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2026-08-25 Work Session MinutesPage 1 of 5 August 25, 2026 1. Call to Order Mayor Supple called the Council Work Session to order at 4:30 pm, on August 25, 2026, in the Bartholomew Room. Council Present: Mary Supple, Mayor; Walter Burk, Sean Hayford Oleary, and Sharon Christensen. Excused: Rori Coleman-Woods. Staff Present: Katie Rodriguez, City Manager; Steve McDaniel, Cash Debt and Budget Manager; Sack Thongvanh, Assistant City Manager; Andrew Spear, IT Manager; Chris Fierst, Liquor Operations Manager; Melissa Poehlman, Community Development Director; Mary Bogie, Finance Director; Rodger Coppa, Interim Fire Chief; Kate Croteau, Human Resources Director; Courtney DesCamps, Senior Analyst; Jay Henthorne, Director of Public Safety; Jennifer Anderson, Support Services Manager; Kristin Asher, Public Works Director; Karl Huemiller, Recreation Services Director; and Michelle Friedrich, City Clerk. 2. Item Discussion a. Presentation of the 2026 Revised/2027 Proposed Budget and Tax Levy. Mayor Supple noted the purpose of the work session was for staff to present the 2026 revised and 2027 proposed budget and tax levy to Council. City Manager Rodriguez thanked department directors, staff, and the Finance Department for their work preparing the recommended budget. She noted the ongoing challenge of maintaining high-quality services while operating within a modest tax base and thanked Budget, Cash and Debt Manager Steve McDaniel for coordinating the budget process. Budget, Cash and Debt Manager McDaniel presented an overview of the 2026 revised and 2027 proposed budgets and tax levy. Staff reviewed the budget development timeline, including the proposed September 22 preliminary tax levy, December 1 Truth in Taxation meeting, and December 8 budget and Capital Improvement Program adoption. The proposed 2027 levy increase is 4.55%, with the HRA levy remaining flat at $742,000, resulting in a combined City and HRA levy increase of approximately 4.45%. Staff noted that the average home value is projected to increase 3.49%, resulting in an estimated $130 increase in taxes on the average home. Budget, Cash and Debt Manager McDaniel reviewed General Fund revenues and expenditures, internal service fund chargebacks, equipment and fleet levy increases, fund balance, debt financing, and planned capital projects. Budget, Cash and Debt Manager McDaniel added the 2027 proposed General Fund expenditures are approximately 2.81% higher than the 2026 revised budget and emphasized the use of fiscal constraint in developing the proposed budget and noted that the General Fund is projected to meet the 40% fund balance target. Council discussed the treatment and presentation of fiscal revenue disparity. Staff explained that fiscal disparities are included with property tax revenue because it is part of the property tax system and noted that it could be shown separately in future budget presentations for greater clarity. Assistant City Manager Thongvanh reviewed the administrative service department's proposed budget, staffing, internal service fund allocations, and 2027 priorities. Discussion included City Clerk and Deputy Registrar operations, records and data management, human resources, information technology, Richfield Council Work Session Minutes August 25, 2026 Richfield Municipal Center Bartholomew Conference Room 6700 Portland Avenue South Richfield, MN 55423 Page 2 of 5 August 25, 2026 cybersecurity, building services, communications, and technology and facility investments. IT Manager Spear highlighted priorities including staff support and training, data management, network infrastructure, cybersecurity, endpoint protection, network monitoring, and technology replacement. Council discussed cybersecurity protections for the City’s information technology and operational technology networks, with improvements prioritized based on risk. Assistant City Manager Thongvanh noted the Building Services priorities include implementation of facility assessment recommendations, capital reserve funding, equipment needs, and opportunities to share or centralize services. Assistant City Manager Thongvanh reviewed the Communications/Cable TV revenue fund, including anticipated expenditure increases, platform and technology updates, long-term planning, and identification of sustainable funding sources. Liquor Operations Manager Fierst presented projected revenues and expenditures for the City’s four liquor locations. Council discussed sales trends, capital needs, and potential changes in federal law. Staff reported that inventory is being reduced while the regulatory environment remains uncertain. Council raised additional questions regarding potential 2027 election-related costs and passport services. Staff indicated that the election budget had been reviewed for potential special-election impacts and would be reviewed again, and that procedures for collecting credit card information for passport appointments would be developed as implementation approaches. Community Development Director Poehlman presented the proposed 2027 Community Development budget. Community Development Director Poehlman noted the department has 21 employees, with approximately half of its operations funded through the HRA and EDA. Community Development Director Poehlman reviewed the City General Fund portion of the budget is proposed to increase by less than 3%, with modest revenue growth anticipated, although development activity and revenues remain below prior years. Community Development Director Poehlman highlighted the department’s 2026 reorganization, recent achievement of