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SCC Item 1. 2026 Budgets and Property Tax LevyTO: Mayor and Councilmembers FROM: Adam Flaherty, City Administrator/Finance Director DATE: September 8, 2025 SUBJECT: Budget Meeting #3 __________________________________________________________________________________________________ On Monday, Council and staff will continue the 2026 budgeting discussions. I have developed an outline of discussion topics below. Please note that the information presented during this meeting is for discussion only and that nothing is final or set in stone at this point in the process. Staff would only be asking for Council direction on the items below to move the budgeting process forward effectively and efficiently. Capital Project Funds The City maintains multiple capital project funds. None of these funds have adopted revenue or expenditure budgets; rather, the expenditure activity of the respective funds is included within the City’s Capital Improvement Plan (CIP). Staff will review sources and use cash flow projections for each Capital Project Fund. The emphasis of the review at this meeting will be on those funds which have a proposed property tax levy for 2026. Those funds with a proposed levy have been through an initial draft review by either the Administrative and/or Public Works Subcommittees. The City Council should provide direction on whether a future budget meeting should be scheduled to provide a more thorough review of the CIP expenditures; however, it should be noted that any item within the CIP does not commit final approval by the City Council. Rather it directs staff to plan towards and gather necessary information for an educated final approval on each respective item. Property Tax Levy City staff will review the preliminary property tax levy payable in 2026, which includes operating revenues for the General Fund, Tax Abatement, Debt Service, and Capital Project fund levies. The packet materials include five scenarios, each which will be discussed for viability and future year impacts. A brief description is as follows: -A: Represents the levy necessary to fund budgeted expenditures. -B: Represents a levy increase aligned with the new debt service payments. -C: Represents a levy increase aligned with General fund operational expenditure changes. -D: Represents a levy increase to maintain the tax rate and aligned with growth in tax capacity. -E: Represents a levy increase to maintain taxes per capita and aligned with new development in the City. It should be noted that four of the scenarios include the use of existing fund balance resources to reduce the impact of the proposed levies. During the meeting, staff will review the source of those fund balance resources and review the impact of using them for this purpose. SCC Item 1. General Fund Budget The City Council reviewed draft revenue and expenditure budgets for the General fund during a budget meeting on August 4. The draft budget is being presented as a balanced budget, with both revenues and expenditure totaling $11,033,898, which is an 11.00% increase from the prior year. City staff will review any revisions to the information presented at the previous meeting. Next Steps To date, the City Council will have reviewed draft budgets and levies for the General, Special Revenue, Debt Service, and Capital Project funds. The City Council should determine whether an additional budget meeting should be scheduled. As a reminder, the City Council will need to adopt a Preliminary Property Tax Levy for Taxes Payable 2026 prior to September 30, with staff recommendation for this to occur at the regular meeting on September 22, 2025. It should be noted that the preliminary property tax levy is the amount used for truth-in-taxation notices that are sent to the taxpayers by Wright County. The final budget and property tax levy will not be adopted by the City Council until December. Changes to the budget can still be made between now and then but increases in expenditure become difficult because the primary revenue source to pay for those increases is property taxes. The property tax levy can be decreased between now and then, but the levy cannot be increased. Materials Attached for Discussion 1) Capital Project Funds – Cash Flow Forecasts 2) Preliminary Tax Levy for 2026 3) General Fund – Budget Changes Tracking City of OtsegoPavement