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SCC Item 1. 2027 Budget Review
TO: Mayor and Councilmembers FROM: Adam Flaherty, City Administrator/Finance Director DATE: August 24, 2026 SUBJECT: Budget Meeting #3 __________________________________________________________________________________________________ On Monday, Council and staff will continue the 2027 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. General Fund Revenues The City Council reviewed draft expenditure budgets for the General fund during a budget meeting on August 11. Due to time constraints the City Council concurred to review the draft revenue budget at a future meeting. City staff have included the draft revenue budget in this packet and will review with the City Council. Capital Project Funds The City maintains fourteen (14) capital project funds; however, during this meeting, the review will focus on those with a proposed property tax levy for 2027. Staff will review source and use cash flow projections for these respective funds as these levies will need to be considered within the preliminary property tax adoption in September. Historically, the City Council has not adopted revenue and expenditure budgets for the capital project funds; rather, the expenditure activity of the respective funds is included within the City’s Capital Improvement Plan (CIP). A separate meeting later in the budget process will be scheduled to review the CIP which would be part of final budget adoptions in December. 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 draft preliminary property tax levy, which includes revenues for the General Fund, Tax Abatement, Debt Service, and Capital Project fund levies. The packet materials include three scenarios, each which will be discussed for viability and future year impacts. A brief description is as follows: -Draft A: Represents the levy necessary to fund budgeted expenditures as presented so far. The increase in the levy for this draft is 13.54% compared to 2026, with an impact to taxpayers of approximately 10%. -Draft B: This option uses Draft A as the starting point. This option removes certain non-recurring expenditures in the General fund and funds them through the fund balance transfer of balances more than City policy target levels. The increase in the levy for this draft is 10.14% compared to 2026, with an impact to taxpayers of approximately 7%. SCC Item 1. - Draft C: This option uses Draft B as the starting point. This option provides a reduction in debt service levies and funds them through remaining bond proceeds available due to the fire station construction project costs being less than forecasted. The proposed reduction amount would be consistent throughout the remaining life of the bond issue. The increase in the levy for this draft is 9.73% compared to 2026, with an impact to taxpayers of approximately 6%. Staff will be seeking feedback and direction from the City Council on the preferred draft to present for future meetings and whether additional draft levy scenarios should be developed. Previous Meeting(s) Follow Up Items City staff will review a few follow-up items from previous budget meetings for discussion, including: - Comparison of Legal Service Budgets from surrounding communities - Updated presentation of net department budgets from interfund transfers - Revised fund balance policy transfer calculation - Additional discussion of the Engineering budget 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(s) are necessary as currently there are no additional meetings scheduled. As a reminder, the City Council will need to adopt a Preliminary Property Tax Levy for Taxes Payable 2027 prior to September 30, with staff recommendation for this to occur at the regular meeting on either September 14 or September 28. 