City Council - Regular Meeting

Not sure what that means either. Good evening. Thank you for joining the Cheska City Council for Monday, July 20th, 2026. I call this meeting to order. Would you 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.

All right. Elise, will you call roll, please?

Council Member Hatfield? Here. Council Member Benes? Here. Council Member Shevlin? Here. Council Member McGraw? Here. Mayor Hubbard?

Thank you. Brings us to item four, adopt the agenda. Any adoption changes to the agenda? Otherwise, I'll entertain a motion.

Motion to adopt the agenda.

Motion by Council Member Hatfield. Second. Second by Council Member Benes. Any discussion? All in favor of adopting an agenda, say aye. Aye. Opposed? agenda is up visitor presentation we do have several people out there i don't know if they're here for just the events but if you are here for something else please come up forward for visitor presentation we just ask you to state your name and address for the records i don't see anyone quickly moving so i'm going to make an assumption that everyone's here just to have fun and listen for a great entertainment night i will move into number six approve previous meeting minutes and those meeting minutes are from june 29th 2026.

Motion to approve meeting minutes.

Motion by Council Member Shevlin. I was going to combine your names there for a minute.

Second. Second by Council Member Hatfield.

Thank you. Any discussion? If there are none, all in favor of approving the meeting minutes of June 29, 2026, say aye. Aye. Opposed, same sign. Number seven is consent items. A reminder, these are items that are on here for informational purposes and information. Do not need any specific conversation. Can be pulled out if we would like to talk about them. Does anyone have any questions or comments regarding the consent items?

I have a question on 7a more just out of curiosity, maybe. So this would be our third and final cannabis retail. And they count as that third, because it sounds like they have a special license from the state because they're going to be doing, actually, it seems kind of cool and interesting. All they're investing in that building to do like growing and cultivating and everything. But that still counts as our third. Now we're done with retail. Okay. Do you know if they're going to grow it inside or outside? That might be a dumb question. That's what I thought too.

Because that building, I mean, that was sort of a unique building. I mean, they used to have the pools inside there and stuff, so it's not like most buildings.

Okay, perfect.

That was my only question.

Any other questions on consent? If not, I would entertain a motion to approve consent items as shown.

Motion to approve consent.

Motion by Council Member Minish. Second. Second by Council Member Shevlin. You're right next to me this whole time. Any further discussion? All in favor of approving consent items as presented, say aye. Aye. Opposed, same sign. Consent approved. That brings us to action items. And the first one, riveting, 8A, the annual 25 financial reports.

All right, Mayor Council members, the item in front of you tonight is something that we do annually. We're required to have an independent audit done of our financial statements from the previous year. So in this case, this would be for the 2025 year. Our finance department is responsible for putting together the information and then the auditors come in to make sure that it meets different tests and financial reporting requirements that we have. So as part of that requirement, we have the auditor come each year to give a presentation to the council. The one thing I'll point out is we typically do this meeting the meeting before we start having our discussions for budget for the next year. I think it's good because this gives you sort of a This sort of illustrates some of the stuff that we've talked about during budgeting processes and how it actually turned out when we got done with the budget year. So it's sort of a good way to sort of re-educate ourselves in the things that we'll be talking about during the budget process, which first meeting will be coming up on August 3rd. So with that being said, I'll turn it over to Noel and he can introduce the process.

