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Home My WebLink About07-28-2025 AGENDA CITY COUNCIL WORK SESSION July 28, 2025 - 6:00 PM Lakeville City Hall, Marion Conference Room Members of the public can participate in person at Lakeville City Hall, Marion Conference Room. Members of the public may join the meeting via Teams Meeting, Meeting ID: 271 518 804 899 or by calling Toll Number 1-323-433-2142; Conference ID: 317 513 434#. The mayor will allow for public comments and questions at the appropriate time. The City Council is provided background information for agenda items in advance by staff and appointed commissions, committees, and boards. Decisions are based on this information, as well as City policy, practices, input from constituents, and a council member’s personal judgment. 1. Call to order, moment of silence and flag pledge 2. Citizen Comments 3. Discussion Items 20 min a. Youth Advisory Commission Update Taylor Snider 20 min b. Rail Storage Update Zach Johnson, Tina Goodroad 30 min c. Electric Bike Ordinance Discussion Joe Masiarchin 30 min d. Short-Term Rental Discussion Tina Goodroad 15 minutes e. Preliminary 2024 Financial Statements Audit Review Julie Stahl 4. Items for Future Discussion 5. Committee/ City Administrator Updates 6. Adjourn Page 1 of 13 Date: 7/28/2025 Youth Advisory Commission Update Proposed Action None Overview The Youth Commission will be giving an update on its year to the Council. They are appreciative of any feedback that Council may have for them as their term comes to an end in September. Supporting Information None Financial Impact: $0 Budgeted: No Source: Envision Lakeville Community Values: A Sense of Community and Belonging Report Completed by: Taylor Snider, Assistant to the City Administrator Page 2 of 13 Date: 7/28/2025 Rail Storage Update Proposed Action No specific action is required; the presentation is for update purposes. Overview Over the past several months, we have been working closely with Compass Rail Services (in Partnership with Progressive Rail) who will be constructing a new facility in Lakeville to accommodate rail car storage. On July 22nd, Compass Rail Services closed on the property (PID 13-00500-01-013) for this development. Annexation by ordinance proceedings will begin shortly. Dan Schmittdiel, of Compass Rail Services, has requested the opportunity to provide an update to the council at the work session. Zach Johnson, City Engineer, will also have a brief presentation. Supporting Information None Financial Impact: $ Budgeted: No Source: Envision Lakeville Community Values: Diversified Economic Development Report Completed by: Tina Goodroad, Community Development Director Page 3 of 13 Date: 7/28/2025 Electric Bike Ordinance Discussion Proposed Action No formal action, for discussion. Overview With the growing popularity of electric bikes (e-bikes) and scooters, staff has noted increased traffic of non-traditional bicycles on city sidewalks, trails and pathways. Staff has received feedback from residents and trail users expressing the need for clear guidance and regulations on e-bike usage throughout public trails and pathways. Staff reached out to surrounding communities to determine what policies already exist. In doing so, it was determined that most municipalities refer to the Minnesota Department of Natural Resource’s guidance on the usage of e-bikes. In collaboration with the Police Department, staff has drafted a policy that leverages the state’s language as well guidance that has been implemented in nearby communities. The Parks, Recreation and Natural Resources Committee reviewed and provided commentary on the draft policy at their June 4 meeting. They are in agreement that clear guidance is needed as the number of non-traditional bikes continues to increase on City trails and pathways. Staff is asking for feedback from the city council about next steps related to this policy. Supporting Information 1. Draft E-Bike Policy