HomeMy WebLinkAbout2025/09/02 - ADMIN - Minutes - City Council - Study SessionOfficial minutes
City council special study session
St. Louis Park, Minnesota
Sept. 2, 2025
The meeting convened at 7:30 p.m.
Council members present: Tim Brausen, Sue Budd, Lynette Dumalag, Yolanda Farris, Mayor Pro
Tem Paul Baudhuin
Council members absent: Mayor Mohamed, Council Member Rog
Staff present: City manager (Ms. Keller), deputy city manager (Ms. Walsh), community
development director, interim building and energy director (Ms. Barton), administrative
services director (Ms. Brodeen), finance director (Ms. Cruver), facilities superintendent (Mr.
Eisold), public services superintendent/deputy public works director (Ms. Fisher), recreation
superintendent (Ms. Friederich), police sergeant (Mr. Hagen), fire chief (Mr. Hanlin),
engineering director (Ms. Heiser), police chief (Mr. Kruelle), deputy police chief (Mr. Nadem),
communications and technology director (Ms. Smith), financial analyst (Ms. Stephens), park
superintendent (Mr. Umphrey), planning manager (Mr. Walther), parks and recreation director
(Mr. West), racial equity and inclusion director (Ms. Yang), sustainabi lity manager (Ms. Ziring)
Discussion items.
1. Capital Improvements Projects
Ms. Cruver presented the staff report. She noted the policy considerations:
1. Does the council support the proposed 2026 Capital Projects and five-year Capital
Improvement Plan, which is dependent upon the following items:
a. Increasing franchise fees and utility fees to support the included projects
b. Prioritizing and securing state aid for the Oxford/Louisiana street improvement
project, and
c. Coordinating planning around the building of new assets, such as sidewalks, to
ensure budgets stay within bonding limits.
2. Does the council support the proposed 2026 budget as drafted? The balanced budget
consists of an all-inclusive preliminary levy increase of 7.92% based upon the following:
a. General levies (general fund, park improvement and employee benefits) of
$45,766,333
b. Debt service levy of 55,792,684
c. Planned use of fund balance in the general fund of $300,000 to support one -time
items in the budget
Ms. Cruver noted recommendations in the proposed 2026 budget are based on maintaining
high-quality services and advancing city priorities while also making the best use of public
dollars.
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Ms. Cruver highlighted recommendations for the proposed 2026 budget:
• A general fund levy that fully funds the city’s municipal building, Information
Technology (IT), and Vehicle and Equipment Replacement budgets without relying on
one-time transfers to maintain existing city assets.
• Fully funding streetlight replacements in city parks and special service districts.
• Incorporating the results of a risk analysis of the city’s underground infrastructure
and increasing the amount of water mains replaced at the end of their lifecycle each
year in the five-year Capital Improvement Plan (CIP).
Ms. Cruver stated these changes result in an all-in 2026 property tax levy increase of 7.92% for
property taxpayers. She added that before the final levy is formally approved, staff will
continue to work to lower the increase while maintaining the council’s policy priorities.
Ms. Cruver presented the 2026 budget planning timeline and explained in detail the capital
improvement fund (CIF) proposed projects.
Council Member Dumalag asked for clarification on paid leave for staff. Ms. Cruver stated that
it is a fund that has needed an increase over time. Paid family medical leave is paid like a payroll
tax, so each employee has part of the compensation going to social security and to healthcare
insurance. As of 2025, part of the compensation also goes to the state paid family and medical
leave program.
Council Member Dumalag asked if the increase in property tax levy would be a different
number if city funds were looked at as a lump sum, versus individual funds. Ms. Cruver stated
the $7 million increase in the levy in the general fund combines with the offsetting $2.5 million
reduction in the levy in the capital funds to bring the overall increase in the general fund to $4
million, which seems more typical.
