City Council - Regular Meeting

The Tuesday, September 1st, 2026 meeting of the Eden Prairie City Council is now called to order. Please rise for the Pledge of Allegiance. It is customary at this time of the meeting for me to read an invitation for our residents about Open Podium. Open Podium is an opportunity for Eden Prairie residents to address the City Council on issues related to Eden Prairie City Government. Prior to each Council meeting, typically the Council meetings are held the first and third Tuesday of each month, except during the summer we have one a month. These, now we're back into the two a month, These open podiums occur from 6.30 to 6.55 p.m. right here in the council chamber. If you wish to speak at open podium, please contact the city manager's office at 952-949-8412 by noon of the meeting date with your name, your phone number, and subject matter so we can be better prepared for you. Open podium is not recorded or televised. If you have questions about open podium, please do contact the city manager's office. It is typical in many cities that the Housing and Redevelopment Authority, which is legislatively mandated that cities have an HRA, typically these HRAs are the city council, not always, sometimes councils appoint a special body, but here in Eden Prairie, the council is the HRA, so we're going to embed an HRA meeting inside our council, a normal council meeting, I'm calling the HRA meeting to order, and I'm asking that there's a motion to approve the HRA meeting that we held the last one back on January 6th, 2026, Council.

I'll move to approve the HRA minutes from January 6th, 2026. Is there a second?

Second. All those in favor say aye. Aye.

Opposed? Opposed?

Next, Mr. Getschow, I believe at this point I turn this over to you and you can give a synopsis here of what we're doing within the HRA meeting this evening.

Certainly. Mayor, members, or actually in this case, chair of the HRA, for tonight's meeting, both the HRA and the regular council meeting later on, you are setting your ceiling, your levy ceiling and your preliminary budget for 2027. This is something that needs to be done by the end of September. We're choosing to take this action at the first meeting in September. As it relates to the HRA, it has been the longstanding practice in the city that the HRA's levy and budget is mainly tied to the wages and benefits of those that work on our housing assistance and planning and redevelopment. programs in the city. And as you can see in the packet, obviously we have more levy authority than that. And as you know, we have many sources of funds for housing programs and even newer sources of funds. We'll talk about this a little bit later with the other public hearing we have. related to the community block grant funding. But the action that you have tonight is adopting a resolution, approving a proposed 2027 property tax levy of $240,000 in a budget of $240,000 for the HRA. Council, any questions of our city manager or any other staff regarding this motion?

Is there someone that would like to make the motion then within the HRA agenda here?

I'll move to adopt the resolution approving the proposed 2027 property tax levy to be $240,000 and accepting the proposed 2027 budget of $240,000. Second.

Is there any further discussion? All those in favor say aye. Aye. Opposed? Is there a motion to adjourn the HRA meeting?

Move to adjourn the HRA meeting. Is there a second?

Second. All those in favor say aye. Aye. Opposed, all right. Moving back into the regular city council meeting, let's approve the agenda for the council meeting. Any items you wish to add, a council member report or anything else? If not, is there a motion to go ahead and approve the agenda?

vote to approve the agenda.

Is there a second?

Second.

All those in favor say aye. Aye. Opposed? All right, we have minutes from our last city council meeting, two meetings actually on August 18th. We had a workshop and a regular meeting. Anybody have questions about either of those or comments or edits? If not, is there a motion to approve both of them?

I move to approve the following city council minutes. City Council workshop held Tuesday, August 18, 2026. City Council meeting held Tuesday, August 18, 2026. Second.

Second. Is there any further? I don't know who got that one. Is there any further comments or any questions, anything else? Okay, all those in favor say aye. Aye. Opposed, all right. Consent calendar, items A through L, again, significant things that we need to approve, but don't necessarily need further discussion. However, any of you can ask to have one of the items pulled temporarily or permanently and voted separately. Anybody have any questions about any of the items A through L? If not, is there a motion to approve the consent calendar?

I'll move to approve items A to L on the consent calendar. Second.

Any further discussion? All those in favor say aye. Aye. Aye. Opposed? All right. Mr. Getschow, we have a public hearing this evening.

