City Council Workshop

AGENDA City Council Workshop Meeting October 28, 2025 Hadley Conference Room 5:00 PM Amended 5:00 PM Washington County Draft 2026-2030 Capital Improvement Plan Comments 5:15 PM 2026 - 2030 Capital Improvement Plan and 2026-2035 Vehicle and Equipment Replacements and Proposed 2026 Property Tax Levy Update and Senior Discount 6:15 PM New Willowbrooke Parks Naming 6:25 PM Administrator Update 6:35 PM Council Topics 6:45 PM Discussion about Oak Marsh Lease – (No attachment - verbal discussion only) 6:55 PM Recess or Adjourn Continue after Regular City Council Meeting, if needed  COUNCIL MEMORANDUM To: Honorable Mayor and City Council From: Brian Bachmeier, Consulting City Engineer Andrew Gitzlaff, Community Development Director Ivan Stepanov, Finance Director Date: October 28, 2025 Subject: Washington County Draft 2026-2030 Capital Improvement Plan Comments BACKGROUND Washington County recently distributed copies of their draft 2026-2030 Capital Improvement Plan (CIP) for comment. This draft included new projects not listed in the previous CIP, and updated cost estimates for all projects. Comments are due back to the County by Friday, November 7, 2025. A comparison of the projects listed in the County’s draft CIP with their previous CIP, and with Oakdale’s CIP is as follows: County Description 2025-2029 2026-2030 City Project City CIP Local Project No. County CIP County CIP No. Share Local Share Local Share RB-2201 Pedestrian Not Included $210,000* L2025-02 $200,000 Improvements at CSAH 14 & Highpoint Drive RB-2645 CSAH 13 From $900,000** $800,000** L2025-01 $100,000 CSAH 6 to CSAH 14 RB-2803 CSAH 14 Trail $175,000 $0 R2025-03 $175,000 from TH 120 Hadley to Granada*** RB-2806 CSAH 13 Trail $127,500 $154,000 less R2026-03 $104,000 from Helmo to $50,000 DNR Olson Lake Trail Grant RB-2820 Signal Battery -0- -0- Backup *Listed with several other signal improvement projects around the County over multiple years. City share to be paid by developer contributions already received. **Includes Oakdale & Lake Elmo. At this point the County is not indicating the allocation between the cities, however the Oakdale side already has a trail and curb gutter so the local share should be limited to the one leg of intersection improvements at CSAH 6 & CSAH 13. ***Removed section from TH 120 to Granada. County participation policy has no local share for reconstruction. The trail improvements associated with RB-2806 are not currently reflected in the City’s CIP, however they are noted as near and midterm future shared use paths in the City’s Pedestrian & Bicycle Plan (Project ID 9 and 14). 1 The City’s Pedestrian and Bicycle Plan identifies trail and sidewalk improvements along 10th Street (CSAH 14) from Hadley Avenue to Trunk Highway 120 as part of a future roadway reconstruction project to improve access to Tartan High School, high density housing, and other destinations. This project ranked high and is identified as a near term priority because of safety concerns (high crash rate), demand (based on public engagement), access to destinations, and ability to be competitive for state and federal funding. The County has indicated they will be initiating a study; however, it is not listed in their CIP. The County's practice is to invoice partner agencies for their share of studies, planning/design, right-of-way, and construction costs upon construction contract award. The City will not need to plan funding until the anticipated construction year of a project. Funding for trail improvements could be provided by Fund 506, Street Improvement Fund. COUNCIL DIRECTION REQUESTED Staff is requesting direction from the Council on the following items: • Request that the County provide an allocation between Oakdale and Lake Elmo for RB-2645. • Intent on if the City’s draft CIP be updated to include $104,000 local funding for the trail improvements associated with RB-2806. 2  COUNCIL MEMORANDUM To: Honorable Mayor and City Council From: Ivan Stepanov, Finance Director Date: October 28, 2025 Subject: 2026-2030 Capital Improvement Plan and 2026-2035 Vehicle and Equipment Replacements and Proposed 2026 Property Tax Levy Update and Senior Discount BACKGROUND The following public meetings were held to discuss the aspects of the Proposed 2026-2030 Capital Improvement Plan (CIP) and 2026 Property Tax Levy: June 16, 2025 Special City Council Workshop: Staff presented proposed 2026 General Fund Expenses including salary and benefit information, new position requests, and other operational changes. Staff requested three new positions for 2026. A GIS Technician is proposed to replace the contracted service, which continues to increase in costs each year and is now cost prohibitive compared to hiring a full-time employee. The staff position will utilize $55,000 of existing levy previously budgeted for contract work. As the City continues to grow, a Human Resources Assistant