City Council - Regular Meeting

Call a city council meeting for Monday, July 6th to order. Would everybody please rise for the Pledge of Allegiance.

I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

Call the roll, please.

Council Member Wilson? Here. Council Member Cordes? Here. Mayor Lien?

Here.

Council Member Burnette? Here. Council Member Winchettle?

Here.

Any changes to the agenda? None. Seeing none, look for a motion to approve the agenda.

Motion to approve. Second.

Motion by Holly, second by Jake. All in favor say aye. Aye. We have an agenda. Item 5-1 is our Parks and Recreation Month Proclamation.

Good evening, Mayor and City Council. Since 1985, people in the United States have celebrated Parks and Recreation Month in July to promote building strong, vibrant, and resilient communities through the power of Parks and Recreation, and to recognize the more than 160,000 full-time Parks and Recreation professionals, along with hundreds of thousands of part-time and seasonal workers and volunteers that maintain our country's local, state, and community parks. This year's theme, The Power of celebrates Parks and Recreation and the people who make it all possible. This month, we're celebrating the many ways Parks and Recreation reveals the power of what connects us, the power of connection, the power of play, the power of community, the power of nature, the power of belonging, and the power of well-being. I want to thank you, thanks to the City Council, Parks and Recreation Commission, and Rambling River Center Advisory Board for your support and always showing up for the Parks and Recreation Department. Thank you to the Parks and Recreation staff and volunteers for all you do to provide quality facilities, parks, programs, and an environment that improves quality of life and promotes community unity in Farmington. The Parks and Recreation Department will celebrate Parks and Recreation Month by hosting a party in the park on Friday, July 17th at Lake Julia Park. The party starts at 7 p.m. with music by Royal Ord of chords and keys, games, water balloons, crafts, and more. At dusk, the movie How to Train Your Dragon will be shown. This is a free community event and everyone is invited to attend. Thank you to the event sponsors, including Castle Rock Bank, Farmington Liquors, Farmington Youth Hockey Association, Marshall Line, and VFW Post 7662. We always say we have the most generous individuals, businesses, and organizations who support us with their time, talents, and sponsorships. We couldn't do what we do without all of them. The action requested tonight is to proclaim July 2026 as Parks and Recreation Month in Farmington.

Excellent, thank you. Steve?

Thanks, Kelly.

Okay, whereas parks and recreation is an integral part of communities throughout this country, including Farmington, promoting health and wellness and improving the physical and mental health of people who live near parks and...

Whereas parks and recreation promotes time spent in nature, which positively impacts mental health by increasing cognitive performance and well-being and alleviating illnesses such as depression... attention deficit disorders, and Alzheimer's, and whereas parks and recreation encourages physical abilities, activities by providing space for popular sports, hiking trails, and many other activities designed to promote active lifestyles, and

WHEREAS PARKS AND RECREATION PROGRAMMING AND EDUCATION ACTIVITIES SUCH AS OUT OF SCHOOL TIME PROGRAMMING, YOUTH SPORTS AND ENVIRONMENTAL EDUCATION ARE CRITICAL TO CHILD DEVELOPMENT AND WHEREAS PARKS AND RECREATION INCREASES A COMMUNITY'S ECONOMIC PROSPERITY THROUGH INCREASED PROPERTY VALUES, EXPANSION OF LOCAL TAX BASE, INCREASED TOURISM, THE ATTRACTION AND RETENTION OF BUSINESSES AND CRIME REDUCTION AND.

Whereas parks and recreation is fundamental to the environmental wellbeing of our community and the city's parks and natural recreation areas, ensure the ecological beauty of Farmington and provide a place for children and adults to connect with nature and recreate outdoors and,

whereas the U.S. House of Representatives has designated July as Parks and Recreation Month, and the City of Farmington recognizes the benefits derived from Parks and Recreation resources. Now therefore, I, Nicholas Lane, Mayor, on behalf of the Farmington City Council, do hereby proclaim July 2026 as Parks and Recreation Month, in witness whereof I have hereunto set my hand and cause the seal of the City of Farmington, Minnesota, to be affixed on the sixth day of July 2026. On to the consent agenda. Look for a motion to approve.

Motion to approve. Second.

Motion by Jake, second by Holly. All in favor say aye. Aye. Item 7-1, we have a public hearing. Resolution 2026-061, adopting the city's capital improvement plan and authorizing the issuance of CIP bonds, which is Kim.

Good evening, Mayor and Council. So before we begin the public hearing, I'd just like to offer a brief introduction to this agenda item. Tonight, we're presenting a proposed capital improvement plan for 2026 through 2030. We'll start with an update from Chief Seem on the proposed renovation expansion expansion of the public department. or police department facility, which is a single project that's identified in the plan. After that, Tammy Omdahl from Northland Securities will walk us through the statutory process for the CIP and the potential use of the CIP bonds. Once those presentations are complete, we'll open the public hearing and invite members of the public to share their comments. After public input, the council will be asked to consider adopting the five-year plan and approving the resolution. Adoption does not commit the city to moving forward with the project or for issuing debt. It simply preserves the authority to use the CIP bonds in the future if the council so chooses. That'll let Chief Seem give us an update on the project.

Thank you, Kim, and thank you, Mayor and Council. I just want to start back at the beginning and give us kind of a refresh on the conversation we had a couple months ago on why this project is necessary and needed at this time. The PD was built in 2002 at 15,000 square feet. At that time it was to accommodate 15 staff and projected 20 years out into the future. Unfortunately at that time they couldn't anticipate the unprecedented growth that Farmington would have and the growth in the police department sitting now at 32 staff, more than double of what we were in 2002. And a squad garage that housed six vehicles back in 2002 and currently we have 12 Patrol vehicles in our fleet that that don't properly fit in our squad garage. Along with that, they couldn't possibly anticipate the needs that are pushed onto law enforcement currently, and some of those needs that are held by other agencies surrounding us that we don't currently have include social workers. Crisis co responders, domestic violence advocates, community engagement officers, crime analysts or records supervisors, which we currently have, but don't have an office for. In 2024, there was a facilities conditions assessment. There's more than $2 million in deferred maintenance, primarily on roof reconstruction, exterior upkeep, and mechanical upgrades. In 2022, a space needs assessment was done, and the assessment resulted in an expected need of more than double our current square feet at 36,000 square feet. And then with this, I also want to update on the timeline on where we're at today. Since May 4th, when you approved the AIA with BKV for architecture, and then on the 15th, when you approved the RFQ to go out for a construction manager. That RFQ was issued on the 17th, two days later. We've had tours at the police department two weeks ago of potential construction managers, and our RFQs are due tomorrow afternoon at 4 p.m., Once those are in, we'll start reviewing those RFQs and moving on with the rest of the process. The timeline, right now we're obviously in the design phase. We're in the document phase starting in October, October through January. Construction bidding, January to February of next year. And then construction anticipated to start in the spring of next year and go on through the fall of 2028. That's all I have.