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) Draft General Fund Revenue Budget 2) Capital Project Funds – Cash Flow Forecasts 3) Draft Preliminary Tax Levy City of OtsegoGeneral Fund Budget - 2027Requested BudgetRevenues12.50% Tax Levy IncreaseDraftActual Actual Year-to-Date Budget BudgetFund Source Account Description 2024 2025 2026 2026 2027 Comments101 31010 CURRENT AD VALOREM TAXES 6,296,543$ 6,928,382$ 4,211,480$ 7,545,000$ 8,488,000$ 101 31011 UNCOLLECTED PROPERTY TAXES ---(74,066) (83,871) Recent collection rates have been 99%101 31020 DELINQUENT AD VALOREM TAXES74,054 70,411 50,866 80,000 80,000 ~ 80% of 12/31/2025 Delinquent Taxes ($105,707)101 31900 PENALTIES AND INTEREST2,693 3,044 187 2,600 2,600 TOTAL - TAXES6,373,290 7,001,836 4,262,533 7,553,534 8,486,729 101 38050 CABLE TV FRANCHISE FEES114,342 102,152 22,431 106,000 97,000 Annualized - Based on Most Recent 4 QuartersTOTAL - CABLE FRANCHISE FEES114,342 102,152 22,431 106,000 97,000 101 32100 BUSINESS LICENSES/PERMITS9,721 2,167 1,516 7,500 5,000 Estimate Based on Prior Year Actuals101 32140 RENTAL INSPECTION FEES46,670 44,035 31,030 44,100 47,100 Based on 2024 - 2025 Actuals & 2026 YTD Monthly Average101 32150 PUBLIC UTILITIES ROW PERMITS50,400 72,000 35,600 55,000 59,600 Based on 298 Permits at $200 Each101 32180 OTHER LICENSES/PERMITS2,990 1,850 830 3,000 3,000 Includes: Fowl Keeping, Gambling, Etc.101 32190 FENCING PERMITS6,900 7,800 5,352 8,100 7,800 Based on 2024 - 2025 Actuals & 2026 YTD Monthly Average101 32210 LIQUOR LICENSES35,775 34,350 35,425 35,300 35,350 Based on 2025 Licensed Operations101 32250 SIGN PERMIT600 460 250 600 500 Estimate Based on Prior Year Actuals101 32260 BUILDING PERMITS1,162,772 1,363,803 935,943 1,541,300 1,502,700 Based on 2024 - 2025 Actuals & 2026 YTD Monthly Average101 32261 PLUMBING PERMITS85,787 109,256 6,305 89,858 -GovWell Implementation - Combined into Building Permits (101-32260)101 32262 MECHANICAL PERMITS94,945 117,433 5,830 99,106 -GovWell Implementation - Combined into Building Permits (101-32260)101 32265 PLAN REVIEW FEE351,116 466,880 253,117 -413,407 GovWell Implementation - Separated for Annual DOLI Reporting10132270 SEPTIC SYSTEM PERMITS3,450 6,625 4,975 3,500 5,000 Estimate Based on Prior Year Actuals101 32999 ASSESSORS FEE17,340 21,500 1,400 17,100 17,880298 Permits at $60TOTAL - LICENSES & PERMITS1,868,466 2,248,158 1,317,573 1,904,464 2,097,337 101 33402 HOMESTEAD CREDIT8,516 8,421 -8,300 8,400 Agricultural MV Credits - Based on Prior Year Actuals101 33403 LOCAL GOVERNMENT AID73,598 ----101 33405 POLICE AID111,191 119,701 -124,000 124,000 Estimate Based on Prior Year Actuals + 4% Growth101 33420 FIRE AID----24,900 Estimate Based on Training Reimbursement & Firefighter Aid101 33422 OTHER STATE AID GRANTS20,018 19,952 -54,03336,046 Public Safety Aid Allocation (Last Remaining Funds in 2027)TOTAL - INTERGOVERNMENTAL213,322 148,074 - 186,333 193,346 Account Number Actual Actual Year-to-Date Budget BudgetFund Source Account Description 2024 2025 2026 2026 2027 CommentsAccount Number101 34050 ADMINISTRATIVE FEES68,220 67,725 37,074 50,000 60,000 Development Contract Administration - Only Receive if Developments Occur101 34103 ZONING AND SUBDIVISION FEES15,620 10,220 11,000 13,000 14,300 Based on 2024 - 2025 Actuals & 2026 YTD Monthly Average101 34107 