Financial Impact: $NA Budgeted: No Source: NA Envision Lakeville Community Values: Safety Throughout the Community Report Completed by: Joe Masiarchin, Parks & Recreation Director Page 4 of 13 • • • • • • • • o Page 5 of 13 Date: 7/28/2025 Short-Term Rental Discussion Proposed Action Provide direction to staff on how to proceed with ordinance amendment related to short-term rentals Overview The City of Lakeville allows short-term rentals subject to approval of an administrative permit under the following requirements: Renting of rooms within an owner-occupied dwelling unit to not more than two (2) individuals who are each unrelated to the principal family as an accessory use provided that: 1. The property owner shall not enter into a rental agreement with more than two individuals within a 30-day period. 2. There shall be one off-street parking stall provided for each rental occupant of the property in addition to the parking stalls required by chapter 19 of this title. This language is included in the Uses by Administrative Permit section in all the residential zoning districts. Based on this language, it has been interpreted in the past that only rooms can be rented, rather than the entire house, and that the owner must reside in the home at the same time as the renter. Staff prepared research from eight cities that have an ordinance for short-term rentals. Requirements vary, but the majority have some type of license, allow rental of the entire home, and do not require the owner to be present. Additional requirements include limits on how many licenses will be permitted. Discussion Staff is seeking direction on how short-term rental requirements could be clarified: 1. Add a definition of short-term rental in the zoning ordinance. 2. Create a separate ordinance section for short-term rentals. 3. Review residential zoning districts that short term rentals should be allowed 4. Clarify if renting the whole house is allowed. Page 6 of 13 5. Clarify if the home must be homesteaded and whether the owner must be on site during the rental. 6. Other considerations: must provide off-street parking, do we want to require a license or registration and fee; do we want any limit on the number of short-term rentals? 7. Amend the Rental Registration ordinance to clarify if it is in effect for any rental 30 days or longer. Based on discussion, staff will prepare appropriate zoning ordinance amendments. Supporting Information 1. Short-Term Rental Research table Financial Impact: $0 Budgeted: No Source: Envision Lakeville Community Values: Safety Throughout the Community Report Completed by: Tina Goodroad, Community Development Director Page 7 of 13 CityType Renewal Fee GuestsParkingAmount of Home Lodging Tax AdditionalBurnsvilleLicense Annual $62Not specifiedNot specified AllMonthly reportMust be homestead and notify neighborsChanhassenLicense Annual $200Two adults per bedroom, plus an additional two adults. Accompanying children don't count towards the limit.Max four vehicles outsideAllNot mentionedGood Neighbor BrochureHopkinsCUP$150No more than 6 adults and their dependent childrenNot mentioned AllNot mentionedNot allowed on lots occupied by ADUsMinnetonkaRegistration Annual$0Not specifiedNot specified AllNot mentionedRosemountLicense Biannual $50Two times number of bedrooms rented plus oneNo on-street parking AllNot mentionedIf not owner-occupied, owner must reside within 30 miles.RosevilleLicense Annual $559.86One family or four unrelated adults to occupy a single family rental unitNot specified AllYesA. "Non-owner occupied." B. Can't be more often than "one every seven days (Oct 1-May 1) and one every ten days (May 1-Oct 1). C. Licensed properties must be 500 feet apart.SavageLicense Annual $25Two adults per bedroom, plus an additional two adults. Accompanying childrend don't count towards the limit.Two vehicles plus one for each available garage stallBedrooms only. Property owner must remain on-site during rentalsNot