Anoka City Council

June 16, 2025 (Regular) Page 1 of 12 REGULAR MEETING OF THE ANOKA CITY COUNCIL ANOKA CITY HALL CITY COUNCIL CHAMBERS JUNE 16, 2025 1. CALL TO ORDER Mayor Skogquist called the regular meeting of the City Council to order at 7:00 p.m., followed by the Pledge of Allegiance. 2. ROLL CALL Present at roll call: Mayor Skogquist, Councilmembers Rostad, Scott, and Weaver. Also present: City Manager Greg Lee; Public Services Director Mark Anderson; Police Chief Andy Youngquist; Senior Planner Clark Palmer; Finance Director Brenda Springer; and Electric Utility Director Del Vancura. Absent at roll call: Councilmember Campbell. 3. COUNCIL MINUTES 3.1 May 27, 2025, Worksession. June 2, 2025, Regular Meeting. Councilmember Weaver noted he was absent from the May 27, 2025, Worksession meeting. Mayor Skogquist shared changes needed for the May 27, 2025, Worksession minutes on Page 10 to add Mayor Skogquist to the City Attorney working group and for the June 2, 2025, Regular Meeting minutes on Page 3 correcting the spelling to Johnson, Page 4 correcting the spelling to Bonnell, and on Page 12 clarifying Councilmember Weaver’s vote. Motion by Councilmember Scott, seconded by Councilmember Rostad, to approve the minutes of the May 27, 2025, Worksession and the June 2, 2025, Regular Meeting as corrected. Vote taken. All ayes. Motion carried. 4. OPEN FORUM 4.1 Presentation; Abdo 2024 Annual Audit. June 16, 2025 (Regular) Page 2 of 12 Finance Director Brenda Springer said the 2024 financial statements are complete and have been reviewed by our auditors at ABDO, then introduced Brad Falteysek from ABDO to provide a brief presentation for Council. She summarized that the net position of the City of Anoka increased by $5,661,146 in 2024. The primary elements for the increase in net position were a combination of decreased expenditures in Highway 10 and the new water treatment facility due to substantial completion of those projects, the sale of one liquor store building, and decreased purchase power costs due to lower electrical consumption. The net position of the City is currently $186,629,544. The largest portion of net position, 87.6% is Capital assets net of debt (land, buildings, infrastructure, and equipment). A small portion, about 4.9% of the City’s net position, is subject to external restrictions on how they may be used (debt and tax increment). The remaining balance of $14,068,753 may be used to meet the City’s ongoing obligations to citizens and creditors. Total unrestricted net position increased by $1,685,366 or 13.61% while net investments in capital assets increased by $5,048,695 or 3.5% due to capital projects completed in 2024 and the decrease in debt associated with the assets. Governmental type activities account for almost 52.8% of the City of Anoka’s net position. For the year ending December 31, 2024, there is a decrease in net position for governmental activities of $2,028,497. Total program and general revenues for governmental activities amounted to $23,989,470. Total expenses were $25,712,967; Transfers out were $305,000. At the end of the fiscal year 2024, the City of Anoka's governmental funds reported combined ending fund balances of $7,844,059, which is a decrease of $1,796,776. Brad Falteysek, ABDO, reviewed the audit opinion and responsibility, general fund results, other governmental funds, enterprise funds, and key performance indicators. He said they were issuing an unmodified or clean opinion, which shows good results and the City as compliant. He said fund balance reserves as a percent of the following year's budget were 29.6% which was down slightly from the previous year, and revenues and expenses came in close to budget. He reviewed general fund revenues by type, special revenue fund balances, debt service funds, and capital project fund balances that totaled nine different funds, and the need to have identified funding sources going forward. Mr. Falteysek explained the City’s internal service funds and enterprise funds, including the electric fund, which was doing well, then spoke about the water, sewer, liquor, golf, and recycling funds. He reviewed cash and investment balances by type and key performance indicators, including taxes, debt, and expenditures per capita, adding their audit resulted in no issues to note. Ms. Springer explained that the chart outlining cash from the electric fund includes a one-day short-term loan to cover all negative balances, so $9 million is reflected as missing for one day on December 31. Mr. Falteysek confirmed that was the case and will include that reference in future reports. Mayor Skogquist asked if debt includes only borrowed or bonded debt, then referred to the taxes per capita and tax rate, and how our tax rate is low, but per June 16, 2025 (Regular) Page 3 of 12 capita it is not, because there is more business and industry in Anoka compared to other cities. Mr. Falteysek confirmed the City’s debt reference only included borrowed or bonded debt and not any internal debt, and agreed the City needs to look at Anoka’s overall trend to compare accordingly. 