Mayor counsel, Tammy, I'm done with Northland securities serving as advisor to the city municipal advisor on the sale of bonds. Um, I have just a few comments, um, to add to what has been presented so far. The reason this public hearing is on the agenda tonight and the action relates solely to having the authority to finance municipal facilities. State law provides authorities for cities to issue general obligation bonds for municipal facilities such as police stations, but to do so requires that you hold a public hearing. Following that public hearing, the adoption of the resolution, and then there is a 30-day period that the public, should they petition, could call it to a vote, to a referendum for the public to vote. So 30 days. The reason that you're having it at this point in the process is to ensure that when you are ready to consider and call for the sale of bonds that you have the authority to do so. By law, the plan has to include a not to exceed amount, as well as the notice for the public hearing that was published in the newspaper included that $25 million not to exceed. You may choose to issue less than that amount, but you cannot exceed that amount following the hearing in the 30-day. The other comment that I have, it's a bit confusing that it's called the CIP plan because when you think of your CIP plan, you think of streets and roads and all the other improvements. That's not what this is. There was a document was in your packet. It's much more limited and it's limited to facilities. By state law, it's called the CIP plan, but it's related solely to facilities. I would also note that it was mentioned it's a five year plan. State law allows you to consider approving a plan that has projects for up to five years. But in the case of Farmington, you have the one project for the police station, renovation and expansion only. So I would just note that it's not five years of it. The last comment that I would have is timing. You might say, well, if we approve this, when does it expire? We have to issue the bonds. State law doesn't determine an expiration. What typically happens is if too much time passes, projects change and the amounts become outdated, but I would note that you are under no requirement as far as timeline once you get past that 30-day period. With that, Mayor Council, I would be happy to answer any questions that you may have for me.

Any initial questions, Phil?

No questions. Thanks for all the detailed information.

You're welcome.

Molly?

I have nothing more.

Jake? No questions. Dave? So... Dave Microsoft.

Need to turn my mic on, thank you. This one is a little bit unique in the sense that we may not use much, if at all, of the authority that we're given here, potentially, depending on how we fund the project. So when you're looking at it from a, you know, how would a bond rating organization look at authority given and then significantly less usage or no usage. Does that ever come into play? Like, you know, why didn't Farmington do that? They put out an authority at $25 million and use $1.5 million, for example.

Great question. With respect to the bond rating, and you're referring to the agency that rates the city's bonds, It would have no implications. And this solely relates to each state as different as far as their authority for municipalities to issue debt. Most cities choose to have an amount in these plans and subject to the reverse referendum. that gives some room or contingency because you have to do this process before you've completed all of your planning, including your funding. Council Member, your point that you may identify other sources that would reduce the amount of bonds to be issued. There would be no implication with respect to the city's bond rating.

Thank you.

Any other questions, Steve?

No, I'm good.

All right. I have no further questions. I appreciate the... Well, I guess... Just to be perfectly clear here, just so I put it on paper, that this is not a vote to say we are building a police department or anything like that. This is all funding related. The votes for those things come later.

That is correct. And tonight you're authorizing, should you approve it, the ability to issue the bonds. You are not calling for the sale of bonds tonight.

I just want to make that perfectly clear for the record as well. Since this is a public hearing, I think we can go ahead and open up the hearing now. Is there anybody that would like to come and speak on the topic?

Good evening, Mayor and Council. Nate Ryan. I live in the city of Farmington here. So I think that as you're considering these heavy duty projects, I know that the municipal projects are different, the streetlights, all those things. But I definitely think that one of the things that the previous mayor talked about was the need for infrastructure projects. And would this be a good time because You know, are rates getting lower? Potentially you could use a different classification of bond. Would this be a good time to look at financing other projects and get that, you know, get that proposal and then have a fairly decent amount of time for taxpayers to understand? Like even this bond, if it were to be enacted soon, payments wouldn't begin until 2028. So, you know, would that be a good time for taxpayers to? Be able to understand the low that's going to start to bear on them in 2028, because I would guess that we're going to need it's like 1.6M dollars a year to pay back this bond starting in 2028. So could we start to anticipate what that's going to look like for homeowners and homeowners taxes or for people who are interested in moving to Farmington? And, you know, just kind of get it all out there. You know, if there's other things that need to be, I totally understand the chief's need to house more people. And a lot of those demands, frankly, aren't his, right? I mean, those investigations that need to happen, that's coming from the state legislator to house some of those people, especially on the fraud side of things. So is there other things that we could potentially anticipate looking forward and be able to get a favorable bond rating and then also to be able to prepare Farmington taxpayers for what's to come? So that way we can make some budget decisions too. We know that our property taxes in 2028 are going to go up by, you know, maybe not just 12% like they did last year overall, you you know, overall number, I get it, not impacted by every single homeowner, I understand that too, but just looking at that, you know, so that would help us budget, it would help you all budget, and I'm not suggesting to borrow any more to expand government, I don't like that idea at all, but I definitely think that, you know, could you really start to look at a five-year plan and say what else could we include here, and then be able to lay out to your taxpayers How much is this going to impact you? When it's going to impact you? You know, what are taxes going to look like? It seems like every year we just kind of get surprised, like, oh, my gosh, surprised that taxes are going up by that amount. When in reality, like the chief had highlighted, these things have been going on in the background for a while. Most of it gets, you know, brushed in the consent agenda. You don't have open forum or open conversations about it here. But, you know. I just think that there could be another way. And if you're going to ask for money, you may as well get it all out there now. So that way the taxpayers can start to plan instead of going, oh, crap, where am I going to get $700 more a month because I got to pay for this police station addition or whatever else that we have to pay for. and truly understand what are the tax ramifications. It's great that, you know, oh, you don't have to spend $25 million, but I would look to them and what are the tax ramifications and when do they start to take effect. So 2028, $1.6 million a year of debt service, that's going to do something to all of our taxes. And I think just a little bit, just that much more trying would be very helpful from you all. Thank you.

