City Council - workshop

Tons of times where I'm like, it's just like, no one's home for dinner. It's just Kate and I, and it's like, oh, okay, I guess, what are we going to do? Yeah, exactly. We have to talk to each other, right? Yeah.

Well, less things on the calendar, I thought, but it's really not. You still find a way to keep busy and do stuff, which is okay.

There's always good stuff to do. Are your kids going back?

One is. Ben went back to Nebraska. Zach is going back Friday. Because what years are they? Juniors.

That went fast.

It's just they start later, about a week apart.

Yeah, it did go fast. Will they get done in four, or will they have to go a little bit?

That's the plan.

That's the plan.

Did they stay the course? Did they, you know, this is what I want to do, and this is what I want to do.

Have not changed majors, yeah. You're getting the one-minute finish.

Oh.

Oh, she's.

Look alive. Right now.

Is that Dan's AI in there? Yeah, yes. Yeah.

Good evening, it's now 5.30 and I call to order the workshop of Victoria City Council. Our workshops are informal so with that we're gonna dive right into our agenda this evening. We have just one item on our workshop agenda this evening and that item is to discuss the proposed 2027 fees and charges and our preliminary 2027 general fund budget and levy projections. Kicking us off on that item this evening is our assistant city manager and finance director, Tricia Pollack. Ms. Pollack, welcome.

Thank you, good evening, mayor, members of the council. Abby and I are gonna be tag teaming the presentation tonight. Perfect, welcome Abby as well. So this is our third workshop and the final workshop before our max tax levy adoption in September. And our first topic is fees and charges for services. So our sources of revenue are primarily property taxes, which are 83% or 8.2 million of our total revenues of 9.8 million. The charges and services include permit revenue, park program fees, and facility rentals that make up 15% or 1.5 million. the total revenues and then other sources make up 2% and those include intergovernmental revenues such as police aid and grants, includes interest earnings and other miscellaneous refunds and reimbursements. The criteria for adjusting fees include market comparisons, which are set at the mid to upper quartile of the market. Some fees are also set by legislation, such as international billing code, and many of our fees are cost recovery and self-supporting where possible. So how do we project the revenues for the 17% that's not levy or franchise fees? We begin by looking at the three year average. So in this case, the three year average is 2023, 24, and 25. And then we also look at our year to date for 2026 to determine whether or not there are any trends that have been changing. Our largest revenue for services is building permits, which can be difficult to predict. However, we look at both the available lots in the city and weigh in the projections from the building department and planning staff to come up with an estimated number of billing permits. We are budgeting 130 new homes for 2027, which is 14 less than 2026, and decreases the revenue by $49,000. It does reflect a slower pace of new residential homes next year. However, we did increase the plan check fees, mechanical and plumbing permits. So this incorporates some additional budget for expected commercial permits to come in next year. And then we are also reducing our budget for facility rentals and recreation fees. While facility rentals continue to stay stable, we've been reducing the number of programs and therefore reducing the overall revenues as expected. So I am going to pass this over to Abby unless you have specific questions about budgeting and these revenues.

Thank you. Council, questions for Ms. Pollack before we volley over to Abby? I think we're good here. Whoops.

I unplugged us.

We're just having a moment. We are having a moment. Bring out Alyssa. Oh, there we go. We're back. We're back. Back in business.

All right. So these next few slides will detail out the changes to the 2027 fee schedule that don't include water, sewer, stormwater, which we'll discuss in November when we look at the enterprise budgets. So for community development, we're increasing tree replacement from 100 to 250 per cal per inch. That's the circumference at six inches from the ground. For miscellaneous licenses and charges, we're changing the annual solicitor permits from 70 per solicitor to $100 per company, and then plus a $40 per solicitor on top of that. So for a 10 person crew, this would be a reduction from 700 to $500. We're no longer emailing references for each individual crew member. So staff time is reduced there We're also removing the weekly Hawker peddler license in favor of having only an annual license and the reasoning here is that staff time required to process the license is the same regardless if it's weekly or annually and Additionally, we have not received a request for a weekly permit in the last four years. I The council candidacy application fee is set by the Minnesota State Statute. Staff is proposing to include the fee for transparency. And Public Works staff is proposing a new fee for a water shut off and turn on that is outside the regular hours. Minimum pay for a callback is two hours and callbacks are paid at an overtime rate and so to recover the cost for the two hours of overtime pay, we're proposing a new fee there.

I have a question for you. What's the difference between our solicitor and hawker peddler licenses? What would be the difference between those two?