Management FundCash Flow Summary 700,000 700,000 700,000 700,000 675,000 650,000 625,000 600,000 575,000 Forecast from 2025 BudgetRevised: September 3, 2025 -25.00% -8.33% -4.55% -4.76% -5.00% -5.26% -5.56% -5.88% -6.25% -6.67% Change in Property Tax LevyActual Forecast2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CommentsRevenuesProperty Taxes 1,000,000$ 800,000$ 600,000$ 550,000$ 525,000$ 500,000$ 475,000$ 450,000$ 425,000$ 400,000$ 375,000$ 350,000$ Intergovernmental (MSA) 334,677 369,820 371,669 373,527 375,395 377,272 379,158 381,054 382,959 384,874 386,799 388,733 MSA Maintenance (1/2% Annual Inflation)Intergovernmental (TAA) 9,635 29,690 47,693 - - - - - - - - - Transportation Advancement Account (25-Actual/26-Forecast)Franchise Fees (Actual) 929,554 - - - - - - - - - - - Actual Franchise Fee ReceiptsFranchise Fees (Future) - 929,554 938,850 948,238 957,720 967,298 976,971 986,740 996,608 1,006,574 1,016,640 1,026,806 Based on Prior Year ActualFranchise Fees (New Growth) - 9,296 9,388 9,482 9,577 9,673 9,770 9,867 9,966 10,066 10,166 10,268 Based on Expected Growth (1% Increase)Special Assessments (Actual) 130,901 - - - - - - - - - - - Actual Wright County SettlementsSpecial Assessments (Levied) - 60,021 54,537 49,091 40,440 39,054 37,667 36,280 33,394 22,870 9,257 - Existing levied assessments ($151k Deferred Not Included)Special Assessments (Future) - - - 13,619 13,229 27,203 36,906 35,887 34,869 46,808 55,993 69,535 Assessments on future projectsInvestment Interest 297,468 - - - - - - - - - - - Total 2,702,235 2,198,381 2,022,137 1,943,958 1,921,362 1,920,500 1,915,472 1,899,829 1,882,796 1,871,192 1,853,855 1,845,342 ExpensesEngineering95,562 - - - - - - - - - - - Other Charges & Services 831 - - - - - - - - - - - Capital Outlay 2,157,883 - - - - - - - - - - - Capital Outlay (CIP-Crack/Patch) - 172,072 159,600 163,055 166,585 170,192 173,879 177,646 181,496 185,430 189,451 193,560 2026-2035 (CIP Budget)Capital Outlay (CIP-Maintenance) - 107,193 210,356 81,811 110,263 154,285 177,739 174,421 624,517 431,243 799,418 871,923 2026-2035 (CIP Budget)Capital Outlay (CIP-Mill+Overlay) - 1,266,794 1,778,407 1,970,642 1,508,858 1,249,647 1,536,498 1,674,206 459,298 201,381 877,429 1,337,512 2026-2035 (CIP Budget)Capital Outlay (CIP-Renewal) - - 486,375 - 552,430 372,242 - - 462,774 377,615 544,017 - 2026-2035 (CIP Budget)Total 2,254,276 1,546,059 2,634,738 2,215,508 2,338,136 1,946,366 1,888,116 2,026,273 1,728,085 1,195,669 2,410,315 2,402,995 Cash Balance - Beginning5,573,912 5,944,044 6,596,366 5,983,765 5,712,215 5,295,440 5,269,574 5,296,930 5,170,486 5,325,197 6,000,720 5,444,259 Balance Sheet Effects (77,827) Revenues 2,702,235 2,198,381 2,022,137 1,943,958 1,921,362 1,920,500 1,915,472 1,899,829 1,882,796 1,871,192 1,853,855 1,845,342 Expenditures (2,254,276) (1,546,059) (2,634,738) (2,215,508) (2,338,136) (1,946,366) (1,888,116) (2,026,273) (1,728,085) (1,195,669) (2,410,315) (2,402,995) Cash Balance - Ending 5,944,044$ 6,596,366$ 5,983,765$ 5,712,215$ 5,295,440$ 5,269,574$ 5,296,930$ 5,170,486$ 5,325,197$ 6,000,720$ 5,444,259$ 4,886,606$ Cash Balance - % of Next Year Capital384% 250% 270% 244% 272% 279% 261% 299% 445% 249% 227%Cash Balance - % of Max Year Capital226% 250% 227% 217% 201% 200% 201% 196% 202% 228% 207% 185%Projection - Capital Improvement PlanY:\Budget\2026\Cash Flows\Capital Funds201-Pavement Management City of OtsegoTrail Management FundCash Flow Summary 82,000 88,000 94,000 100,000 106,000 112,000 118,000 124,000 130,000 Forecast from 2025 BudgetRevised: September 3, 2025 7.89% 7.32% 6.82% 6.38% 6.00% 5.66% 5.36% 5.08% 4.84% 4.62%Actual Forecast2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CommentsRevenuesProperty Taxes 70,000$ 76,000$ 82,000$ 88,000$ 94,000$ 100,000$ 106,000$ 112,000$ 118,000$ 124,000$ 130,000$ 136,000$ Investment Interest 10,440 - - - - - - - - - - - Total 80,440 76,000 82,000 88,000 94,000 100,000 106,000 112,000 118,000 124,000 130,000 136,000 ExpensesCapital Outlay63,162 - - - - - - - - - - - Capital Outlay (CIP-Maintenance) - 70,000 72,000 74,000 76,000 78,000 80,000 82,000 84,000 86,000 88,000 90,000 2026-2035 (CIP Budget)Capital Outlay (CIP-Renewal) - - 100,000 - - 115,000 - - 130,000 - - 145,000 2026-2035 (CIP Budget)Total 63,162 70,000 172,000 74,000 76,000 193,000 80,000 82,000 214,000 86,000 88,000 235,000 Cash Balance - Beginning201,006 