We do, Mayor, as I alluded to, for the community development block grant funds that we receive, these are dollars that we receive from the federal government that are, we call them pass-through dollars because we receive those dollars and then we provide them directly to those in need in Eden Prairie that must be, that are served that must be of low to moderate income. And many of those dollars, as you know, we talk about in quite a regular basis are for many of the programs that we have for us, housing programs and also dollars that are passed on to our social service agencies to provide dollars to those of low to moderate income. For this action that we have tonight, it's simply to hold a public hearing for the Consolidated Annual Performance and Evaluation Report that is in the packet that must be completed every year and that we must allow the community to comment on in a public hearing. It's part of a HUD requirement, Department of Housing and Urban Development. requires that in the program year, for a program year for the federal government is July to June, that you must have, I believe it's actually two public hearings, but this is the public hearing in this case for people to be able to comment on this plan. and the plan is on the website and it was in the packet and it kind of, it lays out how the city uses its funding and spends the dollars that we receive through the Community Development Block Grant program and the different goals that are defined in the plan.

So to kind of underscore and summarize, this is a federal government accountability, a way of trying to have all this money that goes out to all these municipalities across the nation that they want to have some accountability that we report back, here's our plan, here's how we spend it, here's who received it, et cetera. And so now we just offer up to our community, if anybody is in the meeting this evening who wishes to comment on the 2025 Community Development Block Grant Consolidate Annual Performance and Evaluation Report, otherwise known as CAPER, Please come forward and address the City Council at this time. Seeing none, Council, is there a move to close the public hearing?

Move to close the public hearing.

Is there a second? Second. All those in favor say aye. Aye. And there's no other action we need to take other than to have held the public hearing in order to meet the accountability expectations of the federal government.

That is correct, Mayor.

Okay. Moving on then, we have payment of claims, which is a list of all the expenses that we've incurred over the last month since our last meeting. Council, do you have any questions about any of those items within our pages and pages and pages of expenses? If not, is there a motion to approve the payment of claims?

I'll move to approve the payment of claims as submitted. Is there a second?

Second.

Any further discussion? Roll call.

Council Member Freyberg.

Aye.

Council Member Narayan. Aye. Council Member Toomey. Aye. Mayor Case.

Aye. Thank you. Well done, by the way. All right. Mr. Getschow, moving on now. We have... not that all the other things we did were not important, but probably the most important thing we're going to do this evening. And I would argue one of the most important things we do all year, because it ties back to our budget, which ties back to what we believe and what we're told as we get elected by the people of Eden Prairie, that they want their tax dollars or how they want their tax dollars spent. So Mr. Gretchen, with that, I will turn it over to you.