I'll pass it to Claudia since our city clerk is so handily right here next to me. Claudia, thank you.

So a solicitor permit would be someone who's going door to door for items that will be delivered at a later time and date. And then your other one, the hawker, is like the ice cream.

Oh, so they're delivering to you right now. You're going to purchase something. Oh, and it's food.

Yeah, the hawker, like ice cream is food or it could be something else. That's normally all we get for the hawker is like the ice cream. But it could be something else, you know. That one's usually a food item.

Do we, would a food truck come under that license?

No, that would be, you could license a food truck, but they're also licensed by Minnesota Department of Health.

Okay. Okay, so the solicitor permits, that would include people who are selling pest control services, window washing, any of those things. So folks, if they're coming to your door, you should ask them for their solicitor permit?

Correct, and we also have them posted on our website.

Okay, very good, and if they don't have one, send them down to City Hall to get one. Okay. Okay. Thank you. Abby, any other questions, council?

How often do we have a water shut on, shut off outside regular hours? Like 10 a year, 100? I'm just curious.

Um, thank you for that question. Um, we don't really get too often. It's usually an emergency should turn on and shut off, um, where the pager phone will get called and they'll have to respond. Um, you know, usually after late in the evening and they have to have like a plumber come in, the plumber will, um, um call the pager phone to have that turned the water turned off because it's probably a flooding situation yeah exactly so um we just recently had a couple of them but i can't recall that we've had any other ones this year so it's it's not real common thank you here members of the council i just want to add for transparency purposes when that happens when we the way that our callbacks work for public

Public Works and Trish can talk to this too if I'm either misspeaking or not clear. But we have a minimum time that we have to pay when we're doing callbacks and overtime. So it's a minimum of two hours. Correct. So if they show up and it's a five-minute fix for those two hours. So we're trying to recover those costs. Got it.

Thank you. All right. Okay, carry on.

Excellent. Okay, the next two slides are Park and Rec and the VRC. So we'll start off with the Victoria Recreation Center. The VRC charges... Sorry, the VRC changes... Um, they center on a new discount rate. And so the discount rate would be for youth that's 18 and under seniors, which is 60 plus military and first responders residing in Victoria. And so for a one time daily pass, it would be a $5 fee. And for a multi-day 10 punch pass, it would be the proportionate $50 fee. With the transition to cashless, staff would like to provide an option for discounted users for entry without committing to a membership. Additionally, staff would be transitioning open pickleball from a program to an entry fee option to allow consistent guidelines around the activity. Staff is proposing to remove the advertising kiosk in the VRC. The city's bond attorney has recommended against any advertising at the VRC until the bonds are fully paid for. Staff is also proposing changes to the multi-purpose room The half room service is not regularly used due to the small size of the half room and in cases where a half room is rented Typically the other half remains open Additionally, this creates additional staff time to prepare the room for each renter Any questions on this slide council I self-explanatory Go ahead Okay, and the next one is for park and rec so for park and rec staff is proposing to revise the shelter rental structure for simplicity and consistency staff is proposing to reduce The cost from prior year, as staff received significant reduction in usage, potentially due to the cost barriers. We're also proposing to break out the shelters into two groups. The first are for the four post-park shelters with limited services and amenities. That would be like Madeline Creek. And then the second group of shelters would be the ones with restrooms. So both groups are proposing decreased fees. The second chunk here is in relation to Lyons Pavilion. Staff is proposing to decrease the weekend rentals for residents from 350 to 300 a day and increase weekend rentals for non-residents from 350 to 400. And for there, we're actually just trying to make the premium of a weekend rental consistent across the board. So the premium on a weekend rental would be $50. Up next is the athletic fields. So field rentals are currently not being charged Consistently across the city staff is recommending removing this item as it does not cost staff additional time to reserve the fields however field prep is a rare service, but it does take significant time and cost as the city would allow the use of the fields at no cost we would charge then for the additional labor such as field prep and lining a space and and lastly we're proposing to remove the ice arena packages as the city does not have the ability to determine and schedule ice time to the requirements needed for this type of service council questions We did do a special deep dive this year. We did a market analysis of our parkland dedication fees. We compared both our industrial and residential parkland dedication fees to the market cities in the area. A brief overview of parkland dedication fees for anyone watching at home is that the city of Victoria and other communities, as you see here, require a certain percentage of each new development to be dedicated to park space. A developer can choose to pay a parkland dedication fee in lieu of the land for the park. For the analysis, I reviewed the fee schedules of our market cities. uh... and compared where victoria falls within our neighboring communities on this slide are the parkland education fees for residential developments uh... here we see here we have the green bar for a single family pink for duplexes and blue for a multi-family For the single family, the green bar, I found that we are close to average. We're very comparable to Chaska, Carver, and Minnetonka. For duplex and multifamily, I found that we're a little bit below average here. And I included a table there at the bottom with the average and the median.

