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O Hiring for retirements and vacancies will result in four new officers to be trained in 2025. The training costs have been budgeted separately from regular wages as year to year changes will vary based on need. The cost of training four new officers in 2025 is expected to be $114,298. This is a $13,149 increase over the 2024 training amount budgeted. O Health insurance premium increase of 9.1 % is shared 50/50 by the city and the employees. The 2025 impact of the shared increase is $72,925 (includes elected coverage changes from 2023 to 2024). CONTRACTED SERVICES – 10% of expenditures, overall increase of $60,018 offset by a decrease of $82,000 resulting from Hennepin County Board of Commissioner’s decision to stop charging cities for this service; this will be levied through the county’s levy going forward. • Construction permits inspections budgeted at an increasing baseline activity has results in greater expense of $5,394. This increase has no impact on the levy as the inspection fee is a percentage of permit revenue received. • Assessor, attorney, auditor, engineer and planner services reflect rate and activity increases. The net result of these factors is cost decrease of ($27,375) • Contracted information technology costs up $22,383. • Miscellaneous service contracts are estimated to increase by $18,940. This is driven by police and fire increases in contracted costs, and remaining costs impacted by inflation. OTHER INSURANCE COSTS – 5% of expenditures, overall costs up by $17,575. • The worker's compensation insurance experience rating improved by 11% in the 2024-2025 renewal period, combined with overall rate reductions of 15% resulted in a savings of 16.86% for the 2024/2025 policy renewal, resulting in a savings of $58,230 in workers’ compensation premiums for the policy year. The budget year is a combination of half prior renewal rates and half current renewal year rates, resulting in a small overall increase when combined with the prior year increase of 17.2% • Liability, property and casualty premiums are projected increase by $24,469 in 2025. Main contributors to this are a 16.35% increase in municipal liability, 32.56% increase in auto, and 19.5% increase in excess liability premiums, the net increase is 13.64 % PASS THROUGH COSTS – 3% of expenditures, costs up $59,254. • The substantial portion of the increase represents an estimated $72,000 increase in fire relief payments made from state fire aid. This is offset by revenue of the same amount and is an accounting requirement with no net levy impact. The transfer for rent from the community center returned to the 2023 amount, a reduction of $15,000. REMAINING BUDGET LINE ITEMS – 11% of overall expenditures or $1,083,574, costs are up $51,732. • Energy costs make up $4,377 of this increase. • Anticipated inflationary factors have been applied to many of the supplies, printing, and repair and maintenance services pushing these costs up by $21,622. • Budgeted costs for communications, memberships and training, community inclusion and sustainability initiatives and other miscellaneous items are up $25,733 compared to 2024. 21