Anybody else?

that question, what is it going to do to taxes? It's a public hearing.

Do you have any insights for that? I would expect that to be talked about in our actual budget cycle. We have had capital improvement plan discussions numerous times over the years. It is a part of our general budget cycle to have those discussions. I need to do a motion to close the public hearing then. Okay. I'll look for a motion to close the public hearing.

Motion to close. Second.

Motion by Phil, second by Steve. Call the roll, please. Yes.

Yes. Yes. Yes. Yes. Any further commentary by anybody? No.

Look for a motion to approve resolution 2026-061, adopting the city's capital improvement plan and authorizing the issuance of CIP bonds.

Second.

Motion by Steve, second by Jake. Call the roll, please.

Council Member Cordes?

Yes.

Marilene? Yes. Council Member Bernatz? Yes. Council Member Winchell? Yes. Council Member Wilson?

Yes. Thank you. Item 11-1, the 2025 Annual Comprehensive Financial Reports and Related Audit Reports. Kim again.

Mayor and council, each year the city undergoes an independent financial audit to ensure the accuracy of our financial reporting, the strength of our internal controls, and our ongoing commitment to transparency and accountability. This year included both the standard financial audit and the federal single audit because the city's federal expenditures exceeded the threshold that requires that additional level of review. I'm pleased to share that the auditors issued an unmodified, which is a clean opinion. This means our financial statements were found to be accurate and free of material misstatements. And importantly, there were no indications of fraud or misuse of public funds. The federal single audit provides an added layer of oversight in how federal funds are managed, and those results will also be summarized in tonight's presentation. I want to take this time to thank city staff, our finance team, along with the department heads and their staff for their work throughout the year and during the audit itself. It's truly a team effort. The process is detailed and time intensive, and their efforts help ensure we continue to be responsible stewards of public resources. Then I'd like to introduce Bill Lower from L.B. Carlson. Bill will walk us through the results of the 2025 audit and highlight key takeaways from both the financial and compliance reviews.