Mayor Porton, council members, thank you for the opportunity to present before you tonight our 2025 annual comprehensive financial report and the audit that was conducted by our independent auditor that was selected by the council two years ago, Clifton Larson Allen. With us tonight is Lisa Nelson, who's on city staff. She's part of the staff committee. It's part of the staff that prepares this report each year. The finance division is led by Erica Matthysse, who cannot be here tonight. She is the finance division director, and she leads that team for the entire year of its financial operations, as well as then preparing this report each year for the auditors. With us tonight from CLA will be Ezra Kitz. He is the manager from the audit. Ezra was here last year. Chris Konopik, who is the managing partner, could not be with us tonight, but Ezra will be presenting on behalf of CLA this evening. CLA was selected for a five year engagement in 2024. This is the second year of their five year engagement as the independent financial auditor for the city. We work with CLA to go through each year to make sure that we are implementing current gaps requirements as well as GASB standard requirements Gatsby standing for the Government Accounting Standard Board, which provides those requirements by which we compile our financial statements and actually then prepare them for audit. A brief overview of what we're going to cover tonight with the city. There's going to be five different reports that we work through tonight. There'll be the large one, which is the annual comprehensive financial report. We refer to that as the ACFR, ACFR. There will be no single audit tonight, but there will be a couple opinions from the single audit that would typically be included that we will be covering tonight. We're still working on some disclosure requirements that are applicable to the federal single audit. That is not a part of what we are presenting tonight, but those will be completed and submitted as a part of the deadline that's coming up in September. For the city, the second report we're going to look at deals with internal controls. There will also be the Minnesota legal compliance. Have we complied with the requirements for state statutes? There will be required communications from the auditor on the audit and any findings that they had. As well as the executive audit summary, which they prepare. This is what we were used to refer to as the management report. It provides a summary from the auditors of the operations of the year. And it's a good introductory document. If someone doesn't want to review the entire financial report, can refer to that document as a report. We'll also be looking then at some reports from the Fire Relief Association. The city is responsible to fund the benefits that have been awarded to the firefighters through the JASCA Fire Relief Association, Pension Benefit Association. And so they will have their annual financial report that was also audited by CLA. Again, internal control, state compliance, to make sure that they are in compliance with the statutory requirements. like to start with just five numbers if you look at 130 pages of report i want to sort of give you a focus on what is the overall financial position of the city our total operations if we looked at all activities across the city both our governmental as well as our business type activities was 118.4 billion dollars last year so that's what we spent to provide all the different types of services we do so that's the basically the entire pie of the services that we provide 118 million point 118.4 million of that 78.1 million is enterprise operations these are our for-profit type entities that are charging users for the services we have nine different enterprise funds we have the electric the water the sewer the stormwater, the loop, the town course, the community center, the Chaska Curling Events Center, and our Minnesota River Station. So each of these is delivering services that is charging fees to the users of those services to make sure that we are recovering the cost of those services through the rates that we charge. that represents two-thirds of the operations of the city that's actually increased over last year when it was about 63 so we're seeing the enterprise funds continue to expand their footprint in the city our electric fund is the largest of those enterprise funds that's 49.4 million 42% of our operations is electric. It's a significant operation for a city our size, but it also generates significant contributions to the community as well as to our general fund in the form of transfers that we have in place that along with our right-of-way service fee equals about 10% of the gross sales coming into our general fund. So that helps support our general governmental activities, helps reduce our tax levy, and provide the full scope of general fund services. The general fund itself, which is our general governmental fund, police, fire, snow plowing, street maintenance, park and rec, administration, payroll, finance, audit, all of those overhead type services that happen on a day-to-day basis occur in our general fund type activities. That's $28 million, about 24% of our operation. So as you can see, the whole pie is getting smaller and smaller. These are all important services. That general fund operation is supported by a tax levy of about 20.8 million in 2025. That's about 18% of our total expenditures for the year. And the general fund itself is about 13%. So as we go through our budget process, we spend a lot of time looking at what our proposed property tax would be, make sure we're funding at appropriate levels, maintaining our reserves, and we're gonna talk more about that later. That's an important part, but I want you to remember that it represents about 13% of our operation. We're going to spend a significant amount of time through the budget process looking at our enterprise funds, the user charges, because that is a very significant part of our operations. So to start with, you don't have this in printed form, but you do have it in PDF. This is that annual comprehensive financial report. It breaks down into multiple sections. This entire report is prepared and generated by city staff. We prepare the operational financial system throughout the year. We generate trial balances that are used to generate financial statements that we then have the auditors review our activity, our trial balances, and those financial statements. So this is the work product of the finance division, but also of the other staff members across the city. We help make sure that we can properly account for the resources that the city has set aside for services. uh... as a part of this report the auditor includes their audit report com israel from c l a will be presenting more detail on what's included in their report in their role but in this report the first section is the introductory section this is the first page one through ten this provides an overview primarily for first-time reader what is the city where finances what's the difference between a governmental enterprise fund operation what's the overall financial position that the city is in and its operations over the fiscal year It also includes an organizational chart that shows the relationship of the console and its appointed boards. One thing I would like to point out is we do have the Chaska Economic Development Authority. The city console serves as the members of that board and so that is included in this as a part of the city's financial operations. It's been blended into the operation since the since the console and the EDA board are essentially the same members. So they do not have a separate financial statement. It's included in this particular report. The final piece is the elected and appointed officials, which we show on page 10, which is primarily the organizational structure because we are organized around as a city administrator, as a statutory type A city in accordance with state statutes. The second section is the financial section. It begins on page 11 with the independent auditor's report. I'm going to quote from that because it says in there that these financial statements present fairly in all material respects the respective financial position of the City of Chaska as of December 31st, 2025. What this means is this is commonly referred to as a clean opinion. As they went through their audit process, there was nothing that they had to highlight as a qualification against their report that was included in the report. So this is what we strive for. This is what would be expected of a city that is in compliance with Gatsby standards as well as with GAP standards, which are required by the state statute that we report under. uh... after that then in uh... starting on page fifteen is the management discussion section this is a more detailed uh... section that starts to analyze what are the positions in the funds what was the revenue expense levels what is the year ending financial positions say the general fund each of the enterprise funds so as a reader starts to get more familiar with the city this would be the next part of the report i would encourage you to read through to get that understanding And then beginning on page 32 is the basic financial statements. It begins with a two page statement, which we refer to as the entity wide. This is a GASB requirement that takes all of the governmental funds, which are reported on a modified accrual basis, where we match the revenues with the expenditures that are delivering the services. along with the business per enterprise operations, which are on a full accrual model, and shows them all on a full accrual type model to make a common comparison. This is what allows analysts to compare maybe one city to another. And so we have to prepare this entity-wide statement. What this shows at the end of the year is the net position. This is assets less our liabilities that we owe. The city of Chaska's net position was $299.1 million. This is a increase of 27.5 million over last year. This comes primarily from the donation of additional capital assets to the city. So as developers are developing new infrastructure, roads, streets, and utilities, and those get donated to the city, we recognize those assets, and so we do see an increase in the asset value of the city. Our unrestricted net position of the city went from a negative $1.4 million to $9.4 million. This was as a result of some unrestricted cash that became freed up as well as some other donations that were made to the city. So we use this entity-wide statement as a way of just trying to show and review what the analysis is when we're comparing with other cities. When we start doing our budget work internally, we start talking about our operational funds. You're going to hear us talking about our general fund, police and fire administration, the enterprise funds with all of their rates, some special revenue funds that we operate. One of them that's very common in cities that we have is the cemetery fund for Mount Pleasant Cemetery. And so all of those operations have restricted use of their dollars. They're accounted for in that special revenue fund. As we continue to work through the ACFER, there are major and non-major funds that we report. There are four major funds this year. Two key ones I just want to highlight is our general fund. The change in our fund balance in the general fund increased by $789,477. A large part of this was an increase of $300,000 that we have been setting aside each year to increase our fund balance. This is something we've been doing since 2021 in response to a comment from Standard & Poor's that identified that our fund balance reserves were low compared to other entities and that we had six of seven years where we drew doubt on fund balance. So the Council has committed to increase that by $300,000 a year through $100,000 of levy support plus $200,000 from our enterprise funds. That has continued each year to build back our fund balance position. And as we saw in the bond rating report we reviewed with Council earlier this year, S&P continues to notice that our fund balance reserves are increasing, that that's providing long-term predictability for the city, and that that has really raised our position from up to back to the stable position as opposed to the watch type status that we were in in 2021. So that is a very positive change that has been occurring over the last five years, and S&P has continued to monitor. Our total expenditures in the general fund for the year was $28 million. This represents an increase of about $2.3 million as the fund is growing. In particular, you're going to see there were some increases in our public safety expenditures, and this has to do with some staff turnover that we're going to highlight a little later as a part of the presentation with CLA. The second major fund I want to highlight then is our electric fund. This is on page 42 through 44. Net assets of the electric fund is 13.1 million. This represents an increase of 2.5 million, which follows a decrease we had last year of 200,000. The electric fund has been seeing a lot of growth with new customers, both residential as well as business. We've also been incurring some additional costs as it relates to converting our AMI system as well as some staff turnover as we're seeing retirements and also new staff and training coming on with that. So it was a very positive year for the electric fund to once again have a positive net gain for the year. The electric fund contributed to the general fund in 2025, $5.1 million as a support to the general fund. And this is what we will be highlighting in the budget work because we have two different support, two different revenues that support the general fund. We have the 5% right away fee charge that is on every utility bill. that goes to the general fund. And then there's this additional 5% transfer that's made to the general fund. So together that represents a 10% contribution from the electric fund to the general fund. That has been our historic target for many years to have the electric fund support the general fund. The detailed section on page 45 gets into the financial note disclosures. Someone who's really trying to analyze and understand the city, like a bond analyst who is doing our bond rating, or some investor who is looking to understand our position in terms of our assets, our debt, and our long-term obligations is going to review these detailed notes. These are consistent with what's required by GASB for making these disclosures. We spend a significant amount of time updating these numbers each year to make sure that they're correct. and then also adjusting them to reflect changes in GASB pronouncements, which are coming basically every year. There'll be at least two more that CLA is gonna highlight for you tonight. Then on page 112, we get into the non-major funds. This is both governmental funds, special revenue debt service capital projects where we build several of the ongoing like street projects and public improvement projects as well as our non-major enterprise funds which is the two golf courses that we operate The third and final section of the ACTFR is the statistical section, which begins on page 144. This represents 10-year trade information that an analyst is going to want to look at on things such as what were our revenues, what were our tax levies, what have been our expenditures, what sort of debt bonds do we have outstanding, what is our debt limit and are we within that debt limit, which we are, what is our debt service, who are the taxpayers of the community, Who are the largest 10? Who are the largest electric customers? What's our population? What's the number of employees over a 10 year period? That is historical information that analysts turn to and having it in the ACFERD available for them in one single source assists in their review and analysis. Couple highlights from the 2025 fiscal year just to bring to your attention. I did mention before that we did not have the auditors issue at this time the federal single audit report. That will be completed by September. The reason for that is there's a requirement on one of our federal grants that we're still reviewing We feel we just need to document some exemptions that are applicable to our situation and we're still waiting to complete that and then we'll be able to submit the federal single audit. The reason we're doing a federal single audit is because we had $2,045,929 in federal expenditures that were applicable to the 2025 fiscal year. The largest one of these I know has been the least favorite project for the last two years, which is working on building out the EOC and the new public safety facilities, because that was supported through some congressional designation dollars. And so we've had to go through some additional reporting requirements, as well as the auditors had to do some additional testing as a part of the federal single audit process. The threshold for doing a federal single audit increased from 750,000 to now in 25, a million dollars. So at 2 million plus, we were well above that and had to do a federal single audit for 25. Right now with what we anticipate for federal dollars in 26, we're going to take a deep breath and pause for a year. We don't think we need one. I know Matt likes to do a federal single audit every year because as he says, that means we're getting federal dollars. But if we don't have to do a single audit, finance and the auditors are both going to say, thank you. It's a lot of work, but it's well worth it because there is a benefit for the dollars we get. There were two prior period adjustments that were recorded this year. The first one had to do with the closing out of a state aid bond that was refunded. The second one had to do with the change in the level of materiality. This had to do with the Highway 4161 project where we booked a revenue in 24 expecting it to arrive in 25. That revenue has not yet been received and they're still working to close out that project. the the amount became material because there were no other project expenditures so we had to restate our beginning balance for the year this is part of that technical adjustment that we have to do and we review these with the auditors each year we strive to avoid prior period adjustments but we sometimes do find that when there's a change beyond what we anticipated that we do have to go back and adjust our beginning balance for the year all of those are reviewed by the auditor when we make those adjustments Our total cash balance is disclosed in note 13 on page 55 through 57. I want to highlight this because every quarter we're providing the console with our cash and investment report, which shows the position of the cash investments that we have. Altogether, we have $73 million in cash, but of that, $27 million is restricted. Most of this is with bond trustees because we're required to set aside reserves for various revenue bonds. And those debt service requirements have to be held in securities that are held by the trustee and therefore is not available for city use. Our unrestricted cash is at 46 million. This is across the entire city. Most of that is used to manage our ongoing cash flow in the enterprise funds as well as the governmental fund. And as we've talked about on bond rating and in budget discussions, we do have targets in our general fund and governmental funds to maintain about a 35% to 45% balance on our fund balance. We're not quite at those levels But one of the reasons we can be a little lower is because we do have the monthly cash flow that's flowing in from our electric fund So that is something we review with S&P as a part of our process And so as you'll see each quarter when we provide you our investment report We review the investment positions what the maturity is the risk level that they are the longer the maturity the higher the risk and But overall, our return on investment is not to maximize return on investment, but to provide safety and security for the principal while also getting a return on the investment. So that note disclosure on page three is similar to what you see each quarter. Some long-term liabilities. During 2025, we had two major debt issuance. Back in January 16th, we issued $3,972,000 of lease purchase agreement notes. This was used to acquire the MSB2 site. We wanted to control that land before we actually went through and sold the financing this year for the construction. As a part of that financing we did last month, we refunded this temporary financing so that issue from 25 has now been refunded and is no longer outstanding. The second issue we did was on January 30th of 25, 6,125,000 Chaska EDA lease revenue refunding bonds. This refunded some of the bonds that we sold for the Chaska Curling Events Center. These were refunded to capture economic savings, reduce debt service. generated present value savings to the city so we do work with our municipal advisor Baker Tilly to review all of our outstanding debt and when the market is conducive to capturing those refunding opportunities we will bring those before console in the future The other issuance that we have is sort of a rolling basis. We enter into various equipment leases, primarily right now, some of our vehicle leases for like police vehicles and our building inspection vehicles are on a lease basis. And so that is considered outstanding debt of the city. And so we also have to have that disclosed as a part of our financial statements. If we're talking debt here, I just want to review basically our bond rating position at this point. With Standard and Poor's, our general obligation, which is where we've pledged the taxing authority of the city to guarantee the repayment of the bonds, our bond rating with S&P for geo debt is AA. Now the highest is AAA. I'd like to say that we could get there, but right now with the amount of debt that the city has outstanding, I don't think we would qualify for the AAA rating. But as the city continues to grow in the future, continues to have stable revenue sources that we've demonstrated in the past, and we begin to pay off some of our debt when we have completed some of the growth of the city, that might be something that will be available to the city in the future. So for a city that's still growing, also reinvesting in itself through redevelopment, a geo debt rating of AA is very good. When we sell our EDA lease revenue bonds like we did for the MSB2 project, that is still a very secure debt, but because it's a lease pledge and not a GEO pledge, S&P downgrades that one step. So our bond rating through the EDA lease revenue process is double A minus. And so that's one step, and as we saw when we sold those bonds earlier this year, It was about a, normally you'd see a 6 to 12 basis point additional cost for that. When we sold the bonds, we were closer in that 5 to 6% or 6 basis point difference. So our debt was very well received in the market, even though we were a double A minus. When we were comparing to the triple A, it came out very well. We also have outstanding electric revenue bonds. Those are rated A. Again, this is a little lower rating, but still a quality investment grade as a grade A for S&P electric revenue. Because these are supported through electric revenues, there's no geo pledge. There's a little higher risk level for the investors. So that's why we carry the A rating. Moody's provides a similar rating on our electric fund. Their rating is A1, and that would be equivalent to the A from S&P. so overall our bond rating is a very good high quality rating for the city and Last thing I want to talk about from 25 is our general fund fund balance. Again, I mentioned we've been adding 300,000 a year since 2021. This started from some declines we saw in fund balance that were exasperated during the COVID period. We did issue some debt in 21 and S&P highlighted this as an issue for us. And so we worked with Baker Tilly and through our budget process to increase this 300,000 a year with 100,000 coming from the levy. And so in 25, we were able to complete putting that $300,000 towards the general fund fund balance, and that is also included again in our 2026 budget. That is the overall city financial report. There are several other reports that the auditors issue. Those are all included in your reports. Like I said, they refer to our internal controls. There are no findings that the auditors highlighted through that process. There were no findings on the state compliance. So those are very clean opinions. And for that, finance is very grateful because we can't do that without the help of city staff that works with us during the year to, you know, whether it be getting bids when we have to get bids, getting quotes when we have to get quotes, paying bills on a timely basis, being compliant with our investment positions, with our broker dealers. Those are all things that the auditors are reviewing and they found no deficiencies in our state compliance. The next section I just want to highlight briefly is the JASCA Fire Relief Association. There are four reports that they are included in your packet for acceptance tonight. The first one is the 2025 Annual Financial Report. We refer to this as the AFR. This contains a clean, unmodified opinion. The relief continues to accumulate assets based on an actuarial basis that will provide for the future benefits, whether it be a lump sum benefit or for those members that will take a monthly benefit when they retire. So there is an agreement in place right now between the city and the fire relief that looks at the overall funding level every two years through the actuarial study. And if the funding level provides for a benefit increase and that increase results in a funding level of no lower than 85%, Then they will bring forth a increase of that benefit, and the city has stated that they will then support that. As a part of this audit period, we found that there was some additional actuarial gains that were recognized, and I can report to you that the Fire Relief Board is bringing before their membership a benefit increase. And that will be coming forth before the council as a part of our budgeting cycle because that will help set how much we will be setting aside to support the relief in 2027. Any benefit change would not be effective until the first of the year. So this report in the actuarial funding report that goes with it every two years sets up that budgeting process to maintain a competitive benefit level. other three reports is the internal controls there were two findings but these are the two we've had every year there's an issue with cash at fundraising events i know the relief has been taking efforts to improve that this was included again this year because they were halfway through the year with the audit last year when those changes were made this last january the fundraising events our hope would be that cla will be comfortable and maybe that'll go away next year The second comment they had on internal controls is segregation of duties. There's a very limited staff. We do our very best to have two people review the cash controls. The board reviews the financial reports every month that are coming from the accounting firm that does their bookkeeping. So we're doing anything we can to segregate duties and have dual control on review of those duties. These two comments from the auditors have not been an issue with the Office of State Auditor that reviews fire relief reports each year. So in no way will it impede our ability to get the state aid. So these have been, I've been here many years. It has been here as long as I have been. It has not been an issue. There was one legal compliance finding. We have to have statements of economic interest from each trustee. And when we went to look at the end of the year, it turns out we didn't have one of them. So we apologize. We had that person sign it. It's been submitted for the 26th year. So it's been addressed. With that, I'm going to turn this over to Ezra from CLA to go through his presentation. And then I'll come back to do some summary review on the ACFER and request the action.

