2025-11-25 City Council Special Meeting Agenda
Richfield City Council Agenda
November 25, 2025 -- 6:30 PM
Richfield Municipal Center
Council Chambers
6700 Portland Avenue South
1. Call to Order
2. Public Hearings
a. Conduct a Truth in Taxation Public Hearing regarding the 2026 property tax levy
and 2025 Revised/2026 Proposed Budget and Proposed 2026 Utility Rates.
3. Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the
City Clerk at 612-861-9739.
Includes Materials - Materials relating to these agenda items can be found in the Council Chambers Agenda Packet book located by
the entrance. The complete Council Agenda Packet is available electronically on the City of Richfield website.
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City Council Meeting 11/25/2025
Agenda Section: Public Hearings
Agenda Item: 2.a.
Report Prepared By:
Steve McDaniel, Budget, Cash, and Debt Manager
Department Director:
Mary Bogie, Interim Finance Director
Item for Consideration:
Conduct a Truth in Taxation Public Hearing regarding the 2026 property tax levy and 2025
Revised/2026 Proposed Budget and Proposed 2026 Utility Rates.
EXECUTIVE SUMMARY
At the September 23, 2025, City Council meeting, the City Council adopted the 2026
Preliminary Property Tax Levy and announced November 25, 2025, at 6:30 p.m. as the
date and time for the statutory Truth in Taxation Public Hearing.
Hennepin County mailed the proposed 2026 property tax statements to property owners
in Richfield. The property tax statements are based upon the proposed levy, and
announce the date of the public hearing.
RECOMMENDED ACTION
BY MOTION: Conduct and close the Truth in Taxation Public Hearing.
BY MOTION: Schedule the final action on the 2026 property tax levy, the 2025 Revised/2026
Proposed Budget, and the proposed 2026 utility rates, at the regular City Council meeting
scheduled for December 9, 2025.
HISTORICAL CONTEXT
None.
EQUITABLE OR STRATEGIC CONSIDERATIONS OR IMPACTS
Holding the Truth in Taxation Public Hearing furthers the Strategic Priority of
Operational Excellence and Sustainable Infrastructure as this ensures the City has the
financial capacity to continue to support the community.
Equity Considerations: Having a Truth in Taxation Public Hearing allows the public to
provide commentary on the proposed budget and tax levy. It allows for more public
participation and offers an opportunity of diversity in the voices involved in the city's
financial decision-making processes.
POLICIES (RESOLUTIONS, ORDINANCES, REGULATIONS, STATUTES, ETC.)
Counties, cities with populations exceeding 500, school districts, and metropolitan
special taxing districts are required to conduct a single meeting that allows for public
participation, during which the budget and levy will be discussed.
This meeting may be part of a regularly scheduled meeting but must occur after 6:00
p.m. Minnesota Statute mandates the Truth in Taxation Public Hearing must be
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conducted between November 25 and December 8, 2025.
The City has chosen to conduct the Truth in Taxation Public Hearing on November 25,
2025, at 6:30 p.m.
Because Council announced at the September 23, 2025, City Council meeting, the
Truth in Taxation Public Hearing and adoption of the 2026 Preliminary Property Tax
Levy was scheduled for November 25, 2025, at 6:30 p.m., at the Richfield Municipal
Center Council Chambers, the requirement to publish the Truth in Taxation Public
Hearing and proposed property tax levy notice is not required.
Hennepin County also mailed the proposed 2026 property tax statements to property
owners in Richfield. The property tax statements are based upon the proposed levy,
and announce the date and time of the Truth in Taxation Public Hearing.
CRITICAL TIMING ISSUES
Schedule the final adoption action for the 2025 Revised/2026 Budget and tax levy and
utility rates for December 9, 2025.
The City must adopt their final payable 2026 property tax levies and its proposed 2026
budget no later than December 29, 2025.
FINANCIAL IMPACT
• The preliminary gross tax levy for taxes payable in 2026 is $31,749,380.
• The gross tax levy represents a 6.16% increase from the 2025 gross levy.
• The City’s tax capacity rate is anticipated to increase from 54.57% to 55.81%.
