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06-15-2026 CCM Meeting of the City Council Held at the Elk River City Hall Monday, June 15, 2026 Members Present: Mayor John Dietz, Councilmember Cory Grupa, Councilmember J. Brian Calva, Councilmember Mike Beyer, Councilmember Jennifer Wagner Members Absent: None Staff Present: City Administrator Cal Portner, City Attorney Sharda Enslin, Senior Planner Chris Leeseberg, Business Services Director/Assistant City Administrator Joe Stremcha, Community Development Director Zack Carlton, and City Clerk Justin Dunford. 1. CALL MEETING TO ORDER Pursuant to due call and notice thereof, the meeting was called to order at 06:07 PM. 2. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was recited. 3. CONSIDER AGENDA Moved by Councilmember Calva and seconded by Councilmember Beyer to approve the agenda. Motion carried 5-0. 4. CONSENT AGENDA Moved by Councilmember Beyer and seconded by Councilmember Wagner to approve the following consent items as outlined in their respective staff reports. Motion carried 5- 0. 4.1 June 1, 2026 Regular Meeting Minutes 4.2 Check Register 4.3 Hire Police Officer Harris 4.4 Resolution 26-41: Appointment of Absentee Ballot Board for 2026 Statewide Primary 4.5 2026-2027 Liquor License Renewals 4.6 Temporary On-Sale Liquor License: Davis-Darrow-Meyer American Legion Post 112 City Council Minutes June 15, 2026 --------- Page 2 of 8 4.7 Hire Police Officer Daly 4.8 Hire City Hall Support Assistant 4.9 Hillside Mural 5. OPEN FORUM Steven Cyr, 19199 Jackson Ct NW, voiced concerns regarding driving and crossing on Jackson Street. Mr. Cyr is seeking safety improvements for that street. Council referred the issue to Justin Femrite, Public Works Director and Chief Engineer. He will study the issue and then return to council with a recommendation. 6. PRESENTATIONS, AWARDS, AND RECOGNITION 6.1 City of Elk River Volunteer of the Month Mayor Dietz presented the June 2026 Volunteer of the Month award to Gregory Crow. He highlighted the following: Mr. Crow provides airplane rides for kids through the Experimental Aircraft Association Young Eagles Program. Gregory works at the annual Airventure event in Oshkosh, Wisconsin. He is very active in the local American Legion chapter, having served as First Vice Commander, Second Vice Commander, and Adjutant. Gregory is also a member of the Legion Riders. Mr. Crow serves as a member of the American Legion Honor Guard for funerals, football and hockey games, Memorial Day, and Verterans Day events. He also serves food at the Legion fish dinners during Lent. 6.2 Annual Comprehensive Financial Report for Year ended December 31, 2025 Presented by Lori Stitch, City of Elk River Finance Manager. The 2025 Audit was completed by BerganKDV. Andrew Grice presented the findings to the council. The information presented to council was the Independent Auditor's Report. As a result, the information is the unmodified opinion of the reviewing agency, which is the best that can be provided by a financial auditor. The Independent Auditor's Report was conducted in accordance with Government Auditing Standards. The city has a policy to maintain a minimum fund balance between 40-45% of budgeted expenditures. The city currently has a fund balance of 42% compared to budgeted expenditures. Expenditures and revenues came in better than budgeted, as there were lower expenditures and higher revenues. By the end of the year, the city ended up with $350,000 in net fund balance. Mr. Grice stated that the city should consider using fewer intergovernmental transfers for the General Fund. Mr. Grice reviewed funds that the city operates with, such as the Multipurpose Facility Fund, Sewer Operations Fund, Storm Water Operations Fund, and the Municipal Liquor Fund. City Council Minutes June 15, 2026 --------- Page 3 of 8 6.3 Introduce New Staff Lori Stitch introduced Erika Pudas, who started as an accountant on May 26, 2026. 7. PUBLIC HEARINGS 7.1 Ordinance 26-14: Add Outpatient Medical Facilities as a Conditional Use in the Business Park, Lift PT Moved by Councilmember Wagner and seconded by Councilmember Beyer to Adopt Ordinance 26-14 amending Section 30-1295, Business Park District, establishing Outpatient Medical Facilities as a Conditional Use. Motion carried 5-0. Senior Planner Chris Leeseburg presented the staff report. A Conditional Use Permit Request was made by Lift PT to allow Outpatient Health Care Facilities in the business park. The applicant went before the Planning Commission for a Concept Review. Commission unanimously recommended approval of the ordinance amendment before council. Mayor Dietz opened the public hearing. Kelsey Fransen, owner of Lift PT, spoke before Council. She had been looking for space for her business for three years to expand physical therapy operations in the city. 65% of athletes treated at Lift PT are local athletes from both high school and college levels. Building usage is much better in warehouse-type settings due to the high ceilings. Mayor Dietz closed the public hearing. Councilmember Wagner spoke positively of the process and of Lift PT. She personally helped the owner and is very supportive of seeing this change occurring in the business park to best reflect times and how businesses change and adapt. 