218,284 224,284 134,284 148,284 166,284 73,284 99,284 129,284 33,284 71,284 113,284 Balance Sheet Effects - Revenues 80,440 76,000 82,000 88,000 94,000 100,000 106,000 112,000 118,000 124,000 130,000 136,000 Expenditures (63,162) (70,000) (172,000) (74,000) (76,000) (193,000) (80,000) (82,000) (214,000) (86,000) (88,000) (235,000) Cash Balance - Ending 218,284$ 224,284$ 134,284$ 148,284$ 166,284$ 73,284$ 99,284$ 129,284$ 33,284$ 71,284$ 113,284$ 14,284$ Cash Balance - % of Next Year Capital312% 130% 181% 195%86% 92%121%60% 39% 81% 48%Cash Balance - % of Max Year Capital93% 95% 57% 63% 71% 31% 42% 55% 14% 30% 48% 6%Projection - Capital Improvement PlanY:\Budget\2026\Cash Flows\Capital Funds202-Trail Management City of OtsegoPark Development FundCash Flow SummaryRevised: September 3, 2025Actual Forecast2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CommentsRevenuesPark Dedication Fees 955,142$ 522,330$ 395,000$ 398,950$ 402,940$ 406,969$ 411,039$ 415,149$ 419,300$ 423,493$ 427,728$ 432,006$ 2025 (YTD) / 2026-2035 = 100 New LotsIntergovernmental - 670,000 - - - - - - - - - - DNR Grant / MnDOT GrantsSpecial Assessments 2,410 - - - - - - - - - - - Special Assessments (Levied) - 2,410 2,410 2,410 - - - - - - - - Investment Interest 321,734 - - - - - - - - - - - Miscellaneous - 8,000 - - - - - - - - - - Friends of Mississippi RiverDebt Issuance - - - - - - - - - - - - Prairie Park Phase 1Transfers In - - - 897,700 - - - - - - - - From 205 - Prairie Park PlaygroundTotal 1,279,286 1,202,740 397,410 1,299,060 402,940 406,969 411,039 415,149 419,300 423,493 427,728 432,006 ExpensesEngineering 83,714 - - - - - - - - - - - Other Charges & Services 3,673 - - - - - - - - - - - Capital Outlay 1,287,869 - - - - - - - - - - - Capital Outlay (Land CIP) - - 21,100 - - - - - - - - - 2026-2035 (CIP Budget)Capital Outlay (Parks CIP) - 150,000 186,890 3,893,529 3,706,640 - - - - - - - 2026-2035 (CIP Budget)Capital Outlay (Trails CIP) - 673,813 675,450 - 331,100 668,400 804,000 - - - - - 2026-2035 (CIP Budget)Capital Outlay (County CIP) - 235,106 - 250,000 - 250,000 - - - - - - Trail Construction - County ProjectsTotal 1,375,256 1,058,919 883,440 4,143,529 4,037,740 918,400 804,000 - - - - - Cash Balance - Beginning6,505,399 6,606,810 6,750,631 6,264,601 3,420,132 (214,668) (726,099) (1,119,060) (703,911) (284,611) 138,883 566,611 Balance Sheet Effects 197,381 Revenues 1,279,286 1,202,740 397,410 1,299,060 402,940 406,969 411,039 415,149 419,300 423,493 427,728 432,006 Expenditures (1,375,256) (1,058,919) (883,440) (4,143,529) (4,037,740) (918,400) (804,000) - - - - - Cash Balance - Ending 6,606,810$ 6,750,631$ 6,264,601$ 3,420,132$ (214,668)$ (726,099)$ (1,119,060)$ (703,911)$ (284,611)$ 138,883$ 566,611$ 998,617$ MN Statute 462.358, Subd 2B(g) Cash payments received must be used only for the acquisition and development or improvement of parks, recreational facilities, playgrounds, trails, wetlands, or open space based on the approved park Projection - Capital Improvement PlanY:\Budget\2026\Cash Flows\Capital Funds203-Park Development City of OtsegoPark Equipment FundCash Flow Summary 450,000 475,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 Forecast from 2025 BudgetRevised: September 3, 2025 5.88% 5.56% 5.26% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Actual Forecast2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CommentsRevenuesProperty Taxes 400,000$ 425,000$ 450,000$ 475,000$ 500,000$ 500,000$ 500,000$ 500,000$ 500,000$ 500,000$ 500,000$ 500,000$ Contributions - Soccer 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 - - - Boreal Soccer - Lighting ContributionInvestment Interest 13,862 - - - - - - - - - - - Total 426,362 437,500 462,500 487,500 512,500 512,500 512,500 512,500 512,500 500,000 500,000 500,000 ExpensesOther Charges & Services 247 - - - - - - - - - - - Capital Outlay (CIP) - 80,000 580,000 897,700 562,400 - 681,200 - 756,700 - 809,300 118,400 2026-2035 (CIP Budget)Total 247 80,000 580,000 897,700 562,400 - 681,200 - 756,700 - 809,300 118,400 Cash Balance - Beginning113,334 522,713 880,213 762,713 352,513 302,613 815,113 646,413 1,158,913 914,713 1,414,713 1,105,413 Balance Sheet Effects (16,736) Revenues 426,362 437,500 462,500 487,500 512,500 512,500 512,500 512,500 512,500 500,000 500,000 500,000 Expenditures (247) (80,000) (580,000) (897,700) (562,400) - (681,200) - (756,700) - (809,300) (118,400) Cash