08-14-25 City Council Workshop Packet

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Capital Levies Since moving to a 10-year CIP in 2023, staff has continued to build out the inventory of existing assets and timing of maintenance and replacement. Our CIP planning software was upgraded last year, and staff has spent time cleaning up that database and implementing more intuitive numbering systems and custom fields. This continued build-out and review has already begun to inform our long-term capital funding needs. The Draft 2026-2035 Capital Projects list can be found in the July 8th Workshop packet; https://miweblink.metro-inet.us/LakeElmoPublic/0/doc/478830/Page1.aspx. To more clearly differentiate between capital-type expenses and operations expenses, the City implemented separate capital levies in 2025 with those taxes being deposited directly into specific Capital Funds. This revision increases transparency in long-term planning and simplifies a number of accounting and reporting processes. The Infrastructure Reserve Levy has been increased to continue the plan of paying a portion of all street projects with cash. The City Center CIP Levy was increased to an amount intended to fund approximately 50% of the depreciation of the city center facility at a flat rate over time. (This plan will be further developed during the long-term strategic planning process.) The Vehicle Fund will be increased slightly each year until we get to a level that fully funds all vehicles and equipment. The Street Maintenance Levy was increased slightly to account for inflation. The Ballpark Fund Levy is new in 2026 to repay the interfund loan from the Sewer Fund to purchase the future ballfield property. This levy will decrease slightly each year for the next 10 years until that interfund loan is repaid. Levy Name Notes 2025 Levy 2026 Levy Infrastructure Reserve Levy New in 2025 93,333 500,000 City Center CIP Levy New in 2025 50,000 120,000 Park CIP Levy New in 2025 100,000 100,000 Vehicle & Equipment Levy Changed from a GF Transfer in 25 400,000 450,000 Street Maintenance Levy Changed from a GF Transfer in 25 600,000 630,000 Ballpark Fund Levy New in 2026 250,000 TOTAL Capital-Type Levies $ 1,243,333 $ 2,050,000 Summary of Changes by Category It is sometimes helpful to see the categories of expenditures to more fully understand what our dollars are spent on. The first chart below shows an illustration of the categories of expenditures in the general fund, which deals largely with the operations and provision of city services. General Fund expenses primarily fall under Personnel and Charge & Services. The Charges & Services category is roughly 75% contracted services and consultants. (The below tables do not include Utility Fund budgets.)