2026 City of Monticello Budget2026
City of
Monticello
Adopted
Budget
505 Walnut Street, Suite 1
Monticello, MN 55362
(763) 295-2711
MonticelloMN.gov
Table of Contents
Introduction and Overview
Directory of Public Officials .................................................................................................... 1
Distinguished Budget Presentation Award ............................................................................. 2
Organization Chart ................................................................................................................. 3
Strategic Goals & Strategies ................................................................................................... 4
Priorities & Issues ................................................................................................................. 13
Budget Overview .................................................................................................................. 16
Financial Structure, Policy & Process
Fund Descriptions & Structure ............................................................................................. 32
Departments & Funds Relationship ...................................................................................... 35
Basis of Budgeting ................................................................................................................ 36
Financial Policies .................................................................................................................. 37
Budget Development & Administration Practices ................................................................ 37
Revenue Collection Practices ............................................................................................... 39
Expenditures and Payments Practices ................................................................................. 39
Capital Assets Policy ............................................................................................................. 41
Debt Administration Practices ............................................................................................. 41
Reserves and Fund Balances Policy ...................................................................................... 42
Financial Reporting & Accounting Practices ......................................................................... 43
Cash Management & Investment Policy .............................................................................. 44
Balanced Budgets Practices ................................................................................................. 52
The Budget Process .............................................................................................................. 54
Financial Summaries
Consolidated Financial Schedules
All Funds Summary By Fund Type ........................................................................................ 57
Revenues By Category and Fund Type ................................................................................ 59
Appropriations By Category and Fund Type ......................................................................... 61
Interfund Transfers .............................................................................................................. 63
Three Year Consolidated and Fund Financial Schedules
All Funds Summary By Year .................................................................................................. 64
Fund Balance/Working Capital ............................................................................................. 66
Changes in Fund Balance/Working Capital ........................................................................... 67
Ending Fund Balance/Working Capital History ..................................................................... 68
Revenue Sources By Fund
Revenue Trends & Analysis .................................................................................................. 69
Tax Levy History ................................................................................................................... 77
Tax Capacity History ............................................................................................................. 78
Largest Property Taxpayer ................................................................................................... 79
Revenues Sources By Fund .................................................................................................. 80
Long Range Financial Plans ................................................................................................... 82
Long-Term Fiscal Objectives ................................................................................................. 89
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Capital & Debt
Capital Expenditures & Capital Improvement Plan .............................................................. 92
Funding Source Summary .................................................................................................... 99
Projects By Funding Source ................................................................................................ 100
Projects By Department ..................................................................................................... 105
Debt ................................................................................................................................... 108
Departmental Information
General Fund – Summary ................................................................................................... 111
General Government
Mayor and City Council (101-41110) ............................................................................... 114
City Administration (101-41310) ..................................................................................... 115
City Clerk (101-41410) .................................................................................................... 117
Finance (101-41520) ....................................................................................................... 118
Legal (101-41610) ........................................................................................................... 120
Human Resources (101-41800) ....................................................................................... 121
Planning, Zoning & Community Development (101-41910) ............................................ 123
City Hall (101-41940) ...................................................................................................... 126
Public Safety
Law Enforcement (101-42100) ........................................................................................ 127
Fire & Rescue (101-42200) .............................................................................................. 129
Fire Relief (101-42202).................................................................................................... 131
Building Inspections (101-42400) .................................................................................... 132
Emergency Management (101-42500) ............................................................................ 134
Animal Control (101-42700) ............................................................................................ 135
National Guard (101-42800) ........................................................................................... 136
Public Works
Public Works Administration (101-43110) ...................................................................... 137
Engineering & Inspections (101-43115) .......................................................................... 138
Streets & Alleys (101-43120) .......................................................................................... 140
Ice & Snow Removal (101-43125) ................................................................................... 141
Shop & Garage (101-43127) ............................................................................................ 142
Street Lighting (101-43160) ............................................................................................ 144
Refuse Collection (101-43230) ........................................................................................ 145
Recreation and Culture
Senior Center (101-45175) .............................................................................................. 146
Park Operations (101-45201) .......................................................................................... 147
Park Ballfields (101-45203) ............................................................................................. 148
Public Arts (101-45204) .................................................................................................. 149
Library (101-45501) ........................................................................................................ 150
Shade Tree (101-46102) .................................................................................................. 151
Special Revenue Funds – Summary .................................................................................... 153
Cemetery Fund (215-49010) .............................................................................................. 154
Small Cities Development Program (SCDP) Fund (221-46500) ........................................... 156
Community Center Fund (226-4512x) ................................................................................ 157
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Debt Service Funds – Summary .......................................................................................... 159
2015B G.O. Bond Sub-Fund (319-47000) ........................................................................... 160
2016A G.O. Bond Sub-Fund (320-47000) ........................................................................... 162
2017A G.O. Bond Sub-Fund (321-47000) ........................................................................... 164
2018A G.O. Bond Sub-Fund (322-47000) ........................................................................... 166
2019A G.O. Bond Sub-Fund (323-47000) ........................................................................... 168
2020A G.O. Bond Sub-Fund (324-47000) ........................................................................... 170
Capital Project Funds – Summary ....................................................................................... 173
Capital Project Fund (400-4xxxx) ........................................................................................ 174
Street Lighting Improvement Fund (403-43162) ................................................................ 176
Park Dedication Fund (405-45202) ..................................................................................... 177
Bertram Chain of Lakes Sales Tax Fund (406-45202) .......................................................... 178
Transportation Improvements Fund (407-43121) .............................................................. 179
Closed Capital Project Funds .............................................................................................. 180
Enterprise Funds – Summary ............................................................................................. 181
Water Fund (601-4944x) .................................................................................................... 182
Sewer Fund (602-49480 & 602-4949x) ............................................................................... 184
Stormwater Fund (652-4948x) ........................................................................................... 188
Liquor Fund (609-4975x) .................................................................................................... 190
Deputy Registrar Fund (653-41990) ................................................................................... 192
Fiber Optics Fund (656-4987x) ........................................................................................... 194
Internal Service Funds – Summary ..................................................................................... 197
Facilities Maintenance Fund (701-00000) .......................................................................... 198
IT Services Fund (702-00000) ............................................................................................. 200
Central Equipment Fund (703-00000) ................................................................................ 202
Benefit Accrual Fund (704-00000) ..................................................................................... 204
Discretely Presented Component Unit Fund – Summary ................................................... 207
Economic Development Authority Fund (213-46301) ........................................................ 208
Staffing Summary ............................................................................................................... 211
Appendix
Community, Demographic, and Statistical Information ..................................................... 213
Property Tax Basics ............................................................................................................ 216
Truth-in-Taxation (TNT) ...................................................................................................... 219
Debt Guide ......................................................................................................................... 220
Minnesota Statutes ............................................................................................................ 229
Utility Rates for 2026 ......................................................................................................... 233
Capitalization Thresholds & Useful Lives ............................................................................ 234
Tax Capacity, Tax Levy, & Tax Rate History ........................................................................ 235
Useful Terms (Glossary) ..................................................................................................... 236
Acronyms ........................................................................................................................... 245
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DIRECTORY OF PUBLIC OFFICIALS
MAYOR & CITY COUNCIL
Position Name Term Expires Contact Information
Mayor Lloyd Hilgart 12/31/2026 Lloyd.Hilgart@MonticelloMN.gov
Council Charlotte Gabler 12/31/2026 Charlotte.Gabler@MonticelloMN.gov
Council Tracy Hinz 12/31/2026 Tracy.Hinz@MonticelloMN.gov
Council Kip Christianson 12/31/2028 Kip.Christianson@MonticelloMN.gov
Council Lee Martie 12/31/2028 Lee.Martie@MonticelloMN.gov
CITY STAFF
City Administrator ............................................................ Rachel Leonard
Public Works Director/City Engineer ................................... Matt Leonard
Finance Director ......................................................... Sarah Rathlisberger
Community Development Director .............................. Angela Schumann
Parks, Arts & Recreation Director .......................................... Tom Pawelk
City Clerk ...................................................................... Jennifer Schreiber
Human Resources Manager ................................................... Tracy Ergen
Communications Specialist .......................................... Stephanie Trottier
Assistant City Engineer ..................................................... Ryan Melhouse
Street Superintendent ........................................................ Mike Haaland
Utilities Superintendent ............................................................ Mat Stang
Facilities Maintenance Manager ........................................ Dan Halverson
Assistant Finance Director ....................................................... Liz Lindrud
Deputy Registrar Manager .............................................. Carolyn Granger
Liquor Store Manager ..................................................... Randall Johnsen
Information Technology Coordinator .................................... Trevor Mack
Economic Development Manager ............................................ Jim Thares
Chief Building Official .......................................................... Bob Ferguson
Parks Superintendent .................................................... Josh Berthiaume
Recreation Manager ............................................................... Sara Cahill
Fire Chief ............................................................................... Ja ke Olinger
EXTERNAL CONSULTANTS
Wright County Sheriff ........................................................ Sean Deringer
Contracted City Planner..................................................... Steve Grittman
Northland Securities Financial Advisor ............................... Tammy Omdal
Veolia Environmental Services ............................................. Ross Stevens
Fibernet Management Services ............................ Arvig Communications
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DISTINGUISHED BUDGET PRESENTATION AWARD
The Government Finance Officers Association of the United States and Canada (GFOA) presented
an award of Distinguished Budget Presentation to the City of Monticello for its annual budget for
the fiscal year beginning January 1, 2025. In addition to receiving the award, the City of
Monticello also received special recognition in the area of long-range operating financial plans.
