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Home My WebLink About07-14-26 City Council Workshop PacketCity Council Workshop 3880 Laverne Avenue North Tuesday, July 14, 2026 6:30 p.m. AGENDA Call To Order Old City Hall Community Development Director Jason Stopa presenting COUNCIL MEMO - OLD CITY HALL REPORT 7.14.2026.PDF ATTACHMENT - SPACE NEEDS STUDY - 12 -2017 (7).PDF ATTACHMENT - HKGI LAKE ELMO CITY HALL PARKING LOT_CONCEPT 1.PDF ATTACHMENT - HKGI LAKE ELMO CITY HALL PARKING LOT_CONCEPT 2.PDF ATTACHMENT - HKGI CONCEPTLEVELCOSTS.PDF ATTACHMENT - TEMPLATE SALES BOV DATA SHEET - LEASE.PDF ATTACHMENT TEMPLATE SALES BOV DATA SHEET - SALE.PDF PRESENTATION OLD CITY HALL 7.14.2026.PDF Evaluation Of Request -Based Parking Restrictions Public Works Director Pete Tholen presenting WORKSHOP MEMO -EVALUATION OF REQUEST BASED PARKING RESTRICTIONS.PDF Draft Capital Improvement Program & Strategic Financial Planning Related To CIP Finance Director Clarissa Hadler presenting STAFF REPORT - CIP AND FINANCIAL PLANNING.PDF STRATEGIC FINANCIAL PLAN - DRAFT SECTIONS.PDF STORMWATER ANALYSIS.PDF CIP WORKSHOP PRESENTATION.PDF Future Agenda Items FUTURE AGENDA ITEMS.PDF Adjourn Our Mission is to Provide Quality Public Services in a Fiscally Responsible Manner in Partnership with our Community In accordance with the requirements of Minn. Stat. Section 13D.02, members may participate remotely via interactive technology. I. II. Documents: III. Documents: IV. Documents: V. Documents: VI. City Council Workshop3880 Laverne Avenue NorthTuesday, July 14, 20266:30 p.m.AGENDACall To OrderOld City HallCommunity Development Director Jason Stopa presentingCOUNCIL MEMO - OLD CITY HALL REPORT 7.14.2026.PDFATTACHMENT - SPACE NEEDS STUDY - 12 -2017 (7).PDFATTACHMENT - HKGI LAKE ELMO CITY HALL PARKING LOT_CONCEPT 1.PDFATTACHMENT - HKGI LAKE ELMO CITY HALL PARKING LOT_CONCEPT 2.PDFATTACHMENT - HKGI CONCEPTLEVELCOSTS.PDFATTACHMENT - TEMPLATE SALES BOV DATA SHEET - LEASE.PDFATTACHMENT TEMPLATE SALES BOV DATA SHEET - SALE.PDFPRESENTATION OLD CITY HALL 7.14.2026.PDFEvaluation Of Request -Based Parking RestrictionsPublic Works Director Pete Tholen presentingWORKSHOP MEMO -EVALUATION OF REQUEST BASED PARKING RESTRICTIONS.PDFDraft Capital Improvement Program & Strategic Financial Planning Related To CIPFinance Director Clarissa Hadler presenting STAFF REPORT - CIP AND FINANCIAL PLANNING.PDF STRATEGIC FINANCIAL PLAN - DRAFT SECTIONS.PDF STORMWATER ANALYSIS.PDF CIP WORKSHOP PRESENTATION.PDF Future Agenda Items FUTURE AGENDA ITEMS.PDF Adjourn Our Mission is to Provide Quality Public Services in a Fiscally Responsible Manner in Partnership with our Community In accordance with the requirements of Minn. Stat. Section 13D.02, members may participate remotely via interactive technology. I.II.Documents:III.Documents:IV.Documents: V. Documents: VI. STAFF REPORT DATE: 7/14/2026 Workshop TO: Lake Elmo City Council FROM: Jason Stopa, Community Development Director AGENDA ITEM: Old City Hall REVIEWED BY: Nicole Miller, City Administrator CORE STRATEGIES: ☒ Vibrant, inclusive, connected community ☐ Efficient, reliable, innovative services ☒ Responsive, transparent, adaptive governance ☒ Balanced Finances now and future ☒ Managed Growth ☐ Resilient Infrastructure BACKGROUND: The Old City Hall was built in 1986 and is 2,806 square feet building on a 1.5-acre site. It is a single-story wood framed building with a shingle roof. The city moved into a new City Hall adjacent to the old building. Since moving, the building has been leased but is currently vacant. The building needs considerable repair, which is outlined in the Space Needs Study from 2017. This report will provide different scenarios to consider. This item was discussed at the October 2025 workshop with new information provided. ISSUE BEFORE COUNCIL: Staff would like input on how to move forward with the Old City Hall. A few options are listed below. • Demolish the building and expand parking • Lease the building to a business (City Hall parking could be located in the back and a new business parking lot in the front • Keep the building and revisit the issue next year • Monitor the school site and partner with future developers PROPOSAL DETAILS/ANALYSIS: Condition of the Building The Space Needs Study from 2017 covers the condition of the building. Since the review is from 2017, a new assessment should be completed before considering reuse of the building. Below is section from the study. The entire study is attached which contains an architectural report of the building and site. City Hall was built in 1986 and is 2,806 square feet. It is a single-story wood framed building with a shingle roof. The exterior cedar lap siding is failing and needs to be replaced. The vinyl windows are cracked and need to be replaced. The roofing is at the end of its service life and needs to be replaced. The restrooms are not accessible. There is very little in the way of security. There is insufficient office space and conference room space. The space allocated to the sheriff’s department is too small and improperly equipped. Capital Improvement Estimates Based upon findings during the facility assessments, BKV Group estimated the costs to rectify the maintenance, repair, and safety issues at each facility. Each issue was categorized as urgent, short-term (1 to 5 years), medium-term (5 to 10 years), or long term (10+ years). These estimates do not include major building additions to address current functional concerns – those costs are addressed as part of the master planning process later in this report. The City Hall has $1,000 of urgent issues, $862,000 of short-term issues, $80,200 of medium-term issues, and $38,700 of long-term issues. Approximately $420,000 of the short-term issues are related to the exterior envelope, which is in poor condition after 30 years. This $420,000 of repair work would need to be completed if the building is renovated, while many of the other issues would be rectified in the normal scope of the renovations. This $420,000 will be a significant factor when deciding whether to renovate or demolish the building. Staff Comments Fire, Administration, and Finance department would like more parking. Options with Pros and Cons Option #1 Demolish the building and expand parking Pros: One-time cost to demolish, provide more parking, allow access away from the restricted emergency vehicle entrance Cons: Cost to demolish and to construct a parking lot, wouldn’t increase the site value, no additional taxes, could have stormwater requirements Option #2 Lease the building to a business Pros: No cost to demolish, would increase site value, could generate sales taxes, retaining ownership could provide site flexibility in the future Cons: Reduces potential for more parking, business parking would have to be located between Laverne and the building, access would most likely be through City Hall’s entrance off Laverne, increased traffic adjacent to emergency vehicle access, utility easements could restrict use, business investment may make it difficult to change use in the future, could have stormwater requirements Option #3 Keep the building and revisit the issue. Pros: No cost to demolish, retaining ownership could provide site flexibility in the future Cons: Reduces potential for more parking, cost to maintain related to uncertain timing Option #4 Monitor the school site and partner with future developers. Pros: Retain ownership or sell, the development could receive more housing density, could provide site flexibility in the future (a parking lot or other use), the site could be accessed through the abutting parcel, the city would receive funds to develop the site, the adjacent parcel value should increase because of increased density Cons: Uncertain timing and use, the new owner may not want to partner, may not need a housing density increase Current Parking Current City Hall has requires 81 spaces per city zoning (max calculation) with 71 spaces existing (12 at the old City Hall and 59 spaces at new City Hall) Two Scenarios Option 1 Cost Estimate – Parking Lot (Estimates provided by HKGi) Demolition: $35,000 Landscape: $23,950 Hardscape: $174,165 Subtotal: $233,115 Contingency (15%): $34,967.25 Design, engineering, permitting (10%): $23,311.50 Total: $291,393.75 Option 2 Cost Estimate – Lease City Hall Landscape: $17,650 Hardscape: $143,345.50 Subtotal: $160,995.50 Contingency (15%): $24,149.33 Design, engineering, permitting (10%): $16,099.55 Alternate 1 City Hall Connection: $16,450 Total: $217,694.38 Repairs of the building including tenant buildout: $500,000 Total: $720,000 Commercial Value and Leasing (Estimates provide by Scott Kragness Metro East Commercial Real Estate Services) Market value of the building: $473,000 - $555,000 Lease value per year: $43,000 - $52,500, $14.50 – $17.50 Triple Net (taxes, insurance, utilities & maintenance) Types of businesses: Office space for General businesses, Physical Therapist, Religious organizations, non- profits, Law firms, Accounting Professionals, Therapist, Daycare/educational users, or adaptive reuse users. Two leased spaces could provide more revenue Term Length: 5-10 years Tenant build-out costs: $150,000 + $350,000 in deferred maintenance = $500,000 Replacement cost for a new building is around $450 sq.ft. for a new building. A new building at the site would cost between $1.6 - $1.8 million. Commercial Pro Forma: (We are refining the pro forma as various inputs can alter the results) Net Operating Income: $39,115 Debt Service per year: $39,295 ($610,000 at 5% over 30 years) Cash Flow: Positive in year 2: $11,741 year 10 FISCAL IMPACT: No impact on today’s decision OPTIONS: 1. Demolish the building and expand parking 2. Lease the building to a business (City Hall parking could be located in the back and a new business parking lot in the front 3. Keep the building and revisit the issue next year. 4. Monitor the school site and partner with future developers. RECOMMENDATION: Staff would like input on the different options ATTACHMENTS: • 2017 Space Needs Study • Parking Lot Plan - HKGi • Retain and Improve old City Hall Plan - HKGi • Cost estimates for both plans - HKGi • Broker Price Opinions for sale and lease – Metro East 20.00' 15 PARKING SPACES EXISTING COTTONWOOD ADA ACCESSIBLE PARKING + ACCESS AISLE 12 PARKING SPACES ALTERNATE SIDEWALK CONNECTION TO CITY HALL LOT 20 SHRUBS LAYOUT LEGEND: CONCRETE WALK BITUMINOUS NORTH 00 30'60' OVERVIEW: THIS CONCEPT: 1.PRESERVES THE EXISTING BUILDING AND MILLS AND OVERLAYS EXISTING WEST PARKING LOT, ADDING NEW CURB. 12 SPACES. 2.CONSTRUCTION OF NEW ASPHALT LOT TO THE EAST WITH 15 PARKING SPACES, ONE ACCESSIBLE. 3.CONSTRUCTION OF NEW CONCRETE SIDEWALK ON EAST AND WEST SIDES OF EXISTING BUILDING. ADDS/ALTERNATES: 4.CONNECTION TO EXISTING SIDEWALK NORTH OF ROADWAY VIA NEW CROSSWALK. LANDSCAPE: 5.LANDSCAPE BEDS SCREEN PEDESTRIAN ROUTES FROM VEHICULAR HEADLIGHTS. 6.BOULEVARD TREES SPACED 50' APART ALONG ROADWAY. LAKE ELMO CITY HALL PARKING LOT CONCEPT 1 LAKE ELMO CITY HALL PARKING LOT CONCEPT 1 40 PARKING SPACES EXISTING COTTONWOOD 15 SHRUBS OVERVIEW: THIS CONCEPT: 1.REMOVES THE EXISTING BUILDING AND PROVIDES OVERFLOW PARKING FOR CITY HALL. 2.CONSTRUCTION OF NEW ASPHALT LOT SOUTH OF CITY HALL. 40 NEW PARKING SPACES. 3.CONSTRUCTION OF NEW CONCRETE SIDEWALK TO CONNECT TO CITY HALL CIRCULATION. LANDSCAPE: 4. LANDSCAPE BEDS SCREEN PEDESTRIAN ROUTES FROM VEHICULAR HEADLIGHTS. 5. BOULEVARD TREES SPACED 50' APART ALONG ROADWAY. LAKE ELMO CITY HALL PARKING LOT CONCEPT 2 LAYOUT LEGEND: CONCRETE WALK BITUMINOUS NORTH 00 30'60' LAKE ELMO CITY HALL PARKING LOT CONCEPT 2 Lake Elmo Old City Hall Parking Lot Concepts Concept Level Cost Estimate June 2026 Notes:These costs are high level concept costs only. Not for construction. Utilities, stormwater management requirements, soils, and other unknowns may impact final costs. Concept 1 Item Description Qty.Unit Unit Cost Subtotal Total Notes Landscape 17,650.00$ Planting Beds 300 SF 10.00$ 3,000.00$ Planting Soil + Mulch Seeding Allowance 1 LS 2,000.00$ 2,000.00$ Turf seeding to repair disturbed areas (4' offset assumption) Irrigation Allowance for turf and landscape areas 1 LS 5,000.00$ 5,000.00$ Estimated Allowance Shrubs 20 EA 90.00$ 1,800.00$ 5 gal container Trees - 2.5" Cal. 9 EA 650.00$ 5,850.00$ Hardscape 143,345.50$ Common Excavation & Grading 1 LS 20,000.00$ 20,000.00$ Assumption Standard Concrete Walk (4" thick w/base) 2,186 SF 10.00$ 21,860.00$ Medium Broom Finish Concrete Curb + Gutter 765 LF 50.00$ 38,250.00$ Pedestrian Ramp 3 EA 5,000.00$ 15,000.00$ Asphalt Striping 591 LF 0.50$ 295.50$ ADA Signage and Markings 1 LS 1,000.00$ 1,000.00$ Bituminous Pavement (4" Thick) 4,990 SF 6.00$ 29,940.00$ Base incidental Bituminous Mill & Overlay 4,250 SF 4.00$ 17,000.00$ Assumes existing base can be reused Subtotal 160,995.50$ Contingency (15%)24,149.33$ Design, engineering, permitting (10%)16,099.55$ Concept 1 BASE TOTAL 201,244.38$ Concept 1 TOTAL with ADD ALTERNATE 217,694.38$ Add/Alternate (pedestrian connection to City Hall) Item Description Qty.Unit Unit Cost Subtotal Total Notes Hardscape 16,450.00$ Standard Concrete Walk (4" thick w/base) 545 SF 10.00$ 5,450.00$ Medium Broom Finish Pedestrian Ramp 2 EA 5,000.00$ 10,000.00$ Pedestrian Crosswalk Striping 1 LS 1,000.00$ 1,000.00$ Subtotal 16,450.00$ Concept 2 Item Description Qty.Unit Unit Cost Subtotal Total Notes Demolition 35,000.00$ Demo of Old City Hall 1 LS 35,000.00$ 35,000.00$ Landscape 23,950.00$ Planting Beds 1,040 SF 10.00$ 10,400.00$ Planting Soil + Mulch Seeding Allowance 1 LS 2,000.00$ 2,000.00$ Turf seeding to repair disturbed areas Irrigation Allowance for turf and landscape areas 1 LS 5,000.00$ 5,000.00$ Estimated Allowance Shrubs 15 EA 90.00$ 1,350.00$ 5 gal container Trees - 2.5" Cal. 8 EA 650.00$ 5,200.00$ Hardscape 174,165.00$ Common Excavation & Grading 1 LS 20,000.00$ 20,000.00$ Assumption Standard Concrete Walk (4" thick w/base) 742 SF 10.00$ 7,420.00$ Medium Broom Finish Concrete Curb + Gutter 1,017 LF 50.00$ 50,850.00$ Pedestrian Ramp 3 EA 5,000.00$ 15,000.00$ Asphalt Striping 302 LF 0.50$ 151.00$ Bituminous Pavement (4" Thick) 10,878 SF 6.00$ 65,268.00$ Base incidental Bituminous Mill & Overlay 3,869 SF 4.00$ 15,476.00$ Assumes existing base from old back parking lot can be reused Subtotal 233,115.00$ Contingency (15%)34,967.25$ Design, engineering, permitting (10%)23,311.50$ TOTAL 291,393.75$ 1950 Northwestern Avenue, Suite 101, Stillwater, Minnesota 55082  651.351.5005 Broker Opinion of Value Lease City of Lake Elmo 3800 Laverne Ave. North, Lake Elmo MN 55042 This is an updated Broker Opinion of Value based on the 2026 Market conditions and sales activity for the above-mentioned property. Property Overview The subject property is a one-story office building totaling approximately 3,000 square feet. It has been maintained for its intended use; however, certain features reflect functional obsolescence typical of specialized properties, such as municipal buildings. Design challenges include layout limitations and considerations for potential adaptive reuse. The property is currently vacant and in need of some improvements and updates to achieve a standard of highest and best use. From a leasing perspective the building could be leased to a single tenant, or potentially two (2) tenants with a shared hallway and restrooms. 