Tuesday, September 23rd, 2025. First item is roll call. >> Council member Barnes >> here. >> Dumba >> here. >> Ross >> here. >> Rowan >> here. >> Venus >> here. >> Teal >> here. >> Mayor Spooner >> here. Uh, pledge allegiance to the flag of the United States of
America and to the for it stands. One nation under God, indivisible, with liberty and justice for all. Second item tonight is approval of the agenda. >> Mayor Spooner. >> Yes, Mr. Ross. I would like to make a
motion to move item 8G, the resolution 25-244, acceptance of the 2024 audited financial statements to the beginning of item 8 items for discussion. If nobody else minds,
>> you understand that? >> Yep. >> All those in favor of the approve of the amended agenda signify by saying I. I. I all opposed. That passes. Presentations and introductions. We have none tonight.
Approval of the minutes of September 9th, 202025 and the September 26, 2025 special city council meeting. >> Mayor Spooner. >> Yes. >> Through the meeting, the minutes and I did not see
question on the preliminary tax. and vision state. >> Those are those are in work sessions. So, we take notes for those, but we don't ever publish those or have you formally approve those notes. >> Okay. >> But they are available for inspection in
the city clerk's office. >> Okay. So, I'll entertain a motion for those two. >> So, move. >> Yes. Motion by Don Booya, second by Ross. All those in favor? >> I I motion passes.
>> Tonight, request to be heard. I believe we have one request to be heard tonight. Would you like to come forward? >> Three minutes. >> Thank you for hearing me. reach out to the city. Um they you lad that came hooked up the
a hose to and this is my water and I just was wanting to see if any of you would bathe or drink in this and I have been being told oh we're going to fix it.
We're going to fix it. And I it it's not getting fixed. I in 2021 that was they were going to fix it. I'm sorry 22 but in 23 it didn't happen.
And then in 24 we had the floods. So I thought we'll just be patient. And now it's the end of 2025 and here I am with this water now. No, I don't drink this water. My
son put in an think and that's what we drink. But we have to bathe in this and I wash my clothes in this. I mean, I pay my water bill every month. I've never not paid it. It's never been late.
Guys, bathe and drink and live with this. If this is what you paid for, that's why I'm here. Because something needs to be done. And I know you can't fix the dead end water mane now that
this season is almost but there has to be we there's a lot of great smart minds here that for my husband and I and my husband's handicapped in the military and he worked all his life doesn't deserve water like this and
Culligan water was there at the house when city water technician hooked up the hose to my main. So, they were there and they tested it. I have those results and I'm sure you're not going to
problem solve right now, but have any questions of me? >> What was the address? >> 502 13th Street Northwest. >> And your name? Cat Roll. Please state your name for the record. >> Oh, Cat Roll. My for It's Katherine.
Katherine Roll. Ro mis roll is your water always every day. Some days it's a little less. Um I have pictures bathtub looks like when
this this is the worst I've ever seen it. But my shower is indicative of this cuz the the floor and the walls and my husband's shower chair is just red rust red
shower curtain. I have to wash it all the time. >> Okay. Thank you. >> And you say I've been like that for the past three years. Three years. For the past three years. >> We've been there since 2020,
but I reached out in How many times would you say you've reached out to >> um in 20 when did he come? 2023 it was four or five times but other than that it's once
or twice. They're going to make it so the water doesn't just stop at my house or right after. >> Hey, I want to thank you. We're past the three minutes and I appreciate you uh emailing us uh with this the other night and bringing it to our attention and
we've talked to staff and now that we know about it, uh let's hopefully we can get some progress on this situation. >> Thank you. Thank you. >> All right. On to item six, consent agenda items or consent agenda A through
6M. >> Mayor Spooner. >> Yes. >> I'll make a motion to approve consent agenda items 6A through 6M. >> I'll second. >> Motion by Ross, second by Rowan to approve 6 A through 6 M.
I all opposed. Motion passes hearings. We have none. We are approved agenda. We are going to jump ahead to item G resolution 2025-24 acceptance of the 2024 audited financial
statements. Just >> yes. Um, I'm going to introduce my my uh role in this will be basically as controlling the presentation. Um, but I do want to introduce uh Ryan Ingleststead with uh Bergen KDV. He is our audit manager and is here to do a
presentation for you tonight. The um full audit report did go out into the packet. Um, so it is available for you to review, though it is hundreds of pages long and so, um, it's not one that I expected you to review for tonight, but Ryan's going to hit the high points of it.