Balance - Ending 522,713$ 880,213$ 762,713$ 352,513$ 302,613$ 815,113$ 646,413$ 1,158,913$ 914,713$ 1,414,713$ 1,105,413$ 1,487,013$ Cash Balance - % of Next Year Capital653% 152%85% 63%#DIV/0!120%#DIV/0!153%#DIV/0!175%#DIV/0!Cash Balance - % of Max Year Capital58% 98% 85% 39% 34% 91% 72%129% 102% 158% 123% 166%Projection - Capital Improvement PlanY:\Budget\2026\Cash Flows\Capital Funds205-Park Equipment City of OtsegoCapital Equipment Revolving FundCash Flow Summary 616,129 644,094 681,166 713,883 762,904 765,227 772,720 798,921 839,593 Forecast from 2025 BudgetRevised: September 3, 2025 4.43% 7.88% 5.47% 5.23% 10.92% 2.02% 2.09% 3.68% 4.49% 2.05%Actual Forecast2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CommentsRevenuesProperty Taxes 550,393$ 587,937$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Property Taxes (Building) - - 11,335 11,335 11,335 11,335 11,335 11,335 11,335 13,332 13,332 13,332 Based on Equipment DepreciationProperty Taxes (Streets) - - 504,155 540,651 576,868 594,884 668,649 676,296 689,011 710,515 748,197 763,572 Based on Equipment DepreciationProperty Taxes (Parks) - - 98,464 110,320 110,320 128,845 135,367 144,181 148,815 156,573 158,395 161,867 Based on Equipment DepreciationInvestment Interest 23,157 - - - - - - - - - - - Sales of Fixed Assets 6,775 - - - - - - - - - - - Sales of Fixed Assets (Est.) - 49,000 - - - - - - - - - - Transfers In - - - - - - - - - - - - Incoming from Storm Water - TBDTotal 580,325 636,937 613,954 662,306 698,523 735,064 815,351 831,812 849,161 880,420 919,924 938,771 ExpensesCapital Outlay - Building 30,781 - - - - - - - - - - - Replacement CIP - Buildings - - - - - - - - 39,877 - - 46,857 2026-2035 (CIP Budget)Capital Outlay - Streets 154,661 231,818 - - - - - - - - - - Replacement CIP - Streets - 320,000 309,000 531,281 397,286 619,949 139,944 615,181 407,395 710,380 290,690 95,746 2026-2035 (CIP Budget)Additions CIP - Streets - - 137,500 69,500 - 335,000 - - - - - - 2026-2035 (CIP Budget)Capital Outlay - Parks 63,128 79,550 - - - - - - - - - - Replacement CIP - Parks - - 84,098 - 247,116 33,305 18,250 202,197 70,000 37,918 65,032 41,108 2026-2035 (CIP Budget)Additions CIP - Parks - - 85,000 - 75,000 41,000 70,000 - 45,000 - - - 2026-2035 (CIP Budget)Transfers Out - - - - - - - - - - - - Jet Vac Contributions - TBDTotal 248,570 631,368 615,598 600,781 719,402 1,029,254 228,194 817,378 562,272 748,298 355,722 183,711 Cash Balance - Beginning449,479 777,838 783,407 781,763 843,288 822,409 528,219 1,115,376 1,129,810 1,416,699 1,548,821 2,113,023 Balance Sheet Effects (3,396) Revenues 580,325 636,937 613,954 662,306 698,523 735,064 815,351 831,812 849,161 880,420 919,924 938,771 Expenditures (248,570) (631,368) (615,598) (600,781) (719,402) (1,029,254) (228,194) (817,378) (562,272) (748,298) (355,722) (183,711) Cash Balance - Ending 777,838$ 783,407$ 781,763$ 843,288$ 822,409$ 528,219$ 1,115,376$ 1,129,810$ 1,416,699$ 1,548,821$ 2,113,023$ 2,868,083$ Cash Balance - % of Next Year Capital123% 127% 130% 117%80%231% 136% 201% 189% 435% 1150%Cash Balance - % of Max Year Capital76% 76% 82% 80% 51%108% 110% 138% 150% 205% 279%Projection - Capital Improvement PlanY:\Budget\2026\Cash Flows\Capital Funds206-Capital Equipment City of OtsegoFire Reserves FundCash Flow SummaryRevised: September 3, 2025Actual Forecast2024 2025 2026 2027 CommentsRevenuesProperty Taxes (Reserves) 210,000$ -$ -$ -$ Investment Interest 219,058 - - - Intergovernmental 216,188 - - - Debt Issuance 899,742 - - - Bond Proceeds - Reimburse Soft CostsTotal 1,544,988 - - - ExpensesOther Charges & Services 19,804 - - - Capital Outlay (Equipment) - - 1,369,512 - Station & Trucks - Small EquipmentCapital Outlay (Vehicles) 216,188 678,019 2,844,798 - Primary Apparatus (4 Large Trucks)Capital Outlay (Building) 874,375 - - - Total 1,110,367 678,019 4,214,310 - Cash Balance - Beginning4,802,434 4,159,646 4,381,369 167,059 Balance Sheet Effects (1,077,409) 899,742 Revenues 1,544,988 - - - Expenditures (1,110,367) (678,019) (4,214,310) - Cash Balance - Ending 4,159,646$ 4,381,369$ 167,059$ 167,059$ Debt Service Fund or Fire RevolvingCapital Improvement PlanY:\Budget\2026\Cash Flows\Capital Funds214-Fire Reserve City of OtsegoMSA Construction FundCash Flow SummaryRevised: September 3, 2025Actual Forecast2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CommentsRevenuesIntergovernmental 