1950 Northwestern Avenue, Suite 101, Stillwater, Minnesota 55082  651.351.5005 Market Overview The east metro office property market remains thin but active, with transactions driven largely by owner-users rather than investors. Buyers in this segment tend to be churches, non-profits, therapists or groups seeking adaptive reuse opportunities. To establish value, we analyzed Seven Comparable Lease Spaces of similar office buildings within the east side Twin Cities market over the past couple of years. These comparables were selected based on similarity in use, size, and geographic relevance. Valuation Methodology • Removed statistical outliers (highest and lowest sales and closing date) to normalize the data set • Applied average sale price per square foot from remaining comparables • Adjusted for functional obsolescence and marketability factors • Considered current demand for religious and specialty-use properties The resulting indicated value is Approx. $14.50 - $17.50 per square foot NNN. Value Conclusion Based on the analysis above, the estimated annual rents on a NNN basis would range from market value for the subject property is: $43,000 - $52,500 – Annual Net Rent Marketing Considerations • Target tenants will likely include Office space for General businesses, Physical Therapist, Religious organizations, non-profits, Law firms, Accounting Professionals, Therapist, Daycare/educational users, or adaptive reuse users. • Marketing time may be longer than traditional commercial assets depending on Zoning, and allowable uses. • Value could be enhanced with flexibility toward alternative uses (subject to zoning) . Detailed Report LEASE COMPARABLES Number Address City Lease Price NNN Total SF Comparable 3800 Laverne Lake Elmo 3000 Approx CAM/Tax 1 960 Inwood Oakdale $17.50 3112 N/A 2 8515 Eagle Point Blvd Lake Elmo $16.86 1300 10.41 3 8550 N. Hudson Blvd Lake Elmo $18.03 4232 4 8519 Eagle Pointe Blvd Lake Elmo $14.50 2650 5 11550 Stillwater Blvd Lake Elmo $24.00 4000 6 8953 N 33rd St Lake Elmo $20.00 1,000 7 980 Inwood Ave Oakdale $17.00 3048 AVERAGES $18.27 2371 This Broker Opinion of Value (BOV) has been prepared by a licensed real estate broker and is intended solely for informational and marketing purposes. It is not an appraisal and should not be relied upon as such. This analysis is based on current market conditions, available comparable sales data, and professional judgment. Market conditions are subject to change, and actual sale prices may vary. 1950 Northwestern Avenue, Suite 101, Stillwater, Minnesota 55082  651.351.5005 Broker Opinion of Value Sale City of Lake Elmo 3800 Laverne Ave. North, Lake Elmo MN 55042 This is an updated Broker Opinion of Value based on the 2026 Market conditions and sales activity for the above-mentioned property. Property Overview The subject property is a one-story office building totaling approximately 3,000 square feet. It has been maintained for its intended use; however, certain features reflect functional obsolescence typical of specialized properties, such as municipal buildings. Design challenges include layout limitations and considerations for potential adaptive reuse. The property is currently vacant and in need of some improvements and updates to achieve a standard of highest and best use. 1950 Northwestern Avenue, Suite 101, Stillwater, Minnesota 55082  651.351.5005 Market Overview The east metro office property market remains thin but active, with transactions driven largely by owner-users rather than investors. Buyers in this segment tend to be churches, non-profits, therapists or groups seeking adaptive reuse opportunities. To establish value, we analyzed Eight Comparable sales of similar office buildings within the east side Twin Cities market over the past several years. These comparables were selected based on similarity in use, size, and geographic relevance. Valuation Methodology • Removed statistical outliers (highest and lowest sales and closing date) to normalize the data set • Applied average sale price per square foot from remaining comparables • Adjusted for functional obsolescence and marketability factors • Considered current demand for religious and specialty-use properties The resulting indicated value is just under $157 - $185 per square foot. Value Conclusion Based on the analysis above, the estimated market value for the subject property is: $473,000 – $555,000 Marketing Considerations • Target buyers will likely include Religious organizations, Non-profits, Law firms, Accounting Professionals, Therapist, Daycare/educational users, or adaptive reuse users. • Marketing time may be longer than traditional commercial assets due to a more limited buyer pool, subject to Zoning. • Value could be enhanced with flexibility toward alternative uses (subject to zoning) . Detailed Report SALE COMPARABLES Number Address City Sale Price Total SF Price / SF Acres Comparable 3800 Laverne Lake Elmo 3000 TBD 1 980 Inwood Oakdale $450,000 2863 $157 .07 2 8987 Hwy 5 Lake Elmo $185,000 1000 $185 .03 3 8993 33rd St Lake Elmo $150,000 1000 $150 .03 4 8945 33rd St Lake Elmo $425,000 2480 $171 .07 5 11550 Stillwater Blvd Lake Elmo $1,750,000 14,000 $125 2.83 6 964 Inwood Ave Oakdale $275,000 2696 $193 .03 7 8985 33rd St. Lake Elmo $364,000 3049 $119 .03 8 8935 33rd St. N Lake Elmo $405,000 2504 $161 .07 AVERAGES $500,500 3,699 $157 This Broker Opinion of Value (BOV) has been prepared by a licensed real estate broker and is intended solely for informational and marketing purposes. It is not an appraisal and should not be relied upon as such. This analysis is based on current market conditions, available comparable sales data, and professional judgment. Market conditions are subject to change, and actual sale prices may vary. Old City Hall Council Workshop | July 14, 2026 Background •The Old City Hall was built in 1986 and is 2,806 square feet building on a 1.5-acre site. It is a single-story wood framed building with a shingle roof. •The city moved into a new City Hall adjacent to the old building. Since moving, the building has been leased but is currently vacant. •The building needs considerable repair, which is outlined in the Space Needs Study from 2017. Issue Before the Council OPTIONS: 1.Demolish the building and expand parking 2.Lease the building to a business. Parking could be located in the back for City Hall and a new parking lot in the front for the business 3.Keep the building and revisit the issue next year 4.Monitor the school site and partner with future developers 2017 Space Needs Study Based upon findings during the facility assessments, BKV Group estimated the costs to rectify the maintenance, repair, and safety issues at each facility. Each issue was categorized as urgent, short -term (1 to 5 years), medium-term (5 to 10 years), or long term (10+ years). The City Hall has $1,000 of urgent issues, $862,000 of short -term issues, $80,200 of medium-term issues, and $38,700 of long-term issues. Approximately $420,000 of the short-term issues are related to the exterior envelope, which is in poor condition after 30 years. Yearly Maintenance Cost Electric/Gas: Just under $2000/year from 2024-2025 Insurance: •2022 - $1,335.00 •2023 - $1,479.00 •2024 - $6,988.00 •2025 - $6,618.00 Staff Comments Option 1: Demolish the building and expand parking Fire, Administration, and Finance department would like more parking. Current City Hall 81 spaces required 71 spaces existing (12 at the old City Hall and 59 spaces at new City Hall) Options Option #1 Demolish the building and expand parking Pros: One-time cost to demolish, provides more parking, allows access away from the restricted emergency vehicle entrance Cons: Cost to demolish and to construct a parking lot, wouldn’t increase the site value, no additional taxes, could have stormwater requirements. Option #2 Lease the building to a business Pros: No cost to demolish, would increase site value, could generate sales taxes, retaining ownership could provide site flexibility in the future Cons: Reduces potential for more parking, business parking would have to be located between Laverne and the building, access would most likely be through City Hall’s entrance off Laverne, increased traffic adjacent to emergency vehicle access, utility easements could restrict use, business investment may make it difficult to change use in the future, could have stormwater requirements. Options Option #3 Keep the building and revisit the issue Pros: No cost to demolish, retaining ownership could provide site flexibility in the future Cons: Reduces potential for more parking, cost to maintain related to uncertain timing Option #4 Monitor the school site and partner with future developers Pros: Retain ownership or sell, the development could receive more housing density, could provide site flexibility in the future (a parking lot or other use), the site could be accessed through the abutting parcel, the city would receive funds to develop the site, the adjacent parcel value should increase because of increased density Cons: Uncertain timing and use, the new owner may not want to partner, may not need a housing density increase Parking Lot Cost Estimate Demolition: $35,000 Landscape: $23,950 Hardscape: $174,165 Subtotal: $233,115 Contingency (15%): $34,967.25 Design, engineering, permitting (10%): $23,311.50 Total: $291,393.75 City Hall Parking Lease Old City HallParking Lot Cost Estimate Landscape: $17,650 Hardscape: $143,345.50 Subtotal: $160,995.50 Contingency (15%): $24,149.33 Design, engineering, permitting (10%): $16,099.55 Alternate 1 City Hall Connection: $16,450 Total: $217,694.38 Commercial Value and Leasing •Market value of the land and building: $473,000 - $555,000 ($450/sqft for new) •Lease value per year: $43,000 - $52,500, $14.50 – $17.50 Triple Net (taxes, insurance, utilities & maintenance) •Types of businesses: Office space for General businesses, Physical Therapist, Religious organizations, non-profits, Law firms, Accounting Professionals, Therapist, Daycare/educational users, or adaptive reuse users. Two leased spaces could provide more revenue •Term Length: 5-10 years •Tenant build-out costs: $150,000 + $350,000 in deferred maintenance = $500,000 Leasing Operating Statement Year 1 Rental Income 47,702.00$ Vacancy Rate 9% Gross Rental Income 43,408.82$ Property Taxes -$ Triple Net Insurance Triple Net Management Fee 1,908.08$ 4%*rent Maintenance -$ Reserves 2,385.10$ Total Expenses 4,293.18$ Net Operating Income 39,115.64$ Debt Service 39,295.32$ Cash Flow (179.68)$ Leasing Operating Statement Year 1 Year 5 Year 10 Year 15 Year 20 Rental Income 47,702.00$ 53,689$ 62,240$ 72,154$ 83,646$ Vacancy Rate 9%9%9%9%9% Gross Rental Income 43,408.82$ 48,857.01$ 56,638.66$ 65,659.74$ 76,117.63$ Property Taxes -$ Insurance -$ Management Fee 1,908.08$ Maintenance Reserves 2,385.10$ Total Expenses 4,293.18$ 4,832.01$ 5,601.63$ 6,493.82$ 7,528.12$ Net Operating Income 39,115.64$ 44,025.00$ 51,037.04$ 59,165.92$ 68,589.51$ Debt Service 39,295.32$ 39,295.32$ 39,295.32$ 39,295.32$ 39,295.32$ Cash Flow (179.68)$ 4,729.68$ 11,741.72$ 19,870.60$ 29,294.19$ Recommendation Staff would like input on the different options. STAFF REPORT DATE: July 14, 2026 WORKSHOP TO: Mayor and Councilmembers FROM: Pete Tholen, Public Works Director, Dustin Kallis, Fire Chief, Nate Stanley, City Engineer AGENDA ITEM: Evaluation of Request-Based Parking Restrictions CORE STRATEGIES: ☐ Vibrant, inclusive, connected community ☒ Responsive, transparent, adaptive governance ☐Managed Growth ☐ Efficient, reliable, innovative services ☐ Balanced Finances now and future ☐ Resilient Infrastructure BACKGROUND: Recently the city has received citizen requests to either rescind or implement parking restrictions. The city has written guidance and design standards for posting a parking restriction based on street width and classification. The standard and guidance is implemented for new street construction (new subdivisions) and for existing streets when they are reconstructed as part of the Capital Improvement Program. For current practices, the guidance and standards are not implemented on existing streets when performing basic street maintenance (mill and overlay, seal coat, crack sealing). Currently, no formal process exists for request-based posting on existing roadways. Existing parking restrictions may not be based on street characteristics alone and could be due to other factors, such as features attracting visitors (lake access, parks), maintaining access for traffic operations and emergency response, or poor sightlines. Rationale for existing postings is not always available in records and may not be obvious upon review, which can be problematic for staff when evaluating a request. ISSUE BEFORE COUNCIL: Staff feel that a process for evaluation of on-street no-parking requests or rescinding existing postings at an administrative level should be established. Requests will be evaluated by the Public Works Director and be based upon current City Parking Standards and professional judgement. If the request affects a small area, such as a problematic sightline, a review by staff should be sufficient to make a recommendation for posting a restriction. However, if a request affects a larger number of properties, such as a long stretch of neighborhood road, and staff review deems it eligible for posting/removing a posting, it is recommended that a petition and a public hearing before the City Council are required for consideration. Staff is looking for feedback regarding this proposed framework. STAFF REPORT DATE: July 14, 2026 DISCUSSION TO: Mayor and Councilmembers FROM: Clarissa Hadler, Finance Director, Nina Kraemer, Finance Coordinator, Department Heads AGENDA ITEM: Draft Capital Improvement Program & Strategic Financial Planning related to CIP CORE STRATEGIES: ☐ Vibrant, inclusive, connected community ☒ Responsive, transparent, adaptive governance ☒ Managed Growth ☐ Efficient, reliable, innovative services ☒ Balanced Finances now and future ☒ Resilient Infrastructure BACKGROUND: Staff will be addressing three issues during this discussion, as they are all very much related: • 2027-2036 Capital Improvement Program (CIP) • Strategic Financial Planning – specifically related to the CIP • Using Stormwater Funds to pay for Street Projects The below is a brief introduction to each piece of this discussion. There is additional information in the attachments and links. 