full staffing, succession planning, inspector retention and recruitment, and continued employee development and training. She noted the 2027 budget priorities include completion of the Comprehensive Plan update, which will require annual funding in 2027 and 2028, continued staff development, and addressing operational and funding needs. Community Development Director Poehlman also noted that IT cost reallocations reduced the General Fund impact by shifting certain costs to the HRA and EDA. Community Development Director Poehlman added credit card processing fees were identified as a significant expense, particularly for building inspections. Staff noted the 2027 budget assumes implementation of a mechanism to recover a portion of those costs, with approximately $30,000 in related revenue anticipated. Budget, Cash and Debt Manager McDaniel presented the proposed 2027 Finance Department budget. The department includes a contracted Finance Director and 6.5 FTE, with additional finance staff assigned to the utility funds within Public Works. The 2027 proposed Finance Department budget reflects a 0.49% increase. Staff noted that audit costs were previously distributed among the liquor and enterprise funds and have been shifted to the Finance budget. Internal service fund chargeback adjustments, including a reduction in Finance’s building rental allocation contributed to the limited increase. Staff highlighted priorities for 2027, including continued staff development and stabilization, implementation of vendor payment and accounts payable technology, completion of the Tungsten rollout, and implementation of the Financial Management Plan in the 2027 budget process. Finance will also continue reviewing financial practices and internal controls and improving budgeting and reporting for capital projects. Staff noted that the Capital Improvement and Capital Budget document now includes historical and actual project costs to provide a more complete picture of total project expenditures. Page 3 of 5 August 25, 2026 Interim Fire Chief Coppa presented the proposed 2027 Fire Department budget, highlighting staffing stabilization, training, operational continuity, and fleet and equipment needs. Interim Fire Chief Coppa noted the 2027 budget assumes restoration of full command staffing, including the Fire Chief and Deputy Chief positions. Staff noted that approximately 85% of the department’s budget is personnel-related and that staffing shortages, military deployments, and other absences have increased reliance on overtime. Interim Fire Chief Coppa reported that plan review and inspection services are currently contracted, with the goal of transitioning these functions back to internal staff during 2027 as staffing and training allow. Interim Fire Chief Coppa noted additional priorities include professional training, data and performance tracking, fleet replacement planning, and replacement of obsolete radio equipment. Staff also noted rising fire apparatus costs and extended delivery times and indicated that a more sustainable fleet replacement schedule is being developed. Council discussed the Deputy Chief position, which has been vacant since June 2025, and whether funding could instead support additional firefighters. Interim Fire Chief Coppa stated that the Deputy Chief position is critical to department operations, including command, prevention, and training, while acknowledging the ongoing need to evaluate additional shift staffing and reduce reliance on overtime. Council also discussed contracted prevention services and the department’s efforts to strengthen internal capacity and address historical gaps in the prevention function. Human Resources Director Croteau presented the proposed 2027 Human Resources budget. Human Resources Director Croteau noted the department is funded through the General Fund and supports the City’s workforce through recruitment, onboarding, retention, collective bargaining, compensation, benefits, workers’ compensation, safety and compliance, training, equity initiatives, performance management, and workforce planning. Human Resources Director Croteau added the department has four full-time and one intermittent employee and is now established as a separate department, with the Equity Coordinator position transferred to Human Resources. Key 2027 priorities include staff professional development, compensation structure review, paid family and medical leave administration, employee benefits, workplace and safety training, supervisory development, tuition reimbursement, a proposed language incentive program, and continued implementation of employee recruitment and training technology. Senior Analyst DesCamps presented the proposed 2027 Legislative and Executive budgets, which include 2.5 FTE and four budget divisions: Mayor and City Council, Other Agencies, City Manager, and Legal. Senior Analyst DesCamps noted the City Council budget is proposed to increase 0.69%, due to personnel costs and Minnesota Paid Family and Medical Leave, with one-time 2026 costs for an essential services study and executive search removed and funding added for the 2027 strategic plan. Senior Analyst DesCamps added the Other Agencies budget is proposed to increase 3.21%, due to service contract and personnel costs. Senior Analyst DesCamps noted the City Manager's budget is proposed to decrease 16.79%, due to the transfer of the Equity Coordinator position and related projects to Human Resources. Senior Analyst DesCamps noted the Legal budget is proposed to increase 2.91%, due to adjustments to prosecution and general legal service costs. Council asked about the Minnesota Paid