7.2 Ordinance 26-15: Allowed Uses in the Business Park Zoning District, Onyx Strategic Partners Moved by Councilmember Calva and seconded by Councilmember Grupa toadopt, by motion, Ordinance 26-15 amending Section 30-1295, Business Park District, establishing Medical Facilities, Outpatient, Printing and Publishing, and Repair Services as Permitted Uses. Motion carried 4-1. Moved by Councilmember Wagner and seconded by Councilmember Beyer to direct, by motion, staff to prepare a finding of fact denying the ordinance amendment request to allow Indoor Commercial Dog Kennels and removing limitations on Warehouse Space in the Business Park (BP) zoning district. In addition, to direct staff to prepare an ordinance amendment to add Physical Recreation or Training and Health and Fitness Clubs as Interim Uses. Motion carried 5-0 No one spoke during the public hearing. Onyx Strategic Partners is seeking an amendment to allow a number of additional uses in the Business Park zoning district. The Business Park zone has been amended numerous times to respond to the business and commercial market. Recreational uses are often discouraged in industrial zoning areas. For City Council Minutes June 15, 2026 --------- Page 4 of 8 example, recreational users may be exposed to a number of hazards. The Business Park is intended to preserve areas for manufacturing, processing, and similar employment-generating business. The amendment went before the Planning Commission. The Planning Commission agreed with some alterations but disagreed with others. Uses the Planning Commission agreed with and staff has no issues with: wholesale, printing and publishing, repair services (not vehicle repair), machine shops. The amendment is before council to add these as permitted uses. Staff is also looking for direction to prepare Findings of Fact denying physical recreation or training, health and fitness clubs, indoor commercial dog kennels, and removing limitations on the warehouse space of the Business Park. Councilmember Wagner brought up a comment she made at the end of the Planning Commission Meeting. She had made mention of making use of the higher ceilings in the Business Park for some recreational purposes. Councilmember Wagner sought to have recreational use as a Conditional Use (CUP) or Intermittent Use (IUP). 7.3 Ordinance 26-16: Oakwater Ridge PUD Standards Related to Signage, Capstone Homes Moved by Councilmember Wagner and seconded by Councilmember Calva to adopt, by motion, Ordinance 26-16, establishing PUD standards for marketing and development signage within the Oakwater Ridge development. Motion carried 5-0. No one spoke at the public hearing. Capstone Homes is seeking larger marketing signs and approval of an entrance monument. All larger marketing signs are required to be removed upon acceptance of the final residential phase. The Planning Commission unanimously recommended approval of the PUD before council. 7.4 Ordinance Amendment and Conditional Use Permit: Data Center, Michael Margulies, 19178 Industrial Blvd NW Moved by Councilmember Beyer and seconded by Councilmember Calva to continue the hearing to July 6, 2026. Motion carried 5-0. Two applications before Council: an ordinance amendment and a Conditional Use Permit. The ordinance amendment is to allow data centers in I-1 and I-2 zoning districts (Light Industrial Zoning District). The city can include standards for new data centers through this ordinance amendment. The Conditional Use Permit is for the data center project at 19178 Industrial Blvd. The applicant is seeking to utilize an approximately 60,000 square foot existing building. It will be a 33 MW max load, with a 23 MW initial construction. The data center will utilize a closed-loop cooling system and look to employ roughly 40 full-time employees. The closest residence is approximately 930 feet away, and the applicant is preparing a noise study to bring before the Planning Commission at the June 23, 2026, meeting. General Manager Mark Hanson provided an education process on how electric load is delivered by sub- stations to a given customer. In addition, Mr. Hanson explained the infrastructure impacts, utility rate impacts, and risk management of this potential data center project. Applicant Michael Margulies provided background on the project as well as their intent to answer any questions brought