2027 – 2036 CIP Beginning this spring staff started developing recommendations for updates to the 2027-2036 Capital Improvement Program (CIP). This spring we also upgraded our CIP software to add a website version to more easily peruse the data. As such, the draft of the CIP can be found at the following link: https://mn-lake-elmo.web.cipsoftware.com The purpose of this meeting is to introduce the draft CIP and take Council feedback regarding changes they would like to see prior to the CIP coming back for adoption in December. (In an effort to keep this overall discussion within a reasonable timeframe, staff will be providing a more consolidated presentation for the CIP. However, we welcome Council questions on any items or issue within the draft plan.) Strategic Financial Planning For the purposes of this discussion, we’re going to concentrate on the strategic planning and projections most related to the CIP. Attached are the assumptions and objectives first introduced at the November 2025 workshop. As we’re so far along in the year, our assumptions are now revised to reflect drafts of the next year’s budgets and CIP. As mentioned in the attached strategic planning objectives, one of the issues we’ve been concentrating on in our long-term financial planning is improving the funding strategies for these CIP projects in order to decrease debt, while also making sure the city has funds decades from now and does not end up in an even worse situation with debt when we need to reconstruct/reclaim roads again. Developing a capital levy plan is the central focus of this effort. We’ve been adding dedicated funds (a fund is a segregated accounting entity and how we save and account for projects in government) to address specific types of activities and then levying for those funds. Each levy is designed to scale up over time toward an estimated target. Those targets differ by fund and will likely be updated as the CIP and long‑term plan evolve, incorporating new information and aligning with the City’s financial strategies at the time. These levies and funds will be imperative to maintain a sustainable financial outlook for the city long-term. The assumptions have not changed significantly since we discussed this in at the November 12, 2025 workshop. I’ve again summarized the projections in the attached Overview of Draft Projections/Modeling document, and the reports provide a visual summary of the projections and outcomes. One key to getting an accurate long-term outlook will be developing a consistent methodology for more clearly inventorying our assets and estimating replacement costs of items that are not yet on the 10-year CIP. For now, we’ve input some averages based on discussions with staff and city engineers. Part of the strategy that is being developed is to estimate the financial impacts of development; the revenues we expect, expenses to come, and the tax capacity gained. Projections are based on an inventory of potential developments that is updated annually. As important as estimating development to come is estimating when development will stop. It is imperative for the City to understand and prepare for the day that development is no longer occurring and we are no longer receiving those revenues. We know that development will not last forever, so strategically planning for that change well in advance adds an additional layer of financial resilience. The Strategic Financial Plan will be a “living document” that will be updated annually with the budget. Each year we will be able to fine tune the data that is informing the estimates within. Stormwater Fund as a Funding Source for Street Projects As a continuation of the discussion regarding the possibility of funding a portion of street improvements via the stormwater fund, staff is providing the attached analysis. If council would like to continue to move in this direction, the most immediate questions are: Would the Council prefer to: 1) Transfer a flat amount out of the stormwater fund each year a. Benefits: i. Predictable ii. We can ease the fund into it as we continue to increase revenues over time. iii. Less management of project accounting at every stage for multiple staff and consultants. iv. We can still book the final assets to the stormwater fund for proper depreciation. v. If needed, we could set up interfund loans to pay for the entirety of the assets over time from the fund. 2) Plan for and pay an amount more directly related to the costs of each project? a. Questions remain regarding exactly how much of any given project and cost, what types of projects (only local streets, transportation projects, county cost shares?) would be allocated to stormwater. b. This methodology becomes significantly more time-intensive for all involved from the beginning of planning for a project until the day we pay off the bond. c. Staff does not see an added benefit to this method above what we can accomplish with option 1. For now, staff has penciled in option 1 to the Strategic Financial Plan by scaling up to an estimated 10-year average for only the local annual street improvements of $480,000. The fund could handle this transfer with the increases proposed in the 2026 update to the Utility Financial Plan, which proposes 8% increases per year in order to cover depreciation and bring the fund to a net positive revenue over expenditures. The attached analysis provides projections for transferring the 10-year average the entire time (no scale-up), which would require a 10% fee increase each year for 10 years, instead of 8%. Please refer to the attached memo for full details on that analysis. Questions to Address at this Meeting; - CIP o Are there questions regarding the CIP / specific projects? o Changes to CIP? - Strategic Financial Planning – o The projected capital levy amounts for 2027 are (close to) what we would plan to bring to the August budget/levy workshop for discussion. Any concerns with those just yet? - Stormwater o Would the Council like to move forward with funding street projects with stormwater funds? o If so, is Option 1 sufficient at this time? ATTACHMENTS: • Draft Sections of the Strategic Financial Plan • Stormwater Analysis Strategic Financial Plan Foundational Assumptions and Planning Framework (As of July 14, 2026 Council Workshop) This section outlines the core assumptions that will guide the City’s Strategic Financial Plan. These assumptions are primarily focused on governmental funds, though several elements—particularly those involving infrastructure and utilities—will inform the annual utility rate study and related long-term planning documents. The City’s financial planning assumptions are grounded in existing policies, current service levels, and long-range capital and staffing needs. These assumptions will evolve as updated studies, plans, and council direction become available. 1. Existing City Policies and Plans • 2026 – 2035 (now Draft 2027-2036) Capital Improvement Program o The 2026-2035 CIP was adopted at the December 2025 City Council meeting. That plan is derived from the below policies, as well as input from staff and various city commissions. o The Draft 2027-2036 CIP is available at https://mn-lake-elmo.web.cipsoftware.com. o The CIP includes proposed funding sources. All final funding decisions are made at the time of the project. • Vehicle and Equipment Replacement Policy o Currently applies to Public Works, with Fire and Building Departments following similar practices. o The policy will be revised to formally include Fire Dept and Building Dept assets for consistent lifecycle management and replacement scheduling. • Pavement Management Plan and Street CIP o The City maintains a Pavement Management Plan and Street Capital Improvement Program (CIP) to guide infrastructure investment. The most recent version was adopted by Council in July 2025. Revisions to the Street CIP are submitted by the City Engineer in June 2026 and implemented into the above draft of the 2027-2036 CIP. o The Special Assessment Policy assigns 30% of residential street costs (and other streets as appropriate) to benefiting properties. o Stormwater-related improvements within Street Projects are not currently billed to the stormwater fund. This is an ongoing discussion, and staff has incorporated a transfer from stormwater to streets as a planning tool, and should a clearer policy be adopted, we revise our planning tools accordingly. • General Fund Budgets o The 2026 Budget was adopted at the December City Council meeting. o The 2027 Budget is currently being drafted by staff (July 2026). o We incorporate as up-to-date information as we can in various drafts of the plan. • 2025-2026 Strategic Plan o The Strategic Plan was drafted following a workshop in January 2025 and adopted in February 2025. While the Strategic Financial Plan will not be complete until mid-2026, our assumption is that the wider Strategic Plan will continue in a similar format beyond 2026, so we should use those goals and priorities when creating this document. • Other Policies o Fund Balance Policy – Our General Fund balance has been consistently above the policy minimum for a few years. Moving forward, we will strategically decrease that balance closer to the minimums by shifting funds to the funds where they are most necessary. o The city has a number of other financial policies, such as purchasing, investment, and credit card policies, but they do not significantly impact our projections. 2. Staffing, Service Levels, and Organizational Capacity The City will incorporate key findings and policy considerations related to staffing and operations: • Compensation Plan • Union Contract provisions • Findings from the 2025 Raftelis Public Works Staffing Study • Findings from the 2022 Matrix Consulting – Operational Audit of the Administration and Finance Departments • Department Heads will provide input regarding future departmental needs and directions based on service demand projections and operational priorities. • As of July 2026, a new compensation study is underway and we expect the findings in the coming months. 3. Future Major City Projects and Capital Scenarios: • Sports Complex (77 acres) • Future Fire Station 2 • 180 Acres Sale & Improvements 4. Development and Revenue Projections • Future development assumptions will be based on vacant land area and expected land use, providing a foundation for projecting: o Water and Sewer Revenues o Park Dedication Funds o Permit Revenues o Tax Capacity Growth, etc. • These projections should be refined after the 2050 Comprehensive Plan process is complete, and future iterations of the Strategic Financial Plan should incorporate those findings and land use assumptions. 5. Debt and Financial Sustainability Assumptions The City’s outstanding debt at Year End 2025 is approximately $58 million and a number of discussions have been held with Council to decrease this debt moving forward. This reduction will be pursued in coordination with a timely rollout of capital levies, ensuring continued investment in essential infrastructure while managing overall debt responsibly. Financial sustainability, for the purposes of this plan, is defined as maintaining fiscal stability and service delivery capacity over the long term. The City’s financial outlook will extend through 2050, consistent with the planning horizon of the Comprehensive Plan. However, it is important to recognize that these forecasts represent trends—not certainties. Future outcomes will depend on policy choices, economic conditions, development patterns, and external factors beyond the City’s control. The projections are intended to inform, not predict, and will evolve with new data and policy direction. The Strategic Financial Plan is not a fixed roadmap for the next 25 years. Rather, it is a decision-support tool designed to: • Inform current and short-term financial decisions by illustrating their long-term implications. • Align long-term goals and strategies with the City’s fiscal capacity and sustainability targets. • Encourage proactive management of revenues, expenditures, and debt to achieve stable and predictable financial outcomes over time. Strategic Financial Plan Strategic Financial Priorities & Objectives (As of July 14, 2026 Council Workshop) A. DEBT MANAGEMENT AND LONG-TERM FISCAL HEALTH o Increase cash used on capital projects in order to decrease necessary debt. o Reduce total City debt while maintaining necessary capital investment according to the CIP. o Develop a sustainable debt policy with clear debt-to-cash ratios and paydown targets. o Balance capital needs and debt reduction through coordinated levies and borrowing. o Improve credit profile and resilience through debt reduction and increased reserves. B. LEVY STRATEGY AND REVENUE STABILITY o Establish a predictable levy growth plan to fund capital needs while minimizing sharp tax increases. o Implement phased capital levies aligned with infrastructure replacement plans. o Diversify revenue sources to reduce reliance on the tax levy. o Maintain tax policy that is competitive with neighboring and/or similar cities; but not in opposition to appropriately funding operations, capital needs, and strategic priorities. C. CAPITAL PLANNING AND INFRASTRUCTURE INVESTMENT o Fully integrate the Street, Park, and Building CIPs into the long-range plan. o Develop a funding model for all CIP items based on realistic life-cycle costs. o Prioritize data-driven decisions by implementing an engineered street inventory project OR have staff implement 3-year plan to inventory streets and other assets and project life-cycle costs. D. BUDGET SUSTAINABILITY AND SERVICE LEVELS o Link long-term forecasts to staffing and service level evaluations. o Create multi-year operating budget projections based on actual expense detail and feedback from staff. o Incorporate compensation and staffing study findings into planning. o Identify timing for levy or fee adjustments to maintain