ASSESSMENT SEARCH FEES13,910 14,305 10,813 13,395 14,345 Based on 2024 - 2025 Actuals & 2026 YTD Monthly Average (95%)101 34302 STREET & TRAFFIC CONTROL SIGNS25,750 31,500 12,250 25,000 25,000 New Development Street Signs - Only Receive if Developments Occur101 34303 ENGINEERING - REVIEW FEES- - - - - Budget Line Item Still Under Evaluation101 34305 CLEAN UP DAY EVENT11,578 9,153 15,545 9,000 10,000 Estimate Based on Prior Year Actuals101 34320 STREET LIGHT OP9,000 11,500 5,500 9,000 9,000 New Development Street Lights - Only Receive if Developments Occur101 34330 GRADING REVIEWS35,820 41,700 2,850 42,750 44,700 298 Permits at $150 (Offsets Grading Review Costs in Building Department)101 34700 RECREATION FEES58,299 65,774 56,279 65,000 85,000 Estimated by Parks and Recreation101 34701 PARK MEMORIALS205 876 100 500 500 Estimated by Parks and Recreation101 34710 SHELTER RENTAL FEES4,480 4,185 5,273 4,500 4,500 Estimated by Parks and Recreation101 34740 SPORT FIELD USE5,480 11,270 7,084 6,000 10,000 Estimated by Parks and Recreation101 34750 PRAIRIE CENTER4,998 7,415 7,660 6,500 7,000 Estimated by Parks and Recreation101 34760 OTSEGO FESTIVAL VENDORS27,980 26,555 22,840 23,720 26,840 Budgeted Expenditures (101-45250-490), less City Contribution ($5,000).TOTAL - CHARGES FOR SERVICES281,339 302,178 194,268 268,365 311,185 101 36100 SPECIAL ASSESSMENTS5,733 4,941 - 3,400 5,000 Estimate Based on Prior Year ActualsTOTAL - SPECIAL ASSESSMENTS5,733 4,941 - 3,400 5,000 101 35101 FINES & FORFEITS40,982 38,968 24,065 37,100 40,300 Based on 2024 - 2025 Actuals & 2026 YTD Monthly AverageTOTAL - FINES & FORFEITURES40,982 38,968 24,065 37,100 40,300 101 36210 INTEREST EARNINGS179,623 202,140 1,526,250 175,125 154,461 2026 YTD Interest into 2026 YTD Average Cash Balance Allocation101 36213 NET CHANGE IN INVESTMENT FMV78,066 111,967 (398,373) - - Accounting Only - No Cash TransactionsTOTAL - INVESTMENT INTEREST257,688 314,107 1,127,878 175,125 154,461 101 36200 MISCELLANEOUS REVENUES6,600 7,473 5,257 6,000 7,000 101 38010 HPC BOOK SALES69 105 - - - 101 38020 DONATIONS/CONTRIBUTIONS914 13,670 - 1,000 1,000 101 38991 REFUNDS & REIMBURSEMENTS5,911 9,651 1,436 6,000 6,000 101 39101 SALES OF GENERAL FIXED ASSETS10,000 - - - - TOTAL - MISCELLANEOUS23,494 30,899 6,694 13,000 14,000 101 39200 INTERFUND OPERATING TRANSFERS427,000 478,000 603,000 603,000 798,000 Water & Sanitary Sewer Administrative Services ChargeTOTAL - INTERFUND TRANSFERS427,000 478,000 603,000 603,000 798,000 Grand Total9,605,658$ 10,669,313$ 7,558,441$ 10,850,321$ 12,197,358$ Change ($) 1,347,037 Change (%) 12.41% City of OtsegoPavement Management FundCash Flow Summary 550,000 525,000 500,000 475,000 450,000 425,000 400,000 375,000 350,000 n/aForecast from 2026 CIP(50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) n/aDifference from 2027 CIPRevised: August 20, 2026 -16.67% -5.00% -5.26% -5.56% -5.88% -6.25% -6.67% -7.14% -7.69% -8.33% Change in Property Tax LevyActual Forecast2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 CommentsRevenuesProperty Taxes 800,000$ 600,000$ 500,000$ 475,000$ 450,000$ 425,000$ 400,000$ 375,000$ 350,000$ 325,000$ 300,000$ 275,000$ Intergovernmental (MSA) 369,820 391,656 393,614 395,582 397,560 399,548 401,546 403,554 405,571 407,599 409,637 411,685 MSA Maintenance (1/2% Annual Inflation)Intergovernmental (TAA) 29,690 38,872 45,177 - - - - - - - - - Transportation Advancement Account (26-Actual/27-Forecast)Franchise Fees (Actual) 947,665 - - - - - - - - - - - Actual Franchise Fee ReceiptsFranchise Fees (Future) - 947,665 952,403 957,165 