All right, thank you, Noel. Thank you all, and good evening. I will try to make this riveting. As Noel mentioned, I'm the manager of the city's audit. I'm the audit manager. I've been working with the city now for two years. Overall, just appreciate the opportunity to serve the city as your auditor, and appreciate the opportunity to present a riveting presentation for you today. Noel did touch on a lot of what I'm gonna talk about, so some of this might feel a little repetitive, but sometimes it helps to hear it a second time too, right? As far as an agenda, we have audit results, and then some required communications, just as your auditor, I'll just have some required communications I should tell you about. And then I'll go over just some highlights of financial statement results, and then talk about a couple of future pronouncements that will affect the city in future years. So starting off with audit results, Noel did touch on this, but our audit opinion on the financial statements is an unmodified or clean opinion. This is the highest level of assurance that we can provide as your independent auditor. And overall, that opinion indicates that the financial statements were found to be material and to be fairly stated in all material respects. As Noel mentioned with internal control, so we did not have any deficiencies in internal controls that we noted in 2025. We did have one restatement. He did mention two restatements. One of them is related to just a change in major funds. So that's not the result of would be considered an error, as you might see in the financial statements, that language. There was one restatement that would be considered an accounting error. However, we don't have a deficiency for it, as Noel kind of gave some details on. Basically, that was the result of the Public Improvement Projects Fund having unavailable revenue recorded in 2024. And because of a change in activity in that fund between 24 and 25, materiality dropped in 2025, resulting in that amount being material for 2025. Overall, not something that we considered to be a deficiency, just something that had to be corrected in 2025 with that change. Noel also talked about Minnesota legal compliance. So these are six guides that the Minnesota Office of the State Auditor requires all independent auditors to go through for all government entities, basically. There's different checklists for different entities. But we go through those, we do some testing and some inquiry, and we do not note any deficiencies in legal compliance for 2025. noel also mentioned the federal single audit so the single audit is required when a city has over a million dollars of federal expenditures and chaska did have more than that in 2025. he did mention this is still in progress and it's related to that emergency operations center just trying to get some of that last documentation for the the single audit there but we expect that to be completed prior to the september 30th deadline so no issues there and just relates to that emergency operations center within the public safety facility all right then just looking at required communication so as an audit our responsibilities under generally accepted auditing standards as well as government auditing standards as part of our audit we perform a risk assessment we test transactions and balances evaluate significant accounting estimates and disclosures We also take a look at accounting policies. We noted no new accounting policies that were significant in 2025. We also noted no significant accounting estimates in 2025. We had no difficulties in performing the audit, and we had no disagreements with management. And overall, just wanna appreciate all of management's and the whole city staff effort, making sure they're prepared, helping us complete the audit in 2025. It's a great relationship. I will now just highlight some of those key financial statement results. Again, Noel went through some of these already, but just to kind of highlight again. So governmental fund change in fund balances. You can see there was a decrease from 2024 to 2025 of about $34 million. You can see in kind of the first The top part of this table here, it's across all the governmental funds. You can see it's in that restricted category where that decrease was. And then if we look by the different funds, both the major funds and non-major, the biggest change is in that public facilities capital improvement fund. And really in both cases, that's just the... the result of spending down of unspent bond proceeds that were just unspent at the end of 2024. Those have been spent down as part of that public facilities project, and that's where that large decrease is coming from. Noel also highlighted the general fund increase in fund balance of about $789,000, and that's a result of those efforts to replenish the reserve. He said that has been going on for the past couple of years, and that was emphasized in that 2025 budget as well. Continuing to just look at the general fund here, as far as trend analysis. So you can see fund balance had that increase to 7.7 million, so that's $789,000 increase. Pretty much the exact same increase in the cash balance for 2025, about $790,000. Revenue increased by about $3 million. So overall, you know, trending in a positive direction, we're going to continue to encourage the city to just emphasize that revenue replacement, getting up to kind of those targets that Noel was talking about and just ensure some future flexibility in the general fund. But overall, you can see just from that trend analysis how that fund balance amount has increased kind of year over year since that's been implemented. Next, looking at general fund revenue, budget to actual. I'll just highlight a couple of these here. So charges for service revenue had a favorable budget variance due to just higher than anticipated recreation program revenue. Licenses and permits also had a favorable budget variance, and that was due to greater than anticipated building activity in 25. Taxes were actually within 0.3% of budget, and that's just a result of strong collections. So very accurate budgeting there. Next, looking at general fund expenditures. So parks and recreation was over budget by about 273,000 due to higher than expected maintenance upkeep costs in 25. Public safety, Noel alluded to this as well, over budget by about 721,000 due to just an increase in some payroll costs from onboarding and turnover in that area. General government. actually had a favorable budget variance, came in under budget due to multiple departments being under budget, but specifically the IT department had significant under budget amounts for the equipment acquisition costs. So just less spent there than budgeted for. All right, next we will move on to the enterprise funds. Noel kind of gave some background on this, a large chunk of the city's activities in those enterprise funds. In total, enterprise funds increased by about $9 million. So net position at 2025 for the enterprise funds was 136 million, 136.1 million. You can see across all of the different enterprise funds that change in net position was positive. There is one hidden amount in the non-major enterprise. The loop at Chaska did have a deficit. I'll get to that later. But overall, between the two golf courses, that was positive as well. So, again, kind of just replenishing those reserve balances, the effects of supporting operations in some of the funds. We'll look at some of the operating results here in the coming slides. Okay. overall seeing that that positive change in that position so specifically kind of going through each one here the electric fund operating revenue increased by 3.75 million to about 61 million dollars that was an increase in usage as well as rates for the year operating expense increased about 2.3 million due to some higher energy purchases the ami implementation as Noel talked about And then that overall operating income increased by about $1.4 million to $11.5 million. So just overall very strong results in the electric fund. And then as a result of that strength in operations, that was where Noel also talked about the transfers out. Overall, the electric fund transferred out just under $8 million to support other funds in their operations, and a large chunk of that did go to the general fund.

arbitration process with the old vendor that provided us but that process we're just starting right now yeah

All right, then I'll move on to the water fund. So the water fund operating revenue increased by about 484,000. There are some strong increase in residential consumption there. Operating expenses increased by about 665,000. That was just related to an increase in production and distribution costs. But still overall positive operating income in the water fund. Can see it was a little bit of a change from 23. That's as a result of some of the changes that were made accounting wise, restatement wise in the previous year for 24, but overall positive operating income in 25. Next we'll go to the sewer fund. So operating revenue in the sewer fund, 8.3 million. That was an increase of just under 500,000. There's an increase in sewer rates. Operating expenses increased, or actually stayed very consistent. They only increased by about 18,000. And then operating income almost, actually more than doubled. So strong operating income in 2025 in the sewer fund as well. Moving on to the storm fund. So operating revenue here increased by about 125,000. There was additional residential commercial consumption in 25. The operating expenses increased by about 400,000 and that's Part of that's related to just the depreciation on some of the transfer of assets that was done in 2024. So kind of full year depreciation on those assets contributing to some of that difference there. So this was the first year in the past five years that the Storm Fund did see an operating deficit in 2025. So you can kind of see the trend there. Next we'll go to the turbine generator. So as you can see here, operating revenue stayed exactly the same. That's not a typo. That's actually going to be consistent unless there's another type of operating revenue in this fund, which I'll talk about in a bit. But basically it's due to the amortization of this lease asset. So it's being amortized at a consistent amount each year. That's part of a change that was made in 24 to follow a newer GASB standard. And so you'll kind of see that going forward. That's the amount that we had for 2025. Overall operating expense stayed fairly consistent. Again, that 2024 change from 2023 is also related to that change in how we did that in 24. Operating income still positive for operating income. And then the change in net position you can see was even greater for 25. So just wanted to highlight that piece as well. Next, the Community Center Fund. So with the Community Center Fund, did see growth in operating revenue. There's an increase in membership and rentals in 25. Operating expenses also increased by about $342,000. So just from the result of revenues exceeding, well, the change in the revenues exceeding the change in operating expense do you see that that operating loss did decrease from the previous year it is still an operating loss and we actually did want to just highlight that if we were to take out the depreciation which is the expense on all the assets within that fund and just kind of look at those current results we do still show in operating loss in in the community center it has been improving over the past five years but but still at that deficit in 2025.

One thing I'll point out there, if you remember when we go through the community center budgeting now, we've been doing this for the past few years as we have sort of a plan in place where we're sort of taking a chunk each year to get ourselves up to what we think is the proper support from the general fund into the community center fund. Generally, in the municipal comparisons, I think we typically see about 60% of the revenue for a community center facility being generated by the facility itself and about 40% being general fund dollars that are coming in. We've been way under that. We've, through the years, have really tried to rely on that fund being self-supporting, which we just, as it gets older, it can't. So it is good that we're seeing those increases, even though they're small, because that matches with the action that you guys have been taking each year to help improve that position.

Wasn't there also something about it used to fund?

Yeah, so some of the salaries and stuff like that, that was sort of the first place that we sort of turned to was pulling some of those salaries out of the community center and putting them into the general fund. Because they weren't really necessarily community center staff, they were park and rec staff. Yep.