Good evening, Mayor and Council. Thank you for making time on your agenda this evening. As Kim stated, I am here to kind of go through the audit. What I'm going to do with you this evening is try to accomplish three things. First of all, to make some required communications, I need to make sure that you understand, as the body that oversees the city's financial reporting process, the responsibility that the city management has for the main document you received, the city's annual comprehensive financial report, how that differs from our responsibility as auditor. Second, as Kim mentioned, I'm gonna walk through the audit process, the reports and opinions that we issued as a result of that process with you. And finally, I'm just gonna spend a little bit of time going through some of the very high level financial results for the year under audit. So as I mentioned, the first thing I need to do is make sure that you understand each year that the primary responsibility for all the information that went into preparing the, it's over 150 page document that you received this year, rests with city management. We come out and audit this information and the financial statements Provide an opinion as to whether that fairly presents the city's financial position at year end and results for the year end or audit. Again, since you earned over a million dollars in federal awards in 2025, you were subject to that separate single audit of those federal awards expenditures. Essentially, this is a separate compliance audit on how you spent those dollars. Because of that, there's three different areas that we have to look at your internal controls and audit compliance. First of all, because your audit is performed in accordance with governmental accounting standards. We have a letter that you'll find in the special purpose audit reports relating to our review and evaluation of your internal control and compliance with of preparation of your financial statements, a separate letter that relates to internal control and compliance regarding that federal single audit, and finally, you're subject to an audit of your compliance with Minnesota state laws and regulations. There's an audit guide the state auditor's office puts out and updates annually that we have to audit any local government subject to. As far as the audit results, As Kim mentioned, we were once again able to provide an unmodified opinion on the basic financial statements, and also we did not come into anything that we had to report as far as any internal control deficiencies or noncompliance with regard to preparation of that document. The unmodified opinion is basically the highest opinion that we can give. I know it's jargon, but it's basically a clean opinion on your financial statements again this year. as far as the results of your federal single audit. We issue an opinion as to whether the schedule of expenditures of financial awards is fairly stated in relation to those financial statements. That opinion is that schedule is fairly stated. We had no reportable noncompliance. However, we did have two deficiencies in internal control that we reported for the year. The first one relates to suspension and debarment documentation, so this is part of the process for awarding contracts that are financed with federal dollars. Part of that is you have to make sure that any party that is participating in those is not suspended and debarred and they're eligible to participate in a federally funded contract. You did do that, but basically for us to count it as having been done, we have to have the evidence, the documentation kept as to what date that was done and some kind of screenshots or things like that to document the process that you undertook to do that and that documentation wasn't kept. We did re-perform those documents processes and you did not do business with anybody that wasn't eligible. However, that control process of keeping that documentation needs to be improved. And finally, the other one had to do with accurate preparation of the schedule of expenditures of financial awards. Essentially, you had one invoice that was included in the federal awards expenditure schedule that was given to us to audit that was actually spent in 2024. So that was pointed out, it was corrected. It didn't change anything as far as what we had to do to audit your federal program for 2025, but it could have resulted in us selecting the wrong programs or not getting enough coverage or things like that, so we have to report that. Also, I should point out that expenditure did not change what happened in 2024. There was nothing that was impacted where you would have had to have a different audit or anything in 2024. And finally, from a Minnesota legal compliance standpoint, we had no noncompliance to report for the 2025 fiscal year. I'll just pause here for a moment before I move on to some of the financial information. Are there questions on anything that I've covered so far as far as the opinions and reports that I issued? I'm seeing head shaking, no? Okay. Then I am going to move on. So the city maintains two basic fund types, governmental funds and proprietary funds. Your governmental funds include your general, special revenue, debt service and capital projects funds. The way these are accounted for, you're only recording your current assets and liabilities in these fund financial statements. So any capital assets, outstanding bonds, payable long-term employee benefits aren't included within the funds. And fund balance is how your equity in these funds is reported. So this table shows a change in your fund balances for your governmental funds from the end of 2024 to 2025. The top piece shows the different components you report that fund balance in, and the bottom part shows it broken out by the major funds that the city maintains. So at the end of 2025, you had about $41.5 million in total fund balances. across your governmental funds, which was an increase of about four and a half million from the year before. Just briefly, I'll go through the different categories. There are non-spendable fund balance. You got a small amount, about $2,700 there. That's basically prepaid expenditures. Still an asset to you, but it's not cash. You can't spend it for something else. Restricted fund balances are things that are subject to external restrictions. For instance, bond proceeds, they're restricted for what you can use them for by the bonds documents that you issue, things of that nature. So those are kind of outside of your control as to what you can use that for. The last three categories are all controlled at a local level. Committed fund balances are things that either through board action or board policy, you've committed fund balances for specific purposes. Probably the largest thing in there is utility trunk fees that you collect. You have a policy where those are automatically committed for utility extension and improvement projects. Assigned fund balances. are also earmarked at the local level, but they're less formal. Those can be either done at the council level or at the city management level by a designated person. And then unassigned fund balances are available for any purpose. So of that $41.5 million, the bulk of it is under local control. You did have about seven and a half million that's restricted by external restrictions, but just under 20 million that was committed, about 1.6 assigned, and about 12.7 unassigned. As far as the change, that increase of four and a half million, it was mainly three areas. Your restricted fund balances went up by about 1.2 million. Most of that was due to unspent bond proceeds. You issued some bonds for street improvement projects, and those projects were still underway at the end of the year, so you did have some unspent proceeds, mainly within your street improvement capital projects fund. The second area, your committed fund balances went up by about $1.4 million. Again, the biggest piece of that is that utility trunk capital project fund where you're collecting utility trunk fees. And then your unassigned fund balance went up by about $1.9 million. The bulk of that relates to your general fund fund balance. You had a $1.6 million increase in your general fund fund balance and that makes up the bulk of that change in unassigned fund balances. I'll drill down briefly to the general fund. That's your primary operating fund. Your fund balance at the end of 2025 was just a hair under $13 million. That was an increase of about 1.6 million from the year before. You'd actually budgeted basically to break even, I think, at a small, like a $6,600 deficit in your final budget. So it was about $1.6 million better than projected. You do have a policy that you're going to attempt to maintain an unassigned fund balance of about 40% or more of your annual budgeted expenditures for the subsequent year. You're well in compliance with that policy. At the end of 2025, you actually had about 69% of your 2026 budgeted general fund expenditures and transfers out in your ending fund balance. As far as the budget variance, the majority of that came on the revenue side. Your general fund revenues for 2025 were about $19.7 million. That was about $1.5 million higher than budget, roughly 8%. Three areas that were over budget and your governmental revenues were about 384,000 over budget. Mainly this was a few state grants, local affordable housing and some other state grants that came in a little higher than you had budgeted. um licenses and permits including building permits for about 255 000 higher than budget and the largest variances in that all other category kind of the big item in there is your investment income um your that other revenue was about seven hundred and thirty thousand dollars over budget about five hundred and fifty thousand of that was an investment income the reason for that is because you budget conservatively for investment in income because made up of two things first interest that you've actually received from investments that have matured but you also have to mark your investment portfolio to fair value each year you don't realize those gains until you actually sell those investments and typically you intend to keep them to maturity but you still have to recognize the change from period to period and you don't budget for that fair value change so then you had a good year obviously with your portfolio On the expenditure side you spent just under 18 million dollars in 2025. You're very close to budget under budget by about a 1.5% roughly $275,000 in total. The bulk of that variance was in your public safety department. You had about $257,000 less in police salary and benefits than you had budgeted due to some unfilled positions. The other type of fund that the city maintains is proprietary funds. You have some internal service funds, but the main ones are these enterprise funds. So these are funds where you're recovering the full operating costs through user fees typically, which would include the cost of both constructing capital assets and maintaining them. You have five enterprise funds currently a couple years ago You privatized the solid waste collection and that you used to have fun for that that went away at the end of last year Did you still maintain a water sewer storm water and streetlight utility fund and then the liquor store? operations is another enterprise fund and So these funds are reported on a full accrual basis, so these do include all of the capital assets, outstanding debt, long-term liabilities for employee benefits within the funds. And your equity is reported as net position, which at the end of 2025 was just under $76 million across all five of these funds. It was an increase of about 1.8 million from the year before. Of that $76 million, roughly 50 million is your investment in capital assets. So again, these aren't spendable financial resources. This is your investment in mainly your utility infrastructure. uh... you also have about two and a half million which you've been caring for for several years as restricted for uh... drinking water treatment plant expansion or replacement and you have unrestricted net position at the end of the year of about twenty three point five million dollars Again, the lower half of this kind of shows the change by fund, but I do want to make a couple comments there. It looks like it's all kind of coming from your liquor and water funds, but there's a little bit of a story behind that. All five funds had positive operating income for the year. Again, most of this is coming from your utility funds, but your liquor fund had a operating income of $531,000. And in total, all of your funds had total operating income of about two and a quarter million dollars. uh... you also had other income including investment income and water tower rental income for other things like that about one-and-a-half million dollars you had capital contributions for completed completed capital projects basically street improvements were part of that was water and sewer infrastructure that was contributed to those funds of about one point seven million and then finally you transferred out about three and three quarter million dollars mainly to the governmental funds to fund ongoing capital projects over there and when those projects are mainly street improvements are completed then the portion that's attributable to utility infrastructure will be contributed back into these funds so the reason you're seeing some of the negative in the sewer and the storm water is because of those transfers to the project funds. The one fund I'll just talk about a bit more because it is different is your Liquor Operations Fund. You had total sales in 2025 of about $6.9 million. Pretty close to the previous year, it was down about a half a percent, roughly $32,000 lower than the previous year. However, your cost of sales was down by about $60,000. So your gross profit of about $1.9 million was actually about $28,000 higher than the previous year. Your operating expenses did go up the 1.35 million you see there went up by about 10% roughly a hundred and twenty three thousand dollars most of that was salaries and benefits and and your operating income was about $531,000 for the year. You made about $258,000 in transfers out of this fund, roughly $102,000 to support general fund operations, $155,000 to your park improvement fund, which is something you do every year from this fund, and another $1,000 went to one of your internal service funds for employee benefits. Then the last table I'll share with you is actually a very condensed version of the first financial statement that you'll find in this document, which is a statement of net position. This takes all the fund information we just talked about, converts the governmental funds to full accrual, so that governmental activity is the top piece of this, relates to your governmental funds. and kind of gives you a longer term perspective of your net position across the entire city. So the lower piece of this, the business type activities relates to those enterprise funds, those equity numbers you see there are dollar for dollar the same as we just talked about for your enterprise funds. I'm not gonna focus on those. Take a minute to talk about the governmental activities. So we went from fund balances of about 41 and a half million in those governmental funds to total net position of about $81.3 million in the governmental activities. Mainly that's that net investment in capital assets. the value of your capital assets, less depreciation, less any outstanding debt. You've got a few other liabilities in there, some pension liabilities and other post-employment benefits, long-term benefits for your employees. And that's kind of the difference between the modified accrual governmental fund statements and this full accrual statement. And that was an improvement of about $5.6 million from the previous year. Again, about 1.8 of that was in that investment in capital assets. And that's mainly due to capital asset additions that you're financing either through grants or internal financing that weren't funded through debt. I was a reason that number has been going up. And then your restricted net position relates essentially to those restricted fund balances we talked about earlier. The biggest piece of that is Minnesota state aid, street state funding that you still have that's been allocated to you but you haven't used yet. And then your unrestricted net position includes all of those categories of fund balance that are under local control. So. That was everything. I typically cover, from a number standpoint, questions on any of that.

