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Item 3.2.B. 2025.10.27 Special City Council MinutesPage 1 of 3 SPECIAL OTSEGO CITY COUNCIL MEETING MONDAY, OCTOBER 27, 2025 5:30 PM OTSEGO PRAIRIE CENTER Call to Order: Mayor Stockamp called the meeting to order at 5:30 PM. Roll Call: Mayor Jessica Stockamp and Councilmembers: Ryan Dunlap, Tina Goede, Michelle Lund, and Corey Tanner. City Staff: City Administrator/Finance Director Adam Flaherty, Utility Manager Kurt Neidermeier, AE2S Engineer Scott Schaefer, and City Clerk Audra Etzel. 1.2026 Budgets and Property Tax Levy: City Administrator/Finance Director Flaherty outlined the Budget Meeting #4 items that were included in the packet. Utility Operations Overview Utility Manager Neidermeier reviewed the 2026 Utility Budget Narrative and presented a power point. CM Tanner asked about the Water Tower 3 Reconditioning. Neidermeier outlined the process and noted both the tank and pedestal will be painted for this tower. CM Tanner asked about the height of the tower. Neidermeier explained how height creates the pressure and the different pressure zones. CM Dunlap asked about the project on Odean Avenue. Neidermeier noted that the PRV is installed and the pipe installations are ongoing and should be completed in November. Mayor Stockamp asked about the interconnect. Neidermeier said the painting project could take six months and the Water Tower 3 will be down for the duration ; relying on flushing and the other towers and noting the storage and availability of the other water towers will play into the equation. A. Water Utility Fund. Flaherty and Neidermeier reviewed the packet materials. The water utility rate study is in process and noted that preliminary recommendations outline a 7% rate increase factored into the budget. CM Dunlap asked when the Tier 4 rate would be implemented. Flaherty said Tier 4 will start in March of 2026. CM Dunlap asked about the employees being separated between the budgets. Neidermeier said the team is involved in all aspects, adding the separation is a general provision and the percentages are getting closer. Flaherty said this is similar to what has been calculated in past years. CM Goede asked about the average life of a meter. Neidermeier said the older meters lasted about 15 years and the newer meters last about 20 years. Mayor Stockamp asked about the Item 3.2.B. MINUTES OF THE CITY OF OTSEGO SPECIAL CITY COUNCIL MEETING OCTOBER 27, 2025 Page 2 of 3 meter replacement schedule. Neidermeier said every year there will be meter replacements and the cost will be included in the budget. Flaherty noted all the meter information is included in the utility billing software to aid in replacement planning. Neidermeier added that staff continues to evaluate the schedule. Flaherty reviewed the Water Access Charge (WAC) fund. Flaherty reviewed the CIP projects for 2026 to 2035. CM Dunlap asked about Wellhouse 3 costs. Flaherty said there are three different pieces to the project that are included in individual line items. The City Council concurred as presented. B. Sanitary Sewer Utility Fund. Flaherty reviewed the packet materials. The utility rate study proposes a 2% increase to the rates, effective March 2026. Funds also include the Utility Office Coordinator position becoming full-time and the Minnesota Paid Family Leave. Neidermeier said there is less pavement repairs needed for 2026, allowing for less expenses. Flaherty noted utilities and liability and property insurance have increased. Neidermeier noted there are more local property owners that are allowing the disposal of biosolids, reducing expenses. Flaherty reviewed the Sewer Access Charge (SAC) fund and the CIP projected projects for 2026 to 2035. CM Dunlap asked why a property would have a SAC assessment. Flaherty said some commercial/industrial development choose to pay the SAC and WAC fees over time rather than at time of building permit issuance to spread the cost out more. CM Lund asked who determines the maximum amount of SAC and WAC fees. Flaherty said the process to determine the maximum is set by statue and a formal study was completed in 2023. The City Council concurred as presented. C. Storm Water Utility Fund. Flaherty reviewed the packet materials. Flaherty noted that storm water rates for 2026 are pending inflationary indexes and would be included in the fee schedule for adoption. Flaherty outlined a capital budget item for a mulching attachment that had been previously reviewed by the Public Works Subcommittee. The City Council concurred as presented. MINUTES OF THE CITY OF OTSEGO SPECIAL CITY COUNCIL MEETING OCTOBER 27, 2025 Page 3 of 3 Utility Rates Flaherty reviewed the packet materials noting that the rate increases were discussed with each respective fund earlier in the meeting and the water rate study is still being finalized. D. Property Tax Levy. Flaherty reviewed the packet materials, noting the tax capacity has increased and new options have been prepared for City Council consideration. Flaherty reviewed the updated information highlighting the reduced levy for the EDA Lease Payments for the fire station. CM Dunlap asked about the 105% not being applicable. Flaherty noted this is not a true debt levy and therefore bond documents don’t require the additional 5% which is designed to accommodate delinquent tax collections. CM Dunlap asked about delinquency. Flaherty said historically the City has carried the delinquencies within the General Fund, the budget includes a negative 1% for uncollected property taxes. Flaherty reviewed additional charts comparing tax rates and tax levies within Wright County. Next Meetings: Mayor Stockamp motioned to call for special meetings on November 10, 2025, and November 24, 2025, both scheduled for 5:30 PM, seconded by CM Tanner. All in favor. Motion carried 5-0. CM Goede noted she will not be available for the November 24, 2025 , meetings. The Truth-in-Taxation meeting is scheduled for December 2, 2025, at 6:00pm. 2. Adjourn. CM Goede motioned to adjourn at 6:40 PM, seconded by CM Tanner. All in favor. Motion carried 5-0. Minutes prepared by City Clerk, Audra Etzel. City of Otsego _________________________________ Jessica Stockamp, Mayor ATTEST: ___________________________ Audra Etzel, City Clerk