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HomeMy WebLinkAbout10-12-2026 City Council Conference Meeting October 12, 2026 at 5:30 p.m. 7071 University Avenue NE Agenda 1. Finance Update – September 2026 Year-to-Date 2.2027 Proposed Utility Budgets/Rates Discussion 3.2027-2031 Capital Investment Program (CIP) Discussion Accessibility Notice: If you need free interpretation or translation assistance, please contact City staff. Upon request, accommodations will be provided to allow individuals with disabilities or those needing interpretation services to participate in City of Fridley services, programs or activities. If you are in need of an interpreter or require auxiliary aids, contact the City at 763-572-3450 at least five business days in advance to ensure arrangements can be made. A solicitud, se darán adaptaciones para permitir que las personas con discapacidades o las que necesiten servicios de interpretación participen en los servicios, programas o actividades de la Ciudad de Fridley. Si necesita un intérprete o requiere ayudas auxiliares, comuníquese con la Ciudad al 763-572-3450 al menos cinco días hábiles de antelación para asegurar que se puedan hacer los arreglos. Markii la codsado, adeegyo caawimaad ah ayaa la siin doonaa dadka naafada ah ama kuwa u baahan adeegga turjumaadda si ay uga qayb qaataan adeegyada, barnaamijyada, ama hawlaha magaalada Fridley. Haddii aad u baahan tahay turjubaan ama qalabka caawiya dadka naafada ah, kala xiriir Magaalada taleefankan 763-572-3450 ugu yaraan shan maalmood oo shaqo kahor, si loo hubiyo in qabanqaabada laguu sameeyo. Raws li kev thov, yuav muaj kev pab tshwj xeeb rau cov neeg xiam oob qhab lossis cov uas xav tau kev pab txhais lus kom lawv tuaj koom tau nrog Nroog Fridley (City of Fridley service) cov kev pab cuam, cov kev kawm, los sis cov dej num sib txawv. Yog koj xav tau neeg txhais lus los sis xav tau lwm yam kev pab, thov hu rau lub Nroog ntawm 763-572-3450 kom tsis pub tsawg tshaj tsib hnub ua hauj lwm ua ntej, xwv kom peb thiaj li npaj tau rau koj raws li lub sij hawm ntawv. AGENDA REPORT Meeting Date: October 12, 2026 Meeting Type:City Council Conference Submitted By:Joe Starks, Finance Director Title: Finance Update – September 2026 Year-to-Date Background A year-to-date financial update will be provided. Recommendation Attachments and Other Resources 1.Sep 2026 YTD Financial Update 2.Sep 2026 YTD Liquor Store 3.September 2026 YTD Investment Summary Vision Statement We believe Fridley will be a safe, vibrant, friendly, and stable home for families and businesses. For the fiscal period ending 9/30/2026 % of Year Remaining: 25% Revenues 2026 Current Budget2026 YTD Actual2025 Balance% RemainingNote General Fund$ 25,954,900$ 14,836,517$ 11,118,38343%A Cable TV Fund$ 214,600$ 124,343 $ 90,25742%B Solid Waste Abatement$ 573,200$ 390,970 $ 182,23032%C Police Activity Fund$ 256,000$ 135,149 $ 120,85147%D SNC Fund$ 844,400$ 469,685$ 374,71544%A Water Utility Fund$ 7,572,200$ 5,254,509$ 2,317,69131%C Sewer Utility Fund$ 8,180,000$ 5,760,921$ 2,419,07930%C Storm Water Utility Fund$ 2,404,100$ 1,518,624$ 885,47637%C Liquor Fund$ 5,970,200$ 4,161,606$ 1,808,59430% TOTAL REVENUES$ 51,969,600$ 32,652,323$ 19,317,27737% Expenditures 2026 Current Budget2026 YTD Actual2025 Balance% RemainingNote General Fund$ 25,954,900$ 18,942,554$ 7,012,34627% Cable TV Fund$ 468,300$ 356,906 $ 111,39424% Solid Waste Abatement$ 568,500$ 373,005 $ 195,49534% Police Activity Fund$ 256,300$ 173,053 $ 83,24732% SNC Fund$ 815,400$ 623,632 $ 191,76824% Water Utility Fund$ 15,302,300$ 5,413,636$ 9,888,66465%H Sewer Utility Fund$ 10,588,900$ 7,786,462$ 2,802,43826% Storm Water Utility Fund$ 5,396,700$ 1,226,454$ 4,170,24677%I Liquor Fund$ 6,146,500$ 4,302,527$ 1,843,97330%J TOTAL EXPENDITURES$ 65,497,800$ 39,198,229$ 26,299,57140% GENERAL FUND GF Revenue Types 2026 Current Budget2026 YTD Actual2025 Balance% RemainingNote Taxes$ 17,324,600$ 8,931,534$ 