Thank you, Mayor and Council Members. As I mentioned earlier with the HRA budget, tonight is the night. You could obviously continue this to another meeting, but by the end of the month, Eden Prairie and every city in the state of Minnesota needs to set their preliminary levy and budget for 2027. As you know, and I think I've got some slides I'd like to go through to kind of walk through the process a little bit. And there will be a much, much more detailed presentation that the finance manager and I will go through when we get to the final budget process in December. but the preliminary budget process has included many steps to date as well. Probably a little bit difficult to read all those lines on the screen, and the council's well aware of this because you've spent many workshops on this. that we are actually in a two year budget process. Our city works in a two year cycle, even though our city, as well as every city in the state of Minnesota, must adopt our budget on an annual basis. which is actually for the levy that we're asking you to vote on tonight is very important because there are some changes that were proposed for this year that are different than what we're anticipating in 2025. But you can see that the genesis of this entire process started well over a year and a half ago. It begins with city work plans that are done division by division. It goes back through all the different financial, comprehensive financial plans and audits, as well as a survey that we do every other year, a statistically significant valid survey of the residents in our community that begins to somewhat guide the work of the budget process as well. It's hard to believe too that we're actually only two months from the next survey that will guide the next two-year budget process as well. As you know, the entire survey and all the data can be found on the city website as well, but you also know that the important part of this is we, our residents, feel the service levels that we provide are very important and it's something that people want to see provided at a consistently high level and the service levels rank pretty high as compared to cities of similar size across the country. So when you look into the budget highlights that are particular to the current two-year budget, and these are just the budget highlights at a very high level by department, there's just a particular focus on each department that we wanted to expand some of the work that Parks and Natural Resources does in the maintenance of our parks through contracts. We were able to move some of the maintenance costs of our streets out of our general fund. We are preparing for our next comprehensive planning process. We are doing more and more work in the housing policies and programs. Obviously we have even year elections and the budget and administration reflects a higher budget number and even years. So that would be in 2026, that would be something you would see actually go down in the 27 budget. In public safety, and that's actually a majority of the city budget, it's very important that we maintain our staffing levels in police. And we also had a major remodeling of city center for that facility, which necessitated a major debt issuance, and that led to, in 2026, a large increase in the debt levy, but it drops off in 27, and I'm gonna show that. And in fire, as you know, this goes back a few years, we're a few years into our implementation of our standard of coverage study to increase, decrease our response time, increase our staffing coverage and to do it in a very methodical way to bring on more firefighters to continue the hybrid model we have, but at a very steady pace, not all at once and in a very fiscally prudent manner. Those are kind of the, I would say department by department major highlights citywide. We have some major cost drivers in our facility maintenance and technology, very important. They're cost drivers, but they're also needs that we have to stay ahead. And there's also a focus on community engagement and community events. When you get down to the numbers in our revenue and expenditure budget, there are some, I wouldn't say, well, fluctuations could be one word, but the numbers obviously are quite different in the different areas that you look at for what we're proposing from 26 to 27. And I'm gonna get, obviously we're gonna focus in on the taxes number, but if you look at the property tax number, well, what should jump out to most people is in a $67 million general operating budget, $50 million is property taxes. So that's one piece of the puzzle there. Always keep in mind when you think about a total city budget, our total city budget is over $150 million. This is the general operating budget. This is a revenue budget that is tied to people's property taxes. This does not include your utilities. It does not include debt or special revenue funds or the liquor operations. This is the general operating budget. But as you can see, the majority of the revenue is taxes. However, the growth in the revenue is not in the taxes. The growth in the revenue that we're seeing for 2027 is an investment income. and it's in intergovernmental revenue and it's in licenses and permits. The intergovernmental revenue is actually grants related to our fire staffing. So there's gonna be an expense that's tied to the revenue. So we obviously have to put revenue and expense together. So you're gonna see there is a balanced budget. So you're gonna see in the next slide there's the revenue and the expenditures balance. So the grants, you know, wash. But in investment income, there isn't a expense for investment income. So that's a positive and there isn't a full, and there are expenses for the charges for services and the licenses and permits. However, there's a larger increase in the licenses and permits revenue than we anticipated. So what you're gonna see is, due to a larger increase in development. So it isn't that we're raising fees for people. That's not what we're doing because we do that at the outset of the two-year budget. It's that we're seeing a quicker pace in development, which is a positive thing, whether it is new business development, redevelopment, New construction, the pace that we're seeing is probably a little quicker than we budgeted for in 25, so that means, and you'll see this a few slides ahead, that we may not need to have a larger tax levy than we first anticipated. On the expenditure side, The main driver, as you could see, is the fire expense. But again, there's a revenue grant side to that with the additional personnel. And obviously the biggest part of the expenditure side on fire is additional personnel. But you can see in some areas in administration, community development, and parks and recreation, those increases in the total department line items are actually well below the rate of inflation. And in some of those other areas, the main cost drivers are wages and benefits. Overall, I would say if you took out If you focus just on the non-public safety items in the budget, the entire city budget expense side would be going up only 3%. So you can see if you look at the budget by category, we're in the people business, we're in the service delivery business. The majority of the operating budget of the city is focused on people costs. and then you have obviously utilities and IT and fleet and facilities. When it comes to what's changing the increase in that budget, again, similar, it's the cost associated with people. There are other costs that are actually decreasing in some contracted services, And there are actually other areas if you look at electricity, even though that's going up 59,000, I think that the rate of increase in utilities is way beyond that. So there's some sustainability measures that we're taking that are lowering that cost. So