SCC Item 2. Budget Review
TO: Mayor and Councilmembers
FROM: Adam Flaherty, City Administrator/Finance Director
DATE: September 14, 2026
SUBJECT: Budget Meeting #4
__________________________________________________________________________________________________
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
The City Council reviewed draft expenditure budgets for the General fund during a budget meeting on August 11 and
draft revenue budgets during a budget meeting on August 24. City staff have incorporated the feedback from the City
Council received during previous budget meetings into the budget and will review the attachments outlined below:
General Fund Materials Attached for Discussion
1) Revenue and Expenditure Summary
2) Revenue Details
3) Expenditure Function Summary
4) Expenditure Function Summary (Net of Transfer)
5) Budget Changes Tracking – Summary
6) Budget Changes Tracking – Expenditure Details
Fund Balance Policy Transfer
The City’s fund balance policy outlines that the ending fund balance in the General Fund should be 45% of the
subsequent year’s budget. The City Council was presented transfer calculations during budget meetings on August 10
and August 24. City staff have incorporated the feedback from the City Council received during previous budget
meetings into the calculation and will review the attachment outlined below:
Transfer Materials Attached for Discussion
1) Fund Balance Policy Transfer Calculation
Property Tax Levy
The City Council provided the first review of the preliminary property tax levy during a budget meeting on August 24 and
reviewed three draft levy scenarios. During that meeting, the City Council asked staff to prepare information on tax levy
impacts to provide for a phased approach on financing potential future facility projects. 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: This scenario is based on the City Council’s preferred option from the previous budget meeting and
additionally incorporates any General Fund budgetary changes since that meeting. The increase in the levy for
this option is 9.66% compared to the 2026 levy. For the median home valuation in Otsego ($410,650) the
estimated annual impact to taxpayers is approximately $68 (6.36%).
- Draft B: This option uses Draft A as the starting point. This option is primarily for illustrative purposes and
discussion. This option includes an additional $230,000 levy to provide a phased approach of financing one
potential future facility project. City staff during the meeting will provide explanation on this approach.
- Draft C: This option uses Draft A as the starting point. This option is primarily for illustrative purposes and
discussion. This option includes an additional $386,000 levy to provide a phased approach of financing two
potential future facility projects. City staff during the meeting will provide explanation on this approach.
Tax Levy Materials Attached for Discussion
1) Preliminary Tax Levy Summary
Next Steps
The City Council will need to adopt a Preliminary Property Tax Levy for Taxes Payable 2027 at their regular meeting on
September 28, 2026. 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 City Council will need to conduct a public meeting in accordance with Truth In Taxation Requirements. This meeting
needs to take place between November 25 and December 28 and must include discussion on the budget and proposed
property tax levy and allow for public comment and questions. Based on past precedents, the City Council will consider
adopting budgets and levies at their first December meeting, which is on December 14, with staff recommending
scheduling the truth in taxation meeting prior to that date. Formal action for scheduling this will be included on the
September 28 agenda, but discussion on scheduling availability should occur at this meeting.
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.
