11-14-2022 City Council Work Session MinutesCHANHASSEN CITY COUNCIL
WORK SESSION
MINUTES
NOVEMBER 14, 2022
COUNCIL MEMBERS PRESENT: Mayor Ryan, Councilman McDonald, Councilwoman
Rehm, Councilwoman Schubert, and Councilman Campion.
COUNCIL MEMBERS ABSENT: None.
STAFF PRESENT: Laurie Hokkanen, City Manager; Matt Unmacht, Assistant City Manager;
Charlie Howley, City Engineer/Public Works Director; Kelly Grinnell, Finance Director; Don
Johnson, Fire Chief; Jerry Ruegemer, Park & Recreation Director; Rick Rice, IT Manager; and
Kim Meuwissen, City Clerk.
PUBLIC PRESENT: None.
Mayor Ryan called the Work Session to order at 5:30 p.m.
2023 PRELIMINARY BUDGETS, LEVY AND CIP
Finance Director Kelly Grinnell reviewed in detail the following topics with the City Council:
• 2023 Governmental Funds Budgets
• Preliminary 2023-2027 CIP
• Property Tax Levy Options
• Enterprise Fund Budgets and CIP
• Next Steps/Council Questions
2023 Governmental Funds Budgets
Ms. Grinnell defined the General Fund as the primary operating fund for the City, the four
Special Revenue Funds which have dedicated funding sources (Charitable Gambling, Cemetery,
Cable Franchise, and ARPA), the eight Capital Funds used to account for purchase/replacement
of equipment, vehicles, buildings, streets, and other improvements (Vehicle & Equipment
Replacement, Facilities, Park Renovation, Park Development, Transportation Infrastructure
Management, TIF 11, TIF 12, and Pavement Management), and the Debt Service Fund which is
used to account for the repayment of bonds issued to construct the Public Works Facility.
Slides were presented showing General Fund revenue and expenditure comparisons from the
2022 budget to the 2023 preliminary budget. Key changes were reviewed within the Public
Safety, Public Works, Community Development, and Parks & Recreation Departments.
Ms. Grinnell provided 2023 revenue and expenditure highlights and projected ending fund
balances for the Special Revenue Funds, Capital Funds, and the Debt Service Fund.
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Preliminary 2023-2027 CIP
Ms. Grinnell linked the City’s strategic priorities of Financial Sustainability and Asset
Management to Capital Funds and provided a detailed review of each of these funds.
Park and Recreation Director Jerry Ruegemer and Park Superintendent Adam Beers presented
details of the 2023 Playground Replacement CIP, identifying priorities and replacement cost
estimates for Sugarbush, Carver Beach, and South Lotus Lake Parks totaling $250,000. These
parks are a top priority because they are not in compliance with major entrapment points, not in
ADA compliance with base material, replacement parts do not fit with current design requiring
staff to modify non-compliant components, and rubber coating on deck corners and surfaces are
temporarily fixed with “spray can rubber coating.” City Council asked questions and discussed
funding options for these improvements.
Regarding the Transportation Infrastructure Management (TIM) Fund, Mayor Ryan asked Public
Works Director/City Engineer Charlie Howley to provide detail on the need for trail
improvements, and the pavement Overall Condition Index (OCI). Mr. Howley reviewed the
proposed trail/parking lot repairs/rehabilitation CIP and the need for additional levy funds to
allow for more trail maintenance and to raise the OCI of trails.
Ms. Grinnell presented a graph of the 2023-2027 TIM Fund showing the decrease in fund
balance and increase in expenditures if current funding is maintained. An additional levy of
$195,000 for trail rehabilitation is needed to balance this fund.
Pavement Management Fund projects planned for 2023-2027 were reviewed and a bar chart was
presented showing a discrepancy between expenditures and the fund balance.
Property Tax Levy Options
Ms. Grinnell reminded the Council that a preliminary levy of 7.2% was adopted in September.
Four different 2023 levy scenarios were presented at 5.2%, 5.9%, 6.2% and 7.2%. Each of these
scenarios were applied to various home values as well as businesses to show the specific annual
and monthly tax impacts for each. Levy projections with a 7.2% increase (with smoothing) were
shown through 2027.
Enterprise Fund Budgets and CIP
Ms. Grinnell reviewed the preliminary 2023 Enterprise Fund budgets. Highlights include capital
expenses associated with street reconstruction and improvements projects and debt service
principal, Ehlers is currently working on a rate study with results available in December, and
there is no levy for these funds as revenues come from utility bills and connection fees. The
preliminary 2023-2027 CIP budget includes water fund projects of a new well, water tower, and
lower Bluff Creek trunk utility improvements. It was noted that utility improvements associated
with street reconstruction make up a significant portion of the CIP.
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Questions/Next Steps
Ms. Grinnell presented the following questions for Council discussion:
• Should the levy for the TIM fund increase to cover trail rehabilitation?
• If there is no levy for the Park Renovation Fund, should General Fund reserves be used
for projects?
• What are Council thoughts on the preliminary CIP presented?
• What should the final levy amount be?
The Council discussed the various levy options and scenarios and their level of support for each.
Mayor Ryan asked to review this item again at the November 28, 2022 City Council Work
Session.
The Truth-in-Taxation public meeting and levy/budget adoption is scheduled for December 12,
2022 at 7:00 p.m.
FINANCIAL POLICIES UPDATE
This item was not presented due to time constraints.
FUTURE WORK SESSION SCHEDULE
Date Item
November 28 • 2023 Levy Discussion
• Emerald Ash Borer Update
• Tree Policy Discussion
• Discuss Local Option Sales Tax
• Discuss 2023 Legislative Priorities
• Discuss City Council Appointment
December 12 • Work Session Cancelled
January 9 •
January 24 • Civic Campus Update
The work session adjourned at 6:58 p.m.
Submitted by Laurie Hokkanen
City Manager
Prepared by Kim Meuwissen
City Clerk