Council, questions on this? Now, this is something we've been talking about. Council Member Wright, you've got a question?

Well, I was just, more of a comment. I didn't think we were that low on the duplex and multifamily side to our peers.

I would also favor boosting those up. It feels like most other market cities all have the same rate for parkland dedication regardless of what what the housing unit is, I would favor us going consistent that way as well.

Did we survey Waconia?

I see them on here.

I don't see them on here.

I don't believe Waconia is in here.

I think, were they one of the ones that had kind of the anomaly of the way that they...

Yes, you're right. So Waconia did not have like a flat fee in their fee schedule. It was very formula based. It was like 5% of something, something. And so it wasn't easy to have a consistent comparison with Waconia in there, but I definitely could pull Waconia for you if you would like.

Yeah. And then how do we do, do we have Minnetrista? Do we have Mound?

I could add Mound, yes. And I could also add Minnetrista, if you'd like. Yes, absolutely.

So like Minnetonka is five across the board and Carver's about 4,800 across the board, it looks like?

Correct, yep.

And Cheska, about the same.

Those are the three that I have.

My thought is we need to be more in the zone of Eden Prairie, Rogers, Corcoran, Chanhassen, Shakopee. I mean, it's one thing to look at the averages of these communities. It's a completely different... view to look at the utilization. I mean, we have so much more activity going on here, and we have so much more of parks that we need to pay for.

I think Minnetonka is a good one to look at, too, in some respects. But they're more built out. But it's.

Yeah, I mean, we seemed, and it seems that the project after project after project after project after project is not committing land. They're dedicating fees. If that's the direction that developers want to go, then I think it's incumbent for the city of Victoria to be able to use that to provide its residents with the benefits that they keep telling us that they want, that they need, that we know that are outrageously expensive, and that we routinely, routinely make compromises to what we need to do because we just don't have the funding to do it. So if we have a captive audience that is looking to... utilize fees in terms of dedication. They don't want to dedicate the land because they're making a decision that it's more profitable for them to chunk another property on there. Let's start to shift that balance of the equation towards maximizing the benefit for Victoria. We should be able to find the inflection point of where somebody says, I think that that's a little high and I maybe don't want to develop there. I don't think we're at that problem. And we certainly are one of the communities in the Twin Cities that have the space to do it. And then on top of it, we continually get pushed, and this is to my good friend, Council Member Pedersen, you as well as I know the constant pushing on this council and planning commission and staff to continue to shrink down these side yard setbacks so that a particular parcel of land can put that many more profitable homes on it. That should come at a cost to the developer that, hey, Victoria is not the place to run over on this kind of thing. We want these services. This is our time. We should be really... almost adamant on being able to push these fees higher to pay for the things that we know we desperately need and our residents desperately want.

There is a statutory limit on this. Is there not? Yeah, Ms. Hardy, please.

Mayor, members of the council, we don't have the benefit of our attorney being here, but if I recall from the conversation that we last had about this earlier in the year, And you might notice on the chart here, we did include Burnsville. So there's not necessarily a statutory limit. My understanding was that there was a court case with Burnsville that essentially set this, I'll use in quotes, a ceiling for what is acceptable. And so we wanted to put the Burnsville information there just for visibility into what that ceiling would look like.

Is there a formula to that ceiling?

I don't know enough about the court case or I have not read through all of that and maybe Bob could talk more I think it would be instructive madam city manager for Bob to bring that to us because my recollection of the conversation with him about is that this was a disparity between how commercial and developments were being assessed parkland dedication fees versus a multifamily or a duplex. Because I think the underlying crux of the argument is that, well, I mean, people are going to be here. They're not going to be using parks and trails and things like that because they're going to be working. They leave and they go home. So it's not necessarily fair to a commercial property to be assessed an outrageously large parkland dedication fee. Where we're going with this is we are tying the the use of those funds with the source of the funds Better in a residential setting versus a commercial setting so if we could get if we could get that clarity so that we're making Value based decisions on the right basis.