8,393,06648%A Special Assessments$ 70,000$ 29,197 $ 40,80358%A Licenses and Permits$ 1,077,000$ 1,037,905$ 39,0954%E Intergovernmental$ 2,936,600$ 1,721,805$ 1,214,79541%F Charges for Services$ 3,273,600$ 2,589,752$ 683,84821% Fines and Forfeitures$ 172,300$ 117,564 $ 54,73632% Miscellaneous$ 518,300$ 9,385 $ 508,91598%G Other Financing Sources$ 582,500$ 399,375 $ 183,12531% TOTAL GF REVENUES$ 25,954,900$ 14,836,517$ 11,118,38343% GF Dept. Expenditures 2026 Current Budget2026 YTD Actual2025 Balance% RemainingNote Legislative$ 184,400$ 146,270 $ 38,13021%K City Management$ 2,810,400$ 1,790,074$ 1,020,32636% Finance$ 2,203,000$ 1,730,697$ 472,30321%L Public Safety$ 12,386,100$ 9,066,547$ 3,319,55327% Public Works$ 5,493,400$ 4,250,814$ 1,242,58623% Parks & Recreation$ 1,201,100$ 807,562 $ 393,53833% Community Development$ 1,676,500$ 1,150,591$ 525,90931% TOTAL GF EXPENDITURES$ 25,954,900$ 18,942,554$ 7,012,34627% Notes: A - 1st half property tax settlement received in July, 2nd half in December and short settlement in January, 2027. B - Cable franchise fee payments are received quarterly. C - Timing of quarterly utility bills and receipt of corresponding payments. D - Timing of reimbursement requests E - Building permit activity below F - 1st installment of State Aid and Local Government Aid received in July, 2nd in December. Police aid received in October. G - 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. H - Timing of capital projects. I - Timing of capital projects. J - Includes transfer to General Fund and Equipment Capital Fund. K - Annual dues and subscriptions already paid for year. L - Journal entry for chargeback of staff time to utility funds to be completed at year-end. Building Permit Activity Year# of PermitsValuation 2024 YTD 1,882 $ 25,064,246 2025 YTD 2,038 $ 37,290,860 2026 YTD 2,063 $ 74,144,807 Liquor Store #1 - Fridley MarketSep 2026 YTD Category202420252026 Sales 2,416,621 3,567,189 3,454,551 Cost of Sales 1,721,174 2,509,357 2,413,689 Gross Profit ($) 695,447 1,057,832 1,040,862 Gross Profit (%)28.78%29.65%30.13% Operating Expenses 573,442 892,512 918,352 165,321 122,510 Income/Loss 122,005 Nonoperating Revenues 3,033 (11,624) (25,807) Nonoperating Expenses - - Net Profit/Loss125,038153,69796,703 Transfer 164,250 246,375 246,375 Liquor Store #2 - Hwy. 65 Category202420252026 Sales 499,415 720,278 732,862 Cost of Sales 370,280 533,372 533,423 Gross Profit ($) 129,135 186,907 199,439 Gross Profit (%)25.86%25.95%27.21% Operating Expenses 88,906 140,736 145,688 Income/Loss 40,229 46,171 53,750 Nonoperating Revenues - - - Nonoperating Expenses - - Net Profit/Loss 40,229 46,171 53,750 Transfer 30,000 30,000 45,000 Liquor Stores - Combined Category202420252026 Sales 2,916,036 4,287,467 4,187,413 Cost of Sales 2,091,455 3,042,728 2,947,112 Gross Profit ($) 824,582 1,244,739 1,240,301 Gross Profit (%)28.28%29.03%29.62% Operating Expenses 662,348 1,033,248 1,064,040 Income/Loss 162,234 211,491 176,261 Nonoperating Revenues 3,033 (11,624) (25,807) Nonoperating Expenses - - - Net Profit/Loss 165,267 199,867 150,454 Transfer 194,250 276,375 291,375 AGENDA REPORT Meeting Date: October 12, 2026 Meeting Type:City Council Conference Submitted By:Joe Starks, Finance Director Title: 2027 Proposed Utility Budgets/Rates Discussion Background Staff and Council will discuss the 2027 Proposed Utility Budgets and Rates. Items to be discussed will include assumptions being used for all funds and those specific to each fund, impacts on each specific fund, including capital projects, utility costs of comparable/surrounding cities and any objectives and guidance Council deems import as the budgets and rates are developed. Recommendation Attachments and Other Resources 1.10-12-2026 Proposed 2027 Utility Funds Budget Vision Statement We believe Fridley will be a safe, vibrant, friendly, and stable home for families and businesses. UTILITY FUNDS OUTLOOK AND OBJECTIVES 2027 BUDGET OCTOBER 