by staff or the public. Mr. Margulies spoke about the upcoming noise study, including low-frequency emissions. City Council Minutes June 15, 2026 --------- Page 5 of 8 Mayor Dietz opened the public hearing and set speaking rules of three minutes per speaker. Tony Sofio, 19370 Upland St NW, Elk River, MN 55330 Mr. Sofio is concerned about the number of questions that remain about the project. In addition, Mr. Sofio sees potential risk of the project from noise pollution, environmental impacts, and broader impacts on the community. Mr. Sofio seeks to know if construction jobs are going to be local and whether the potential for 40 full-time jobs will actually be fewer jobs. Andrea Claire, 18950 Queen St., Elk River, MN 55330 Mrs. Claire is a 15-year resident of Elk River. She is concerned about the city's growth and what the city is becoming as development continues. Rebecca Ruley 19551 Vernon St. Based on all the information presented, she believes Elk River has enough money as is and does not wish to see a data center created. Jessie Lang, 19371 Upland St NW, Elk River, MN 55330 Mr. Lang raised concerns about the ownership of the project, Swervo and Michael Margulies. Mr. Lang also raised concerns about noise pollution and how low-frequency noise can be inadequately captured by standards and noise studies. Mr. Lang seeks 5 conditions be added to the CUP. Pre-construction baseline becomes the operative limit. Independent peer review at applicant's cost. Scope must require C-weighted and octave band analysis, chiller yard receptor placement, full 33 MW load model, and nighttime evaluation. Post-construction verification with a remedy trigger. Annual monitoring for 5 years. Generator testing to be limited to weekday daytime periods. Cynthia Grummak, 18384 Xerxes St NW, Elk River, MN 55330 New to the community and is concerned about the levels of noise that the data center would create. Desires the City Council to ensure there are experts that will assist with project review and to educate the City Council. Jan Filer, 19448 Vernon St, Elk River, MN 55330 Concerned neighbor who has been a licensed real estate agent and brokerage for over 20 years. Mrs. Filer has experienced potential home buyers who are concerned about potential negative effects on the real estate market and property values. Sarah Spiers, 19366 Vernon St NW, Elk River, MN 55330 Mrs. Spiers is concerned about the impacts on the neighborhoods near the data center. As an educator, she is concerned about water pollution, noise pollution, and negative long-term health effects. Mrs. Spiers is looking to ensure that there are strong protections against environmental impacts on the rest of the community and independent review of the noise created by the data center. Assid Abdul, 8655 Erik St, Elk River, MN 55330 Mr. Abdul is concerned about the water used during hot days, is seeking boundaries against the noise pollution, and wants to know how the money is going to be spent. Mr. Abdul asked staff about the water usage of the facility and is seeking budget transparency. David McClellan, 1877 Ulysses St NW, Elk River, MN 55330 Mr. McClellan brought concerns about a closed loop system not being a truly closed loop system, and there being additional non-disclosed water usage. Mr. McClellan also seeks transparency in the data City Council Minutes June 15, 2026 --------- Page 6 of 8 used to estimate utility revenue from the proposed data center project. Tim Jones, Owner of Aegir Brewing Company Mr. Jones is concerned about the potential negative effects on the data center being a neighbor to his company. His concern is that his business would close due to the data center. Sarah West, 17885 Tyler St NW, Elk River, MN 55330 Mrs. West wanted to know if the city council signed non-disclosure agreements during the course of this project. Mrs. West is concerned that data centers tend to only last 10 years and wants to know what comes afterward. Anna Wagner, 12616 3rd Ave S, Zimmerman, MN Mrs. Wagner was a 42-year resident of Elk River until recently. She submitted information to the city council for their review. She raised concerns about the data center project, highlighting a Gallup poll showing the unpopularity of data centers. She also raised concerns about infrared sound. Jack Lorge, 1940 Lowell St NW, Elk River, MN Mr. Florge raised concerns about community members not being aware of the potential project and the public meetings the city has been holding. Mr. Florge asked to have a petition circulated outside of the council chambers. Mary Gillete, 13919 223rd Ave NW, Elk River, MN 55330 Mrs. Gillete is seeking power guarantees regardless of the data center's activity and wants to ensure that residential utility customers are protected from any negative effects of the data center. Abby Huslid, 14099 182nd