2024-06-18 CC Agenda Packet WorkshopI.
H L
PUBLIC FINANCE ADVISORS
City of Mound, Minnesota
Utility Rate Study and Financial Management Plan
June 18, 2024
Overview - Rate Study
• What are enterprise funds
• What are fixed costs
• Purpose of the study
• Approach to study
• How you currently bill
• Assumptions and other factors
• Rate structure
• User impacts
• Recommendations
jg'%*4EHLERS
PUBLIC FINANCE ADVISORS
Utility Funds
• Enterprise Funds
✓ Water
• Cost related to providing clean water for drinking, indoor and outdoor use
✓ Sanitary Sewer
• Costs related to treating water for indoor uses
— Mound is part of Metropolitan Council wastewater services
✓ ctr)rm CPU►/Pr
• Costs related to dealing with storm water runoff
• Not part of rate study
✓ Recycling
• Costs related to recycling collection
94 EHLERS
PUBLIC FINANCE ADVISORS
Utility Funds
• Meant to operate like a business
• Should have sufficient cash for
✓ Capital projects
✓ Operations
• Staff, supplies, and maintenance and repair
✓ Replacement reserves
✓ Debt
• Have a minimum of:
✓ 6 months of operating expenses excluding depreciation
✓ Following year's bond/debt payments, if any
✓ Funding for capital projects
✓ Flexibility to accommodate unforeseen repairs
94 EHLERS
PUBLIC FINANCE ADVISORS
Fixed Costs
• What are they?
✓ Staff
✓ Equipment/vehicles
✓ Supplies
✓ Cost to send out the bills
✓ Meters for resale and meter repair/maintenance (water fund only)
• Why important?
✓ Need to make sure these costs are covered by base charges and not subject to usage of
the system
d'S EHLERS
PUBLIC FINANCE ADVISORS
Utilities are Operating and Capital Intensive
Water Expenditures 2023
■ Operating ■ Capital ■ Debt
Sewer Expenditures 2023
■ Operating ■ Capital ■ Debt ■ MCES
Jg'%*4EHLERS *Debt payments fund prior year's capital projects
PUBLIC FINANCE ADVISORS
Purpose of the Utility Rate Study
Get the fund out of the $4.4M deficit in a timely fashion
• Appropriate usage
tiers
• Tier charges to
promote
conservation
• User classes pay for
what they use
96FREERS
PUBLIC FINANCE ADVISORS
• Assure fixed costs are
covered by base rates
• No property tax
support
• Ensure utilities are self-
sufficient
• Maintain healthy
reserves
• Determine how
Capital
Improvement costs
(CIP) will be funded
• Look at user impacts
and overall
affordability
Assumptions and Other Factors
1. 95% of 2023 consumption used
96FREERS
PUBLIC FINANCE ADVISORS
Gallons Pumped and Precipitation
45.0
230, 000,000
40.0
225, 000,000
35.0
220,000,000
30.0
25.0
215,000,000
20.0
210,000,000
15.0
205, 000, 000
10.0
200,000,000
5.0
0.0
195,000,000
2018 2019 2020 2021 2022 2023
�County Precipitation
30.56 41.18 25.98 23.67 22.46 28.46
tGallons Pumped
210,127,000 208,757,000 228,255,000 225,761,000 224,488,050 222,461,308
8
Assumptions and Other Factors
increase in expenses, 4% CIP inflation
✓ 6% increase in salaries and benefits in 2025 per Union contract
3. MCES charge increase 7% annually
4. No interest income projected
5. All capital projects are incorporated per the Capital Improvement Plans
✓ Water treatment plant and meter replacements not part of plans
✓ Storm water projects continue to be funded by tax levy (Capital Improvement Fund)
Jg'%*4EHLERS
PUBLIC FINANCE ADVISORS
Approach to Study
Residents/Business
jg'ZEHLERS
PUBLIC FINANCE ADVISORS
What We Look At
1. Base/Fixed Fee
2. Tiers
3. Usage vs. Revenue
jg'%*4EHLERS
PUBLIC FINANCE ADVISORS
Rate Structure Components - Water and Sewer
• Volumetric Charges for Water and Sewer
✓ Rate per 1,000 gallons
✓ For water, rate increases for higher consumption ("tiers")
• Sewer Base Fee
✓ Customers pay for a minimum amount of use even if actual is less
• Water Base Fee
✓ Fixed fee
jg'%*4EHLERS 12
PUBLIC FINANCE ADVISORS
How You Currently Bill
• Water fund
✓ Quarterly billing for residential and monthly for commercial
✓ Apartments are considered "commercial" and billed monthly
✓ Only charge 1 base fee to apartments, regardless of the # of units
• Conservation/Tiered Rates
✓ Instituted in 2008
✓ Statute 103G.291— "If a conservation rate is applied to multifamily dwellings, the rate
structure must consider each residential unit as an individual user."
