CITY COUNCIL REGULAR MEETING AGENDA PACKET 2-17-26

Page 7 of 13 Table 4. Water Operations and Maintenance Fund Overview Sewer Operations and Maintenance Fund – As shown in Table 5 below, recommended changes to the Sewer Operations and Maintenance Fund include increasing the expenditure budget by $1.07 million. Just over $0.80 million of that increase is for a new Vac-Con Combo Truck. This vehicle was originally expected to be delivered in FY 2024/25, but it arrived in the current fiscal year. Other expenditure adjustments include $0.27 million for additional utility costs, personnel budget allocation adjustments, and parts and equipment costs. The result of these adjustments is an estimated ending fund balance of $6.71 million, which equals 32.9 percent of FY 2025/26 operating expenses. The City’s policy requires reserves equal to a minimum of 30.0 percent, a maximum of 40.0 percent, with a target of 35.0 percent. The Sewer Rate Study is currently underway and will be presented to the City Council later this year with the proposed new rate going into effect starting on January 1, 2027. Associated budget adjustments to the FY 2026/27 budget will be presented either as a separate staff report or through the FY 2026/27 mid-year budget review report. Table 5. Sewer Operations and Maintenance Fund Overview Internal Service Funds Recommended changes to internal service funds include 1) increasing expenditure in the Police Vehicle Replacement Fund by $0.23 million for outfitting of new vehicles and purchasing leased vehicles; and 2) increasing revenue and expenditure in the Library & Recreation Replacement Fund by $0.06 million based on estimated contribution and spending in the Page 76 of 144