned, the City’s Subdivision Ordinance requires wetlands and storm water ponding areas that are reflected in the SWMP to be platted as outlots and deeded to the City. Prior to the Wetland Conservation Act, wetland areas were often utilized for stormwater management for development. Nowadays, wetland areas are typically not used for direct stormwater treatment. Rather, modern developments generally treat stormwater runoff via manmade ponds or special infrastructure (e.g., underground chambers) prior to any discharge into a wetland. It is important to note that manmade storm ponds and other Best Management Practices (BMPs) are governed by a different set of laws (the Clean Water Act) and are regulated under the City’s Municipal Separate Stormwater System (MS4) permit. The City’s current policy also requires those facilities to be on platted outlots. There are no changes proposed to this policy in regards to storm water ponds/holding areas. ## Benefits of City Owned Wetland Outlots Below are important advantages of City ownership of wetland area. •City ownership ensures long-term preservation of open space by preventing development from occurring – particularly through wetland banking (i.e., authorized wetland impacts through mitigation credits). oPrivately owned wetland outlots on separate parcels can also create problems if they go into tax forfeiture, and enforcement can be problematic. •Having defined wetland outlots can be helpful as people tend to better understand the difference between property lines, rather than easement lines. 2 • In some instances, wetlands support and enhance recreational infrastructure (e.g., wetland surrounded by trails at Willowbrooke Commons). • Maintenance performed by the City is conducted in accordance with applicable laws and best practices, whereas many private property owners do not have the technical knowledge or resources to do so or undertake work that causes more harm than good. • There are certain circumstances in which platting wetland as outlots and deeding them to the City generally works well, such as when a wetland area supports drainage for a new city street or park. ## Disadvantages of City Owned Wetland Outlots Below are some of the disadvantages of City ownership of wetland areas. • There is often a false expectation from the public for consistent and timely maintenance of City owned wetland areas, which is difficult to fulfill given the sheer amount of such areas throughout Oakdale. In addition, the City’s Ordinance also contains language about preserving open space in a natural state (City of Oakdale, Code of Ordinances, Chapter 15, Article 2). o Oftentimes City or other utility vehicles have difficulty accessing wetland areas due to inadequate easements or lack of frontage onto public roads. o The City’s current Subdivision Ordinance requires extension of wetland outlots to the public right-of-way with a minimum width of 15 feet. However, a 15-foot pathway may not always be sufficient for proper access.  Staff prefer to require a wider pathway than 15 feet to accommodate modern utility vehicles. o Excessive maintenance of wetland areas can negatively impact the natural features of wetland and can conflict with best management practices.  For example, retaining natural growth around wetland areas serves an important function by filtering harmful sediments from entering the water. • Separating wetlands onto their own outlots creates an additional lot line, which can create challenges for new structures trying to comply with setback requirements. o Regardless of the presence of lot lines, the watershed districts maintain specific buffer distance requirements from wetland areas. o From a regulatory perspective, the watershed districts are indifferent toward ownership of wetland areas as their regulations apply regardless of ownership. • City ownership of outlots results in loss of property tax revenue, albeit the amount is generally miniscule. o Of the few privately owned wetland outlots throughout Oakdale, staff observed that property tax revenue from these sites typically generate less than $16 per acre per year. ## Peer City Research City staff researched a number of municipalities within Minnesota to gain a better understanding of their approaches to managing wetland areas. ## MUNICIPALITY DESCRIPTION OF REGULATIONS Roseville Wetland are protected via wetland protection overlay district White Bear Lake Wetland are platted as easements Stillwater Wetland are protected via wetland overlay district Cottage Grove Wetland must be platted as outlots and deeded to the city Woodbury Wetlands are platted as outlots by default. However, the city allows an easement to be dedicated if it is sufficient to protect the wetland. Maplewood Wetland are platted as easements Lake Elmo Can be dedicated as an outlot to the city or protected via easement North St. Paul Wetlands must be platted as outlots 3 Eagan Wetlands are platted easements New Hope Wetland are protected via wetland overlay district Lakeville Wetlands must be platted as outlots Coon Rapids Wetland are platted as easements Rochester No easement or outlot requirement, rather property owners must enter into an agreement allowing the city to access areas for inspections/enforcement Eden Prairie Wetland are platted as easements ## STAFF RECOMMENDATION Given that there are advantages and disadvantages of City ownership of wetland outlots, Council may wish to consider amending the Subdivision Ordinance to an approach similar to Woodbury’s regulations. By default, wetlands would continue to be platted as outlots. But the City would maintain, as an option, the authority to require wetlands to be platted as easements if the areas are sufficiently protected. If the Ordinance is amended to allow wetlands to be protected solely through easements, specific standards (e.g., no clear public benefit, not required under the MS4 permit or in the SWMP, not accessible via public right-of-way) should be codified to ensure that the City is making this determination, and not developers. ## COUNCIL DIRECTION REQUESTED It is requested that the City Council provide guidance on amending the City’s Subdivision Ordinance as it relates to wetlands. If it is the City Council’s intent to amend the Subdivision Ordinance, there is a short-term solution to prevent delays in processing land use applications. The City Attorney confirmed that the City Council can waive certain subdivision provisions, including the requirement of the platting of wetland as outlots and conveying them to the City. ## Attachments ## Presentation Slides ## Excerpt of Ordinance No. 421 1 ## City Council ## Meeting ## Wetland Outlots June 9, 2026 2