4.2 Proclamation; Anoka Women of Today Founders Day, July 1. Pam Drier and Jennifer Fournier, Anoka Women of Today, shared about Founders Day and accepted the Proclamation. They spoke about their goals of service, growth, and friendship in the 47 chapters across the State, then shared the 2025 milestones celebrating 75 years at the State level, 60 years in Anoka, and one member celebrating their 50th year. They outlined community work that included Adopt-a-Highway, Riverfest, Anoka Halloween, and others, then spoke about their community involvement that included scholarship awards. Mayor Skogquist read the Proclamation into the record. 4.3 Police Activity Update/Civilian Service Medal. Police Chief Andy Youngquist shared the recognition of citizens who helped another on March 18 when they heard a child crying in the area and found an autistic child near a marsh area who had entered the water. He said they called 911 and returned to their car with the child for warmth while they waited for emergency personnel. He shared the child was treated for hypothermia and exposure but recovered thanks to their involvement, then awarded Phyllis and Jasmine Harris the Civilian Service Medal and thanked them for saving the child’s life. A round of applause was offered by all in attendance. Councilmember Scott thanked them for their service and for being concerned for their neighbors and looking out for fellow citizens. Chief Youngquist shared about their work the past weekend, preparing for the No Kings protest, then spoke about the shooting of the Hortmans and Hoffmans. He explained how the Anoka County SWAT Team was activated and how Anoka officers assisted throughout the weekend and offered the Department’s sincere condolences to the Hortman family and prayers for recovery for the Hoffmans. He concluded that the protest resulted in 400-500 people and thanked Sherrif Wise and his team for the additional support. Senator Jim Abeler shared comments about the difficult weekend and commended the local police for their work throughout the entire event. He thanked the officers who came to his door to ensure he and his family’s safety, and how good it was to see staff being allowed to take initiative, such as those officers who decided to stay to protect them. He said Anoka was the first police force to June 16, 2025 (Regular) Page 4 of 12 respond and said how proud he was to live in Anoka. He spoke about Representative Hortman’s work and how she stood up for what she believed until the end, and how leaders always lead just like she did, which unfortunately can be very difficult sometimes. He said he was so pleased Senator Hoffman and his wife survived and spoke about their dedication to the State and their commitment to the elderly and people with disabilities, and asked for prayers for recovery. Senator Abeler spoke about how everyone needs to put politics aside and thanked God for all their blessings. Councilmember Rostad thanked Senator Abeler for speaking and for working across the aisle and shared her hope that this work will continue to get better and be a model for Anoka. Mayor Skogquist echoed the comments about police response and thanked them for their long hours that weekend. He said most elected officials know we need to bond together to get work done sometimes, but too often we hear politics portrayed negatively. He said in his experience, he believes most understand that a rising tide raises all ships and that everyone wants to work together, then spoke about his interactions with both Representative Hortman and Senator Hoffman. He shared about their unique styles, but how whenever Anoka requested something, neither started with a no, but instead with a yes, and how can we do this, such as trail funding, social district, and the Anoka dam project. Mayor Skogquist said he was