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4-28-2025 City Council Conference Meeting April 28, 2025 5:30 PM Fridley City Hall, 7071 University Avenue N.E. Agenda Agenda 1.Zoning Code Recodification Process Update 2.2026 Budget Outlook & Objectives 3.Finance Update March 2025 Year-to-Date Accessibility Notice: If you need free interpretation or translation assistance, please contact City staff. Si necesita ayuda de interpretación o traducción gratis, comuníquese con el personal de la ciudad. Yog tias koj xav tau kev pab txhais lus los sis txhais ntaub ntawv dawb, ces thov tiv tauj rau Lub Nroog cov neeg ua hauj lwm. Haddii aad u baahan tahay tarjumaad bilaash ah ama kaalmo tarjumaad, fadlan la xiriir shaqaalaha Magaalada. Upon request, accommodation will be provided to allow individuals with disabilities to participate in any City of Fridley services, programs or activities. Hearing impaired persons who need an interpreter or other persons who require auxiliary aids should contact CityClerk@FridleyMN.govor (763) 572-3450. 1 Jufn!2/ AGENDA REPORT Meeting Date:April 28, 2025 Meeting Type:City CouncilConference Meeting Submitted By:Scott Hickok, Community Development Director Stacy Stromberg, Planning Manager Nancy Abts, Associate Planner Title Zoning Code Recodification Process Update Background Planning staffalongwith the help of HKGi, a local planning consultingfirm,started the recodification process for the zoning code with a kickoffmeeting with the Council and the Planning Commission (Commission)in February 2024. We held workshops with the Planning Commission in April, June and September and then held a wrap up meeting with the City Council(Council)and Commission in November. Since November, staff and the consultant worked on the final draft, reducing the 400-pagedocument to 244. The draft has since been reviewed by the City Attorney and the City Clerk. A public hearing was held before the Planning Commission on April 16, 2025, with a unanimous recommendation of approval. Prior to the May 12, 2025, public hearing before the Council, staff will review the document with the Council and answer any questions. The key changes and new content are outlined in the attached document. The full copy of the Zoning Code that was approved by the Planning Commission can be viewed in their https://www.fridleymn.gov/Your-Government/City-Council- th Commissions/Agenda-Center. The Council will receive a full copy of the document in their May 12 meetingpacket. Focus on Fridley Strategic Alignment X Vibrant Neighborhoods &Places X Community Identity &Relationship Building X Financial Stability & Commercial Prosperity X Public Safety & Environmental Stewardship X Organizational Excellence Attachments and Other Resources Outline with key changes and new content Vision Statement We believe Fridley will be a safe, vibrant, friendly and stable home for families and businesses. 2 Jufn!2/ 3 Jufn!2/ 4 Jufn!2/ 5 Jufn!2/ 6 Jufn!2/ 7 Jufn!2/ 8 Jufn!2/ 9 Jufn!3/ AGENDA REPORT Meeting Date:April 28, 2025 Meeting Type:City Council Conference Meeting Submitted By:Joe Starks, Finance Director/City Treasurer Title 2026Budget Outlook & Objectives Background Finance Staff andCityCouncil(Council)will have their first discussion related to the 2026Budget. Items to be discussed include the State and Federal outlook and projections, considerations and assumptions to be used for the 2026Budget and any objectives and guidance the Council deems important as the budget is developed. Key dates in the 2026Budget process will also be highlighted. Focus on Fridley Strategic Alignment Vibrant Neighborhoods &PlacesCommunity Identity &Relationship Building X Financial Stability & Commercial ProsperityPublic Safety & Environmental Stewardship X Organizational Excellence Attachments and Other Resources Budget Presentation Vision Statement We believe Fridley will be a safe, vibrant, friendly and stable home for families and businesses. 