All right, then we'll move on to the Curling Center Fund. So operating revenues here increased as well, 63,000, additional lessons membership, the biggest driver there. Operating expenses increased about 40,000, some additional salary repair expense. Overall operating loss in 2025, and kind of similar to the community center, if we take away the depreciation, we still do show an operating loss in 2025. Did want to highlight, you know, change in net position, that is positive. A large result of that is going to be transfers in from other funds supporting the activity in the Curling Center, and especially the debt service activity in that fund. Yeah, so I wanted to highlight both of those pieces. All right, and then we'll take a look at the golf course funds. So with the loop at Chaska, I did allude to this earlier, but operating revenue increased 74,000. Operating expenses increased about 199,000. So overall did have a loss on operations. And then even if we take away the depreciation, it's still a loss, though it did become less of a loss. You can see that depreciation is kind of the main reason for the additional piece of loss in 2025. And again, that fund is kind of still getting off the ground. This is kind of the first full year of revenues depreciation. So we'll see kind of how that goes into the future here. And then for the Town Course Golf Fund, operating revenue, $146,000 increase to about 3.4 million, 3.47. Operating expenses decreased about 274,000. And so actually from a deficit in 2024, this did end up having a positive operating income in 2025. And so we actually showed that. In 2024, if you took away the depreciation, you still had the income from operations, but there was an overall operating income loss. Now there was enough that even covered the depreciation in 2025. All right, so just to kind of pull all of this together, and Noel did talk about this earlier, so summary of net position, governmental activities, that's the result of all of those governmental funds, so your general funds, special revenue funds, capital project funds, debt service funds, that are all on the modified accrual, converting those to full accrual to then kind of compare them apples to apples with all the enterprise funds that are already full accrual. So in total, those governmental activities in the full accrual piece increased by about 18.4 million. The business type activities increased by about 9 million, altogether increasing about 27.5 million to get that total net position of 299 million. The big reason for the difference in the governmental activities is gonna be related to construction progress on the public facilities as that will eventually be depreciated when it's fully capitalized. But at the moment, it basically just goes into an asset column. So that's a large piece of that as well. But yeah, overall 299 million for the entire entity wide net position. All right, then the last piece I was gonna touch on was just some future pronouncements. So we have two future pronouncements from the Governmental Accounting Standards Board that'll be effective next year in 2026. It's going to be GASB's 103 and 104. GASB 103, the goal here is really to make financial statements easier to understand, make them a little more transparent. How they're gonna do that, Noel kind of went through the ACFER. He talked about the management discussion analysis. There's gonna be some changes there just as far as what they actually want. They're basically requiring governments to have five distinct sections. They're going to tell you exactly what sections those are. They're not too different from the sections you already have, but it's basically making things consistent across governments for those sections. And then there's also going to be a larger emphasis on why for some of these changes. So instead of a little bit less, and not to say that's not already in there, but just an additional emphasis on just what are some of the policies driving some of these changes, why did some of these things change, et cetera. There also is a change with Gatsby 103 related to the enterprise funds. So they're giving us a clear definition of operating revenues versus non-operating revenues. So we may see some changes there and we'll be working with the city on that on just what will actually show up in those buckets. So when we see some of those comparisons year over year, just know that there may be some changes from Gatsby 103. Additionally, there's an introduction of a non-capital subsidy as this new classification in the financial statements. And really what that's trying to do is say you have transfers supporting a fund and its operations that are basically allowing you to keep rates lower. That's one of the things that they're saying, hey, if this is not related to capital, this is something that we just want to call out separately now. So something that may change for 2025 and again, we'll start for 2026 and we'll be we'll be working with the city on that. But some changes that you might see next year. Gatsby 104 is basically making some of the capital asset disclosures more consistent across governments. The past couple of years, we had a couple different Gatsby standards that created new. assets, and we'll talk about these a little bit, like lease assets, subscription assets, and basically it's just making sure that, we didn't have great guidance on what those were supposed to look like in the financial statements, so not every government did it exactly the same, and now we're just getting good guidance that hey, this is exactly what this needs to look like. So we'll make sure that that's up to date for 2026. it also introduces capital assets held for resale kind of a new term basically if the city is going to intends to sell an asset in 2026 but it hasn't done so at the end of 2026 if it meets certain criteria we may just disclose in the financial statement notes that hey you're going to be selling a building you're going to be selling something if it's if it's large enough that the users of the financial statements would potentially care. So those are the two big changes for 2026. And then GASB 105 will be effective in 2027. That's going to be a really small change. Basically, it clarifies the definition of a subsequent event, which is really for us to kind of go through and look at things. And then there will just always be a note disclosure now of what date we evaluated subsequent events through. So whether or not there are any subsequent events, we're gonna say, hey, we looked at subsequent events through this date. We already do this piece, it's just gonna be an additional no disclosure in the financial statement. So really minor there. So basically all three of these statements basically are big upcoming changes in the governmental accounting world, but really what they're just trying to do is create that consistency and transparency across governments. And those are the big changes. So that was everything I had. Once again, just wanna thank you for allowing us to serve you as your auditor and then presenting for you today. If you have any questions, happy to take those. But otherwise, thank you.

Any questions? Thank you.

Thank you, Ezra. Just a couple things here. Just I wanted to highlight on page eight of the ACFER is the Certificate of Achievement, which is issued by the Government Finance Officers Association. This is their program that basically we participate in it so that they will have reviewers look at our ACFER, two of them from out of state and one in-house at GFOA to make sure that we have met not only the GASB requirements, but also the standards of the certificate program by including the letter, the management discussion, the full note disclosures, the statistical section. Those are parts of the basic financial statements that a lot of communities do not include in their ACTFRT. That's why it would just be a financial report as opposed to a annual comprehensive financial report. This gives us a lot of great feedback from outside reviewers, which helps us make sure that we maintain the standard that we are striving for through their program participation. In 2024, we received the certificate. It's included in this 25 edition. That was the 36th consecutive year. We've received it every year since 1989. To give you some perspective on this, there's over 91,400 governmental units across the United States. GFOA last year only issued 4,072 certificates of achievement. So that right away puts us in the top 4.5% of reporting entities in the nation. If you look at of that 4,000, about 1,937 of them, which is about 47% of the certificates, came from large or small organizations. municipalities, large being like a Minneapolis, St. Paul, small being a Bloomington to a Chaska to an Elk River. Of those certificates, that would put us in the top 2.1% of all the entities in the United States. In the state of Minnesota, we have a very high participation rate of governmental entities that apply for the certificate each year. There are 131 certificates issued in the state of Minnesota. Of the 3,672 entities, that puts us in the top 3.6% in the state of Minnesota. when we met with s p i actually spoke to them about this and said what does it mean to you when you see the certificate in an act for and they say you know that lets us know that you are at a higher level reporting that we know we can rely on the standards that the auditors have provided issued opinion on but also that you've risen beyond those requirements and obtain the higher level of disclosure requirements of the certificate of program. They also know they've got the 10 year of history that they need already available to them in one source. So it is very beneficial to the rating agencies who are looking at us. It's also used by bond analysts. who are oftentimes reviewing bids to bid on our bonds, as well as analysts who are looking to maybe purchase those bonds on the secondary market to be a part of their portfolio. So it is a very high standard that we appreciate getting the feedback from. Most of our comments are pretty small, but when an issue is identified, It helps us identify and improve our financial reporting. So the finance staff is very proud to participate in this program each year. The ACFER is available to the public. It's on our city website. It'll be in the Laconia Patriot, which is our legal publication paper this Thursday in summary form. It has also been posted on EMMA, which is the electronic municipal database for all of our financial disclosure through the MSRB. And so that's where all of the bond rating agencies or analysts are going so they have access to that data GFOA certificate program also has links to every Certificate that's been awarded so people can see it on there We also have it available in the Chaska library as well as anyone who wants to see it here at City Hall So we've already distributed this to the state auditor's office but a lot of the other entities that are looking for our financial report each year and And then finally, I just want to acknowledge, I did mention Erica is our finance division director. She leads the team that works all year and then works on the audit to get that done by our June 30th deadline. Lisa Nelson has been our controller for many years. She's responsible for our enterprise ERP financial system that we operate the entire year. And then she uses that to draft the trial balances and financial statements and no disclosures for the act for her experience is very beneficial to the city. All of the finance staff who work every day on processing the activity, the revenues, the expenditures, the disclosures that we have to make on a timely basis, as well as the department heads that work on their budgets and the department leads who manage the budget operations within each of the city departments. It's a very diversified effort across the entire city. and all of course there's Matt's leadership who develops budgets with us and then we also review financial activity with him and then finally the city council yourselves. It's a pleasure to be able to work and represent the city from a financial perspective to implement the decisions that you've brought forward and hopefully this report reflects those desires and activities that you've directed over the last year. With that, I'll take any other questions as well. Otherwise, there is the requested action by the council to accept the city and the fire relief reports.

Questions for Noel.

Questions, but great job on that. I've seen many audits that don't look so good. Actually used to work for Clifton Larson Allen long ago in the healthcare sector. But it's a pleasure to have someone who knows what they're doing go through this with us and also manage this all year long. So Noel, as the lead of finance, good job to you as well. Thank you.

I do want to point out that Ezra said that Gatsby added one more thing to make things simpler. Only in the government can we add one more thing to make things simpler. We look forward to that. Any other comments?

I just had one fun fact. Yes. if anyone listening at home or watches in the future, in 2025, there were 1,637 public fire hydrants in the city of Cheska.

That was the fun fact I found.

Just buried into that thing. Just like someday you're going to be somewhere in a bar and that's the conversation. 1,637 public fire hydrants. Well, we have more. We got more now. That was in 2025. But I just thought that was fun to point it out in the riveting discussion as we talked about it.

And with our 10-year analysis, you'll see as those numbers go up that we've been growing.

Yeah, I mean, to your point, right, in all seriousness, it is actually a really good model of growth, right? Like more growth, more fire agents, but yeah, fun stuff. All right, thank you. So with that, there is a motion to accept, or we need a motion and a second to accept the 2025 Annual Comprehensive Financial Report for the City of Chaska Associated Audit Reports, as well as the 2025 Annual Financial Report for the Chaska Fire Department Relief Association and Associated Audit Reports. So moved. Motion by Council Member Hatfield. Second. Second by Council Member Benesch. Additional conversation? Hearing none, all in favor of the motion, say aye. Aye. Opposed, safe sign. Motion is passed, thank you. Bring us to 8B, adopt resolution number 2026-65, approving the concept plan for Vista Ridge slash Johnson Rylan Homes, PC number 2026-12.

Mayor and Councilman, first of all, I just want to thank Noel and Ezra and Lisa for being here and all the work with us. They put in a ton of work into that, so I really appreciate that. Thank you. The item in front of you tonight from a planning perspective is a concept plan that's being proposed for the remainder of the Carlson property in southwest Chaska. It's a concept plan for 27 lots that would be on 30 acres and just south of the The property that was developed there is a couple years ago. So you'll see that it is being recommended from the Planning Commission for approval, and we have Ashley here to go over a presentation for it.

Thank you, Matt. As Matt said, tonight we have a concept plan by Johnson and Ryland Homes for 27 single-family detached dwelling units on a roughly 30-acre site. The concept plan, as the council is aware, is the first of CHASCA's three-step process. Tonight, we're not necessarily solving issues. We're identifying them, providing some feedback on them, and giving direction for the developer to come back and resolve those items as the process moves forward into the preliminary phase and the final phase, with each of those plans getting more detailed and our review getting more detailed. Surrounding the development site, which is highlighted in black, they're kind of in the center of your screen, is roughly 350 residential lots within five subdivisions, generally all developed within the last decade. Earlier this year, the council also reviewed a concept plan for or a Pulte concept plan by Pulte for the Holosik site kind of west of here. That was for 207 units and was a mix of single detached dwelling units and twin homes. Chaska's downtown is just off to the right of the screen to the east and then the southwest Chaska Park and the future Savannah Way and future elementary school is to the west of the site. And then lastly, on the Lano property directly to the south is a gravel mine. So again, the development site is roughly 30 acres. It encompasses four properties. The first is a portion of Outlot H of ensconced woods, Outlot A from Carlson Bluffs, then a large unaddressed parcel. All three of those lots are owned by Linda Carlson and were intended for future development. And then the last site is the former Schramm Brewery property. That site does contain the only building on the property and the access into the site. So earlier this evening, the council did approve as part of the consent agenda conditional use permit for that site. So it's important to note here. that this site is really only part of the project to provide access there's not redevelopment proposed for the site other than that realignment before you this evening This site, as you can see, is heavily wooded. A tree inventory has not yet been submitted for review, but you can see here from these photos looking in all directions into the site that it's very heavily vegetated, and you can start to see what will become kind of the site's biggest challenge to overcome, and a theme throughout my presentation this evening related to topography. The site does slope about 100 feet from the highest point in the northwest corner of the site down to the lowest point in the southeast corner of the site along Chaska Boulevard. Generally, the site does slope downwards from that highest point to an area where it sort of flattens out. When looking at the concept plan, that's roughly in the area of that new cul-de-sac, and then it continues to slope downwards again. The site, much like the surrounding area, does have a lot of areas of significant wooded steep slope. Those areas are highlighted kind of around the perimeter of the northern and eastern sides of the property and then extending off site. So before I go through staff's review of the project and all of the plans, I just wanted to kind of give you a quick grounding of the concept plan itself. So again, 27 new single dwelling lots. Those would be accessed by a new connector roadway, Soaring Eagle Parkway, running from east to west. That new road does terminate on the western side of the property. And then also a new cul-de-sac Soaring Eagle Court would allow access for the 13 remaining lots.