incredibly saddened and shaken by the violence that occurred on our neighbors and how all elected officials need to continue to work together and be open and accessible to citizens, but how that now may be in question. He spoke about the need to humanize and listen to each other, even when we don’t agree, and avoid an us versus them narrative, and better highlight when we work together instead of against, and encouraged the public to do the same. He thanked everyone for their work, both elected officials, staff, and the community, and the families who bear the burden. Councilmember Weaver said the events are very difficult to fathom then spoke about the honor and pleasure he had to work with both Representative Hortman and Senator Hoffman on the MRCAA rules and the Coon Rapids dam and how Representative Hortman was instrumental and understood the importance of the rivers and that she will be dearly missed. Councilmember Scott shared about the unsung heroes that included Yvette Hoffman, who saved her daughter during the attack, who could then call police for help as well as Brooklyn Park Police Sergeant Nordan, who helped stop further tragedy, and that our hearts go out to all victims. Senator Abeler shared an update on the Anoka dam and how Representative Stephenson recommended removal of half the sales tax funding in the transportation bill, and how Anoka County wanted this bill to pass. He shared about the environmental bill and how it was good to take the lead as it was June 16, 2025 (Regular) Page 5 of 12 important to the City then spoke about other topics that included allowing three- plexes to be constructed with no parking that didn’t pass and the Miller building that will be replaced with beds for the AMRTC to house the 30% of inmates who don’t belong in jail but need mental health assistance instead. Senator Abeler spoke about the Human Services bill amendment to fund $35 million and how more was needed for operations, and how this should happen by 2028 or 2029, which will be a good thing for Anoka, as it will provide good-paying jobs and opportunities for people living in Anoka. Mayor Skogquist thanked Senator Abeler for his work, stating Anoka is in a very good position with all our elected officials being on the same page and thanked the coalition for their work. Senior City Planner Clark Palmer said staff was currently working with the architect on the AMRTC project, which will be before Council for site plan review in the near future as well as a possible rezoning. OTHER INFORMATION UNDER OPEN FORUM No one appeared. 5. PUBLIC HEARING(S) None. 6. CONSENT AGENDA Councilmember Scott thanked Commissioner Murff for being part of the HRA. Motion by Councilmember Scott, seconded by Councilmember Weaver, to approve Items 6.1 through 6.7 of the Consent Agenda as presented. 6.1 Approve Verified Bills. 6.2 Revising and Setting Council Calendars. 6.3 Issuance of Special Event Permit; Anoka Sidewalk Sale. 6.4 Cancellation of July 7, 2025, City Council Meeting. 6.5 Resignation from Housing and Redevelopment Authority; Andrea Murff. 6.6 Issuance of a Tree Care/Arborist License; J’s Lawn and Landscape, Inc., Nowthen, Minnesota. June 16, 2025 (Regular) Page 6 of 12 6.7 Consideration of an LG220 Gambling Permit for a Raffle at Anoka Ice Arena on July 25, 2025. Vote taken. All ayes. Motion carried. 7. REPORTS OF OFFICERS, BOARDS, AND COMMISSIONS None. 8. PETITIONS, REQUESTS, AND COMMUNICATION None. 9. ORDINANCES AND RESOLUTIONS 9.1. ORD/Recommencement of Existing Gas Franchise Fee with CenterPoint Energy. 2nd Reading ORDINANCE Ms. Springer shared a background report stating first reading of this ordinance was brought to Council at the May 19 meeting, and there have been no changes to this franchise agreement since the first reading. The City reinstated the gas fee on October 7, 2019, effective from January 2020 through December 31, 2023. The gas franchise fee more equitably assigns right-of-way costs with users, reduces reliance on state aids and taxes, and provides funding for the street infrastructure replacement program. The fee provides approximately $418,000 annually to the street renewal program. Annual costs for about a mile of road is about $5.2 million. Direct assessment of properties, state aids, transfers from other funds, and interest earnings make up the balance of funding sources. The various utility funds pay for the portion of infrastructure costs relating to the individual