Yeah, I guess I would just say I completely agree with everything councilmember Vansky has said I I wonder where, and this is obviously what staff is probably going to have to look into, is that, like, where's that right line, right? Because we don't want to get to a point where it's so high, you know, that, yes, they're just giving, you know, the minimum amount of land that's just going to be, right, they're not going to really do anything with it, but now it's, you know, our, like, we're going to have to take care of it, we're going to have to, right? So we don't want just, there's got to be some, I don't want to say negative, but there's a push and pull here with this. So I completely agree with you that we want to get as much as we can. And I'd rather have them build nice, big, beautiful parts. You know what like you said right like right now. We're just it's you know We're not going to do it because the fee is low enough where they're just you know we'd rather put another house a lot but I guess I'm just curious if whether it's you guys or miss Hardy like if there's any if we've looked at this enough to know if like what would be the downside of I guess raising this to a point where You know What would be the downside?

Mayor member Roberts members of the council know we've not done a deep dive analysis on that But just from the things that you're saying are exactly the things that we would likely be flagging So if the council would like us to do a deeper dive in this and do some additional analysis We can certainly do that and bring this back for your budget discussion this fall.

Yeah, I think I

And I think it's similar to look at a couple spotlight cities. I think you brought up some, Council Member Vanske, to add in. I think the other thing is Delano, Buffalo, some of these areas that are a little farther away, but they're growth communities. And look at it from that perspective. I mean, I'm looking at multifamily. I think we're the lowest Yep, maybe Chaska is just one slot below and then duplex were pretty far. We're as you said we're pretty Close to average or above average on the single family.

I'm just wondering I just was surprised at the discrepancy I was just curious and you probably don't look into it. You know most of these the single family is either the highest or Even with the other ones, I'm curious why Burnsville and Elk River are basically the exact opposite. I mean, I know Burnsville's a much bigger city, right? But I'm just curious as to why that would...

you know i think it's also the perspective again it's like utilization uh... i think that we're probably at least in sort of our current vision alignment done the balance of multi-family and duplexes these of the residential in the city of victoria we've heard from our residents on you know their uh... desires on the the mix that we have i think we read i have a Little daylight between us on we feel like we have the right balance so while the the bars tell a story that we're below and Will we actually have that utilized? Possibly not. So we don't necessarily need to get that as right as where the next development is going to come from. And that next development is leaning its way towards single family. And we should, like Councilmember Roberts is alluding to, what's the choke point? Where does the developer say, hey, I want to give you land because you charged me too much to buy it from you? it would be i think instructive for us to look at the last the last two years of developments that have taken place in the city of victoria and say percentage of those projects have these developers come to the city and said i want to buy land instead of giving to so and you guys have heard me with my smart ass colloquial i want to be known as the city of lakes and parks not the city of lakes and parkland dedication fees so I think that we can't build parcels of land. We can really shape what we do with the parcel of lands to the best of our abilities, and part of that ability has to deal with how much we have in terms of financial resources to do it. If we don't ask for the resources, we won't get them, and we'll just be saying, I would've loved to do this, but I can't.

Any other comments for staff?

I would just say, what's the negative of doubling the duplex and the multifamily park dedication fees? I mean, to me, that looks like that's going to get us in line with a lot of the other cities that we're comparing ourselves to here. I guess I can't figure out what the downside would be other than they choose not to develop here, but they're not getting any better deal anywhere else for it, so why not be even with everybody else?

I'm aligned with you. We can certainly bring us in line with other communities there. Again, I think that utilization, as we've all pointed to, may not be there, but the consistency would, I think, be a very noble cause in this.

All right, staff, I'm seeing consensus around, let's take a look at a couple more market rate, or market cities. Give us some ideas about where we can, where that inflection point is, and then we also want to hear from Bob about We don't want to see ourselves in court over this either, so. Everybody, staff clear on that? Great, okay. Any final thoughts? We're moving on.

Excellent, thank you. Okay, so while this slide is for residential fees, this slide is the same, parkland dedication fees. It's a market comparison, but it's for industrial and commercial fees. Victoria, as you can see here, is the second lowest, higher more only than Carver. So I've included Burnsville here also way at the end. Burnsville is not considered one of our market cities, and so it's not included in the average in the table below there either. But I just wanted to include it because of the discussion around it.

Looking at the table Victoria is well below the average and mean for parkland dedication fees for our market cities on the industrial and commercial uses bill Okay, so this was the these were the fees that we just said we we can collect parkland dedication fees from these folks But these are people who are here for work and not I Mean we certainly could could we use these for to create a plaza or? where people can have lunch, those kinds of things. Is that considered parkland?