City of OtsegoGeneral Fund Budget - 2027Requested BudgetRevenue & Expenditure SummaryDraft PreliminaryActual Actual Year-to-Date Budget Budget Budget2024 2025 2026 2026 2027 2027 $ Change % ChangeRevenuesTaxes 6,373,290$ 7,001,836$ 4,262,533$ 7,553,534$ 8,486,729$ 8,152,585$ 599,051$ 7.93%Cable Franchise Fees 114,342 102,152 22,431 106,000 97,000 93,000 (13,000) -12.26%Licenses & Permits 1,868,466 2,248,158 1,432,868 1,904,464 2,097,337 2,058,965 154,501 8.11%Intergovernmental 213,322 148,074 12,312 186,333 193,346 193,346 7,013 3.76%Charges for Services 281,339 302,178 241,464 268,365 311,185 385,895 117,530 43.79%Special Assessments 5,733 4,941 - 3,400 5,000 5,000 1,600 47.06%Fines & Forfeitures 40,982 38,968 28,149 37,100 40,300 40,500 3,400 9.16%Investment Interest 257,688 314,107 1,327,831 175,125 154,461 161,364 (13,761) -7.86%Miscellaneous 23,494 30,899 7,526 13,000 14,000 14,000 1,000 7.69%Interfund Transfers 427,000 478,000 603,000 603,000 798,000 765,000 162,000 26.87%Subtotal9,605,658 10,669,313 7,938,113 10,850,321 12,197,358 11,869,655 1,019,334 9.39%ExpendituresGeneral Government 1,949,464 2,071,129 1,639,350 2,549,850 3,036,177 2,998,557 448,707 17.60%Public Safety 4,040,998 4,301,624 3,596,844 4,827,286 5,189,660 5,043,577 216,291 4.48%Public Works 1,891,835 2,023,001 1,353,554 2,234,775 2,502,739 2,358,739 123,964 5.55%Culture & Recreation 1,097,769 1,220,457 842,041 1,306,497 1,367,382 1,367,382 60,885 4.66%Economic Development 90,600 82,465 63,246 101,150 101,400 101,400 250 0.25%Interfund Transfers - - - - - - - #DIV/0!Subtotal9,070,667 9,698,675 7,495,035 11,019,558 12,197,358 11,869,655 850,097 7.71%Net Change in Fund Balance534,991$ 970,639$ 443,078$ (169,237)$ -$ (0)$ Description
City of OtsegoGeneral Fund Budget - 2027Requested BudgetRevenues8.02% 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$ 8,150,000$ 101 31011 UNCOLLECTED PROPERTY TAXES - - - (74,066) (80,015) Recent collection rates have been 99%101 31020 DELINQUENT AD VALOREM TAXES 74,054 70,411 50,866 80,000 80,000 ~ 80% of 12/31/2025 Delinquent Taxes ($105,707)101 31900 PENALTIES AND INTEREST 2,693 3,044 187 2,600 2,600 TOTAL - TAXES 6,373,290 7,001,836 4,262,533 7,553,534 8,152,585 101 38050 CABLE TV FRANCHISE FEES 114,342 102,152 22,431 106,000 93,000 Annualized - Based on Most Recent 4 QuartersTOTAL - CABLE FRANCHISE FEES 114,342 102,152 22,431 106,000 93,000 101 32100 BUSINESS LICENSES/PERMITS 9,721 2,167 1,891 7,500 5,000 Estimate Based on Prior Year Actuals101 32140 RENTAL INSPECTION FEES 46,670 44,035 33,725 44,100 46,500 Based on 2024 - 2025 Actuals & 2026 YTD Monthly Average101 32150 PUBLIC UTILITIES ROW PERMITS 50,400 72,000 38,000 55,000 59,600 Based on 298 Permits at $200 Each101 32180 OTHER LICENSES/PERMITS 2,990 1,850 950 3,000 3,000 Includes: Fowl Keeping, Gambling, Etc.101 32190 FENCING PERMITS 6,900 7,800 5,902 8,100 7,700 Based on 2024 - 2025 Actuals & 2026 YTD Monthly Average101 32210 LIQUOR LICENSES 35,775 34,350 36,075 35,300 35,350 Based on 2025 