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3 PROFILE OF THE GOVERNMENT The City of Lake Elmo, incorporated in 1926, is a statutory city in the State of Minnesota six miles east of St. Paul, Minnesota. Located in Washington County, it covers 25 square miles and has an estimated 2023 population of 14,033, which represents 5,206 households. Policy-making and legislative authority are vested in a governing council consisting of an elected Mayor and four council members. Per Minnesota State Statute, the governing council is responsible for passing ordinances, adopting an annual budget, appointing committees and hiring both the city’s administrator and attorney. The City Administrator is responsible for carrying out the policies and ordinances of the governing council and overseeing the day-to-day operations of the city. The Council is elected on a non-partisan basis. The Mayor serves a four-year term and council members serve a four-year staggered term, with two of these positions elected every two years. The Mayor and the Council are elected at-large. The City of Lake Elmo provides a full range of Services including fire protection, construction and maintenance of streets and infrastructure, recreational facilities, and water, sanitary sewer and storm water utility services. The City contracts with the Washington County Sheriff’s Department for police services. The annual budget serves as the foundation for the City of Lake Elmo’s financial management and fiscal stewardship. City departments and agencies of the City submit their requested budget to the City Administrator and the Finance Director in order to compile a preliminary balanced budget for submission to the City Council. The preliminary balanced budget is presented to the City Council in September each year so that the preliminary property tax levy can be submitted to Washington County by the annual due date. The preliminary property tax levy may be decreased but not increased. The 2023 Adopted Budget and final property tax levy were required to be adopted by and submitted to Washington County by December 28, 2022. Included in the City’s annual budget process is the compilation of a Capital Improvement Plan which allows for strategic planning of City infrastructure and equipment needs while maintaining a reasonable level of debt and a strong unassigned fund balance. Quarterly budget to actual comparison reports are provided to the City Council to keep them apprised of the financial performance of the City. FACTORS AFFECTING FINANCIAL CONDITION The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Lake Elmo operates. LOCAL ECONOMY Lake Elmo is home to numerous businesses that are leaders in their respective industries. New residential developments platted since 2014 numbering approximately 3,243 dwelling units have been approved. In 2023 and early 2024, the city saw continued interest in residential and commercial growth. Projects started in earlier years continue, including: • Wildflower 4th addition – 41 new single-family homes • Royal Golf 5th Addition – 43 new single-family homes • Hendrix Apartments and Goddard School – 190-unit apartment building and daycare • Drake Development - Tesla, Dairy Queen and two additional commercial lots • Amira - 146 senior rental apt building • Lil Explorers Daycare is under construction • DeMontreville Convent is under construction • Carmelite Church is under construction • The Jesuit Retreat house is under construction • Remodel and new accessory building at Royal Park Golf Clubhouse