I would say that increases even would be much higher if not for some of the work that we're doing in that area. So when you look at some of the goals that we have overall for the budget, based on some of the things I said earlier, that the council has directed the staff to put together in the budget is really to maintain a high quality level of service delivery at a reasonable tax. we'll get to the tax piece in a second, to have a balanced budget, to maintain strong fund balances, to have reasonable fees that you that you look at annually. You have a conservative estimate of your revenues and expenditures, and you look out long term. We do a lot of long range capital planning. In terms of the conservative estimate of revenues and expenditures, I think that's part of the adjustment that we're making on some of the advance fees. So the council's seen this slide before as well, and this is a slide from last year. the slide that when we did the two year budget, the anticipation was that in 2025, when we were looking at what the budget would be, or the levy would be in 26, the anticipation was a five point a 6% to 8% levy in 26, and that's what it was, and probably a 5.6% levy in 27. That's why I highlighted those areas, because you see the 6.6, that was an estimate based on fiscal disparities. I don't even want to talk about fiscal disparities. That's for December. We'll get to that at a different time. But just look at the 5.8 and the 5.6. So based on some of those changes I mentioned in revenues and expenditures, and there are some areas where we were able to reduce expenditures as well, and this is something the council talked about in the July workshop as well, we are proposing to bring down the general fund levy to 3.1%. So then when you factor in the debt levy, you have to put all your levies together, you factor in the debt levy being flat, and then we now have an anticipation of what we have to contribute to the fiscal disparity pool in the seven county metro area, we have a 2.9% levy. that we are looking at this evening. Again, this is the highest levy you can set. You could go down from here. That's not something we recommend. You know this from the last decade or so. I think, at least for 15 straight years, the levy ceiling that you have set in September is the levy that you have set in December. There are other cities that in September they will set a levy of let's say 6% or 8% and they will say, oh, maybe by the time we get to December we could drop it a percent or two. We have always worked under the auspices of let's set what we know we can set and stick with it. And so I have no plan to bring forward anything lower than this. There's the debt levy. And then market value playing into the tax impact piece I'm going to show. It's positive growth in the city's market value. Obviously there, if you kind of look post COVID, there was pretty fast growth in the residential sector and new construction. We continue to see some of that growth. We always like to say if we put the entire city up for sale, the price tag on the city would be about $14 billion. And then these are not final numbers yet, but depending on the value of your home, based on what the levy would be across many different values, the individual tax, of the individual resident is gonna range anywhere from basically being flat to going up two or 3% to possibly going up six to 7%. It all depends on what the value of your home is worth and what happened to the value of your home. And you can even see in this chart If your home is in the $300,000 to $450,000 value range, your home went up on average about 1.7%. If the levy goes up 2.9%, your tax goes up 3.5%. Homes above $710,000 on average are going up about 4%. You add 2.9%. The tax is actually less than that. The tax is only 6.4. It's less than 4.1 plus 2.9. Looking at all those factors, if you took the $14 billion of gross property value, multiplied it by all the different class rates, you get city tax capacity. That's taxable value in the city. That's the blue number. That's our capacity. The lowest number is what our certified levy has been. And the orange, I always say, is the barometer of your community. The barometer of your community is what is your tax rate. If you're shopping for a home and you want to be in the city with the lowest or highest or middle or whatnot tax, what the tax is, go find out what their tax rate is. It's all about the tax rate. Our tax rate's actually been pretty stable for the last five years. It took a dip down to 28%. It's up around 32. A lot of that has to do with what's been happening with commercial property values, but the tax rate has stayed roughly the same. Again, this is just an estimate. It's pretty early yet in the fall. But as you can see, if that almost $500,000 residential home sees a $40 increase in their tax, apartments and commercial properties are seeing a drop. Their taxes are going down. That's too small, I apologize, but that's the breakdown of all the value increases. A letter from our city assessor that says, in a nutshell, across the city, values in 26 for different classes of property for taxes in 27 are as follows. Single family homes went up about 4%. Townhomes are flat. Condos went down about 3%. Commercial properties went down one half of 1%. That's actually good. Commercials flat. If you remember, commercial property down 5%, down 7%. In the core cities, commercial property was down 10% a few years ago. Multifamily property down about just under 2%. So I'm told that the commercial market is... stabilized, but we shall see. And that's reflected in this slide. This slide shows you that Eden Prairie, if you look at the type of property we have by class, As we sit today, or next year's taxes, we are at the highest point in time for our value being residential. 64.2% of our taxable value is in residential property. 10 years ago, it was at 57.8%. If you think about our city 10 years ago, we have not built thousands and thousands of homes in the last 10 years. We've actually probably built, we built quite a few multifamily units, but there has been quite a bit of commercial built. The bottom line with that is the increase in residential values is far outpaced commercial values. That's what that chart is indicative of. Last two slides, council members, I'm almost done. If you look at the city's cumulative property tax levies over the last 10 years, we have been consistently near the bottom. We have, so I think our 2.9 is reflective of what we've been doing. It's not a contest. I guess Maple Grove would be winning the contest if we were playing a contest for the last 10 years, but we have been consistently having some of the lower levy increases of neighboring cities. And then from what we can gather from our peers, and this is what some of these cities are saying, they are setting as a levy ceiling. That could change by the end of the month, and it certainly could change by the end of the year. I am not aware of any city of similar size that is looking at a levy ceiling. below ours but that just gives you again it's not a contest but it gives you some indication of what we are seeing around us Finally, following the preliminary levy and budget approval that the council would vote on tonight or by the end of the month, each individual taxpayer in the city would receive their property tax notice in early November. They would receive, every single person would receive notice of the opportunity to come to the City Council meeting of December 1st, of which will be a public hearing, a presentation, and action by the City Council to approve the final 2027 budget and tax levy. So with that, Mayor, this is not a public hearing of any sort. It's simply a report of the city manager and then action needed by the city council to set the preliminary levy and budget.