Starting this side this time.

I'm good. Well, I guess I do have one question. I'm not sure if it's the right question. Our fund balances across the board, you know, and of course, fund balance is all, you want to have positive fund balance, especially in the largest funds. But is that something that we should, as a council, kind of look at and just monitor? I mean, the growth of the fund balances, I mean, I'm trying to figure out, because in general, I view a fund balance favorably, but it seems like across the board, it could be viewed by the public as like, holy cow, these guys have a lot of money they're sitting on and my taxes keep going up. So I think that's kind of what I'm, I'm trying to balance both sides that I'm aware of. Sure.

If I may, I'm going to back up to one of the graphs that I went over. So The reason that you, or one of the main reasons you have your policy of the maintaining a 40% minimum fund balance in your general fund of your next year's expenditures is the amount of your revenue that comes from property taxes. I believe the number was about 78, 79% of your general fund revenue comes from your annual property tax levy. That, of course, gets collected twice a year. You don't get any payments on that until May, June, and then again November, December. So in order to have operating capital to make your payrolls and do everything the city does, until those dollars come in, you have to have some money in the bank, which is the reason for having that fund balance policy. The state auditor's office actually recommends a fund balance policy that is tied to annual expenditures the way yours is, and I think the range they have out there is 40 to 50%, so your policy is certainly in line with that. It has grown the last couple of years, and I don't know all the details of what you've been doing as far as You know any intention to use that to internally finance like you talked about your police facility If you've got fund balance to finance some of that an issue less debt or things of that it does give you that option So that answer your question Jake no questions, but thank you bill for your presentation tonight.

Yeah No questions. Thank you.

No questions. Thank you

I probably had the same question as Steve, I guess, is when you see that number creeping up towards 70 is what number gets to be too high where you say you're kind of sitting on too much cash when you need to spend it down. And it sounds like the words you're saying there is 50% generally is kind of the upper area where you start to have a discussion about being on the larger side.

Yeah, depending on, again, what you may have internally planned for your mark for using. But yeah, for cash flow only, the state auditor's recommendation was between 40% to 50%. Your internal policy is actually 40%.

Okay, we can talk about that when we get into the later cycles. I understand, I'm sure it fluctuates around from year to year. It's not just because it's 68 this year, it doesn't mean next year we'll be at that amount. So that's one thing. I'm always happy that these... I make this joke every year, but I'm always happy these are extremely boring because it means you guys are doing your job extremely well. So I appreciate all the hard work that goes into this and all the clarity of information that you present to us. So thank you.

Thank you. I think I have to look for a motion here. One second.

we would look for a motion to accept the audited financial statements and independent auditor's reports for the fiscal year ending December 31st, 2025. Motion?

Second.

Motion by Holly, second by Steve. Call the roll, please.

Council Member Bernice? Yes. Council Member Wichita?

Yes.

Council Member Wilson?

Yes.

Council Member Cordes? Yes. Mayor Lien?

Yes. And thank you, Melissa, for sending me the... citizen comment announcement right before this. I was getting a little bit lost there. Citizen comments. Comments are a time for anyone to address the city council on matters not on the agenda. Comments from speakers must be informational in nature and may not exceed five minutes. The city council will not engage in discussion or debate in those five minutes, but will take the information and issue a response to those requiring one by the next council meeting. When you come up to the podium, state the city or township that you live in. As part of the protocol, it is unacceptable for any speaker to slander or engage in character assassination or discuss personnel complaints at a public council meeting. Excuse me. As such, speakers will not be allowed to identify city employees either by name or position or to identify any other person by name during the public comment period. If one does, their comments will be deemed done. Please address your comments to the council as a whole. If decorum cannot be maintained during a speaker's time, the council will recess to allow decorum to be restored. Upon return from recess, citizen comments will resume, provided order can be maintained. If order cannot be restored, the meeting may be adjourned. Is there anyone who would like to speak tonight?

