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Project expenditures for the Snelling Avenue N & Royal Hills Trail Improvements were increased by $90,000 due to updated cost estimates. Due to changes in project timelines, the gateway sign project within the EDA Fund was reduced by $90,000 in 2026 and increased by the same amount in 2027. Rates within the Water Utility Fund are set to 4% in 2026, 6% in 2027, and 3% in 2028 and forward. A preliminary plan has been prepared and is attached which includes a summary of projects, detailed project sheets, sources of funds, and estimated fund balances (since the operating budgets have not yet been completed, these fund balances are estimated operating costs). Information is included on street and park projects going out ten (10) years even though our CIP is only for five years. Please note that project timelines are subject to change and that the current timeline is City Staff s best estimate. The 2025-2029 CIP was a $29.6 million plan, while the proposed 2026-2030 CIP is listed for $37.1 million in expenditures. This is a 25.7% increase from the previous year's program or $7,586,516. The largest increases are in Parks and Streets due to the timing of trail & PMP projects and changes 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 $600,000 is being proposed for 2026, which is an increase of $350,000 from 2025. The levy was set to $200,000 from 2017-2019 and $250,000 from 2020-2025. Based on estimated project costs, this amount should be increased in 2030 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 2029, with $100,000 per year estimated for planning and design in 2026 and 2027. The project 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 Page 2 of 5