The city has submitted its budget for consideration since 2009 and has received this award each
year. To receive this award, a governmental unit must publish a budget document that meets
program criteria as a policy document, an operations guide, a financial plan, and a
communications device.
This award is valid for a period of one year only. We believe our current budget continues to
conform to program requirements, and we are submitting it to GFOA to determine its eligibility
for another award.
GOVERNMENT FINANCE OFFICERS ASSOCIATION
Distinguished
Budget Presentation
Award
PRESENTED TO
City of Monticello
Minnesota
For the Fiscal Year Beginning
January 01, 2025
Executive Director
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ORGANIZATION CHART
The City of Monticello operates a city administrator form of government, whereby the city
administrator acts as the liaison between city staff and the city council. The city administrator
leads council workshops and discussions to form strategic plans and goals. The strategic plans
and goals are then used as the starting point for city leaders to submit budget requests for the
upcoming year.
During internal budget discussions, staff look to the city administrator to ensure the budget is
aligning with council’s desired outcomes. City leaders are then responsible for how their
departments’ budgets translate from the council’s strategic plans and goals to daily workload.
Residents
City Council
City Administrator
Human Resources Communications Finance
Deputy Registrar
Liquor Operations
Information Technology
Development Services
Planning & Zoning
Economic Development
Building Safety & Code Enforcement
Public Works
Streets
Water & Sewer Utilities
Engineering
Facilities Maintenance
Parks, Arts & Recreation
Community Center
Parks
MontiArts
City Clerk
Elections
Reception
Animal Control
Fire Department Contracted Services
City Attorney
Law Enforcement
County Assessor
FiberNet
Boards & Commissions
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STRATEGIC GOALS & STRATEGIES
The City of Monticello continues to use strategic planning as an important mechanism for
balancing the needs and wants of the community with sound fiscal management. Strategic
planning is also the first step in the annual budget process. Annually, the City Council
meets to reaffirm or adjust priorities and policy positions and to align these overarching
goals with direction for city staff.
Leadership staff developed the city’s Mission Statement, Strategic Goals, and Values, which
were affirmed by the Council at the strategic planning worksession in 2021. The goals were
formed from feedback received from residents related to two major characteristics of
Monticello: just over one-third of the tax base is reliant on an electric-generating plant and
the city originated from a river settlement with a strong community connection to history.
The city is tasked with balancing the need to replace tax base that will eventually go away
in the future when the power plant closes with the desire to maintain its community
character.
•The City of Monticello responsibly manages our resources to provide quality
services and programs, creating a dynamic community by building on our
strengths and investing in our future.
Mission Statement
1.Maintain a Balanced & Thriving Community
2.Harness Incremental Growth
3.Facilitate a Stable, Expanding Tax Base
4.Support a Connected Community, Investing in People and Partnerships
5.Reinvest in Existing Assets to Protect their Value
Strategic Goals
•Leadership
•Stewardship
•Customer Service
•Integrity
•Community
Values
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The worksession in 2021 also brought about the idea of the “Big 6” (in no particular order):
•Investment in the city’s downtown with a focus on Blocks 52 and 34
•A new operations, maintenance, and storage facility for the Public Works department
•The Pointes at Cedar (formerly known as Chelsea Commons) 100-acre development &
recreation area
•Bertram Chain of Lakes Regional Park, a joint venture with Wright County of which the
city is responsible for the athletic park area
•A Water Treatment Plant to treat the city’s water supply
•Fallon Avenue Improvements, including trunk lines that are necessary for future
development to the South and for increased pedestrian safety
Through the 2026 budget process, the Council and staff considered the impact these projects
would have on the next 5-10 years. While these are long-term projects, the city’s 2026 budget
supports continuation of five of these projects, while others are on hold until triggered by
development or external funding. A desire for sustainable growth, as highlighted in the city’s
Monticello 2040 Comprehensive Plan, continues to drive decision making along with a funding
approach that will avoid large impacts to the property tax levy each year without delaying vital
projects.
The city has completed numerous plans to help guide future growth and spending priorities. A
chance to develop additional planning for the future decommissioning of the Xcel Energy
Nuclear Generating Plant, which makes up just over one third of the city’s tax base, became a
reality in 2021 when the city was awarded a grant from the MN Department of Employment
and Economic Development as part of its Community Energy Transitions (CET) grant program.
The city was able to engage in studies to help determine the most advantageous growth areas
along with recommendations on the best ways to execute the plans.
Downtown
Revitalization
New Public
Works Facility
The Pointes at
Cedar
Bertram Chain
of Lakes
Regional Park
Development
Fallon Avenue
Improvements
Water
Treatment
Facility
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Plans for service provision and growth & development:
1.Monticello 2040 Vision + Plan (Comprehensive Plan) – Adopted 2020.
The Comprehensive Plan is a tool for guiding the growth, redevelopment, and improvement of
Monticello over the next 20 years. As the City’s blueprint for growth and guide to decision
making, the comprehensive plan is the foundation upon which decisions about community
growth and development are based. Development of the Monticello 2040 Vision + Plan began in
2019 with significant community engagement in the visioning phase, which resulted in the
adoption of the 2040 Community Vision Statement:
“In 2040 the City of Monticello is an inclusive community focused around sustainable growth
while maintaining its small-town character. Monticello is a Mississippi River town known for its
schools, parks, biking and walking trails and vibrant downtown. Monticello is an evolving,
friendly, and safe community that respects the quality of its environment, fosters a sense of
belonging and connection, encourages a healthy and active lifestyle and supports innovation to
promote a prosperous economy.”
The vision, value statements and preferred development scenario were fundamental to the
establishment of the Comprehensive Plan during the second phase of the planning process. The
Comprehensive Plan provides a set of goals, policies, and strategies for achieving Monticello’s
vision for the future. The Plan includes chapters focusing on land use, transportation, parks and
open space, economic development, community character, community Infrastructure and
implementation.
2.Mobility & Connectivity
The city’s Transportation Plan is encompassed within Chapter 4 of the Monticello 2040 Plan, and
is a guide that outlines the goals, policies, and transportation strategies to improve mobility and
connectivity in Monticello by continuing to build a safe and efficient multimodal transportation
system that strengthens the economy and enhances quality of life. Ongoing major transportation
efforts include:
•Continued evaluation of collector street network improvements for safety, intersection,
and congestion improvements.
•Work with regional and state partners on alternatives and projects related to Highway
25 congestion relief and I-94 capacity expansion.
•Extension of School Boulevard west from current terminus.
•Installation of new roundabout locations throughout the city.
•Street improvements from rural to urban standards for certain streets including Fallon
Avenue, and Edmonson Avenue, among others.
3.Parks & Pathways Plan – Adopted 2011, Update in Progress.
The Monticello Parks and Pathways Plan identifies the city’s objectives for park, pathway, and
recreation planning and development. The Plan also identifies strategies for building on and
maintaining the existing parks infrastructure. The city completed a Pathway Connections map, a
planning document related to pathway connections within the larger system in direct response
to the objectives identified within the plan. The 2040 Plan provides updates but does not
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duplicate the detailed analysis in this plan. A Parks Master Plan is recommended by the
Monticello 2040 Plan to update the detailed portion of this plan, which will conclude in 2025
with adoption by the city council after planning began using consultant Bolton & Menk in late
2022.
4.Bertram Chain of Lakes Regional Park Master Plan – Adopted 2016, Update in Progress.
The Bertram Chain of Lakes Regional Park Master Plan was adopted in 2016, highlighting its
importance in the Monticello 2040 Comprehensive Plan and the 2011 Park & Pathway Plan as a
vital aspect of community quality of life. The initial concept for the regional park and athletic
complex was established in 2011, leading to the approval of a Master Plan for the athletic
complex in 2016. Phase I, completed in 2019, focused on essential park infrastructure, including
a water reuse pond, grading, wells, parking, and access roads. Phase II, finalized in 2024,
introduced ADA-compliant gravel trails and parking, along with various recreational support
facilities and transportation improvements.
The athletic park features adaptable open fields suitable for multi-sport, attracting numerous
local teams to establish their home fields following the 2019 upgrades. Phase II enhancements
included a new gravel entrance, parking lot, water fountains, temporary restrooms, and
extended irrigation lines. Future developments will aim to further enhance infrastructure for
both players and spectators.
A Local Option Sales Tax, approved by city residents in November 2024, was implemented in
2025 to fund improvements at the Bertram athletic park. The tax will last the shorter of 20 years
or until $15 million has been raised. Future park improvements can be completed by issuing
bonds or using a pay-as-you-go approach.
5.Downtown Small Area Plan – Adopted 2017, Update in Progress.
The Downtown Small Area Plan is an implementation plan which integrates market,
transportation, and land use considerations for the purpose of creating a vibrant downtown
district. The Plan states that “The purpose…is to attract and direct investments on the core
blocks of Downtown Monticello, MN over the next 10 years. The Plan advocates for solidifying
Downtown as the heart of the community with a series of coordinated public and private
investments. Together, these investments will create a human-scaled environment that
encourages gathering, socializing, visiting and enjoying on a daily basis - throughout the year.
