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4 New applications for building and development continue to come in. Some of which include: • Northstar 1st Addition – 107 new single-family homes • Royal Golf 5th Addition – 43 new single-family homes • Easton Village 6th and 7th Addition – 27 new single-family homes • At Home Apartments – 40 twin homes • Royal Golf 6th Addition – 46 new single-family homes • Bridgewater – 4 Commercial lots and a future apartment site Further, the following commercial building projects were fully completed in 2023: • Kokoro Volleyball - 27,540 sq. ft. athletic facility • 11160 & 11190 Hudson Blvd • City Center additions The City’s highway infrastructure continues to make Lake Elmo a desirable residential location. Rapid growth is further reflected in 2023 population estimates of 14,033 or an increase of 24% since the 2020 census. New housing starts in 2023 numbered 168 with a total permit value of $55,067,525 and an average home value of $327,783. There were three new commercial construction projects in 2023, and a number of remodels and expansions. All these new developments have been built in 2023 or will be finished in 2024, which will greatly strengthen the existing tax base of the City. LONG TERM FINANCIAL PLANNING Total unassigned General Fund balance as of December 31, 2023, was 110% of the next year’s general fund expenditures and other financing uses. Although the State Auditor recommends maintaining a level of 35% - 50%, the City has consistently exceeded that rate, showing the City’s financial strength. In 2023, the City moved from a 5-year to a 10-year Capital Improvement Plan (“CIP”). The City’s 10-year CIP serves as the foundation for long-term financial planning. Funding needs for capital replacements are reflected in tax levies for the street renewal and general fund asset replacements. Funding needs for capital infrastructure in the enterprise funds are funded through user fees in those funds. During 2017, Moody’s Investors Service increased the City's long-term debt rating to Aa1, and reaffirmed this rating in 2022, 2023, and 2024. In their assessment of the City, Moody’s noted the following: • Very strong financial position • Full value per capita and resident income levels exceed the median for similarly rated peers nationally Projections for the next five years indicate that property tax contributions, user fees, and investment income will continue to grow based on planned development and expansion within the City. RELEVANT FINANCIAL POLICIES Trends of the past decade, changes in state tax law, and recent legislation indicate that the City will have a greater reliance on property taxes as a source of financing for city operations in the future and less reliance on the intergovernmental revenues (federal and state) and building permit fees. Changes in state tax law over the past decade have resulted in funding changes for both schools and local governments. The elimination of the homestead and agricultural credit aids program, and large cuts in both local government aid and the market value homestead credit programs resulted in revenue losses to the City. In addition, as the City continues toward full development, we anticipate future decreases in building permit revenues.