961,951 966,761 971,595 976,453 981,335 986,242 991,173 996,129 Based on Prior Year ActualFranchise Fees (New Growth) - 4,738 4,762 4,786 4,810 4,834 4,858 4,882 4,907 4,931 4,956 4,981 Based on Expected Growth (1/2% Increase)Special Assessments (Actual) 71,522 - - - - - - - - - - - Actual Wright County SettlementsSpecial Assessments (Levied) - 52,184 47,299 38,884 37,551 36,217 34,884 32,150 21,787 8,778 - - Existing levied assessments ($151k Deferred Not Included)Special Assessments (Future) - - - 13,589 27,525 36,458 35,517 34,575 45,633 54,959 68,630 66,676 Assessments on future projectsInvestment Interest 339,225 - - - - - - - - - - - Total 2,557,922 2,035,115 1,943,256 1,885,007 1,879,397 1,868,818 1,848,400 1,826,613 1,809,233 1,787,509 1,774,396 1,754,471 ExpensesEngineering 90,635 - - - - - - - - - - - Other Charges & Services 1,080 - - - - - - - - - - - Capital Outlay 1,313,161 - - - - - - - - - - - Capital Outlay (CIP-Crack/Patch) - 159,600 163,590 167,131 170,749 174,447 178,226 182,087 186,033 190,066 194,187 198,399 2026 (CIP) & 2027-2036 (CIP Budget)Capital Outlay (CIP-Maintenance) - 181,345 81,808 111,622 159,558 187,012 185,385 708,543 493,873 950,478 1,060,946 348,543 2026 (As-Bid) & 2027-2036 (CIP Budget)Capital Outlay (CIP-Mill+Overlay) - 1,224,694 1,990,040 1,630,515 1,251,061 1,580,529 1,605,620 418,648 201,609 878,421 1,339,025 2,201,471 2026 (As-Bid) & 2027-2036 (CIP Budget)Capital Outlay (CIP-Renewal) - - 485,337 550,923 371,226 - - 461,511 376,585 542,533 - - 2026 (Project Canceled) & 2027-2036 (CIP Budget)Total 1,404,876 1,565,639 2,720,775 2,460,191 1,952,594 1,941,988 1,969,231 1,770,789 1,258,100 2,561,498 2,594,158 2,748,413 Cash Balance - Beginning5,944,044 7,048,396 7,517,872 6,740,353 6,165,168 6,091,972 6,018,801 5,897,970 5,953,794 6,504,927 5,730,938 4,911,176 Balance Sheet Effects (48,694) Revenues 2,557,922 2,035,115 1,943,256 1,885,007 1,879,397 1,868,818 1,848,400 1,826,613 1,809,233 1,787,509 1,774,396 1,754,471 Expenditures (1,404,876) (1,565,639) (2,720,775) (2,460,191) (1,952,594) (1,941,988) (1,969,231) (1,770,789) (1,258,100) (2,561,498) (2,594,158) (2,748,413) Cash Balance - Ending7,048,396$ 7,517,872$ 6,740,353$ 6,165,168$ 6,091,972$ 6,018,801$ 5,897,970$ 5,953,794$ 6,504,927$ 5,730,938$ 4,911,176$ 3,917,234$ Cash Balance - % of Next Year Capital450% 276% 274% 316% 314% 306% 333% 473% 254% 221% 179%Cash Balance - % of Max Year Capital256% 274% 245% 224% 222% 219% 215% 217% 237% 209% 179% 143%Projection - Capital Improvement PlanY:\Finance\Budget\2027\Cash Flows\Capital Funds201-Pavement Management City of OtsegoTrail Management FundCash Flow Summary 88,000 94,000 100,000 106,000 112,000 118,000 124,000 130,000 136,000 n/aForecast from 2026 CIP- 4,000 8,000 12,000 16,000 20,000 24,000 28,000 32,000 n/aDifference from 2027 CIPRevised: August 20, 2026 7.32% 11.36% 10.20% 9.26% 8.47% 7.81% 7.25% 6.76% 6.33% 5.95% Change in Property Tax LevyActual Forecast2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 CommentsRevenuesProperty Taxes 76,000$ 82,000$ 88,000$ 98,000$ 108,000$ 118,000$ 128,000$ 138,000$ 148,000$ 158,000$ 168,000$ 178,000$ Investment Interest 10,840 - - - - - - - - - - - Total 86,840 82,000 88,000 98,000 108,000 118,000 128,000 138,000 148,000 158,000 168,000 178,000 ExpensesCapital Outlay 70,000 - - - - - - - - - - - Capital Outlay (CIP-Maintenance) - 72,000 76,000 80,000 84,000 88,000 92,000 96,000 100,000 104,000 108,000 112,000 2026 (As-Quoted) & 2027-2036 (CIP Budget)Capital Outlay (CIP-Renewal) - - 100,000 - - 115,000 - - 130,000 - - 145,000 