is critical given the growing workload in HR programs and processes. Lastly, the City is looking to partner with Washington County to provide a coordinated response to calls for assistance utilizing a social worker and police officer. A new Police Officer position is proposed in the Oakdale Police Department in 2026 for this purpose. The City Council and staff also discussed the opportunity for one-time funding versus ongoing General Fund funding for various expenses. July 8, 2025 City Council Workshop: Staff presented the 2026-2035 Vehicle and Equipment Replacement Fund (VERF). A new approach to developing the VERF that includes a data-driven fleet replacement strategy was discussed. The 2026–2035 VERF outlined a projected total cost of $17,658,791 across all 10 years of the plan, with an average annual investment of $1,765,879. Council direction was to maintain the $1.4 million annual tax levy rather than increasing it after 2026, to not pay for police interceptors out of Charitable Gambling, and push the $500,000 for an ambulance out to 2027 when the City expects to make payment. July 22, 2025 City Council Workshop: Staff presented the 2026-2030 CIP. The focus of the discussion was on the capital funds that included a levy: Municipal Building Fund, Park Capital Fund, Street Improvement Fund, and VERF. The proposed levy increase for all four was $523,400 for 2026 with Municipal Building Fund and Park Capital Fund increasing by $75,000 each, VERF increasing by $373,400, and no increase for the Street Improvement Fund. The Street Improvement Fund began seeing revenues from the increased Franchise Fees in 2025, so no levy increase was proposed. Staff proposed transferring from the Charitable Gambling Fund to the Parks Capital Fund to help pay for the new Park System Plan updates. Council direction was not to increase the Municipal Building Fund levy, continue to levy for the Street Improvement Fund through 2030, and reduce levy for VERF to $1.2 million. Council direction on Park Capital Fund included $200,000 from Charitable Gambling in 2026, adjustment of park projects in 2026 and 2027, and to replace bonding for Tanners Lake Park Improvements with a $2 million transfer from the Tanners TIF. August 12, 2025 City Council Workshop: Staff presented the 2026 General Fund Revenues, proposed changes to the 2026 General Fund Expenses, and Capital and Debt levies. New changes proposed by 1 staff at this meeting included the elimination of the new Police Officer position and Metro Cities membership for 2026, reduction in the VERF levy to $1,050,000, reduction of total expense for the Community Development Intern position, and movement of additional General Fund expense to other funds such as Special Projects, Forfeiture, SEED, and the Closed Bond Fund. Council provided direction on reducing the 2026 levy by moving items to the Special Project Fund, using Closed Bond Funds to pay 2026 levy for 2016A, 2017A, and 2018A Bonds, and reducing the 2026 levy to the Street Improvement Fund. Council also directed adding the additional Police Officer in 2026 to start July 1 along with the social worker. August 26, 2025 City Council Workshop: Staff presented the 2026 Enterprise Budgets, proposed 2026 utility rates, and Capital Improvement Plans for Enterprise Funds. Council confirmed support for a 3% rate increase in Water and 2% rate increase each for Sewer, Street Light, and Surface Water. Council further directed the Drinking Water Settlement Fund only contain projects receiving funding from 3M. Questions were raised regarding the senior discount and sewer usage that staff will follow up on. September 9, 2025 City Council Meeting: The City Council adopted Resolution 2025-83, setting the Proposed 2026 Property Tax Levy at 20,461,585, up 7% or $1,334,457 over 2025. At the proposed levy amount, the median residential property in Oakdale valued at $346,200, which experienced an increase of 0.8% from prior year’s $343,500 value, is estimated to see the City’s share of their property tax bill increase by approximately $46.88 or 3.5% for 2026. As a reminder, assessed values are not final. The date for the Truth-in-Taxation Meeting was established for December 9, 2025 at 7:00pm. Capital Improvement Plan Levy There has been no change in the 2026 Capital Improvement Levy since the September 9, 2025 City Council meeting. 