>> Yep. Thank you, Jessica. Uh, good evening, Mr. Mayor, and members of the council. Thank you for having me, and it's a pleasure to be here to present the results of, uh, the audit work that we did for the city for the 2024 year. And as Jessica uh mentioned, the
deliverables that we provide uh as far as the audited financial report and a separate communication letter, it it is it's 250 pages of information. Uh so what we do uh to condense that and uh and communicate the the key items to you
is uh in a slide deck here of 15 or so slides. I'll I'll take you through that information uh audit results and then some financial analysis and commentary with that. Uh but I'll try to keep my presentation here to 10 minutes or so. And certainly if there's any questions
as I'm going through or at the end uh feel free to uh raise those. So uh if we move ahead just one more slide here. Uh so there's a a few different reports that we issue uh as part of the uh deliverables. So, at the front of the
financial report is our independent auditor's report. With regards to the financials specifically, uh there's three pages of information that's included in there. The one section that gets the most uh attention by the users of the report is the
opinion uh section that comes first. Uh and as noted here on the slide deck, uh the type of opinion that we are providing and that the city is accustomed to receiving is what's referred to as an unmodified or clean opinion. Uh so that's the optimal result
when it comes to the set of an audit set of audited financials. Uh that's what bond rating agencies, the state auditor's office, uh other grant grantor uh entities are looking for uh when they go to your financial report uh just to
uh give them comfort that they can uh have reliance on the the information that's included therein. Uh so that is uh uh again the optimal or um best achievement in that in that regard that can be obtained. Uh there is additional
information about responsibilities just from a very high level. Our duty as the auditors is to uh design and execute an audit approach that meets the uh relevant professional standards. Uh that puts us in a position where we can provide that opinion uh with reasonable
assurance that there would not be any material uh misstatements that would go undetected as part of the process. That term reasonable assurance in the context of the audit standards is meant to provide a high level of confidence 90 to 95% confidence that there would not be
any again anything material that would go undetected as part of the process. So and then in addition to that there's two separate reports that we issue that are part of a a separate communications uh letter and uh within there one is in
regards to or required under government auditing standards really touches on internal controls uh that are in place for uh the city and uh the information that's included uh within that report. uh provides uh definitions and and just
some context around our duties as far as gaining an understanding of the controls that are in place and ultimately what we would report on. Uh if there was anything that's that was considered a material weakness or significant deficiency, uh those are the types of things we'd call out uh in detail in that letter. uh but pleased to report
there wasn't anything uh that we uh identified as as part of our procedures that rose to uh those reportable uh thresholds and uh things like segregation of duties would be a common one. So if a if an entity that's being audited doesn't have appropriate checks
and balances in place uh for having a separate set of eyes uh looking at information approvals things like that that's a common one that could be reported. So just to give again some further context to what type of findings uh would surface the it would be things
like that uh but again a clean report uh for the city and the last one is in regards to Minnesota legal compliance. So the state auditor's office they publish a lengthy guide that we have to uh utilize u as an addendum to our normal audit programs. Uh and really
what it does is it hones in on the relevant state statutes that uh municipalities have to adhere to when it comes to uh a variety of things. Uh um for example, bidding and contracting um the deposits and investments that are
in place, ensuring that the banks have pledged appropriate collateral that's over the FDIC coverage, uh all of those things. So the types of procedures we went through uh to address those relevant statutes again there uh very positive result. Nothing that surfaced
in terms of a uh reportable finding in that. Okay. Well, that gets us then to uh some uh discussion on the just the financial results uh for the year. And within the graphs that we include here, it does
provide a a five-year trend uh just to give uh some additional uh information kind of that a further look as to what has transpired. So looking first at the general fund and then we'll move on to the the enterprise funds uh util for the utilities etc.
Uh so for the general fund uh this first graph uh looks at the uh the fund balance uh as well as the cash and investments position uh for the fund. And you can see over the course of the five years presented it's grown from about 10.5 million up to about 14.5
million uh at the end of 2024. uh within the uh fund balance total uh a a common uh with the bifurcation that's included within the financial statements of overall fund balance. The category
that gets uh the most attention is the unassigned fund balance as that that represents dollars that are truly available to to cover you know day-to-day operating cash flow needs of the city. And uh the total of the of the
14 million about 12 million uh is in that unassigned fund balance category. And then the other metric that's looked at is it um looking at how much coverage does that unassigned fund balance provide in comparison to the budgeted expenditures for the next year. uh
because of the fact that uh city governments uh receive for the general fund in particular, you re uh uh municipalities receive the majority of that revenue uh significant portion of that revenue in two installments uh throughout the course of the year with
the property tax settlements. So with the first settlement being in middle of May uh to the county and then the county uh it's about a month or so uh getting close to the end of June, first part of July when those funds then get released out to the cities. Uh so in order to
cover cash flow uh for that first six months of the next fiscal year, you really need to have about 50% of uh unassigned fund balance on hand to to cover that. Uh and the way it uh calculates out is that if you take that unassigned fund balance, compare it to
the budget for the next year, it's about 52% uh is where the city was at at the end of 2024. Uh so certainly a good result. Nothing too e excessive. Uh but yet um within the range that the state auditor's office provides of 35 to to
55% uh the city is certainly in a in a good position uh when it comes to that metric. Okay. forward. Then uh some detail about the revenue and expenditure trends uh for the general fund. As you'd expect growth
over the years, uh a couple things to just uh make uh to call out uh especially in looking at 2023 compared to 24 uh on the revenue side, you can see it stayed almost about as flat as can be. Uh but there's two offsetting
factors. Uh so the the normal uh property tax levy increase uh came into play that was about 850,000 roughly. Uh but then uh offsetting that 2023 included a a fairly large
nonrecurring public safety grant of about a similar amount $820ome,000. So factor in those two offsetting items and uh total revenue stays uh pretty much flat year-over-year. Uh on the
expenditure side, uh some rather significant increases. We'll look at uh the budget to actual uh results uh here in a following in a following slide. Uh roughly a a 10% uh increase
um year-over-year if you back out some like the capital outlay type things. And a lot of that was driven uh came within the uh different categories. So you think general government, public safety, public works. Uh most of it was in the general government category because of a
few different things. The new uh ERP or computer system that came in into play in 2024. a lot of the kind of initial cost uh tied to that uh that that were incurred as well as some severance payments uh uh with regards to you know
tied to separations that occurred uh and then just other non non-recurring type uh expenses. move forward here. Uh, similar information just in bar graph form. Visuals are nice to to provide a a different look at it. But you can see
there again just the the trend year-over-year. The the gap between revenue and expenses certainly is the closest it's been u you know for this most you know within this most recent year of 2024. Uh so then here this looks at just the composition of the revenue sources. Uh
