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Page 4 of 12 The remainder of this memo is not new content and was provided to Council in the September 8, 2025 memo. Council directed Staff to include a $10,000 placeholder starting in 2026 and forward, for future construction costs related to the Parks Master Plan, which has been incorporated into the proposed budget. Public Safety Fund Additional changes were made to the Public Safety Capital Equipm ent Fund based on the latest preliminary estimates from the Lake Johanna Fire Department (Attachment C, pages 21-23):  Public Safety Capital Equipment. ($247,957) Change in Fund Balance o Expense. Addition of command vehicle replacements in 2031 and 2033, including an engine/ladder replacement programmed in 2032 ($247,957). The levy reserve bank and corresponding transfer to the General Fund is based on 9 new FTEs (6 fire captains and 3 firefighters). Equipment/Building Replacement Fund Council also directed staff to incorporate the below changes to the Equipment/Building Replacement Fund:  Equipment/Building Replacement. $0 Change in Fund Balance o Expense. Delayed the 1993 Case 621 Loader to 2027 and delayed the 2013 Ford Escape to 2027. No Fund Balance impact. Staff will bring forward an equipment replacement plan to Council in March 2026. This plan will feature a leveled cost structure for further discussion. Background – Tree Preservation and Landscaping Fund Due to the strong demand and positive feedback around the 2025 Tree Trust Partnership pilot program, Tree Trust has asked the City to continue its tree sale partnership, which promotes environmental sustainability. The 2026 cost is estimated to be $6,750. Council’s consensus at the August 25, 2025 Special Work Session supports the continuation to partner with Tree Trust, and funding to come from the Tree Preservation and Landscaping Fund. Background – General Fund Budget Annually, City staff prepares and submits a preliminary budget to the City Council for review and feedback. Attached to this memo is the City’s preliminary General Fund budget for the 2026 fiscal year. Each department provided their respective forecasts for this budget. The proposed 2026 budget is $7,518,589, an increase of $757,310 or 11.2%. For the purpose of this discussion, there is a 15.0% or $906,103 tax levy increase reflected in the budget, of which $754,103 for the General Fund, $100,000 for the EDA Fund, and $52,000 for the Public Safety Capital Fund. As presented, the General Fund Budget is underfunded by $122,009, which is the budget shortfall projected in the 2025 budget. This practice is not sustainable in the long term. A tax levy increase of 17.1% or $1,028,112 would be needed to balance the budget in 2026.