2027-2036 (CIP Budget)Total 70,000 72,000 176,000 80,000 84,000 203,000 92,000 96,000 230,000 104,000 108,000 257,000 Cash Balance - Beginning218,284 235,124 245,124 157,124 175,124 199,124 114,124 150,124 192,124 110,124 164,124 224,124 Balance Sheet Effects - Revenues 86,840 82,000 88,000 98,000 108,000 118,000 128,000 138,000 148,000 158,000 168,000 178,000 Expenditures (70,000) (72,000) (176,000) (80,000) (84,000) (203,000) (92,000) (96,000) (230,000) (104,000) (108,000) (257,000) Cash Balance - Ending235,124$ 245,124$ 157,124$ 175,124$ 199,124$ 114,124$ 150,124$ 192,124$ 110,124$ 164,124$ 224,124$ 145,124$ Cash Balance - % of Next Year Capital327% 139% 196% 208%98%124% 156%84%106% 152%87%Cash Balance - % of Max Year Capital91% 95% 61% 68% 77% 44% 58% 75% 43% 64% 87% 56%Projection - Capital Improvement PlanY:\Finance\Budget\2027\Cash Flows\Capital Funds202-Trail Management City of OtsegoPark Equipment FundCash Flow Summary475,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 n/aForecast from 2026 CIP- - - - - - - - - n/aDifference from 2027 CIPRevised: August 20, 2026 5.56% 5.26% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Change in Property Tax LevyActual Forecast2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 CommentsRevenuesProperty Taxes 425,000$ 450,000$ 475,000$ 500,000$ 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 - - - - Boreal Soccer - Lighting ContributionInvestment Interest 34,295 - - - - - - - - - - - Total 471,795 462,500 487,500 512,500 512,500 512,500 512,500 512,500 500,000 500,000 500,000 500,000 ExpensesCapital Outlay 60,289 - - - - - - - - - - - Capital Outlay (CIP) - 580,000 897,700 562,400 - 681,200 - 756,700 - 809,300 118,400 - 2027-2036 (CIP Budget)Total 60,289 580,000 897,700 562,400 - 681,200 - 756,700 - 809,300 118,400 - Cash Balance - Beginning522,713 930,330 812,830 402,630 352,730 865,230 696,530 1,209,030 964,830 1,464,830 1,155,530 1,537,130 Balance Sheet Effects (3,889) Revenues 471,795 462,500 487,500 512,500 512,500 512,500 512,500 512,500 500,000 500,000 500,000 500,000 Expenditures (60,289) (580,000) (897,700) (562,400) - (681,200) - (756,700) - (809,300) (118,400) - Cash Balance - Ending 930,330$ 812,830$ 402,630$ 352,730$ 865,230$ 696,530$ 1,209,030$ 964,830$ 1,464,830$ 1,155,530$ 1,537,130$ 2,037,130$ Cash Balance - % of Next Year Capital160%91% 72%#DIV/0!127%#DIV/0!160%#DIV/0!181% 976%#DIV/0!Cash Balance - % of Max Year Capital104%91% 45% 39% 96% 78%135% 107% 163% 129% 171% 227%Projection - Capital Improvement PlanY:\Finance\Budget\2027\Cash Flows\Capital Funds205-Park Equipment City of OtsegoCapital Equipment Revolving FundCash Flow Summary662,306 698,523 735,064 815,351 831,812 849,161 880,420 919,924 938,771 n/aForecast from 2026 CIP(490) 5,053 6,154 6,962 14,501 26,217 34,602 34,601 34,601 n/aDifference from 2027 CIPRevised: August 20, 2026 5.22% 6.31% 5.35% 10.94% 2.92% 3.43% 4.53% 4.32% 1.97% 1.10% Change in Property Tax LevyActual Forecast2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 CommentsRevenuesProperty Taxes 587,937$ 613,954$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Property Taxes (Administration) - - - 4,670 4,670 4,670 4,670 4,670 4,670 4,670 4,670 4,670 Based on Equipment DepreciationProperty Taxes (Building) - - 11,335 11,335 11,335 11,335 11,335 11,335 13,332 13,332 13,332 15,679 Based on Equipment DepreciationProperty Taxes (Streets) - - 538,417 575,507 591,999 666,442 681,162 701,635 727,140 764,822 780,196 786,507 Based on Equipment DepreciationProperty Taxes (Parks) - - 112,064 112,064 133,214 139,866 149,146 