as I alluded to property taxes making up a very significant uh percentage I think it's about for rough around 45%. Um and then uh the other the other piece that makes up another significant uh portion is the intergovernmental revenues for local government aid and
other other grants that would be coming through in the in the general fund. Uh so again that stayed fairly consistent uh year-over-year as far as that that overall makeup uh just the continued growth there in total expenditure side. I touched on this
already as well with the general government piece really having the most significant portion of that overall increase uh tied to those items that I noted. Okay, budget actual here. Uh so in uh re on the revenue side
uh positive variance there of about $775,000 and uh mo uh the most significant uh piece of that uh overall positive variance is coming through in that miscellaneous line item. And what uh
what's driving that is that is the category that uh reflects the the biggest item in there is is investment earnings. Uh so interest earnings on on the CDs and other u u uh investment securities that the city has entered
into as far as the general funds share of of that. Um and it's common practice to budget conservatively uh when it comes to investment earnings just because you don't know you know what the future's going to hold uh you know with regards to interest rates and and uh
there's also some fair value adjustments that come into play to mark those investments to market. So some swings that can happen there. So uh municipalities do budget conservatively but it 23 like and then similarly in 24 uh certainly very very positive uh
results uh when it came to the investment earnings piece expenditure side um stayed very close to budget uh percentage- wise it's just a couple couple percentage points and the one thing I do want to call out is that
um within the capital outlay section uh there is about $600,000 uh just shy $600,000 of of cost there. Uh which really are offset by the 600,000 that's down towards the b bottom
of the screen in that lease and sabida uh proceeds. Sabita's subscriptionbased IT arrangements. I'm not going to get into the weeds, but um in essence, those are offsetting each other. So if you back that expense out uh up above, it's just the required presentation for it as
why it's shown this way. Um but expenditures would be almost exactly in line with with what the budget amount was. Of course, some variances here and there across the different categories, but all in all uh you know indicator of a very good fiscal
management uh practices in place for the city uh to adhere with that that budget that was put into place. Uh so then just real quickly uh looking at the various utility funds uh for the for the water utility uh the trend that we're seeing uh and kind of expecting as
we went into our audits this past year uh thinking of of the u you know the amount of precipitation that was uh that um you know each year experienced 2023 was a rather dry year. So the as we saw
across all the different municipalities we work with the water utility revenues really jumped up in 2023 and then with 2024 not being as dry of a year uh those irrigation uh uh the the usage came down
you know quite notably I think in Farbo's case uh residential side it was about a 10% decrease in usage for commercial it was about a 20% decrease on the usage side offset by roughly 6% increases on the rates. Uh so factoring
both sides of that in ends up in a net decrease in the the operating revenues for the water utility for uh comparing 23 to 24. Uh on the expense side uh 23 had some fairly significant nonrecurring
uh maintenance costs that that were necessary for the water utilities. So that jumped up and now in 24 kind of came back down to um a normal level uh for expenditures. Uh so that uh coming into play uh with a notable drop on the
expense side uh resulted in another positive uh significantly you know positive year for generating operating income for that utility. uh which certainly is a a optimal uh result um uh to allow for being able to um rely on
some of that buildup of of fund balance or net position to help with future capital needs. You with utilities, there's always a need for uh you know issuing debt as well to help supplement uh the costs of future projects. And I know in 2025, the city has issued uh
some uh bonds for the for the water utility. But again, just being able to build up that that uh fund balance position uh is important to help subsidize or or help supplement um those project costs. >> Uh here's cash and investments uh as
well as the unrestricted net position. So again, you can see a little bit of a dip in 23 uh because of some of those non-recurring costs uh that were that were coming through in that period and now uh kind of come coming back up uh in forming kind of in in line with where it
was say back in 2021. Okay. Uh for the sewer utility uh here not as significant of a decrease on the revenue side. uh there was a a drop in in uh uh with regards to industrial
discharge. Uh so that brought the revenues down slightly from where it was the the previous year. Uh but some rate increases there too to partially offset that. Uh and then with the on the expense side held fairly steady about a 3% increase. And uh some of those costs
had it not been for the the flooding, there was some some added costs that came into play in 24 uh that that hit the for the sewer utility uh tied to the flooding incident. Uh so without that expenses would have been you know very much in line or even a slight decrease
or uh and here as well with this with this fund generating positive operating income even after non-cash depreciation expense and u allowing for the to to build up that reserve again for future capital needs
here just again trend on cash investments and the in the uh unrestricted net position. Uh nothing further to add there. Uh well actually I will add one thing. Uh you can see it looks a little bit unusual because cash dropped down uh somewhat notably
compared to for 24 compared to 23 while the unrestricted net position stayed uh very much in line. The reason for that is because of the internal loan that was approved u where the sewer utility it
has advanced or is in borrowing dollars to the park um projects fund capital projects fund for the vioaduct park uh project. So, and that'll get repaid over future future years with interest uh um
to reimburse the the sewer utility for the the last utility, the storm water fund. Uh so again, they're really ramping up over the the course of the last 5 years. Uh notable increases both on the revenue uh and the expense side
from 23 to 24. uh nothing uh real unusual, just uh anticipated rate increases that were known uh to come in and and then expenditures in in line with budget as well. But really um yeah, over the over the five years, a lot of uh uh uh growth
that's happened in terms of the dollars that are coming in uh related to uh the needs there for that that utility cash and unrestricted net position. Nothing further to add there again tied to the previous comments continued growth uh stemming from the operating
results. So then the last graph that we have here is just taking a look at uh what has transpired over the five years last 5 years uh with regards to the city's tax rate. Uh so looking uh the trend for the tax capacity driven by the
growth in the market value of property within the city. um as well as then comparing that to the increases in the tax levy over the years presented. Uh if I'm if my memory serves me right, uh the increase in the five years on the tax
capacity was about 40%. And then on the levy side uh over the course of that that 5year period was about a 23 24% increase. um of course from year to year um you know kind of jumping around but
uh that that's what the overall percentage change was in that time period. Uh so that with the tax capacity or the market values growing at a faster pace than the levy allowing for that tax rate to continue to decline uh going
from 53 back in 2020 down to about you know 47 in 2024. So great great news there for the city and for the residents, taxpayers and such. Okay. Uh so that is uh the information that I had for you. Sorry I maybe got a little bit
long-winded there, but um just want to again thank uh the city for the opportunity to be of service um with regards to your audit needs. Thank you to Jessica and her team for for all the hard work that they put into the process. Uh uh they were um very very
well prepared. uh some assistance provided by the ABDO firm as well and um and you know really stayed on top of questions that we had requests for further information all all of that. Uh so we we appreciate all that hard work uh that was put in by by the folks at
the city and uh kudos on a on a job well done. So I'll I'll take any questions forward >> to reading the full report. All right. Well, thank thank you very much.