Quick question, who names streets?

These are the road names that are proposed by the developer.

Can I suggest that we change that to Soaring Hawk Parkway, not Eagle?

My understanding is Soaring Eagle may have, and the applicant may have more information on that. I'm not sure if they're here this evening. I'm joking, but I'm actually pretty serious. I believe that Soaring Eagle was a request by the property owner, but I will make that.

I would guess the property owner would love the sword and hawk idea.

Yeah, because this is not Eden Prairie. I'm just saying. The eagles are over there.

We'll talk more about that.

I'll put that note in.

I like that. Like I said, I'm kind of joking, but I'm kind of mostly serious, actually. It would be awesome.

And then there is also proposed supporting infrastructure, the utility sidewalks and the stormwater to support those new homes and the new roadway. And then you can just see the examples of what they're proposing in terms of those new homes there on the bottom of the screen. So is, if I understand this right, the SRAM,

lot or where it sits today is part of this like it'll be rebuilt into a house that no no so this so right now uh it received a conditional approval to basically just be like a contractor storage building in the future it would get redeveloped but that the only reason that that parcel's in this now is because they need it for access So the access would basically be when you'd come up to SRAM and you'd see sort of the opening in the woods going up. That would basically be the access up to this. In the future, you can bet, though, that that and properties to the east are probably going to want to redevelop.

Yeah, but hopefully like another restaurant or something, not a house.

Yeah, I mean, it's hard to say at this point. I mean, right now our comp plan guides it for higher density residential. Okay.

I mean, keep in mind, the only reason that it was used where it was is because it was an abandoned or emptied county building that the county no longer needed.

Okay, yeah, interesting.

That is crazy to think that it's going to, because that's steep. That's steep, yeah. Like to go straight up, like that'll be an interesting.

That used to be our gun range. Well, yeah, because you had the hill. It was Carver County Sheriff and Chaska Police Department. That's where all the firearm training was.

Oh, wow.

You guys are making a lot of my presentation points, so if you want to continue, skip right to the recommendation. We hear from you all the time. As Matt said, the Schramm Brewery site is one of two properties in that area that are guided by our comp plan for high density residential. The remainder of the property is primarily low density residential and then open space preservation, which covers a lot of that steep slope area to the north and the east. As noted in your report, the proposal may fall under what our threshold is for low-density residential, but a more careful and thoughtful calculation can really happen once this northern boundary is clarified, and that goes into more description in your report this evening. But it's likely going to tip that threshold into conformance once we understand what that boundary is. Roughly two-thirds of the site is currently zoned open development. The classification is really a holding zone for properties that will become rezoned when they are developed. The remaining kind of residential areas as part of the concept plan are zoned planned residential district as part of ensconced woods to the north and Carlson Bluffs to the west. And then that Schramm Brewery site is zoned I-2 restricted industrial district. It's likely that if the proposal were to come back before you, the residential portion, so that western side, would be rezoned to a consistent PRD district just to ensure consistency, but there would likely not be any rezoning to that Schramberry property. So continuing to step through, when we're reviewing lot configurations, lot sizes are ranging from 13,000 to 116,000 square feet, just over on both of those. That's consistent with what we see in the southwest Chaska area. And then the lot widths are really ranging from 70 feet to 405 feet. Again, consistent with what we've seen in southwest Chaska. The As currently shown, the lot lines are extending into those wooded steep slope areas. So those wooded steep slope areas are shown in this red area. You can see those property lines extending into them. Some of the council may recall when we reviewed Carlson Bluffs to the west, there was a similar proposal that came through as part of concept plan review. We had a similar condition as what's included in your report this evening. to adjust those lot lines to align with that 30 foot no grade no mo setback to protect the steep slope and really what that what that allows us it's the highest level of protection because we're taking those sensitive areas out of private property ownership And so with Carlson Bluffs, that condition really allowed them, or they did modify most of their rear lot lines except for two small areas of encroachment. The council did support those two areas because they needed them to kind of meet their lot size requirements, but they had some stronger conservation needs that they had to meet and there are signs that are out there to alert the property owners where those areas exist.

Just a question on that, and it's fitting that you're sitting in this room because you asked me this question too. When there's contravention easements in there, and property owners use it as their own property, put stuff there, cut things down, move things. they're in violation of the city. I mean, that would be enforceable through the city, correct? Like if there's recognition, again, now it's hard because there's lots of them and it's not things that we always are fun to chase after. But I guess what I say out loud here is if you are those people who have that in your backyard, respect that because that is intended to be conservation spaces, not what you decided is because you've taken it as your own property.

I can tell you that some of the least fun conversations that we've had with people is when neighbors get upset at other neighbors for the neighbor using the conservation easement. We've had it where they've had decks built into it, and it's a really uncomfortable conversation. Because you're right, the intent is to try to preserve those areas. And 90% of the people do. But there's always a few that don't. And they become very difficult to address.

Is that not something, instead of an easement, that the city could just keep ownership of those and the lot lines could be smaller?

Well, it is owned by the city, essentially. The problem is that it's their backyard. Yeah. Right? So they just extend into this.

I can sort of weigh in here, too, a little bit. Easements, property lines, they're all enforceable, right? They're all tough to enforce. And so whether we put a property line there or an easement there, if a resident has a strong desire to encroach into it, I mean, I can point to every which way in the city and give you examples of both. And so- I agree that 95% of people are trying to do the right thing. I also think that there's folks who encroach that don't necessarily realize what they're doing, but that's just the reality of it. So whether you want to call it a city outlot or you want to call it an easement, there's the potential for encroachment and enforcement challenges in the future. That's just the reality of it.

I brought it up to help with the percent of people that don't know what they're doing is not right. Because that's the helpful part. Because I think you're right. I think some people don't know.

If we need to keep it like that, which sounds like is beneficial, maybe we just keep ownership of it. But you're right. You still, if your property life butts up to it and nothing's ever going to be there, you.

I think probably the most effective thing, and this is the direction we've been going and Ashley mentioned it, is having signs go up that actually indicate that It's hard to say you don't know. It's hard to say you don't know when there's a sign that says that it's there. That's something we hadn't done in the past, but I know it's become something that has been a lot more on our mind because we've had a few cases pop up in older parts of town. You go through it once and you don't want to have to go through it again. And so you do that.

I mean, and maybe I'm thinking of newer parts of town. But like Cheval, for instance, we've been very clear that some of that green space can't be, you know, and the lots are big and there's, you know, like, it seems like we've taken the right precautions to keep the green space. There's still enforcement issues, though. Oh, are there?

Oh, yeah. And I can think of... People. I can actually think of specific properties where I know there's encroachment occurring. And so it's an ongoing issue.

Thank you. Sorry. Go ahead.

No, that was great discussion. So in your prepared information this evening, staff is suggesting or recommending that those lot lines be adjusted to that 30-foot no-mow, no-grade setback. So that kind of black line outlining the red would effectively be some configuration similar there of of what that lot line would be obviously we'd want to make sure that those lot configurations and dimensions make sense. But you would start to see it follow more of that line.

And then tonight just ask one more question. As we were just talking about Southwest Park earlier in the drainage. Coming from other neighborhoods around there. How will this dream because it is on such a steep Hill and it will

um that's the i assume that's not in here now yeah i guess at a concept level i can't really speak to specifics as to exactly how you know drainage is going to be captured and treated that's going to be a requirement they need to meet through the process um you know and how how drainage is captured on the road versus how drainage coming off of the private property is captured can sometimes be handled in different ways as well.

No, I meant more like we were asking Pulte for some money towards the park for this.

You wouldn't be able to have that opportunity here because the water is going that way. So the park is on the left-hand side, so the water is all going to the southeast.

So we couldn't, okay. No, we wouldn't be able to do it. I was trying to think of where we could find it.

We can do it on the Pulte side because the water's heading in that direction, but not on the other side. Okay. Yeah.

Okay.

Got to get to the river somehow.

Mm-hmm.

I was just thinking if we could make some money for your trail device flash pad, we should.

As currently proposed and currently named, Soaring Eagle Partway would extend from a newly upgraded intersection at Chaska Boulevard up through that Schramm Brewery site and then through the site to the west and then terminating. The concept plan does also show a future road connection that would go through the Lano property to connect into Percheron over to the west that would require

coordination with that lot of property owner at the time that that would happen and then again sorry so it is it as yeah as a concept is it's it's a one in one out correct yep and i know our fire and police and emergency they'll take a look at it those are always the ones that you we scrutinize a little bit just because of if something were to happen to that space and couldn't get in and out.