I think so. You know, if we had a market.

Yeah, if we had a, you know, an office park to create a plaza or an area where people could, you know, with benches or picnic tables, those kinds of things.

Mayor and Council, I do think if you're calling it a park and actually naming it and you accept it, As a park, you could certainly use parkland dedication for that. The only restriction on parkland dedication fees is that you can't use it for ongoing maintenance or to do replacement of existing amenities.

It's like a good spot where we can get ahead of this by bringing us up the average. The place that I think we're going to see this kind of activity, downtown west is largely done, so certainly we're probably not going to be able to garner much in that space. But the south growth area is a place where one would expect we're going to see this kind of commercial development and we would be well served with having those areas develop and get in line with other communities on this. Again, because we know that this stuff is expensive, we know that it's needed and this is our place to get it if we're not gonna get land.

The only thing I would say, I mean, we definitely have obviously room to grow here based off of these numbers. I do think we need to be careful in this area of getting too high. I think we want to You know, residential, I think, is a different beast. We have plenty of people that wanna build houses here. We keep searching for the right commercial developments, and I do think we wanna be careful and be more cognizant of trying to entice commercial development here. So, you know, that could be a factor in, yes, we're lower than most of these, but our land prices are also probably higher than a lot of these places as well. So we know our land prices tend to be high in Victoria. So, you know, We've wanted to get more commercial development to help take the burden off our taxpayers. So I would just say, although we want, I think we have room to maybe raise this a little bit, I also want to be careful and not dissuade commercial development or industrial development from coming because of these additional fees either. That's a good point.

Any other comments on this? Okay. I think we see some room for growth here.

Excellent. Thank you. I'm going to pass it back to Trish.

Okay. So next up, this slide is looking at our utility franchise fee fund. It's a 10-year projection. We currently are building about $100,000 annually in fund balance. The original undergrounding debt will be paid off in year 2031. And then the Wasserman Park bonds will be paid off in 2036. So staff are not recommending an increase in utility franchise fees at this time. And just for added information, the franchise fee agreement does sunset after 20 years. So it would be at year end 2036 when it would need to be renegotiated.

And so currently those are the only two obligations we have to the franchise fees. That's correct, Mayor. Council, thoughts, comments, questions? I'm a little uncomfortable collecting fees if we don't have a purpose for them. I'm feeling like this is something we might want to revisit once we've been able to service our debt that we owe. Unless we have another purpose for using these franchise fees, we could pause them, we could sunset them early. Council, any thoughts on that?

The fees for burying cables, right? And then we used it for Wasserman Park, or Wasserman Preserve, which could be considered outside of the original purpose of those fees. I'm with you, I think it should be sunset once we've paid off our debt for these two things. You know, that's not what staff wants to hear, but.

I mean, just to be clear, though, the 20 years will align with the bonds pending for Wasserman Park, so that, but once that, when that sun sets, we're gonna have a fund balance of $2.6 million. That's correct, Mayor. That's the projection. I mean, we are projecting what the revenues will be, so I can't say that that's going to be exactly what the fund balance will be, but approximately, according to projections and continued growth in the city, that's what we would anticipate. I did have a conversation with Kara asking about additional undergrowing projects and At this time, unless we want to bury lines that are already above ground, we wouldn't have any additional projects that is on their radar from an engineering standpoint.

Let me ask this question. So we are currently collecting a franchise fee, and that's a fee that we have set. So we have the ability to either raise or lower that fee, and that fee is spent based on council direction or council policy. I'm seeing a nod from our city manager that that is true. So we could reduce that fee so we're not with a, you know, we don't have that fund balance that high that has no assignment to it. We could carry on with it and then sunset it let it automatically sunset in 2036. One of the things I think that's interesting about franchise fees is every member, every community member pays them. So if we have projects that we feel like everybody should have a part in, this is a good way to pay for some of those kinds of things. So every non-profit that isn't paying property taxes does pay franchise fees. so that's that's something to consider but this is a policy conversation for sure so i would encourage i don't know that we want to make any changes at this point but i'd encourage council to give this some thought yeah mayor i mean i i share with you on your thoughts on the the um