>> At this point in time, I'll take a motion on resolution 2025-244. >> No moved. as the motion second by Adama to approve resolution 2025 acceptance of the 2024. >> All those in favor signify by saying
>> I. All opposed. That passes. Thank you very much. >> Thank you. Thank you. >> All right. Back to our original item. A ordinance 2025-12 approving text amendments. Thank you, mayor, and good evening,
council. Uh, so the item in front of you is actually the second reading of this ordinance. Um, there are two requests tonight. One is actually the approval of the second reading of the ordinance. The other is the uh summary publication that would go in the paper that would accompany this.
The summary publication needs at least a 57 vote. Uh but with that, I'm happy to take any questions about uh either of these. >> Mayor Spooner. >> Yes. >> I'll make a motion to approve ordinance 2025-12.
>> A second. >> Motion by Ross. Second by Vance L. Zonic Tax Amendments Chapter 3 nonconformity. Second read. A roll call. >> Council member Barnes. >> Hi. >> Jumbo. >> Hi. >> Ross. >> Hi. >> Rowan.
>> Hi. >> Venus. >> Hi. >> Teal. >> Hi. >> Mayor Spooner. >> Hi. >> Approval of the publication. >> So moved. Second. >> I Van Sloo. Second by Teal. >> I say I >> I
passes. On to item B. Rice County, Fourth Street Northwest, Second Avenue Northwest. Conditional use permarians. Uh we have two of them right here, Harry. Yes, sir. >> Correct. Uh Harry Davis, city planning.
>> Uh thank you, mayor and councel. Uh looks like we're trying to set up the presentation. Um but I'll just go in with with the introduction. So there are two items in front of you tonight. conditional lease permit and a variance. They are submitted by Matt
Ganter on behalf of uh believe it's Farbo Real uh Real Estate and the owner of the property is Rice County. Uh the location for the conditional use permit and variances uh are near the corner of Fourth Street Northwest and Second Avenue Northwest. You recently saw this
uh asair of a preliminary and final plat. The proposal in front of you tonight is a Kishi's permit and variance. Um here's a just a general location map. Uh and then a little bit further on in terms of just the area that we're talking about.
Now uh the plats we platted all the properties that are within this block. Uh right now what we're just focusing on is the bolded yellow area that you can see on your location map on the screen. And then uh this is a zoning map. It's not updated yet, but as a part of that
preliminary and final plat process, you did reszone uh the parcels that are closest to Fourth Street to Central Business District or CBD, which will come in uh with the variance request. So, the two requests, the condition's permit is to construct a standalone
parking lot on a uh parcel all on its own without a principal use and that off-site parking will serve an adjacent proposed office use. The variance is for that office use. The building specifically uh in the central business
district metal architectural panels are not allowed at all on a exterior building or on the on a building's exterior. And in this case, the applicants uh initially requested up to 60 to 70% depending on if we're including the rooftop screen of the
facade will be metal panels. So just super quickly uh you know on the screen right now is uh the lots that are outlined in red. Lot one will be the uh office use and lot two is the uh bulk of the park uh parking lot that will serve
uh not just this adjacent office use but will actually be uh publicly owned. The end of it I believe the city will be taking ownership of that parking lot. And so that parking lot will actually be a public amenity uh not just for that adjacent office use, but serve uh the
Rice County buildings and offices that are nearby uh the city's police uh station that's just across First Avenue and then uh any adjacent properties or or nearby properties within downtown. Uh with regards to the variances, so
these are the uh building elevations that were submitted at the beginning of the project. Uh the applicant has since submitted updated elevations that I'll show at the end. Uh but these were what was initially submitted. So uh if we're not including the rooftop screen, uh which you can see is kind of this gray
shaded area on top of each of the elevation views. Um we're just focusing on the building itself. It's about 60% of that facade is made up of metal architectural panels. Like I said, in the central business district, uh none is allowed. So that's the variance that we're going through today and sort of
what we're um what the general discussion is focused on. Um for the conditional use permit, you know, generally when it comes to a standalone um parking lot, in this case, the city will actually own that parking lot and it'll be to the benefit of the
public. Uh it just has the added benefit of also supporting the adjacent office use. um the criteria that uh a condition use permit for a standalone parking facility would need is is is met. Um it will serve the greater uh community and the greater downtown area. Uh so we are
recommending in favor of that the variance u so uh staff's uh recommendation for this is that the criteria uh are met and staff has provided findings that that support this variance. This is a building that is not
a butler building. Uh which the intent of not having metal at all on a building in the downtown in the central business district. That's really the intent behind why we have that requirement of this is not a Butler building. This is a uh well-designed it's it's a it's a
architecturally interesting and it although it will be in contrast too it will it will be a a nice spoil to what we have downtown which is a lot of historic buildings. This is a brand new building uh that will take up a good half of a city block uh and so it'll
have a pretty prominent location along Fourth Street. Um, but it will draw attention to and end up uh in staff's opinion supporting a lot of what our historic downtown looks like, provide a nice foil to uh the rest of our downtown. It is outside of our heritage
preservation district and so it doesn't have that added layer of of requirements for a new construction. Uh so staff uh does see this as as a variance worth granting. I'd be happy to go into any of the details if needed. Um coming out of planning commission, planning commission
unanimously supported the conditional use permit. Uh but with regards to the variance, there was uh one dissenting vote that felt that the uh findings provided by staff were not enough in order to grant a variance. Uh but ultimately in a 4 to one vote, planning
commission did support the request in front of you. So generally this meets our zoning requirements uh and the findings uh in the resolution support that. So we are recommending that you approve both resolutions uh one of them being 2025-236
for the canal lease permit and the other being 2025-237 uh for the variance and with that I'm happy to take questions um and I'll just show the >> questions Mr. Ross >> uh thank you mayor Mr. Davis, the uh
just pertaining to the parking lots, >> my understanding was the east parking lot was going to be primarily used for the police department. Is that still the case or is it just kind of first come
first serve for the general public? And >> Sure. Yeah, that's a very good question. Thank you. Um, so the parking lot will be owned by the city and so the adjacent offices does, you know, they they do not have rights to those parking spaces except for the ones that are on their
property. So it will be essentially first come first serve. >> Okay. So we're not having like a uh uh enclosed uh police lot similar to what we have behind their building. Correct. It's going to be open. >> Yeah. This is this is for the public. So
this is not for like parking of of police cruisers. Okay. All right. Thank you. >> Yes, >> Davis. I love the building. I think it looks beautiful. Addition. I just have a question on the exit and entryway for the parking lot. It looks like it's
facing that correct. >> Um so that's not the only entrance and exit. So, the other entrance uh and exit would actually be along Second Avenue and it'll be sharing access with uh Rice County's property.