Correct. And I talk a little bit more about emergency services and some of their comments a little bit later. But in an attempt to get to your point about ensuring that there's a turnaround, they did include this little turnaround here intended to allow for fire trucks to be able to turn around until that future connection is made. And then there's this cul-de-sac again for those 13 lots, Soaring Eagle Court. As more thoroughly detailed in your report, the alignment of that connector roadway has been heavily studied by the city over many, many years and by many plans. The first was really the southwest Chaska plan. There were three alternatives. explored as part of that plan in relation to where the site is. Ultimately, the preferred growth and development plan coming out of that study did show that that connection road would come just to the south of the development site, primarily on the Llano site. And then that alignment showing connection kind of at where the existing Edge Hill Road intersection with Chaska Boulevard is, was then also reflected in the 2040 comp plan. In 2018, the county looked at this area for 61 and 41, this corridor plan. Their plan does identify two full intersections at both Edge Hill Road and the Schramm Brewery site. North is kind of to the east of this site, if you will, or to the east of this slide, if you will. The Edge Hill intersection was intended to provide access for that future connector roadway, and then that Schramm Brewery site was intended to provide access to those future redevelopment sites to the north. Most recently, last year, staff with Stantec took a look at this Percheron Boulevard extension and identified three alternatives. Alternative three, shown in purple, cuts through the Llano site. It was quickly eliminated, though, due to poor soils, so soil conditions and just feasibility of what that construction would take. There was also spacing issues that were coming up and arising from County Road 40. So the alternative one shown in red here, that one, again, kind of aligns with the Edge Hill Road, so generally what was previously identified as that location. This one was still considered an option. However, it was realized that that would probably result in the most impact to the wooded steep slope in this area of the three alternatives. so alternative to shown in green and generally aligns with what's being proposed as part of the concept plan it would result in likely the least amount of steep slope impact but still recognizing that there would be some so staff is is open to the further exploration of this alignment and we would look for some more details coming forward as part of preliminary to better understand what that looks like My report goes into more detail, including pictures and what the historical marker says. I admittedly have driven by it a thousand times, but hadn't stopped to read it. But it was originally constructed in 1938. It was put on the National Register of Historic Places following its reconstruction in 2010. The developer has indicated that they do not plan to have any impacts to that site. Some of their line work does suggest otherwise, but it might just be an overlay issue, and so there is a condition of approval that they just have to clarify that when they're moving into preliminary. And it's a smaller issue in comparison to some of the other challenges as part of this proposal, but it's important to note because if there is impact, there would need to be additional review by other jurisdictions. So that east-west connector, Soaring Eagle Parkway, does have some impacts and needs in order to construct it. The first would be a pretty sizable retaining wall on the north side of the new roadway. There would be two areas of grading within the wooded steep slope area on the east side. There's also some grading that would happen on the Lano property to the south that would require them to participate in the process. So again, we're looking for some more clarification on that should the project move forward. This is a little exciting for me. I'm going to nerd out for a little bit. You often see these street profiles in your staff report as part of our grading plans, but we very rarely get to actually talk about them. Tonight, it's a pretty significant part of the presentation, so I'd like to just take a little bit of time to walk you through it and explain why it's important. But in order to do that, I'll try to explain it. But feel free to stop me if I nerd out too much and you're having a hard time following. So the street profile is essentially if you're bisecting the center line of that new east-west corridor. So everything beyond this line, so everything to the left of that, is showing the grades for the future connection. Everything to the right of that is what we're looking at as part of that newly constructed Soaring Eagle Parkway. So these kind of lines help orientate, so those are the stations along that roadway that help orientate us where we are within the site to help provide that context. The green areas are showing what would be needed in terms of fill in order to construct that road, and then the red is obviously areas in the opposite direction, so areas that would need to be cut of the site in order to bring the gray down in order to construct that roadway. So hopefully I haven't lost you yet. But again, here's the end of the terminus of the road down to the Chaska Boulevard intersection. That's roughly 1,800 feet of new roadway. That grade change across that 1,800 feet is 80 feet. So we're dropping 80 feet from the one end to the other end. So when you're averaging that across the entire profile, we're well within what our city standards would be. However, there's this area on the eastern end when you're dropping within that wooded steep slope where that grade change is really getting up to 14%. So that newly constructed road would have a 14% grade. And that far exceeds what our ordinance would allow. So the maximum in our subdivision ordinance is 8%. So we're nearly doubling that. So staff has some concerns with that, primarily from emergency service access and just maintenance and construction of what that new roadway would be. And so included in your packet this evening is a recommendation for that grade change to be brought down to that 8%. And so there will have to be some work done as part of their plan in order to make that happen. So moving into hopefully the less complex and less nerdy parts of the presentation, the concept plan is proposing a five-foot sidewalk on the north side of Soaring Eagle Parkway and then on the east side of Soaring Eagle Court. Generally that's pretty consistent with what we see in single-family neighborhoods, but there has been additional kind of shared use pass and trails bisecting the site. So there's a trail junction that was shown in the 2040 comprehensive plan that reflects back to some trail alignments that were reviewed as part of a Southwest Chaska plan. And then most recently in that recently adopted 2040 pedestrian and bike master plan. Again, it's kind of showing this bisection and the intent of that is to allow for access from the new community park down to downtown and then also from Savannah Way to the southwest up to Big Woods Boulevard in the northeast and so included again this evening is recommendations to ensure consistency with those previously approved plans and with the adjacent neighborhoods and so in order to get to that consistency We would want to see sidewalks on both sides of Soaring Eagle Court, continuing to show that sidewalk on the north side of Soaring Eagle Parkway, but then also showing an eight-foot shared-use trail on the south side of that roadway, and then also establishing the location for where that additional bisecting trail would come through and where that trail junction would be. So earlier this evening, I said that a tree inventory has not been submitted. so we will that is a requirement for the next phase we would want to see that we would compare that to a comprehensive site grading plan to better understand what the site impact or the impacts to those existing site trees would be so this evening that's a requirement you can obviously see these wooded steep slope areas again where our ordinance would provide or require some additional protections Utilities to the site. Connection would be made to existing infrastructure east of the site by directionally boring under Chaska Boulevard. Those utilities would be brought up through the SRAM site and then through the site. The water main then would loop through connect to existing infrastructure into Percheron the developer initially indicated that that would be a future connection the city has continued to advocate that that water main loop is extremely important to ensure that there's adequate water pressure due to the site's topography throughout the entire development so staff would advocate for that water main to be constructed at the time of the development and again that would require coordination with that southern property owner So this is just showing those off-site impacts, the one going under Chaska Boulevard, and then again the portion of that water main connection that would require the Lano coordination. Moving into just some building design review, the new homes are generally shown to be consistent with what you've seen from other Johnson Rylan developments. Footprints of roughly 2,000 square feet, a mix of single and two-story homes with generally three car. Attached garages. Their development setbacks are generally consistent with kind of all of the setbacks that are within that area. They're identical to what was approved with Carlson Bluffs to the west. with the note that they are not including a corner side lot setback. So included in your packet this evening would be our recommendation to add that to 15 feet to be consistent with what our ordinance would be. It was likely just an oversight by the developer as they kind of carried over Carlson Bluffs, which doesn't have any corner lots, so that setback was not needed. But in this development there would be some corner lots that we would want to that to carry over and be consistent Did they build Carlson bluffs? They did The Planning Commission reviewed the concept plan at their meeting earlier this month. They ultimately did recommend approval of the project. They didn't have a lot of discussion about it, but they did express concern about the anticipated amount of tree loss. They wanted to better understand what that would look like. They expressed concern about the steep slope impacts. And then also the street grades. Some of them shared some experiences of driving Big Woods as it is today and trying to correlate that over to what the new slope would be.

What is that? What is Big Woods Boulevard's grade if you go up from Chaska Boulevard?

I can look it up. I don't know offhand.

Just curious. I drive that every day, so that's why I'm wondering.

I can tell you that it would have met city standards.

So it's less than 8%.

It might be 7%.

So 14 is, yeah, that's a steep hill.

But Nate's giving me the eyes, so maybe he'd recall something differently.

The eyes, huh?

Actually, actually, that's just my face.

We're getting squirrely on this Monday night. That's good. It's been a long month.

It's because I'm running it today. That's the problem.

No, I appreciate it. It's good humor. So then they, again, they supported the trail connections as staff was recommending them, and they wanted to see those changes incorporated to the plan as well. So this evening, staff's continuing to recommend approval, understanding that it's the appropriate land use. It's a continuation of what's happening in Southwest Chaska. It does provide logical expansion. There are a number of conditions of approval though to get to these items that we've talked about this evening That would need to be addressed as part of that next step So again approval tonight does not constitute construction and there's many more things and much more information that's needed before we get to the actual construction

One point, Ashley, sorry to interrupt. I just want to point out, because I've had conversations with the property owners that surround this property on a few occasions. And just to point out, not that Ashley didn't already, but access road access and sewer and water access all require cooperation with neighboring properties this this particular property will not get that service absent that cooperation and so i think it's important for the developer you know, continue to keep that in mind as they move forward through the process. And I think, you know, different property owners have their own perspectives on it. But regardless, it will require that cooperation.

So with that, that concludes my presentation. Thank you, Nate, for adding that again. And I'll turn it back to you. Okay. All right.

And the developer is here?

I don't see them. Okay. So perhaps they might be online.

Do you think they're online? I don't know if she can hear us back there.

I'm not seeing them online either.

Well, it is concept. So any questions as a concept planning, questions from the council, or feedback, or comments?

I think it's exciting that it's growing up the way we kind of had hoped, but there's a lot of contingencies on this one. So the road, the backyard easements, the cooperation with other neighborhoods, certainly we'll want to see them in the preliminary address some of those things, but also very exciting to see that we're developing land that we were hoping to develop.

Yeah, no real questions. A concept. I think it was all covered well and the call outs are the things I had on my mind too. So I think it's good. It's such a beautiful area. So I think it'll be nice for homes to be there of course once this is all worked through. So yeah, no other comments or questions.

Yeah, I just, I echo those thoughts that I think that, I just realized I said echo, it's an inside joke between Michaela, but I echo things a lot.

Actually, I did it.

Development's great. I do, the access onto Chaska Boulevard is always interesting. That is an interesting area. The county knows that. I also think the road, whatever road comes from Carver there, that road doesn't sit right with me either. Every time I look at that road, you're like, coming so with development comes some of those changes and fixes which is good because I think you know improved visibility and access points are important you know I'm still gonna shut out to change Eagle to Hawk I'm gonna say that again because it seems minor but I think it's cool I think it'd be a great selling point unless there's some really attachment to Eagle with with that decision to I get that too so all right any other conversation Otherwise, I lost it.

Motion to approve the neighborhood. Is there something about the neighborhood?

It would be adopt resolution number 2026-65, approving the concept plan for Vista Ridge or Island Homes, BC 26-12. So moved. Motion by Council Member Shevlin. I didn't have to pause that time. I got it right. You did. Second. Second by Council Member Hatfield. Any further discussion? All in favor say aye. Aye. Opposed, same sign. B is adopted. Thank you. That brings us to 8C, authorized letter of intent for TIF assistance for the proposed Big Woods Business Park project.

Mayor and council members, the item in front of you tonight is in relation to the industrial park that we are currently working on trying to bring to reality with Scannell, who's a developer. of the property. You'll see tonight that the item in front of you tonight is to authorize a letter of intent for assistance to propose to bring to this business park. You'll hear Julie talk about how it fits within our policy. Maybe one thing I will mention about this particular park is this is a particularly difficult park to develop and get going because the utilities for the property are on the north side and the road and access is on the south side. And so a lot of times you have the road access and the sewer access and water access are all sort of coming from the same place and so you can sort of build into the development and not have to put all the investment in up front before you actually have the users. the way this lays out that just doesn't allow that to happen we need to bring that sewer utility all the way across the site to make it happen and so the developer ends up having to take some pretty big upfront cost to be able to accomplish that and you'll see that we still talk about our policy and how they'll meet our policy but I just wanted to put some context behind Why bring this letter forward now is important for the developer because it's a big component of how do they make it financially feasible to get this industrial park off the ground. So with that, I will turn it over to Julie.

Thank you, Matt. Thank you, Mayor Pro Tem and Council Members. I think I'm going to start just by giving some background, so we're all on the same page of where we're talking about. And Matt, thanks for introducing it so well. Here's a location map. What we're talking about is the Big Woods Business Park Phase 1, which is in blue on the map in front of you. It's outlined in purple. It's in Southwest Chaska. The concept plan for the Big Woods Business Park was approved back in February and it went through preliminary planning approvals earlier this month. What we're talking about tonight is Big Woods Business Park North, which is north of Big Woods Boulevard, County Road 44, and it's east of Jonathan Carver, which is County Road 11. And within that red circle on the map in front of you is the portion we're talking about tonight. That's the portion that's under control by the developer, Scannell Properties. What's also part of Big Woods Business Park North are parcels to the east. They're shown industrial uses and commercial uses. Those are owned by different entities. One is owned by the city and another is under control by traditions. Those are not part of the discussion tonight. I just wanted to clarify that what we're talking about tonight is pretty much within the circle that you see. So phase one, which I said was approved in June by the city council, the developer is working with an end user of the phase one facility, and that's what I'm gonna call the phase one facility is what's in the turquoise on the map in front of you. That is a 218,000 square foot distribution facility with parking and then private site improvements all along in that property. The site will be sold to the end user once construction is completed. In addition, the developer will also be constructing the public improvements that Matt talked about. That is the public road A in pink. They will also be doing some improvements to Big Woods Boulevard and Carver County 11 just to make the road network work for the entire North Business Park. As Matt said, there will also be the water extensions. Those will come from the northeast. They will go underneath the ravine, which also adds to some of the expense. And then there'll be mass grading for the entire portion shown here. So not only will it be for phase one, the grading will also take place in the purple portions. Those are the future phases of the business park.