The improvements outlined in this Plan aim to build on the unique qualities of Monticello to
make the Downtown more attractive to those who have chosen to live and do business in the
community.” The city and Economic Development Authority utilize the Downtown Small Area
plan to implement strategies to realize plan goals. The Small Area Plan has led to further
planning in the Downtown Area, including adoption of Walnut Street Corridor Plan, which
guides investment and improvement for Walnut Street between the river and I-94. The
Downtown Small Area Plan is incorporated in the Monticello 2040 Vision +Plan (Comprehensive
Plan).
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6.The Pointes at Cedar Small Area Plan – Adopted 2022.
Following the update to the City’s Comprehensive Plan in 2020, which highlights the desire to
grow from within, The Pointes at Cedar Master Plan was developed to guide the preparation of
plans and specifications for construction of the public park and open space improvements in the
area between Cedar Street, Edmonson Avenue, Chelsea Road, and School Boulevard. A Small
Area Plan for The Pointes at Cedar was adopted in September 2021. The Pointes at Cedar Small
Area Plan focuses on the potential development of a prominent land area in the core of
Monticello as an exceptional mixed-use neighborhood in which to live, work and play. The
Pointes at Cedar is centered on a recreational water feature and surrounded by a series of
interconnected public spaces. The Plan is designed to encourage private development that
builds on the distinctive public areas within The Pointes. The Small Area Plan provides a guide
for both public and private investments in the development area. Following adoption of the
Small Area Plan, the city completed a planning process for the public areas of the development
project area, which led to the adoption of The Pointes at Cedar Master Plan. The Master Plan is
intended to provide greater detail on the public spaces anchoring the project, including the
identification and location of amenities and recreational features. The Master Plan then serves
as the foundation for the development of plans and specifications for the public improvements
at The Pointes. The Pointes is intended to be a long-term development and growth opportunity.
7.Strategic Transition Plan – Adopted 2022.
The Strategic Transition Plan (STP) is the culmination of the numerous studies and plans
completed by the city in 2021 and 2022 using the aforementioned CET grant dollars. Because
the City’s largest taxpayer is an electric-generating facility, the STP connects these plans and
previously adopted policy documents by evaluating their content for specific strategies that will
support a successful transition away from an energy-based economy. The STP is a document
identifying implementation measures from each plan which supports a sustained and successful
transition effort. The desired document would also draw relationships between the new and
previously adopted studies as they relate to community transition.
8.Comprehensive Water System Plan – Updated 2022.
A water distribution system model was created to evaluate the existing water system. The water
system plan was then developed using this model to identify water system capital
improvements necessary to serve future land use designations in accordance with the city’s
Comprehensive Plan. In 2022, the city conducted an analysis of its water system to determine
improvements necessary for future expansion of the city. These improvements include necessary
water main improvements, trunk lines, additional storage, and other water distribution assets.
9.Comprehensive Sanitary Sewer System Plan – Updated 2022.
The sanitary sewer comprehensive plan identifies the existing sanitary sewer system and
projected future wastewater flows and service areas based on future land use designations in
accordance with the city’s Comprehensive Plan. Several individual sanitary sewer studies were
developed after the adoption of this plan in response to development. The Sanitary Sewer Plan
was updated in 2022 as a concentrated effort to provide the City of Monticello with working
knowledge of the flow characteristics of the sanitary sewer system, identify issues, concerns, or
8Table of Contents
deficiencies with the collection system, and recommend changes or improvements that would
address issues and benefit system operation for the long term.
10.Storm Water Pollution Prevention Program – Adopted 2007.
In 2005 the City of Monticello was designated as a regulated small municipal separate storm
sewer system (MS4) under Minnesota Rules, Chapter 7090. This required the city to obtain a
National Pollutant Discharge Elimination System/State Disposal System (NPDES/SDS) storm
water permit, and to develop and implement a Storm Water Pollution Prevention Plan (SWPPP)
to reduce the discharge of pollutants, including sediments, from our storm sewer system to the
maximum extent practicable.
The city is continuing to implement the required six minimum control measures (MCM’s) as
follows:
A.Public Education and Outreach,
B.Public Participation and Involvement,
C.Illicit Discharge Detection and Elimination,
D.Construction Site Stormwater Runoff Control,
E.Post-Construction Stormwater Management Measures; and,
F.Pollution Prevention/Good Housekeeping Measures.
Zoning, subdivision, and illicit discharge ordinances were adopted related to grading, drainage,
erosion control, and storm water management to meet current MPCA requirements per the
city’s new MS4 permit issued on October 29, 2021.
11.Comprehensive Water Resource Management Plan – Updated 2019.
The Comprehensive Water Resource Management Plan was developed to meet local watershed
management planning requirements of the Metropolitan Surface Water Management Act and
Board of Water and Soil Resources Rules 8410. It was formed in conformance with the
requirements of the Metropolitan Council, and applicable State and Federal laws. The plan and
its referenced literature are intended to provide a comprehensive inventory of pertinent water
resource related information that affects the city and management of those resources.
12.Wellhead Protection Plan (Part 1 and 2) – Completed 2016.
The goal of the Wellhead Protection Plan is to prevent human-caused contaminants from
entering the water supply wells and to protect all who use the water supply from adverse health
effects associated with groundwater contamination. The preparation of the city’s plan was
required by Minnesota Rules 4720.5100 to 5720.5590. Part 1 was completed in 2015, and Part 2
was completed in 2016. The plan is anticipated to be updated by 2026 as determined by the
Minnesota Department of Health.
13.Plan Requirements and Design Guidelines (“Design Manual”) – Updated 2022.
These guidelines were established for developers of property within the City of Monticello. The
guidelines provide design standards, specifications, and detail plates for the design of
infrastructure improvements, street, utility, and site work construction.
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These guidelines are referenced in the city’s zoning and subdivision ordinances related to
grading, drainage, erosion control, and storm water management. The Design Manual is
updated as needed for new design regulations and requirements.
14.General Specifications and Standard Detail Plates for Street and Utility Construction –
Updated 2017.
These specifications represent the city’s requirements for construction of public streets and
utility systems.
15.Interchange Planning Study – Ongoing.
The Interchange planning study will determine a reasonable location or locations for a future I-
94 Interchange within the city west of TH 25. The Monti:2040 Comprehensive Plan recognizes
that Northwest Monticello, which includes the CSAH39 to Orchard Road corridor, is a primary
focus for future development and further cites the Future Interchange as a critical component of
understanding growth potential and land use in the Northwest Area. However, the feasibility of
development to the East side of city limits was also studied.
16.Central Mississippi River Regional Planning Partnership (CMRP) – Ongoing.
A joint power agreement was adopted in 2015, with a shift in focus from strictly transportation
to broader regional planning taking place a few years later. The group obtained 501(c)(4) status
in January 2025. A TH 25 area transportation study was completed in 2018 and identified
options for near-term and long-term improvements to the corridor. Wright and Sherburne
Counties completed a Planning & Environmental Linkage (PEL) Study in 2024-2025. Additional
funding is being sought to proceed to next steps.
17.Natural Resource Inventory & Assessment – Adopted 2008.
The purpose of the Natural Resource Inventory and Assessment (NRI/A) is to identify existing
natural resources within the City of Monticello and its growth area (the Monticello Orderly
Annexation Area), inventory these resources, and assess the resource quality. These resources
are then considered and evaluated during growth/development.
18.Economic Development Strategic Workplan – Updated 2025.
The EDA adopts a strategic workplan annually, which directs EDA staff focus and resources over
the following three years. The current workplan is effective for 2025-2027.
Plans for Facility and Infrastructure Maintenance:
1.Wastewater Treatment Facility Plan – Updated 2022.
The Wastewater Treatment Facility Plan was updated to provide recommendations to address
aging infrastructure and future treatment requirements. Capital improvements identified
include the demolition of obsolete equipment and installation of an influent lift station and grit
removal, a gasifier tank, and long-term improvement of an additional SBR tank.
2.Overall Street Reconstruction Program – Adopted 2004, ongoing as part of capital
improvement plan.
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The 2025-2029 Capital Improvement Plan includes projects related to the program, with various
projects planned throughout the city, which typically occur every other year.
3.New Water Treatment Plant
Tests of the city’s municipal water supply showed manganese levels above guidelines from the
Minnesota Department of Health (MDH) in 2018. The city stopped using the well with the
highest levels of manganese and began educating the public on strategies to mitigate impacts.
Simultaneously, the city began applying for federal and state funding to contribute to the
significant cost of building a central water treatment plant.
The city was successful in receiving $11 million in funding via the State’s bonding bill in 2023.
However, with cost projections continuing to rise due to inflation, the city continues to request
additional funding at both the state and federal levels. Conditions of the original state funding
require the city to use the funds by 2028, so design is nearing 90% plans with construction
expected to begin in summer 2026.
4.New Public Works Facility
The city completed a study of the public works facility in 2007 which identified the need for
additional storage and more efficient configuration of the public works department. Due to the
recession shortly thereafter, the project never gained traction but was recently revived because
of need. Concept plans have been drafted, and land was purchased in 2021 for the future
facility. An architect was hired in late 2022 for design of the facility, a construction manager
was brought on board in 2023. Design is underway with construction anticipated to begin in the
fall of 2026.
5.Transportation Projects
TH 25 Pavement Preservation Project – MNDOT has a planned pavement preservation project in
2031 for TH 25 from Big Lake to the I-94 interchange. To prepare for this project, MNDOT is
completing a corridor study to identify potential improvements that may be included in the
project to increase capacity and safety along this corridor. Additionally, MNDOT is planning for
a 2027 project to re-deck the TH25 bridge over I-94.