mentionedOwner background checks. Only 12 licenses are issued annually in the City (first-come).ShoreviewLicense Annual $150Not specifiedNot specified AllNot mentionedIf owner lives outside 7-county metro, an agent who does is required.Short Term Rental PoliciesPage 8 of 13 Date: 7/28/2025 Preliminary 2024 Financial Statements Audit Review Proposed Action Discussion only Overview The City's 2024 audit is nearly complete and currently undergoing final report review. The auditors, CliftonLarsonAllen (CLA), reported no findings in their review of the City's 2024 financial activity and transactions. The City has filed extensions with both the Office of the State Auditor and the Government Finance Officers Association for the 2024 Annual Comprehensive Financial Report. The final report will be presented to the City Council for acceptance at a meeting in August. The attached General Fund and Enterprise Funds reports are provided to inform the Council of their current status ahead of the 2026 budget work sessions. Debt Service Funds continue to meet statutory obligations, and Capital and Special Revenue Funds are tracking as expected. Supporting Information 1. 2024 Financials excerpts_General-Enterprise Funds Financial Impact: $ Budgeted: Yes Source: Property Taxes, Utility Fees, and Liquor Sales Envision Lakeville Community Values: Good Value for Public Service Report Completed by: Julie Stahl, Finance Director Page 9 of 13 2024 2024 2024 VARIANCE ORIGINAL FINAL ACTUAL WITH FINAL BUDGET BUDGET AMOUNTS BUDGET +(-) REVENUES PROPERTY TAXES 29,821,150 29,821,150 29,513,139 (308,011) LICENSES & PERMITS 3,262,810 2,962,810 3,200,703 237,893 INTERGOVERNMENTAL 1,596,841 1,904,208 2,172,655 268,447 CHARGES FOR SERVICES 3,059,510 3,224,220 3,869,599 645,379 FINES 240,000 240,000 222,790 (17,210) SPECIAL ASSESSMENTS 0 0 9,321 9,321 INTEREST INCOME 311,190 611,190 470,764 (140,426) INCRS/(DECRS) IN FAIR MKT VAL 0 0 398,037 398,037 PROCEEDS - CAPITAL ASSET SALES 6,860 29,260 20,070 (9,190) DONATIONS 45,200 45,200 76,289 31,089 MISCELLANEOUS 32,024 32,024 70,471 38,447 TRANSFERS FROM OTHER FUNDS 1,276,571 226,998 226,998 0 Total REVENUES 39,652,156 39,097,060 40,250,839 1,153,779 EXPENDITURES GENERAL GOVERNMENT 9,416,561 8,688,235 8,119,871 568,364 PUBLIC SAFETY 19,099,677 19,391,474 19,567,229 (175,755) PUBLIC WORKS 6,887,988 6,544,259 5,613,790 930,469 CULTURE & RECREATION 5,776,344 5,988,916 6,052,703 (63,787) Total EXPENDITURES 41,180,570 40,612,884 39,353,593 1,259,291 Net Change in Fund Balance (1,528,414)(1,515,824)897,246 2,413,070 BEGINNING FUND BALANCE 22,372,997 22,372,997 22,372,997 FUND BALANCE ADJUSTMENTS 64,136 ENDING FUND BALANCE 20,844,583 20,857,173 23,334,378 Restricted Fund Balance (Public Safety)1,850,000 Fund Balanced - Net of Restricted FB 21,484,378 Unasssigned FB - % of 2025 BUDGET 49.4% CITY OF LAKEVILLE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL FUND Period Ending 12/31/2024 Page 10 of 13 General Fund ASSETS Current assets Cash and investments 31,222,478$ Interest receivable 114,920 Taxes receivable 2,090,389 Accounts receivable 716,281 Special Assessments Receivable 136,153 Leases and financed purchases receivable 40,292 Inventory 308,206 Prepaid expenses 44,559 Total Assets 34,673,278 LIABILITIES AND FUND EQUITY Current liabilities Salaries payable 680,886$ Accounts payable 1,090,054 Contracts payable - Deposits payable 8,228,705 Unearned revenue 190,325 Total current liabilities 10,189,970 Deferred Inflows Of Resources Unavailable revenues - taxes 361,737 Unavailable revenue - special assessments 749,054 Leases and financed purchases 38,140 Unavailable revenue - other - Total Deferred Inflows of Resources 1,148,931 Total liabilities 11,338,901 FUND BALANCE Nonspendable 352,767 Restricted 1,850,000 Committed - Assigned - Unassigned 20,234,366 Total Fund Balance 22,437,133 Total Liabilities/Deferred Inflows/Fund Balance 33,776,034 Beginning Fund Balance - January 22,372,997 Fund Balance Prior