David Pritzlaff, Farmington. I'm not really too sure where to start, so I'll start by saying when you come to the podium at a council meeting, you guys just don't listen. When you come to the city here and you come to a workshop, you just don't let them talk. That was rude. For me to be here for an hour, I asked at the last meeting to be able to talk about side-by-sides, have an ordinance, and the e-bike thing, that whole thing. I mean, your first conversation about the comprehensive plan, they had two gentlemen, Councilmember Wilson and the chair of the Planning Commission, was dead on. You have a comprehensive plan that you're working on. One says you wait for that, which I agree on. The other one says your processes, they don't, you know, even the Planning Commission don't know the process. I said before, you keep saying yes, yes, yes to developers or people, you don't have a process, and now You know, they're saying, well, now our back's up against the wall because we went down too far. You had staff at that part of the workshop must have said, oh, we're starting conversation. We want to have conversations. Conversation. Must have said that 100 times. I know what you're gonna say, you didn't have time at the end of the workshop for public to speak, but if you would have cut out 100 of the conversation topics you said, you would have had time. You could have taken that first conversation of the comp plan and the developer down to 30 to 45 minutes. I respectfully asked to say something about the e-bike thing. Flat out, I said, no, no, no. Okay, so I didn't. And I thought, maybe there'd be time at the end of the conversation or the workshop about side-by-sides and the e-bike. Nothing. Well, that pissed the hell out of me. You have no respect for people who sat an hour or two hours at a workshop. That's what you said to do. You don't get conversation here. Well, guess what? You don't get it at a workshop neither. And what I wanted to bring up, and I had to tell the Park and Rec Commission at the end of the meeting, is that when you're looking at the e-bikes and the scooters and all that stuff, I don't think there was one person It said, you're concerned about the safety of other people walking and using the park system. Not one. It was all about, well, is it safe for the bikes, the e-bikes, the scooters, the this, the that. When they're going up the bike path at 40 miles an hour, scaring the hell out of people and them falling down or their dogs or whatever. Do you have any concern for the safety of the other people that are using the park system for a leisurely walk? I don't think so. I couldn't bring that up at a workshop. Now I wanna ask again, can you have another workshop to where people could have a conversation about side-by-sides? We got onto that one while we're talking about golf carts and we're talking about this. I specifically said at the last meeting that the machines that I have and the machines that most people are probably asking about is stuff that you have licensed. My stuff is licensed to the DNR. I have to pay a yearly license, the fee, the tabs, or the sticker for it. What am I licensing it for? Well, if a city has an ordinance, then you can ride it. I have insurance on it. I have turn signals. I have horn. They're street legal. I don't care about a golf cart that doesn't have lights or anything and you got some kids that are running them. I'm asking for the adults. I think Council Member Wilson said that at the workshop. It's like generally people that are running that stuff have a little bit more, you know, focus on what they're doing and a little bit more safer. I mean, God forbid, if we can let people take e-bikes and motor scooters up and down the bike paths, it would scare the hell out of people. You think the people that pay their taxes would be able to get something out of it, maybe support local businesses and take a vehicle that they have, a recreational vehicle, down to the gas stations, car washes, establishments, and try to support local business? But you obviously don't want that neither. So, you know, set some time aside. I mean, if your workshops are that book or if you're gonna be redundant about everything, I can understand why they run that long, but set up another workshop so that we can have a conversation about the licensing, the vehicles that are licensed and insured and street legal with everything and see if we can get somewhere with that. And then maybe take some conversation about it from the public. That's why you have a public workshop.

Hi, I'm Carolyn Kiefer. I live in Castle Rock. I'm not sure what I can say. I did talk to a city employee. I talked to them on July 1st. I'm just trying to understand a lot of what's going on. I've talked to many of you. I asked them if there were currently any other NDAs with TRACT or any other data center, and they told me no. I asked them why the infrasound, low frequency noise, tonal noise was not addressed at all in the environmental review, the AUAR. They said, I don't know. I asked why industrial wastewater was not addressed in the AUAR. I was told, I don't know. I said, do you know what happens to the wastewater? Is it put down the city sewer? Is it put into the Vermillion River? I don't know. Do you agree that the city is the RGU, the regulatory governmental unit for noise? Said yes. Does the city of Farmington have noise ordinances or will they use the Minnesota pollution controls noise standards? The Minnesota pollution control standards would be used. These standards are measured in A weighted decibels, which means that they filter out intentionally low frequency noise and infrasound, which are so dangerous to humans. but there will be eliminated from the measurements. I said, do you know what the Minnesota pollution control noise standards are? I don't know. I then wrote them down and I said, do you understand what these numbers mean? No, I don't know. I asked if the city would monitor the noise or if the data center would self-monitor the sound. I don't know. What do I do if the sound is above the state noise standards? I don't know. I said, do I call the cops? Do I call you? He said, call the cops. I said, do the cops have decibel meters? Probably not. I asked if they would monitor the baseline data for interest sound and for low frequency noise. It's a reasonable request for the city, who is the RGU. And they should make the developers do it. It's no cost to the city. That's their job to request these reasonable things. The developer would need to pay for it to have it done, not the city. He said that maybe he could abstract. I said, you need to demand that they do it. This is your job. You're the regulatory unit. That's what you're supposed to do. You're supposed to protect the citizens. He said, I don't feel comfortable doing that. Maybe I could ask them. This is the regulatory unit that's not really regulating. So they have the ability to require monitoring. And it's like, who's running the city, Farmington or Tract? He told me that he does not know much about sound. And he said, how can the city allow and then regulate what they know nothing about? I said, it looks to me like the residents living nearby are being sacrificed for the project. I don't know if that's true. And I said, sir, you say that's a false statement. Silence. He would not say that's a false statement. The residents living nearby are being sacrificed for the project. I said, is that false? Silence. That's shocking. I was shocked. I didn't know what to do about that point. The residents that live near the data center will be guinea pigs. In the U.S., research labs are not allowed to expose humans to, and especially children, to infrasound low-frequency noise for a long period of time. The longest studies I've seen, about three minutes, and you see results, and they heavily, lots of waivers to do it. Yet tract will be allowed to expose the neighbors to these low frequency noise 24 hours a day, 7 days a week, 365 days a year. Not allowed in a research laboratory in this state, in this country. I ask how long expected construction would go on. I don't know. I ask again to give me an estimate, 1 to 10 years. He does not know much about this AUAR that he signed. I ask who all signed the NDAs. I don't know. Well, I can't give names, but you can read them in the newspaper. So there's not much transparency. I don't know. I don't know how something can be allowed like that. And it looks to me like Farmington is so desperate for money, they will sacrifice the quality of life, the mental and physical health of the residents for this project. If you look at TRAC's own documents, I've looked at them, it says these are not appropriate for residential centers. They liken it to an airport, data center like an airport. and you're putting it right next to people's homes.

Thank you. Anybody else tonight?

