Summary   
5:30 P.M. - WORK SESSION (TRAINING ROOM) 

Hwy 7 Corridor Study Update 
 
The City Council received an update on MnDOT’s Highway 7 Corridor Study. The study covers Highway 7 from I-494 to western Carver County, with Chanhassen’s stretch running from Minnewashta Parkway to Highway 41, which is included in Segment 1. 

MnDOT outlined its recommended approach for Segment 1, which features roundabouts at key intersections, a concrete median barrier to reduce severe crashes and turning conflicts and a continuous multi-use trail along the corridor. Roundabouts are under consideration at County Road 92, County Road 44, County Road 13, Minnewashta Parkway and Highway 41, with a three-quarter intersection at Eureka Road. MnDOT noted that these changes would address the project’s main needs: safety, mobility and better pedestrian and bike connectivity. Most of these safety improvements are not currently funded as part of MnDOT’s planned project in 2029. 

Staff also reviewed public feedback from the current engagement period, which remains open through November 30. More than 500 comments and nearly 300 in-person conversations have been collected. Common themes include concerns about median access changes and construction impacts, as well as mixed opinions on roundabouts and the trail. There is strong support for improvements at Eureka Road. 
 
Council members stressed the importance of consistent community engagement as the project moves forward and emphasized the need for clear communication from MnDOT so residents remain educated, informed and involved throughout each stage of planning and design. 

MnDOT will finalize public comments at the end of the month and prepare a final report in December 2025, with additional design work and engagement to follow. 

Final Review of 2026 Budgets, 2026-2030 CIP, and Property Tax Levy 
 
The City Council reviewed the final draft of the 2026 operating budgets, the 2026–2030 Capital Improvement Plan and the proposed property tax levy. This followed several months of workshops where staff refined cost projections and aligned each fund with the city’s long-term goals. The Finance Director’s presentation comes ahead of the formal adoption, which will take place at the December 15 Truth in Taxation meeting. 

Staff reported that the 2026 general fund budget is balanced at $16.96 million. Revenues are supported by higher permit activity and increased police and fire state aid, while key cost drivers include wage and benefit adjustments, a 15 percent health insurance increase and a rise in the county policing contract. 

The presentation also covered special revenue, capital project and enterprise funds. Staff noted that enterprise fund rate increases adopted last year will continue in 2026, but the storm water and sewer funds still show negative trends in later years. Council asked staff to monitor those funds closely and consider long-term strategies to strengthen overall financial health. 

Staff then walked through levy options. The preliminary levy adopted in September was 7.2 percent and included a $35,000 contingency, which was suggested to be allocated  to the park renovation fund. Removing that contingency would reduce the levy to 6.9 percent. A comparison of nearby cities showed Chanhassen’s proposed levy toward the lower end in comparison to neighboring similarly sized cities and well below the statewide average. A median-value home at $501,600 would see an increase of about $75 annually under a 6.9 percent levy. 

After discussion, the Council selected Option A, removing the $35,000 contingency and lowering the levy from 7.2 percent to 6.9 percent. Council will revisit the long-term outlook of the park renovation fund at a future workshop next year. 

With this adjustment, the city remains on track to adopt a balanced budget for 2026. 

Lake Ann Park Preserve Update 
 
The City Council received an update on the Lake Ann Park Preserve project as staff reviewed recent archaeological findings, Minnesota State Historic Preservation Office (SHPO) responses and the construction schedule planned for 2026. The city submitted its Phase I and Phase II survey reports, project alignment plans and required SHPO forms on August 8. 

Staff summarized SHPO’s findings across three sites. Sites 21CRO186 and 21CRO187 were cleared to proceed because both lacked the historical context needed for National Register eligibility and the planned work will not disturb sensitive areas. Site 21CRO188 needs more review since the planned trail crosses an area with known archaeological material. SHPO asked the city either to reroute the trail or conduct additional data recovery. 

To address this, the city and the 106 Group developed a revised plan that places clean fill over the existing surface so the trail can be built without digging into artifact layers. This cap and fill approach was submitted to SHPO on October 28 and a determination is pending. 

Staff also reviewed project costs. Roughly $1.39 million has been spent to date, funded through ARPA, a DNR grant and assigned balances. About $3.3 million in total funding is available, leaving the project in a positive position once remaining trail and parking lot work is complete. 

Looking ahead, bid documents will be updated and split this winter. The parking lot and north trail section will be advertised in December 2025 with an award expected in January 2026. Tree clearing is planned for February, followed by spring and summer construction. If approved by SHPO, the south trail segment will be added. 

Sign Code Discussion 

The City Council continued its review of proposed updates to the city’s sign ordinance, part of the 2025 Community Development work plan. Staff outlined recommended changes to outdated definitions and explained amendments needed to align the code with federal law, including First Amendment requirements that prevent regulating signs based on content. This will require shifting several rules toward size, placement and design rather than message. 

The presentation included data on temporary sign permits. Only 28 permits were issued between 2023 and 2025, with most tied to recurring banners or a single parcel. Given the low volume, staff recommended removing the permit requirement while keeping all existing lawful standards.  