utility, i.e., water, sewer, storm sewer, and electric. Through the franchise fee, the City is able to charge private companies access to public right-of-way. The City is responsible for the management of about 71.5 miles of right-of-way, which provides land access to the homes, businesses, and other properties in the City. The alternative to a gas franchise fee would be to increase annual assessments or increase the tax levy to include street renewal costs. The City currently assesses R-1 and R-2 street renewal properties at $4,820 per unit plus $25 per foot frontage. Other properties are double that of residential properties. If the City were to consider an additional assessment to cover costs, the assessment for R-1 and R-2 properties would need to double, as well as other properties doubling. If the City were to consider an additional tax levy, it would impact an average home of $305,200 by $52 a year or $4.33 a month. This same property is currently paying $3.48 a month in a gas franchise fee; staff is proposing an increase to $4.00 per month. June 16, 2025 (Regular) Page 7 of 12 Councilmember Weaver asked if a sunset date is included, then spoke about how this tax can be much higher for commercial users than the gas itself, but understood its importance. Ms. Springer said if adopted, the fee would begin October 1 and sunset December 31, 2030. Councilmember Scott asked if it would be prudent to consider an escalation factor. Councilmember Weaver said the fee has always been flat but suggested reducing the term to address the fee totals much sooner. Mayor Skogquist agreed that could be done, similar to a lease, with an escalator, and said five years ago we did 15% over the term, and how people don’t like large changes year after year, supported a 3% annual increase to help offset increasing costs. Councilmember Rostad asked what the street reconstruction costs have been over time. Mr. Lee said 10 years ago the cost to reconstruct ¾ of a mile of street was $1 million, and now is $3 million, which is far more than the annual 3% increase. Ed Evans, Anoka, asked if the amount is aggregated and if there are separate meters for each section of a suited building as well as apartment buildings instead of a per-unit basis. Councilmember Weaver said the amount is based on usage, account, and size of meters and that while this amount can add up quickly the amount is similar regardless. Motion by Mayor Skogquist, seconded by Councilmember Scott, to hold second reading and adopt an ordinance recommencing and increasing the existing gas franchise fee within the City of Anoka, Minnesota with CenterPoint Energy as amended, to include in Section 5 that a 3% increase for the previous year’s fee on all customer classifications shall occur annually starting January 1, 2027. Upon a roll call vote: Mayor Skogquist, Councilmembers Rostad, Scott, and Weaver voted in favor. Motion carried. 9.2. ORD/Recommencement of Existing Electric Franchise Fee with Connexus Energy and Anoka Municipal Utility. 2nd Reading ORDINANCE Ms. Springer shared a background report stating first reading of this ordinance was brought to Council at the May 19 meeting with no changes since first reading. This is the second reading for recommencement of the existing electric franchise fee for the City of Anoka. The City recommenced the electric franchise fee with Connexus Energy on September 21, 2020, effective from September 1, 2020, through August 31, 2025. The City is also recommencing its electric franchise fee ordinance from 1995 with the City of Anoka Electric Municipal June 16, 2025 (Regular) Page 8 of 12 Utility as the franchisee, effective from September 1, 1995, through August 31, 2025. The electric franchise fee assigns right-of-way costs with users and provides funding for the street maintenance. The fee provides approximately $892,000 annually to the general fund supporting street maintenance costs. Annual costs for maintaining streets are about $1.3 million. Through the franchise fee, the City of Anoka Electric Utility transfers $.004 cents per kwh usage in the city (about $873,000) to the general fund for access to public right of way. It also collects $.004 cents per kwh usage in the city (about $19,000) from Conexus Energy for access to public right of way. The City of Anoka is responsible for the management of about 71.5 miles of right of way, which provides land access to the homes, businesses, and other properties in the City. Having a gas