So, there are there are two entrances and exits. Only concern is that is a really dangerous intersection because is on street parking and I've been on that road if we can look into instead of going out on highway 60
is if we could change it to maybe it only onto >> so that has come up um but if if it's kind of hard to see from the the graphic that's presented uh that driveway is currently existing on Highway 60 and it
lines up directly with the uh large Sallyport overhead um kind of underground storage that is the county that is the county's property. And so as there's been multiple parties and talking about all of these things that was a desire on their part to see that
driveway kind of lined up so they don't have to maneuver kind of around to get into their property. as well, which would make it hopefully. >> Mayor, if I could just add one thing to that. So, we uh have uh tried a few
times to solicit Mandot for any uh input on that particular entrance. Uh if we do end up hearing from Mandot that they are not supportive of that, they would that they would rather see that go, uh there is uh some discussion about having a First Avenue entrance. So if that ends
up being the case where MDOT does not support it, then we do have a backup. >> Any other questions for staff? >> Your thoughts on it? You weren't my thoughts. He laid it out that it's going to be the corner store of downtown. I actually
think it's going to be properties that we had west that need improvement development on the edge of that I think that way that need to be red first in downtown I'm all in favor of it
>> all right >> mayor >> first one yes >> I'll make a motion to approve resolution 2025-236 >> second by Initial use permit for offsite standalone parking >> 4 Street Northwest and Second Avenue
Northwest. All those in. >> All opposed. That passes on the resolution. Second. >> Yes. >> I make a motion to approve resolution 2025-237. >> Second.
Second by Don Booya to 2025-237 approval of varants for building facade materials on the corner of 4th Street Northwest and 2nd Avenue Northwest.
>> All opposed passes on to item C resolution 2025-239 Harry Davis. >> Thank you mayor and councel. Uh great. So, the item in front of you is for a conditional use lease permit for a
drive-thru within C2 uh along Lindale. Um the application is um on the on the northern end of of Lindale Avenue. Uh it's a conditionally use permit. The location is is here at the corner of 7th Street Northwest in
Lindale Avenue North U and as well as Highway 21. Uh this is the uh sort of a aerial of the of the property. The property is outlined in yellow. Um here's what the general zoning looks like for adjacent properties. It's mostly commercial until
you're looking at the other side of Lindale Avenue. Uh the conditions permit that's uh requested uh tonight is for a drive-thru restaurant. It would end up being uh a Culver's restaurant uh that that would like to be located here. And Culver is
known for a drive-thru. they would they would like a drive-thru as a part of their restaurant. Here's the site plan that they have submitted um and the elevations of what the building will look like on the exterior. Um you know, generally the
conditional use permit is is meeting the criteria for approval. Uh they don't really have any residential properties nearby or or or in close proximity to worry about uh the the speaker noise. uh and they will have a lot of adequate room for stacking on site. So, a lot of
our uh criteria and findings uh sort of reflect that. Plan commission did unanimously support the request. Uh they did hear a lot of public comment from adjacent properties along that private frontage road uh that fronts onto Lindale Avenue that's shared uh with a
lot of properties going to the south of the subject property. Um just a lot of concerns about traffic speed and con and congestion. Uh the thing about that is that that is a private road. So the city really doesn't have jurisdiction over it. Uh the developers are working with those adjacent property owners in order
to come up with a resolution. It might be with uh you know sort of uh coming up with with with different methods whether it's speed bumps uh posted speed limit uh some screening for the drive-thru with those adjacent properties. Uh so
they are working with those neighbors but generally it does meet our uh our zoning requirements and so we are recommending that and I do apologize for the typo that city council actually approve this uh resolution 2025-239. Happy to take any questions.
>> Any questions on this matter? >> Mayor Spooner. >> Yes. Make a motion to approve resolution 2025- 239. >> Second >> approval of a conditional use. >> I
motion pass. We are on to items and E. We're going to do them together, I would assume. >> Uh, yes. Uh, thank you, your honor. Um, >> your honor, your honor. >> That was my dad. That was my dad.
>> This is the second reading of the ordinances for Excel Energy for renewing a an electric franchise as well as a gas franchise. Um, there is really nothing new with this. The thing that I pointed out at the last meeting in in the memo
was that uh this enables us to have a franchise fee um as part of these things. Those are established under separate resol or separate ordinances though. Um and so with each of these there's also the summary publication as this would be the second and final reading.
>> Thank you. Uh questions for staff. First one ordinance 2025 13. And I'm not going to read all that. The first one >> make a motion to approve ordinance 2025-13. >> Second. >> Second.
>> Ran on the approval. Barnes on the second. All those in favor. >> Council member Barnes. >> Hi. >> Jumbo. >> Hi. >> Ross. >> Hi. >> Rowan. >> Hi. >> Bunsloo. >> Hi. >> Teal. >> Hi. >> Mayor Spooner. >> Hi.
>> Next one. Um, make a motion to approve ordinance 202. >> Oh, the summary. >> Approving the summary publication of ordinance 2025-3. >> Motion by Ran, second by Vance Loose to
approve the summary publication. >> I pass on ordinance 2025- Bruner. >> Yes. Make a motion to approve ordinance 2025-14. >> Second by Barnes on ordinance.