d'S EHLERS
PUBLIC FINANCE ADVISORS
Water Fund - Fixed Costs
• 2024 budgeted fixed costs = $695,415
• Current Base Fee Charges is same for all user types
Base Rates:
Residential Base Fee - Quarterly 60.18
Commercial & MF Base Fee - Monthly 1 20.06
• 2024 Base Fees = -)y1y,3yu
jg'%*4EHLERS
PUBLIC FINANCE ADVISORS
Take Away
1. Base fee charges currently pay for fixed costs
2. No changes required for base fee
• Unless you want to increase commercial and decrease residential
Water Fund - How You Currently Bill - Tiers
jg'%*4EHLERS
PUBLIC FINANCE ADVISORS
Take Away
1. Usage rates are the same regardless of user, which is appropriate
2. Multi -family is in same category as commercial and should be in its own
2023 Water Usage Tiers — Residential - Current
Residential Single Family Water Usage
Fall 2023
600
Tier 1— 22%
Tier 2 — 73%
Tier 3 — 5%
528
488
500
400
384000�
95% of users are in the 15t 2 tiers
351
318
300
244
219
200
141
97
100
'
.
■
■
23
28
14 13 12 9 8 4 2
3 20
2 4
6 8 10 12 14 16
18
20
22
24
26
28
30 32 34 36 38 40 42
44 46
To To To
To To To To To To
To
To
To
To
To
To
To To To To To To To
To To
94 EHLERS
PUBLIC FINANCE ADVISORS
Take Away
1. Too few low users are captured in 1 st tier
2. Too many users captured in 1 st 2 tiers
3. Tiers don't promote conservation
16
2023 Water Usage Tiers — Residential - Proposed
Residential Single Family Water Usage
Fall 2023
Tier 1-44% Tier 2-34% 1
Tier 3-22%
.11
528
500
400 384
351
318
300 —
219
200
141
78% of users are in the 15t 2 tiers
97
100 49 46
' 23 28 14 13 12 9 8 4 2 3 20
2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46
To To To To To To To To To To To To To To To To To To To To To To To To
�4 EHLERS
PUBLIC FINANCE ADVISORS
17
Water Fund - What Changed
• Changed tiers
✓ Increase the number of low water users to be in the 1st tier
✓ Reduced the # in the 1st 2 tiers to promote conservation
• Changed billing for multi -family
✓ Billed quarterly with residential properties, not monthly as commercial
✓ Each residential unit is charged a water base fee
✓ More usage billed at lower tier
• Everyone still pays same usage rate
jg'%*4EHLERS 18
PUBLIC FINANCE ADVISORS
Water Fund - Current vs. Proposed Rates
Base Rates: Base
Residential Base Fee - Quarterly Residential Base Fee - Quarterly 60.18 63.00
Commercial & MF Base Fee - Monthly Commercial Base Fee - Monthly 20.06 21.00
Multi Family Base Fee - Quarterly Multi Family Base Fee - Quarterly - 63.00
Usage Rates:
Residential - Billed e Quarterly
Tier 1 (Up to 5,000 Gallons Tier 1 (Up to 8 000 Gallons 5.22 %5
Tier 2 (5,001-25,000 Gallons) Tier 2 (8,001-14,000 Gallons) 6.00 7.00
Tier 3 (Over 25,000 gallons) Tier 3 (Over 14,000 gallons) 6.90 8.75