157,738 169,880 171,701 175,174 177,222 Based on Equipment DepreciationInvestment Interest 36,234 - - - - - - - - - - - Sales of Fixed Assets 103,658 15,000 - - - - - - - - - - Total 727,829 628,954 661,816 703,576 741,218 822,313 846,313 875,378 915,022 954,525 973,372 984,078 ExpensesAdditions CIP - Admin - - 35,000 - - - - - - - - - 2027-2036 (CIP Budget)Replacement CIP - Buildings - - - - - - - 39,877 - - 46,857 49,282 2027-2036 (CIP Budget)Capital Outlay - Streets 572,448 - - - - - - - - - - - Replacement CIP - Streets - 489,166 365,000 315,350 619,949 235,296 710,534 482,329 710,380 290,690 95,746 1,239,362 2027-2036 (CIP Budget)Additions CIP - Streets - 109,500 23,500 - 335,000 - - - - - - - 2027-2036 (CIP Budget)Capital Outlay - Parks 79,550 - - - - - - - - - - - Replacement CIP - Parks - 84,098 - 252,916 36,000 18,250 202,197 70,000 37,918 65,032 41,108 101,070 2027-2036 (CIP Budget)Additions CIP - Parks - 85,000 - 75,000 41,000 70,000 - 70,000 - - - - 2027-2036 (CIP Budget)Transfers Out - - - 12,806 12,806 12,806 12,806 12,806 12,806 12,806 12,806 12,806 Jet Vac Contributions - TransferTotal 651,998 767,764 423,500 656,072 1,044,755 336,352 925,537 675,012 761,104 368,528 196,517 1,402,520 Cash Balance - Beginning777,838 1,023,530 884,720 1,123,036 1,170,540 867,003 1,352,964 1,273,740 1,474,106 1,628,024 2,214,021 2,990,876 Balance Sheet Effects 169,861 Revenues 727,829 628,954 661,816 703,576 741,218 822,313 846,313 875,378 915,022 954,525 973,372 984,078 Expenditures (651,998) (767,764) (423,500) (656,072) (1,044,755) (336,352) (925,537) (675,012) (761,104) (368,528) (196,517) (1,402,520) Cash Balance - Ending 1,023,530$ 884,720$ 1,123,036$ 1,170,540$ 867,003$ 1,352,964$ 1,273,740$ 1,474,106$ 1,628,024$ 2,214,021$ 2,990,876$ 2,572,434$ Cash Balance - % of Next Year Capital133% 209% 171% 112% 258% 146% 189% 194% 442% 1127% 213%Cash Balance - % of Max Year Capital73% 63% 80% 83% 62% 96% 91%105% 116% 158% 213% 183%Projection - Capital Improvement PlanY:\Finance\Budget\2027\Cash Flows\Capital Funds206-Capital Equipment City of OtsegoCapital Improvements FundCash Flow SummaryRevised: August 20, 2026Actual Forecast2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 CommentsRevenuesProperty Taxes -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Intergovernmental 40,483 - - - - - - - - - - - SHIP Grant (Wright County)Special Assessments 24,666 - - - - - - - - - - - Actual Wright County SettlementsSpecial Assessments (Levied) - 23,415 5,898 231,364 223,538 211,909 204,212 196,515 188,818 181,121 173,424 165,727 Existing levied assessmentsInvestment Interest 281,032 - - - - - - - - - - - Tax Abatement - City 87,436 108,624 122,342 27,665 - - - - - - - - Parkview Retail Abatements (City)Tax Abatement - County 93,318 93,864 26,271 - - - - - - - - - Parkview Retail Abatements (County)Miscellaneous - 2,183 - - - - - - - - - - Total 526,935 228,086 154,511 259,029 223,538 211,909 204,212 196,515 188,818 181,121 173,424 165,727 ExpensesCapital Outlay - General 25,200 - - - - - - - - - - - Capital Outlay - Public Safety 52,461 - - 40,000 - - - - - - - - Emergency Siren AdditionCapital Outlay - Public Works 1,456,376 - - - - - - - - - - - Capital Outlay - Parks 15,283 - - - - - - - - - - - Capital Outlay (Streets CIP) - - 1,503,328 - - - - - - - - - 65th Street Improvement ProjectCapital Outlay (County CIP) - 7,061 1,000,000 - 1,150,000 1,812,500 - - - - - - 2026-2030 County CIP (No LOST Projects)Capital Outlay (Property CIP) - - 50,000 - - - - - - - - - $$ TBD - CR137 LandscapingTotal 1,549,320 7,061 2,553,328 