there is certainly a great benefit to have something where effectively what you've said is it's a head tax for every head that walks around they breathe the same amount of oxygen regardless of whether or not their house is worth five hundred thousand or whether it's worth five million so that there is a certain fairness to it we don't really start to accelerate on this till we get to twenty thirty two five years for future we do run up against a little bit of like we don't have a crystal ball here uh... we we don't know what potentially could be around the corner certainly uh... if we pay attention to the headlines those of late are things like Where is this enormous amount of electricity going to come from to power the latest and greatest AI boom that's just right around the corner that's going to make us all very productive and we'll be able to sit and do nothing and just earn passive income? somehow or another those projects are gonna make their way into an infrastructure need that we might have to face that we can't foresee today. So I agree that a policy perspective is good. It's a tool in our toolkit that we just need to be judicious about, but we certainly have made a good amount of benefit to the citizens of Victoria over the years by having inter-fund loans as well that have really made the burden of other large projects that more, that bringing benefits. So let's, I mean, again, you make a great point, but we don't wanna necessarily artificially hamstring ourselves or take away some of our tools.

Okay, other comments, thoughts?

Ms. Hardy has one.

Thank you, Mayor. And members of the council, I just want to say from a staff perspective, we 100% understand and know that this is a policy decision. So whatever the council decides, we are 100% comfortable with that. So when you're ready to have that policy conversation, we'd be happy to do whatever research that you would like and bring that information back for you to consider. I think all the things that you have said here are all very good things to consider. I will note that the franchise fees are allowed for any public purpose. So as you look for alternative funding sources, you heard earlier, 83% of our property taxes or our revenues are property taxes. So if you're looking at having, this is essentially a tax, a tax that is collected not only by property owners, but everybody, even those who don't pay property taxes would be subject to paying these fees. Cities, for example, will use these types of utility franchise fees for things like sidewalks and trail maintenance replacements, trail gap construction, some of the road, so mill and overlay projects, things like that. It could be for the recreation centers. We're looking not to have property tax support for those. So there could be some policy decisions where you're looking for property tax relief where this could come into a policy decision. But noted that that's in the future. So as you're thinking about those things, I just wanted you to have some additional context to think about.

And those are good alternate uses, what you're discussing. What would be a good next step? Is it a workshop type item, do you think? Would that be a benefit? It would be a benefit to me, personally.

Mayor, members of the council, I think this would be a really good all-day workshop discussion because then you could align it with your strategic priorities and really take that deep dive.

I tend to agree with you. I mean, I hesitate to just stockpile money because we can without a purpose to it. And I feel like we, with the changes coming up with the rec center and all of those kinds of things that that would be really a good and useful exercise for us.

I would just add, I mean, I agree with council member Vansky, right? Like this is, you know, we should be looking at it now, right. And, and, and, and figuring these things out, but you know, we're 2036, 2032, whatever is a ways out. And, you know, a lot can change in that time. We've also got, um, being that they can be used for pretty much anything it sounds like, or most things that, you know, we've got the cold storage unit that's down here that's gonna have to be replaced at some point, right? We're gonna need funds for that. We have, you know, what might we have to do to the old fire station to, you know, make it usable for whatever is determined that we need to use the rec center. we've heard parking a lot, right? It could be used for whatever is determined with parking. So I just, I hesitate to say like, yeah, we shouldn't, we should just stop doing these because they're, it's not, these aren't dream things that we're thinking about. There are real things that in the very near future, we're gonna have to start figuring out how to pay, so. And it's another option where you're like, we don't have to take out a loan. We have the money, right? So we're not paying interest. We're not, you know, so... We don't have the money right now.

We have $677,000 right now.

Understood, but I'm saying by 2032 we will, right?

I mean, we're looking at 10 years down the road, and I'm just saying... as a tax, which is what it is, if we don't have something or an area to put it, there's no reason to continue to charge for it. That's my point.

All right, more to come on this discussion. All right, Trish, carry on.