• Included in the 2026 preliminary gross levy is a levy to fund the purchase of
rolling stock and technology equipment of $1,682,308, a levy to fund the
Economic Development Authority of $645,160, and a debt service levy of
$3,946,030.
LEGAL CONSIDERATIONS
The City has scheduled December 9, 2025, for the official adoption of the final levy and
budget. Final adoption of the payable 2026 property tax levies must be completed by
December 29, 2025.
ALTERNATIVE RECOMMENDATION(S)
None.
ATTACHMENTS
1. City TNT Presentation 2025 - 11.25.25
Page 3 of 23
2026 Budget & Tax Levy
Page 4 of 23
Timetable and key events
12 Aug.
Work session: 2026 budget preview, KFS, utility rates & city fees, 2026 CIB/2027-2030 CIP
26 Aug.
Work Session: 2025 Revised and 2026 Proposed Budget presentation with Directors
23 Sep.
Adopted preliminary tax levy
25 Nov.
Truth in Taxation meeting
9 Dec.
Certify final levy, adopt Budget & CIB/CIP
Page 5 of 23
Budget Update
•Labor force participation continues to remain below pre-
pandemic levels.
•Cost of living increase at 3%, average step increase at
2.75%, and average negotiated contract step increases 3%-
5.5%
•Personnel continues to be approximately 71% of the General
Fund budget.
•Debt issues planned for late 2025 funded with local sales tax.
Debt issues planned for late 2026 funded with local sales tax,
utilities, and property taxes.
•Continued inflationary pressure expected to persist into 2026.
Page 6 of 23
Budget Update, cont.
•2026 Local Government Aid (LGA) remains almost
flat, increasing by $37,764.
•2026 Fiscal Disparity Aid increase almost 3% or a
total of $134,500 over 2025.
•Licenses and permits revenue for 2026 is projected to
be similar to 2025 revised and 2024 actuals.
•Rolling stock/building/tech levy at $1,682,308. This
includes a 3.5% increase over 2025 as well as
$100,000 related to buildings maintenance.
•EDA levy at $645,160 which is a 3.5% increase.
•Proposed levy increase is 6.16%.
Page 7 of 23
History
of State
Aid
Certified Change
2014 -$1,937,907 $0
2015 -$2,053,363 $ 115,456
2016 -$2,084,057 $ 30,694
2017 -$2,094,443 $ 10,386
2018 -$2,229,280 $ 137,837
2019 -$2,235,643 $ 6,363
2020 -$2,366,046 $ 130,403
2021 -$2,001,680 $ (364,366)
2022 -$2,010,927 $ 9,247
2023 -$2,038,711 $ 27,784
2024 -$3,392,552 $1,353,841
2025 -$3,410,633 $ 18,081
2026 -$3,448,397 $ 37,764
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City Reserves
City policy also requires the General Fund to have reserves not less than 40% of
current year expenditures. The balance was $12,028,802 at FYE 2024. This is a
separate reserve from above.
Long-term Capital Reserves
2024 Balance $ 7,113,666
2025 Budgeted Transfers# ($565,000)
2025 Projected Balance* $ 6,548,666
2026 Budgeted Transfers # ($530,000)
2026 Projected Balance* $ 6,018,666
* Projections do not include any investment returns
# Transfers to Ice Arena, Pool and Central Garage
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Forecast of City Reserves
•Planned Capital Reserves transfers since 2021 to bring
negative reserves in the Ice Arena and Pool into the black
by 2028.
•The Pool ended positive in 2024 at $209,957.
•Reduced transfers to GF to zero in 2024 (LGA increase
funded previous budget gap).
•Budgeting surplus to fund General Fund 40% reserve
requirement in 2025 and 2026 to stop future transfers
from reserves.
•Proposed 2026 Rolling Stock, Equipment and IT levy
increase is 3.5% plus an additional $100,000 to Buildings.
