--- ## author: Sue Barry date: D:20260522082653-05'00' --- ## AGENDA ## City Council ## Workshop Meeting May 26, 2026 ## Discovery Center, 4444 Hadley Ave N ## 5:00 PM ## 5:00 PM Utility Rate Study 5:40 PM Wetland Outlots and City Ownership ## 6:00 PM Review Long Range Financial Model ## 6:30 PM Golfview and Tower Parks Playground Selection ## 6:50 PM Recess ## Continue after Recess ## 2026 Eco Fair Recap ## Administrator Update ## Council Topics 1 ## COUNCIL MEMORANDUM ## To: Honorable Mayor and City Council ## From: Jake Foster, Assistant City Administrator Date: May 26, 2026 ## Subject: Utility Rate Study ## BACKGROUND In fall of 2025, the City entered into an agreement with Advanced Engineering and Environmental Services (AE2S) to complete a comprehensive utility rate study for the City’s water, sanitary sewer, stormwater, and streetlight utilities. The purpose of the study was to evaluate the financial condition of each utility, assess whether existing rate structures equitably allocate costs among users/user groups, and develop recommendations to support long-term financial sustainability in each fund. ## T he scope of the work included three primary components: 1.Cost of Service Analysis (COSA) – Evaluation of how different customer classes drive utility costs, with the most detailed analysis focused on the water utility. 2.Rate Structure Evaluation – Review of existing rate structures and development of recommendations to better align rates with industry best practices and policy goals. 3.Financial Modeling – Development of long-term financial models to project operating, capital, and reserve needs and to assist with future annual rate setting. ## Overall Utility Recommendations: •Phase out the Utility System Replacement Fund (USRF) and allow each utility to directly fund its own capital improvements. •Establish utility-specific operating reserve and capital funding targets. •Implement the recommended 2027 rate adjustments. •Utilize the financial models developed by AE2S to guide future annual rate setting. ## Water Utility: •Establish meter-size-based fixed charges for commercial and irrigation accounts. •Simplify and adjust tiered usage rates to better encourage water conservation. ## Sewer Utility: •Establish meter-size-based fixed charges. •Maintain a uniform volumetric charge. ## Stormwater Utility: •Maintain the existing rate structure. •Consider an impervious-surface-based billing methodology in the future. ## Streetlight Utility: •Maintain the current rate structure. 2 ## Proposed 2027 Rate Adjustments: •Water: Structural changes with revised tiering and increased fixed charges. Proposed is a minimal volumetric charge and a 12% base charge increase, commercial base charge increases vary by meter size. •Sewer: 2% volumetric increase and 4% base charge increase for residential and apartments, commercial base charge increases vary by meter size •Stormwater: 3% increase. No changes to…

--- ## author: Sara Ludwig date: D:20260604223717-05'00' --- ## WORKSHOP MINUTES ## OAKDALE CITY COUNCIL ## MAY 26, 2026 The City Council held a Workshop on Tuesday, May 26, 2026 at Oakdale Discovery Center, 4444 Hadley Avenue North, Oakdale, Minnesota. The meeting began at 5:00 PM. ## Present: Mayor Kevin Zabel ## Council Members: Kari Moore ## Andy Morcomb ## Gary Severson ## Katie Wrich ## City Staff Members: Chris Volkers, City Administrator ## Sara Ludwig, City Clerk ## Hannah Dunn, Senior Community Development Specialist ## Jake Foster, Assistant City Administrator ## Andy Gitzlaff, Community Development Director ## Mikaela Huot, Finance Director ## Melanie Lee, Human Resources Director ## Luke McClanahan, Planning Manager ## Nick Newton, Police Chief ## Lori Pulkrabek, Communications Manager ## Mark Statz, City Engineer ## Cory Tietz, Public Works Director ## Kevin Wold, Fire Chief ## Others Present: Nikki Schlepp, LHB ## Jacob Strombeck, AE2S ## UTILITY RATE STUDY Assistant City Administrator Jake Foster explained that Advanced Engineering and Environmental Services (AE2S) completed a comprehensive utility rate study to evaluate the financial condition of each utility, assess whether existing rate structures equitably allocate costs among users, and develop recommendations to support long-term financial sustainability in each fund. City staff is looking for Council feedback on the findings and recommendations. Jacob Strombeck with AE2S went over the rate study objectives, rate study process, and key findings, noting that the Utility System Replacement Fund (USRF) creates transparency challenges and the utility reserve strategy could be improved. Mr. Strombeck reviewed a list of overall recommendations for Council consideration. In response to Mayor Zabel’s question about how a change in the utility reserve structure would affect the fund balance policy, City Administrator Chris Volkers indicated that the fund balance policy would need to be updated to show that the utility reserves have their own fund ## WORKSHOP MINUTES ## MAY 26, 2026 ## PAGE TWO balance account and therefore, the minimum unassigned General Fund balance could be potentially lowered. Mayor Zabel pointed out that there have been a few utility projects that have not fit into one of the four utility funds and have historically been paid for out of the USRF. City staff will perform an audit of these types of projects to determine how they can be categorized into one of the four utility funds moving forward. Mr. Strombeck moved to the water rate structure base charge and usage charge recommendations. Ms. Volkers pointed out an approximate twelve percent (12%) increase in the residential and apartments quarterly base charge with the AE2S recommendation. Mr. Strombeck explained that studies have shown thirty percent (30%) of to…