All right. Okay, now we're gonna look at the updated 2027 general fund budget and levy. So in June, the preliminary budget levy projection was 3.31% increase. After considering the guidance given from council at that June workshop and additional budget reviews, we are proposing a max tax levy increase of 4.85%. This doesn't mean that property taxes will increase that much. That is the amount that it will increase over the 2026 levy. And the changes that have been made since June are per council direction, an additional parks and rec full-time employee was added back into the budget at $91,000 annually. This position will manage open space open space corridors and capital assets. This position was included in the current year's adopted budget but had been removed from the proposed 2027 budget presented in June. And then the next item, even though this request won't have a general fund budget impact, we wanted to present the utility department full-time employee request. One water operator is going to be reducing their hours to 32 hours a week beginning in January, which will be creating a staffing gap for water. on-call coverage and snow plowing responsibilities. So by requesting one additional FTE, the position will additionally support a planned reorganization of public works duties as the operational and technical responsibilities are continuing to expand. And this will allow some existing staff to absorb higher level technical work, which will then provide a greater support to our public works director and our public works superintendent. And in addition, streets and storm water duties are going to be aligned to improve efficiencies on shared activities such as street sweeping, black topping, milling, and pond maintenance where a larger crew is needed to perform those duties. And this position allows us to maintain our service levels, improve operational flexibility, and supports growing public works demands with a single additional FTE. Again, no increase to the general fund budget, and we will discuss the further impact that this will have to the enterprise funds at our November discussion. The next is the fire department wages for paid on-call and duty crew. They have fallen below our market cities. So we are planning a 7.7% increase versus the normal 3% increase to begin a plan to get the wages closer to market over the next few years. And then in addition, one paid on-call or duty crew firefighter will be added to the team. And then in 2027 elections, which we normally don't have, we may have to hold a special election at an estimated cost of $17,000 if Senator Klobuchar wins the governor's race. And then per council direction at our last workshop, we added in wayfinding signs for a total of 75,000. 35,000 will be coming from the general fund and the remaining 40,000 is going to come from the shared parking fund. We're removing $15,000 for a Laserfiche upgrade project. And then finally, Southwest Transit will be removed from the 2027 budget. There have been some discussions at the county level of possibly subsidizing this service to Victoria residents. And in the next slide, Abby's gonna take over and we'll give you more context into who is currently using the service and other options available for transit services in Victoria.

So just a quick question on the election thing.

Yes.

Is there a decision, somebody makes a decision about whether to appoint a replacement for Senator Klobuchar? or to hold a special election?

So apparently in state statute, which I recently learned is that this is a position that they are not allowed to appoint.

Oh, okay. I just learned that too. I did not know that. Okay. Thank you.

The county, I had a meeting with the county and that's what they said. So there will be, is what they're telling us, an election if governor, if she does win the governor's race. There's still some talk about the state maybe providing cities funding, but they're not gonna make that decision, I guess, until probably they know for sure if there actually is gonna be an election. So all the cities are just planning on that there's gonna be an election just in case for budgetary purposes.

Okay, thanks. All right, Abby.

Okay, so about a year ago, we completed a large analysis to find trends in the ridership data. We looked at all the rides for the 12 months between August 2024 and August 2025. In that time, there were 1,391 total rides picked up in Victoria. What we found is that a lot of those rides are repeat individuals. In fact, the top 30 riders made up 80% of the rides. In total, we saw 147 individual riders, which is about 1.2% of the population of Victoria. How are these riders utilizing the service? Looking at the trends in the pickup and drop-off addresses, we can surmise that people are coming in to work. we can see in the data that the same individual riders are being picked up at the elementary school, downtown restaurants, downtown businesses, and being dropped off at apartment buildings in neighboring towns. Southwest charges the city based on the pickup location. So neighboring cities are billed for transportation into Victoria, and Victoria is charged for transportation back home. And we also saw riders being picked up at homes in Victoria and being dropped off at retail, grocery stores, and medical facilities in the area. 10% of the pickups for the year were picked up at AbleLite. There is an alternative to Southwest Transit that is currently operating in Victoria. It's called Transit Link, and it has a similar cost to the rider, similar coverage area, and there is no cost to the city for residents to use this. In summary, a small percentage of Victoria's population use Southwest Transit, and the people who use it use it for necessary travel. There are current alternatives that will not impact the tax levy, and depending on where the county lands for funding, may continue to be a service available to residents.

Okay, so I have a question on, so currently we are subsidizing the Southwest Transit rides. Will those rides still be available but without a subsidy if we choose not to fund it? Do we know that answer?

So, Mayor, members of the council, I'll jump in here. Transit link so we'll start with that the Met Council service will continue to operate as far as we know And that will not have a property tax contribution so that the rider Calls or schedules their appointment they get picked up they pay their fee directly to the bus driver When they get on and we just get ridership data. We don't get a bill on Southwest transit If the county decides that they will continue to fund the service for Victoria, um, and pick up our share of the cost. So what we've been contributing now with property tax levy, um, is the ask on the table. Um, and so if the county makes that decision, which it sounds like they're going to make that decision by the end of the year, just not before max tax. then that service would continue in the similar fashion as Transit Link, so the Met Council Transit, where the rider would pay their fee, we would get a report, but we would not be paying that subsidy. In place of that would be the county paying that subsidy for us. And so if the county decides not to do that, it is my understanding that Southwest Transit will cease their on-demand service service here in Victoria. So that doesn't mean that those transit services go away because the Met Council, the transit link surfaces will continue.