>> I do without you Barnes. >> Hi >> Zumbuya. >> Hi >> Ross. >> Hi >> Rowan. >> Hi >> Hi >> Teal. >> Hi >> Mayor Spooner. All right. >> On to the public spooner. >> Yes. >> I'll make a motion to approve uh summary
publication for ordinance 2025-14. >> Second by Ross. Second by moves to approve the summary. >> I all opposed that pass on ordinance 2025-15.
uh ordinance versus regard. >> Yes. Uh this is the second reading of an ordinance that basically provides that the lodging tax should be collected um by the commissioner of revenue for the state of Minnesota on behalf of the city of Farbo. Uh this is language that uh
the the department of revenue specifically said they needed to institute this. um by passing this tonight, we will be able to provide the notice um within 90 days to have them start making this collection um as of
January 1 of 2026. >> Spooner, >> I make a motion to approve ordinance 2025-15. >> Second. and replace chap. >> Council member Barnes. >> Hi Jim Buuya. >> Hi >> Ross. >> Hi >> Rowan. >> Hi
>> Benus. >> Hi >> Teal. >> Hi Mayor >> Spooner. Hi. Motion to approve summary public ordinance 2025. Second. That is passed. >> And we're going to move on H resolution
2025. >> Yes. Uh so this uh presentation that I am going to do will actually cover um the next two items for the ADA. um preliminary tax levy and the HA preliminary tax levy as well. Uh this is
very interesting to have the audit go first to see year in 2024 stuff as we're talking about two years down the road and and what that looks like. And so um I've I will go through this as uh quickly as possible but please ask questions. There were some minor changes
which are reflected here. Um so this this slide really tells you about kind of how the process go we go. We get the um initial uh market value from the county assessor and then from there uh we get our uh tax capacity from which we
reduce tiff amounts and then we get our next net tax capacity. And so for 2026 we are seeing a 6.4% increase in market value and a 3.54% increase in um net tax capacity. Then we determine what do we need to meet our
needs kind of related to a few specific areas being the general fund, community and economic development fund, tax abatements and uh debt service. And so uh through that process um in total uh 17.8 8 almost 17.9 million is uh what we
need which is a 10.3% increase over the total dollars that we had on the 2025 tax levy. So as was reported at our last work session we were at 9% basically I think we're 9.3
uh actually so this went up just slightly um due to an error in uh missing uh one department in the general fund. What that means is a 4.39% increase to property owners, which I think is always important as we're talking about percents to understand our
percentage of revenue increase does not equal what happens to a property. And as we go through what happens to a property uh and again these assume that the um that there has been uh no um market
value increase um which tends not to be true. there tends to be some level of market value increase um as well. 223,900 is the median value of a residential property in Farbo. And so with that um between 2025 actual and 2026 with no
change, uh we're looking at a 4.39% increase in the um revenue to the city from that individual property or $45.91. So that's kind of a a scale of how that like revenue increase to us plays out
with an individual property owner. It's also the same percentage um on a commercial or industrial property. Uh commercial industrial we're assuming higher dollar values there. And so this just kind of gives you a look at what does that market value look like um uh at at some higher levels and what does
4.39% look like from 2025 to 2026 with no change in market value. Um, looking at the tax rate history, uh, I I kind of wanted, it's interesting kind of how that came out through the, uh, through the, um, audit because for
2025, we did go up. Uh, we're not using, um, 50% of what what's available, but, we're very close to 50% of those total um, tax dollars that are available to us. for 2026, we're talking about um just about 52
um uh 8% of the total tax dollars that are available for us is what we have here on the preliminary tax levy. And so you can see it's been a while um since 2021 since we were kind of at that um height. Uh but that's that's where we
find ourselves kind of as we move forward here. So the total tax levy we're talking about is um 14.9 million and it breaks down um into these funds which we'll go through um further with the general fund being the the largest user of these dollars as it's our
largest fund um largest operating fund of the city. So when we look at the general fund uh for 2026 we have proposed expenditures of just uh about 24.7 million in total. uh when we look at that um uh revenues
and expenditures being equal on that one. So it's the same when we look at that uh property tax revenue and what we need is 52% of revenues and expenditures and I believe that he said for 2024 we were looking at 45%. So, the property tax levy is looking at picking up a
larger percentage of things. Um, which I could see from uh this presentation from just updating 2025 numbers to 2026. We were about uh 51% last year. So, or for 2025, the current year. Um, LGA is a very local government aid is a very
interesting thing. Um, Ryan mentioned that as well. uh that is 28% of our uh general fund um revenue revenues expenditures make up um which is a pretty significant thing um to think
about. LGA only increased by $16,632 this year. Uh you'll recall it was in 2024 there was a significant bump um that uh was about like I think a $900,000 bump, but we're not seeing that from year to year. um at this point uh
for 2026, we're just happy there's not going to be any um clawing back of those prior increases from the state. And so that's kind of where we are. But the thing that I want to point out and and it's I would say all governments probably deal with this on some level is that you have 80% of our revenue really
coming from two sources. Um, so when we talk about fees and fee schedules and stuff, those little those are are things that are generally not making up a very significant portion of our revenue. Even though it's important to make sure we're recovering costs and things, there's really not any one fee change that we
can make that's going to change the mix of revenue diversity kind of moving forward. And this is really similar to what 2025 was presented as as well. So, as our as our proper or as LGA really kind of main remains stagnant, you know,
16,000, we appreciate the increase. We certainly do. Um, the property tax levy is really picking up bigger portions of expense increases from year to year. And then the other thing that I just like to to point out, and we'll keep talking about this as we get to the final levy,
um 18 million of that 24.7 million of expenditures is personnel costs. And so that's 73.4% 4% of our total budget. When we looked at how this breaks down and where are we spending in kind of those general categories that Ryan um
mentioned previously, public safety is our biggest spending area with nearly 46% of the general fund. And then culture and recreation comes in number two at uh 23%. And then you have general government and public works really showing a similar percent. And you can probably barely see it on the far right
side. there is this uh pink very thin line um that is our other which is essentially um just our unallocated costs that we have budgeted as well as then our $12,000 a year for our transit um contract with Hayawa Land Transit and
I'd say this when I was looking at what this was for 2025 very similar there was very minimal change on this at all so uh we're kind of staying constant in sort of where our expenses are uh that is the general fund. Um when we
look at fund 240, which is our community and economic development fund, we are proposing um 411,000 almost $412,000 of property tax revenue. Uh there's very limited revenue possibilities in this fund. And I think as we move further down the road here,
we should probably start talking about whether or not the activities in community and economic development should be in the general fund in order to just kind of eliminate this as something separate. um and review the pros and cons of that. Uh moving forward, uh the other revenues that are
available to um the community and economic development fund are administrative fees. Uh we have $100,000 budgeted coming from the HR, Robinwood, and public housing. Um as well as then what we had discussed at some of our last work sessions of $50,000 from EDA
for this year as well. So, that's essentially $150,000 that does not need to be on the tax levy because there's other sources that will be um providing uh offsetting revenue to some of the costs that we have. Um this fund is