40,000 1,150,000 1,812,500 - - - - - - Cash Balance - Beginning6,076,833 5,150,343 5,371,368 2,972,551 3,191,580 2,265,118 664,527 868,739 1,065,254 1,254,072 1,435,193 1,608,617 Balance Sheet Effects 95,895 Revenues 526,935 228,086 154,511 259,029 223,538 211,909 204,212 196,515 188,818 181,121 173,424 165,727 Expenditures (1,549,320) (7,061) (2,553,328) (40,000) (1,150,000) (1,812,500) - - - - - - Cash Balance - Ending5,150,343$ 5,371,368$ 2,972,551$ 3,191,580$ 2,265,118$ 664,527$ 868,739$ 1,065,254$ 1,254,072$ 1,435,193$ 1,608,617$ 1,774,344$ Cash Balance + Due From Other FundsProjection - Capital Improvement PlanY:\Finance\Budget\2027\Cash Flows\Capital Funds414-Capital Imp. City of OtsegoCity Buildings & Property MaintenanceCash Flow Summary140,000 150,000 160,000 170,000 180,000 190,000 200,000 210,000 220,000 n/aForecast from 2026 CIP- - - - - - - - - n/aDifference from 2027 CIPRevised: August 20, 2026 7.69% 7.14% 6.67% 6.25% 5.88% 5.56% 5.26% 5.00% 4.76% 4.55%Actual Forecast2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 CommentsRevenuesProperty Taxes 120,000$ 130,000$ 140,000$ 150,000$ 160,000$ 170,000$ 180,000$ 190,000$ 200,000$ 210,000$ 220,000$ 230,000$ Total 120,000 130,000 140,000 150,000 160,000 170,000 180,000 190,000 200,000 210,000 220,000 230,000 ExpensesCapital Outlay (City Hall) 184,091 - - - - - - - - - - - Capital Outlay (Prairie Center)43,263 - - - - - - - - - - - Capital Outlay (CH/PW CIP)- 136,692 123,000 69,000 - - - 140,000 - - - - 2027-2036 (CIP Budget)Capital Outlay (PC CIP) - - - - 65,000 81,000 - 24,000 - - - - 2027-2036 (CIP Budget)Capital Outlay (IT CIP) - - 17,000 - 140,000 135,000 90,000 - - - 72,000 - 2027-2036 (CIP Budget)Total 227,354 136,692 140,000 69,000 205,000 216,000 90,000 164,000 - - 72,000 - Cash Balance - Beginning133,181 25,827 19,135 19,135 100,135 55,135 9,135 99,135 125,135 325,135 535,135 683,135 Balance Sheet EffectsRevenues 120,000 130,000 140,000 150,000 160,000 170,000 180,000 190,000 200,000 210,000 220,000 230,000 Expenditures (227,354) (136,692) (140,000) (69,000) (205,000) (216,000) (90,000) (164,000) - - (72,000) - Cash Balance - Ending25,827$ 19,135$ 19,135$ 100,135$ 55,135$ 9,135$ 99,135$ 125,135$ 325,135$ 535,135$ 683,135$ 913,135$ Cash Balance - % of Next Year Capital19% 14% 28% 49% 26% 10% 60%#DIV/0! #DIV/0!743%#DIV/0!Cash Balance - % of Max Year Capital12% 9% 9% 46% 26% 4% 46% 58%151% 248% 316% 423%Projection - Capital Improvement PlanY:\Finance\Budget\2027\Cash Flows\Capital Funds439-Buildings & Property City of OtsegoFire Capital RevolvingCash Flow Summary553,880 565,483 565,483 565,483 565,483 565,483 565,483 565,483 565,483 n/aForecast from 2026 CIP6,417 9,222 18,843 33,384 33,384 33,384 33,384 37,835 37,835 n/aDifference from 2027 CIPRevised: August 20, 2026Actual Forecast2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 CommentsRevenuesProperty Taxes 6,189$ 8,333$ 560,297$ 574,705$ 584,326$ 598,867$ 598,867$ 598,867$ 598,867$ 603,318$ 603,318$ 608,327$ Investment Interest 123 - - - - - - - - - - - Total 6,312 8,333 560,297 574,705 584,326 598,867 598,867 598,867 598,867 603,318 603,318 608,327 ExpensesCapital Outlay (Additions) - - 120,000 65,000 85,000 - - - - - - - 2027-2036 (CIP Budget)Capital Outlay (Replacement) - - - - - - - - 96,600 - 100,000 800,073 2027-2036 (CIP Budget)Capital Outlay (Land) - - - 250,000 - - - - - - - - 2027-2036 (CIP Budget)Capital Outlay (IT) - - - - - - 45,000 - - - - - 2027-2036 (CIP Budget)Total - - 120,000 315,000 85,000 - 45,000 - 96,600 - 100,000 800,073 Cash Balance - Beginning- 6,312 14,645 