Does the transit link, I mean, when you say it's similar or just like Salt Lake, I mean, they're able to take wheelchairs because my biggest concern is, you know, yes, it's only 1.2% of Victoria's population, but As we see, 10% are from AbleLite. I'm sure a lot of them are people who can't drive, who can't have special, right, whatever. I'm just concerned about the ability for our more vulnerable residents to be able to get to the places they need to get to.

Mayor, members of the council, my understanding is it's similar buses and similar services. The only thing that would change would, the biggest difference is Southwest says you can go on an app and literally do, I need to be picked up in two hours. And they will try to accommodate that as best as possible. The difference with Met Council service is that they request 24-hour notice. They will try to accommodate any, if I need to be picked up in two hours, it might be we can't get there for three hours. But to guarantee the ride, 24 hours is requested. So with some of the data that we've collected and how people are using it, a lot of it is to get to and from work. Those are fairly predictable jobs. You know your schedule probably 24 hours in advance. So we feel like with some education and some direct, I'll call it marketing or outreach to those individuals, we can help them make that transition if Southwest is no longer funded. Part of what's driving this change is that the Southwest board level, they have said that they really want to focus on recouping their costs for operating. And to operate per ride, they're telling us it's close to $40. So we're paying $12 a ride. I think the rider's paying $4 or $5, so there's a significant gap there. And so it would be very challenging for us to continue to pay $40 a ride or $35 a ride.

Two things. I'm not seeing a lot of downside in transit link as an option, number one. And then you said the county, if the decision by the end of the calendar year, roughly?

That is my understanding.

Okay.

Not before max tax.

Got it. Do we have individual rider, like do we get that data at all? So like we could try and, like you said, reach out and... Provide that data and then obviously also Kendra and her team are great at social media so we can pump out as much information as possible to the public about this change.

Okay, other questions, thoughts?

I would just add that part of that I would like maybe, just because not some of these, you know, our seniors and stuff might not be on social media, so like visiting, whether it's visiting AbleLite or, you know, getting a pamphlet to Able, right? Like just making sure we're doing our best to reach out to those seniors. Maybe it's even one of those donuts, you know, in Victoria type thing where we're doing something.

Mayor, members of the council, just a quick note. I know that we're short on time, but I just want to say that we have met, staff have met with the Transit Link people, and they are very much in support of coming out. Actually, Donuts was one of the things that they said that they would be interested or even going. For example, if we have a lot of riders at Able Light that they would be willing to go to AbleLite and share who they are and help people get connected. So they've been really good partners.

And this all could be moot if the county decides to fund it.

All right, go ahead.

Okay, so back to the levy. So the breakdown of the projected levy is as shown. The overall increase in the levy is about $475,000 or 4.85%. And as you can see here, we're looking at a fairly steady levy over the next couple of years after returning to a level similar to 2022, after having a few recent years that included investments in higher cost infrastructure. And what does this 4.85% increase in the city's levy mean for your property tax bill? This chart shows the projected tax rate with the updated market values I received from the county last week. The adjusted net tax capacity increased by 7.9%, which does include new construction values. So as you can see, the projected tax rate will decrease, resulting in a decrease in taxes if your home value remained stable year over year. Now if your home value increased by 3.5%, which reflects the overall market value increase, your taxes should stay close to the same because of the lower tax rate. Any questions on the levy numbers?

And this is based on the 4.85%?

It is, yes.

That's great news. Okay. Any other questions, comments on this?

No.

Then, as stated earlier, our September 14th meeting will have to set our max tax levy, which needs to be certified to the county by September 30th. We will continue to review and refine the tax levy throughout the fall. And then just a few questions. I know, I think the first question we already got answered with the Parkland dedication fees. I think we're all pretty clear on what you are asking about that. But the next question is asking council if they wish to proceed with a max tax levy of 4.85%. And then if there's any additional information that you would like to see before that's approved on the September 14th meeting.

Council, anything more than what we've already directed for staff? I think we're all set then. All right, that's the end of my presentation. Thank you. All right, any final thoughts for Trish and team before we adjourn the workshop? Okay, there are no further items on our workshop agenda this evening, so I will entertain a motion to adjourn.

I'll make a motion to adjourn. Second.

We have a motion and a second. All in favor signify by saying aye.

Aye.

Any opposed? Motion carries. We stand adjourned.