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MEMORANDUM To: Saint Anthony Village City Council From: Deborah Maloney, Finance Director and Charlie Yunker, City Manager Date: August 26, 2025 City Council Meeting Request: 2026 Preliminary Levy & General Fund Budget BACKGROUND On June 24 a revised Street Improvement schedule was presented for City Council input and consideration. Staff worked in coordination with the City’s engineering team to evaluate and adjust the street reconstruction schedule and proposed a pause for street projects in 2026 and 2027 and a transition to an every-other-year project cycle beginning in 2028. This modification is intended to reduce the frequency of debt issuance while still appropriately maintaining the City’s street and utility infrastructure. The proposed 2026 Debt Levy will be part of the requested approval of the Preliminary Levy for 2026 at the September 9th City Council Meeting. At the July 22 work session, Staff provided the City Council with an early projection regarding the overall levy and General Fund Budget based on known cost increases and inflationary assumptions. Staff continues to analyze actual costs with new information provided by vendors, contractual service providers, and review of labor union contracts. GENERAL FUND BUDGET AND LEVY The standard parameters used for preparing the General Fund Budget and Levy include:  City revenues budgeted at current run rates for sources that are subject to trends and conservative baseline estimates for re-occurring aids and charges for services.  Expenses budgeted at amounts that will maintain present level of City services.  Liquor transfers to the General Fund based on liquor operating results from the previous 5-7 years and the long-term needs of the fund. As presented at the July 22, work session, excess General Fund balance is applied for easing the transition from use of one-time public safety funds by using $200,000 of general fund balance in accordance with the City’s fund balance policy to reduce the levy. THE GENERAL FUND BUDGET AND LEVY DETAILS Each year the General Fund revenue and expenditure budget line items are examined for changes in expected collections/charges, labor adjustments, changes in contract rates, insurance rates, utility costs, usage of various materials or needs, etc. The findings of this examination produce the drivers associated with the proposed increase in the overall Levy. The charts below show the cost drivers for general fund dollars and how they are allocated. 41