10 Jufn!3/ OUTLOOK AND OBJECTIVES 2026 BUDGET APRIL 28, 2025 11 Jufn!3/ OVERVIEW ¤2024 General Fund Budget Performance & 2025 Budget ¤Budget Planning Projections for 2026 Budget ¤LongÏTerm Financial Plan ¤Economic Expectations ¤Impacts on 2026 Budget ¤Property Tax Levy ÏTrend & Potential Levy Impacts for 2026 ¤Next Steps and Other Considerations, Objectives, Guidance Ћ 12 Jufn!3/ GENERAL FUND 2024 BUDGETPERFORMANCE(U NAUDITED) & 2025 ADOPTEDBUDGET Ќ 13 Jufn!3/ GENERAL FUND, REVENUES ¤For Fiscal Year 2024, actual revenues were over budget by approximately $432,900 ¤Largely due to investment earnings, intergovernmental aid and reimbursements Ѝ 14 Jufn!3/ GENERAL FUND, EXPENDITURES ¤For Fiscal Year 2023, actual expenditures were below budget by approximately $656,200. ¤Largely due to savings in contractual/professional services and unfilled/vacant positions Ў 15 Jufn!3/ GENERAL FUND, BALANCE HISTORY General Fund Balance History, 2015-2024 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- 2015201620172018201920202021202220232024 Working Capital 35%Working Capital 50%Fund Balance Џ 16 Jufn!3/ LONGÏTERM FINANCIAL PLAN 2026 B UDGET А 17 Jufn!3/ FRIDLEYÔS FINANCIAL STRENGTH ¤Aa2 credit rating ¤Strong Financial Position (healthy fund balance and cash balance) ¤Strong financial policies & practices ¤Conservative budgetary approach ¤Multi-year operating and capital budget forecasting ¤Clean Financial Audit ¤City Awards ¤Certificate of Achievement for Excellence in Financial Reporting ¤Popular Annual Financial Reporting Award ¤Distinguished Budget Presentation Award Б 18 Jufn!3/ LONGÏTERM FINANCIAL PLAN ¤Consistent with the Vision Statement and Organizational Values of the City, the Planning 2026 Budget seeks to provide excellent public services at a fiscally responsible cost ¤Under this general goal, the City relies upon a series of guidelines to inform the development of the annual budget: ¤Stabilize ongoing revenues and expenditures, and minimize/eliminate unanticipated variances ¤Maintain structural balance and appropriate cash/fund balance levels ¤Make best use of existing City resources ¤Set the levy in conjunction with long-term plans to mitigate Ñpeaks and valleysÒ and Ñpushing it down the roadÒ ¤Provide accountability and trans ¤Conservative budgetary approach В 19 Jufn!3/ ECONOMIC EXPECTATIONS ¤State Forecast ¤The StateÔs projected budget surplus for FY 2026-27 is currently $456 million, down from $3.7 billion at this time last year and $17.5 billion the year before ¤Projected shortfall for FY 2028-29 just short of $6 billion ¤Local Government Aid ¤2025 certified at $265 increase, after $327,209 increase in 2024 ¤LGA is certified for 2026 around August 1, 2025 ¤Start budget development with assumption of $0 change ЊЉ 20 Jufn!3/ LOCAL GOVERNMENT AID Local Government Aid Allocation, 2022Ï2029 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- 2022202320242025B2026F2027F2028F2029F General Fund Capital Project Funds ЊЊ 21 Jufn!3/ ECONOMIC EXPECTATIONS ¤Federal Forecast ¤Current federal funds rate at range of 4.25% to 4.50% ¤5.25% to 5.50% at this time last year