The city was awarded grant funding to improve pedestrian safety along Golf Course Road
(County Road 39) West from Elm Street to 7th Street. Construction began in 2025 with
completion in 2026.
Financial Plans:
1.Annual Budget - Adopted each December.
2.Capital Improvement Plan - Updated and adopted each year as part of the budget process;
most recently for 2026 -2030.
3.Long-term Financial Management Plan – Updated annually.
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This first phase of the Comprehensive Plan
process, the Visioning phase, included a
community engagement process to identify
common values, growth aspirations and a vision
to inform the planning direction for the next
20 years. The vision, value statements and
preferred development scenario will serve as the
foundation for creating the new Comprehensive
Plan during the second phase of the planning
process. The Comprehensive Plan provides a set
of goals, policies and strategies for achieving
Monticello’s vision for the future.
PHASE ONE | JANUARY 2020
In 2040 the City of Monticello is an inclusive community focused around sustainable
growth while maintaining its small-town character. Monticello is a Mississippi River
town known for its schools, parks, biking and walking trails and vibrant downtown.
Monticello is an evolving, friendly and safe community that respects the quality of its
environment, fosters a sense of belonging and connection, encourages a healthy and
active lifestyle and supports innovation to promote a prosperous economy.
A balanced land use and transportation framework that provides options and connectivity.
A range of attainable housing options in terms of type, cost, and location.
A respected school and education system serving the community.
A healthy community focused on physical and mental health and wellness of its residents.
A safe, clean, and beautiful community
supported by caring and helpful residents.
A network of parks, open space and trail connections that provide recreation opportunities.
An inclusive community welcoming people of all ages, races, religions and ethnic backgrounds.
A diversified and strong local economy competitive at regional, state and national levels.
A vibrant downtown that embraces the River and provides a focal point for the community.
A thriving arts and culture scene that reflects the creativity of the community and supports a sense of place.
VISION STATEMENT
VALUE STATEMENTS
VISIT
CI.MONTICELLO.MN.US/MONTI2040
TO LEARN MORE!
PREFERRED SCENARIO
PRIORITYGREENWAYSMIXED RESIDENTIAL/COMMERCIAL
INDUSTRIALCOMMERCIAL
PLANNED DETACHED
RESIDENTIAL DEVELOPMENT INTERCHANGE
LEGEND:DETACHED RESIDENTIAL
MIXED COMMERCIAL/OFFICE/LIGHT INDUSTRIALATTACHED RESIDENTIAL RIVER
ACCESS
• Sustainability - Focus on sustainability, open space and wetland
preservation throughout City.
• Infill Development - New service commercial and light industrial infill.
• Conservation Neighborhoods - Single-family housing developed as
conservation subdivisions in a clustered fashion mitigating impacts to
sensitive areas.
• Industrial Expansion - Full build out and expansion of Otter Creek
Industrial Park and growth around future Interchange.
• Multi-Family Housing - New multi-family infill development near core
of downtown and other focus areas.
• New School - New elementary and middle school campus with
environmental focus.
• Downtown - Downtown plan implementation thriving with new
commercial, mixed-use and public realm improvements.
• Mississippi River - Focus on River with new access, connections and
riverfront trail.
• New Employment Center - New industrial business park developed
around new interchange with green technology, renewable energy,
manufacturing and other uses.
• Xcel Facility - The Xcel Monticello Nuclear Generating Plant is
licensed through 2030 and will seek relicensing to 2040.
• Annexation Area - Portions of the Orderly Annexation Area are
designated as an Urban Reserve for future development. Development
would likely include conservation single-family cluster subdivisions.
Note: The Preferred Scenario guidance and mapping provided in the Vision
Report will be further refined during the Comprehensive Plan process. This
map is not the City of Monticello’s final Land Use Plan. This map provides
initial guidance for the next phase of the project, the Comprehensive Plan,
and will be further detailed and refined.
The preferred development scenario is the result of community feedback on the four previous scenarios and the community’s vision.
The community envisions Monticello in 2040 as an environmentally and economically sustainable community that has experienced
strong, balanced growth.
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Development Assumptions
Key Preferred Scenario Aspects
URBANRESERVE
INCREMENTAL, SUSTAINABLE Growth Scenario
Downtown Focus
New School
Industrial and Employment
Conservation Neighborhoods
Retail and Commercial
Trails and Open Space
VISIT
CI.MONTICELLO.MN.US/MONTI2040
TO LEARN MORE!
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COUNTY RD 39 NECOUNTY RD 39 NE
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Downtown Mixed Use10-18 Unit/Acre10-18 Unit/Acre
Service Commercial and Light Industrial Infill
Regional Oriented Commercial
Multi-Family10-18 Unit/Acre10-18 Unit/Acre
Medium and Small Lot Conservation Developments4-10 Units/Acre4-10 Units/Acre Potential School Site withEnvironmental Focus
Medium and Small Lot Conservation Developments4-10 Units/Acre4-10 Units/Acre
Otter Creek
Industrial Park
Commercial/Residential Mix (Neo Traditional) Development
Residential (South) Residential (South) 8-10 Units/Acre8-10 Units/Acre
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Technology, Renewable Energy,
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12Table of Contents
PRIORITIES & ISSUES
The city’s priorities were redefined in the Monti:2040 Comprehensive Plan adopted in 2020.
This Comprehensive Plan highlights the city’s desire to grow from within before expanding out
by focusing on three key themes: Sustainability, Community Health and Sense of Place. The
Comprehensive Plan is the primary influence in financial planning.
After years of adapting due to impacts from the COVID-19 pandemic, the city’s 2026 budget
reflects a more routine approach to operations while at the same time retaining efficiencies
and other strategies discovered during the pandemic. While the city has mainly returned to
routine levels of service and funding, the Community Center Fund was slower to rebound.
Revenues in the Community Center Fund are close to pre-pandemic levels, however, the costs
to generate that level of revenue have increased greatly. As is fiscally responsible, revenues are
budgeted conservatively, and expenditures are estimated liberally to ensure sound financial
position.
The American Rescue Plan Act of 2021 (ARPA) provided just over $1.5 million directly to the
city. All ARPA funds were used in 2021 through 2023 for wages and benefits at the Monticello
Community Center. Going forward, the Deputy Registrar Fund has been identified as a source of
financial support to the Community Center Fund while opportunities for additional revenue or
decreased expenditures are examined. The 2026 budget reflects increased rates, adjusted
facility hours, and limited investments in additional services or fitness equipment to reset.
The city’s strategy for budgeting focuses on entity-wide “buckets” or “pieces of a puzzle”
including the following areas:
Noteworthy changes in service levels and fees include:
Personnel:
•Overall: A 3.0% cost-of-labor adjustment (COLA) was applied to the wage scales in 2026
in addition to implementation of a new wage scale identified in a classification and
compensation study completed in 2025. Budget impact: $280,000.
Personnel
Notable Operating Expenditures
Equipment
Capital Projects
13Table of Contents
•Overall: Step increases are awarded to staff with a satisfactory annual performance
review. Review dates are staggered based on date of hire. Budget impact: $118,000.
•Overall: Costs of benefits increased substantially in 2026 due to increased rates for
health insurance and a new state-mandated tax to fund Minnesota Paid. Budget impact:
$168,000.
•Planning & Zoning: Creation of an internal Senior Planner position (beginning April 1,
2026) to replace the contracted planner’s upcoming retirement. Budget impact:
$110,000.
Notable Operating Expenditures:
•City Clerk: elections in 2026. Budget impact: $31,000
•Law Enforcement: Increase to hourly rate of the contract. Budget impact: $110,000.
•Emergency Management: Installation of AED devices. Budget impact: $8,000.
•Animal Control: Increase to contracted services for animal control response including
facility maintenance. Budget impact: $15,000.
•Shop & Garage: Increased allocation of Facilities Maintenance Fund costs. Budget
impact: $45,000.
•Refuse: Addition of new accounts with continued community development. Budget
impact: $135,000.
•Park Operations: Purchase of new park benches for downtown in 2025 with none in
2026. Budget impact: -$25,000.
•Shade Tree: Continued response to and treatment of Emerald Ash Borer (EAB) infected
trees. Budget impact: $40,000.
Equipment (Fleet):
•Streets: The streets department, through the Central Equipment Fund, budgeted for a
plow truck, asphalt roller, and skid loader and loader grapple attachments. Budget
impact: $530,000 ($68,600 annually to the General Fund for 10 years).
•Sewer: The sewer department budgeted for a replacement sewer camera & trailer.
Budget impact: $166,000.
Capital Projects:
•City Facilities – Water Treatment Plant: Completion of design and commencement of
construction of a new water treatment plant. Budget impact: $12,800,000.
•City Facilities – Public Works Facility: Completion of design and commencement of
construction of a new public works facility. Budget impact: $17,500,000.
•City Facilities – Other: Improvements to the Monticello Community Center building
envelope, repaving of the library parking lot, and repairs to the soccer building roof.
Budget impact: $1,925,000
•Transportation: Completion of Golf Course Road Trail, engineering & design of East
Bridge Park Accessibility trail and underpass improvements, and design and construction
of neighborhood mill & overlay projects. Budget impact: $2,310,000.
14Table of Contents
•Utilities Infrastructure – County Rd 39 Water Extension: Extension of water trunk lines
from Chelsea Road to the west. Budget impact: $1,000,000, with $500,000 in grant
funding.