Staff also reviewed areas where the zoning code and Downtown Design Guidelines need alignment, including projecting signs, awning signs and options for canopy signage. Council discussed which sign types should remain allowed and where additional standards may support long-term downtown character. 

Staff also shared how much sign area downtown businesses currently use compared to what is allowed, noting most use less than 6 percent of their available wall area. This prompted discussion about whether to adjust maximums now in anticipation of future redevelopment or wait to revisit them as specific projects come forward. 

City Council expressed their support for projecting signs on the first floor for but did not desire to allow for large projecting signs on upper floors.   Council shared initial impressions and discussed the pros and cons of updating the ordinance in advance of expected downtown growth. 

7:00 P.M. CITY COUNCIL MEETING (City Council Chambers) 

Consent Agenda  

The Council unanimously approved the following items on the Consent Agenda. They were: 

Invitation to the Annual Tree Lighting Ceremony 
 
The City Council invited residents to attend the upcoming Tree Lighting Ceremony, continuing the city’s tradition of highlighting major community events during public announcements. This event will take place on Saturday, December 6, 2025, at 5 p.m. at the Chanhassen Recreation Center due to ongoing Civic Campus construction. Council noted the activities planned for the evening along with the community partners who help make the event possible. 

Resolution 25-XX - Consider a Request for Approval of a Metes and Bounds Subdivision with a Variance to Subdivide Excess Right-of-Way on the Northwest Corner of Lyman Blvd and Great Plains Blvd 
 
The City Council held a public hearing to consider a request to create a new parcel from excess right of way at the northwest corner of Lyman Boulevard and Great Plains Boulevard. The land was originally acquired during the Highway 212 project and is wider than needed for long-term transportation plans. After approving a purchase agreement with Carver County on October 27, the city needed to complete a metes and bounds subdivision, along with a variance, to formally separate the strip of land from the remaining right of way. 

Staff reviewed the history of the parcel and noted that it has no current zoning designation, though the 2040 Land Use Plan guides it as Mixed Use. Required communications were completed ahead of the hearing, including published notice, a development sign, emails, and postcards to nearby properties. 

The presentation outlined the city’s limited discretion for metes and bounds subdivisions, which must meet established ordinance standards. Staff confirmed that all seven findings were satisfied. A variance was also necessary because the parcel does not meet any of the exceptions in section 18-4 of city code that allow conveyances without subdivision. The need for a variance stems from the parcel’s unique inclusion in an older county right of way acquisition. 

Staff determined that the request meets all criteria for granting a variance, including a demonstrated hardship tied to the property’s history. The subdivision and variance are consistent with the comprehensive plan and do not conflict with surrounding properties. Staff supported approval. 

The City Council adopted the resolution approving the subdivision with a variance, creating a cleanly defined parcel that can support future use consistent with long-term planning goals. 

Resolution 2025-XX: Accept Feasibility Study, Conduct Public Improvement Hearing, and Authorize Preparation of Plans and Specifications for the 2026 City Pavement Rehabilitation Project No. 26-01  
 
The City Council reviewed the feasibility study for the 2026 Street Rehabilitation Project and opened the required public improvement hearing, continuing the city’s annual pavement preservation process. Staff outlined the two project areas planned for 2026. The Vasserman area will receive mill and overlay with limited curb, sidewalk, and utility repairs, while most streets in the Fox Hollow area require full reconstruction due to deteriorated pavement, drainage needs, and repeated water main breaks. Fox Drive is planned for mill and overlay. Storm sewer additions in the Fox Hollow area will align with the watershed district’s North Lotus Lake Park stormwater project, which will help meet required permitting. 

Staff summarized the city’s engagement efforts, including mailed notices, a dedicated webpage, Sun Sailor publication and a November 19 open house that drew about 75 attendees. Twenty-seven formal comments were received, with the main themes centering on potential realignment of Fox Hollow Drive near the park, questions about assessments, support for drainage improvements and general project questions. 

Preliminary assessments follow the city’s flat rate method. Proposed 2026 rates are 2,940 dollars for mill and overlay and 9,550 dollars for full reconstruction. Final amounts will be set at a separate 2026 hearing. The estimated project cost is 7.1 million dollars, including a 30 percent contingency. 

The public hearing brought significant input from Fox Hollow residents. Many opposed straightening Fox Hollow Drive, citing traffic calming, neighborhood character and safety for children. Others raised concerns about assessment levels and asked for clear communication as designs evolve. Staff explained existing infrastructure shortcomings and noted that any realignment concept remains preliminary. Council members discussed neighborhood concerns, traffic patterns and experiences from other areas where increased connectivity did not lead to the issues residents feared. 

Council directed staff to continue exploring design options that preserve the character of the dog leg near the park while still addressing maintenance, access and safety needs. The feasibility study concludes the project is necessary and cost effective at this stage, and detailed design decisions are not required yet. 

Following discussion, the Council accepted the feasibility study, closed the public hearing, ordered the improvements and authorized preparation of plans and specifications. Design work will continue through winter, with another open house in early 2026, an assessment hearing on March 9 and construction expected to begin in May 2026. Substantial completion is planned for October 2026, with final completion in summer 2027.