Which that's a huge positive for us that we're going to have industrial parcels that are actually ready to go. That's been a real challenge for us to have enough industrial parcels ready to go. I mean, I think people have seen over in Carver with some of the industrial development that's happening there. And the first user that they had go over there came from Chaska, and one of the big reasons that They didn't want to leave Chaska, but we did not have a spot for them to be able to build when they made that decision. So having an inventory of industrial lots is, I think, a real positive thing for our community.

Thanks, Matt. The developer is requesting TIF assistance to make the construction of the public improvements financially feasible. This assistance will be used to reimburse the upfront investment for the public infrastructure, including building the public road A and the improvements to Big Woods Boulevard, County Road 11, and the utility extensions and the masquerading for the site prep. These improvements are needed not only for the phase one facility, but also to prepare, So the entire northern portion of this business park for future development. So the industrial project, and that is outlined in red on the map in front of you. This is the phase one facility. This project qualifies for TIF assistance under the city's TIF policy as an eight year economic development district. Under the proposal, the phase one project would be where we would create the district and that's what would generate the TIF increment or the funding source. However, the end user of the distribution facility is not requesting anything from the TIF assistance for their facility. Instead, the developer is requesting that the TIF funding be used solely to reimburse them for the upfront public infrastructure and site development costs for the Greater Business Park, North Business Park. So under the city's TIF policy, eligible industrial projects may receive TIF assistance in the amount of two times the amount of taxes generated by the completed project or up to three times the amount of taxes generated if there's sufficient land to accommodate future building expansion of 50%, which this property does have. The developer has requested TIP assistance equal to three times the property taxes generated by the phase one facility along with any remaining increments generated within the district to help finance those big upfront costs that Matt indicated. This project does differ from some of the typical industrial developments because the public infrastructure needed to serve the site is being constructed by the developer rather than the city. Usually with an industrial development that has multiple phases, the city would construct the public roads and all the utilities and other infrastructure needed. to move the project forward. That's similar to how TIF 24, the Oppenden Chaska Creek Industrial Park was structured and that was just to the north of the site where the city built all the infrastructure needed and then Oppenden built the buildings that were located within that TIF district. In this case, the end user has an accelerated construction schedule that cannot be accommodated through the city's normal infrastructure construction schedule or timeframe. To meet the timeline, the developers agree to design and construct the required public infrastructure in the city's standards. And assume all the associated financial and construction risk with that, and then complete the improvements that will ultimately serve not only this phase one facility, but also the future industrial development throughout the entire north portion of the Big Woods Business Park. Including those properties that are not part of this, the ones owned by Tradition and the city. As a result, the project has extraordinary upfront public infrastructure costs that would not typically be part of a single industrial development. So as part of the, just to give a little background on the TIF and letter of intent process, in Chaska, our TIF process begins with a letter of intent, or LOI as we sometimes call it. The LOI outlines the proposed TIF framework and the key business terms. For the city's process, once the LOI is approved by council and the EDA, Then the TIF plan, the TIF agreement are negotiated, and these outline the project scope, the financing, and the eligible costs that will be in that TIF district. These plans and agreements would then be brought back to city council and the EDA for approval, along with holding a public hearing that would ultimately lead to the creation of a new TIF district. So when considering the proposed TIF district, the city's TIF policy states that there should be public benefits as part of the project. These include things like creating a tax base, creating business opportunities, generating jobs, or supporting public infrastructure. So this project is expected to provide those benefits. Some of them include, in phase one, the facility itself will add approximately 200 full-time jobs to the city at an average wage of $60,000. In addition, there would be 400 logistic and distribution jobs associated with that facility. These would expand Chaska's industrial employment and tax base. Then the construction of the public infrastructure, the roads, utilities would serve the future development. And then that would create development ready sites like Matt already mentioned that can attract private investment in the future. One of the state statute requirements when considering a TIF project is to determine if the project has a financial gap. Because phase one is funding the future public infrastructure, the road cost, the extension to the utilities and the mass grading. After reviewing this project, the city staff, the city's financial consultant, Baker Tilly, has concluded that these costs do create a financial hardship that would not exist if this was a typical industrial project. And without the TIF funds, the development, both the phase one facility and the public infrastructure installation would not be able to be built. So. That leads us to the proposed framework that is highlighted in the letter of intent that is attached to your report. Based on this review, staff is recommending the following framework. Creating an economic development district, and that would be an eight-year district, structured as a pay-as-you-go note, and that means that the developer is reimbursed after the construction is done, and then they get funds as increment is generated each year. so they would not be paid up front. The TIF would only be eligible for the public infrastructure. As described, it would not be used for any of the private phase one facility and the private parking and other structures being built in that site. There would be a one year look back review after project completion and stabilization just to confirm that the project is consistent with all the assumptions that we were making. And it will require some more financial analysis to ensure that the amount of TIF is appropriate. And that amount we are working on and will be brought back to you with the TIF plan and the TIF agreement. So why are we considering going above and beyond our policy, which is the three times the tax or the two times the tax generated? Although the proposed phase one tip assistance exceeds the typical level contemplated under the policy, staff believes this approach is appropriate because the phase one developer is constructing public infrastructure that will directly benefit future development throughout the entire Big Woods Business Park North. And create development ready sites that will attract additional private investment and future industrial employers. In an effort to keep the overall development of Big Woods Business Park North consistent with the city's TIF policy, staff is recommending treating that additional phase one assistance. As I mentioned, the developer is requesting three times the amount of taxes as per our policy, plus all of the increment generated within that district. So that additional increment would be considered as an advanced investment in the business park itself. Because the developer is constructing the public infrastructure that will benefit the entire North Business Park, staff recommends treating this assistance above the standard policy as an advanced investment. What that means is any excess TIF received above that three times the tax generated would be distributed for all of the future phases that were in purple in that previous map.

I think the best way to think of it is when it's all said and done, the entire development will all receive the same amount of assistance based on our policy. It's just that in future phases, we'll actually give less because we've given more in the first phase. And again, it's because we're having to stretch all those utilities all the way across the site. When it's all said and done, the assistance provided will be identical to what we do in every other place. It's just that the future buildings will get less.

But they're all owned by the same developer, so he's going to get it.

The land is owned by the same developer now, but chances are it's going to be just like the first building where each site will get sold to whoever that end user is.

Oh, so they still have to, okay. Yep. Because I'm saying he's doing the work for all of those other ones right now.

And so that's what the TIF assistance is basically there to reimburse for those public infrastructure improvements.

okay but then he could pass those costs on to the buyers of the because he owns the rest of the lot yeah yes yep yep so if if you're needing a visual to understand kind of what we're talking about this map kind of shows some concepts of what could happen so the phase one TIP districts outlined in red, some potential concepts of future phases are outlined in blue, purple, and yellow. So, for example, if future TIP District A comes in and they request two times the amount of taxes per our policy, what we would do is... What would be available to them would be that request minus the excess that was provided in phase one. And it would be distributed evenly across the lands of the future parcels. Basically, like Matt said, the goal is that when the entire business part is developed, at least this part that is in control, is controlled by Sconell Properties, when that is developed, the total amount of TIF assistance remains aligned with the city's TIF policy.

Right. It's just fronting it. It's fronting it. Okay.

Yep. So the future TIF framework that's outlined in your letter of intent is also outlined in the attached letter of intent. Everything that I just talked about is in there. One thing that I haven't mentioned is the caveat that each of those future projects will be evaluated on their own merits. We're not guaranteeing that there will be TIF assistance provided, but we're just setting up the framework so that this is how we can look at it in the future.

So for instance, if you had a building come in and it was more than 10% office, it would not be eligible under state statute for TIF assistance. So TIF assistance can't be used for a pure office building. So when she says they each have to be looked at on their own merit, we have to make sure that each building as they come in actually meet the criteria from the state. Now chances are they will because it's an industrial park, but we have to look at each one separately.

So the letter of intent that's attached outlines the proposed framework and the business terms, as I mentioned. Approving this letter of intent establishes the city's intent to continue negotiating the proposed TIF assistance. It's not a binding financial commitment to provide that TIF assistance, nor is it establishing the district tonight. Upon approval, staff will then work with the developer, the EDA attorney, and the financial consultant to finalize the remaining negotiations and amount and the due diligence that needs to be completed and then we'll draft the TIF plan the TIF agreement both of these will then be brought in a final and the final amount of TIF assistance will be brought back to the council and the EDA for approval in the next month or so so the the future council actions to create a district would be holding a public hearing approving a TIF plan approving the TIF agreement and ultimately creating a new district So I just want to close by emphasizing kind of one important point that we've been trying to get through tonight, that tonight's recommendation is not about helping finance the private distribution or warehouse building. That's not what we're recommending. What we are recommending is partnering with the developer who is willing to take the risk of holding. building the public infrastructure for the entire north business park years before it might actually happen otherwise that infrastructure benefits more than just that first project it opens the entire business park to future development once the roads and utilities are in place we'll have development ready industrial sites that can attract additional businesses employers and investment within southwest chaska and that's the vision that the city established when we approved the southwest chaska plan back in 2013 And this is an opportunity to move that vision forward sooner. Staff believes that's where the long term public value is, not subsidizing the single private building, but investing in the public infrastructure that will support many future projects. So that's why we're recommending approval of the TIF framework along with the future allocation provisions. and keeping the overall business part consistent with the city's policy. So we are recommending council approve the motion to authorize the city administrator to execute the letter of intent. I should note that the EDA will be asked to make a similar motion because both need to sign the letter of intent. I also want to mention that Jake Kurth with Scannell Properties is here to help answer questions that you might have tonight, and of course I can take any questions as well.

Thank you.

Questions for anyone? Jake's going to be one of our best viewers because he's been in a lot of meetings lately. And he's always the last one to go.

I don't have any questions, but I think this is clear, and I appreciate staff outlining really why the ask is. And I think it was helpful to clarify, like, over the whole piece of development, it will come out the same, but because of where we're at with needing to be able to service that with public utilities, I think it makes sense. But I appreciate that we can be clear about that, because I think that's important, so...

If no other questions, I would look for a motion to authorize the city administrator to execute the letter of intent for TIF assistance to the proposed Big Woods Business Park project.

So moved.

I'll take a motion. I have a motion from Council Member Shevlin.

Second.

Second by Council Member Hatfield. Any further discussion? Hearing none, all in favor say aye. Aye. Opposed, same sign. That is our action item. So bring us the bills. Questions on bills? No questions. I will make a motion to approve the bills. Do I have a second? Second. Second by Council Member Benesch. Alicia, will you call roll, please?

Council Member Hatfield? Yes. Council Member Benesch? Yes. Council Member Shevlin? Yes. Mayor Pro Tem McGraw?

Aye. Bills are paid. I wrote it down. All right. That brings us to agenda item 10, other business. Let's start with customer shoveling.

Here I was looking over there. I know. I saw you looking that way. You were looking over there. Gotcha. Let's see. Well. I guess I hope everybody enjoyed 4th of July and Fire and Ice. I think it was a, we were actually here for the Wednesday fireworks and then went up north to Brainerd for the 4th. And it was nice to be able to see them and support the city and then head up north. So I think that it worked out nicely that it was early. And I did not, I was not able to attend Fire and Ice at all this year, but I have heard overwhelmingly that it was a great time. So happy to hear that. And then, yeah, I think that's all I have. Thank you.

