Becca, the city manager, presented preliminary guidance for the 2025 budget and told the council she recommended setting a final tax levy that reflects a 3%–7% increase in the general fund levy, along with required debt-service levies. She said the preliminary levy is often set higher because a final levy can be reduced but not increased after the preliminary is set.

On health insurance, Becca said the city is budgeting conservatively for a 10%–15% increase after prior plan years that produced large jumps; "we may budget for 15% for health insurance just because health insurance has been, quite high." She also noted the city's PEAP contract is a two-year agreement that may influence cost trends.

Staff reported ongoing union contract negotiations for police and other employees; a wage-and-benefit study is underway with results expected in July that will inform bargaining. Becca said the city plans to maintain workforce levels but anticipates modest wage increases and noted employer/employee obligations tied to a new state family and medical leave program that will include a 0.7% contribution starting in 2026.

Capital and infrastructure priorities discussed included a planned 2025 street, water and sewer project on the west side of town (preliminary numbers expected from Jeff Quune); a proposed $200,000 contribution to capital outlay; potential MS4-related stormwater fees to fund upcoming projects; continued pursuit of grants for park and bathroom projects after a Wells Park bathroom grant denial; lead-service-line surveys with potential replacement contingent on state funds; and coordination with MnDOT on environmental and utility-relocation costs for a Highway 9 sidewalk project. Becca also flagged exploratory solar projects at the bus garage and treatment facilities pending sustainability staffing and upfront budget commitments.

Outcome and next steps: Council heard the guidance and asked staff to continue refining preliminary numbers, set dates to meet with bargaining counterparts, and prepare further cost estimates for proposed projects ahead of the formal preliminary levy deadline.