sustainability. o Examine resiliency of financial systems by projecting loss of certain revenues such as building and development fees. E. UPDATES AND STRATEGIC ALIGNMENT o Align the Strategic Financial Plan to the overall Strategic Plan. o Establish an annual update process for the Strategic Financial Plan. o Align the plan with the 2050 Comprehensive Plan as that process progresses. o Reinforce that the plan’s purpose is to inform—not dictate—long-term decisions. Strategic Financial Plan Overview of Draft Projections/Modeling – Capital Project Funding (As of July 14, 2026 Council Workshop) The next few sections provide an initial glimpse of how we have set up our modeling for the Strategic Financial Plan. Much of our work developing strategic financial models has focused on infrastructure and capital needs, as that has been the most underfunded segment of our expenses. Thus, it is the area in need of more strategy and financial planning than it has had in the past. (All of the modeling for the Strategic Financial Plan is proposed in 2027 dollars. So, any proposed changes or increases would be on top of inflation.) Overall Assumptions • The purpose of this financial plan is to illustrate what might happen to various outcomes given a certain set of assumptions or policy decisions. • See Foundational Assumptions for more information on those. • See Strategic Priorities & Objectives for more information on those. • Capital Improvement Programs o Engineering created the 10-year Infrastructure CIP, which includes Residential Street Improvements, Transportation Improvements (city and county collectors), and Utilities. Finance then uses this data, along with our scenario assumptions to project the funding mechanisms for each project. o Department Heads determine various other CIP items based on replacement policies, strategic investment decisions, perceived needs, etc. o The Parks Commission reviews the Parks CIP items annually and recommends items for input into the city- wide CIP. • We purposefully do not add investment income to these models, as that interest to some degree funds the inflation that is also left out of these models. Fund-Specific Assumptions • Capital Funds & Levy Amounts – The Fund / Levy Purposes & Funding Strategies table below provides a list of the capital funds we use for long-term financial planning, as well as a description and the current funding strategy for each. Levies for any given year can be found in the Strategic Financial Plan Reports: Projected – Tax Levy – Capital Levies Only. • When we say the “max”, it’s in 2027 dollars and the maximum for the purpose of this version of projections. Those amounts will increase in the future at a level equivalent to expected inflation OR it will change based on revised information that informs what a more appropriate amount may be. (For instance, the average needed for Street Maintenance was originally calculated in 2023 at $600,000 per year. This is proposed at $650,000 for 2027; which equates to an average increase of 2.1% per year. While we present the model in 2027 dollars, we presume that next year the entire model will be updated and amounts will be represented in 2028 dollars, so that $650K may become $665K.) • Approx Value of Assets/Projects Covered – These amounts are derived from asset data based on purchase cost, not replacement cost. We should presume replacement costs will be much higher in many cases. • For the most part, these funds are set up to strategically and transparently plan for and manage the funding streams for larger projects. However, levying for and depositing into any of these funds does not legally restrict the funds to that purpose. The City Council may generally move levied money from one fund to another via resolution. Restrictions may apply to certain money, such as park dedication or deposits into a fund from state grants or other sources. Fund / Levy Purposes & Funding Strategies Current Draft Levy Amounts Fund Fund / Levy Name Purpose/History Start/Max Amounts Year 401 General Fund Projects & Misc Small levy intended to plan for the few Admin and Finance capital purchases and major special projects. Our last enterprise software purchase cost approximately $200,000 to implement and we would expect to use it for at least 10 – 15 before transitioning again. There are also opportunities for additional investments in technology. Start $ 5,000 2027 Max $ 15,000 2029 Approx Value of Assets / Projects Covered by Fund $200,000 402 Public Works Facilities PW Facilities include the large shed at Ideal and the smaller (former Fire Station) on Jamaca, and any surrounding exterior areas. The fund is meant to cover major repairs, replacements, and improvements at those facilities and any added streets/general PW facilities that may be added as the city grows. Start $ 25,000 2027 Max $ 100,000 2030 Approximate Value of Assets / Projects Covered by Fund $5,000,000 403 City Center CIP The new Lake Elmo City Center opened its doors in July 2023. This fund is intended to cover major repairs, replacements, and improvements at that facility, as well as the adjacent Old City Hall. Start $ 50,000 2025 Max $ 250,000 2030 Approximate Value of Assets / Projects Covered by Fund $13,000,000 404 Park Dedication Park Dedication is funded by development and expenses are restricted to certain purposes by state statute. No Levy. Revenue assumptions are based on development projections 405 Park Reserve Intended as a backstop to the Park Dedication Fund, which currently funds Park replacements and improvements. Park Dedication is funded by development, so when development slows/stops we will need a replacement funding mechanism. This fund also currently receives 50% of franchise fees. Start $ 100,000 / $50,000 2027 / 2029 Max $ 100,000 2032 Approx Value of Assets / Projects Covered by Fund (404 & 405) $ 6,000,000 407 Fire Equipment & Project The fund was originally opened to manage a State Fire Aid distribution and will now serve as the ongoing funding mechanism for fire equipment like SCBA, turn-out gear, tires, and various other items that can cause the fire budget to fluctuate substantially. Start $ 80,000 2027 Max $ 80,000 2027 Approximate Value of Assets / Projects Covered by Fund $800,000 408 Street Maintenance Intended for large street maintenance projects like mill & overlays and sealcoat projects. City engineers occasionally provide an average expected need for those purposes. Start $ 600,000 2025 Max $ 650,000 2027 This fund covers the major maintenance on the same assets covered in Fund 409 below. 409 Infrastructure Reserve The main funding mechanism for Local Street Improvements, City Transportation projects (collector roads), and County Transportation cost shares. The per year average for those projects in the 2027-2036 CIP is Start $ 93,333 2027 Mid $ 1,500,000 2035 Max $ 3,000,000 2045 Approx Value of Assets / Projects Covered by Fund $ 103 Million 410 Vehicle & Equipment This fund has been in existence for a while but was originally funded by transfers from the General Fund. We switched to a capital levy in 2025 to make it more transparent. Start $ 400,000 2025 Max $ 600,000 2031 Approx Value of Assets / Projects Covered by Fund $ 6,500,000 411 Street Lights The City has not previously had a funding source to replace the streetlights. This fund would provide a dedicated funding stream for that purpose. We have calculated an avg of $125,000/yr for the next 25 yrs. Start $ 25,000 2027 Max $ 125,000 2031 Approx Value of Assets / Projects Covered by Fund $ 3,000,000 4XX Crosswalk Improvements In 2026 the City adopted a Crosswalk Improvement policy. Improvement amounts will likely vary substantially. This levy could be decreased if the average over a few years is less than estimated or if the fund achieves a balance of $200,000. Start $ 50,000 2027 Max $ 50,000 / TBD 2027 Approx Value of Assets / Projects Covered by Fund TBD 412 Ballpark The city purchased land in 2025 for the potential build- out of a centralized multipurpose sporting and civic park. The land was purchased with an interfund loan from the sewer fund. This fund/levy is to repay that interfund loan and potentially start saving for future improvements to that land. Start/Max $ 250,000 2026 Final $ 250,000 2035 Approx Value of Assets / Projects Covered by Fund $2,500,000 Additional Information Regarding Certain Funds • 409 – Infrastructure Reserve / Street Improvement Projects o Cash funding assumptions for infrastructure projects. ▪ For Residential Street Reconstructions, we assumed a mix of current (cash) and future (debt) dollars, plus 30% in special assessments. The cash portion increases from 8% in the first year to 35% in the 10th year. This allows for a 35-30-35 split between Cash, Assessments, and Debt. By 2036, the fund is fairly healthy and for the purposes of this model we shift it to a 70-30 split (Cash-Assessments). ▪ For Transportation Projects, we again use an increasing cash assumption, starting at 40% and growing to 100% of the project. ▪ Overall, we’re trying to move toward using “all new dollars” in any project year, meaning any levy, franchise fees, and MSA received in any given year. ▪ We’re trying not to utilize existing fund balance in any given year, so that the fund can continue to grow to meet future needs. It grows any year we did not utilize 100% of “new dollars”. o Future Improvement Averages – In order to do a strategic plan that extends beyond our 10-year CIP, we’ve had to make some assumptions as to the potential expenditures beyond 2037. Based loosely on past expenditures and conversations with the City Engineer, the plan currently estimates an average per year of $ 3,400,000 for all city street projects. This equates to slightly more half of the current CIP’s 10-year average. We are assuming the following; ▪ numerous improvements have been completed in the last 15 years, so it will drop off for a while, ▪ in the future, we will be doing less reconstruction and more reclamations (per the city engineer), ▪ the city is growing, so our inventory of streets is growing rapidly. o Future Improvements data can be enhanced in the future by; ▪ Investing in a Streets Inventory created by City Engineers OR ▪ Staff incrementally creating a streets inventory using the fixed asset database, property records, past development information, etc. o Sources of Cash; ▪ Capital Levy – see above ▪ Minnesota State Aid (MSA) – the construction portion of MSA gets deposited into this account. Only certain projects qualify for the utilization of these funds. Funds are applied via a reimbursement process when they are used; we are not paid the funds until we have spent money on a qualified project. The amounts in this plan are based on the city engineer’s projected amounts for 2026 and 2027. ▪ Franchise Fees – The city implemented franchise fees for electricity and gas utility providers in 2025. 50% of franchise fees are being dedicated to the Infrastructure Fund. We’re currently estimating $250,000 per year, but this will likely grow slightly each year as development continues. ▪ Transfers from the General Fund – Staff is recommending two transfers from the General Fund of $2,000,000 each in 2026 and 2027. At the end of 2025, the General Fund balance was 140% of the following year’s budget. The Fund Balance Policy requires it to be 50 – 60%, so these transfers bring it more in line with policy. (We recommend transferring to this fund as Streets represents the largest group of depreciable assets. The money can be moved later if future Councils determine it is better used elsewhere.) ▪ Transfers from the Stormwater Fund – We’ve penciled in these transfers for now while decisions are made regarding how much and in what form the Council would like to pay toward stormwater-related costs during street improvement projects. The transfers start at 100,000 in 2026 and grow to 480,000 in 2034. (Additional discussion regarding this issue is in the July 14 Council Workshop Staff Report.) Debt Assumptions •Debt is planned for a portion of street and transportation projects as well as one stormwater project. •4% interest rate – interest rates fluctuate and will continue to do so. •15-year term – some of our bonds have been a shorter term, some longer. Decisions regarding term length are made at the time of bond issuance. •Flat repayment schedule in models – actual bond payments will vary slightly year-to-year. City policy does not allow bonding to be set in a way that puts off large portions of a bond to later dates. •Levy amounts are 105% of principal and interest. •Debt balances include debt funded by special assessments. •Staff’s goal with this plan is to reduce debt to zero by 2045 – except for that debt that is funded by assessments. We believe there is a strong chance the city will need to take on substantial debt in the years following that for street reconstruction and facility improvements. Strategic Financial Plan Reports •The charts show the trajectory of a number of the outcomes related to taxes, debt and cash, in an effort to determine if planned revenues and expenditures are sustainable. •Please note these are early projections and most will change -- some even significantly -- as we move through the process. •In addition, any specific projection amount is only valid when real life perfectly mirrors the scenario assumptions (i.e. never), so we want to pay more attention to trajectory than exact amounts. Report List & Links •Tax Levy & Tax Base Historical Tables o Tax Levy o Estimated Market Value o Tax Capacity o Tax Rate o Tax Rate - broken out by portion of the Levy o Effective Tax Rate for Each Portion of the Levy - further broken out by debt issuance and capital levies o Median Home Values o Parcel Counts o Population o New Improvements (ie Development that adds to the taxable value) o Tax Rate Comparisons o Tax Impact on Median Value Home •Projections – 2026 - 2050 o Projected – Tax Levy • The General Fund Levy is in red as we have a lot of work to do on that front while we complete • our 2027 Budgeting. It will be revisited at the August 2026 Budget Workshop. o Projected – Tax Levy – Capital Levies Only o Projected Tax Rates o Projected – Levy / Tax Capacity / Tax Rate Comparison o Debt Projections – Principal Balance o Projected – Debt Levy o Sources & Uses of Funds – Major Capital Funds •Park Dedication Fund (404) •Infrastructure Reserve (409) •Vehicle & Equipment Fund (410) What’s Missing? • So much! We’re using our expertise and the data that we have on hand to make predictions decades into the future. Staff