Family and Medical Leave allocation. Staff clarified that the cost is included in departmental budgets as applicable to eligible employees and does not apply to elected officials. Director of Public Safety Henthorne presented the proposed 2027 Public Safety budget, noting a projected 4.8% increase primarily due to personnel costs, insurance, paid family and medical leave, pensions, aging radio replacement, increased IT costs, professional development, and a policy and procedure management platform. Staff highlighted priorities including technology and cybersecurity upgrades, radio replacement, training and succession planning, emergency notification and siren maintenance, and implementation of a short-term rental licensing and compliance platform. Director of Public Safety Henthorne also reported anticipated increases in grant, fine and forfeiture, licensing, and short-term rental compliance revenues. Emergency Services expenditures are projected to increase 2.77%, while Support Page 4 of 5 August 25, 2026 Services expenditures are expected to increase by approximately $80,000. Council discussed code enforcement capacity and performance measures. Staff reported a 95–97% compliance rate and noted that three cadets have increased proactive enforcement capacity. Support Services Manager Anderson noted routine violations are generally resolved quickly, while more complex cases require additional staff time. Staff added that each cadet receives approximately six weeks of training. Mayor Supple recessed the meeting at 6:05 pm. Mayor Supple reconvened the meeting at 6:10 pm. Public Works Director Asher presented the proposed 2027 Public Works budget. The department includes four General Fund divisions, three enterprise divisions, and the Central Garage internal service fund, with 54 full-time employees and approximately 67 employees during the seasonal months. Public Works Director Asher reviewed budget changes within Public Works Administration, Engineering, Streets, Water, Sewer, Stormwater, and Central Garage. Key items include office renovations, completion of a federal forestry grant, major water capital projects, increased water treatment and maintenance costs, an increase in the Metropolitan Council Environmental Services fee, Norby’s Pond reconstruction, and additional funding for storm sewer inspection and cleaning. Staff noted that changes in utility budgets are largely attributable to capital projects and associated bond proceeds and grants. Public Works Director Asher noted the Central Garage budget reflects continued challenges with vehicle availability, delivery times, and increasing equipment and maintenance costs. Public Works Director Asher reviewed the proposed fleet portion of the equipment levy. Staff also reported progress toward hiring a GIS Asset Manager and improving the City’s asset management program. Public Works Director Asher highlighted 2027 priorities including capital project planning, comprehensive planning efforts, surface water and water supply planning, transportation and non-motorized planning, and reconstruction of Norby’s Pond. Public Works Director Asher also discussed pursuing a joint feasibility study with Bloomington for the Wilson Pond area to address flood mitigation and downstream capacity concerns. Recreation Services Director Huemiller presented the proposed 2027 Parks and Recreation budget and noted the department has 21 full-time employees and more than 125 seasonal and part-time employees supporting the pool, ice arena, community center, and Wood Lake Nature Center. Recreation Services Director Huemiller added the department includes General Fund operations and special revenue funds for the pool, ice arena, Veterans Park, and sustainability programs. Recreation Services Director Huemiller highlighted increased Wood Lake expenditure and revenues associated with two new full-time positions and the new facility. Recreation Services Director Huemiller added the Event Coordinator position will be split between Wood Lake and the ice arena, with anticipated rental and program revenues expected to offset the position’s costs. Staff also anticipate increased facility-rental and arena revenues and will continue efforts to eliminate the ice arena’s negative fund balance. Recreation Services Director Huemiller noted the 2027 priorities include hiring a Natural Resources Coordinator to begin implementing the Natural Resources Management Plan, coordinating grants and volunteers, and advancing natural resource and tree canopy initiatives. Recreation Services Director Huemiller added capital projects include Veterans Park improvements, ice arena renovations, community center planning, park building and lighting improvements, locker room renovations, and playground replacement. Recreation Services Director Huemiller also highlighted efforts to increase facility rentals and youth programming, expand community center weekend rentals, and implement a new Garden-to-Kitchen program funded through a Department of Agriculture grant. Council discussed the potential impact of Veterans Park construction on the Farmers Market; staff indicated the market is expected to continue, with relocation within the park if necessary. City Manager Rodriguez noted that the Council packet includes a summary of department highlights and accomplishments from the past year, along with action steps outlining updates on 2026 projects and priorities for 2027. Page 5 of 5 August 25, 2026 3.Adjournment Mayor Supple adjourned the work session meeting at 6:47 pm. Date Approved: September 8, 2026 Mary Supple Mayor Michelle Friedrich City Clerk Katie Rodriguez City Manager