Council Member Brausen asked if the climate investment fund comes out of the general fund
levy. Ms. Cruver stated yes. Council Member Brausen asked for clarity on $200,000 in general
spending that is usually committed to the climate investment fund and another $150,000
coming from the excess fund balances. Ms. Cruver stated the plan is to allow for all proposed
spending to be fully funded and to give council flexibility in how to proceed with the levy in the
future.
Council Member Brausen asked if the council wanted to create a more robust commitment to
the climate investment fund, would those funds need to come from the general levy? Ms.
Cruver stated yes. He stated he would propose doing this as it makes a strong statement at a
time when the federal government is washing its hands of climate change funding, adding that
this is important.
Council Member Brausen stated that budgets are moral documents, and it is important to make
a statement to the rest of the state that St. Louis Park takes climate action seriously. He added
he would hate to see a resident apply for funding for a solar grant and be turned away because
the city did not budget for it.
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Ms. Cruver noted that franchise fees have not been increased since 2021.
Council Member Brausen asked who pays franchise fees. Ms. Cruver stated that everyone who
pays a utility bill pays franchise fees, which is a distinction from those who pay property taxes.
She added that non-profit organizations do not pay property taxes, but franchise fees are paid
by all who use a utility, so it is distributed slightly differently. This fund does not include cable
television fees, which are deposited into the city’s cable fund and support cable television. She
noted franchise fees are only related to Xcel Energy and CenterPoint Energy.
Council Member Budd asked if higher users of energy pay higher amounts in franchise fees. Ms.
Cruver stated that currently, it is a flat fee. She recommended that, in the future, this be
negotiated with the utility companies and changed so that franchise fees in St. Louis Park are
based on use.
Council Member Budd noted that residents use the energy assistance program and stated that
this increase will be an extended hardship for those folks. Ms. Cruver agreed.
Council Member Brausen asked if the city has built out most of the Connect the Park structure,
will the focus now shift to watermain replacement, sidewalks and trails.
Ms. Heiser stated that Connect the Park was approved by the council in 2012 and included 32
miles of on street bikeways, 12 miles of sidewalk and seven (7) miles of trail. Later, the council
directed staff to build bikeways that met the needs of all ages and abilities. She indicated that
about 75% of the plan has been implemented. She reported that the remaining segments were
adjacent to streets in good condition and would be timed with street reconstruction projects.
Ms. Heiser noted that Cedar Lake Road and Louisiana Avenue included Connect the Park
segments and shared that the council also had directed staff to fill in the gaps in the citywide
sidewalk network.
Council Member Budd asked about earlier engagement on projects. Ms. Heiser indicated staff is
working on it, sharing that the 2025 pavement management project had budgeted $1.7 million
for sidewalk construction. Because of the low traffic volumes and tree impacts on the streets in
the project, staff did not recommend building a majority of the sidewalks, reducing the budget
to $250,000. Ms. Heiser summarized a plan to gain an earlier understanding of where sidewalks
are recommended to be built as a part of projects. In 2026, the public will be engaged for the
2028 pavement management projects, allowing staff to know the sidewalk costs in 2027 before
the budget recommendations for 2028 are brought to the city council. Ms. Cruver stated that
earlier engagement will help with future budgeting.
Council Member Dumalag asked how significant interest rates are to bonding. Ms. Cruver
stated that there is a cost for bond issuance that can be affected by interest rates.
Council Member Budd noted the five-year levy and stated it is tough to have an increase of
7.9% this year. However, she noted that the rate is anticipated to decrease in future years. She
asked how the levies this year and next year could be brought into the 6% range and then
decreased in the future. Ms. Cruver pointed out the pieces that are driving spending in 2026
and noted the highlighted points where a new asset or service is being added. She summarized
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that the process is complex, pointing out that a 1% decrease on the levy equates to $500,000.
City staff would need to know what projects can be delayed.
Council Member Budd asked to clarify that the $2.1 million increase in personnel spending does
not increase the number of city employees and rather relates to employee benefits. Ms. Cruver
confirmed that the total number of employees was not increased, and that these funds go
towards the new state family medical leave program, in addition to healthcare insurance
increases and pay increases for employees.