will continue building out the modeling so that it is relatively easy to add new information and update existing data. • There are some very big “what ifs” to analyze as we continue to build this out. o The sale price to the 180 acres and where those funds should be dedicated to. o Building out a Sports Complex on the 76 acres might include increases in debt, capital replacement planning, and operations costs. o What other facilities might a growing city of our size need? Staff will be discussing long-term planning and contemplating what projected growth might mean for their departments. This portion of the report focused on Capital Project Funding. Future additions will address operations and General Fund Budgets. The Financial Plan for Utilities is used to review the financial outlook for the three Enterprise Funds. Taxy Levy Tax Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 General Fund 2,491,588 2,421,588 2,421,588 2,190,706 1,818,847 2,382,813 2,963,905 3,537,317 3,824,879 5,013,574 5,121,265 5,998,212 5,588,958 6,300,000 G.O. Debt Levy 484,814 484,814 484,814 664,541 874,622 1,213,788 1,215,934 1,412,506 1,438,389 2,455,174 2,697,188 2,923,828 3,251,727 3,417,784 Library Levy 256,957 256,957 231,261 256,957 256,957 - - - - - - - - - Capital Levy - - - - - - - - - - - - 1,243,333 1,780,000 Total Levy 3,233,359 3,163,359 3,137,663 3,112,204 2,950,426 3,596,601 4,179,839 4,949,823 5,263,268 7,468,748 7,818,453 8,922,040 10,084,018 11,497,784 - - - - - (1,213,788) - (1,412,506) (1,438,389) - - - - - Tax Levy & Tax Base Historical Tables - 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Tax Levy General Fund G.O. Debt Levy Capital Levy Library Levy Back to Report ListBack to Report List Tax Levy & Tax Base Historical Tables Estimated Market Value Tax Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Real Estate 1,056,314,500 1,070,314,400 1,207,400,900 1,254,442,700 1,363,110,200 1,506,642,000 1,705,754,100 1,954,566,200 2,056,301,400 2,280,459,900 2,923,091,800 3,230,297,900 3,379,354,700 3,482,231,200 Personal Property 12,154,300 12,025,700 12,242,100 13,398,400 14,734,400 16,424,700 17,346,100 17,377,500 18,810,700 14,469,800 15,560,500 15,236,600 15,236,600 17,776,300 Total EMV 1,068,468,800 1,082,340,100 1,219,643,000 1,267,841,100 1,377,844,600 1,523,066,700 1,723,100,200 1,971,943,700 2,075,112,100 2,294,929,700 2,938,652,300 3,245,534,500 3,394,591,300 3,500,007,500 - - - - - - - - - - - - - - - 500,000,000 1,000,000,000 1,500,000,000 2,000,000,000 2,500,000,000 3,000,000,000 3,500,000,000 4,000,000,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Estimated Market Value Total EMV Tax Levy & Tax Base Historical Tables Estimated Market Value Tax Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Existing MV (PY)1,068,468,800 1,082,340,100 1,219,643,000 1,267,841,100 1,377,844,600 1,523,066,700 1,723,100,200 1,971,943,700 2,075,112,100 2,294,929,700 2,938,652,300 3,245,534,500 3,389,781,600 Existing MV Change (1,551,300) 114,214,200 27,781,900 68,121,000 75,342,500 104,265,900 130,225,400 18,170,100 102,298,600 469,527,000 140,366,800 43,926,200 25,898,500 New Improvements 15,422,600 23,088,700 20,416,200 41,882,500 69,879,600 95,767,600 118,618,100 84,998,300 117,519,000 174,195,600 166,515,400 100,320,900 84,327,400 Total EMV 1,082,340,100 1,219,643,000 1,267,841,100 1,377,844,600 1,523,066,700 1,723,100,200 1,971,943,700 2,075,112,100 2,294,929,700 2,938,652,300 3,245,534,500 3,389,781,600 3,500,007,500 - - - - - - - - - - - - - (500,000,000) - 500,000,000 1,000,000,000 1,500,000,000 2,000,000,000 2,500,000,000 3,000,000,000 3,500,000,000 4,000,000,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Estimated Market Value Existing / MV Change / New Improvements Existing MV (PY)Existing MV Change New Improvements Tax Levy & Tax Base Historical Tables Tax Capacity Tax Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Real Estate 11,392,876 11,504,611 12,938,515 13,386,725 14,520,320 16,054,044 18,184,317 20,907,484 21,975,125 24,469,045 31,639,649 35,724,938 37,281,319 38,685,441 Personal Property 237,584 238,764 243,104 266,218 292,938 326,744 345,172 345,800 374,464 287,646 309,460 302,982 354,276 354,276 Total Tax Capacity 11,630,460 11,743,375 13,181,619 13,652,943 14,813,258 16,380,788 18,529,489 21,253,284 22,349,589 24,756,691 31,949,109 36,027,920 37,635,595 39,039,717 - - - - - - - - - - - - - - - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Tax Capacity Total Tax Capacity Tax Levy & Tax Base Historical Tables Tax Rate Tax Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Est. Local Tax Rate 24.03%23.89%23.80%23.12%20.02%22.44%22.93%23.48%23.64%30.55%24.13%24.55%26.84%29.69% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Est. Local Tax Rate Local Tax Rate Tax Levy & Tax Base Historical Tables Tax Rate Tax Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 GF Tax Rate 23.22%22.39%19.54%17.14%13.05%15.51%17.07%17.67%18.11%21.35%16.73%17.26%15.55%17.00% Fiscal Dispar. Adj. -6.10%-5.36%-1.51%-1.23%-1.16%-0.97%-1.15%-1.25%-1.29%-1.25%-1.41%-1.12%-1.21%-1.33% GF Rate less FD*17.12%17.03%18.02%15.91%11.90%14.54%15.92%16.42%16.83%20.09%15.32%16.13%14.34%15.67% Debt Service 4.52%4.48%3.91%5.20%6.28%7.90%7.00%7.05%6.81%10.45%8.81%8.41%9.05%9.22% Library Rate 2.39%2.38%1.87%2.01%1.84%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00% Capital Levies 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%3.46%4.80% * for the purposes of this particular comparison, the Fiscal Disparities adjustment has been applied to the GF rate. 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Local Tax Rate by Type of Levy GF Rate less FD*Debt Service Library Rate Capital Levies Tax Levy & Tax Base Historical Tables Effective Tax Rate for Each Portion of the Levy Levy 2025 2025 2026 2026 General Fund less Fiscal Disp*14.34%14.34%15.67%15.67% 2014A 0.51%0.50% 2016A 0.52%0.50% 2017A 1.01%0.89% 2018 Certificate 0.36%0.34% 2019A 0.82%0.78% 2021A 2.85%2.75% 2022A 0.78%0.75% 2023A 0.98%0.96% 2024A 1.22%1.18% 2025A 0.00%0.57% All Debt Service Levies 9.05%9.22% Infrastructure Reserve Levy 0.26%1.08% City Center CIP Levy 0.14%0.13% Park CIP Levy 0.28%0.00% Ballpark Levy 0.00%0.67% Vehicle & Equipment Levy 1.11%1.21% Street Maintenance Levy 1.67%1.70% All Capital Levies 3.46%4.80% 26.84%26.84%29.69%29.69% * for the purposes of this particular comparison, the 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 2025 2025 2026 2026 Stacked Effective Tax Rates for each Portion of the Levy All Capital Levies Street Maintenance Levy Vehicle & Equipment Levy Ballpark Levy Park CIP Levy City Center CIP Levy Infrastructure Reserve Levy All Debt Service Levies 2025A 2024A 2023A 2022A 2021A 2019A 2018 Certificate 2017A 2016A 2014A General Fund less Fiscal Disp* Capital Levies Debt Levies Debt Levies Capital Levies Tax Levy & Tax Base Historical Tables Median Home Values Tax Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 OVERALL 319,300 328,600 371,500 371,500 382,200 383,350 401,600 430,600 434,800 458,700 553,800 585,700 581,700 585,800 Townhomes/Condos n/a 270,300 284,900 286,600 244,100 247,700 230,900 285,500 283,700 309,700 341,800 375,600 368,100 361,000 Single Family n/a 331,400 375,200 376,000 387,800 389,900 408,700 438,800 441,400 464,600 563,500 598,300 600,100 603,500 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Median Home Values OVERALL Townhomes/Condos Single Family Tax Levy & Tax Base Historical Tables Parcel Counts Tax Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Agricultural Class 116 130 135 131 116 113 129 113 117 122 118 118 118 108 Apartment Class 5 5 5 5 5 6 6 7 7 10 10 10 12 17 Commercial/Industrial Class 197 193 201 196 201 201 203 207 201 201 201 204 209 210 Residential/SRR Class 2,755 2,758 2,756 2,821 3,359 3,563 3,971 4,306 4,410 4,579 4,872 4,902 4,947 5,151 Total 3,073 3,086 3,097 3,153 3,681 3,883 4,309 4,633 4,735 4,912 5,201 5,234 5,286 5,486 - 1,000 2,000 3,000 4,000 5,000 6,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Parcel Counts Residential/SRR Class Commercial/Industrial Class Agricultural Class Apartment Class Tax Levy & Tax Base Historical Tables Population Tax Year 2013 2014 2015 2016 2017 2018 2019 2020 Census 2021 2022 2023 2024 2025 2026 Population n/a 8,958 9,180 9,403 9,625 10,521 11,105 11,335 12,655 13,514 14,033 14,283 15,280 15,530 Levy Per Capita n/a 353 342 331 307 457 376 561 530 553 557 625 660 740 Population based on Metropolitan Council Annual Population Estimates, except where Census is noted. - 100 200 300 400 500 600 700 800 900 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 2014 2015 2016 2017 2018 2019 2020 Census 2021 2022 2023 2024 2025 2026 Population Population Levy Per Capita Tax Levy & Tax Base Historical Tables New Improvements Tax Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 New Improvements 13,570,800$ 15,422,600$ 23,088,700$ 20,416,200$ 41,882,500$ 69,879,600$ 95,767,600$ 118,618,100$ 84,998,300$ 117,519,000$ 174,195,600$ 166,515,400$ 100,320,900$ 84,327,400$ Avg. 2013-2026 Avg. 2017-2026 Avg. 17-22 & 25-26 105,402,440 89,164,175 80,465,907 $- $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 $140,000,000 $160,000,000 $180,000,000 $200,000,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 New Improvements Tax Levy & Tax Base Historical Tables Tax Rate Comparisons 0 10 20 30 40 50 60 Stillwater Oak Park Heights Newport Forest Lake Saint Paul Park Hugo Mahtomedi Lake Elmo Scandia Grant City Tax Rates Washington County cities most comparable in population to Lake Elmo 2024 2025 2026 Proposed Tax Levy & Tax Base Historical Tables Tax Rate Comparisons 0 10 20 30 40 50 60 70 Tax Rates (%) All Washington County Cities 2024 2025 2026 Proposed Tax Levy & Tax Base Historical Tables Tax Impact on Median Value Home (in real dollars - not adjusted for past inflation) Tax Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Median Home Value 319,300 328,600 371,500 371,500 382,200 383,350 401,600 430,600 434,800 458,700 553,800 585,700 581,700 585,800 Tax Rate 24.03%23.89%23.80%23.12%20.02%22.44%22.93%23.48%23.64%30.55%24.13%24.55%26.84%29.69% City Tax 747 767 875 850 759 854 918 1,011 1,028 1,401 1,369 1,490 1,616 1,803 - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Tax Impact on Median Value Home Median Home Value City Tax DRAFT -- for discussion at July 14, 2026 Council Workshop Projected - Tax Levy Tax Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 General Fund 6,300,000 7,778,150 8,295,963 8,827,035 9,332,007 9,851,552 10,220,094 10,854,661 11,251,033 11,665,033 12,097,523 12,303,290 12,775,397 13,318,865 13,833,750 14,372,159 14,935,258 15,574,273 16,189,493 16,883,273 17,556,039 18,260,291 18,997,605 19,819,641 20,627,144 G.O. Debt Levy - Debt 3,417,784 3,401,817 3,331,868 3,449,338 3,244,256 3,401,080 3,535,325 3,605,742 3,259,820 2,884,670 2,792,048 2,499,969 2,401,788 2,399,898 2,397,011 2,399,150 1,568,523 1,284,170 939,187 762,777 590,900 462,180 391,918 302,863 234,679 Capital Levies 1,780,000 2,257,000 2,519,000 2,781,000 3,038,000 3,170,000 3,302,000 3,434,000 3,566,000 3,450,000 3,610,000 3,770,000 3,930,000 4,090,000 4,250,000 4,410,000 4,570,000 4,730,000 4,890,000 5,050,000 5,120,000 5,120,000 5,120,000 5,120,000 5,120,000 Total Levy 11,497,784 13,436,967 14,146,831 15,057,373 15,614,263 16,422,632 17,057,419 17,894,403 18,076,853 17,999,703 18,499,571 18,573,259 19,107,185 19,808,764 20,480,761 21,181,309 21,073,781 21,588,443 22,018,680 22,696,050 23,266,939 23,842,471 24,509,523 25,242,504 25,981,822 Levy Increase 14.0% 16.9% 5.3% 6.4% 3.7% 5.2% 3.9% 4.9% 1.0% -0.4% 2.8% 0.4% 2.9% 3.7% 3.4% 3.4% -0.5% 2.4%2.0% 3.1% 2.5% 2.5% 2.8% 3.0% 2.9% Strategic Financial Plan Reports Scenario 2 The following reports are estimates based on various modeling and assumptions. Each report is referenced in another section of the Strategic Financial Plan; such section should be reviewed in order to obtain the full context of the data within the tables and charts herein. All modeling is based on 2027 dollars and does not reflect inflation in revenues or costs, or changes in home values. - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 Projected Tax Levies (future years are shown in 2027 dollars and do not account for inflation) General Fund G.O. Debt Levy - Debt Capital Levies DRAFT -- for discussion at July 14, 2026 Council Workshop Strategic Financial Plan Reports Scenario 2 The following reports are estimates based on various modeling and assumptions. Each report is referenced in another section of the Strategic Financial Plan; such section should be reviewed in order to obtain the full context of the data within the tables and charts herein. All modeling is based on 2027 dollars and does not reflect inflation in revenues or costs, or changes in home values. Projected - Tax Levy - Capital Levies Only Tax Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 General Fund Projects & Misc - 5,000 10,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 Public Works Buildings - 25,000 50,000 75,000 100,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 City Center CIP 50,000 100,000 150,000 200,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 Park Reserve - 50,000 60,000 70,000 80,000 90,000 100,000 110,000 120,000 130,000 140,000 150,000 160,000 170,000 180,000 190,000 200,000 210,000 220,000 230,000 300,000 300,000 300,000 300,000 300,000 Fire Equipment & Project Fund - 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 Street Maintenance 630,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 650,000 Infrastructure Reserve 400,000 522,000 644,000 766,000 888,000 1,010,000 1,132,000 1,254,000 1,376,000 1,500,000 1,650,000 1,800,000 1,950,000 2,100,000 2,250,000 2,400,000 2,550,000 2,700,000 2,850,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 Vehicle & Equipment 450,000 500,000 525,000 550,000 575,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 Street Lights - 25,000 50,000 75,000 100,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 Crosswalk Improvements - 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 Ballpark Levy 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 - - - - - - - - - - - - - - - - Total Capital Levy 1,780,000 2,257,000 2,519,000 2,781,000 3,038,000 3,170,000 3,302,000 3,434,000 3,566,000 3,450,000 3,610,000 3,770,000 3,930,000 4,090,000 4,250,000 4,410,000 4,570,000 4,730,000 4,890,000 5,050,000 5,120,000 5,120,000 5,120,000 5,120,000 5,120,000 - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Capital Levies General Fund Projects & Misc Public Works Buildings City Center CIP Park Reserve Fire Equipment & Project Fund Street Maintenance Infrastructure Reserve Vehicle & Equipment Street Lights Crosswalk Improvements Ballpark Levy DRAFT -- for discussion at July 14, 2026 Council Workshop Strategic Financial Plan Reports Scenario 2 The following reports are estimates based on various modeling and assumptions. Each report is referenced in another section of the Strategic Financial Plan; such section should be reviewed in order to obtain the full context of the data within the tables and charts herein. All modeling is based on 2027 dollars and does not reflect inflation in revenues or costs, or changes in home values. Projected Tax Rates Tax Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 GF Tax Rate 17.00% 19.66% 20.33% 21.29% 21.92% 22.53% 22.60% 23.41% 23.80% 24.09% 24.46% 24.60% 25.24% 25.85% 26.59% 27.39% 28.25% 29.25% 30.33% 31.58% 32.79% 34.06% 35.38% 36.85% 38.30% Fiscal Dispar. Adj. -1.33% -1.25% -1.21% -1.19% -1.16% -1.13% -1.09% -1.07% -1.04% -1.02% -1.00% -0.99% -0.98% -0.96% -0.95% -0.94% -0.93% -0.93% -0.93% -0.92% -0.92% -0.92% -0.92% -0.92% -0.92% GF Rate less FD*15.67% 18.41% 19.12% 20.09% 20.76% 21.40% 21.51% 22.34% 22.75% 23.07% 23.47% 23.61% 24.27% 24.90% 25.64% 26.45% 27.32% 28.32% 29.40% 30.66% 31.87% 33.13% 34.46% 35.94% 37.38% Debt Service 9.22% 8.60% 8.16% 8.32% 7.62% 7.78% 7.82% 7.78% 6.89% 5.96% 5.65% 5.00% 4.75% 4.66% 4.61% 4.57% 2.97% 2.41% 1.76% 1.43% 1.10% 0.86% 0.73% 0.56% 0.44% Capital Levies 4.80% 5.70% 6.17% 6.71% 7.14% 7.25% 7.30% 7.41% 7.54% 7.13% 7.30% 7.54% 7.76% 7.94% 8.17% 8.40% 8.64% 8.88% 9.16% 9.45% 9.56% 9.55% 9.53% 9.52% 9.51% Local Tax Rate 29.69% 32.71% 33.45% 35.12% 35.52% 36.43% 36.63% 37.53% 37.19% 36.16% 36.41% 36.14% 36.78% 37.49% 38.42% 39.43% 38.93% 39.61% 40.32% 41.53% 42.54% 43.55% 44.72% 46.02% 47.32% * for the purposes of this particular comparison, the Fiscal Disparities adjustment has been applied to the GF rate. 