o Federal Open Market Committee (FOMC) will meet in May and have signaled it may be too early to cut interest rates in context of high economic uncertainty. o Waiting for great clarity and economic data (impact of tariffs) o Rate cut in June could be probable Inflation ¤CPI rose at an annual rate of 2.4% in March o 3.5% at this time last year, down from 5.0% earlier in the year last year and down from 40-year high of 9.1% in June 2022 ЊЋ 22 Jufn!3/ IMPACTS ON 2026 BUDGET ¤Personnel Services ¤Planned progression through the CityÔs compensation plan and market adjustments/reclassifications ¤Impact of Public Safety labor agreements ¤Health Insurance ¤2025 included a negotiated increase (as part of 0% increase for 2024) ¤2026 increase was not negotiated and is TBD ¤MN Paid Family Leave ¤0.44% to 0.88% of wages ¤2 Elections (0 in 2025) ¤Utility Funds Ïno ARPA funds to fund capital projects going forward ¤Metropolitan Council Environmental Services (MCES) Fee ÏSanitary Sewer ¤Locke Water Treatment Plant Upgrade ÏWater, potential $3 mil. grant and $3.6 mil. low-interest loan from PFA ¤Drinking Water Regulations ÏLead/Copper Rule, PFAS and other contaminant standard changes ¤Liquor Store Ïimpact of cannabis on liquor sales ¤Cable Franchise Fees Ïdecline in cable/increase in streaming ЊЌ 23 Jufn!3/ IMPACTS ON 2026 BUDGET th ¤57Avenue Bridge Funding (City cost share) Ï2026 and beyond ¤TBD based on remainder of funding after ÑthawingÒ of federal grant and other sources sought. ¤Streets Funding (City cost share) Ï2026 and beyond th ¤44Avenue ¤Trunk Highway 65 south of I-694 ¤Trunk Highway 47 (University Avenue) corridor ¤Mississippi Street ¤Central Avenue ¤I-694 corridor ¤Impact of Tariffs on Capital Expenditures/Projects Ïmuch uncertainty could be a cost to the City ЊЍ 24 Jufn!3/ NET TAX CAPACITY BY PROPERTY CLASS Net Tax Capacity by Classification ÏNet Tax Capacity by Classification Ï Net Tax Capacity by Classification ÏPayable Payable 2024Payable 2025 2026 2% 2% 17% 1% 15% 18% 35% 32% 38% 47% 48% 46% Residential Homestead Residential Homestead Residential Homestead Commercial/Industrial Commercial/Industrial Commercial/Industrial Railroad/Public Utility Railroad/Public Utility Railroad/Public Utility Residential, Non-Homestead Residential, Non-Homestead Residential, Non-Homestead Property Taxes Payable for 2024 Property Taxes Payable for 2026 Property Taxes Payable for 2025 Median Value Homestead: $284,700 Median Value Homestead: $296,700 Median Value Homestead: $288,900 ğǣ ĬğƭĻΉĬǒƩķĻƓ ƭŷźŅƷ ŅƩƚƒ /ΉL ğƓķ wĻƭźķĻƓƷźğƌͲ bƚƓΏ IƚƒĻƭƷĻğķ Ʒƚ wĻƭźķĻƓƷźğƌ IƚƒĻƭƷĻğķ ЊЎ 25 Jufn!3/ PROPERTY TAX LEVY 2026 B UDGET ЊЏ 26 Jufn!3/ PROPERTY TAX LEVY TREND Property Tax Levy %, 2016-2025 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2016201720182019202020212022202320242025 ЊА 27 Jufn!3/ POTENTIAL TAX LEVY IMPACTS FOR 2026 ¤0% General Fund Tax Levy Increase o$40 approximate annual property tax increase for median value homeowner Tax base/burden shift from Commercial/Industrial and Multi-family/Apartments to Residential Homestead ¤3% General Fund Tax Levy Increase o$483,000 additional revenue o$75 approximate annual property tax increase for median value homeowner ¤5% General Fund Tax Levy Increase o$804,900 additional revenue o$95 approximate annual property tax increase for median value homeowner ¤8% General Fund Tax Levy Increase o$1,287,800 additional revenue o$125 approximate annual property tax increase for median value homeowner *** These numbers are very preliminary and approximate and based