Tier 1 (Up to 5,000 Gallons) Tier 1 (Up to 8,000 Gallons) N/A 5.75
Tier 2 (5,001-25,000 Gallons) Tier 2 (8,001-14,000 Gallons) N/A 7.00
Tier 3 (Over 25,000 gallons) Tier 3 (Over 14,000 gallons) N/A 8.75
Commercial & Multi -Family - Billed Montt Commercial - Billed Monthly
Tier -1(UD to 2.000 Gallons Tier 1 (UD to 3,000 Gallons 5.22 %5
Tier 2 (2,001-15,000 Gallons) Tier 2 (3,001-9,000 Gallons) 6.00 7.00
Tier 3 Over 15,000gallons) Tier 3 Over 9,000gallons) 6.90 8.75
Take Away
��' EH 1. Proposed 2025 tiers and rates are projected to generate an additional $362,000 in revenue
PUBLIC FINANCE ADVISORS
Water Usage and Revenue
Current Residential
Commercial and Multifamily
*Multifamily currently billed as commercial
Take Away
1. Residential is paying for more than their share of water used
2. Likely issue is how multi -family is currently billed
94 EHLERS
PUBLIC FINANCE ADVISORS
Water Usage and Revenue
Revised
Take Away
1. User classes pay equally for what they use
2. Fixed by changing how multi -family is billed to align with statute
d'S EHLERS
PUBLIC FINANCE ADVISORS
Ensure Adequate Cash Balances - Water
4,000,000
3,000,000
2,000,000
1,000,000
[F
(1,000,000)
(2,000,000)
(3,000,000)
(4,000,000)
(5,000,000)
94 EHLERS
PUBLIC FINANCE ADVISORS
21
Water Fund
Projected Cash Balances
■ Target Cash ■ Ending Cash
2030 is last year
of debt issuance
Take Away
1. Get out of the "hole" in 5 years with $165,000 annual transfer from liquor from
2025-29. 6 years with no liquor transfer.
zz
Ensure Adequate Cash Balances - Sewer
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
94 EHLERS
M PUBLIC FINANCE ADVISORS
Sewer Fund
is plan ro
planned debt Projected Cash Balances
planLift Station Significant
issuance Capital - Equipment
Project Replacement
2022 2023
2031 tax levy
no longer
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
■ Target Cash _ Ending Cash
Take Away
1. Bonds needed in 2024 to replenish fund from prior expenditures and for some
current expenditures
Ensure Adequate Cash Balances - Storm
Storm Water Fund
Projected Cash Balances
1,000,000
500,000 0 $140,000 per year in
additional revenue needed to
2022 2023 2024 2 5 2 6 2 7 2028 2029 2030 2031 2412 2033
achieve
(500,000) 0 Capital projects funded by tax
(1,000,000) levy in Capital Improvement
Fund
(1,500,000)
✓ $2M from 2024-33
(2,000,000)
• Commercial users carrying
(2,500,000) the burden
■ Target Cash ■ Ending Cash
dgEHLERS
PUBLIC FINANCE ADVISORS
Take Away
1. Work is needed to address this fund going forward
Sewer Fund - Current vs. Proposed Rates
jg'%*4EHLERS
PUBLIC FINANCE ADVISORS
Take Away
1. Proposed 2025 rates with generate an additional $220,000 in revenue