•Utilities Infrastructure – Wastewater Treatment Plant: Replacement of gasifier tank.
Budget impact: $700,000.
•Utilities Infrastructure – Stormwater & Fiber: Improvements to Ditch 33, regional pond
expansions near Otter Creek business park and Fallon Avenue, and fiber extensions into
new neighborhoods. Budget impact: $2,800,000.
•Recreation Improvements: Replace hockey boards at 4th Street Park and pier on Front
Street (both dependent on external funding contributions). Budget impact: $130,000.
•Fallon Avenue Improvements: Oversizing and landscaping in the first phase of the
Haven Ridge West development and planning for future reconstruction from Chelsea
Road to Fallon Drive. Budget impact: $2,451,000.
•Bertram Chain of Lakes Regional Athletic Park: Construction of pickleball courts and
maintenance facility shared with Wright County. Budget impact: $1,705,000.
•Downtown: Expansion of the parking lot on Block 51. Budget impact: $175,000.
Furthermore, the city evaluates utility rates annually. The following increases were adopted in
the 2026 Fee Schedule and incorporated into the 2026 budget.
•Water: Usage charges were increased by 8% in anticipation of large upcoming capital
improvements, including a new water treatment facility. Access and truck charges
increased 27% slightly higher than the rate study completed in 2025 recommended.
•Sewer: Usage charges increase 3% for base and usage charges. Access and trunk charges
were increased by 4% as recommended by the rate study.
•Stormwater: Stormwater fees increase 5% to $5.00/drainage unit each month. Access
and trunk charges were increased by 3%.
•Garbage & recycling: The garbage and recycling charges adjusted in 2026 for garbage to
remain consistent with 2025 rates and a 2% decrease in recycling rates. Rates match the
hauler’s charges to the City per the new 10-year contract, which began with new hauler
LRS on June 1, 2025.
The city’s estimated population is over 15,000. A city of Monticello’s size, operations, tax base
composition, and location require careful planning for sustainable and responsible growth. The
valuation of the Xcel Electric Generating Plant creates large fluctuations in the tax statements
of city residents and businesses. The city has many competing priorities in terms of capital
improvements and support for development that need to be balanced with the financial
appetite of the property taxpayers. The Council’s discussions in the 2026 budget process
centered around a balance of investing in some areas now with waiting to invest in certain
areas until additional debt is paid off or external grant funding is obtained.
15Table of Contents
2026 BUDGET
OVERVIEW
City of MonƟcello, Minnesota
Property Taxes
16%Tax Increments
1%
Franchise & Other Taxes
1%
Sales & Use Tax
2%
Sale of Goods
7%Licenses & Permits
1%
Intergovernmental Revenues
5%
Charges for
Services
15%
Fines & Forfeits
0%
Special Assessments
0%
Miscellaneous
3%
Contributed Capital
0%
Operating Transfers In
0%
Debt Proceeds
49%
2026 Revenues by Category - All Funds
General Fund
$9,435,000
62%
MCC Operations
$552,000
4%
Capital
$2,844,489
19%
Debt Service
$2,305,511
15%
2026 Property Tax Levy
Personnel Services
13%
Supplies
8%
Other Services &
Charges
18%
Capital Outlay
57%
Debt Service
4%
Operating Transfers
Out
0%
2026 Expenditures by Category - All Funds
Fund Type 2025 2026 2025 2026
General 13,181,000$ 13,886,000$ 13,181,000$ 13,886,000$
Special Revenue 2,146,000 2,225,000 2,103,000 2,179,000
Debt Service 2,449,000 2,513,000 2,612,000 2,612,000
Capital Project 6,520,000 43,780,000 7,298,000 24,671,000
Enterprise 19,405,000 32,043,000 24,889,000 32,371,000
Internal Service 1,974,000 2,068,000 1,954,000 1,879,000
Component Unit 896,000 1,379,000 757,000 1,194,000
Total 46,571,000$ 97,894,000$ 52,794,000$ 78,792,000$
Total Budget
Revenues Expenditures
2026 Water Treatment Plant
Capital Public Works Facility
Projects Downtown Parking on Block 51
BCOL Pickleball & Maintenance Facility
Fallon Avenue/85th Street
City Facility Maintenance & Improvements
Transportation Improvements
Water & Stormwater Improvements
Equipment Purchases
16Table of Contents
17Table of Contents
18Table of Contents
BUDGET OVERVIEW
INTRODUCTION
The budget is a tool; how this versatile tool is used depends on the stakeholder. Policy makers
use the budget to provide direction on service levels and place limits on spending. For
managers, the budget offers benchmarks for measuring performance and assessing
stewardship. To community advocates, the budget conveys visibility as to whether their
concerns are being addressed. Universally, the budget is an essential tool for communicating
the city's plans, policies, procedures, and objectives regarding the services to be delivered and
the assets to be acquired in the upcoming and future fiscal years. The budget’s effectiveness is
meaningfully influenced by the conviction of the various stakeholders using this dynamic tool.
BUDGET POLICY AND STRATEGY
This budget document was prepared after analyzing and evaluating requests from various
departments and budget units. The content represents the requested financial support for the
operation of the City of Monticello for the upcoming fiscal year. Revenue estimates are
conservative and realistic, based on historical trends with greater weight placed on the most
current years. The importance of a sound revenue picture cannot be overstated.
The City of Monticello provides a range of services to the community, including police
(contracted) and fire protection; street maintenance; snow and ice removal; water, sewer and
stormwater utility services; parks, arts, and recreation amenities (including community center)
and programming; and administrative and planning services. In addition, the city owns and
operates a department of motor vehicles (DMV), municipal off-sale liquor store (Hi-Way
Liquors), and a fiber optic network (FiberNet). The level of service provided by the proposed
2026 budget is consistent with what is currently enjoyed by the community. City Council and
city staff used the goals set during the strategic planning process to direct the development of
the 2026 budget.
STRATEGIC OR KEY INITIATIVES
The City of Monticello provides a full range of municipal services, as listed in the previous
paragraph, and as authorized by state statute. Monticello is fortunate to have many assets,
including a beautiful setting, an excellent location, a rich heritage, and a talented population.
The city seeks to use, preserve, and enhance these assets in building a great, affordable place to
live, work, and recreate. The city will fulfill the goals below to achieve this mission:
1.Focus on value-added services, programs, and investments to balance the near-term desire
for a competitive tax rate with the responsibility to set Monticello up for a vibrant, thriving
future. The city will continually evaluate how we calculate and collect user charges and
development fees to ensure proper allocation of costs while not stifling development in the
process.
The 2026 property tax levy increase of 7.2% was set to align with the tax capacity increase
to preserve the city’s tax rate near 37.701.
19Table of Contents
2026 Budget: The city levy increases $1,020,000 to $15,137,000 and the Housing and
Redevelopment (HRA) levy increases $5,000 (1.0%) to $504,000. Combined tax levy increase:
$1,025,000 (7.0%). The tax levy rate is the 5th lowest of the 17 cities in Wright County.
2.Develop and maintain a quality system of parks, trails, and recreational facilities, including
the unique assets of the Monticello Community Center (MCC), the Mississippi River, and the
Bertram Chain of Lakes (BCOL) Regional Park, to support public health and wellbeing as well
as contribute to a sense of community and belonging.
In partnership with the county in the early 2010s, the city acquired park land, which is
roughly 50% designated for non-athletic purposes and 50% designated for athletic purposes.
The city also maintains roughly 367 acres of park land and 51 miles of trail.
2026 Budget: $1,705,000 BCOL pickleball and maintenance facility design and construction;
$1,500,000 MCC building envelope repairs; $1,645,306 General Fund’s park operations and
ballfields activities; $2,145,000 Community Center Fund’s operating expenditures.
3.Maintain and plan for high quality water and sewer utility systems.
With some of the lowest water and sewer rates in Minnesota, the city provides excellent
services from these utilities to serve existing residents and businesses and to plan for future
growth. The budget includes funds to plan for the construction of a water treatment facility
to treat iron and manganese, improvements to the wastewater treatment plant, and
ongoing system improvements in each fund.
2026 Budget: Water - $12,800,000 water treat facility construction, $1,000,000 trunk
extension on West County Road 39, $405,000 trunk oversizing near Fallon Avenue and 85th
Street; Sewer - $1,060,000 trunk oversizing near Fallon Avenue and 85th Street, and
$700,000 replacement of gasifier tank at Wastewater Treatment Plant.
4.Implement the long-range transportation plan as outlined in the Comprehensive Plan, with
the goal of improving multi-modal traffic flow around and through the city including
completion of street overlay projects before the need for reconstruction along with capacity
improvements to accommodate future local and regional growth.
Monticello is one of numerous government entities in the area taking part in regional
planning and economic development initiatives, including a study to identify an additional or
expanded interstate interchange site and Mississippi River crossing; the city is also an active,
due-paying member of the I-94 Coalition. The city’s pavement management program
identifies varying condition levels of every street. The city implemented a gas franchise fee in
2026 to provide funding for projects identified in the pavement management program in lieu
of special assessments to benefiting properties.
2026 Budget: $1,260,000 for mill & overlay design and construction to select neighborhood
streets; $900,000 to complete the Golf Course Road trail project, $901,000 for street/trail
design along Fallon Avenue and roundabout installation near 85th Street; $325,000 library
parking improvements, $8,000 for memberships, $1,450,878 for the General Fund’s streets
and alley activity.
