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AGENDA ITEM - 3E <br />MEMORANDUM <br />DATE: April 27, 2026 <br />TO: Honorable Mayor and City Councilmembers <br />Jessica Jagoe, City Administrator <br />FROM: Joua Yang, Finance Director <br />SUBJECT: Exploring Alternative Funding Sources <br />Budgeted Amount: Actual Amount: <br />N/A <br />Background <br />N/A <br />Funding Source: <br />N/A <br />As part of the City's 3 Year Strategic Plan, the City is evaluating its long-term fiscal strategy, with a <br />specific focus on alternative revenue sources and exploring federal and state funding opportunities to <br />supplement property tax levies and ensure the long-term fiscal sustainability of the City. Staff has <br />compiled a list of funding opportunities for further discussion. Some of these funding opportunities <br />would require state legislative action. Staff recommends that the City Council review the attached <br />preliminary data and provide direction on which revenue categories warrant further financial <br />analysis. Staff will continue to refine this list as new options are identified. Based on Council <br />direction, staff will bring back, at a future Council work session, recommendations based on current <br />staff resources. <br />• Local Option Sales Tax (LOST): Implementation of a city -specific sales tax (typically <br />0.5%) to fund designated capital projects of regional significance, such as Rice Creek <br />Commons. <br />• Franchise Fees: Implementation or adjustment of fees for utilities (electric/gas) using the <br />public right-of-way. The City implemented electric franchise fees in 2025 to fund the new <br />fire station. <br />• Grant Opportunities: Targeting county, state, and federal grants. <br />• Bonding: Borrowing obligation that incurs interest and requires repayment, typically used <br />for larger capital projects. <br />• Municipal Liquor/Cannabis Store <br />• Public EV Charging Stations <br />Page] of 3 <br />