Council Mayor, again, Nate Ryan, city staff. There's something I just want to say just real quick. If you want to take it off my five minutes, that's fine. But, Nick, I think that your statement, and I am addressing Nick because he's the one who read it, but you say you can't name people's names. If that woman wants to come up here and say who she talked to, she can't. That is our First Amendment right, is to come up here and be able to speak. Now, she can't disparage that person because that's part of your rules, but technically she could. Just because it's part of your rules and you're going to call it done doesn't mean that her comment should be done. It's the First Amendment. The First Amendment exists between me and government. The First Amendment does not exist between me and my wife or me or someone who I meet on the street. I don't have the right to say whatever I want to someone on the street, but I do have the right to say whatever I want just about to government. And you saying you can't name, that woman couldn't come up here and name the person who she talked to and she was flustered? You're bullying them. You're bullying people into saying, well, you can't come up here and say, I was gonna make your comments done. We're going to effectively steal your First Amendment rights. So I used two minutes on that, but I think that's wrong, Nick. And I really, really, really hope that you look into that. We have the right of the people to come on, use this microphone and do that. And if you don't want us to have that right, as it's been explained to you before, then just do away with the public comments. You can do that too. So, I'd like to be restarted in five minutes, but that's okay if I'm not. So what I came up here to talk about tonight is I noticed that as more and more new people come, they start where we were two years ago. They start with all the same things that they're wondering about two years ago. This person just came up here, this resident just came up here, and she's at the same point where we were at two years ago. And I'll say his name, we were talking to Tony about it two years ago. We don't have the answers. We don't know what's going to go there. I talked to Phil after the meeting last week or two weeks ago. And I was like, hey, Phil, why haven't you asked the questions? And Phil goes, well, we don't even know what's going to go there. BS, the AUAR says what's gonna go there. The AUAR, this document that you're holding onto so much as our environmental review process, the only required thing by the state of Minnesota, Holly, that, That specifically said a hyperscale data center. And the use said it was industrial. It didn't say anything other than industrial in terms of the use goes. So if you're standing on that, then why don't you truly stand on it? And why don't you truly try to zone that land as pure industrial properties? And why don't you know what's gonna go there yet? The AUAR says business park data center. It has never not been anything other than that. From the point that we learned about this project over two years ago to the point when more and more residents are learning about it even more. It's never changed. It's a data center. That's what it is. Yes, the end user hasn't been defined yet, but the end use, the highest and best use of that property is going to be a data center. That was explained to you in the AUAR process. The last thing I wanna talk about is I'm curious why they're not moving dirt yet. That was track came here a few weeks ago, they said that they were gonna start. Is that because they found contaminants in the soil? Is that because they found heavy metals in the soil because of what was done to that golf course since the 1970s? Right? I remember growing up, and I'm not that old, but I remember my uncle and my aunts telling me stories about running after the DDT truck because it smelled good, and you've got all these chemicals coming off of that thing, and lo and behold, it causes cancer. Well, lo and behold, all those things, and all those things that the golf course put on their property since 1970, they bind to the soil. Have you done any soil testing out there? Has the company done any soil testing out there? And what are the dust measures and protocols going to be? Guys, these things should have been decided, these things should have been talked about well before you approved a site plan, well before you did any of these things. Process, process, process. Let's think about what we need to do to have the end result that we want. And I want a data center in Farmington. Never not wanted one. But how do we get it there? Use zoned land and follow the rules.

Thank you, Nate. Anybody else tonight?

Okay. My name's Maria Doffing. I'm from Hampton. And, um, I definitely feel like I'm two years behind on the whole data center thing. I think you guys must be concerned about it, or some of you must be concerned about it. Sounds like we don't even know where it's going. But my dad used to go to the golf course there, and he's recovering from open-heart surgery. He would be able to drive there.

A lot of us are concerned about it. And did you guys know about the Jordan Aquifer? Does anybody know what that is?

You got this. Keep going.

You got it.

Oh, thanks. I've seen you. I've been watching the videos. I'm really behind.

It's okay. Keep going. You got this. Tell them what they need to hear.

You know... Do you guys, does anybody know what the Jordan Aquifer is? Do people know? Yeah. It's, we only have the tip of it. It's, most of it's in Iowa. I'm concerned that our water's gonna be taken up. I mean, yeah, I'm concerned for the people here, the guinea pigs. And I really don't know that much, but I know there's people, people that are suing you guys. Um... And I don't know how Farmington's going to fare through all that. And I grew up here. I would hate to see. I just, yeah, I got to do my research. And you all are. And you are. And I don't know. I don't know. I'm just thankful to be up here today, okay? And thank you so much.

I appreciate you coming up.

Anybody else?

All right, round table. Amy.

No report tonight.

Phil? No, I just wanted to say thank you to all the volunteers for the top of the tater days. I made that successful. It was a great time. I was out there a couple days. This doesn't happen without all those people, and I just want to say thank you to every person. But put their time and effort into it. It's very much appreciated. Thank you. Holly?

Yeah, top the tater was a ton of fun congratulations also to the Incoming ambassadors who are going to be out representing Farmington all across the region and a huge Thank you to those that served for the last year I think they're gonna be coming at some point in July to To tell us a little bit about what they're up to but for those that are not familiar this is a group of individuals that are travel all around the southern and central state and basically volunteer their time to be the face of Farmington and other communities. And so very grateful to them, hoping that everybody had a good Fourth of July, managed to keep all their fingers, and stayed safe even though the rains came. I really don't have anything else going forward, though, so that's it.

Thank you, Jake. I just wanna echo what Phil and Holly said. Thank you to the organizers of the Top the Tater Days Festival. I do think they're gonna be coming at our next meeting, so we'll get to thank them in person. But it was a great week-long celebration. I hope everyone had a happy and safe Independence Day this past weekend. And then just a few moments for a short story. On the evening of June 18th, my son Oliver suffered a minor medical event, but thankfully it ended up, like I said, being minor in nature. It was one of the scariest moments of our lives as parents, but thankfully within five minutes of calling 911, the Farmington Fire Department was on scene to assist with this. And I was just astonished. I shouldn't have been astonished, but it was good to see it in person. But how quickly they arrived and thankful for the care and compassion that they showed our son and the reassurance that they provided to Bridget and I in one of our scariest moments as parents. So it's something we all know, but a huge shout out and a huge thank you to all three of those firefighters and all of our firefighters who are incredible human beings.