Hey, Rick, and I think you're working the slides, but would you go back to the last, there you go. So in the interest of full transparency, but also pride, I think in our 2.9%, It was a figure that, I mean, you mentioned that, but for intergovernmental revenue and development, we might've been around five and a half to six, which we had planned at a year ago. And so because we have had strong development, which is a positive statement for everything that staff and council has been doing, I don't wanna gloss over that at all. but we can't always control the development world out there and we certainly can't control intergovernmental revenue. So my point is that maybe a fair, if you really want apples to apples for years to come, I just don't want to set everybody up that we're gonna be 2.9 for the next 10 years. a fair number here might be we were gonna be around five, five and a half, but still look at that, we'd still be one of the lowest. And next year, unless intergovernmental revenue remains strong and unless development remains strong, we'll likely be around the five or six, but consistently for a decade, we've been one of the two or three lowest cumulatively at that kind of comfortable, I don't wanna say comfortable, tax increases are not comfortable, but at that level of five, five to six percent. This year, we're incredibly fortunate because of circumstances, some in our control and some not, that we're able to do 2.9, which is amazing, and we'll grab at that and celebrate that while we can. I just wanted to also add to that that I've been asked, I don't know, five, six different times in the last week, partly because I've been bragging about the 2.9, and the question that follows, including Today, if you get a chance to watch Fox 9, I think it's on this evening, I was interviewed about why and how. Why are we at 2.9 and how is that possible? And we saw tonight that number one, the levy is a portion. I mean, it's not everything, right? And so you look at all the other moving parts of revenue, That's a big piece of it. Granted, other cities have those moving parts too. But the second thing is that we for sure have this stable, consistent leadership, both on the council level. We've had 16 years of really people on our council that have been positive for our growth, positive in support of our staff, responsible with our taxing levies, clearly some of the lowest in the whole Twin Cities area. We've had this stable leadership. We've had consistent support of our goals and objectives. We have a culture that really prioritizes and rewards creativity and innovation and efficiency. And there's all kinds of examples of that. And really, I guess you could almost call it luck of where Eden Prairie landed in the second ring suburb and our natural resources. But it's also strategic planning after 60 years of councils and mayors and and incredible staff. So we deserve I think the credit for this 2.9. We also are fortunate to be in a position that we have these resources and we have a phenomenal tax base that I always said was 60-40 residential commercial and I understand that moves a little bit. I get that. So Council, anything else that you want to add? before we actually end up taking voter questions. Well, again, this is our sixth, what did you say, sixth or seventh meeting on the budget and on taxes, and this is nothing really new here this evening, but it may have sparked a question or a comment.