2. Multi -family has its own category now and will be billed quarterly with residential
Multi -Family changing from
monthly to quarterly billing
User Impacts - Residential
Water
$ 101.26 $
104.28 $ 109.00 $
125.35 $
142.27 $
158.63
Sewer
122.54
126.21
135.00
145.13
155.28
165.38
Recycling
15.75
17.04
17.72
18.43
Street Lighting
1.50
1.50
1.50
1.50
1.50
1.50
Storm
3.00
3.00
3.00
3.00
3.00
3.00
Total
$ 244.05 $
250.74 $
264.88 $
292.01 $
319.77 $
346.94
Amount Increase- per quarter
$6.69
$14.14
$27.13
$27.76
$27.16
Water
$ 136.24 $
140.28 $
151.00 $
173.65 $
197.09 $
219.76
Sewer
152.94
157.53
170.00
182.75
195.54
208.25
Recycling
15.75
15.75
16.38
17.04
17.72
18.43
Street Lighting
1.50
1.50
1.50
1.50
1.50
1.50
Storm
3.00
3 nn
i nn
3.00
3.00
3.00
Total
$ 309.43 $
318.06 $
341.88 $
377.94 $
414.85 $
450.94
Amount Increase- per quarter
$8.63
$23.821
$36.06
$36.92
$36.08
Water
$ 171.22 $
176.28 $
203.50 $
234.03 $
265.62 $
296.16
Sewer
198.54
204.51
222.50
239.19
255.93
272.57
Recycling
15.75
15.75
16.38
17.04
17.72
18.43
Street Lighting
1.50
1.50
1.50
1.50
1.50
1.50
Storm
3.00
3.00
3.00
3.00
3.00
3.00
Total
$ 390.01 $
401.04 $
446.88 $
494.75 $
543.77 $
591.66
Amount Increase- per quarter
$11.03
$45.84
$47.87
$49.02
$47.89
User Impacts - Multi Family
• 16 years City hasn't followed statute
• Other users have been making up the difference
• 44 accounts
✓ 17 are 4 units or less (39%)
✓ 13 are 5 to 12 units (30%)
✓ 9 are 13 to 50 units (20%)
are more than 50 (11%)
jg'%*4EHLERS 27
PUBLIC FINANCE ADVISORS
User Impacts - Multifamily
Water
$ 287.08
295.50 $
492.00 $
565.80 $
642.'18 $
7'16.03
Sewer
520.60
566. 16
b4U. UU
580.50
621.14
661.51
Total
$ 807.68
831.66
1,032.00 $
1,146.30 $
1,263.32 $
1,377.64
Amount Increase- per quarter
$23.98
$200.34
$114.30
$117.02
$114.22
Per Unit Cost
$201.92
$207.92
$268.00
$286.68
$316.83
$344.39
Water
$ 430.13
442.80 $
1,112.50
$ 1,279.38 $
1,452.09
$ 1,619.08
Sewer
1,470.60
1,514.52
1,620.00
1,741.50
1,863.41
1,984.53
Total
$ 1,900.73
1,967.32 $
2,732.60
$ 3,020.88 $
3,316.60
$ 3,603.61
Amount Increase- per quarter
$66.69
$776.18
$288.38
$294.62
$288.11
Per Unit Cost
$168.39
$163.11
$227.71
$261.74
$276.29
$300.30
Water $ 4,604.23
t 4,741.50
$ 10,616.
$ 12,209.26
$ 13,857.51
$ 15,451.13
Sewer 12, 990.30
13, 378.26
14, 310.00
15, 383.25
16, 460.08
17, 529.98
Total $ 17,694.63
$ 18,119.76
$ 24,926.76
$ 27,692.61
$ 30,317.69
$ 32,981.11
Amount Increase- per quarter
$626.23
$6,806.99
$2,666.76
$2,726.08
$2,663.62
Per Unit Cost $166.99
$170.94
$236.16
$260.31
$286.02
$311.14
Converted 2023-24 to quarterly bills for comparison. Majority of zoz5 increase is result of charging each unit abase water fee.