1,004,029$ 1,109,458$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Special Assessments - - - - - - - - - - - - Investment Interest - - - - - - - - - - - - Miscellaneous - - - - - - - - - - - - Transfers In - - - - - - - - - - - - Total 1,004,029 1,109,458 - - - - - - - - - - ExpensesEngineering - - - - - - - - - - - - Other Charges & Services - - - - - - - - - - - - Capital Outlay - - - - - - - - - - - - Capital Outlay (CIP) - - - - - - - - - - - - Transfers Out - - - - - - - - - - - - Total - - - - - - - - - - - - Cash Balance - Beginning(617,526) (617,526) 347,763 347,763 347,763 347,763 347,763 347,763 347,763 347,763 347,763 347,763 Balance Sheet Effects (1,004,029) (144,169) Revenues 1,004,029 1,109,458 - - - - - - - - - - Expenditures - - - - - - - - - - - - Cash Balance - Ending (617,526)$ 347,763$ 347,763$ 347,763$ 347,763$ 347,763$ 347,763$ 347,763$ 347,763$ 347,763$ 347,763$ 347,763$ MSA Annual Allottment1,004,029$ 1,109,458$ 1,109,458$ 1,109,458$ 1,109,458$ 1,109,458$ 1,109,458$ 1,109,458$ 1,109,458$ 1,109,458$ 1,109,458$ 1,109,458$ 2025 Actual - Then StagnantMSA Disbursements-$ 965,289$ MSA Fund Balance(144,169)$ 0$ 1,109,458$ 2,218,916$ 3,328,374$ 4,437,832$ 5,547,290$ 6,656,748$ 7,766,206$ 8,875,664$ 9,985,122$ 11,094,580$ Projection - Capital Improvement PlanY:\Budget\2026\Cash Flows\Capital Funds403-MSA Construction City of OtsegoNorth Mississippi WatershedCash Flow SummaryRevised: September 3, 2025Actual Forecast2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CommentsRevenuesDevelopment Fees 14,928$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Investment Interest - - - - - - - - - - - - Special Assessments (Actual) 2,761 - - - - - - - - - - - Actual Wright County SettlementsSpecial Assessments (Levied) - 2,761 2,761 2,761 - - - - - - - - Existing levied assessmentsTransfers In - - - - - - - - - - - - Total 17,689 2,761 2,761 2,761 - - - - - - - - ExpensesSupplies - - - - - - - - - - - - Other Charges & Services - - - - - - - - - - - - Capital Outlay- - - - - - - - - - - - Capital Outlay (CIP) - - - - - - - - - - - - Transfers Out - - - - - - - - - - - - Total - - - - - - - - - - - - Cash Balance - Beginning(262,435) (270,903) (268,142) (265,381) (262,620) (262,620) (262,620) (262,620) (262,620) (262,620) (262,620) (262,620) Balance Sheet Effects - - - - - - - - - - - - Revenues 17,689 2,761 2,761 2,761 - - - - - - - - Expenditures - - - - - - - - - - - - Cash Balance - Ending (244,746)$ (268,142)$ (265,381)$ (262,620)$ (262,620)$ (262,620)$ (262,620)$ (262,620)$ (262,620)$ (262,620)$ (262,620)$ (262,620)$ Projection - Capital Improvement PlanY:\Budget\2026\Cash Flows\Capital Funds405-NoMissWS City of OtsegoLefebvre Creek WatershedCash Flow SummaryRevised: September 3, 2025Actual Forecast2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CommentsRevenuesDevelopment Fees 6,976$ 13,254$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Investment Interest 28,544 - - - - - - - - - - - Miscellaneous - - - - - - - - - - - - Transfers In - - - - - - - - - - - - Total 35,520 13,254 - - - - - - - - - - ExpensesSupplies - - - - - - - - - - - - Other Charges & Services - - - - - - - - - - - - Capital Outlay- - - - - - - - - - - - Capital Outlay (CIP) - - - - - - - - - - - - Transfers Out - - - - - - - - - - - - Total - - - - - - - - - - - - Cash Balance - Beginning572,610 608,130 621,384 621,384 621,384 621,384 621,384 621,384 621,384 621,384 621,384 621,384 Balance Sheet Effects - - - - - - - - - - - - Revenues 35,520 13,254 - - - - - - - - - - Expenditures - - - - - - - - - - - - Cash Balance - Ending 608,130$ 621,384$ 621,384$ 621,384$ 621,384$ 621,384$ 621,384$ 621,384$ 621,384$ 621,384$ 621,384$ 621,384$ Projection - Capital Improvement PlanY:\Budget\2026\Cash Flows\Capital Funds406-LefebvreCreekWS City of OtsegoOtsego Creek WatershedCash Flow SummaryRevised: September 3, 2025Actual Forecast2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CommentsRevenuesDevelopment Fees 325,053$ 181,438$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Intergovernmental 210,000 - - - - - - - - - - - Wright County GrantInvestment Interest 82,540 - - - - - - - - - - - Miscellaneous - - - - - - - - - - - - Transfers In - - - - - - - - - - - - Total 617,593 181,438 - - - - - - - - - - ExpensesSupplies - - - - - - - - - - - - Other Charges & Services - - - - - - - - - - - - Capital Outlay309,977 - - - - - - - - - - - Capital Outlay (CIP) - 105,486 - - - - - - - - - - Otsego Creek RestorationTransfers Out - - - - - - - - - - - - Total 309,977 105,486 - - - - - - - - - - Cash Balance - Beginning1,715,623 2,012,817 2,088,769 2,088,769 2,088,769 2,088,769 2,088,769 2,088,769 2,088,769 2,088,769 2,088,769 2,088,769 Balance Sheet Effects (10,422) - - - - - - - - - - - Revenues 617,593 181,438 - - - - - - - - - - Expenditures (309,977) (105,486) - - - - - - - - - - Cash Balance - Ending 2,012,817$ 2,088,769$ 2,088,769$ 2,088,769$ 2,088,769$ 2,088,769$ 2,088,769$ 2,088,769$ 2,088,769$ 2,088,769$ 2,088,769$ 2,088,769$ Cash Balance + Due From Other FundsProjection - Capital Improvement PlanY:\Budget\2026\Cash Flows\Capital Funds408-OtsegoCreekWS City of OtsegoCrow River WatershedCash Flow SummaryRevised: September 3, 2025Actual Forecast2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CommentsRevenuesDevelopment Fees -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Investment Interest - - - - - - - - - - - - Miscellaneous - - - - - - - - - - - - Transfers In - - - - - - - - - - - - Total - - - - - - - - - - - - ExpensesSupplies - - - - - - - - - - - - Other Charges & Services - - - - - - - - - - - - Capital Outlay- - - - - - - - - - - - Capital Outlay (CIP) - - - - - - - - - - - - Transfers Out - - - - - - - - - - - - Total - - - - - - - - - - - - Cash Balance - Beginning(11,991) (11,991) (11,991) (11,991) (11,991) (11,991) (11,991) (11,991) (11,991) (11,991) (11,991) (11,991) Balance Sheet Effects - - - - - - - - - - - - Revenues - - - - - - - - - - - - Expenditures - - - - - - - - - - - - Cash Balance - Ending (11,991)$ (11,991)$ (11,991)$ (11,991)$ (11,991)$ (11,991)$ (11,991)$ (11,991)$ (11,991)$ (11,991)$ (11,991)$ (11,991)$ Projection - Capital Improvement PlanY:\Budget\2026\Cash Flows\Capital Funds410-CrowRiverWS City of OtsegoCapital Improvements FundCash Flow SummaryRevised: September 3, 2025Actual Forecast2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CommentsRevenuesSpecial Assessments 24,401$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Special Assessments (Levied) - 24,148 23,415 5,897 4,061 3,932 - - - - - - Existing levied assessmentsInvestment Interest 347,656 - - - - - - - - - - - Tax Abatement - City 88,224 87,436 108,624 108,624 41,383 - - - - - - - Parkview Retail Abatements (City)Tax Abatement - County 76,672 93,318 93,318 26,817 - - - - - - - - Parkview Retail Abatements (County)Total 536,953 204,902 225,357 141,338 45,444 3,932 - - - - - - ExpensesCapital Outlay - General 8,100 - - - - - - - - - - - Capital Outlay - Public Safety - 40,000 - 40,000 - - - - - - - - Radio Repeater System / Emergency SirenCapital Outlay - Public Works 10,170 1,407,474 - - - - - - - - - - Cold Storage FacilityCapital Outlay (County CIP) - 364,049 - 1,500,000 350,000 600,000 - - - - - - 2025-2029 County CIP (No LOST Projects)Capital Outlay (Property CIP) - 772,411 - - - - - - - - - - Balance of Cold Storage BudgetTransfers Out 2,000,000 - - - - - - - - - - - Total 2,018,270 2,583,934 - 1,540,000 350,000 600,000 - - - - - - Cash Balance - Beginning7,722,626 6,076,833 3,697,801 3,923,158 2,524,496 2,219,940 1,623,872 1,623,872 1,623,872 1,623,872 1,623,872 1,623,872 Balance Sheet Effects (164,476) Revenues 536,953 204,902 225,357 141,338 45,444 3,932 - - - - - - Expenditures (2,018,270) (2,583,934) - (1,540,000) (350,000) (600,000) - - - - - - Cash Balance - Ending 6,076,833$ 3,697,801$ 3,923,158$ 2,524,496$ 2,219,940$ 1,623,872$ 1,623,872$ 1,623,872$ 1,623,872$ 1,623,872$ 1,623,872$ 1,623,872$ Cash Balance + Due From Other FundsProjection - Capital Improvement PlanY:\Budget\2026\Cash Flows\Capital Funds414-Capital Imp. City of OtsegoCity Buildings & Property MaintenanceCash Flow Summary 150,000 160,000 170,000 180,000 190,000 200,000 210,000 220,000 230,000 Forecast from 2025 BudgetRevised: September 3, 2025 8.33% 7.69% 7.14% 6.67% 6.25% 5.88% 5.56% 5.26% 5.00% 4.76%Actual Forecast2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CommentsRevenuesProperty Taxes 35,000$ 120,000$ 130,000$ 140,000$ 150,000$ 160,000$ 170,000$ 180,000$ 190,000$ 200,000$ 210,000$ 220,000$ Investment Interest 5,507 - - - - - - - - - - - Total 40,507 120,000 130,000 140,000 150,000 160,000 170,000 180,000 190,000 200,000 210,000 220,000 ExpensesCapital Outlay (City Hall) 25,490 - - - - - - - - - - - Capital Outlay (CH/PW CIP) - 