franchise fee requires the City to also have an electric franchise fee. Without the electric or gas franchise fees, the City would need to consider replacing this revenue source with a tax levy of about $1.3 million. If the City were to consider an additional tax levy, it would impact an average home of $305,200 by $162 a year or $13.50 a month. This same property is currently paying $4 a month in a gas franchise fee. Councilmember Weaver asked if this tax sunsets as well. Ms. Springer said the sunset will match the gas franchise on December 31, 2030. Dr. Evans asked where the authority comes from that allows the City to charge an electric franchise fee. Ms. Springer said Statute states if a city charges a gas franchise fee, then we have to charge an electric fee as well which was why the City didn’t pass the fee onto the customers. Dr. Evans disagreed, stating the fee was put in place a number of years ago to prevent retail wheeling and that he was not sure where staff’s information was coming from. Mayor Skogquist suggested an amendment similar to the earlier one regarding an escalation clause. Councilmember Scott suggested rounding the charge per kilowatt hour to the nearest 1000th penny to have more of an impact in the final year. Ms. Springer said she was not sure how many decimals the system allowed to be billed, but could explore that possibility. Mayor Skogquist said he believed staff thought the rounding was doable and supported a future discussion on ways to have others contribute going forward. Councilmember Weaver clarified that this will be a tax and asked if this tax is chargeable for exempt properties. Ms. Springer explained that exempt properties will have to pay the franchise fee because they have a meter and provides a way for them to contribute to street repair. June 16, 2025 (Regular) Page 9 of 12 Mayor Skogquist explained that only customers on Anoka Electric will be charged this fee. Motion by Mayor Skogquist, seconded by Councilmember Rostad, to hold second reading and adopt an ordinance recommencing the existing electric franchise free within the City of Anoka, Minnesota with Connexus Energy and City of Anoka Electric Utility as amended to add language in Section 4 a 3% increase for the previous year’s fee on all customer classifications shall occur annually starting January 1, 2027. Upon a roll call vote: Mayor Skogquist, Councilmembers Rostad, Scott, and Weaver voted in favor. Motion carried. 9.3. RES/Authorizing of an Interfund Loan from Electric to the Cannabis Fund to Build Anoka Cannabis Shop, Located at 839 East River Road, Anoka. RESOLUTION Ms. Springer shared a background report on May 5, 2025, Council approved bids and awarded bid package contracts to build the Anoka Cannabis Shop located at 839 East River Road, Anoka. The estimated total construction cost of the Anoka Dispensary is $2,794,006, which includes a contingency with the Construction Manager. The construction estimated costs are as follows: In order for the new Cannabis fund to purchase this property in 2025, it is necessary to create an interfund loan not to exceed $3,000,000 from the Electric Utility fund to the Cannabis fund. The repayment of this loan will come from future cannabis sales. This transfer, if approved, will provide the funds to build the Anoka Cannabis Shop. Requirements for maintaining utility reserves as part of the City’s Utility Financial Reserve Policy. The policy states that for the electric utility, the City should maintain a cash reserve equivalent to four months of operations and the total of the following year’s capital projects. For 2025, our total operating budget is $34,324,795, and our budgeted capital is $6,511,889 (this includes conversion to AMI). Total reserves should be $15,093,088. Our current cash balance in the Electric Fund is $15,099,927. Dr. Evans asked about the interest rate and maximum term of the loan, then referred to Statute, which states loan amounts must be in writing. Ms. Springer said the interest rate is 5% for internal loans for however long the loan exists and the electric fund receives the interest payments. She noted internal loans allow the City to fund projects without having to pay loan closing costs, etc., and if cannabis sales exceed expectations, we can pay the loan off earlier. She said the general fund has paid for all initial costs of setting up the business, and that we just broke ground on the property, so no payment has been made to the