28
User Impacts - Commercial Accounts
• 84 accounts
✓ 61 are 8,000 gallons or less (73%)
✓ 1 are 8,001 to 31,000 gallons (14%)
are 31,001 to 82,000 gallons (10%)
✓ 3 are more than 82,001 gallons of water (3%)
jg'%*4EHLERS 29
PUBLIC FINANCE ADVISORS
User Impacts - Commercial
Water
$ 64.60 $ 66.50 $
73.25 $
84.24 $
95.61 $
106.60
Sewer
78.85 81.22
88.75
95.41
102.08
108.72
Total
$ 143.45 $ 147.72T
162.00 $
179.64 $
197.69 $
215.32
Amount Increase- per Month
$4.27
$14.28
$17.64
$18.05
$17.63
Per Quarter
$17.08
$57.12
$70.57
$72.20
$70.52
Water
Sewer
Total
Amount Increase- per Month
Per Quarter
Water
Sewer
Total
Amount Increase- per Month
$ 212.61 $ 218.90
$ 272.75 $
313.66 $
356.01 $
396.95
253.65 261.31
290.00
311.75
333.57
355.25
$ 466.26 480.21
562.75
$
625.41 $
689.58 $
752.20
$13.95
1
$82.54
$62.66
$64.17
$62.62
$55.80
$330.16
$250.65
$256.67
$250.49
$ 554.31 $ 570.80
719.00
$ 826.85 $
938.47 $
1,046.40
641.25 660.64
736.25
791.47
846.87
901.92
$ 1,195.56
1,231.44 $
1,455.25
$ 1,618.32 $
1,785.35 $
1,948.32
$35.88
$223.81
$163.07
$167.03
$162.97 ;
Per Quarter
43.52 $895.24 $652.28 $668.11 $651.88
Historical Rate Increases — 2018-2024
,residents didn't see an increase from what they paid in 2017 for water until 2023
Water 0% 0% 0% 0%
0%
3%
3%
Sewer 3% 3% 3% 3%
3%
3%
3%
Storm -90% 0% 0% 0%
0%
0%
0%
Recycling 0% 0% 0% 0%
31%
0%
0%
*Quarterly fee decreased from $30.57 to $3
"Increase was the result of a new contract
***Sewer fund is supported by $360,000 annual tax levy (4.5%)
jg'%*4EHLERS
PUBLIC FINANCE ADVISORS
Recommended Rate Increases — 2026-2033
Proposed 2025 increase for
Recycling is also 4%
2026
15 %
7.5 %
4
2027
13.5 %
7 %
4
2028
11.5 %
6.5 %
4
2029
7.5 %
5.5 %
4
2030
5 %
3%
4
2031
5%
3%
4%
2032
3%
3%
4%
2033
3%
3%
4%
jg'%*4EHLERS 32
PUBLIC FINANCE ADVISORS
Community Comparison - Neighbors
$600.00
$550.00
$500.00
$450.00
$400.00
$350.00
$300.00
$250.00
$200.00
$150.00
$100.00
$50.00
$0.00
Neighboring Communities
Quarterly Residential Bill for Water, Sewer, and Storm Water
Assumes 14,000 gallons of water and sewer
8.48 $201.55
$3.75
low_$147.50 $2�
$170.00 $152.s4 _
$157.53
115.2�
$112.00
7
12-47 �146.35
$132.41
� e
Mound 2024 Proposed Shorewood Minnetrista 2024 Orono 2024 Excelsior 2024 Tonka Bay 2024 Minnetonka Minnetonka Wayzata 2024
Mound 2025 1 2024 2024 Beach 2024
—Storm Water Charges —Sewer Charges —Water Charges —Average Quarterly Bill
Recycling and street lighting excluded — services are not consistent amongst communities
�4 EHLERS
PUBLIC FINANCE ADVISORS
33
What Can Residents Do to Conserve Water
• Faucets in kitchens and bathrooms are fourth largest source of home water
consumption
✓ Newer, low -volume faucets use aeration and flow restrictors
• Conventional top -loading washers use as much as 51 gallons per load
✓ High -efficiency front -loading washers use as little as 15 gallons per load
• Older shower heads have high rates of water flow and use as much as 8 gallons per
minute
✓ Newer low volume shower heads use as little as 2.5 gallons per minute
Obtained from MN DNR (www.dnr.state.mn.us,waters,watermgmt_section,appropriations/water-conservation-residents)
Igg EHLERS 34
PUBLIC FINANCE ADVISORS
Let's Talk!
