01-09-2023 City Council Work Session MinutesCHANHASSEN CITY COUNCIL
WORK SESSION
MINUTES
JANUARY 9, 2023
COUNCIL MEMBERS PRESENT: Mayor Ryan, Councilman McDonald, Councilwoman Schubert,
and Councilman von Oven.
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; Jerry Ruegemer, Park
& Recreation Director; Rick Rice, IT Manager; Ari Lyksett, Communications Manager; and Kim
Meuwissen, City Clerk.
PUBLIC PRESENT:
Jessica Cook, Ehlers Public Finance Advisors
Kyle Sawyer, Ehlers Public Finance Advisors
Bill Maloney, 7211 Frontier Trail
Wesley Erpelding, 9061 Springfield Drive
Bryan Harjes, HKGi
Mayor Ryan called the Work Session to order at 5:30 p.m.
UTILITY RATE STUDY PRESENTATION
Public Works Director/City Engineer Charlie Howley introduced Jessica Cook and Kyle Sawyer from
Ehlers Public Finance Advisors. Ms. Cook has worked with the city for the past 20 years conducting the
rate study annually and the city has followed recommendations which kept the city in a really good
financial position. This year there have been some changes as a result of the city desiring to accomplish
more road projects, which also includes more utilities. Ms. Cook shared a PowerPoint presentation and
stated that the purpose of utility rate study is to fund road projects, ensure utilities are self-sufficient,
model Avienda development, and estimate bill impacts. She reviewed the 2020 rate study
recommendations and outlined what has changed since then. The Capital Improvement Plan has
increased mostly due to road projects, and staff costs have been studied and reallocated from the general
fund to utilities according to time spent, with the biggest impact being to the Storm Water Fund. Growth
assumptions were updated and two growth scenarios were analyzed, with and without SAC units in the
Avienda development. Ms. Cook shared a slide showing the impact of growth assumptions to hook-up
fees and user revenues. Growth generates hook-up fees to pay for expanding infrastructure and water
treatment plant debt service, and more user revenues are generated with new customers. Higher revenues
from growth lessens rate increases and also impacts debt needed to finance capital projects. Other key
assumptions included a 6% annual increase in Metropolitan Council Environmental Services (MCES)
charges, a personnel cost increase of 5% annually, and an increase to non-personal operating costs of 3%
annually. This analysis did not review the current water rate structure, just inflationary increases only as
the current rate structure is consistent with industry standards.
Ms. Cook shared Ehlers’ rate recommendations for the water, sanitary sewer, and storm water utility rate
increases and provided graphs showing projected year end cash balances for each. Sample residential
and commercial utility bills were also presented showing what charges would be with and without the
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Avienda development. Proposed 2023 hook-up fees were presented as well as future annual increases of
3.5% for water and sewer. A community comparison was also shared for hook-up fees.
Following her presentation, Ms. Cook outlined the following next steps:
• Obtain council feedback on the proposed rates.
• Adopt the proposed 2023 rate increases.
• Refine the rate study based upon council direction and schedule a future meeting to review rates
for 2024 and beyond.
Council asked questions and discussed the results of the utility rate study. City Manager Laurie
Hokkanen mentioned that adoption of an ordinance establishing the 2023 city fee schedule is currently
scheduled on the January 23, 2023 city council agenda. The council requested staff present comparisons
of different cost options to the utility rate study for council to review at the January 23 city council work
session prior to adopting the 2023 fee schedule ordinance.
DISCUSS LEGISLATIVE REQUESTS AND PROCESS
City Manager Laurie Hokkanen stated that the city has hired Lockridge, Grindal, Nauen to represent
Chanhassen at the legislature on the following legislative priorities:
• Local Option Sales Tax (LOST) to fund a public-private partnership for a recreational facility at
Avienda. The next steps include:
o Adopt a resolution on January 23, 2023
o Developer Mark Nordland to attend the January 23 work session to discuss the Avienda
project
o Consider adopting LOST resolution on January 23
o FlashVote survey on desired amenities
• Seek sales tax exemption on construction materials for the civic campus project. The League of
Minnesota Cities is currently seeking a local government sales tax exemption for construction
materials and are optimistic for approval this year.
• Bonding bill request for possible state capital contribution to the Avienda recreational facility.
Ms. Hokkanen provided a list of 21 cities that had sales tax ballot questions in 2022. Voters approved 18
of the 21 projects.
DISCUSS CITY COUNCIL VACANCY
Mayor Ryan explained the selection process to fill the current city council vacancy created by former
Councilmember Lucy Rehm being elected to the house of representatives. A total of 11 applications
were received. Mayor Ryan polled the council on their top candidates. Council selected the following
candidates to be interviewed at a special city council meeting on January 18 starting at 6:00 p.m. in the
Fountain Conference room:
• Mark Randall
• Josh Kimber
• Luke Bame
• Kelsey Alto
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Ms. Hokkanen stated she would contact the applicants selected to be interviewed and schedule the 30-
minute interviews on January 18. She will also contact the remaining applicants. Interview questions
will be provided for council review prior to January 18. Appointment will occur at the January 23 city
council meeting.
FUTURE WORK SESSION SCHEDULE
Date Item
January 23
• Avienda Recreational Facility Discussion
• Civic Campus Update
• Utility Rate Study Discussion
February 13 •
February 27 • Commission Interviews
March 13 • Commission Interviews
March 20 •
The work session adjourned at 7:35 p.m.
Submitted by Laurie Hokkanen
City Manager
Prepared by Kim Meuwissen
City Clerk