seeing an increase of about $30,000 uh for expenditures um which puts us at about uh $563,000. Uh this when I went back and looked, this is really all personnel related. Um Dave runs a very tight ship up there and is always willing to try and find ways
to save money and uh but you can't when people are kind of your main expense. So that makes it more difficult. We talked about this earlier in the budget process how there is a negative cash balance at the end of 2024 and that um in this current fiscal year we'll be
transferring some dollars into that fund so that we don't need to put those on the tax levy. Um, with the with the audit being complete now, we'll we'll talk about that. Um, the audit document really combines fund 240 and fund 239 tax abatement. So, there's some working
that we'll have to do on our back end to make sure that we have the correct number for that. Um, moving forward, but that is definitely still on the to-do list here for this year. Tax abatements are decreasing from 2025 to 2026. Uh, we are down to just three
tax abatements right now. And that chart though it's little um kind of gives you an idea of where we're at. Um and that uh realistically by 2028 if you do nothing else there will not be any other tax abatements um to be added. However,
that's not likely as this has been one of our economic development tools that we've kind of been discussing in multiple scenarios in which it could be used um for some continued development um within the community. So, uh, I do see that there will be a point in time
that, um, this does come start to increase. Again, what'll be interesting is the timing of when does a a a new property or a new renovation hit the tax roles versus when does something pop off? And is 2028 going to be a year
where things kind of spike because everything is there, but then you have a drop off the next year. The other thing we also have is the tax abatement bond that we've discussed for Vioaduct Park. that will be showing up under here and not as debt service because it is part of our total tax abatement request that
we can make for a year. Um, which has essentially a 10% cap on it as part of our net tax capacity. So like 28 or 2.8 million is the most that we could ever request under tax abatement. As you can see, we're we're nowhere near that with
143,000 that service funds. Um we're happy to report there is no borrowing for um equipment this year like we have the 2025 internal capital loan um and internal internal loan for capital equipment. Uh the other thing that's
really fun to point out here is that uh things are changing when it comes to debt service less any future decisions that you make that still have to be decided on. And council member Ross loves this chart so I had to make sure that I got it in here. 2026 is our peak year. We're paying off a bond in 2027.
another in 29, another in 2030. Um, I do think that there is a a point in time that we should probably talk about um sort of looking at the um the internal loan and deciding if since things are falling off, do we want to remodify that
to maybe add more principle on to pay that off sooner than eight years? And I think uh that's entirely possible to do. Um, but really depends on other conversations to be had around uh borrowing for the community center and a fire station as well as just some other
really big needs that we have coming up like a public works building roof um as well as just some fire trucks that are about four or five years out as well that are not cheap either. So there will be more borrowing in the future. This graph doesn't show it only shows what
you have committed to at this point and is that that is truly outstanding debt. uh the HR and the EDA levies. Both boards have submitted a request for their maximum levy. Uh you can see that's um just about 440,000 for the HA
and 431,000 for the EDA. Neither board has finalized their budgets. My plan would be that in a work session in November like we did last year, um that the uh economic development coordinator and the HR executive director would really be
presenting those budgets to you and hopefully with some participation of the council members that are on each of those boards as well and really talking about what those priorities are for the the coming year. Uh, one thing that I'll just highlight here is, um, because we
had it last year and I think we we saw some usage of it is the city of Farbo tax receipt. Um, and I'm going to pull it up here real quick just to show you it is live. And, uh, it is on our website. And so, if we enter in that
pro, uh, market, Whoops, I didn't want to add another. Um, if we enter in that median home value, again, if we're using that as a market value, uh, you're going to have a homestead exemption that would probably come off of that. The numbers are out there with the county currently
that you can kind of do your own math to figure out what is your taxable value to enter in here because it's the taxable value. Um but for the sake of of time just to show you here we've got it broken down as to um somebody that would have a taxable value of that 223,900
uh will be spending $22.51 on the city council next year uh which does include um some of the nonprofit contracts I should say. Um and then uh as we get down you can see there's a cost for police of 333. We get into public works
as well. uh culture and recreation, which is really parks and wreck in the library. Um as well as then other functions. So we've got our debt that this property would be paying $64.76 um towards what we need to pay for debt. Uh and then a few other things. So a
total of $1,100. These are just examples. Um, it's meant to be something that's educational about where does your money go, not to be a precise comparison from 2025 to 2026 and what does this mean in terms of percentage change. Um, but it did is live now and so we will be
pushing this out here um to have things move forward um with uh hopefully some property owners uh making sure that they can see where we spend our money or where in our preliminary sense we have said we want to spend our money. final thing. So, next steps, we're
rolling out the POCO tax receipt. We're not done with budget workshops. So, we still have our special revenue funds and the utility funds to move through. We should be able to do those in in October and November. Um, given that we now do have the audit back and a lot of what
need to happen with those is based on the audit. December 2nd is going to be that last work session for you guys to review the um final levy and then December 9th is the council meeting at which the um public hearing and uh final tax levy will be presented. Um overall I
don't expect significant changes to the general fund which is the majority of the tax levy. Uh but we'll we'll of course make adjustments as they keep coming in and uh be talking to you um uh talking to you about those as those come forward. But December 2nd, barring
anything substantial, would be when that happens. So that's all I have. Um, happy to answer any questions. >> Questions for staff? >> Not necessarily a question. Thank you, mayor. Not necessarily a question, administrator, but just a a comment for the thousands and thousands of people
that are watching. >> You had a a matrix up there that showed uh the home at a value of 223,000. I think their uh property tax if their home stayed the same went up like $34
and a little bit less than that. It was 30 $40 $50. We want to keep in mind that's an annual amount, not a monthly amount. So, we're talking, you know, if your house did not increase in value at that median value, it's we're talking
$3.75 a month. Just want to make note of that that that amount is not it's an annual amount not a >> the way people usually pay their >> yes >> taxes through escrow. >> And thank you for bringing that up because I think the other thing that is
a good thing to bring up is we are we can control what we can control. So we can't control what other taxing entities are doing but we do recognize that other taxing entities that are making decisions that impact property owners as a whole. And so, um, that's that's where
we we can control what we can control. Um, so, uh, what we're proposing as a tax levy increase will certainly not reflect a total tax levy increase by the time the county and the school district have set their tax levies as well. >> All right, we're going to mow through
these. Adoption of the 2026 property tax levy. >> So moved. >> Second. >> All motion passes resolution 20 economic development. So
>> move second. I >> I pass resolution 2025. >> Second. >> Motion by Barnes, second by Van Sloo. All those in favor signify by saying I.