20Table of Contents
5.Invest in the city’s facilities and other infrastructure with an emphasis on proactive
maintenance to minimize reconstruction and replacement costs.
The city owns a variety of buildings and other infrastructure assets which support purposes
including stormwater control, fiber optic services, shade tree preservation and expansion.
These assets serve specific purposes to enhance quality of life for Monticello’s citizens.
2026 Budget: $17,500,000 for construction of a new public works facility (assumed half of
total project cost), $2,000,000 for stormwater improvements to Ditch 33, $1,172,000 for
stormwater pond maintenance and operations (for example, street sweeping), $200,000 for
capital repair and expansion of the FiberNet network, $1,648,000 to operate FiberNet and
$270,250 for operations of the General Fund’s shade tree activity.
6.Implement the Downtown Small Area Plan which will support a downtown area that
combines a successful commercial district, community identity and heritage, and
connection with Bridge Park and the Mississippi River.
The 2017 Downtown Small Area Study plan for identified various options for re-creating the
city’s downtown. A major redevelopment was built on Block 52 in 2023, and planning for
development on Block 34 has begun. The city completed the Downtown Roadway and Safety
Improvement project to supplement the investment from private developers, and future
improvements to Walnut Street, as identified in the Walnut Street Corridor Plan, are planned
to further support private downtown development.
2026 Budget: $325,000 for accessibility/underpass improvement design at East Bridge Park
and parking improvements on Block 51, $43,250 for professional services in the EDA Fund.
7.Attract a variety of housing options to create life-cycle housing and quality neighborhoods,
allowing residents to maintain a home in the community through all stages of life.
Staff facilitate the development of additional residential home lots on the perimeter of the
city by working with developers and engineers. Infrastructure needs are regularly assessed
and incorporated into the city’s capital improvement plan. A housing needs and market
demand study, which measures progress towards meeting these goals, was updated in
2023, and will be updated every 3 years. The City Council and EDA continue to discuss and
identify housing trends and priorities for the community.
2026 Budget: $12,000 for housing program policy. The EDA is holding almost $150,000 of
additional funding to date from housing aid allocated from the State of Minnesota for which
a program is being created.
8.Create, attract, and retain a wide range of employment opportunities with a growing
emphasis on higher-paying jobs while diversifying and expanding the city’s tax base.
This concept promotes the city’s competitive advantages (i.e., low taxes, property
availability, transportation access, etc.) to businesses looking to move or grow.
2026 Budget: $0 specifically; however, the EDA uses its operating budget to prioritize new
development opportunities through TIF districts, Greater Monticello Enterprise Fund (GMEF)
low-interest loans, and incentive packages via State funding.
21Table of Contents
TOTAL BUDGET
The 2026 budget includes all the funds maintained by the city. Each fund is responsible for
accounting for a particular activity or activities. Each fund type will be discussed within this
message and/or in the budget document.
The following compares the adopted 2025 and 2026 budgets:
Total revenues increase 210.2% (7.6% without bond proceeds) and total expenditures increase
149.2% (8.1% decrease without the associated projects) in 2026. General Fund revenues and
expenditures increase 5.3%, most of which is funded by the property tax levy increase. The
slight increase in special revenue activity reflects anticipated inflation for the Community
Center Fund. The increase in debt service revenues reflects less reliance on fund reserves to
make bond payments in 2026. Capital project funds include $35 million of bond proceeds (with
$17.5 million of association capital costs), a full year of sales tax collections, and
implementation of the new gas franchise fee in 2026. Enterprise activity includes $12,800,000
of bond proceeds (with associated capital costs) and increased user rates. Internal service funds
account for anticipated inflation, and the EDA component unit increases reflect new TIF
districts in 2026.
The following graphs display the revenues and expenditures attributable to each fund-type in
the 2026 budget:
Fund Type 2025 2026 2025 2026
General 13,181,000$ 13,886,000$ 13,181,000$ 13,886,000$
Special Revenue 2,146,000 2,225,000 2,103,000 2,179,000
Debt Service 2,449,000 2,513,000 2,612,000 2,612,000
Capital Project 6,520,000 43,780,000 7,298,000 24,671,000
Enterprise 19,405,000 32,043,000 24,889,000 32,371,000
Internal Service 1,974,000 2,068,000 1,954,000 1,879,000
Component Unit 896,000 1,379,000 757,000 1,194,000
Total 46,571,000$ 97,894,000$ 52,794,000$ 78,792,000$
Total Budget
Revenues Expenditures
General
14%
Special
Revenue
2%
Debt Service
3%
Capital
Project
45%
Enterprise
33%
Internal
Service
2%
Component
Unit
1%
2026 Revenues by Fund Type
General
18%
Special
Revenue
3%
Debt Service
3%
Capital
Project
31%
Enterprise
41%
Internal
Service
2%
Component
Unit
2%
2026 Expenditures by Fund Type
22Table of Contents
PROPERTY & SALES TAXES
The state of Minnesota has granted local municipalities the authority to levy taxes to fund
operations and debt payments. For the City of Monticello, the property tax levy accounts for
68% of revenues in the General Fund and 26% in the Community Center Fund. In 2026, debt
service funds will receive $2,305,511 in property taxes for principal and interest payments on
general obligation debt, which is $109,318 (5.0%) higher than the prior year. With the available
levy capacity, the city levied $443,682 (18.5%) more for the Capital Project Fund in 2026. The
city's 2026 general property tax levy will increase to $15,137,000, by $1,020,000 (7.2%) over
the prior year. The Economic Development Authority Fund levies a Housing and Redevelopment
Authority (HRA) special benefit levy. The HRA levy increases to $504,000 (1.0%) from $499,000
in the prior year. When added together, the two levies represent a 7.0% property tax increase.
The following table is a historical view of the tax capacity value, tax capacity rate and tax levy:
Under contract, the Wright County assessor values all properties located within the city’s
corporate limits. This market value is applied to the class rates assigned by the state to
determine a property's tax capacity. The county estimates the city's tax capacity for taxes
payable in 2026 at $40,164,721, a 7.3% increase. The Xcel Energy nuclear power plant taxable
market value increased 10.2% for 2026 to $785 million. The Xcel plant alone accounts for an
estimated 37.7% of the city’s tax capacity. The city's property tax levy is divided by the tax
capacity to determine the city's tax capacity rate, which is then applied to each property's tax
capacity to determine that property’s city tax. For 2026, the city's tax capacity rate is expected
to decrease minimally from 37.701 to 37.687.
The city generally does not have the authority to levy or collect local sales taxes or other types
of taxes under the state's tax system. However, the state legislature authorized Monticello to
include a local sales tax question on the ballot in November 2024. Voters approved a 0.5% sales
tax for rehabilitation of the Bertram Chain of Lakes (BCOL) Regional Athletic Park effective April
1, 2025 for 20 years or until $15 million is raised, whichever occurs first.
PERSONNEL SERVICES
The 2026 budget includes one staffing change with the addition of a Senior Planner within
Development Services which will facilitate the transition from a contracted planner who is
nearing retirement. A 3.0% wage adjustment for all employees is included in the 2026 budget.
Tax Capacity Capacity Tax Capacity Rate City Tax HRA Levy
Year Value % Change Rate % Change Levy Levy % Change
2017 $27,583,160 6.5% 33.172 -3.8% $9,150,000 $280,000 2.5%
2018 $29,528,145 7.1% 32.332 -2.5% $9,547,000 $323,000 4.3%
2019 $29,076,227 -1.5% 34.262 6.0% $9,962,000 $348,000 4.3%
2020 $29,870,392 2.7% 34.968 2.1% $10,445,000 $355,000 4.8%
2021 $31,026,583 3.9% 35.659 2.0% $11,063,700 $366,300 5.9%
2022 $31,073,603 0.2% 36.536 2.5% $11,353,000 $388,000 2.6%
2023 $34,393,769 10.7% 35.035 -4.1% $12,050,000 $402,000 6.1%
2024 $37,843,681 10.0% 34.547 -1.4% $13,074,000 $451,000 8.5%
2025 $37,445,040 -1.1% 37.701 9.1% $14,117,000 $499,000 8.0%
2026 $40,164,721 7.3% 37.687 0.0% $15,137,000 $504,000 7.2%
23Table of Contents
Public Works employees belong to a union, and their collective bargaining agreement for 2026-
2027 is ongoing at yearend.
The city provides benefits to employees including insurance for health and dental, long-term
disability, and life. The city’s policy is to cover the cost of 100% for health and dental insurance
for employee only coverage. Family coverage is covered at 100% of the single plan’s premium
plus 75% of the difference in family and single premium. This is the case for both union and
non-union employees, who participate in separate health benefit plans. Staff continue to
explore ways to reduce future premium increases for both the city and its employees.
The contribution rates to the Public Employees Retirement Association (PERA) remain the same
in 2026 for both employer and employees. PERA rates: 7.50% of wages for employer and 6.50%
for employee. The budget also calculates taxes for FICA at 6.20% and Medicare at 1.45%. New
in 2026, the State of Minnesota implemented a Paid Leave program. The city opted to
participate in the State’s plan rather than obtain coverage through a private carrier; therefore,
the city pays 0.44% of gross wages to the state.