Period Adjustment 64,136 Net Change in Fund Balance - 2024 897,245 Ending Fund Balance - December 23,334,378 CITY OF LAKEVILLE BALANCE SHEET - GENERAL FUND DECEMBER 31, 2024 Page 11 of 13 2024 2023 2024 2023TotalTotalTotalTotal Operating revenues Street light use fees 1,297,348$ 1,231,279$ -$ -$ Water sales 8,225,448 10,278,864 - - Sewer use fees 9,488,268 8,929,881 - - Storm sewer fees 2,085,418 1,937,325 - - Liquor Sales 22,612,689 22,692,555 Liquor COGS (16,331,345) (16,474,955) Other 191,200 338,353 - - Total operating revenues 21,287,682 22,715,702 6,281,344 6,217,600 Operating expenses Personnel services 3,394,004 3,470,613 3,004,335 3,184,837 Commodities 810,496 845,869 72,670 111,455 Other charges and services 3,974,651 4,860,980 1,162,483 1,185,729 Major maintenance not capitalized 1,936,950 2,342,698 - - Disposal charges 5,382,250 5,066,715 - - Depreciation 6,703,894 6,007,119 752,031 673,810 Total operating expenses 22,202,245 22,593,994 4,991,519 5,155,831 Operating income (loss)(914,562) 121,708 1,289,825 1,061,769 Non-operating revenue (expense) Intergovernmental - grants 178,555 1,028,276 38,882 163 Investment income (charges)672,633 528,470 126,406 220,137 Change in Fair Value of investments 569,101 574,013 - - Interest and fiscal charges (120,540) (133,289) - (39,607) Disposal of capital assets 11,189 (9,017) - - Total other revenue (expense)1,310,939 1,988,453 165,288 180,693 Income (loss) before Contributions/Transfers 396,376 2,110,161 1,455,113 1,242,462 Contributed assets from developers 9,831,445 5,739,878 - - Contributed assets from City 1,264,516 5,042,714 - - Transfers to General Fund - (342,169) (30,000) (30,000) Transfers to Debt Service Fund (523,569) (519,319) (750,450) (748,883) Transfers to Capital Project funds (293,500) (67,500) (559,500) (2,899,846) Transfers from other funds - - - 2,354,946 Total 10,278,893 9,853,604 (1,339,950) (1,323,783) Change in Net Position 10,675,269 11,963,765 115,163 (81,321) Net Position - Beginning of Year 208,198,790 196,235,025 12,869,551 12,950,872 Net Position - Prior Period Adjustment 4,352,162 - - - Net Position - End of Year 223,226,221$ 208,198,790$ 12,984,714$ 12,869,551$ Liquor FundUtility Funds CITY OF LAKEVILLE ENTERPRISE FUNDS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION YEAR ENDED DECEMBER 31, 2024 With Comparative Totals for Year Ended December 31, 2023 Page 12 of 13 Utility Liquor 2024 2024 Current assets Cash and investments 29,904,370$ 3,627,065$ Interest receivable 164,272 16,723 Accounts receivable 6,142,966 - Inventory 330,337 2,085,150 Prepaid expenses 14,413 - Total current assets 36,556,358 5,728,938 Non-current assets Land 585,087 3,087,882 Buildings/Other Improvements 26,234,314 12,246,017 Machinery and equipment 8,306,227 765,513 Infrastructure 264,154,977 - Accumulated depreciation (101,910,274) (2,492,838) Net capital assets 197,370,331 13,606,574 Total assets 233,926,689 19,335,512 Deferred Outflows Of Resources Deferred pension resources 210,577 242,185 210,577 242,185 LIABILITIES AND FUND EQUITY Current liabilities Salaries payable 81,797$ 297,803$ Accounts payable 397,285 761,967 Contracts payable 89,624 - Accrued interest payable 119,100 2,930 Deposits payable 9,900 6,817 Unearned revenue 107,800 37,921 Long-term debt/Leases-current - 815,000 Total current liabilities 805,506 1,922,438 Non-current liabilities Accrued compensated absences 371,631 - Net pension liability 866,900 839,250 Net OPEB obligation 102,088 104,096 Unamortized bond premium 555,730 - Long-term debt / Lease Payable 7,585,000 3,047,078 Total non-current liabilities 9,481,349 3,990,424 Total liabilities 10,286,855 5,912,862 Deferred Inflows Of Resources Deferred pension resources 662,083 680,117 662,083 680,117 Net assets Invested in capital assets 189,372,445 295,133 Unrestricted 33,853,777 12,574,420 Total net position 223,226,222 12,869,553 CITY OF LAKEVILLE STATEMENT OF NET ASSETS - ENTERPRISE FUNDS DECEMBER 31, 2024 Page 13 of 13