Licensed Operations101 32250 SIGN PERMIT 600 460 300 600 500 Estimate Based on Prior Year Actuals101 32260 BUILDING PERMITS 1,162,772 1,363,803 1,044,049 1,541,300 1,484,700 Based on 2024 - 2025 Actuals & 2026 YTD Monthly Average101 32261 PLUMBING PERMITS 85,787 109,256 6,305 89,858 - GovWell Implementation - Combined into Building Permits (101-32260)101 32262 MECHANICAL PERMITS 94,945 117,433 5,679 99,106 - GovWell Implementation - Combined into Building Permits (101-32260)101 32265 PLAN REVIEW FEE 351,116 466,880 253,117 - 393,235 GovWell Implementation - Separated for Annual DOLI Reporting101 32270 SEPTIC SYSTEM PERMITS 3,450 6,625 5,475 3,500 5,500 Estimate Based on Prior Year Actuals101 32999 ASSESSORS FEE 17,340 21,500 1,400 17,100 17,880 298 Permits at $60TOTAL - LICENSES & PERMITS 1,868,466 2,248,158 1,432,868 1,904,464 2,058,965 101 33402 HOMESTEAD CREDIT 8,516 8,421 - 8,300 8,400 Agricultural MV Credits - Based on Prior Year Actuals101 33403 LOCAL GOVERNMENT AID 73,598 - - - - 101 33405 POLICE AID 111,191 119,701 - 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 GRANTS 20,018 19,952 12,312 54,033 36,046 Public Safety Aid Allocation (Last Remaining Funds in 2027)TOTAL - INTERGOVERNMENTAL 213,322 148,074 12,312 186,333 193,346 Account Number
Actual Actual Year-to-Date Budget BudgetFund Source Account Description 2024 2025 2026 2026 2027 CommentsAccount Number101 34050 ADMINISTRATIVE FEES 68,220 67,725 58,925 50,000 60,000 Development Contract Administration - Only Receive if Developments Occur101 34103 ZONING AND SUBDIVISION FEES 15,620 10,220 13,000 13,000 14,600 Based on 2024 - 2025 Actuals & 2026 YTD Monthly Average101 34107 ASSESSMENT SEARCH FEES 13,910 14,305 11,793 13,395 14,155 Based on 2024 - 2025 Actuals & 2026 YTD Monthly Average (95%)101 34302 STREET & TRAFFIC CONTROL SIGNS 25,750 31,500 15,750 25,000 25,000 New Development Street Signs - Only Receive if Developments Occur101 34303 ENGINEERING - REVIEW FEES - - - - 14,600 Based on 2027 Budget for Zoning & Subdivision Fees101 34304 ENGINEERING - DEVELOPMENT FEES - - - - 60,000 Based on 2027 Budget for Administrative Fees101 34305 CLEAN UP DAY EVENT 11,578 9,153 15,545 9,000 10,000 Estimate Based on Prior Year Actuals101 34320 STREET LIGHT OP 9,000 11,500 8,500 9,000 9,000 New Development Street Lights - Only Receive if Developments Occur101 34330 GRADING REVIEWS 35,820 41,700 2,850 42,750 44,700 298 Permits at $150 (Offsets Grading Review Costs in Building Department)101 34700 RECREATION FEES 58,299 65,774 62,328 65,000 85,000 Estimated by Parks and Recreation101 34701 PARK MEMORIALS 205 876 100 500 500 Estimated by Parks and Recreation101 34710 SHELTER RENTAL FEES 4,480 4,185 5,393 4,500 4,500 Estimated by Parks and Recreation101 34740 SPORT FIELD USE 5,480 11,270 7,084 6,000 10,000 Estimated by Parks and Recreation101 34750 PRAIRIE CENTER 4,998 7,415 8,175 6,500 7,000 Estimated by Parks and Recreation101 34760 OTSEGO FESTIVAL VENDORS 27,980 26,555 32,020 23,720 26,840 Budgeted Expenditures (101-45250-490), less City Contribution ($5,000).TOTAL - CHARGES FOR SERVICES 281,339 302,178 241,464 268,365 385,895 101 36100 SPECIAL ASSESSMENTS 5,733 4,941 - 3,400 5,000 Estimate Based on Prior Year ActualsTOTAL - SPECIAL ASSESSMENTS 5,733 4,941 - 3,400 5,000 101 35101 FINES & FORFEITS 40,982 38,968 28,149 37,100 40,500 Based on 2024 - 2025 Actuals & 2026 YTD Monthly AverageTOTAL - FINES & FORFEITURES 40,982 38,968 28,149 37,100 40,500 101 36210 INTEREST EARNINGS 179,623 202,140 1,726,204 175,125 161,364 2026 YTD Interest into 2026 YTD Average Cash Balance Allocation101 36213 NET CHANGE IN INVESTMENT FMV 78,066 111,967 (398,373) - - Accounting Only - No Cash TransactionsTOTAL - INVESTMENT INTEREST 257,688 314,107 1,327,831 175,125 161,364 101 36200 MISCELLANEOUS REVENUES 6,600 7,473 5,757 6,000 7,000 101 38010 HPC BOOK SALES 69 105 20 - - 101 38020 DONATIONS/CONTRIBUTIONS 914 13,670 - 1,000 1,000 101 38991 REFUNDS & REIMBURSEMENTS 5,911 9,651 1,748 6,000 6,000 101 39101 SALES OF GENERAL FIXED ASSETS 10,000 - - - - TOTAL - MISCELLANEOUS 23,494 30,899 7,526 13,000 14,000 101 39200 INTERFUND OPERATING TRANSFERS 427,000 478,000 603,000 603,000 765,000 Water & Sanitary Sewer Administrative Services ChargeTOTAL - INTERFUND TRANSFERS 427,000 478,000 603,000 603,000 765,000 Grand Total9,605,658$ 10,669,313$ 7,938,113$ 10,850,321$ 11,869,655$ Change ($) 1,019,334 Change (%) 9.39%
City of OtsegoGeneral Fund Budget - 2027Expenditures by Function SummaryRequested AmountsDraft PreliminaryActual Actual Year-to-Date Budget Budget Budget2024 2025 2026 2026 2027 2027 $ Change % ChangeGeneral Government41100 City Council 88,382$ 88,078$ 69,862$ 103,178$ 103,541$ 103,541$ 363$ 0.35%41320 City Administrator 230,031 242,808 160,969 251,087 262,188 262,188 11,101 4.42%41400 Administration 401,194 400,486 269,415 425,331 450,591 450,591 25,260 5.94%41410 Elections 73,194 6,836 15,377 84,408 65,831 65,831 (18,577) -22.01%41550 Assessing 162,700 164,295 170,795 168,075 171,510 171,510 3,435 2.04%41600 Finance 293,551 392,351 293,992 449,615 636,475 636,475 186,860 41.56%41650 Information Technology 200,935 206,975 171,545 300,909 393,282 393,282 92,373 30.70%41700 Legal 40,750 38,233 25,424 38,110 41,200 41,200 3,090 8.11%41800 Human Resources 181,902 170,952 179,908 312,365 397,782 357,782 45,417 14.54%41850 Communications 49,407 134,775 107,680 166,339 193,302 193,302 26,963 16.21%41900 Facilities Maintenance - - - - - 78,940 78,940 #DIV/0!41940 Prairie Center Building 59,436 67,260 39,278 79,013 74,559 74,559 (4,454) -5.64%41945 City Hall & Public Works Building 163,572 152,223 131,167 165,713 240,101 163,541 (2,172) -1.31%41950 Old Township Building 4,410 5,856 3,939 5,707 5,815 5,815 108 1.89%Subtotal1,949,464 2,071,129 1,639,350 2,549,850 3,036,177 2,998,557 448,707 17.60%Public Safety42100 Police Services 2,063,959 2,045,868 1,373,401 2,086,735 2,208,007 2,208,007 121,272 5.81%42150 Public Safety Commission 2,262 1,908 34 2,420 2,420 2,420 - 0.00%42200 Fire Protection 