jg't*4EHLERS
PUBLIC FINANCE ADVISORS
Goals of the Financial Management Plan (FMP)
1. Incorporate past decisions regarding franchise and dock fees
2. Eliminate tax levy reliance for sewer fund
3. Reduce reliance on internal borrowing to lessen strain on financial reserves
4. Manage tax levy increases to below double-digit increases
5. Assure plan in place for capital needs
6. Assure appropriate fund balances to provide resources for unforeseen costs
7. Limit future debt to the extent needed to keep funds "healthy"
d'S EHLERS 36
PUBLIC FINANCE ADVISORS
Assumptions and Other Factors
1. General Fund reserves are maintained at 50% of next years expenditures
✓ Fund Balance Policy is 42%
3. Incorporated sewer and water rates from rate study
4. Incorporated updated dock fees
5. All capital projects are incorporated per the Capital Improvement Plans
✓ Water treatment plant and meter replacements not part of plans
✓ No future special assessments for road projects
✓ Storm water projects continue to be funded by tax levy (Capital Improvement Fund)
d'#4 EHLERS 37
PUBLIC FINANCE ADVISORS
Assumptions and Other Factors
6. Franchise Fees
✓ Input new rates
✓ Annual Change Annual Cha
For 2025 this is an
Residential Rate Change 45.50% 5.00%
increase of $270,000 Commercial Rate Change 18.00% 5.00%
✓ Increasing 5%
annually in 2026 and
beyond
(approximately
$30,000/year)
✓ Excludes cable
franchise fee,
projecting 7% annual
decrease
4EHLERS
PUBLIC FINANCE ADVISORS
Elartrir Utilitiac - XrPI Enarnv
Annual
Annual
Residential
Monthly Fee
4.00
Revenue Monthly
Estimate
213,600.00
Fee
4.20
Revenue
Estimate
224,280.00
Small C&I — Non -Demand
12.00
27,072.00
12.60
28,425.60
Small C&I — Demand
30.00
25,560.00
31.50
26,838.00
Large C&1
145.00
-
152.25
-
Public Street Lighting
4.00
672.00
4.20
705.60
Municipal Pumping — Non -Demand
4.00
1,392.00
4.20
1,461.60
Municipal Pumping —Demand
4.00
48.00
4.20
50.40
Total
1
268,344.00 1
1
281,761.20
Assumptions and Other Factors
Have ability to increase more if desired with minimal impact
10% = $56,000
15% = $84,000
20% = 112,000
2026
$ 641 769
83,709
AnnualChange AnnualChan a AnnualChan a AnnualChan a Annual Chan e
Residential Rate Change 45.50% 5.00% 10.00% 15.00% 20.00%
Commercial Rate Change 18.00% 5.00% 10.00% 15.00% 20.00%
Electric Utilities -Xcel Enerqy
Residential
4.001
213,600.001
4.20
224,280.00
SmallC&I- Non -Demand
i:z.uu
'I/,u/L.UU
"'�26u
.
Small C&I - Demand
30.00
25,560.00
31.50
26,838.00
Large C&I
145.00
-
152.25
Public Street Lighting
4.00
672.00
4.20
705.60
Municipal Pumping - Non -Demand
4.00
1,392.00
4.20
1,461.60
Munici al Pumping - Demand
4.00
48.00
4.20
50.40
Total
1
268,344.00
1
281,761.20
94 EHLERS
PUBLIC FINANCE ADVISORS
4.40 234,960.00 4.60 245,640.00 4.80 ' 256,320.00
, is.uu u 32,486.40
33.00 28,116.00 34.50 29:394:00 36.00 30,672.00
159.50 - 166.75 - 174.00 -
4.40 739.20 4.60 772.80 4.80 806.40
4.40 1,531.20 4.60 1,600.80 4.80 1,670.40
Assumptions and Other Factors, continued...
7. Capital Projects and equipment costs over the next --
Total
8. Existing tax base increases 2% annually
✓ No new residential and commercial development growth built in
✓ TIF Districts decertifying in 2026, 2028, and 2031 built in
4 EHLERs 40
I, PUBLIC FINANCE ADVISORS
Assumptions and Other Factors, continued...
