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are and how they are allocated. It may be noted that when police and finance costs are netted with offsetting contract revenues their portions are reduced to 44% and 3% respectively. GENERAL FUND EXPENDITURES PERSONNEL COSTS – 71% of expenditures, overall budgeted costs increased by 749,652 comprised of 11.46% increase in Payroll & related expenses and 10.77% increase in health insurance costs.  The 2025 base wage increase is based on the anticipation of city’s unions accepting a 3% cola along with appropriate market adjustments. The net cost impact on reoccurring wage base is $442,961. Other factors creating the additional $233,766 of costs are as follows: O The police department budget includes the full year impact of restoring the lieutenant position and adding a VCET officer in 2024. These additions occurred mid‐year. The budget impact is an increase of $152,860 in 2025. O Similarly, the assistant fire chief position was added midyear in 2024, the impact of the full year of the position in 2025 will be an increase of $68,828. O Union negotiations are still ongoing, with high market demands driving up requests and having a more significant impact on the levy than in previous years. 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, net decrease of ($60,980) mainly as a result of Hennepin County Board of Commissioner’s decision to no longer charge cities for assessing services; 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 (decrease of $82,000), attorney – reduced budgeted contingency, auditor, engineer and planner services reflect rates and activity in these accounts. The net result of these factors is cost decrease of ($107,000)  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 policy renewal rates and half current policy renewal rates, resulting in a smaller 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. 19