1,399,540 1,606,111 1,825,530 2,052,150 2,157,775 2,011,692 (40,458) -1.97%42250 Fire Station Building - - 18,069 37,067 132,466 132,466 95,399 257.37%42410 Building Safety 544,873 608,203 362,873 611,739 657,157 657,157 45,418 7.42%42500 Emergency Management 8,552 23,517 6,521 16,675 12,435 12,435 (4,240) -25.43%42710 Animal Control 21,812 16,018 10,415 20,500 19,400 19,400 (1,100) -5.37%Subtotal4,040,998 4,301,624 3,596,844 4,827,286 5,189,660 5,043,577 216,291 4.48%Public Works43100 Street Maintenance 1,204,371 1,340,221 800,552 1,417,531 1,462,422 1,462,422 44,891 3.17%43150 Engineering 71,772 92,669 60,454 87,380 289,542 145,542 58,162 66.56%43160 Street Lights 178,473 192,995 131,934 201,860 203,900 203,900 2,040 1.01%43240 Fleet Management 437,220 397,116 360,613 528,004 546,875 546,875 18,871 3.57%Subtotal1,891,835 2,023,001 1,353,554 2,234,775 2,502,739 2,358,739 123,964 5.55%Culture & Recreation45200 Park Maintenance 777,751 868,914 603,185 914,798 969,212 969,212 54,414 5.95%45250 Recreation 318,538 349,137 238,813 386,499 392,970 392,970 6,471 1.67%45300 Heritage Preservation Commission 1,057 1,389 - 2,780 2,780 2,780 - 0.00%45350 Parks & Recreation Commission 423 1,016 43 2,420 2,420 2,420 - 0.00%Subtotal1,097,769 1,220,457 842,041 1,306,497 1,367,382 1,367,382 60,885 4.66%Economic Development46530 Planning Commission 1,260 1,392 - 3,500 3,500 3,500 - 0.00%46570 Planning 84,397 74,677 56,418 85,490 85,490 85,490 - 0.00%46580 Economic Development 4,944 6,396 6,829 12,160 12,410 12,410 250 2.06%Subtotal90,600 82,465 63,246 101,150 101,400 101,400 250 0.25%Interfund Transfers49300 Interfund Transfers - - - - - - - #DIV/0!Subtotal- - - - - - - #DIV/0!Grand Total9,070,667$ 9,698,675$ 7,495,035$ 11,019,558$ 12,197,358$ 11,869,655$ 850,097$ 7.71%Increase / (Decrease) from Draft Budget(327,703)$ Function & Department
City of OtsegoGeneral Fund Budget - 2027Expenditures by Function SummaryRequested AmountsNet Preliminary NetBudget Utility Budget Budget Utility Budget2026 Transfer 2026 2027 Transfer 2027 $ Change % ChangeGeneral Government41100 City Council 103,178$ (11,263)$ 91,915$ 103,541$ (12,205)$ 91,336$ (579)$ -0.63%41320 City Administrator 251,087 (123,008) 128,079 262,188 (103,099) 159,089 31,010 24.21%41400 Administration 425,331 (32,643) 392,688 450,591 (34,560) 416,031 23,343 5.94%41410 Elections 84,408 - 84,408 65,831 - 65,831 (18,577) -22.01%41550 Assessing 168,075 - 168,075 171,510 - 171,510 3,435 2.04%41600 Finance 449,615 (212,823) 236,792 636,475 (249,193) 387,282 150,490 63.55%41650 Information Technology 300,909 (68,091) 232,818 393,282 (82,730) 310,552 77,734 33.39%41700 Legal 38,110 - 38,110 41,200 - 41,200 3,090 8.11%41800 Human Resources 312,365 (101,797) 210,568 357,782 (107,224) 250,558 39,990 18.99%41850 Communications 166,339 (39,472) 126,867 193,302 (46,419) 146,883 20,016 15.78%41900 Facilities Maintenance - - - 78,940 (19,140) 59,800 59,800 #DIV/0!41940 Prairie Center Building 79,013 - 79,013 74,559 - 74,559 (4,454) -5.64%41945 City