9. 2% increase in revenues, 4% increase in expenditures, 4% CIP Inflation
✓ 6% increase in salaries and benefits in 2025 per Union contract
10. Projected debt over the next 10 years
krea Fire Service
-
-
545,000
'apital Improvements
1,100,000
1,250,000
1,250,000
Hater
645,000
950,000
2,200,000
>ewer
2,565,000
-
-
'ommunity Investment
-
900,000
-
Total
4,310,000 .%
3,100,000
3,995,000
$30.8M total to fund $71.8M in projects
- 948,000 - -
5,000,000 4,500,000 4,500,000 -
1,300,000 1,050,000 1,100,000 1,000,000
6.300.000 6.498.000 5.600.000 1.000.000
• 2024 debt is to reimburse prior expenditures to replenish cashflow and limit interfund loans
✓ No debt issuances planned beyond 2030
94 EHLERS
PUBLIC FINANCE ADVISORS
Capital Improvements Fund
• $36.1M in Capital Projects
✓ No new special assessments
✓ Capital Improvements Projected Levy
Increased tax levy funding
$3,500,000
✓ $2M in storm water projects $3,000,000
$2,500,000
• 2024-2029 Capital Projects $2,000,000
✓ $4.5M average annual cost $1,500,000
$1,000,000
✓ $2.9M average annual debt issuance ,
$ 500,000
• 2030-2033 Capital Projects $-
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
✓ $2.3M average annual cost ■Projected Levy Amount
✓ No debt issuance
94 EHLERS 42
PUBLIC FINANCE ADVISORS
Capital Improvements Fund
$4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
S-
Capital Improvements Funds
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
94 EHLERS
PUBLIC FINANCE ADVISORS
� Ending Fund Balance Fund Balance Goal
Items for Consideration
1. Establish a fund balance goal equal to
50% of annual average expenditures of
approximately $1.8M
2. Increase tax levy to eliminate reliance on
debt issuance
3. Closely monitor construction costs and
adjust plan accordingly
Key Takeaway
Continued increase of annual levy needed to eliminate
reliance on debt issuance
43
Community Investment Fund
. 3, in Parks Capital Projects
✓ Harbor Park - $2.3M Total
➢ $746,000 in 2024
➢ $884,000 in 2025
➢ $732,000 in 2028
• Capital Funding
✓ No park dedication fees projected
✓ $60,000 annually from Liquor Fund
✓ $700,000 land sales from Harbor TIF moved to this Fund
✓ $900,000 debt issuance in 2025
✓ Reduced reliance on tax levy
➢ $325,000 in 2024 reducing to $100,000 annually in 2029 going forward
94 EHLERS 44
PUBLIC FINANCE ADVISORS
Community Investment Fund
Community Investment Fund
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000 '
$(100,00 _ M 2 2 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Ending Fund Balance Fund Balance Goal
94 EHLERs
PUBLIC FINANCE ADVISORS
Items for Consideration
1. Establish a fund balance goal equal to
annual average expenditures of
approximately $330,000
2. Closely monitor construction costs and
emerging park needs and adjust plan
accordingly
Key Takeaways
Healthy Fund Balance — continue to monitor actual costs
Equipment Replacement Fund
in Equipment Costs
✓ Fire equipment funded through Area Fire
Service Fund
• Funded via tax levy
✓ $150,000 in 2024
✓ $250,000 from 2025-26
✓ Increasing $50,000 annually from 2027-2029
✓ Increasing $25,000 annually from 2030-2033
✓ $500,000 tax levy in 2033
d'#4 EHLERS
PUBLIC FINANCE ADVISORS
�f
r
Equipment Replacement Fund
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
Equipment Replacement Fund
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
� Ending Fund Balance -Fund Balance Goal
Key Takeaway
Healthy Fund Balance — continue to monitor actual costs
Items for Consideration
1. Establish a fund balance goal equal to annual
average expenditures of approximately
$400,000
2. Continue tax levy funding; levy reestablished
in 2024 after no levy in 2023
194 EHLERS 47
PUBLIC FINANCE ADVISORS
Building Replacement Fund
• $2.1M in Capital Projects
✓ City Hall, Public Works, Centennial, Parks Building Replacement Fund
Storage, Depot
$500,000
$400,000
Items for Consideration $200,000
1. Establish a fund balance goal equal to annual $100,000
average expenditures of approximately .'