I opposed pass 51 attorney. >> Thank you, honorable mayor and honorable council members. Um, yeah. Uh, you have before you our standard abatement resolution. However,
it's got a lot of detail and there's a reason it has a lot of detail. property the city's been dealing quite some time. Uh you have both chiefs out in the audience that can help out if necessary. But what you have before you is our standard resolution. It also has an order in there that we would um serve on
the property. The problem is the owners, the actual owners of record are deceased at this point in time, but we have parties in the property. So, we're going to have some service issues. We want you to approve this resolution. I'll go through some of the items in there. Um, but then it's going to take us a little
while to serve it. So, just keep that in mind. It's not an immediate reaction here. Once it's served, there'll be 20 days for someone to respond. We'll have to figure out who that someone is. Uh, we have an idea of who's there, but um, we're going to serve the estate and and
other parties that may be in possession of the property. So, keep that in mind. But again, what you have before you is a very detailed resolution. You also have uh a number of attachments that go with the staff report or excuse me the the packet materials that are all these
citations and letters that have gone out before and I and I said all but I shouldn't. It's not all of them. It's many of them that are supporting what's there and set forth in the resolution. Uh we have pictures that are at the end of this presentation that we can jump to as well to show you what the property
looks like. Uh but in addition to that, we do have some uh bodywn camera that's also evidence relative to what's going on in the property and it's they're serious violations and we're looking at doing a civil action under both state
statute and city code. Under state statute, it's a hazardous building act chapter uh 463. Under our city code, there are various nuisance sections as well that apply. So, we're we're going with a multitude of issues that are relative to this property, but I will
refer in the resolution to the bottom of page one of the resolution that starts with two whereas clauses that are rather lengthy and that rolls on to the next page two of the resolution. All of those are conditions that exist at the property. They're in violation of either
state statute or the city lists those all out for you. If you have any questions on those, I certainly can explain those in much more detail. and so can the chiefs if you need that done. Um, but you can see there are an extensive number of violations existing at the co existing under the city's code
and state statute. That is the reason we're asking for you to approve the resolution to go forward with this matter. Um, what happens once you adopt the resolution would be that city attorney's office as well as our city staff serve this order out as I've said
and we prosecute it if there's no response. It allows you at that point in time to clean up the property and assess it back if in fact parcel or the property is not cleaned up by who'sever there. Um, dealing with individuals on the property would be a separate issue,
but it would be involved in this if we have to go forward with that as well. not coming up. I see >> it's on some of them. We're having an issue with that monitor. >> Okay. >> But it's on the screen. >> Well, and I can go through as much detail as you want, but you've got a lot
in the packet that you've seen. Um, I can discuss that, but the resolution goes on for obviously five pages as you see there with an exhibit A that starts on page six and then exhibit B, which is the order, which is three pages long as well that would be served out on this
matter. Following the resolution, uh, You have, as I said, the compliance letters and citations that have previously been provided, at least portions of them, to the property as long as as well as another report that's there. And then the last three pages for
this matter show you depictions of what the property looks like. And I will tell you, in most cases, pictures don't do justice to what's there. If you're there in person, it's way worse. You don't have the body worn cameras here to see what was there inside the property, but
it's significant. Certainly, our chiefs can attest to what that was there. Um, it's a problematic property and we're recommending you adopt the resolution. >> Right. Any questions? owner. >> Make a motion to approve resolution 2025-251
ordering the abatement of hazardous property and structures and public nuisances at 1422 First Avenue Norththeast. Second by Barnes. Motion passes. >> Thank you. bids. We have none tonight. Boards,
commission reports, announcements, project updates. Anyone? Yes. >> So, fire department is having an open house on October 5th at 10:00 a.m. to 100 p.m. >> Excuse October.
>> What did I say? Oh, >> you said six. >> Oh, October 4th. It says fifth on here. Um then Iris is going to be having a loss remembrance day on October 15th.
A farmers market final final market of the year I guess on October 25th. And bats, bones, and bonfires will be at the Riverbend Nature Center October 25th from 2 to 5:00 p.m. >> Yep. I have a few as well. The Paradise
Theat is hosting uh Joy and Parker Band as they'll present uh the music of Paty Klein. This that's Friday, September 26th at the Furbo High School homecoming parade is Friday, October 3rd at 2 p.m. Uh
Third and Long on Third Street, you can meet Viking legend legend Tommy Kramer from 6:00 to 9 downtown. And last but not least, but not the end. There's more. I know there's more hundred women gather and give. Uh Sunday, October 5th
that's coming up. That's always a really good event and raises some good funds. >> October 4th is the fall festival going on open house and I was approached by a local business to do chili feed again.
I don't mind. But I said yes. And I said to all of you people, I will cook it. I will pay for it. I will do everything, but I will send you out next week. We do not have a meeting next week. So, let you know the details.
Okay. Anyone else? Anything? Administration. No meeting next week. No meeting next week. >> All right, let's entertain a motion to adjurnn. So >> move second. >> Motion by Don Booya, second by Van Sloo.
All those in favor signify by saying I. >> I. Could you send out the time? >> Yes. >> I believe Michelle will be sending out something. >> I get these in the mail and I'm like,
what's going on? you and I'm like