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 Local Tax Rate by Levy Purpose GF Rate less FD*Debt Service Capital Levies DRAFT -- for discussion at July 14, 2026 Council Workshop Strategic Financial Plan Reports Scenario 2 The following reports are estimates based on various modeling and assumptions. Each report is referenced in another section of the Strategic Financial Plan; such section should be reviewed in order to obtain the full context of the data within the tables and charts herein. All modeling is based on 2027 dollars and does not reflect inflation in revenues or costs, or changes in home values. Projected - Levy / Tax Capacity / Tax Rate Tax Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 Total Levy 11,497,784 13,436,967 14,146,831 15,057,373 15,614,263 16,422,632 17,057,419 17,894,403 18,076,853 17,999,703 18,499,571 18,573,259 19,107,185 19,808,764 20,480,761 21,181,309 21,073,781 21,588,443 22,018,680 22,696,050 23,266,939 23,842,471 24,509,523 25,242,504 25,981,822 Tax Capacity for LTR 37,061,655 39,568,118 40,814,077 41,468,877 42,568,637 43,728,547 45,217,417 46,368,687 47,279,157 48,414,267 49,450,027 50,023,147 50,612,267 51,514,767 52,017,267 52,471,267 52,868,147 53,249,027 53,379,027 53,459,027 53,539,027 53,619,027 53,699,027 53,779,027 53,859,027 Local Tax Rate 29.69% 32.71% 33.45% 35.12% 35.52% 36.43% 36.63% 37.53% 37.19% 36.16% 36.41% 36.14% 36.78% 37.49% 38.42% 39.43% 38.93% 39.61% 40.32% 41.53% 42.54% 43.55% 44.72% 46.02% 47.32% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% - 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 Levy / Tax Capacity / Tax Rate Total Levy Tax Capacity for LTR Local Tax Rate DRAFT -- for discussion at July 14, 2026 Council Workshop Debt Projections - Principal Balance Tax Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 Current Debt 50,235,000 44,475,000 38,800,000 33,585,000 28,310,000 23,865,000 19,385,000 15,285,000 11,550,000 8,410,000 5,820,000 3,415,000 2,465,000 1,835,000 1,235,000 625,000 - - - - - - - - - New Debt 2,520,800 6,233,747 11,258,960 13,326,707 18,145,920 19,011,467 18,749,147 18,782,227 18,365,440 18,845,520 19,688,933 18,006,347 16,293,760 14,551,173 12,778,587 10,976,000 9,311,467 7,875,667 6,773,333 5,831,533 5,246,400 4,780,133 4,367,467 4,033,667 3,756,000 Total 52,755,800 50,708,747 50,058,960 46,911,707 46,455,920 42,876,467 38,134,147 34,067,227 29,915,440 27,255,520 25,508,933 21,421,347 18,758,760 16,386,173 14,013,587 11,601,000 9,311,467 7,875,667 6,773,333 5,831,533 5,246,400 4,780,133 4,367,467 4,033,667 3,756,000 Strategic Financial Plan Reports Scenario 2 The following reports are estimates based on various modeling and assumptions. Each report is referenced in another section of the Strategic Financial Plan; such section should be reviewed in order to obtain the full context of the data within the tables and charts herein. - 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 Principal Balance Projections (All Debt / All Funds) Current Debt New Debt DRAFT -- for discussion at July 14, 2026 Council Workshop Strategic Financial Plan Reports Scenario 2 The following reports are estimates based on various modeling and assumptions. Each report is referenced in another section of the Strategic Financial Plan; such section should be reviewed in order to obtain the full context of the data within the tables and charts herein. Projected - Debt Levy Tax Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 G.O. Debt Levy - Existing Debt 3,455,453 3,241,385 2,887,083 2,659,570 2,278,078 2,263,025 2,268,550 2,268,706 1,833,728 1,390,394 1,182,086 771,014 672,833 670,943 668,056 670,195 - - - - - - - - - G.O. Debt Levy - New Debt 160,432 444,785 789,767 966,178 1,138,055 1,266,775 1,337,037 1,426,092 1,494,276 1,609,963 1,728,955 1,728,955 1,728,955 1,728,955 1,728,955 1,568,523 1,284,170 939,187 762,777 590,900 462,180 391,918 302,863 234,679 Total Debt Levy 3,455,453 3,401,817 3,331,868 3,449,338 3,244,256 3,401,080 3,535,325 3,605,742 3,259,820 2,884,670 2,792,048 2,499,969 2,401,788 2,399,898 2,397,011 2,399,150 1,568,523 1,284,170 939,187 762,777 590,900 462,180 391,918 302,863 234,679 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 Projected Debt Levy G.O. Debt Levy - Existing Debt G.O. Debt Levy - New Debt 2027 through 2036 Sources & Uses of Funds - Park Dedication (404) Lake Elmo, MN Source Project # 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Park Dedication Fund (404) Beginning Balance 2,600,000 2,290,950 832,161 -1,732,355 -1,107,355 -1,222,355 -1,347,355 -591,674 -218,990 -218,990 Revenues and Other Fund Sources Revenue Park Dedication 400,950 201,211 455,484 1,080,000 0 0 880,681 372,684 0 0 Total 400,950 201,211 455,484 1,080,000 0 0 880,681 372,684 0 0 Other Fund Sources Total Revenues and Other Fund Sources 400,950 201,211 455,484 1,080,000 0 0 880,681 372,684 0 0 Total Funds available 3,000,950 2,492,161 1,287,645 -652,355 -1,107,355 -1,222,355 -466,674 -218,990 -218,990 -218,990 Expenditures and Uses Capital Projects & Equipment Parks and Recreation Tana Ridge Park Play Equipment - Replacement PR-028 0 0 0 125,000 0 0 0 0 0 0 Tablyn Park Play Equipment - Replacement PR-029 0 210,000 0 0 0 0 0 0 0 0 Produced Using Plan-It CIP Software Source Project # 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Stonegate Park Play Equipment - Replacement PR-030 200,000 0 0 0 0 0 0 0 0 0 Reid Park Play Equipment - Replacement PR-031 0 0 0 0 0 0 125,000 0 0 0 Hidden Knoll Park Play Equipment - Replacement PR-034 0 0 0 0 0 125,000 0 0 0 0 Carriage Station Park Play Equipment - Replacement PR-036 0 250,000 0 0 0 0 0 0 0 0 Trail Additions PR-038 0 0 100,000 0 0 0 0 0 0 0 Lions Park Concession Stand & SW Parking Lot Paving PR-043 0 600,000 0 0 0 0 0 0 0 0 Skate Park PR-044 0 0 150,000 0 0 0 0 0 0 0 Outdoor Fitness Equipment PR-045 0 0 30,000 0 0 0 0 0 0 0 Outdoor Fitness Park PR-046 0 0 30,000 0 0 0 0 0 0 0 Disk Golf PR-047 0 0 30,000 0 0 0 0 0 0 0 Central Play Complex PR-048 0 0 300,000 0 0 0 0 0 0 0 Court Resurfacing PR-050 0 0 0 0 40,000 0 0 0 0 0 Trail Connection PR-051 0 0 900,000 0 0 0 0 0 0 0 Park Sign Replacement PR-052 0 0 0 225,000 0 0 0 0 0 0 Multisport Complex Amenities PR-053 0 0 1,000,000 0 0 0 0 0 0 0 Invasive Species Management PR-054 0 0 0 25,000 0 0 0 0 0 0 New Park Pavilion - Location TBD PR-056 80,000 0 0 0 0 0 0 0 0 0 New Park Pavilion PR-057 0 80,000 0 0 0 0 0 0 0 0 New Park Pavilion - Location TBD PR-058 0 0 80,000 0 0 0 0 0 0 0 New Park Pavilion - Location TBD PR-059 0 0 0 80,000 0 0 0 0 0 0 Lions Court & Ice Rink Surface Replacement PR-061 50,000 0 0 0 0 0 0 0 0 0 Limerick Village Area Park Dev PR-062 0 0 400,000 0 0 0 0 0 0 0 Lions Park Paving North lot & trails PR-063 80,000 0 0 0 0 0 0 0 0 0 Ridge Park Parking Lot PR-064 300,000 0 0 0 0 0 0 0 0 0 Central Greenway Regional Trail PR-069 0 520,000 0 0 0 0 0 0 0 0 Pebble Park Tot Lot PR-070 0 0 0 0 75,000 0 0 0 0 0 Total 710,000 1,660,000 3,020,000 455,000 115,000 125,000 125,000 0 0 0 Other Uses Total Expenditures and Uses 710,000 1,660,000 3,020,000 455,000 115,000 125,000 125,000 0 0 0 Change in Fund Balance -309,050 -1,458,789 -2,564,516 625,000 -115,000 -125,000 755,681 372,684 0 0 Ending Balance 2,290,950 832,161 -1,732,355 -1,107,355 -1,222,355 -1,347,355 -591,674 -218,990 -218,990 -218,990 Produced Using Plan-It CIP Software 2027 through 2036 Sources & Uses of Funds - Infrastructure Reserve (409) Lake Elmo, MN Source Project # 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Infrastructure Reserve Fund (409) Beginning Balance 2,815,745 4,099,831 4,940,831 4,497,831 3,377,831 3,121,831 4,061,831 5,598,831 4,896,831 6,701,831 Revenues and Other Fund Sources Revenue Capital Levy 522,000 644,000 766,000 888,000 1,010,000 1,132,000 1,254,000 1,376,000 1,500,000 1,650,000 Franchise Fees 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 MSA 806,086 800,000 800,000 800,000 800,000 800,000 800,000 800,000 800,000 800,000 Transfer - General 2,000,000 0 0 0 0 0 0 0 0 0 Transfer - Stormwater Fund 200,000 200,000 250,000 250,000 300,000 300,000 400,000 480,000 480,000 480,000 Total 3,778,086 1,894,000 2,066,000 2,188,000 2,360,000 2,482,000 2,704,000 2,906,000 3,030,000 3,180,000 Other Fund Sources Total Revenues and Other Fund Sources 3,778,086 1,894,000 2,066,000 2,188,000 2,360,000 2,482,000 2,704,000 2,906,000 3,030,000 3,180,000 Total Funds available 6,593,831 5,993,831 7,006,831 6,685,831 5,737,831 5,603,831 6,765,831 8,504,831 7,926,831 9,881,831 Expenditures and Uses Capital Projects & Equipment Produced Using Plan-It CIP Software Source Project # 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Public Works Department Replace City Entrance Signs PW-094 0 0 100,000 0 0 0 0 0 0 0 Street Light Replacements PW-099 100,000 0 0 0 0 0 0 0 0 0 2027 Street Improvements PW-102 319,000 0 0 0 0 0 0 0 0 0 2028 Street Improvements PW-103 0 448,000 0 0 0 0 0 0 0 0 2029 Street Improvements PW-104 0 0 561,000 0 0 0 0 0 0 0 2030 Street Improvements PW-105 0 0 0 720,000 0 0 0 0 0 0 2031 Street Improvements PW-106 0 0 0 0 667,000 0 0 0 0 0 2032 Street Improvements PW-107 0 0 0 0 0 442,000 0 0 0 0 2033 Street Improvements PW-108 0 0 0 0 0 0 667,000 0 0 0 2034 Street Improvements PW-109 0 0 0 0 0 0 0 608,000 0 0 2035 Street Improvements PW-110 0 0 0 0 0 0 0 0 1,225,000 0 2036 Street Improvements PW-111 0 0 0 0 0 0 0 0 0 2,520,000 Hudson Blvd Improvements - Vahli- Hi to Bus Fac. PW-121 0 170,000 0 0 0 0 0 0 0 0 Hudson Blvd Improvements - Keats to Lake Elmo Ave PW-122 0 0 1,470,000 0 0 0 0 0 0 0 5th St N - Keats to Lake Elmo Ave PW-124 0 0 0 1,288,000 1,449,000 0 0 0 0 0 TH36-Lake Elmo Ave (CSAH 17) Imp PW-125 1,200,000 0 0 0 0 0 0 0 0 0 Ideal Ave (CSAH 13)-Phase 3- CSAH 14 to CSAH 6 PW-128 0 0 378,000 0 0 0 0 0 0 0 CSAH 14 - Klondike to 39th PW-129 50,000 0 0 0 0 0 0 0 0 300,000 CSAH 17 Imp - CSAH 14 to 43rd St PW-130 0 50,000 0 0 0 0 0 0 0 1,000,000 Lake Elmo Ave (CSAH 17) & 39th St N Traffic Signal PW-131 0 0 0 0 500,000 0 0 0 0 0 CSAH 6/Inwood Signal Improvements PW-132 0 0 0 0 0 0 500,000 0 0 0 CSAH 10 / CSAH 17 Roundabout PW-133 0 385,000 0 0 0 0 0 0 0 0 CSAH 15 - Manning Imp -43rd St to 58th St PW-138 0 0 0 800,000 0 0 0 0 0 0 CSAH 10 / CSAH 19 Roundabout PW-140 0 0 0 500,000 0 0 0 0 0 0 45TH - Julep, etc. (Lake Jane Trail to Lake Elmo) PW-141 600,000 0 0 0 0 0 0 0 0 0 Demontreville Trail (TH36 to 50th Street) PW-142 0 0 0 0 0 0 0 3,000,000 0 0 KIMBRO AVE / 50TH ST (47TH ST to LAKE ELMO AVE) PW-143 0 0 0 0 0 1,100,000 0 0 0 0 2026 CROSSWALK IMPROVEMENTS PW-145 145,000 0 0 0 0 0 0 0 0 0 Produced Using Plan-It CIP Software Source Project # 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 UPPER 33RD STREET UPRR CROSSING CLOSURE PW-146 80,000 0 0 0 0 0 0 0 0 0 Total 2,494,000 1,053,000 2,509,000 3,308,000 2,616,000 1,542,000 1,167,000 3,608,000 1,225,000 3,820,000 Other Uses Total Expenditures and Uses 2,494,000 1,053,000 2,509,000 3,308,000 2,616,000 1,542,000 1,167,000 3,608,000 1,225,000 3,820,000 Change in Fund Balance 1,284,086 841,000 -443,000 -1,120,000 -256,000 940,000 1,537,000 -702,000 1,805,000 -640,000 Ending Balance 4,099,831 4,940,831 4,497,831 3,377,831 3,121,831 4,061,831 5,598,831 4,896,831 6,701,831 6,061,831 Produced Using Plan-It CIP Software 2027 through 2036 Sources & Uses of Funds - Vehicle & Equipment Fund (410) Lake Elmo, MN Source Project # 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Vehicle & Equipment Replacement Fund (410) Beginning Balance 847,327 699,327 644,569 971,874 1,079,874 1,018,130 860,630 920,630 1,278,630 1,638,630 Revenues and Other Fund Sources Revenue Capital Levy 500,000 525,000 550,000 575,000 600,000 600,000 600,000 600,000 600,000 600,000 Interfund Loan 1 0 500,000 0 0 0 0 0 0 0 0 Interfund Loan 2 0 0 1,300,000 0 0 0 0 0 0 0 Total 500,000 1,025,000 1,850,000 575,000 600,000 600,000 600,000 600,000 600,000 600,000 Other Fund Sources Total Revenues and Other Fund Sources 500,000 1,025,000 1,850,000 575,000 600,000 600,000 600,000 600,000 600,000 600,000 Total Funds available 1,347,327 1,724,327 2,494,569 1,546,874 1,679,874 1,618,130 1,460,630 1,520,630 1,878,630 2,238,630 Expenditures and Uses Capital Projects & Equipment Building Department Produced Using Plan-It CIP Software Source Project # 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Building Inspection Vehicle 1 B-001 0 0 30,000 0 0 0 0 0 0 30,000 Building Inspection Vehicle 2 B-002 0 0 0 30,000 0 0 0 0 0 0 Building Inspection Vehicle 3 B-003 0 0 0 30,000 0 0 0 0 0 0 Building Inspection Vehicle 4 B-004 0 30,000 0 0 0 0 0 0 30,000 0 Total 0 30,000 30,000 60,000 0 0 0 0 30,000 30,000 Fire Department Brush 1 F-006 0 0 0 0 0 0 0 0 0 