GENERAL FUND
Expenditures
The following schedule displays 2026 budgeted General Fund expenditures, which increased
5.3% over 2025, by department compared with the prior year budget:
The chart below presents the 2026 budgeted expenditures allocated by function/department:
Department 2025 2026 % Change
General Government 3,054,797$ 3,319,770$ 8.7%
Public Safety 3,973,644 4,130,648 4.0%
Public Works 2,995,852 3,124,720 4.3%
Sanitation 900,000 1,038,450 15.4%
Recreation & Culture 2,250,707 2,266,412 0.7%
Operating Transfers Out 6,000 6,000 0.0%
Total 13,181,000$ 13,886,000$ 5.3%
General Fund Expenditures and Other Uses
General
Government
24%
Public Safety
30%
Public Works
23%
Sanitation
7%
Recreation &
Culture
16%
2026 Appropriations By Department
24Table of Contents
The largest department based on budgeted expenditures is the Public Safety Department. The
2026 Public Safety department budget increases 4.0%. Public safety activities include law
enforcement, fire & rescue, building inspections, emergency management, animal control, and
National Guard. The city contracts with the Wright County Sheriff's department for law
enforcement. The 2026 contract includes a $5/hr (4.5%) increase in the hourly service rate still
for 60 hours per day. The fire and rescue budget decreased 2.7% due to lower Central
Equipment Fund rental charges in 2026. Fire relief and emergency management expenditures
increased by 12.1% and 54.5%, respectively; both are offset with external support (state aid and
grant funding) meaning there is no impact to the taxpayers for these adjustments. Animal
control expenditures increased 21.1% due to an increase in the contract with the animal control
officer in 2026.
The 2026 budget for general government activities increases 8.7%. City administration
increases due to an increase in projected solar investment credits. The city clerk activity
increases 14.3% due to holding elections in even-numbered calendar years. The planning &
zoning activity increases by 17.9% with the addition of a new senior planner position (transition
from contracted).
In 2026, Public Works is the third largest department in terms of budgeted expenditures with
an overall increase of 4.3%. Across the various activities, wage and benefit increases were the
largest cause of growth to the budget. Additional inflationary impact were considered in setting
the budget.
Recreation and culture expenditures increase by 0.7% in 2026. While the ballfields activity
reports a 45.2% increase, the cause is a shift in expenditures from the park operations activity.
Shade tree expenditures increase due to additional grant funding in 2026 for Emerald Ash Borer
(EAB) response. The library does not have a specific building project in 2026 like in 2024 and
2025, but the activity’s allocation of the Facilities Maintenance Fund’s costs increased.
Sanitation expenditures include the costs of the contract with LRS for residential garbage and
recycling collection. The city’s contract for residential garbage hauler ended on May 31, 2025,
and the city’s request for proposals led to a new ten-year contract with a new hauler through
2035.
Shifting analysis to category rather than department, 52% of the General Fund’s budget
expenditures are for other services & charges. This category increases 4.4% from 2025 mostly
due to the hourly rate increase of the law enforcement contract with Wright County. Other
services include assessing, legal, auditing, and engineering services, utility charges and
insurance premiums. Appropriations for personnel services follow at 35% of the total. Capital
outlays include the internal rent payments to the Central Equipment Fund. Additional
equipment purchases will translate into higher lease payments, and completion of lease
payments for select pieces of equipment will alleviate the increase. Supplies, including office
supplies, motor fuels and repair parts, account for 7% of the general fund budget.
The following table and graph provide perspective on expenditures and other uses for the
various General Fund expenditure categories in the 2025 and 2026 budgets:
25Table of Contents
Personnel services include wages and benefits for all full-time, part-time, and seasonal
employees. This cost category rises with wage and benefit inflation and changes to staff levels.
Revenues and other sources
Revenues and other sources supporting General Fund expenditures and other uses are
classified as follows:
The General Fund’s tax levy increases by 5.0%, while the General Fund’s portion of the
combined levy (city + HRA) decreases from 61.5% to 60.3%. Franchise & other taxes decrease to
offset the decreased budget for street lighting. Decreases in intergovernmental revenues are
attributable to 2025 non-recurring state aid from the State of Minnesota for public safety and
for response to the Emerald Ash Borer infestation in city trees. The increase in charges for
services reflects more residential garbage and recycling users. Fines & forfeits remain
consistent with 2025. Miscellaneous revenues are projected to be higher due to higher interest
Category 2025 2026 % Change
Personnel Services 4,542,664$ 4,989,172$ 9.8%
Supplies 931,650 831,250 -10.8%
Other Services & Charges 7,055,786 7,365,678 4.4%
Capital Outlay 644,900 693,900 7.6%
Operating Transfers Out 6,000 6,000 0.0%
Total 13,181,000$ 13,886,000$ 5.3%
General Fund Appropriations
Personnel
Services
35%
Supplies
7%
Other Services &
Charges
52%
Capital Outlay
6%
2026 Appropriations -General Fund
Classification 2025 2026 % Change
Property Taxes 9,007,000$ $9,457,000 5.0%
Franchise & Other Taxes 302,000 293,500 -2.8%
Licenses & Permits 482,000 580,000 20.3%
Intergovernmental Revenues 825,000 616,000 -25.3%
Charges for Services 1,514,900 1,668,000 10.1%
Fines & Forfeits 78,500 78,000 -0.6%
Miscellaneous 971,600 1,193,500 22.8%
Total 13,181,000$ 13,886,000$ 5.3%
General Fund Revenues and Other Sources
26Table of Contents
rates being earned on investments and increases in the credit for the city’s solar farm
investment.
The property tax levy generates 68% of the General Fund revenues. Other than franchise fees,
the city does not impose other taxes, such as local option sales taxes or income taxes for
General Fund operations. Therefore, the city will remain dependent on property tax revenue as
its major source of future revenues.
SPECIAL REVENUE FUNDS
The City of Monticello currently operates special revenue funds for cemetery and community
center activities along with the Small Cities Development Program (SCDP) Fund, which provided
revolving loans to local businesses.
Like the General Fund, the special revenue fund budgets are set at a level to maintain services.
The tax levy supports community center operations ($552,000). Charges for services are the
largest revenue source for both the community center (memberships) and the cemetery (plot
sales). Community center charges were budgeted conservately due to significant rate increases
in 2026 to better align with the costs to operate the facility and programming.
The following tables display the change in budgeted revenues and other sources and the
change in budgeted expenditures and other uses for special revenue funds:
Property Taxes
68%
Franchise &
Other Taxes
2%Licenses &
Permits
4%
Intergovernmental
Revenues
4%
Charges for
Services
12%
Fines & Forfeits
1%
Miscellaneous
9%
2026 Revenues -General Fund
Classification 2025 2026 % Change
Property Taxes 535,000$ 552,000$ 3.2%
Charges for Services 1,450,800 1,504,000 3.7%
Miscellaneous 60,200 69,000 14.6%
Operating Transfers In 100,000 100,000 0.0%
Total 2,146,000$ 2,225,000$ 3.7%
Special Revenue Funds Revenues and Other Sources
27Table of Contents
DEBT SERVICE FUND (Aggregate of Sub-Funds)
The city's debt service for 2026 is $2,612,000, the same as 2025, for routine amortization of
outstanding bond issues. Funding for debt service comes from special assessments and
property taxes. Outstanding governmental debt as of January 1, 2026 is $12,170,000. The city's
bond rating from Moody’s Investors Services is Aa3.
CAPITAL PROJECT FUNDS
The budgets for capital project funds are based on the 2026 project expenditures listed in the
first year of the city's capital improvement plan. The city's capital improvement plan is included
in a later section of this report. Governmental debt issuance of $35 million is anticipated in
2026 for construction of a new public works facility. Half is budgeted to be spent in 2026 with
the other half with project completion in 2027.
ENTERPRISE FUNDS
Total revenues and other sources for the enterprise funds (Water, Sewer, Stormwater, Liquor,
DMV, and Fiber Optics) are estimated at $32,043,000 for 2026. The decrease in sale of goods
reflects recent trends in liquor store sales. The increase in charges for services is a conservative
estimate given the substantial 2026 utility rate increases. The miscellaneous revenues increase
is due to slightly less conservative estimates for interest earnings. Contributed capital is related
to utility trunk charges on anticipated developments, and debt proceeds are for construction of
a water treatment plant. Additional proceeds for the project are expected in 2027.
Department 2025 2026 % Change
Personnel Services 1,195,454$ 1,320,745$ 10.5%
Supplies 130,700 124,000 -5.1%
Other Services & Charges 756,846 734,255 -3.0%
Capital Outlay 20,000 - -100.0%
Total 2,103,000$ 2,179,000$ 3.6%
Special Revenue Funds Appropriations
Classification 2025 2026 % Change
Sale of Goods 7,366,428$ 6,428,000$ -12.7%
Licenses & Permits 2,000 2,500 25.0%
Intergovernmental Revenues 2,485,000 2,445,625 -1.6%
Charges for Services 8,853,209 9,098,500 2.8%
Special Assessments 30,000 26,000 -13.3%
Miscellaneous 668,363 1,017,375 52.2%
Contributed Capital - 225,000 -
Debt Proceeds - 12,800,000 -
Total 19,405,000$ 32,043,000$ 65.1%
Enterprise Funds Revenues and Other Sources
28Table of Contents
Personnel services increase with wage and benefit inflation of 3.0% and a step increase for
staff, where applicable. Supplies decrease following sales trend at the liquor store. Capital
outlay increases due to the water treatment plant construction. Debt service is for existing debt
in the Sewer Fund. Operating transfers out in 2025 were from the Liquor Store and DMV to
fund capital projects and from the Deputy Registrar Fund to support operations in the
Community Center special revenue fund. Only the latter is included in the 2026 budget.