on very preliminary EMV valuation data. 1st PRISM data from Department of Revenue released August/September. Tax Capacity is based on gross tax capacity, tax increment and fiscal disparities data, which are not available yet and/or finalized yet *** ЊБ 28 Jufn!3/ NEXT STEPS AND OTHER CONSIDERATIONS 2026 B UDGET ЊВ 29 Jufn!3/ PROPOSED 2026 BUDGET CALENDAR April 28Discuss outlooks and objectives with the City Council July 14Discuss Proposed 2026Ï2030 CIP with City Council August 11Discuss CIP and Property Tax Levy with City Council August 26Discuss Property Tax Levy with City Council September 8Discuss Proposed 2026 Budget and Property Tax Levy with City Council September 22Adopt the Proposed 2026 Budget and Property Tax Levy Discuss Proposed 2026 Budget and Utility Rates with Council September 22Adopt Final Housing and Redevelopment Authority Property Tax Levy ЋЉ 30 Jufn!3/ CITY COUNCIL CONSIDERATIONS ¤Based on the current economic conditions and the needs of the organization, what changes, if any, should the City consider in budget development process? ¤Are there any other budget questions or priorities the City Council would like to consider? ЋЊ 31 Jufn!3/ THANK YOU! QUESTIONS? ЋЋ 32 Jufn!4/ AGENDA REPORT Meeting Date:April 28, 2025 Meeting Type:City Council Conference Meeting Submitted By:Joe Starks, Finance Director/City Treasurer Title Finance Update March 2025Year-to-Date Background A year-to-date financial update will be providedby the Finance Department. Focus on Fridley Strategic Alignment Vibrant Neighborhoods &PlacesCommunity Identity &Relationship Building X Financial Stability & Commercial ProsperityPublic Safety & Environmental Stewardship X Organizational Excellence Attachments and Other Resources March 2025YTD Financial Update March 2025YTD Liquor Store Income Statement March 2025 Investment Summary Vision Statement We believe Fridley will be a safe, vibrant, friendly and stable home for families and businesses. 33 Jufn!4/ For the fiscal period ending 3/31/2025 % of Year Remaining: 75% Revenues 2025 Current Budget2025 YTD Actual2025 Balance% RemainingNote2024 YTD Actual25 vs. 24 YTD General Fund$ 24,293,300$ 1,400,904$ 22,892,39694%A$ 1,247,661$ 153,243 Cable TV Fund$ 260,000$ (9,482)$ 269,482104%B$ 2,625 $ (12,107) Solid Waste Abatement$ 578,500$ 112,491 $ 466,00981%C$ 104,030$ 8,461 Police Activity Fund$ 226,000$ 13,003 $ 212,99794%$ 6,580 $ 6,423 SNC Fund$ 810,500$ 122,142$ 688,35885%A$ 128,125$ (5,983) Water Utility Fund$ 8,211,200$ 36,558 $ 8,174,642100%C$ 320,820$ (284,262) Sewer Utility Fund$ 7,941,500$ 611,625$ 7,329,87592%C$ 654,135$ (42,510) Storm Water Utility Fund$ 3,940,400$ (183,096)$ 4,123,496105%C$ 120,734$ (303,830) Liquor Fund$ 6,422,400$ 1,275,050$ 5,147,35080%$ 1,365,873$ (90,823) TOTAL REVENUES$ 52,683,800$ 3,379,195$ 49,304,60594%$ 3,950,583$ (571,388) Expenditures 2025 Current Budget2025 YTD Actual2025 Balance% RemainingNote2024 YTD Actual25 vs. 24 YTD General Fund$ 24,293,300$ 5,151,000$ 19,142,30079%$ 4,761,825$ 389,175 Cable TV Fund$ 442,900$ 63,930 $ 378,97086%$ 116,706$ (52,776) Solid Waste Abatement$ 566,200$ 88,640 $ 477,56084%$ 70,212$ 18,428 Police Activity Fund$ 228,200$ 44,901 $ 183,29980%$ 41,626$ 3,275 SNC Fund$ 794,100$ 158,144$ 635,95680%$ 147,105$ 11,039 Water Utility Fund$ 10,694,000$ 867,586 $ 9,826,41492%$ 895,368$ (27,782) Sewer Utility Fund$ 9,071,800$ 2,277,095$ 6,794,70575%$ 2,355,876$ (78,781) Storm Water Utility Fund$ 4,629,600$ 334,869 $ 4,294,73193%$ 309,618$ 25,251 Liquor Fund$ 6,496,000$ 1,322,249$ 5,173,75180%$ 