Yeah, the only thing I'll add, Mayor, too, is, I mean, it's both sides of the ledger, too, because there are, because you mentioned the staff. I mean, there are some areas on the expenditure side where there were some savings and there was some good work done in insurance and a few other areas where there were some savings. So you're right, though. I mean, we could have maneuvered a half a percent or a percent. So it could maybe it's four and a half percent instead of five and a half, if only for expenditures. So there's, you know, I think there's many different factors at play as well, but there's revenues and expenditures and it's a mix of things.

We have a phenomenal story to tell and Eden Prairie is in just a really good place right now. And again, I'm so thankful for staff. you know, people forget that staff that go to work in municipalities have a lot of choices. 800 cities in the state granted. Some are large and some are small. But people can go work elsewhere. But we are, from everything I've always heard, we're the place to work. We're the police department to work at. We're the fire department to work at. We're park and rec people. Amy, you want to come to work, and we take them from other cities. And because of our culture, we have a phenomenal culture, and that doesn't come accidentally. That's strategic. And it starts with... council that prioritizes and values people, pays them fairly, treats them, you know, I hope really wonderfully, but then that leads to hiring a city manager who wins the city manager of the year and a communications person that wins the communication person of the year. And help me here, Rick, I know there's a whole bunch of others. I mean, our staff have been receiving awards, best of in the state and now for the last couple of years, tremendously often. And that's not quite the statement. I do wanna say one thing just so that we don't disparage our neighbors. We do have a great story to tell. Eden Prairie, I'm the mayor, so I know it comes out of my mouth easily, but we're the best city around. I mean, we really got a lot good going. But when you start comparing numbers and you'll hear this, you'll hear St. Paul or Minneapolis or some of our suburban cities of equal size, no two cities really compare perfectly well. There's different obviously size city, aging infrastructure. I mean, I don't know if there's still wooden, I think that's New York City, but there's still aging infrastructure in Minneapolis and St. Paul. There's different community resident expectations. There's different tax base. I mean, there's just so many variables out there that make it so that it's just not like, hey, we are doing a phenomenally best job, I think. But you can't just say other cities are not. I mean, the Edinas and Minnetonkas and Woodburys and Plymouths of the world, they're doing a really good job the best they can. We've made some, I think, phenomenal decisions in the last, you know, maybe six years, but for sure the last decade that have led to us reaping the benefits right now. And I'm so proud of that. But I just wanted to add that, that I don't want to necessarily throw any other city under the bus. They each have their own issues and their problems and the ways that they confront it. I just wanna say we've done a great job, so. Council, anything else?

No, I agree with everything you just said.

Yeah, all right. Couldn't say it better. Okay, I think we need a motion.

move to adopt resolution to certify the proposed 2027 property tax levy to be 54,381,193 and set December 1st, 2026 at 7 p.m. as a meeting which will include discussion of the budget and provide for public comment and accept the proposed 2027 budget of $70,165,770 and consent and approval of the HRA tax levy of $240,000. So second. Second.

Any further discussion? All right. All those in favour, say aye. Aye. Opposed? We just did one of the most important things that a Council can ever do, and that's, now again, this is the preliminary, right? We can always move down. We just can't go up. Technically, officially, right, The levy is actually set in the first meeting in December. At least we choose to do that. I think it can be within a couple weeks of that. And that drives then, the money we bring in, right, drives a portion, right, a significant portion of then what our budget was, which then drives the response to what our residents expect in terms of the quality that they want in this community. So pretty much all starts with the levy. All right. Is there anything else to come before the Council this evening? With that, I'll entertain a motion to adjourn.

I'll move to adjourn the City Council meeting.

Is there a second?

Second.

Further discussion? All those in favour say aye. Aye. Opposed? This meeting is adjourned.