Mayor Pro Tem Baudhuin noted that last year, some projects were delayed in order to keep the
levy as low as possible. He asked if staff had information on the impact of delays from last year
to this year. Ms. Cruver stated that staff can investigate this question and report back to the
council.
Council Member Budd asked if there was a possibility of using $1 million of the $10 million
development fund to drop the levy by two percentage points. Ms. Cruver noted that using one-
time funds to reduce the property tax levy will create a fiscal cliff next year. If the property tax
levy were reduced without also reducing spending, the levy would need to be increased by an
additional two percentage points next year just to get back to base level. This is why staff has
been careful about using one-time funds to pay for ongoing costs.
Ms. Cruver stated that if the council would like to make changes, the CIP is a good roadmap to
use when considering which projects can be delayed, such as new spending items. However,
any decision to delay will just move a project down the road to be paid for later.
Council Member Dumalag shared that she had been asked to speak to a group about the impact
that federal legislation would have for St. Louis Park residents. If the city finds that residents are
struggling due to cuts to a variety of federal services such as Medicaid, where would the city
stand up programs to partner with nonprofit organizations? In response to a community that is
struggling, she is concerned about residents being able to stay in St. Louis Park and asked where
funds might come from. Ms. Cruver stated the general fund levy is the most flexible source of
revenue. However different layers of government are charged with providing different services,
for example most health and welfare programs are funded through the county and not the city,
so the city would need to get creative on how to respond to community needs without
absorbing the roles of other municipal bodies
Council Member Brausen stated he supports policy consideration #1 and added that staff have
done amazing work that is appreciated. He stated he supports the 2026 budget as drafted and
would like to see the climate fund increased by another $50,000 as well.
Council Member Dumalag added that she is also supportive of policy consideration #1 . She
stated the Louisiana Avenue and Oxford Street is an important infrastructure investment
project and will help mitigate flooding in the creek as well.
Council Member Budd stated she supports both policy considerations and noted she is open to
any creative improvements. She stated she is not supportive of the 10% increase in the
franchise fees and then dropping them to 2.5% after that, adding she got a lo t of feedback on
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that from people on a fixed income. Ms. Cruver stated this can be looked at again and
negotiated with the utility companies.
Council Member Farris stated she also supports both policy considerations. She stated that if
the council does not decide to increase the franchise fee now, they will have to increase them
in the future.
Mayor Pro Tem Baudhuin presented Council Member Rog’s comments: Council Member Rog
stated she is concerned about the park items in the budget, noting she is in favor of adding
$50,000 to the climate action plan as well. Overall, she is concerned about the 10% increase in
franchise fees but does not have enough information at this time to take a position. She
supports both policy considerations but has concerns about a levy of 8%.
Mayor Pro Tem Baudhuin stated he is also in favor of both policy considerations and noted he
would like to look at the results from items that were delayed last year. His primary concern is
communication and what to communicate. The budget process is difficult and the community
cannot have all the services that the city provides as well as having very low taxes. He wants to
be sure the fees and levies are communicated to residents effectively and positively in a way
that shows how the city does its due diligence to trim and cut where appropriate. He is also in
favor of adding $50,000 to the climate action plan and presenting how the federal changes in
climate action directly affect the city’s core values.
Ms. Keller stated the preliminary levy would be at 8% with an increase of $50,000 to the climate
action plan.
Council Member Brausen stated the preliminary levy last year was double digits and it
decreased to 7%. He stated the messaging needs to include that aid from the federal
government for climate action is no longer supportive, so it will be up to the city to support
climate action, adding that this makes a real statement.
Ms. Cruver stated that staff will be working on communications, including the annual financial
report, which is online and interactive, and will be sent to the council for review. After that,
department financial updates will be rolled out and total city spending and revenues will be
posted on the city website and in publications.
It was the consensus of the city council to support policy considerations #1 and #2.
The meeting adjourned at 8:47 p.m.
______________________________________ ______________________________________
Melissa Kennedy, city clerk Paul Baudhuin, mayor pro tem
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