55,620 136,692 25,000 69,000 - - - 140,000 - - - 2026-2035 (CIP Budget)Capital Outlay (PC CIP) - 24,720 - 58,000 - 65,000 81,000 - 24,000 - - - 2026-2035 (CIP Budget)Capital Outlay (IT CIP) - 160,600 - 17,000 - 140,000 135,000 90,000 - - - 72,000 2026-2035 (CIP Budget)Total 25,490 240,940 136,692 100,000 69,000 205,000 216,000 90,000 164,000 - - 72,000 Cash Balance - Beginning118,164 133,181 12,241 5,549 45,549 126,549 81,549 35,549 125,549 151,549 351,549 561,549 Balance Sheet EffectsRevenues 40,507 120,000 130,000 140,000 150,000 160,000 170,000 180,000 190,000 200,000 210,000 220,000 Expenditures (25,490) (240,940) (136,692) (100,000) (69,000) (205,000) (216,000) (90,000) (164,000) - - (72,000) Cash Balance - Ending 133,181$ 12,241$ 5,549$ 45,549$ 126,549$ 81,549$ 35,549$ 125,549$ 151,549$ 351,549$ 561,549$ 709,549$ Cash Balance - % of Next Year Capital55% 9% 6% 66% 62% 38% 39% 77%#DIV/0! #DIV/0!780%Cash Balance - % of Max Year Capital62% 6% 3% 21% 59% 38% 16% 58% 70%163% 260% 328%Projection - Capital Improvement PlanY:\Budget\2026\Cash Flows\Capital Funds439-Buildings & Property City of OtsegoFire Capital RevolvingCash Flow SummaryRevised: September 3, 2025Forecast2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 CommentsRevenuesProperty Taxes 6,189$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Property Taxes (Vehicles) - 8,333 26,641 30,476 30,476 30,476 30,476 30,476 30,476 30,476 30,476 Light Vehicles Replacement ReserveProperty Taxes (Apparatus) - - 100,157 100,157 100,157 100,157 100,157 100,157 100,157 100,157 100,157 Medium Vehicles Replacement ReserveProperty Taxes (Apparatus) - - 321,358 321,358 321,358 321,358 321,358 321,358 321,358 321,358 321,358 Heavy Vehicles Replacement ReserveProperty Taxes (Equipment) - - 98,584 98,584 98,584 98,584 98,584 98,584 98,584 98,584 98,584 Equipment & Tools Replacement ReserveTotal 6,189 8,333 546,740 550,575 550,575 550,575 550,575 550,575 550,575 550,575 550,575 ExpensesCapital Outlay (Land) - - - - - - - - - - 500,000 Fire Station ParcelCapital Outlay (Vehicles) - - - - - - - - - 102,643 100,000 2026-2035 (CIP Budget)Capital Outlay (IT) - - - - - - 45,000 - - - - 2026-2035 (CIP Budget)Total - - - - - - 45,000 - - 102,643 600,000 Cash Balance - Beginning- 6,189 14,522 561,262 1,111,837 1,662,412 2,212,987 2,718,562 3,269,137 3,819,712 4,267,644 Balance Sheet EffectsRevenues 6,189 8,333 546,740 550,575 550,575 550,575 550,575 550,575 550,575 550,575 550,575 Expenditures - - - - - - (45,000) - - (102,643) (600,000) Cash Balance - Ending6,189$ 14,522$ 561,262$ 1,111,837$ 1,662,412$ 2,212,987$ 2,718,562$ 3,269,137$ 3,819,712$ 4,267,644$ 4,218,219$ Projection - Capital Improvement PlanY:\Budget\2026\Cash Flows\Capital Funds447-Fire Revolving City of OtsegoProperty Tax Levy CalculationsPayable 2026Revised: September 3, 2025$% $% $% $% $%2024 2025 2026 Change Change 2026 Change Change 2026 Change Change 2026 Change Change 2026 Change Change CommentGeneral Fund 6,336,000 7,000,000 7,802,000 802,000 11.46% 7,802,000 802,000 11.46% 7,802,000 802,000 11.46% 7,802,000 802,000 11.46% 7,802,000 802,000 11.46%Tax Abatements 88,224 87,436 108,624 21,188 24.23% 108,624 21,188 24.23% 108,624 21,188 24.23% 108,624 21,188 24.23% 108,624 21,188 24.23%Debt ServiceSeries 2018A 102,144 104,308 106,313 2,005 106,313 2,005 106,313 2,005 106,313 2,005 106,313 2,005 Series 2020A 197,000 186,000 186,000 - 186,000 - 186,000 - 186,000 - 186,000 - Series 2024A - - 1,339,065 1,339,065 1,339,065 1,339,065 1,339,065 1,339,065 1,339,065 1,339,065 1,339,065 1,339,065 Sub-total 299,144 290,308 1,631,378 1,341,070 461.95% 1,631,378 1,341,070 461.95% 1,631,378 1,341,070 461.95% 1,631,378 1,341,070 461.95% 1,631,378 1,341,070 461.95%Capital ReservesPavement Management 1,000,000 800,000 600,000 (200,000) 600,000 (200,000) 600,000 (200,000) 600,000 (200,000) 600,000 (200,000) Trails Management 70,000 76,000 82,000 6,000 82,000 6,000 82,000 6,000 82,000 6,000 82,000 6,000 Parks Equipment 400,000 425,000 450,000 25,000 450,000 25,000 450,000 25,000 450,000 25,000 450,000 25,000 Capital Equipment Revolving 550,393 587,937 613,954 26,017 613,954 26,017 613,954 26,017 613,954 26,017 613,954 26,017 Fire Reserve 210,000 - - - - - - - - - - - Fire Capital Revolving - 6,189 8,333 2,144 8,333 2,144 8,333 2,144 8,333 2,144 8,333 2,144 City Buildings & Property 35,000 120,000 130,000 10,000 130,000 10,000 130,000 