454,942 714,647 1,213,973 1,812,840 2,366,707 2,965,574 3,467,841 4,071,159 4,574,477 Balance Sheet EffectsRevenues 6,312 8,333 560,297 574,705 584,326 598,867 598,867 598,867 598,867 603,318 603,318 608,327 Expenditures - - (120,000) (315,000) (85,000) - (45,000) - (96,600) - (100,000) (800,073) Cash Balance - Ending6,312$ 14,645$ 454,942$ 714,647$ 1,213,973$ 1,812,840$ 2,366,707$ 2,965,574$ 3,467,841$ 4,071,159$ 4,574,477$ 4,382,731$ Projection - Capital Improvement PlanY:\Finance\Budget\2027\Cash Flows\Capital Funds447-Fire Revolving City of OtsegoProperty Tax Levy CalculationsPayable 2026Revised: August 21, 2026$% $% $%2025 2026 2027 Change Change 2027 Change Change 2027 Change ChangeGeneral Fund 7,000,000 7,545,000 8,488,000 943,000 12.50% 8,488,000 943,000 12.50% 8,488,000 943,000 12.50%Tax Abatements 87,436 108,624 122,342 13,718 12.63% 75,004 (33,620) -30.95% 75,004 (33,620) -30.95%Debt ServiceSeries 2018A 104,308 106,314 113,412 7,098 113,412 7,098 113,412 7,098 Series 2020A 186,000 186,000 186,000 - 186,000 - 186,000 - Series 2024A - 1,275,300 1,274,050 (1,250) 1,274,050 (1,250) 1,274,050 (1,250) Sub-total 290,308 1,567,614 1,573,462 5,848 0.37% 1,573,462 5,848 0.37% 1,573,462 5,848 0.37%Capital ReservesPavement Management 800,000 600,000 500,000 (100,000) 500,000 (100,000) 500,000 (100,000) Trails Management 76,000 82,000 88,000 6,000 88,000 6,000 88,000 6,000 Parks Equipment 425,000 450,000 475,000 25,000 475,000 25,000 475,000 25,000 Capital Equipment Revolving 587,937 613,954 661,816 47,862 661,816 47,862 661,816 47,862 Fire Capital Revolving 6,189 8,333 560,297 551,964 560,297 551,964 560,297 551,964 City Buildings & Property 120,000 130,000 140,000 10,000 140,000 10,000 140,000 10,000 Sub-total 2,015,126 1,884,287 2,425,113 540,826 28.70% 2,425,113 540,826 28.70% 2,425,113 540,826 28.70%Adjustment to Achieve Option - - (330,083) (330,083) (375,709) (375,709) Grand Total 9,392,870 11,105,525 12,608,917 1,503,392 13.54% 12,231,496 1,125,971 10.14% 12,185,870 1,080,345 9.73%Growth (%) 4.50% 18.23%Tax Capacity 39,284,126 42,394,192 43,481,378 43,481,378 43,481,378 Growth (%) -0.59% 7.92% 2.56% 2.56% 2.56%Net Tax Capacity 38,570,629 41,649,271 42,968,298 42,968,298 42,968,298 Growth (%) -0.84% 7.98% 3.17% 3.17% 3.17%Tax Rate 24.352 26.664 29.345 28.466 28.360 Population 23,132 23,790 24,451 24,451 24,451 Tax Levy Per Capita 406 467 516 500 498 Residential City Tax City Tax City Tax City Tax City TaxValuation Tax Capacity 2025 2026 2027 Change ($) Change (%) 2027 Change ($) Change (%) 2027 Change ($) Change (%)200,000 1,715 418 457 503 46 10.07% 488 31 6.78% 486 29 6.35%300,000 2,805 683 748 823 75 10.03% 798 50 6.68% 795 47 6.28%410,650 4,011 977 1,069 1,177 108 10.10% 1,142 73 6.83% 1,137 68 6.36%500,000 4,985 1,214 1,329 1,463 134 10.08% 1,419 90 6.77% 1,414 85 6.40%600,000 6,250 1,522 1,667 1,834 167 10.02% 1,779 112 6.72% 1,773 106 6.36%Levy DescriptionDRAFT A DRAFT B DRAFT CY:\Finance\Budget\2027\Property Taxes\Tax Levy Calculations (2027)2027-V1 City of OtsegoProperty Tax Levy CalculationsPayable 2027Revised: August 21, 2026ABC2027 2027 2027Reduction Amount Shown - 330,083 375,709 Funding Source & Reduction DescriptionFund Balance Policy Transfer Compensation Study (40,000) (40,000) Fund Balance Policy Transfer Elk River Fire Contract (146,083) (146,083) Fund Balance Policy Transfer Engineering Succession (144,000) (144,000) Bond Proceeds Debt Levy Reduction (45,626) Reduction Balance Remaining - - - DescriptionY:\Finance\Budget\2027\Property Taxes\Tax Levy Calculations (2027)Levy Reduction Details