2025 Adopted 2026 25 to '26 Capital Project Levy 2024 Actual Budget Proposed Change % Change Municipal Building Fund $135,000 $135,000 $70,000 ($65,000) -48% Park Capital Fund $245,000 $320,000 $395,000 $75,000 23% Street Improvement Fund $345,000 $395,000 $95,000 ($300,000) -76% Vehicle & Equip. Replace. Fund $965,000 $1,120,474 $1,050,000 ($70,474) -6% Total $1,690,000 $1,970,474 $1,610,000 ($360,474) -18% However, expenses in the VERF have been updated to better align with department needs and the previously proposed reduction in the property tax levy. While there were no changes to the requests for police, fire, building inspections, or engineering, the Public Works Director is recommending the following vehicles for 2026 after evaluating needs based on reliability, maintenance costs, and overall condition: • V2026-07: Street Truck for $67,000 • V2026-08: Parks Lawn Mower for $92,000 • V2026-09: Parks Lawn Mower for $92,000 • V2026-10: Utilities Backhoe for $250,000 • V2026-11: Forklift for $57,000 2 This is a reduction of $168,900 from the Public Works requested expenditures presented at the July 8, 2025 workshop. The property tax levy for the VERF for 2026 remains the same as presented at the September 9th meeting at $1,050,000. Beginning in 2027, the levy to VERF is proposed to increase 1% over the 2025 total levy or $190,000 each year. Proposed 2026 Levy Change in levy components since the September 9, 2025 meeting: • Reduction in the legal budget of $83,418 due to contracting prosecution services. The current Proposed 2026 levy is $20,378,167, up 6.5% or $1,251,039 over 2025. 2026 Levy Adopted 2023 2024 2025 Proposed % Change General 12,631,812 14,352,993 15,142,790 16,766,186 10.7% Capital Improvement Plan 1,143,346 1,690,000 1,970,474 1,610,000 -18.3% Debt Service 2,289,699 2,022,665 2,013,864 2,001,981 -0.6% Total Levy Adopted 16,064,857 18,065,658 19,127,128 20,378,167 6.5% Property Tax Rate and Effects on Median Valued Residential Property At the proposed levy amount, the median value residential property in Oakdale valued at $346,200, which experienced an increase of 0.8% from prior year’s $343,500 value, is estimated to see the City’s share of their property tax bill increase by approximately $40.36 annually or 3.0% for 2026 which is $3.63 per month for the City share of the property taxes. As a reminder, the 2026 values are not final. Senior and Disabled Discount Elimination-Water and Sewer Operating Funds At the February 11, 2025 workshop, the City Council directed staff to notify those receiving the senior and disabled utility discount that the program would be terminated as of the end of the year. As discussed at the August 26, 2025 workshop, the revenues proposed for the water and sewer funds for 2026 include the elimination of the senior and disabled discount on 12/31/25. Staff is estimating an additional $43,064 to the Water Fund due to seniors and disabled paying the base water fee (currently $15.38) each quarter in 2026. Staff is estimating an additional $71,848 to the Sewer Fund due to seniors and disabled paying the base sewer fee (currently $25.66) in each quarter in 2026. Another change that results from the elimination of this discount is that folks previously receiving the discount were only charged a sewer usage fee based upon their actual water usage in the winter quarter. All other residential customers pay for 12,000 gallons regardless of their actual usage. This change of charging everyone a minimum of 12,000 gallons of water in the winter to determine their quarterly sewer fee will result in an additional estimated $140,000 in revenues for the Sewer Fund in 2026. The chart below includes a sampling of customers who received the senior/disabled discount in August 2024 but were removed in August 2025 due to failure to reapply or otherwise qualify for the program. The last two columns show how the change in sewer usage based on a minimum of 12,000 gallons billed impacts fees. While each household has some differences in water usage, this could be indicative of what the customers currently on the discount will see next year when the discount goes away. 3  Quarterly Utility Bill Comparison Billing Samples Aug 2024 with Discount Aug 2025-No Discount Increase Aug 2024 Sewer Usage Aug 2025 Sewer Usage Household A $54.95 $141.08 $86.13 $13.62 $55.56 Household B $67.09 $152.64 $85.55 $36.32 $55.56 Household C $35.31 $124.92 $89.61 $4.54 $55.56 Household D $50.99 $122.29 $71.30 $18.16 $55.56 Household E $54.23 $123.44 $69.21 $22.70 $55.56 Since the August 26, 2025 workshop, staff has done further research on the history of the senior and disabled discount. The discounts were first approved by resolutions (Resolution No. 75-20 and 75-35) in 1975. At the time of adoption, the fees for water and sewer usage for seniors and disabled mirrored the usage charges for residential customers. The discount came in the form of no base water or base sewer charges. In 1975, the discount was available to senior citizens (over 62 years of age) and with a maximum yearly gross income of $10,000 and those totally disabled defined as a disability resulting from injury or sickness which completely prevents a person from performing any work or engaging in any occupation for wage profit and with gross annual incomes of less than $8,000. The income thresholds were periodically increased over the years. The most recent record is in the 2022 budget book which makes the senior discount available