Hall & Public Works Building 165,713 - 165,713 163,541 - 163,541 (2,172) -1.31%41950 Old Township Building 5,707 - 5,707 5,815 - 5,815 108 1.89%Subtotal2,549,850 (589,097) 1,960,753 2,998,557 (654,570) 2,343,987 383,234 19.55%Public Safety42100 Police Services 2,086,735 - 2,086,735 2,208,007 - 2,208,007 121,272 5.81%42150 Public Safety Commission 2,420 - 2,420 2,420 - 2,420 - 0.00%42200 Fire Protection 2,052,150 - 2,052,150 2,011,692 - 2,011,692 (40,458) -1.97%42250 Fire Station Building 37,067 - 37,067 132,466 - 132,466 95,399 257.37%42410 Building Safety 611,739 - 611,739 657,157 - 657,157 45,418 7.42%42500 Emergency Management 16,675 - 16,675 12,435 - 12,435 (4,240) -25.43%42710 Animal Control 20,500 - 20,500 19,400 - 19,400 (1,100) -5.37%Subtotal4,827,286 - 4,827,286 5,043,577 - 5,043,577 216,291 4.48%Public Works43100 Street Maintenance 1,417,531 - 1,417,531 1,462,422 - 1,462,422 44,891 3.17%43150 Engineering 87,380 (3,915) 83,465 145,542 (42,215) 103,327 19,862 23.80%43160 Street Lights 201,860 - 201,860 203,900 - 203,900 2,040 1.01%43240 Fleet Management 528,004 - 528,004 546,875 (58,227) 488,648 (39,356) -7.45%Subtotal2,234,775 (3,915) 2,230,860 2,358,739 (100,442) 2,258,297 27,437 1.23%Culture & Recreation45200 Park Maintenance 914,798 (9,988) 904,810 969,212 (9,988) 959,224 54,414 6.01%45250 Recreation 386,499 - 386,499 392,970 - 392,970 6,471 1.67%45300 Heritage Preservation Commission 2,780 - 2,780 2,780 - 2,780 - 0.00%45350 Parks & Recreation Commission 2,420 - 2,420 2,420 - 2,420 - 0.00%Subtotal1,306,497 (9,988) 1,296,509 1,367,382 (9,988) 1,357,394 60,885 4.70%Economic Development46530 Planning Commission 3,500 - 3,500 3,500 - 3,500 - 0.00%46570 Planning 85,490 - 85,490 85,490 - 85,490 - 0.00%46580 Economic Development 12,160 - 12,160 12,410 - 12,410 250 2.06%Subtotal101,150 - 101,150 101,400 - 101,400 250 0.25%Interfund Transfers49300 Interfund Transfers - - - - - - - #DIV/0!Subtotal- - - - - - - #DIV/0!Grand Total11,019,558$ (603,000)$ 10,416,558$ 11,869,655$ (765,000)$ 11,104,655$ 688,097$ 6.61%Function & Department
City of OtsegoGeneral Fund Budget - 2027Budget Changes Tracking - SummaryDraft PreliminaryBudget Budget2027 2027 $ Change CommentsRevenuesTaxes 8,486,729$ 8,152,585$ (334,144)$ Levy Reduction for Expenditure ReductionCable Franchise Fees 97,000 93,000 (4,000) Additional Months of Activity to Estimate BudgetLicenses & Permits 2,097,337 2,058,965 (38,372) Additional Months of Activity to Estimate BudgetIntergovernmental 193,346 193,346 - Charges for Services 311,185 385,895 74,710 Engineering Review Fees Budget DevelopedSpecial Assessments 5,000 5,000 - Fines & Forfeitures 40,300 40,500 200 Additional Months of Activity to Estimate BudgetInvestment Interest 154,461 161,364 6,903 Additional Months of Activity to Estimate BudgetMiscellaneous 14,000 14,000 - Interfund Transfers 798,000 765,000 (33,000) Recalculated after Engineering Contract RemovedSubtotal12,197,358 11,869,655 (327,703) ExpendituresGeneral Government 3,036,177 2,998,557 (37,620) Class & Comp Study / Facilities Maintenance PositionPublic Safety 5,189,660 5,043,577 (146,083) Elk River Fire Contract - Paid by Fund BalancePublic Works 2,502,739 2,358,739 (144,000) Engineering Succession Contract - Paid by Fund BalanceCulture & Recreation 1,367,382 1,367,382 - Economic Development 101,400 101,400 - Interfund Transfers - - - Subtotal12,197,358 11,869,655 (327,703) Net Change in Fund Balance-$ (0)$ Description