I don't have much, just looking forward to the parade on Thursday for River City Days. I'll be participating. I don't know if everybody else will, but I'll be part of it. I hope this be you. I'm all right with that. I like handing out candy. Yeah, looking forward to that for the weekend. Everybody come on out and experience River City Days and stay safe. Thanks.

Is it at Lions this year again?

Yeah.

Yeah.

Councilmember Hathaway.

Correct. Yeah, fire and ice, I could not believe the crowds both days. It was literally insane.

Especially Friday.

Friday, I was like, what is happening? Yeah. Every parking spot in downtown Jasco, people were finding new parking spots. And it was beautiful. It was crazy.

It was great weather. There was a lot of young people.

Oh my gosh. I was like, I didn't know there were this many teenagers in Cheska, is how I felt when I first watched it. But it was really great. The fireworks were fantastic. And so it was just, it's always a great event. And then the farmers markets have been packed, bummed that, We had terrible air quality and had to cancel last one. But the farmers markets, if you haven't got and checked one out, they're popping. And there's great things. Now people have flowers to that time of the season. So there's a lot of really amazing vendors and local vendors. So definitely check that out. River City Days, yes, is coming up this weekend. There's a lot going on. Obviously the parade, which is at a new time, everyone's used to being it on Sunday, as council member mentioned it, but it is now on Thursday at 6.30, the normal route. So if you're used to going on Sunday, don't. It's now on Thursday night. So that'll be exciting. And they've got a lot planned for the 50th anniversary of River City Days. Shout out to that team that plans River City Days. It is not a city event, contrary to popular belief. There is a whole organization that plans it and puts a lot of blood, sweat, and tears into making it a really amazing time for everyone. So thank you for all they've done. There's local vendors, there's a ton of good food. There is going to be a drone show this year. The water fights are always so much fun to watch. Kids love it. They usually get a little mist going on with the water. So all of those things are a whole lot of fun. Is there a dunk tank? but there is there's usually like a whole kids area with like um blow up the bounce houses and things so there is just a ton to do i highly recommend taking Southwest transit from the Chaska garage on 41 to the event. There's not a lot of parking, if any at all. Like if you're literally, if you're trying to go pretty much the vendors take it all up. So just go take the trolley. It is super air conditioned. It's a short ride. They're very friendly. It is well worth it. When you're parking, you can park under the ramp so your car is shaded. It is literally the only way to get there. When people try and park at River City Days, I am baffled. And there was barely anyone that used it for fire and ice, and I think that was a mess. Is it from East Creek? Yeah, it'll be from East Creek down. um that and then i also just wanted to say um the council we all got an email about the blood drive uh there is a a shortage of um units of blood and so there that's happening on friday from 10 to 4 at the curling center and so you can find it on facebook or online um but i know that i had a family member that had that needed blood urgently about a decade ago and they lived only because so many people had given blood and they were able to get that but I think they had have their body blood workplace three times over so it's like very important so if you can and you're able please do that you can sign up to to give blood that's important so that's River City days there's some other things coming up the coffee with the first responders tomorrow And it is in the public safety building, which is really exciting, in the classroom there. So you can go check that out from 9 to 10. I think that's going to be fantastic. If I didn't have to work, I would go. And then Thursday, another thing you can do at 6, the Chaska Cubs game is hosted by the Chaska Police and Parks and Rec. So you can go over to the athletic park, catch some of that game, go to the parade, and go back to the game, however you want to do that. So it's a fun week coming up. I think that's everything that I can think of. So, farmer's market.

Do we have a farmer's market this week?

You can do a lot on Thursday night, don't make any other plans, you're busy. Farmer's market, you can go to the farmer's market and then go to the parade and then go to the baseball game. Your whole night's planned, you're welcome.

So, I think that's everything. Isn't the farmer's market earlier?

Yeah, so go to the farmer's market, go to the parade, go to the game, and you have everything covered. Yeah, so I think that's everything. I'll get off my soapbox now, that's it.

Deal. Thank you. Nate?

uh... river city days this weekend at the city's booth here we go one of the items that we're going to be uh... featuring is the downtown master plan so you'll see a number of things that are there to talk about that and hopefully engage with the community we're looking to gather feedback there'll be a map that people can put stickers and thoughts on there'll be another board where we'll be trying to gather input from folks And we're also quickly putting together online engagement opportunities with, you know, surveys and maps that you can kind of mimic the more analog version, right, that'll be in the booth. So with, you know, ability for folks to get to those. So your help in gathering people's perspectives this weekend would be much appreciated.

I was actually going to ask a question on that. Is there anything around the library being presented?

Yes. Yes. So in addition to the downtown master plan, we all have information on the new MSB facility, the new library, and just general information about the city as well as city hall plaza, which we'll start next week. Sure.

Okay. Thank you.

Elise, anything more to add? I know you. Okay. Perfect. Christophe?

Just briefly, I have an introduction to make. Hakeem Jackson is sitting right here in the front row. He is our newest associate attorney at Melkert Hubert Shadeen. And so if you see him on an email thread or if my toddler brings home a fever for me from preschool and I'm not able to make it at the council meeting, have somebody sitting here, you won't have to wonder who he is. It's Hakeem.

nice to meet you thanks for sitting through this entire meeting for this

The only thing I'll mention about Southwest Transit is it is the only way to go to the new amphitheater in Shakopee. That is super convenient. You get on the bus, you're over there in like five minutes, and afterwards they pick you up right out in front. And watching everybody else having to get onto the casino buses and go back and... you know, wrestle with that, I really appreciated getting on a Southwest Transit bus. That is a very nice service, and I think they did it for the Yacht Club Festival this weekend. Do they do it every time there's a big concert? Every time there's a big concert, they do it. Most of them. Most of them, yeah.

Apparently, we're not doing Hilary Duff, but I wasn't in charge. We're saying most at big concerts. Most at big concerts. The ones worth noting. Yeah. Our transit planner worked with Live Nation a whole lot to make that happen. And it is, yeah, you do not want to try and even park there. That's a mess. Even the restaurants are horrible. Yeah, it's just a mess. So definitely, I mean, I haven't done it, but I would agree. And it's nice because if you park at Chaska, the only time it happens... Yeah, that you don't have to wait through all the other stops.

Yeah, you're the last to get picked up and the first to get dropped off.

So it's really nice. The opposite of the state fair. Is it all at East Creek, too, or is it down at Walnut? No, East Creek. East Creek, okay.

That's all I had.

Okay. All right. I have a couple things. I was able to go to Fireworks on Saturday. Friday was state baseball. Saturday was great. Yeah, Fireworks was great. Just a lot of people, a lot of good weather. It's just such a fun event of how that... it's turned out you know being on the park board when we looked at the curling Center and Fireman's Park at the time we felt that was a great space to be a community gathering space to think that many people would fit in that space and I wasn't Friday night it sounds like Friday imagine about a third yeah exactly right so it's just fun and and you know I think the you know I just you see a lot of people you know you see a lot of people you don't know so I think it was great Talked about River City Days. I will say it again, but it was said already, but I think it's important because I think sometimes it gets lost. River City Days is run by an organization. The city certainly supports it and is glad that it happens, but it's not a city-run event. I think sometimes people wonder about that, but thanks for all those volunteers. I know they, I really, my personal opinion about this nation, it helps that it's an anniversary year. They really energized the mentality, the vigor behind it. I think some of that truthfully came from a tough decision at the time to move the Lions, and then it was like, wow, that's a really great decision, and that's really, I don't know, maybe parking is a trouble. I'm sure the residents around there will see some traffic there, but please be patient, or take the bus.

Take the bus.

And then lastly, I'll just take this opportunity because I don't get to talk about me too often, which is okay. Just a shout out to the Chaska 11 AAA baseball team. Tomorrow's our last game for the season. It is the league playoff, league championship. We're in tier three for that. Um, I've had the pleasure to be an assistant coach for those boys. 11 year olds are just a lot like 10 year olds. They just get older, you're older, but it's just fun to see the growth and the development and the team attitude. And, you know, this last weekend we were up in Sartell for, go for state tournament and And a lot of hotel stays and shenanigans of funness of being a kid in a hotel with a bunch of parents watching and observing and pool time. And it was indoor volleyball court that we were staying in St. Cloud. So just a shout out to the Chaska 11 AAA team. It's been a pleasure to be one of your assistant coaches. And I look forward to continuing to do that and great things from all of you in the future. So just to shout that out. Last call. Anything else to add? I will remind us that we do have a Economic Development Authority meeting right after this. The other thing that usually gets brought up by the person who runs this meeting is our next meeting is... On August 3rd. August 3rd.

Gosh, it's going to be August already. That's crazy.

August 3rd, so we'll meet on August 3rd. I will look for a motion for adjournment. Motion to adjourn. Motion to adjourn by Council Member Hatfield. Do I have a second?

Second.

Second by council member Benish. All in favor of adjournment, say aye.

Aye.

We are adjourned. Oh, I didn't ask Nate. No, we're adjourned. We're good. I know that early. You just have to say it, then it ends.

No, you didn't ask Nate. He went, and then we kind of bled into it at least, remember?

I will pause here, and then I think I can go right into it. I've got to pull up that here. Hold on. I'll let some people cycle out here. I'll still call.

Yeah.

I appreciate that.

Hi, Matt Podorowski. Welcome. Yeah.

All right, thanks.

All right, I will at 9.20 call the Chaska Economic Development Authority meeting together on Monday, July 20th, again at 9.20. Can I take a roll call, please?

Commissioner Hatfield? Here. Commissioner Benesch? Here. Commissioner Shevlin? Here. Commissioner Graw? Here. President Hubbard?

That brings us to item three, adopt the agenda as presented. If there's no changes made, I look for a motion and a second.

Motion to adopt the agenda.

Motion by Commissioner Hatfield. Second. Second by Commissioner Benesch. Any further discussion? Hearing none, all in favor of adopting the agenda as presented, say aye. Aye. Opposed, same sign. Agenda adopted. Brings us to four. Approve previous meeting minutes. Those meeting minutes are from the June 15th, 2026 meeting. Any questions or clarifications? Otherwise, also look for a motion for approval and a second.

Motion to approve meeting minutes from 6-15-2026.

Motion from Commissioner Shevlin. Second. Second by Commissioner Hatfield. Further discussion? Hearing none, all in favor of approving previous amendments from June 15th, 2026, say aye. Aye. Opposed, same sign.

It's proved resist number five discussion items 5a authorized letter of intent for TIF assistance for proposed Big Woods Business Park project Mr. President and commissioners this item is identical to the item on the council meeting So unless you'd like us to go through the whole presentation again, we would recommend Approving it. This would be the EDA entering into that letter along with the city. I

If I said I wanted to hear it all again, is Julie really going to do it?

I don't know. I do have one question though. Do I have to sign it twice?

All right. This is the identical item that was in the council member agenda, but since it involves EDA, it also needs our authority. So I would look for a motion to authorize a letter of intent for TIF assistance for proposed Big Woods Business Park project.

So moved.

Moved by Commissioner Benesch. I'll second by Commissioner, or I guess President Pro Temp Gra. That's weird to say. All in favor say aye. Aye. Opposed, same sign. Aye. Other business? We'll just do open. I can call all of you, but if you have open, we'll just go open. Anyone have any other business? I look for a motion for adjourn, then.

Motion to adjourn.

Motion by Commissioner Hatfield. Second. Second by Commissioner Shevlin. All opposed, or excuse me. All in favor of a no. Say aye. Aye. Opposed, same sign. We are adjourned.