Agenda Packets - City Council - work session 7/28/2025

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o Revenue for the new fund is charged to each respective department. The charge is calculated based on City buildings' square footage that the Facilities department maintains along with the number of employees in each department per building applicable. o Expenditure budget is transitioned from the Central Services department in the General Fund. • Insurance Fund — o Revenue is based on the worker's compensation charged to each department per employee and insurance for each department, such as general liability, umbrella, equipment floater. Worker's compensation charge is based on current year worker's compensation modification, which is 0.54 for 2025. o The expenditure budget is based on an average of the last three years' actual amounts of insurance cost along with a budget for unanticipated non -covered insurance items. The Insurance Fund sees years of both shortfalls and surplus with the goal of keeping the General Fund and tax levy stable due to insurance cost fluctuating. • IT Service Fund — o Revenue comes from other departments that the IT department service in terms of IT equipment, infrastructure and service. Current year revenue/charge to other department was planned to gradually increase over the years and eventually make up for the short -falls in the beginning years of the fund (2021-2025). o Expenditure is increasing due transitioning telephone cost and software licensing to the fund. Additional items to be noted that will be effective in 2026 and included in the budget are as follows: • Paid Family Medical Leave (PFML) premiums are included in the budget, with the employer covering 50%. As of January 1, 2026, Minnesota Paid Leave law will go into effect and create a state -administered paid family and medical leave insurance program. The City has opted to go with a state -approved equivalent plan for a discounted premium in 2026. As staff continues to refine the budget and receive additional budget numbers, an updated draft budget and tax levy will be presented at the next General Fund Budget and Tax Levy work session in September. A copy of the June 23rd work session memo is attached along with a draft preliminary budget and tax levy information and draft internal service funds budgets. 2026 Budget Memo 07/28/2025 — Page 3