Ave, Elk River, MN 55330 Ms. Huslid is currently a Concordia College student and grew up next to one of the current data centers in Elk River. She is concerned about the moral aspects of the data center and the potential negative effects on the community. She does not want to see a third data center present in Elk River. Nick Canable, 9660 178th Ave, Elk River, MN 55330 Mr. Canable is a millwright and believes that there is no such thing as a closed-loop system. He is also concerned about the noise and vibrations from the generators in the data center should power go out. Vicky Stevenson, 19890 Watson Cir NW, Elk River, MN 55330 Mrs. Stevenson raised concerns about the number of schools in the general vicinity of this proposed project, in addition to sports fields. Mrs. Stevenson is concerned about the frequency, noise, sound, and air pollution of the cooling system and the generators. Jessica Rolsehouse, 12542 194th LN NW, Elk River, MN 55330 Mrs. Rolsehouse wanted to raise concerns about this project, its proximity to neighborhoods and the community, and the project's potential impacts. Sabrina Mattiss, 12600 105th Ct NW, Elk River, MN 55330 Mrs. Mattiss has an autistic, non-speaking child and highlights the negative effects of sound on her well- being. She also raised concerns that the city council might be receiving kickbacks or employment from the developers. With no one else to speak on the matter, Mayor Dietz closed the public hearing. City Council Minutes June 15, 2026 --------- Page 7 of 8 8. GENERAL BUSINESS 8.1 Northbound Construction Guaranteed Maximum Price (GMP) Moved by Councilmember Calva and seconded by Councilmember Grupa to approve, by motion, the guaranteed maximum price (GMP) of $6,020,589 for Terra Construction to begin constructing the new Northbound liquor store. Motion carried 5-0. 8.2 Parks and Recreation Framework Plan Moved by Councilmember Wagner and seconded by Councilmember Beyer to approve, by motion, the Parks and Recreation Framework Plan proposal submitted by ISG. Motion carried 5-0. 8.3 Tall Pines Occupancy Permits Tall Pines Developer is seeking occupancy permits to be released so that they can begin selling homes. The occupancy permits have been held up due to a stormwater issue. Council was firm in its direction that no occupancy permits would be released until the stormwater review and permits have been accepted by staff. 9. MOTION TO ADJOURN REGULAR MEETING Moved by Councilmember Calva and seconded by Councilmember Grupa to adjourn the meeting. Motion carried 5-0. The regular meeting adjourned at 8:26 p.m. Mayor Dietz called the work session to order at 8:31 p.m. 10. WORK SESSION 10.1 Concept Review: Subdivision and Commercial Development along Highway 10 Community Development Director Zack Carlton presented the staff report to City Council. City ordinance requires all billboards be placed on their own plats. As a result, staff are looking at plans to create a plat for billboards along Highway 10. One of the impacts is that development potential in the area is pushed back behind the billboard plats that would be created. Another option would be to amend the ordinance to have billboards added as PUD so that they do not need their own plats. Council was supportive of this idea. 11. COMMUNITY EVENT CENTER JOINT SESSION The Community Event Center Commission was called to order at 8:43. 11.1 2027 Facility Rates FT Center staff presented the 2027 Facility Rates, which includes facility and event rentals. Primarily, rates are increasing with the inflation rate and are based on a review of local rates. City Council Minutes June 15, 2026 --------- Page 8 of 8 Rates are broken down into three categories, Bronze, Silver, and Gold. 11.2 Capital Improvement Items Staff presented current Capital Improvement Items to the joint meeting. The FT Center is looking to increase the number of bathrooms in the facility, as the current bathrooms are located on only one side of the building. The parking lot is in the process of being expanded as well. Lastly, team shower facilities are being explored. One of the main hurdles is ensuring the showers, as well as bathrooms, meet ADA requirements. After the Capital Improvement items were discussed, the joint meeting discussed the continuing purpose and mission of the Community Event Center Commission. 12. MOTION TO ADJOURN Moved by Commissioner Hecker and seconded by Commissioner Beyer to adjourn the meeting of the Community Event Center Commission. Motion carried 4-0. Moved by Councilmember Beyer and seconded by Councilmember Calva to adjourn the meeting of City Council. Motion carried 5-0. The meeting adjourned at 09:28 p.m. Minutes prepared by Justin Dunford. 13. INFORMATION 13.1 May Financial Reports __________________ John J. Dietz, Mayor _______________________ Justin Dunford, City Clerk