$ 215, 000 $-
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2. Continue tax levy funding; $90,000 levy in ti ti ti ti ti ti ti ti ti ti ti ti ti ti
2024 and increase $30,000 annually in 2025 Ending Fund Balance -Fund Balance Goal
and beyond
�§4 EHLERS
PUBLIC FINANCE ADVISORS
Key Takeaway
Monitor projects, upcoming expenses, and review
Capital Improvement Plan
Street Maintenance Fund
• $3.3M in Capital Projects
✓ Seal coating and pavement repairs
• $300,000 annual transfer from Liquor reduced to
$135,000 from 2025-29 to get Water Fund out of
hole a year early
• $70,000 of annual MSA allocated to this fund
Items for Consideration
1. Establish a fund balance goal equal to annual
average expenditures of approximately
$330,000
96FREERS
PUBLIC FINANCE ADVISORS
$1,000,000
$800,000
$600,000
$400,000
$200,000
Street Maintenance Fund
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� Ending Fund Balance -Fund Balance Goal
Key Takeaway
Monitor project expenses
Dock Fund
• $330,000 average annual spending
✓ Tree removal, riprap, and staff
• Funded by dock slips
✓ Plan for annual increases to fees established
• Established a fund balance goal equal to 50%
of annual average expenditures of
approximately $165,000
94 EHLERS
PUBLIC FINANCE ADVISORS
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
Dock Fund
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
� Ending Fund Balance -Fund Balance Goal
Key Takeaway
Monitor costs and increases to fees to ensure
they continue to align
50
Area Fire Service Fund
• $2M average annual spending
Area Fire Service Fund
✓ Operations, Capital and Debt $1,400,000
• $787,000 average annual Fire protection $1,200,000
contracts funding $1,000,000
• City of Mound cost funded through Tax Levy $800,000
• Equipment certificates issued for heavy rescue $600,000
vehicle and fire pumper $400,000
✓ $545,000 in 2026 $200,000
✓ $948,000 in 2028
• Planned reserves for future capital purchases CP tititi tititi, tiA , P "�ti 9 "91
tioti oIf, elf, ootioo
■ Ending Fund Balance
94 EHLERS
PUBLIC FINANCE ADVISORS
Key Takeaway
Reliable funding sources support ongoing
operations and capital needs
51
General Fund — Fund Balance
$5,000,000
$4,500,000
$4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1, 500,000
$1,000,000
$500,000
General Fund - Fund Balance
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
■ 50% of Operating Expenditures ■ Unassigned Fund Balance ■ Assigned Fund Balance
94 EHLERS
M PUBLIC FINANCE ADVISORS
• Unassigned fund balance is 50% of next
years operating expenditures
✓ 42% is City's fund balance policy
✓ $115,000 average annual contingency
budgeted from 2027-2033
• Assigned Fund Balance
✓ $300,000 in 2024 and beyond for severance
Item for Consideration
1. Update fund balance policy to 45% to 55%,
with target of 50%
Key Takeaway
City has maintained a healthy General Fund balance, consistently
exceeding Fund Balance Policy
52
Tax Levy and Rate Trends
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
3.95% 4.97%
6,000,000
4,000,000
2,000,000
0
5%
2020 2021 2022
96FREERS
PUBLIC FINANCE ADVISORS
Tax Levy and Rate Trends
Percentages are the increase in the total annual levy
6.
11.66%
5.35% 5.58% '
�
5%
6.75%
8.4%
8.65%
5.92%
50.00%
72% 45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2023 2024 1 2025 2026 1 2027 2028 2029 2030 2031 2032 2033
General Fund Levy � Debt Levy � Other Levies -Tax Rate
53
Impact on Average Value Home
$180
$160
$140
$120
$100
$80
$60
$40
$20
Projected Increase on Average Value Home - $367,100
(2023 Value)
2025 2026 2027 2028 2029 2030 2031 2032 2033
� $ Tax Increase on $367,100 Home Average $ Increase
96FREERS
PUBLIC FINANCE ADVISORS
I
2022-2024
3-Year Average = $108/year, 2024 had an
increase of $168/year
Future Years
025: $73/year
• 2026: $78/year
• 2027: $53/year
• 2028-2033: Average $125/year,
ranging from $87/year to $152/year
54