The most pressing topic was the proposed budget for 2025, which outlines a 3.08% increase in operational expenses. This increase is driven by union contracts and adjustments for city staff. The budget also includes capital improvement requests totaling $2.5 million, which the city can no longer fund from reserves due to their depletion. To address this, the proposed budget allocates $450,000 from the general fund for capital improvement projects.

The proposed preliminary tax levy for 2025 represents a 99.3% increase, resulting in an estimated total increase of $947 for the average homeowner. This substantial rise will support general fund operations, city hall reserves, and street improvement debt. Finance Director Tom Odin presented further details, emphasizing that the preliminary tax levy must be certified to the county by the end of the month. The breakdown of the levy includes 85% for the general operating budget, 10% for street debt, and 5% for city hall reserves.

Odin also discussed the planning for a future city hall, noting that levying funds began in 2022. The city’s growing tax base would allow for increased funding over time. Additionally, the city has initiated street improvement projects since 2022, requiring steady levies to cover the debt service obligations. The council will continue to refine the budget and hold a truth-in-taxation hearing in December to finalize the levy for 2025.

During the discussions, concerns were raised about setting a preliminary budget that seemed higher than some council members were comfortable with. The staff recommended this approach to allow for necessary adjustments as new information, such as health insurance costs, becomes available. It was emphasized that the preliminary budget reflects the best estimates based on current data and provides a cushion for unforeseen expenses.

The council also debated involving department heads in the budget discussions to identify potential areas for reductions. It was confirmed that department heads had been consulted since early May regarding their requests, which informed the proposed budget. Adjustments to the budget may be made in future presentations, though these changes are not expected to alter the preliminary figures.

Another topic was the allocation of funding from the capital investment fund. The council plans to allocate only $450,000, leaving limited resources for departmental needs, including a critical replacement of a snow plow that has not been updated since 2017. A potential loss of $1.9 million if budgetary constraints are not addressed added urgency to the discussion. The motion to approve this allocation passed unanimously.

The council also authorized the purchase of a new hazardous materials decontamination system for the fire department, using American Rescue Plan Act (ARPA) funds. The existing system, operational for over two decades, is outdated and in disrepair. The new system, costing $24,418.96, was approved unanimously. Additionally, the purchase of a set of rescue struts for the fire department was authorized, funded by public safety funds from the state of Minnesota. The lowest bid was $6,800 from Alex Air Apparatus, and the motion passed unanimously.

A request to set a public hearing concerning the vacation of drainage and utility easements for the Waterview senior housing project was also discussed. The proposal includes adjusting from six-foot to ten-foot easements in the area. The Municipal Utilities Commission had approved the petition, and the council agreed to set the public hearing without opposition.