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in cost assumptions. There are two PMP projects included in the 2025-2029 CIP, whereas three PMP projects are included within the 2026-2030. The largest decrease is in the Sewer fund due to changes in cost assumptions. 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 annual investment of approximately $1.5 million. The current funding sources, which consist of the tax levy, Municipal State Aid, and special assessments account for about $1.3M on average per year for 2026-2030. This gap in the CIP fluctuates from year to year, but will need to be addressed. • A property tax levy of $250,000 is being proposed for 2026, which is unchanged from 2025. Based on potential projects, this amount should be increased to ensure there is appropriate funding to meet future project expenditures. • Current projections include prepayments of special assessments, which is based on a 5-year historical collection rate of 40%. • The Old Highway 10 Trail project is programmed for 2026 and estimated to cost $4.5 million, with the City's cost estimated to be $1.2 million, and the remaining $3.2 million is expected to be funded through grants and Ramsey County. Of the City's cost, approximately $587,000 would be Municipal State Aid eligible. The City did not receive state bonding dollars for this project. • The Lake Johanna Boulevard Trail is programmed to start in 2027 and is estimated to cost $2 million, with $1.49 million expected to be Municipal State Aid eligible. • The City has been able to self -finance the special assessment portion of the PMP street projects thus far. However, with the cost of these projects increasing, the City should discuss alternative and long-term financing methods for these projects. Some options to the City could include: o Bonding biennially for the special assessment portion of the PMP street projects o Bonding annually for all projects within the PIR fund o A dual approach that increases the property tax levy for smaller projects and utilizes bond financing for the larger infrastructure projects Bonding provides the near -term cash needed to fund projects and reduces the overall impact to the PIR fund through leveled and structured debt service payments. 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 $2.1 million at the end of 2035 and won't be positive again until 2042. Attachment C is a summary of the City's MSA account as of June 30, 2025. 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. 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. Page 2 of 4