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CITY OF LAKE ELMO, MINNESOTA
<br />MANAGEMENT’S DISCUSSION AND ANALYSIS
<br />DECEMBER 31, 2024
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<br />THE CITY AS A WHOLE (Continued)
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<br />Governmental Activities
<br />Revenue for the City’s governmental activities increased by $9,105,270 (40.29 percent). This increase in revenue is primarily
<br />due to an increase in revenues from capital grants and contributions, resulting from significant contributions of infrastructure
<br />from developers during 2024. The City also received supplemental aid from the State in the current year. Total expenses
<br />increased $2,060,134 (19.77 percent), primarily due to increased expenses for public safety and public works costs. Such
<br />changes in expenses have been reviewed in greater detail below.
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<br />Table 3 presents the cost of each of the City’s programs - general government, public safety, public works, parks and recreation,
<br />economic development, and Interest and Other Charges - as well as each program’s net cost (total cost less revenues generated
<br />by the activities). The net cost shows the financial burden that was placed on the City’s taxpayers by each of these functio ns.
<br />Activities (net of capital outlay which is excluded from Table 3) were generally comparable to the prior year as operations
<br />remained fairly consistent with the prior year, with the exception of:
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<br />• Public safety net cost of services increased $1,202,174 primarily due to an increase in personnel costs and building
<br />inspection fees, along with a de crease in corresponding State aid.
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<br />• Gross costs for public works did increase by $748,954, primarily due to additional depreciation expense being
<br />recognized for large capital asset infrastructure recently placed into service. However, on a net basis, public works
<br />cost of services decreased $7,282,824, due to an increase in revenues recognized from contributed infrastructure
<br />previously discussed.
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<br />Table 3
<br />Governmental Activities
<br />Total Cost Net Cost
<br />of Services of Services
<br />2024 2023 2024 2023
<br />General Government 1,513,163$ 1,220,552$ 1,040,302$ 672,353$
<br />Public Safety 3,853,006 3,228,801 2,164,688 962,514
<br />Public Works 5,376,826 4,627,872 (12,834,720) (5,551,896)
<br />Parks and Recreation 848,199 526,835 (282,730) 241,578
<br />Economic Development 7,074 - (41,737) -
<br />Interest and Other Charges 881,870 815,944 881,870 815,944
<br />Totals 12,480,138$ 10,420,004$ (9,072,327)$ (2,859,507)$
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<br />Business-type Activities
<br />Revenues of the City’s business-type activities (see Table 2) increased by $5,825,346 (38.07 percent) and program expenses
<br />increased by $564,889 (7.47 percent). The increase in revenues is due primarily to an increase in contributions of infrastructure
<br />from developers during 2024. Additionally, revenues from water and sewer access fees also increased significantly from those
<br />of the prior year. The increase in expenses is due largely to an increase in depreciation expense being recognized in 2024, due
<br />to various projects being finalized and placed into service. Additionally, the City incurred additional costs related to sewer
<br />utilities.
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