12, 2026 OVERVIEW •Assumptions for All Utility Funds •Water •Sanitary Sewer •Stormwater •Solid Waste Abatement (Recycling) •Next Steps and Other Considerations, Objectives, Guidance 2 WHAT ARE UTILITY FUNDS? •Separate funds (enterprise funds) used to account for the revenues and expenses of providing essentially utility services such as water, sewer and stormwater •Operates like a business in that they are self supported through user fees •Operates independently from the general fund, which is supported by property tax revenue 3 UTILITY FUNDS 2027 BUDGETIMPACTSANDASSUMPTIONS 4 ASSUMPTIONS/IMPACTS ON ALL UTILITY FUNDS •Personnel Services •Planned progression through the City’s compensation plan and market adjustments/reclassifications •Capital •No ARPA funds to fund capital projects moving forward •ARPA funds allowed the City to stabilize rate increases while paying for capital needs •Impact of Tariffs on Capital Expenditures/Projects 5 WATER UTILITY FUND 2027 B UDGETIMPACTSANDASSUMPTIONS 6 IMPACTS ON WATER UTILITY FUND •Locke Water Treatment Plant (WTP) Granular Activated Carbon (GAC) Upgrade •$5.9 mil. project between 2026 & 2027 •Received low interest (2.413%) project financing •Received 50% loan forgiveness (approximately $2.95 mil.) due to emerging PFAS contaminant designation •Project $2.95 mil. in proceeds in 2026 and same in 2027 (dependent upon timing of project work) •Approximate $191k annual repayment beginning in 2027/28 for 20 years (dependent upon timing of project work) •Other Debt Service •2016A Water Revenue Bonds paid off in 2031 (approximately $300k annually) •Consumption Trends •Loss of 3 major water users (Rich Products & Aramark in 2024, BAE in 2025 (December) •Conservation •Weather patterns •Other considerations •Drinking Water Regulations –Lead/Copper Rule, PFAS and other contaminant standard changes •Higher fund balance is prudent due to the age of water infrastructure 7 WATER CAPITAL INVESTMENT PROGRAM (CIP) •Proposed 2027 CIP Project Highlights o$2,950,000, Locke Park WTP GAC Treatment Addition (depending on timing of project work/completion) o$800,000, Water Distribution Upgrades with Street Projects o$100,000, Water Treatment Plant 3 Valve Replacement •Future CIP Project Highlights •$3,900,000, Annual Water Distribution Upgrades with Street Projects (2028-2031) •$3,000,000, Storage Retrofits and Reconditioning Water Storage Systems (2028-2029) •$1,200,000, Treatment Plant Retrofits (Commons WTP, 2028) 8 SANITARY SEWER UTILITY FUND 2027 B UDGETIMPACTSANDASSUMPTIONS 9 IMPACTS ON SEWER UTILITY FUND •Metropolitan Council Environmental Services (MCES) Fee •0.75% increase for 2027 (approximate $49k increase) •12.88% increase for 2026 (approximate $748k increase) •Since 2021, will have increased 44.6% (approximate $2 mil. increase) •Average increase over last 5 years has been approximately 6.6% •MCES charge is over 80% of fund’s operating expenditures •Debt Service •N/A •Consumption Trends •Loss of 3 major water users (Rich Products & Aramark in 2024, BAE in 2025 (December) •Conservation •Weather patterns •Higher fund balance is prudent due to the age of sanitary sewer infrastructure and volatility of charges from MCES 10 SANITARY SEWER CIP •Proposed 2027 CIP Project Highlights o$1,800,000, Sanitary Sewer Lift Station Rehabilitation o$250,000, Sanitary Sewer Force Main Construction •Future CIP Highlights •$4,950,000, Sanitary Sewer Collection System Lining (2028-2031) •$2,100,000, Sanitary Sewer Lift Station Rehabilitation (2029-2030) 11 STORM WATER UTILITY FUND 2027 B UDGETIMPACTSANDASSUMPTIONS 12 IMPACTS ON STORM WATER UTILITY FUND •Debt Service •N/A •Other Considerations •Higher fund balance is prudent due to the age of storm water infrastructure and the potential for emergency events (flooding, etc.) within the City 13 STORM WATER CIP •Proposed 2027 CIP Project Highlights o$450,000, Norton Creek Flood Control o$225,000, Storm Water System Upgrades with Street