Thank you, Jake. Steve? I wanted to thank everybody in the community for giving Ryan Labrasch a little bit more money than me. Very grateful for that. But I probably am even more grateful to all the people that just contributed to make Tops of Tater Days great. And all the money really that went to the Kiss the Pig contest goes to our Park and Rec Department. I've said this last year and probably the year before, the only person really up here who is equipped to understand just how incredibly difficult, invigorating, and all of it is Holly, who has led our celebration back to where it is today. So I'm just really grateful to Homestead Community Church and all the amazing volunteers that did so much work this year. So that's all I have. Melissa?

Yes, so absentee voting has started. You can vote here at City Hall. We're here Monday through Thursday from 8 to 4.30 or Friday from 8 to 11. Chansky.

Chansky. Thank you, Mr. Mayor, Council. A couple things this evening. First, July 14th begins the filing period for non-primary positions that will be on the November general election ballot. So for the city of Farmington, we'll have three positions. One is the special election for the remaining term for the mayoral position. So that'll go from the time that the council... certifies the election results until December 31, 2028. And then two four-year city council positions that are run from January 2027 until December 31st of 2030. So again, that begins on Tuesday, July 14th and runs until Tuesday, July 28th. Anyone interested in filing for one of those positions can file with Melissa here at City Hall. Another thing was brought up tonight, budget process. We are in budget process. Kim's been leading us through that from a staff level initially for the last couple weeks, meeting with all the different departments, going over what we're looking at from budget requests for 2027. We're now working on bringing that all together in preparation for having a meeting with the council in August. to start discussing what does the 2027 budget look like from just general operations to our five-year capital improvement plan and then other projects and discussing things like, okay, what can we do, what can we not do, and what kind of funding mechanisms are there out there and available to the city. And then lastly, we do have some exciting things happening with Team Farmington this month. We have a number of people joining us. Tori Christensen and Robert Chapman will be joining our full-time crew with Farmington Municipal Liquors on July 7th and July 20th, respectively. Jacob Seppelt will be joining us as our Assistant Finance Director on July 15th. And Ruiz Acosta is our Accounting Specialist on July 20th. And then Jeremiah Bauman will be starting as our communications and public affairs manager on July 27th. On top of that, we have nine paid on-call firefighter candidates, like a few of those you approved tonight, will begin their onboarding process and preparation for the Fire Academy to start up in September. And we have another nine current fire cadets that are just finishing up their training and should be pinned as full firefighters at the end of the month. That's all I have. Thank you.

Mr. Powell.

Thank you, Mayor and city council members. Excuse me. On the consent agenda this evening, you approved a contract with the Minnesota Department of Natural Resources for the 2025 Relief Community Forestry Grant. That's $204,000 with no match required from the city. that's coming in via that grant. All the credit for that goes to our natural resource specialist, Ben Humley, and our grant writer, Kerry Kubitschek. They did a fantastic job, and this adds on to the previous grants we've been able to get in our battle with EAB. So specifically, this will go toward the replacement, removal and replacement of 120 diseased trees, generally in the Dakota County Estates neighborhood, located east of Pilot Knob Road and at the north end of the city. So we're getting to the point where we can hopefully see the end of our Emerald Ash Borer efforts, and this will help us get there even more.

If you've been by Feely Fields in the last week, you can see a skate park starting to transform. Tomorrow or Wednesday, Spahn Ranch will be on site. If you've seen the little school bus in the field, that's their bus that they drove up from Wyoming. It has some of their concrete tools. So they will start their process, like I said, either tomorrow or Wednesday. The build is anticipated to be about four months, so it will be completed at the end of October. I want to thank the Minnesota Department of Natural Resources for the grant. Remember, we received an outdoor recreation grant for the skate park, and that $350,000 was matched by liquor store community project funds, so I also want to thank Josh Sollinger and his team for that. Without those two efforts, the skate park wouldn't come to fruition, but it will be exciting to see it happen over the next four months.

Kim. As David mentioned, we do have two new hires that you approved on tonight's consent agenda and I'm very grateful for your support. We've been short staffed and these new hires will go a long way towards increasing or rebuilding that capacity. So excited to welcome Jacob. Seppelt as the new assistant finance director and Ruiz Acosta as our new accounting specialist and Ruiz is in the audience tonight. So we're very excited to have them join the team and getting them settled in. And again, I sincerely appreciate your support. Thank you.

Thank you. Chief.

I wanted to mention National Night Out is coming up October 4th of next month. August. Sorry, August 4th. Much sooner. Registration for that will be opening very shortly, probably tomorrow. We hope to see a lot of neighborhoods open up their parties to police and fire to stop by and say hi. I want to do an expansion remodel update in this venue every session if we could, and I've already spoke to it here in earlier comments, but I want to refresh those or go over them again. Where we are right now with the expansion remodel project, currently in the design phase, we're meeting regularly with BKV to go over schematic designs and concepts for the building, and we actually have a meeting tomorrow to go over interior features, FF&E furniture and interior design options. So really busy with them trying to poll our department and decide what we want the building to look like. And then also tomorrow, I mentioned our request for quotes from construction managers are due tomorrow. So we can really start moving forward with that process, get those quotes evaluated and decide who we're sending that request proposal out to, and then move on with that, and hopefully have a construction manager on board soon so that we can really dive into what the project is going to look like and cost so we can present that to council. That's all I have for you.

Thank you. I do want to say thank you for kind of putting up with me tonight. I was a little slightly under the weather, and I had a veterinary emergency today, so today has been a little bit crazy for me. So thanks for bearing with me, everybody. Did she leave? The young lady? Oh, you're there. Sorry. I really do want to say thank you. I know it took an incredible amount of courage to stand up there and do that, but it is really important. that you come up and say those things and be empowered to say those things. That is what this government is all about, is that freedom to say that. Those kind of moments do stick with us. I know it doesn't seem, it seems probably like you're talking to a wall, but we hear you and we appreciate your comments. And I'll say thank you, Nate, for staying on there and encouraging her. It was nice of you. Look for a motion to adjourn.

Second.

Motion by Steve, second by Jake. All in favor say aye. Aye. We're adjourned at 8.15.