City of OtsegoGeneral Fund Budget - 2027Budget Changes Tracking - ExpendituresTotal Expenditures - Draft Budget Binder (August 11) 12,197,358$ Human ResourcesClassification & Compensation Study (Paid with Fund Balance Transfer) (40,000) Facilities MaintenanceAdditional Items Added to Budget for New Position 2,380 Fire ProtectionElk River Fire Contract (Paid with Fund Balance Transfer) (146,083) EngineeringSuccession Contract (Paid with Fund Balance Transfer) (144,000) Total Expenditures - Preliminary Levy (September 28) 11,869,655
City of OtsegoFund Balance Policy General Fund Transfer2026Calculation Comments2026 General Fund Budget 11,019,558 Resolution 2025-65Minimum Fund Balance 4,958,801 The City's Fund Balance states that the minimum General Fund Balance should be 45% of the subsequent year budget.2025 Ending Fund Balance 6,532,427 Per Audited Financial Statements(313,682) Less: Fund Balance from Insurance Reserve Fund (#204) - Grouped with General for Financial Reporting(74,462) Less: Fund Balance from Educational Programming Fund (#215) - Grouped with General for Financial Reporting(90,079) Less: Restricted Fund Balance - Public Safety Aid Distribution in 2023 (Restricted for Law Enforcement Contracts)(102,202) Less: Nonspendable Fund Balance - Financial Reporting Requirement - Funds actually have alredy been expended.(202,200) Less: Nonspendable Fund Balance - Financial Reporting Requirement - Future funds from land for resale proceeds.Fund Balance Available (Unassigned) 5,749,802 Non-Budgeted Use of Fund Balance (193,082) Fire Staffing Hiring Timeline Change - As presented and approved by City Council (February 2026)Non-Budgeted Use of Fund Balance (45,500) Contract Fire Marshal Position Addition - As presented and approved by City Council (June 2026)Amended Fund Balance Available 5,511,220 % of Current Year's Budget 50.01%Calculated Transfer552,419 Presented to City Council for Discussion on August 24, 2026FUND BALANCE AS % 2026 BUDGET - POST TRANSFERAmended Fund Balance Available 5,511,220 See aboveClassification & Compensation Study(40,000) Elk River Fire Contract (146,083) Engineering Succession Contract(144,000) Fund Balance - Post Transfer5,181,137 % of Current Year's Budget (2026) 47.02% Exceeds City Policy Target - Within Office of State Auditor Recommended RangeFUTURE VIEW - FUND BALANCE AS % 2027 BUDGET - POST TRANSFERAmended Fund Balance Available 5,511,220 See aboveClassification & Compensation Study(40,000) Elk River Fire Contract (146,083) Engineering Succession Contract(144,000) Fund Balance - Post