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2026 Proposed Preliminary
Levy
2026 Proposed Levy is $31,749,380
o Increase of 6.16%over the 2025 Levy
$25,475,883•General Fund Levy
•Equipment Levy
•EDA Levy
–Base Levy Total
•Debt Service Levy
–Total 2026 Levy
$ 1,682,308
$645,160
$27,803,351
$3,946,030
$31,749,380 (6.16%)
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Gross Tax Levy History
2026 $31,749,380 6.16% increase
2025 $29,907,569 5.45%increase
2024 $28,363,158 5.89%increase
2023 $26,784,954 6.60%increase
2022 $25,127,419 4.98%increase
2021 $23,934,632 5.50%increase
2020 $22,687,471 4.90%increase
2019 $21,626,692 4.87%increase
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2026 Proposed Levy
Impact on the Average
Richfield Home
2025
•$319,000 average home
•City Tax $1,743
•Increase over 2024: $86
2026 Proposed
•$327,000 average home
•City Tax $1,825
•Annual tax increase: $82
Page 13 of 23
Page 14 of 23
2026 Proposed General Fund
Budget
The 2026 proposed General Fund Budget of
$35,134,115 is a:
•7.35% increase from the 2025 adopted
budget
•7.16% increase from the 2025 revised budget
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General Fund Budget Expenditure History
Average increase of 5.25%
2026P:
7.35%
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
2019 2020 2021 2022 2023 2024 2025 2026
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General Fund Revenues
2025A 2025R 2026P
Taxes 23,419,852 23,419,852 25,223,647
Licenses and Permits 1,177,750 1,121,850 1,130,850
Intergovernmental 5,294,208 5,492,443 5,766,368
Charges for services 1,766,800 1,947,888 1,830,300
Fines and forfeitures 200,000 215,000 220,000
Miscellaneous 58,750 80,975 129,255
Transfers 812,600 508,490 833,695
32,729,960 32,786,498 35,134,115
Page 17 of 23
2026 (2025) Proposed Budget General
Fund Revenues
Taxes
72% (71%)
Intergovernmental
Revenue
16% (16%)
Charges for Service 5%
(5%)
License/Permits 3%
(4%)
Fines/Forfeits 1% (1%)
Miscellaneous
Revenue/Transfers 3%
(3%)
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General Fund Expenditures
2025A 2025R 2026P
Legislative/Executive 1,314,929 1,300,946 1,360,777
Administrative 1,304,174 1,357,601 1,427,977
Finance 678,020 495,832 701,628
Public Safety 12,824,640 12,586,184 13,642,788
Fire 6,188,977 6,333,130 6,641,729
Community Development 1,865,120 1,806,325 1,916,110
Public Works 5,303,150 5,301,140 5,949,340
Recreational Services 2,474,590 2,474,590 2,561,200
Transfer Out 352,250 352,250 372,250
0.44% Paid Family Medical Leave 0 0 115,000
40%Fund Balance Reserve 424,110 778,500 445,316
32,729,960 32,786,498 35,134,115
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2026 (2025) Proposed Budget
General Fund Expenditures
Public Safety
39% (39%)
17% (16%)
Public Works
5% (6%)
Comm. Develop
4% (4%)
Admin. Service
4% (4%)
Leg/Exec.
Recreation
7% (8%)
Fire
19% (19%)
Transfers
1% (1%)
2% (2%)
Finance Paid Family Medical Leave & Reserves
2% (1%)
Page 20 of 23
Staffing Update –
2025R Proposed Position Additions:
•Adding 1 full-time Finance-Senior Financial Analyst, Sept
2025
•Public Works-Asset Mgmt/GIS Analyst, Nov 2025
2025R Proposed Temporary Position Additions:
•Administrative Services/HR-PT Admin Support,current
through year end
•Administrative Services/Communications-PT Web
Coordinator, Sep 2025-Sep 2026
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2026 proposed capital budget
2026 Capital Improvement Budget = $21,976,136
Major projects include:
•$6.725 million in recreation and open space improvements
including WLNC and Veterans Park Complex
•Fleet Vehicle Purchases
•Nicollet Avenue Reconstruction
•64th Street Sidewalk, 73rd Street Sidewalk, and Sheridan Hills
Safe Routes to School (SRTS) projects
•Sanitary Sewer Lining
•Rehabilitation of Stormwater Mains & Structure
•Improvements at the Water Treatment Plant
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2026 proposed capital budget
Rolling Stock/Equipment - Purchases
•Total Cost of Equipment > $1,600,000
•General Tax Levy - $1,174,725
•Internal user fee for services
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