70,000 Utility 1 F-008 0 0 0 0 0 0 0 0 0 60,000 Rescue Boat & Trailer F-010 0 0 0 0 0 0 0 0 0 40,000 Ladder 1 F-012 0 664,758 960,242 0 0 0 0 0 0 0 Command Vehicle 1 F-014 0 0 57,453 0 0 0 0 0 0 0 Command Vehicle 2 F-015 0 0 0 0 51,744 0 0 0 0 0 Total 0 664,758 1,017,695 0 51,744 0 0 0 0 170,000 Parks and Recreation PR1 - Chevy 2500 PR-001 0 0 50,000 0 0 0 0 0 0 0 PR2 - Kubota SUV PR-002 0 25,000 0 0 0 0 0 0 0 0 PR3 - Bobcat ToolCat PR-003 0 0 0 0 0 0 0 0 80,000 0 PR4 - John Deere Gator PR-004 0 50,000 0 0 0 0 0 0 0 0 PR5 - Air Compressor PR-005 0 0 0 0 0 25,000 0 0 0 0 PR6 - Skid Loader PR-006 70,000 0 0 0 0 0 0 0 0 0 Total 70,000 75,000 50,000 0 0 25,000 0 0 80,000 0 Public Works Department D1 - Dump Truck 1 - 25 Mack Tandem PW-001 0 0 0 0 0 0 0 0 0 405,000 D2 - Dump Truck 2 - 15 Mack Single PW-002 0 310,000 0 0 0 0 0 0 0 0 D3 - Dump Truck 3 - 17 Mack PW-003 0 0 325,000 0 0 0 0 0 0 0 D4 - Dump Truck 4 - 19 F-450 PW-004 0 0 0 0 70,000 0 0 0 0 0 D5 - Dump Truck 5 - 19 Mack PW-005 0 0 0 0 310,000 0 0 0 0 0 D6 - Dump Truck 6 - 20 Mack Tandem PW-006 0 0 0 0 0 390,000 0 0 0 0 D7 - Dump Truck 7 - 21 Mack PW-007 0 0 0 0 0 0 310,000 0 0 0 D8 - Dump Truck 8 - 22 F-550 PW-008 0 0 0 0 0 0 0 75,000 0 0 P1 - Pickup 1 - F-250 PW-011 70,000 0 0 0 0 0 0 0 0 0 P2 - Pickup 2 - F-250 PW-012 65,000 0 0 0 0 0 0 0 0 0 P3 - Pickup 3 - F-150 PW-013 48,000 0 0 0 0 0 0 0 0 0 P4 - Pickup 4 - Ranger PW-014 0 0 0 0 0 25,000 0 0 0 0 P5 - Pickup 5 - 3500 PW-015 0 0 0 0 0 0 0 37,000 0 0 P6 - Pickup 6 - Bucket Truck PW-016 50,000 0 0 0 0 0 0 0 0 0 Produced Using Plan-It CIP Software Source Project # 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 E1 - Equip 1 - Case Loader PW-021 320,000 0 0 0 0 0 0 0 0 0 E5 - Equip 5 - Bobcat Skid PW-025 0 0 0 0 0 45,000 0 0 0 0 E6 - Equip 6 - Service Lift PW-026 0 0 0 35,000 0 0 0 0 0 0 E8 - Equip 8 - Asphalt Roller PW-028 0 0 0 110,000 0 0 0 0 0 0 E9 - Equip 9 - Asphalt Trailer PW-029 0 0 0 0 0 42,500 0 0 0 0 E10 - Equip 10 - Chipper PW-030 0 0 0 0 0 0 0 0 0 48,000 E11 - Equip 11 - Forklift PW-031 0 0 0 32,000 0 0 0 0 0 0 E18 - Equip 18 - Forestry Mulcher PW-038 25,000 0 0 0 0 0 0 0 0 0 Total 578,000 310,000 325,000 177,000 380,000 502,500 310,000 112,000 0 453,000 Other Uses Repay Interfund Loan 1 0 0 100,000 100,000 100,000 100,000 100,000 0 0 0 Repay Interfund Loan 2 0 0 0 130,000 130,000 130,000 130,000 130,000 130,000 130,000 Total 0 0 100,000 230,000 230,000 230,000 230,000 130,000 130,000 130,000 Total Expenditures and Uses 648,000 1,079,758 1,522,695 467,000 661,744 757,500 540,000 242,000 240,000 783,000 Change in Fund Balance -148,000 -54,758 327,305 108,000 -61,744 -157,500 60,000 358,000 360,000 -183,000 Ending Balance 699,327 644,569 971,874 1,079,874 1,018,130 860,630 920,630 1,278,630 1,638,630 1,455,630 Produced Using Plan-It CIP Software Stormwater Analysis Funding a Portion of Street Improvements Stormwater Fee History The 2026 utility study recommended annual stormwater fee increases to address long-term capital needs and maintain fund sustainability. Prior to 2026, stormwater fees remained unchanged for ten years. While revenues were sufficient to cover routine operating expenses, they did not generate adequate funding to support depreciation or build reserves for future capital replacements. To address this gap, the study recommended implementing an annual 8 percent fee increase beginning in 2026. Under those assumptions, the stormwater fund was projected to achieve a positive cash balance by 2031, with debt issuance required only once—in 2028—to fund the Lion’s Park drainage pond as shown in the table below. All other capital projects were anticipated to be funded with cash on hand. Because much of the city’s stormwater infrastructure is relatively new, major maintenance needs have been limited. Public Works and Engineering will complete a more thorough inventory and condition assessment, which is expected to identify future maintenance and replacement needs. These findings may increase long-term capital projections and will require future updates to the fee model. Model Assumptions In response to City Council’s request, staff analyzed the potential use of stormwater funds for street improvement projects. The updated model incorporates a planned annual $480,000 contribution to fund the stormwater-related components of local street reconstruction projects, as seen in the table below. This figure represents the estimated average share of stormwater infrastructure included in annual CIP street projects. If transportation projects were added, the average contribution would increase to approximately $750,000. With the inclusion of the annual $480,000 transfer, a 10 percent yearly fee increase is required to maintain long-term fund solvency. Under this structure, the fund achieves a positive change in net position by 2033—two years later than projected in the original 2026 model as shown in the chart below. The revised model includes only currently planned capital projects. As Public Works completes its expanded stormwater infrastructure inspection program, additional maintenance needs may emerge. These could require further adjustments to fee levels or project timing to maintain required cash balances. Proposed Rates Based on the new assumptions and the 10% annual increase in fees, the table below outlines the proposed stormwater rates for the years 2027 through 2036. Residential annual charges increase from $103 in 2026 to $267 by 2036, with similar proportional increases applied to commercial and multifamily customers. These annual adjustments generally fall between 9 and 11 percent each year, providing the revenue needed to support operations, capital replacement, and stormwater-related components of street projects. Cash Flow With the increased rates there is a noticeable increase in cash between 2034 and 2036 as shown in the graph below. Because rate increases continue annually regardless of CIP fluctuations, revenue can outpace expenditures during years with fewer projects. As Public Works completes the expanded stormwater system inventory, future models may reflect additional maintenance or replacement needs that could reduce this projected increase in cash. The analysis uses an averaged or “smoothed” project cost approach. If project funding were based on actual annual costs instead of an averaged transfer, net cash flow could fluctuate more significantly. In some years, the fund might require additional borrowing, either through revenue bonds or interfund loans. Conclusion The updated stormwater fee model demonstrates that a 10 percent annual increase is necessary to support both stormwater infrastructure needs and the stormwater share of street reconstruction projects. This structure maintains long-term solvency, with positive net position achieved by 2033 and increasing cash reserves through 2036. As Public Works completes its detailed system inventory, additional maintenance and replacement needs may emerge, potentially requiring future adjustments to the fee structure. The revised analysis provides a stable financial framework that supports current capital needs while ensuring flexibility for future system demands. Table N Storm Sewer Fund Pro Forma - 8% Increase Prior Year Actual Prior Year Actual 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Revenues Charges for services 580,896 653,752 628,360 696,331 773,130 858,639 958,438 1,083,910 1,217,292 1,350,509 1,489,554 1,636,183 Investment income 44,496 55,356 20,510 4,400 4,400 4,400 4,400 4,400 4,400 4,400 4,400 4,400 Other revenues 30,329 30,329 16,508 --------- Availability charges - - - --------- Capital assets contributions non-cash 2,402,156 3,998,524 - --------- Intergovernmental revenue - - - --------- Special assessments 7,363 40,836 - --------- Total Revenues 3,065,240 4,778,797 665,378 700,731 777,530 863,039 962,838 1,088,310 1,221,692 1,354,909 1,493,954 1,640,583 Expenses Personal services 106,356 126,124 157,957 167,151 172,166 177,330 182,650 188,130 193,774 199,587 205,575 211,742 Materials and supplies 9,453 12,613 7,666 9,050 9,322 9,601 9,889 10,186 10,491 10,806 11,130 11,464 Professional services 49,838 62,278 96,092 109,521 112,807 116,191 119,677 123,267 126,965 130,774 134,697 138,738 Repairs and maintenance 49,132 23,153 22,087 44,500 45,835 47,210 48,626 50,085 51,588 53,135 54,729 56,371 Utilities 422 957 690 0 0 0 0 0 0 0 0 0 Depreciation expense 791,557 450,000 457,501 465,636 468,983 487,682 492,326 493,733 495,182 496,674 498,212 498,212 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 Interest and fees on long-term debt 40,562 35,921 39,463 34,713 29,913 25,063 48,546 38,500 32,313 25,825 21,313 18,950 Transfer out to Capital Fund - - - --------- Other expenses 9,791 14,135 - --------- Cost of bond issuance - - - --9,983 ------ Total Expenses 1,057,111 725,181 981,455 1,030,570 1,039,024 1,073,059 1,101,714 1,103,900 1,110,312 1,116,802 1,125,656 1,135,477 Change in Net Position 2,008,129 4,053,616 (316,078) (329,839) (261,495) (210,020) (138,876) (15,591) 111,380 238,107 368,298 505,106 Ending net position 14,775,400 18,829,016 18,512,938 18,183,099 17,921,605 17,711,584 17,572,708 17,557,117 17,668,498 17,906,605 18,274,903 18,780,009 Assets Cash and investments 1,417,272 1,942,596 1,652,653 1,232,306 1,075,157 989,146 891,094 1,037,222 1,300,079 1,689,021 2,413,217 3,346,535 Cash and investments held in escrow - - - --------- Special assessments receivable 43,281 23,947 - --------- Other current assets / receivables 319,378 350,684 310,000 310,000 310,000 310,000 310,000 310,000 310,000 310,000 310,000 310,000 Due from other governmental units - - - --------- Capital assets 18,525,385 22,726,270 23,026,292 23,351,697 23,485,597 24,233,532 24,419,295 24,475,571 24,533,534 24,593,237 24,654,731 24,654,731 Less Accumulated depreciation (3,205,819) (4,117,484) (4,574,985) (5,040,620) (5,509,603) (5,997,285) (6,489,611) (6,983,343) (7,478,525) (7,975,199) (8,473,410) (8,971,622) Deferred outflows 14,242 9,502 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 Total Assets and Deferred Outflows 17,113,739 20,935,515 20,424,960 19,864,383 19,372,151 19,546,392 19,141,778 18,850,449 18,676,089 18,628,059 18,915,537 19,350,643 Liabilities Other current liabilities / payables 33,646 37,917 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 Bonds payable 2,190,000 1,975,000 1,755,000 1,530,000 1,305,000 1,695,000 1,435,000 1,165,000 885,000 600,000 520,000 450,000 Unamortized bond premium 49,498 43,760 38,022 32,284 26,546 20,808 15,070 9,332 3,591 2,454 1,634 1,634 Other non-current liabilities 48,029 30,917 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 Unearned revenues - - - --------- Deferred inflows 17,166 18,905 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 Total Liabilities and Deferred Inflows 2,338,339 2,106,499 1,912,022 1,681,284 1,450,546 1,834,808 1,569,070 1,293,332 1,007,591 721,454 640,634 570,634 Total Liabilities, Deferred Inflows, and Net Position 17,113,739 20,935,515 20,424,960 19,864,383 19,372,151 19,546,392 19,141,778 18,850,449 18,676,089 18,628,059 18,915,537 19,350,643 Projected Storm Sewer Fund Pro Forma - 10% Increase Prior Year Actual Prior Year Actual 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Revenues Charges for services 657,030 647,504 697,772 788,091 890,558 1,006,663 1,143,582 1,315,386 1,502,831 1,697,281 1,906,623 2,131,676 Investment income 55,356 69,390 20,510 4,400 4,400 4,400 4,400 4,400 4,400 4,400 4,400 4,400 Other revenues 17,782 36,743 - - - - - - - - - - Water meter sales - - - - - - - - - - - - - - - - - - - - - - - - Availability charges - - - - - - - - - - - - Capital assets contributions non-cash 3,998,524 6,193,185 - - - - - - - - - - Intergovernmental revenue - - - - - - - - - - - - Special assessments 40,836 22,863 - - - - - - - - - - Refunds and reimbursements - - - - - - - - - - - - Lateral Benefit Fee - - - - - - - - - - - - Connection charges - - - - - - - - - - - - Transfer in - - - - - - - - - - - - Total Revenues 4,769,528 6,969,685 718,282 792,491 894,958 1,011,063 1,147,982 1,319,786 1,507,231 1,701,681 1,911,023 2,136,076 Expenses Personal services 126,124 160,393 167,151 172,166 177,330 182,650 188,130 193,774 199,587 205,575 211,742 218,094 Materials and supplies 10,831 13,319 11,300 11,639 11,988 12,348 12,718 13,100 13,493 13,898 14,315 14,744 Professional services 62,278 88,317 99,396 102,378 105,449 108,613 111,871 115,227 118,684 122,245 125,912 129,689 Repairs and maintenance 23,153 26,827 45,050 46,402 47,794 49,227 50,704 52,225 53,792 55,406 57,068 58,780 Utilities 957 472 690 711 732 754 777 800 824 849 874 900 Depreciation expense 911,665 1,127,793 1,134,943 1,148,193 1,162,871 1,193,239 1,210,996 1,227,034 1,242,394 1,258,216 1,274,511 1,291,296 Interest and fees on long-term debt 35,921 31,226 34,713 29,913 25,063 20,113 43,733 33,613 27,225 22,713 20,450 18,275 Transfer out to Capital Fund - - 100,000 - - - - - - - - - Intergovernmental payments - - - - - - - - - - - - Other expenses 14,135 11,551 - - - - - - - - - - Cost of bond issuance - - - - - 9,983 - - - - - - Total Expenses 1,185,064 1,459,898 1,593,243 1,511,400 1,531,226 1,576,926 1,618,929 1,635,773 1,655,999 1,678,899 1,704,872 1,731,779 Change in Net Position 3,584,464 5,509,787 (874,960) (718,909) (636,268) (565,863) (470,947) (315,986) (148,768) 22,782 206,151 404,297 Ending net position 18,359,864 23,869,651 22,994,691 22,275,782 21,639,514 21,073,651 20,602,703 20,286,717 20,137,949 20,160,731 20,366,881 20,771,179 Assets Cash and investments 1,473,444 1,717,791 1,529,740 1,198,286 902,050 693,957 452,995 441,762 634,836 1,202,166 1,965,175 2,918,566 Cash and investments held in escrow - - - - - - - - - - - - Special assessments receivable 23,947 22,900 - - - - - - - - - - Other current assets / receivables 350,684 338,394 310,000 310,000 310,000 310,000 310,000 310,000 310,000 310,000 310,000 310,000 Due from other governmental units - - - - - - - - - - - - Capital assets 22,726,270 28,919,455 29,205,455 29,735,455 30,322,555 31,537,286 32,247,558 32,889,098 33,503,513 34,136,361 34,788,194 35,459,582 Less Accumulated depreciation (4,117,484) (5,245,277) (6,380,220) (7,528,413) (8,691,284) (9,884,522) (11,095,518) (12,322,552) (13,564,946) (14,823,162) (16,097,674) (17,388,970) Deferred outflows 9,502 12,075 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 Total Assets and Deferred Outflows 20,466,363 25,765,338 24,675,975 23,726,328 22,854,322 22,667,721 21,926,035 21,329,308 20,894,403 20,836,365 20,976,695 21,310,179 Liabilities Other current liabilities / payables 37,917 49,684 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 Bonds payable 1,975,000 1,755,000 1,530,000 1,305,000 1,075,000 1,460,000 1,195,000 920,000 635,000 555,000 490,000 420,000 Unamortized bond premium 43,760 38,022 32,284 26,546 20,808 15,070 9,332 3,591 2,454 1,634 814 - Other non-current liabilities 30,917 33,640 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 Unearned revenues - - - - - - - - - - - - Deferred inflows 18,905 19,341 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 Total Liabilities and Deferred Inflows 2,106,499 1,895,687 1,681,284 1,450,546 1,214,808 1,594,070 1,323,332 1,042,591 756,454 675,634 609,814 539,000 Total Liabilities, Deferred Inflows, and Net Position 20,466,363 25,765,338 24,675,975 23,726,328 22,854,322 22,667,721 21,926,035 21,329,308 20,894,403 20,836,365 20,976,695 21,310,179 Projected $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 20 2 6 20 2 7 20 2 8 20 2 9 20 3 0 20 3 1 20 3 2 20 3 3 20 3 4 20 3 5 Mi l l i o n s Chart 19 Storm Sewer Fund Revenues and Expenses Expense, inclusive of depreciation, is planned to exceed revenues as the City draws on available cash to pay interest expense on bonds outstanding and relies on private development to finance future improvement Revenues Expenses Storm Water Fund 2027 Capital Improvement Plan w/Street Projects Storm Sewer Fund Model Year Project Description 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Use of Funds SW-002 - Phase 3 Regional Drainage Impr - Lions Park Drainage Retention - - - 610,018 - - - - - - - SW-003 - Stormwater Reuse - Development Irrigation Systems - - - - - - - - - - - SW-004 - Stormwater Reuse - Lions & VFW Park Irrigation - - - - 131,127 45,020 - - - - - SW-005 - Stormwater Reuse - Irrigation Systems - City Ball Fields - - 41,200 42,436 - - - - - - - SW-TBD - Future Unidentified Stormwater Projects - 50,000 51,500 53,045 54,636 56,275 57,964 59,703 61,494 63,339 65,239 2027 Streets - 480,000 - - - - - - - - - 2028 Streets - - 494,400 - - - - - - - - 2029 Streets - - - 509,232 - - - - - - - 2030 Streets - - - - 524,509 - - - - - - 2031 Streets - - - - - 540,244 - - - - - 2032 Streets - - - - - - 556,452 - - - - 2033 Streets - - - - - - - 573,145 - - - 2034 Streets - - - - - - - - 590,339 - - 2035 Streets - - - - - - - - - 608,050 - 2036 Streets - - - - - - - - - - 626,291 Cost of Issuance - - - 9,983 - - - - - - - Total Use of Funds - 530,000 587,100 1,224,713 710,273 641,540 614,415 632,848 651,833 671,388 691,530 Source of Funds Par Amount of Bonds - - - 620,000 - - - - - - - Special assessments - - - - - - - - - - - Use of cash from fund - 530,000 587,100 604,713 710,273 641,540 614,415 632,848 651,833 671,388 691,530 Total Source of Funds - 530,000 587,100 1,224,713 710,273 641,540 614,415 632,848 651,833 671,388 691,530 **This uses the Northland Model, incorporating a 3% yearly inflation factor Projected 2026 Adopted 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 103.00 113.00 125.00 137.00 151.00 166.00 182.00 201.00 221.00 243.00 267.00 103.00 113.00 125.00 137.00 151.00 166.00 182.00 201.00 221.00 243.00 267.00 2027 - 2036 Proposed Rates - 10% Increase STORMWATER RATES Storm Sewer Annual Basic Charge - Residential Storm Sewer Annual Equivalent Basic Charge Commercial /Multi Family Billed at 3.08X Residential Storm Sewer Annual Charge - Vacant Land - Per Acre Charge 14.25 14.25 14.25 14.25 14.25 14.25 14.25 14.25 14.25 14.25 14.25 % Change **9.7%10.6%9.6%10.2%9.9%9.6%10.4%10.0%10.0%9.9% $ Change 10.00 12.00 12.00 14.00 15.00 16.00 19.00 20.00 22.00 24.00 ** Due to rounding to the nearest dollar, the resulting percentage may not equal exactly 10% $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Mi l l i o n s Stormwater Fund Ending Cash by Year - 10% Increase Capital Improvement Program & Strategic Financial Planning Council Workshop | July 14, 2026 Discussion Topics Capital Improvement Program •High-level review of the CIP •Questions/Feedback •Most pressing – are there changes for 2027? Strategic Financial Planning •High-level review of the CIP-related assumptions •Questions/Feedback •Most pressing – are there changes for 2027? Stormwater Funding for Streets •Discussion •Decision for 2026/2027 2027-2036 CIP includes 156 projects totaling almost $137.3 million Dept # Projects $ Projects % Projects Admin & Finance 0 0 0% Building Dept 4 210,000 0.15% City Hall 5 200,000 0.15% Fire 10 3,161,197 2.30% Public Works 65 57,184,500 41.63% Parks 34 6,565,000 4.78% Water 25 63,745,799 46.40% Sewer 8 5,100,000 3.71% Storm Water 5 1,205,000 0.88% TOTAL 156 137,371,496 % of $ Projects by Dept Admin & Finance Building Dept City Hall Fire Public Works Parks Water Sewer Storm Water 2027-2036 CIP includes 155 projects totaling almost $87.5 million (excluding the Treatment Plant) Dept # Projects $ Projects % Projects Admin & Finance 0 0 0% Building Dept 4 210,000 0.24% City Hall 5 200,000 0.23% Fire 10 3,161,197 3.62% Public Works 65 57,184,500 65.45% Parks 34 6,565,000 7.51% Water 24 13,745,799 15.73% Sewer 8 5,100,000 5.84% Storm Water 5 1,205,000 1.38% TOTAL 155 87,371,496 % of $ Projects by Dept Admin & Finance Building Dept City Hall Fire Public Works Parks Water Sewer Storm Water Admin/Finance/Building/City Hall •Admin and Finance typically do not have many CIP projects. •Building - 4 vehicle replacements that are reviewed annually. •City Hall - A facility needs list has been developed and will continue to be refined; only a few items are currently included in the CIP. 2027-2036 – 8 Projects totaling $410,000 Major Expenditures for 2027 – 2028 •1 Vehicle replacement in 2027 Fire Vehicle and equipment acquisitions — funded through the Vehicle Replacement, General, and Fire Equipment & Projects funds plus vehicle and equipment trade-ins or sales—are reviewed annually for potential replacement. 2027-2036 -- 10 Projects totaling $3,161,197 Major Expenditures for 2027 – 2028 •Ladder 1 replacement in 2028 •Turnout Gear Public Works Departments •Streets / General Public Works •Parks •Water •Sewer •Stormwater Public Works Departments •Streets / General Public Works •Parks •Water •Sewer •Stormwater 96% of all CIP $ (even w/out the $50M water treatment plant) % of $ Projects by Dept Admin & Finance Building Dept City Hall Fire Public Works Parks Water Sewer Storm Water Public Works CIP Breakdown Total $ 2027 - 2028 PW Vehicles & Equip $5,160,299 $865,000 PW Buildings / Other $1,035,000 $0 in 2027 Parks $6,210,000 $710,000 Infrastructure Streets $52,265,000 $5,675,000 Water $63,400,000 $13,455,000 Sewer $4,500,000 $1,050,000 Stormwater $1,205,000 $90,000 TOTAL $133,775,299 $21,845,000 Checkpoint 1:Questions / Feedbackon CIP? Strategic Financial Planning What is it? •“Plan” – but more of a guide and an informant •Set goals and implement strategies to put our financial trajectories on the right path •See opportunities and problems well in advance •Provide financial insight into big decisions moving forward Strategic Financial Planning High-Level Priorities & Objectives (additional detail in the packet) A.Debt Management and Long-term Fiscal Health B.Levy Strategy and Revenue Stability C.Capital Planning and Infrastructure Investment D.Budget Sustainability and Service Levels E.Updates and Strategic Alignment Strategic Financial Planning 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 Money In - Money Out - Cash – Debt (for illustration purposes only) Money In Money Out Cash Balances Debt Balances •Using Policies, Practices, and a lot of Assumptions •Projecting Money In and Out, Cash, and Debt – Long-term •Provide information for decision-making Strategic Financial Planning •CIP Discussion was the “Money Out” •What is the “Money In”? •Capital Levies •Utility Fees •Water Fund •Sewer Fund •Stormwater Fund •MSA (Minnesota State Aid) •Split between Maintenance and Improvements •Franchise Fees •50%/50% Infrastructure Reserve and Park Reserve •Tranfers from Other Funds •Cash Balances •Liabilities -- Bonding (Debt) Strategic Financial Planning Bonding (Debt) •Goal – Decrease over time. •Debt free by 2050 (could make that sooner) - 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 Principal Balance Projections (All Debt / All Funds) Current Debt New Debt Strategic Financial Planning 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Capital Levies -- 2013 - 2026 Tax Year Transfer to Vehicles Fund Infrastructure Reserve Levy City Center CIP Levy Vehicle & Equipment Levy •Our Debt Balances are a great example of the important of Strategic Financial Planning. There may have been other transfers from the GF that I wasn’t able to find. Strategic Financial Planning •Capital Levies •Goals – •Slowly increase to a point that fully funds the cash portion of capital projects •Find the “leveling off point” (moving target in a developing city) •Maintaining revenue sufficiency beyond the timeline of the projections Strategic Financial Planning - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 Capital Levies General Fund Projects & Misc Public Works Buildings City Center CIP Park Reserve Fire Equipment & Project Fund Street Maintenance Infrastructure Reserve Vehicle & Equipment Street Lights Crosswalk Improvements Ballpark Levy Strategic Financial Planning - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 Projected Tax Levies (future years are shown in 2027 dollars and do not account for inflation) Current draft includes early estimates on the 2027 GF Levy request that may change between now and the August Budget Workshop. General Fund G.O. Debt Levy - Debt Capital Levies Strategic Financial Planning Capital Levies 2026 2027 Proposed General Fund Projects & Misc - 5,000 Public Works Buildings - 25,000 City Center CIP 50,000 100,000 Park Reserve - 50,000 Fire Equipment & Project Fund - 80,000 Street Maintenance 630,000 650,000 Infrastructure Reserve 400,000 522,000 Vehicle & Equipment 450,000 500,000 Street Lights - 25,000 Crosswalk Improvements - 50,000 Ballpark Levy 250,000 250,000 TOTAL 1,780,000 2,257,000 Checkpoint 2:Questions / Feedbackon Strategic Financial Planning? Stormwater Fee Analysis Update •2026 study recommended 8% annual increases beginning in 2026 •Fees were unchanged for 10 years prior to 2026. •Revenues covered operations but not depreciation or capital reserves •Council requested analysis of stormwater revenue capacity for street projects Updated Model Assumptions •Annual $480,000 transfer for stormwater elements of local street reconstruction. •If transportation projects were included, the amount increases to $750,000. •Same planned capital projects as existing CIP. •10% annual fee increase required to maintain fund solvency •Achieves positive net position by 2033 (two years later than the original model) Proposed Rates (2027-2036) •Residential increases from $103 (2026) to $267 (2036) •Commercial & Multifamily rates increase proportionally. Cash Flow and Funding Considerations •Cash balance significantly increases between 2034-2036 •Future maintenance discoveries may reduce projected cash surpluses •Model uses a “smoothed” annual transfer. Actual project by project funding could create cash flow fluctuations. •Some years may require revenue bonds or interfund loans. Conclusion •10% annual increase is necessary for long-term sustainability and street project support. •Positive net position by 2033; strong cash position projected by 2036. •Pending stormwater system analysis may change future needs. •Model provides a stable and flexible funding option Stormwater Funding for Streets •If we are implementing; •Option 1 – Annual Transfer •Starting at $100,000 and growing to $500,000 •Option 2 – Project Cost •Staff would need to know which projects and costs to allocate to stormwater. •This method is more labor-intensive for all involved from initial CIP planning through the last payment of any debt issuance. Checkpoint 3:Questions / Feedbackon Stormwater Funding for Streets? Discussion / Direction •Nothing is urgent. •We can chat more at the August Budget Workshop. •Potential Opportunities for Direction •Of the 30 (non-water treatment) projects currently scheduled for 2027, are there any that should be revised? •Of the 2027 Capital Levies, are there any we know should be revised? •Are we changing how we fund street improvements and, if so, which direction are we leaning for immediate implementation? Date Type Due date for packet Order Agenda Section Agenda item 7/21/2026 CC Meeting 7/14/26 Presentation YSB annual presentation Consent Agenda Approve contract for services with YSB for 2027 Consent Agenda Inwood Neighborhood Special Event Permit Consent Agenda Approve Temporary Liquor License for Lake Elmo Rotary Consent Agenda 2nd Quarter Dashboards and Financials Regular Agenda Legislative Representation Proposal Consent Agenda Fund Transfers Discussion Sports Complex/76 acre Consultant Discussion Regular Agenda PW Lead positions Regular Agenda Social host ordinance Regular Agenda Order Feasibility Report for 2027 Collector Road Reclaim Project Regular Agenda Limerick Village Preliminary Plat and PUD Regular Agenda 2nd Quarter Goals Update Closed Session before meeting Ryan Companies offer Closed Session Discuss sale of 11052 34TH ST N 8/5/2026 CC Meeting 7/30/26 Consent Agenda 180 Acres AUAR Approval (tentative) Consent Agenda Sunfish Deer Hunting Consent Agenda PW Snow Groomer Purchase Regular Agenda 9691 60th St (MYP) Zoning Text Amendment and Conditional Use Permit Regular Agenda 180 Acres Broker Selection 8/11/2026 CC Workshop 8/4/26 Discussion Sheriff's contract budget Discussion Draft 2027 Budget & Levy Discussion CIP F-012 Ladder 1 Replacement Approval Community Engagement Results - City 180 8/18/2026 CC Meeting 8/11/26 Regualr Agenda CIP F-012 Ladder 1 Replacement Approval 9/1/2026 CC Meeting 8/25/26 9/8/2026 CC Workshop 9/1/26 Annual Water Updates Fury Site City Prosecution services overview and proposed contract 9/15/2026 CC Meeting 9/8/26 Regular Agenda 2027 Preliminary Levy Consent Agenda Appoint Election Judges 10/6/2026 CC Meeting 9/29/26 Consent Agenda 3rd Quarter Dashboards and Financials Regular Agenda 3rd Quarter Goals Update Future Council Agenda Items *Please note: This list is subject to change* 10/13/2026 CC Workshop 10/6/26 10/20/2026 CC Meeting 10/13/26 Regular Agenda 3rd Quarter Financials and Dashboard 11/4/2026 CC Meeting Regular Agenda Bonding 11/10/2026 Special Meeting Canvass Election Results 11/10/2026 CC Workshop Employee Policies Updates 11/17/2026 CC Meeting Regular Agenda 12/1/2026 CC Meeting Regular Agenda 12/8/2026 CC Workshop Obstructions in ROW 12/15/2026 CC Meeting