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Page 2 of 4 The largest increases are in Parks, Public Safety, and Sewer, with the largest decrease in Street due to the timing of biennial PMP street projects. PIR Fund • The city has about $60 million of streets and trails (based on 29.42 miles of city streets). Estimating the useful life of these assets at 40 years would require an investment of about $1.5 million annually. The current funding sources which consists of the tax levy, Municipal State Aid and special assessments account for about $1.0M on average per year for 2025- 2029. This gap in the CIP fluctuates from year-to-year, but will need to be addressed over time. • A property tax levy of $250,000 is being proposed for 2025, which is unchanged from 2024. Based on potential projects, this amount should be increased in future years to ensure there is appropriate funding to meet future project expenditures. • The city has been able to self-finance the special assessment portion thus far. However, with the cost of these projects increasing, the City may need to eventually look into bonding for the special assessment portion of street projects. Current projections include prepayments of special assessments, which is based on a 5-year historical collection rate. • There is not sufficient MSA funds to cover the projects included in the CIP for the next 10 years. Based on current projections, our MSA fund will be short by $3.36 million at the end of 2033 and won’t be positive again until 2044. • There is a definite need to stay on top of street improvement projects to ensure streets reach their useful lives and don’t require costly premature full reconstructions. Several areas of the city are reaching those crucial ages where significant outlay is needed to ensure the long-term vitality of the streets. • Projects were programmed to get the City on a schedule of completing a major street reconstruction project every other year. • The 3 types of street improvement projects being considered based on condition are: o Resurfacing is the milling of the top 1.5 to 2 inch surface layer of street pavement and overlaying the street with a new bituminous surface layer. o Full Depth Reclamation involves spot repair of existing curb, milling or reclaiming the full depth of existing bituminous pavement, blending milled material with underlying aggregate material and installing a new bituminous pavement section. o Reconstruction involves removal and replacement of larger quantities of existing curb, installing underlying subgrade correction materials, new aggregate base and a new bituminous pavement section. • Future PMP projects included in the CIP (2030 and beyond) assume Full Depth Reclamation will be required. Costs will decrease if Resurfacing is required and increase if Reconstruction is required. Public Safety Capital Equipment Fund • The fund is currently being used to account for capital expenditures made by the Lake Johanna Fire Department. • The assumption being used for this CIP is that debt service on the new fire station will begin in 2025 at $375,000 per year. • Engine/ladder truck replacements are scheduled for 2027. • The current $170,000 tax levy does not support the needs of this fund. The City will need to determine if the City will 1) move forward with implementing a franchise fee and/or 2) increase the tax levy to support the new fire station and anticipated future expenditures. A