1,402,260$ (80,011) TOTAL EXPENDITURES$ 57,216,100$ 10,308,414$ 46,907,68682%$ 10,100,596$ 207,818 GENERAL FUND GF Revenue Types 2025 Current Budget2025 YTD Actual2025 Balance% RemainingNote2024 YTD Actual25 vs. 24 YTD Taxes$ 16,118,300$ -$ 16,118,300100%A$ -$ - Special Assessments$ 60,000$ -$ 60,000100%A$ -$ - Licenses and Permits$ 1,177,600$ 239,569 $ 938,03180%D$ 126,711$ 112,858 Intergovernmental$ 2,784,500$ 384,062 $ 2,400,43886%E$ 263,741$ 120,321 Charges for Services$ 3,069,900$ 686,395 $ 2,383,50578%$ 655,118$ 31,277 Fines and Forfeitures$ 152,000$ 42,235 $ 109,76572%$ 29,275$ 12,960 Miscellaneous$ 364,100$ (86,982)$ 451,082124%F$ 37,191$ (124,173) Other Financing Sources$ 566,900$ 135,625 $ 431,27576%$ 135,625$ - TOTAL GF REVENUES$ 24,293,300$ 1,400,904$ 22,892,39694%$ 1,247,661$ 153,243 34 Jufn!4/ GF Dept. Expenditures 2025 Current Budget2025 YTD Actual2025 Balance% RemainingNote2024 YTD Actual25 vs. 24 YTD Legislative$ 208,400$ 77,551 $ 130,84963%$ 37,107$ 40,444 City Management$ 2,140,300$ 422,095 $ 1,718,20580%$ 443,757$ (21,662) Finance$ 2,030,100$ 444,151 $ 1,585,94978%$ 388,421$ 55,730 Public Safety$ 11,961,400$ 2,627,835$ 9,333,56578%$ 2,435,487$ 192,348 Public Works$ 5,138,500$ 1,033,742$ 4,104,75880%$ 923,054$ 110,688 Parks & Recreation$ 1,009,000$ 180,283 $ 828,71782%$ 180,745$ (462) Community Development$ 1,805,600$ 365,343 $ 1,440,25780%$ 353,254$ 12,089 TOTAL GF EXPENDITURES$ 24,293,300$ 5,151,000$ 19,142,30079%$ 4,761,825$ 389,175 Notes: A - 1st half property tax settlement will be received in June, 2nd half in December and short settlement in January. B - Cable franchise fee payments are received quarterly. C - Timing of quarterly utility bills and receipt of corresponding payments. D - See building permit trend below. E - 1st installment of State Aid and Local Government Aid received in July, 2nd in December. Police aid and fire aid (pass through) received in October. F - Investment income allocated at year-end, based on average cash balances, as part of year-end process. Negative amount is reversal of year-end unrealized gain/market value book entry. Building Permit Activity Year# of PermitsValuation 2023 YTD 562 $ 6,226,445 2024 YTD 504 $ 4,599,558 2025 YTD 538 $ 13,321,936 35 Jufn!4/ Liquor Store #1 - Fridley MarketMarch 2025 YTD Category202320242025 Sales 1,150,866 1,130,818 1,066,474 Cost of Sales 816,727 803,932 749,928 Gross Profit ($) 334,139 326,886 316,546 Gross Profit (%)29.03%28.91%29.68% Operating Expenses 265,807 275,274 278,214 51,612 38,333 Income/Loss 68,332 Nonoperating Revenues 49,485 3,018 (12,028) Nonoperating Expenses - - - Net Profit/Loss117,81754,63026,305 Transfer 69,625 82,125 82,125 Liquor Store #2 - Hwy. 65March 2025 YTD Category202320242025 Sales 238,573 232,037 220,630 Cost of Sales 180,893 177,945 162,869 Gross Profit ($) 57,680 54,092 57,761 Gross Profit (%)24.18%23.31%26.18% Operating Expenses 42,853 43,487 44,114 Income/Loss 14,827 10,605 13,647 Nonoperating Revenues - - - Nonoperating Expenses - - - Net Profit/Loss 14,827 10,605 13,647 Transfer 15,000 15,000 15,000 Liquor Stores - CombinedMarch 2025 YTD Category202320242025 Sales 1,389,439 1,362,855 1,287,104 Cost of Sales 997,620 981,877 912,796 Gross Profit ($) 391,819 380,978 374,307 Gross Profit (%)28.20%27.95%29.08% Operating Expenses 308,660 318,761 322,327 Income/Loss 83,159 62,217 51,980 Nonoperating Revenues 49,485 3,018 (12,028) Nonoperating Expenses - - - Net Profit/Loss 132,644 65,235 39,952 Transfer 84,625 97,125 97,125 36 Jufn!4/ 37 Jufn!4/ 38 Jufn!4/ 39