building, and that no general fund money will be used for that. June 16, 2025 (Regular) Page 10 of 12 Dr. Evans asked if he could receive a copy of the resolution this evening if adopted. Mayor Skogquist explained that if adopted, there is a signing process that needs to occur, and that staff will follow normal protocol and will provide Dr. Evans with a copy when complete. Mr. Lee noted Anoka is governed by Charter and not all statutes apply, which is different than statutory cities. Ms. Springer said the 5% interest rate and flexible term were similar to what was done with the Urban Redevelopment Fund for dock purchases, which was paid off early. Mayor Skogquist thanked everyone for their work, adding it is important to retain our reserves and noted any City property sold goes towards paying the electric fund, and that will continue. Ms. Springer added that the amount would be more if bonding was needed due to conversion. Motion by Councilmember Scott, seconded by Councilmember Rostad, to adopt a resolution authorization of an interfund loan from electric to the cannabis fund to build a cannabis shop at 839 East River Road, Anoka. Upon a roll call vote, Mayor Skogquist, Councilmembers Rostad, and Scott voted in favor. Councilmember Weaver voted nay. Motion carried. 10. UNFINISHED BUSINESS None. 11. NEW BUSINESS None. 12. UPDATES AND REPORTS 12.1 Distribution of 1st Half 2025 Round Up Funds. Ms. Springer shared a background report, sharing an update on the status of the “Round Up for Change” program regarding collections and disbursement of revenues. The program, adopted November 21, 2011, Policy # 2011-03, has been in place since 2012. Funds collected are for donations that improve the lives of families, children, and seniors in our community. Each new customer is introduced to the program when they sign up for service and make the decision to enroll or not at that time. The new customer booklet also gives more information, as well as the AMU website and social media. Despite diligent introduction to the program from staff, we did have a 1/10th of a percent decrease in total customer June 16, 2025 (Regular) Page 11 of 12 participation compared to December 2024. Revenue total for 2025 through June 1 is $14,761, and there is $17,178 available for disbursement for the 1st half of 2025. Councilmember Scott asked how customers can get involved in the program if they choose. Ms. Springer encouraged anyone to contact City Hall Utility Billing and noted the total amount would be no more than $12 a year. Councilmember Weaver said the City implemented this program because we were making donations from the general fund, which was not right and that this program has been very successful. 12.2 Tentative Agenda(s). The Council reviewed the tentative agendas of the upcoming Council meetings. Councilmember Weaver noted he will be absent on July 21 and suggested the Planning Commission appointment be moved to the first meeting in August instead. Councilmember Rostad noted she may not be attending July 21 as well. Mayor Skogquist said the date was already decided upon, but supported rescheduling and suggested a special meeting be called on June 23 instead. Motion by Councilmember Scott, seconded by Councilmember Weaver, to call a special meeting on June 23 to consider Planning Commission appointment. Vote taken. All ayes. Motion carried. Councilmember Weaver inquired about the mowing contract and amount paid for City-owned properties. Ms. Springer said staff will provide that information at the June 23 worksession during the service contracts item. Joelle Alvord, inquired about the City Attorney’s absence. Mayor Skogquist explained the City Attorney was absent due to a vacation. Mr. Lee said the June 23 meeting is going to be very lengthy and suggested the display of flags on City-owned property item be moved to the July worksession instead. Motion by Councilmember Scott, seconded by Councilmember Rostad, to reschedule the display of flags on City-owned property item to the July 28, 2025, worksession. Vote taken. All ayes. Motion carried. June 16, 2025 (Regular) Page 12 of 12 12.4 Staff and Council Input. None. 13. ADJOURNMENT Councilmember Scott made a motion to adjourn the Regular Council meeting. Councilmember Rostad seconded the motion. Vote taken. All ayes. Motion carried. Time of adjournment: 8:44 p.m. Submitted by: Cathy Sorensen, TimeSaver Off Site Secretarial, Inc. Approval Attestation: Amy T. Oehlers, City Clerk