10,000 130,000 10,000 130,000 10,000 Sub-total 2,265,393 2,015,126 1,884,287 (130,839) -6.49% 1,884,287 (130,839) -6.49% 1,884,287 (130,839) -6.49% 1,884,287 (130,839) -6.49% 1,884,287 (130,839) -6.49%Adjustment to Achieve Option(694,354) (694,354) (957,264) (957,264) (1,603,252) (1,603,252) (1,766,235) (1,766,235) **DISCUSSION NEEDED**Grand Total 8,988,761 9,392,870 11,426,289 2,033,419 21.65% 10,731,935 1,339,065 14.26% 10,469,025 1,076,155 11.46% 9,823,037 430,167 4.58% 9,660,054 267,184 2.84%Growth (%) -3.66% 4.50%Tax Capacity39,516,976 39,284,126 40,707,494 40,707,494 40,707,494 40,707,494 40,707,494 1.02% of EMV (11 Year Average)Growth (%) 23.20% -0.59% 3.62% 3.62% 3.62% 3.62% 3.62%Net Tax Capacity 38,897,895 38,570,629 40,337,056 40,337,056 40,337,056 40,337,056 40,337,056 99.09% of Tax Capacity (11 Year Average)Growth (%) 23.29% -0.84% 4.58% 4.58% 4.58% 4.58% 4.58%Tax Rate 23.109 24.352 28.327 26.606 25.954 24.352 23.948 Population 22,705 23,132 23,790 23,790 23,790 23,790 23,790 Source = MN State DemographerTax Levy Per Capita 396 406 480 451 440 413 406 Description 2024 2025 2026 Change ($) Change (%) 2026 Change ($) Change (%) 2026 Change ($) Change (%) 2026 Change ($) Change (%) 2026 Change ($) Change (%)Median Appraised Value 402,700 386,400 402,500 16,100 4.17% 402,500 16,100 4.17% 402,500 16,100 4.17% 402,500 16,100 4.17% 402,500 16,100 4.17%Less: MV Exclusion (997) (11,774) (10,325) (10,325) (10,325) (10,325) (10,325) Taxable Market Value 401,703 374,626 392,175 392,175 392,175 392,175 392,175 Tax Capacity4,017 3,746 3,922 175 4.68% 3,922 175 4.68% 3,922 175 4.68% 3,922 175 4.68% 3,922 175 4.68%Taxing Estimated Estimated Estimated Estimated Estimated Estimated EstimatedAuthority Tax Tax Tax Change ($) Change (%) Tax Change ($) Change (%) Tax Change ($) Change (%) Tax Change ($) Change (%) Tax Change ($) Change (%)City of Otsego 928 912 1,111 199 21.82% 1,043 131 14.36% 1,018 106 11.62% 955 43 4.71% 939 27 2.96%Levy DescriptionCity Taxes Only. Based on the Median Value for each respective year. Note: The formula for tax capacity changed in 2025 to due legislative changes for the Homestead Market Value Exclusion Program.DRAFT A - (9/8/2025) DRAFT B - (9/8/2025)DRAFT D - (9/8/2025) DRAFT E - (9/8/2025)DRAFT C - (9/8/2025)Y:\Budget\2026\Property Taxes\Tax Levy Calculations (2026)2026-V1 City of OtsegoGeneral Fund Budget - 2026Requested BudgetRevenue & Expenditure SummaryDraft PreliminaryActual Actual Year-to-Date Budget Budget Budget2023 2024 2025 2025 2026 2026 $ Change % ChangeRevenuesTaxes 5,253,657$ 6,373,290$ 3,955,342$ 6,992,002$ 7,861,364$ 7,807,781$ 815,779$ 11.67%Cable Franchise Fees 126,594 114,342 53,217 117,000 109,000 109,000 (8,000) -6.84%Licenses & Permits 1,544,769 1,868,466 1,775,584 1,703,459 1,878,642 1,878,642 175,184 10.28%Intergovernmental 575,521 213,322 19,952 209,554 173,533 173,533 (36,021) -17.19%Charges for Services 270,009 281,339 252,739 244,830 261,870 261,870 17,040 6.96%Special Assessments 10,389 5,733 1,685 3,500 3,500 3,500 - 0.00%Fines & Forfeitures 32,109 40,982 24,045 33,600 38,000 38,000 4,400 13.10%Investment Interest 282,834 257,688 2,242,469 142,657 149,572 149,572 6,915 4.85%Miscellaneous 39,567 23,494 21,614 15,500 12,000 12,000 (3,500) -22.58%Interfund Transfers 320,600 427,000 478,000 478,000 600,000 600,000 122,000 25.52%Subtotal8,456,047 9,605,658 8,824,648 9,940,102 11,087,481 11,033,898 1,093,796 11.00%ExpendituresGeneral Government 1,677,552 1,949,464 1,384,290 2,196,516 2,553,921 2,553,921 357,405 16.27%Public Safety 3,323,206 4,040,998 3,223,864 4,263,499 4,915,008 4,861,425 597,926 14.02%Public Works 1,694,597 1,891,835 1,272,104 2,118,872 2,215,610 2,215,610 96,738 4.57%Culture & Recreation 943,533 1,097,769 792,579 1,250,315 1,301,792 1,301,792 51,477 4.12%Economic Development 91,788 90,600 51,121 110,900 101,150 101,150 (9,750) -8.79%Interfund Transfers 710,829 - - - - - - #DIV/0!Subtotal8,441,505 9,070,667 6,723,959 9,940,102 11,087,481 11,033,898 1,093,796 11.00%Net Change in Fund Balance14,543$ 534,991$ 2,100,689$ -$ -$ 0$ Description City of OtsegoGeneral Fund Budget - 2026Budget Changes TrackingTotal Expenditures - Draft Budget Binder (August 1) 11,087,481$ Fire ProtectionRevised Contract for City of Albertville (53,583) Total Expenditures - Preliminary Levy (September 22) 11,033,898 Y:\Budget\2026\General Fund\2.0 - 2026 GENERAL BUDGET (PRELIM)