to individuals 62 or older with a total annual household income of $52,500 or less. In 1984, with the adoption of Resolution 1984-06, a minimum sewer usage charge of 4,000 per month (which is the same as 12,000 per quarter) was adopted for residential customers; however, for senior citizens their sewer bill was still based on actual usage. If the Council would like to retain the discount after seeing this additional information, please provide that feedback to staff so they can prepare for the 2026 fee schedule update accordingly and update the revenue projections in the 2026 water and sewer budgets. FINANCIAL CONSIDERATIONS To further reduce the levy, the Council may want to consider the following: • On October 1, 2025, the City received its Police and Fire State Aid for 2025 which were $479,273.62 and $245,311.54. The 2026 budget was based upon 2024 actual data. Now that 2025 actuals are available, the 2026 budget for these items could be adjusted to match. Increasing these non-tax revenues by $39,000 and $35,000 respectively, could reduce the tax levy by an equal amount. • The Special Projects Fund has about $230,000 unallocated after accounting for 2026 and 2027 proposed projects. Are there any other expenses in the General Fund levy or Capital Improvement Plan Levy that could be paid out of this account? • The Charitable Gambling Fund projected fund balance for 12/31/26 is over $227,000 even after the $200,000 transfer to the Parks Capital Plan. Are there any other levy expenses that could be paid from this fund in 2026? • The SEED/Economic Development Fund projected fund balance for 12/31/26 is about $33,000. Are there any general levy expenses that could be paid from this fund in 2026 (i.e. $15,000 from Community Development budget for Economic Development Advisory Services/Planning Services/Code Implementation)? • Should the levy for the Municipal Building Fund be further reduced from $70,000 to $0 for 2026 since bond premium was obtained in 2025A bond issuance? • The Unassigned Fund Balance in the General Fund was at 63% as of December 31, 2024. Between $2-3 million could be applied (for one-time expenses or a temporary fix that would have 4  to be corrected in future years) to the 2026 budget to reduce the levy and still remain within 45.83- 50% of operating expenses for 2026. Items the Council may want to consider adding to the 2026 budget include (assuming an equivalent amount or more is reduced from the levy such as those options listed above): • Should the $815 be added to the general fund budget in communications for new resident mailers? • Should the Street Improvement Fund (506) be amended to include up to $104,000 as the City’s cost share on the CSAH 13 Trail from Helmo to Olson Lake Trail? This would add a new project R2026-03 (CSAH 13 Trail) to align with the County proposed CIP project. Street Improvement Fund balance could be used or the levy increased for 2026 or a later year in the Street Improvement Fund to retain fund balance. COUNCIL DIRECTION REQUESTED Staff requests remaining feedback and intent from the Council on the updates to the 2026 - 2030 Capital Improvement Plan, 2026 - 2035 Vehicle and Equipment Replacements, Proposed 2026 Property Tax Levy and 2026 Operating Budgets, prior to setting the final levy scheduled for the December 9, 2025 City Council meeting. Remaining Budget Calendar November 10, 2025 Workshop - No Longer Needed Final update on 2026 General Fund Budget/Levy Mid-Nov, 2025 Proposed Property Tax (Truth in Taxation) notices sent by County to all property owners in the City. Dec 9, 2025 Truth in Taxation meeting for 2026 Budget and Tax Levies. City Council adopts 2026 Budget, 2026 Tax Levy, and 2026-2030 CIP including the 2026-2035 Vehicle and Equipment Replacement Plan 5  COUNCIL MEMORANDUM To: Honorable Mayor and City Council From: Lori Pulkrabek, Communications Manager Date: October 28, 2025 Subject: New Willowbrooke Parks Naming BACKGROUND At the June 10 and August 26, 2025 Workshops, Council Members discussed the naming of the two new parks in the Willowbrooke neighborhood, currently referred to as Willowbrooke Park West and Willowbrooke Park North. The Council ultimately decided on the following finalists for each park: Willowbrooke Park West Willowbrooke Park North • Willowbrooke Fields Park • Prairie Trails Park • Oak Grove Sports Park • Pathways Park at Willowbrooke • Pine Ridge Park • Acorn Nature Park City staff was directed to put the finalist names up for a public vote. A survey was created and promoted, encouraging residents to vote for their favorite names. It was open from Monday, September 15 to Friday, October 10, and voters were only allowed one name selection per park. Survey results will be provided to Council under separate cover. COUNCIL DIRECTION REQUESTED It is requested that the City Council discuss the results and confirm the names of the two new Willowbrooke parks.