Projects o$200,000, Total Maximum Daily Load (TMDL) Water Quality Projects o$200,000, Watershed District Quality Projects o$200,000, Storm Water System Upgrades o$150,000, Storm Water Pond Maintenance •Future CIP Project Highlights o$1,400,000, TMDL Water Quality Projects (2028-2031) o$1,200,000, Watershed District Water Quality Projects (2028-2031) o$950,000, Storm Water System Upgrades with Street Projects (2028- 2031) 14 Monthly Utility Bill for Comparable Cities Andover Oakdale Ramsey Anoka White Bear Lake New Brighton Inver Grove Heights Fridley Champlin Roseville Richfield Columbia Heights Prior Lake Forest Lake $- $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 WaterWastewaterStormwater 15 Water costs for Minneapolis/St. Paul Area Based on 6,000 Gallons Monthly CityPopulationWaterWastewaterStormwaterTotal Forest Lake 20,991 $ 42.67$ 63.22$ 4.92$ 110.81 Prior Lake 28,000 $ 35.09$ 51.37$ 13.85$ 100.31 Columbia Heights 22,358 $ 50.14$ 31.94$ 6.38$ 88.46 Richfield 36,994 $ 34.60$ 40.07$ 8.01$ 82.68 Roseville 36,810 $ 41.39$ 31.16$ 8.74$ 81.29 Champlin 24,115 $ 21.95$ 48.18$ 9.31$ 79.44 Fridley 30,289$ 27.86$ 44.87 $ 4.91$ 77.64 Inver Grove Heights 36,129 $ 24.93$ 41.06$ 9.75$ 75.74 New Brighton 22,556 $ 26.34$ 37.19$ 7.91$ 71.44 White Bear Lake 24,880 $ 26.03$ 33.42$ 4.00$ 63.45 Anoka 18,178 $ 21.69$ 35.32$ 5.20$ 62.21 Ramsey 28,850 $ 22.87$ 32.14$ 6.42$ 61.43 Oakdale 29,013 $ 21.06$ 36.33$ 3.73$ 61.12 Andover 33,426 $ 22.93$ 23.63$ 4.50$ 51.06 Average$ 29.97$ 39.28 $ 6.97$ 76.22 16 SOLID WASTE ABATEMENT (RECYCLING) FUND 2027 B UDGETIMPACTSANDASSUMPTIONS 17 IMPACTS ON RECYCLING FUND •City received updated recycling rate from Republic Services, which will go into effect on May 1, 2027 •2027 recycling charge will be $4.15 per household up from $3.75 per household •Yearly average is $4.02 ($3.75 for 4 months, $4.15 for 8 months) •Up from $3.74 •Increase is driven by a 4.5% increase in the pickup charge as outlined in contract as well as in increase in processing charge •Increase in processing charge primarily driven by dip in commodity value •6-year look back on commodity values below: Commodity 20-Jan21-Jan22-Jan23-Jan24-Jan25-Jan26-Jan Type Mix paper$0/ton$45/ton$90/ton$0/ton$55/ton$55/ton$50/ton OCC$50/ ton$75/ton$160/ton$35/ton$90/ton$80/ton$75/ton PET$190/ton$150/ton$410/ton$240/ton$280/ton$335/ton$145/ton HDPE #2 $1280/ton$1370/ton$1200/ton$1260/ton$700/ton$1570/ton$1000/ton Nat HDPE #2 $370/ton$470/ton$550/ton$260/ton$520/ton$125/ton$60/ton PIG 18 NEXT STEPS AND OTHER CONSIDERATIONS 2027 B UDGETIMPACTSANDASSUMPTIONS 19 PROPOSED 2027 BUDGET CALENDAR October 12Discuss Proposed 2026 Budget and Utility Rates with Council October 26Discuss Proposed 2026 Budget and Utility Rates with Council November 9Council Consideration of Approval Proposed 2027 Budget and Utility Rates November 23Council Consideration of Approval Proposed 2027 Budget and Utility Rates, if needed 20 THANK YOU! QUESTIONS? 21 AGENDA REPORT Meeting Date: October 12, 2026 Meeting Type:City Council Conference Submitted By:Joe Starks, Finance Director Title: 2027-2031 Capital Investment Program (CIP) Discussion Background City Council and staff will discuss the 2027-2031 CIP, particularly as it relates to utility funds. Recommendation Attachments and Other Resources 1.CIP Projects Summary 10.12.2026 2.Project Details 10.12.2026 Vision Statement We believe Fridley will be a safe, vibrant, friendly, and stable home for families and businesses. Dbqjubm!Jnqspwfnfou!Qmbo! Qspkfdut!Cz!Efqbsunfou! Efqbsunfou!Qspkfdu!$!Qsjpsjuz!3138!3139!313:!3141!3142!Upubm! Cvjmejoh!Dbqjubm!Qspkfdut! 516.32.3::11!461-111! 516.42.38262!211-111! 516.42.38263!361-111! 516.42.382::!311-111! 516.42.39261!61-111! Cvjmejoh!Dbqjubm!Qspkfdut!Upubm!381-111!231-111!531-111!81-111!81-111!:61-111! Dbcmf!Ufmfwjtjpo! 336.23.38811!:6-111! Dbcmf!Ufmfwjtjpo!Upubm!33-111!39-111!36-111!31-111!1!:6-111! 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