Transfer5,181,137 2027 General Fund Budget 11,869,655 2027 Draft Budget Less Items Paid by Transfer% of Current Year's Budget (2027) 43.65% Within Office of State Auditor Recommended RangeTRANSFER TO MAINTAIN 45% of 2027 DRAFT BUDGETAmended Fund Balance Available 5,511,220 See above2027 General Fund Budget 11,869,655 2027 Draft Budget Less Items Paid by TransferMinimum Fund Balance 5,341,345 Calculated Transfer169,875 Difference vs. Proposed 160,208 Y:\Finance\Budget\2027\General Fund\Calculation of Fund Balance Policy Transfers2026 (V3)
City of OtsegoProperty Tax Levy CalculationsPayable 2026Revised: September 11, 2026$% $% $%2025 2026 2027 Change Change 2027 Change Change 2027 Change ChangeGeneral Fund 7,000,000 7,545,000 8,150,000 605,000 8.02% 8,150,000 605,000 8.02% 8,150,000 605,000 8.02%Tax Abatements 87,436 108,624 75,004 (33,620) -30.95% 75,004 (33,620) -30.95% 75,004 (33,620) -30.95%Debt ServiceSeries 2018A 104,308 106,314 113,412 7,098 113,412 7,098 113,412 7,098 Series 2020A 186,000 186,000 186,000 - 186,000 - 186,000 - Series 2024A - 1,275,300 1,228,424 (46,876) 1,228,424 (46,876) 1,228,424 (46,876) Sub-total 290,308 1,567,614 1,527,836 (39,778) -2.54% 1,527,836 (39,778) -2.54% 1,527,836 (39,778) -2.54%Capital ReservesPavement Management 800,000 600,000 500,000 (100,000) 500,000 (100,000) 500,000 (100,000) Trails Management 76,000 82,000 88,000 6,000 88,000 6,000 88,000 6,000 Parks Equipment 425,000 450,000 475,000 25,000 475,000 25,000 475,000 25,000 Capital Equipment Revolving 587,937 613,954 661,816 47,862 661,816 47,862 661,816 47,862 Fire Capital Revolving 6,189 8,333 560,297 551,964 560,297 551,964 560,297 551,964 Capital Improvements - - - - 230,000 230,000 386,000 386,000 City Buildings & Property 120,000 130,000 140,000 10,000 140,000 10,000 140,000 10,000 Sub-total 2,015,126 1,884,287 2,425,113 540,826 28.70% 2,655,113 770,826 40.91% 2,811,113 926,826 49.19%Grand Total 9,392,870 11,105,525 12,177,953 1,072,428 9.66% 12,407,953 1,302,428 11.73% 12,563,953 1,458,428 13.13%Growth (%) 4.50% 18.23%Tax Capacity 39,284,126 42,394,192 43,481,378 43,481,378 43,481,378 Growth (%) -0.59% 7.92% 2.56% 2.56% 2.56%Net Tax Capacity 38,570,629 41,649,271 42,968,298 42,968,298 42,968,298 Growth (%) -0.84% 7.98% 3.17% 3.17% 3.17%Tax Rate 24.352 26.664 28.342 28.877 29.240 Population 23,132 23,790 24,451 24,451 24,451 Tax Levy Per Capita 406 467 498 507 514 Residential City Tax City Tax City Tax City Tax City TaxValuation Tax Capacity 2025 2026 2027 Change ($) Change (%) 2027 Change ($) Change (%) 2027 Change ($) Change (%)200,000 1,715 418 457 486 29 6.35% 495 38 8.32% 501 44 9.63%300,000 2,805 683 748 795 47 6.28% 810 62 8.29% 820 72 9.63%410,650 4,011 977 1,069 1,137 68 6.36% 1,158 89 8.33% 1,173 104 9.73%500,000 4,985 1,214 1,329 1,413 84 6.32% 1,439 110 8.28% 1,457 128 9.63%600,000 6,250 1,522 1,667 1,771 104 6.24% 1,805 138 8.28% 1,828 161 9.66%Levy DescriptionDRAFT A DRAFT B DRAFT CY:\Finance\Budget\2027\Property Taxes\Tax Levy Calculations (2027)2027-V2