INTERNAL SERVICE FUNDS
The City of Monticello operates four internal service funds: Facilities Maintenance, Information
Technologies (IT) Services, Central Equipment Fund, and Benefits Accrual. These funds operate
on a cost-recovery basis, but the time horizon differs greatly. Internal service fund charges are
recorded as expenditures in other funds.
The Facilities Maintenance (FM) and IT Services funds are not capital intensive. IT equipment
usually has a shorter replacement cycle but is less per item. The FM Fund focuses on proactive
monitoring and repairs & maintenance of existing city buildings. Major capital improvements or
replacements are funded through the appropriate capital projects fund or enterprise fund.
The Central Equipment Fund is funded through annual rental charges to benefitting budget
units, mostly in the General Fund, to recover equipment purchase costs. Annual depreciation
and inflation for each capital asset are used in calculating annual rental payments.
The Benefits Accrual Fund accumulates resources from governmental funds (General,
Community Center, and Economic Development Authority funds) to match the city’s paid leave
(paid-time-off) liability for governmental fund employees.
DISCRETELY PRESENTED COMPONENT UNIT FUND
The city currently has one discretely presented component unit fund. Component units are
legally separate entities for which the city (primary government) is financially accountable, or
for which the exclusion of the component unit would render the financial statements of the
primary government misleading. The Monticello Economic Development Authority (EDA) is a
legally separate entity created pursuant to Minnesota Statutes § 469.090 through § 469.108 to
carry out economic and industrial development and redevelopment within the city in
accordance with policies established by the City Council. Under Section 469.033, subd. 6, of the
HRA Act, the HRA’s special benefit tax is levied annually and is limited to 0.0185% of the taxable
market value. Tax increments support economic development activities, but their use is
generally restricted to a specific activity in a specific area.
Department 2025 2026 % Change
Personnel Services 2,726,632$ 2,911,486$ 6.8%
Supplies 6,008,500 5,262,600 -12.4%
Other Services & Charges 4,706,268 4,709,872 0.1%
Capital Outlay 10,079,000 19,016,000 88.7%
Debt Service 366,600 371,042 1.2%
Operating Transfers Out 1,002,000 100,000 -90.0%
Total 24,889,000$ 32,371,000$ 30.1%
Enterprise Funds Appropriations
29Table of Contents
FUND BALANCES
Fund balances increase when revenues exceed expenditures and decrease when expenditures
exceed revenues. The General Fund and Monticello Community Center (MCC) Fund have
balanced budgets where revenues and expenditures are equal. Additional analysis on the
change in fund balance can be found on page 66.
CHALLENGES IN CONTEXT
The preparation of this budget reflects the need to meet both short-term and long-term
challenges. While the local economy is stable, inflation, federal reserve rates, and state and
federal economic policy add uncertainty to Monticello’s future fiscal planning. The heavy
reliance on the Monticello Nuclear Generating Plant represents a level of volatility in the tax
base not typically seen by municipalities. Even a slight change in its value can create a tax shift
where other taxpayers could pay more in taxes even if the amount of tax revenue the city levies
is not increased. Ultimately, the City Council desires to meet current and future growth needs
by maintaining a modest tax capacity rate.
Second, in 2021, the city paid off the judgment bonds related to the 2014 settlement of the
telecommunication bondholder’s class-action lawsuit, which further allows the city to put the
bond default behind it. The city has contracted operations with Arvig Enterprises since 2016
with renewal of the existing agreement needed by July of 2026. Discussions on the city’s plan
for its telecommunications operation will occur within its long-term strategic planning.
Third, the city is moving ahead with several capital projects. Most large projects have
reimbursement resolutions, meaning the city can recover their temporary draw on reserves
with debt proceeds if it chooses. Major Council initiatives in the next few years include a new
water treatment facility, a new public works facility, additional phases for improvements at the
Bertram Chain of Lakes (BCOL) Regional Park (funded by the new sales tax), utility and
transportation improvements on Fallon Avenue, continued downtown improvements, and the
Pointes at Cedar development area. However, while the city strives to maximize external
funding, prioritization of finite financial resources will continue to be needed to accomplish the
City Councils goals while also responding to an interest in development.
Fourth, stable leadership requires long term planning, but council seats are not as long as
planning efforts require. In 2024, the mayor was re-elected for a third two-year term, one
existing councilmember was re-elected for an additional four-year term, and one new
councilmember began their four-year term. The mayor and two councilmembers have terms
expiring again at the end of 2026.
Fifth, an interest in development from the data center industry has come to Monticello. The
Planning Commission and City Council are in the process of drafting an ordinance regulating
data center development in Monticello and the Orderly Annexation Area. Two concepts have
been presented to Council but the future of these or other concepts is uncertain
In summary, the uncertain economic environment, public safety service enhancement,
transportation improvements, stabilization in Fibernet operations, and economic and park
development impacted decisions made in drafting the 2026 budget.
30Table of Contents
DISTINGUISHED BUDGET PRESENTATION AWARD
The Government Finance Officers Association of the United States and Canada (GFOA)
presented a Distinguished Budget Presentation Award to the City of Monticello, Minnesota for
its annual budget for the fiscal year beginning January 1, 2025. To receive this award, a
governmental unit must publish a budget document that meets program criteria as a policy
document, as an operations guide, as a financial plan, and as a communications device.
This award is valid for a period of one year only. The City of Monticello has received this award
every year since 2009 and is one of 28 entities (22 of which are cities) in Minnesota to receive
the award in 2025. We believe our current budget continues to conform to program
requirements, and we are submitting it to GFOA to determine its eligibility for another award.
CONCLUSION
Conservation of city financial resources continues to be a top objective. The budget is the
primary tool in making sure limited resources are wisely utilized. The 2026 budget is a product
of collective efforts by the City Council, staff, and various other stakeholders and allows the city
to deliver excellent municipal services in a cost-effective and efficient manner. The City
Council’s commitment, judgment, and expertise are invaluable to the budget process.
Sincerely,
Rachel Leonard Sarah Rathlisberger
City Administrator Finance Director
31Table of Contents
FUND DESCRIPTIONS & STRUCTURE
BUDGETED FUNDS
The city has legally adopted budgets for the General Fund and all special revenue funds.
Expenditures may not legally exceed budgeted appropriations at the total fund level. Monitoring
of budgets is maintained at the department level. Any amounts over budget would need to be
approved by the city council through the disbursement process. Although the city is not legally
required to adopt an annual budget for the nonmajor special revenue funds, the debt service
funds, capital projects funds, enterprise funds, and internal service funds, it does so as a means
of implementing an entity-wide view of the city’s finances, all of which are included in the city’s
Annual Comprehensive Financial Report (ACFR) and Long-Term Financial Plan, both of which are
updated annually.
Budgets are adopted on a basis consistent with accounting principles generally accepted in the
United States of America. Budgeted amounts are as originally adopted or as amended by the city
council. All annual appropriations lapse at year-end.
MAJOR FUNDS
A fund is considered major for budgetary purposes if its revenues or expenditures, excluding
other financing sources and uses, constitute more than 10% of the revenues or expenditures of
the city-wide appropriated budget. Major funds are bolded and underlined in the hierarchy on
the following pages and do not necessarily match the major funds presented in the city’s ACFR
because the calculation for purposes of the ACFR differ slightly and are based on actual rather
than budgeted revenues and expenditures.
General Fund - The General Fund is used to account for all financial resources except those
required to be accounted for in another fund.
Capital Project - The Capital Projects (capital project) Fund is used to account for all capital
acquisition and construction activities of the city not accounted for in another capital project,
enterprise, or internal service fund.
Sewer - The Water (enterprise) Fund is used to account for all activities necessary to provide
water services to the residents and businesses of the city, including operations of the city’s trunk
line system and future water treatment plant.
Details on the purposes of the nonmajor funds are included with each fund later in this report.
32Table of Contents
Go
v
e
r
n
m
e
n
t
a
l
General
Special Revenue
Cemetery
Small Cities Development Program
(SCDP)
Community Center
Debt Service
2015B GO Bond
2016A GO Bond
2017A GO Bond
2018A GO Bond
2019A GO Bond
2020A GO Bond
Capital Project
Capital Projects
Street Lighting Improvements
Park Dedication
BCOL Sales Tax
Transportation Improvements
33Table of Contents
Pr
o
p
r
i
e
t
a
r
y
Enterprise
Water
Sewer
Stormwater
Liquor
Deputy Registrar
Fiber Optics
Internal Service
Facilities Maintenance
IT Services
Central Equipment
Benefit Accrual
Co
m
p
o
n
e
n
t
U
n
i
t
Discretely-Presented Economic Development
Authority Fund
34Table of Contents
DEPARTMENTS & FUNDS RELATIONSHIP
The departments within each fund’s budget are noted in the matrix below:
All capital project funds were combined for this presentation, except the BCOL Sales Tax Fund,
which has a dedicated sales tax funding sources. Principal and interest payments on debt occur
in the Debt Service Fund (comprised of subfunds) and the Sewer Fund.
General Cemetery
Community
Center
Capital
Projects
BCOL
Sales Tax
Water, Sewer
& Stormwater
Liquor
Store
Deputy
Registrar
Fiber
Optics
Facilities
Maintenance
IT
Services
Central
Equipment
Benefit
Accrual EDA
GENERAL GOVERNMENT
Mayor & Council ●
City Administration ●●●
City Clerk ●●●
Finance ●●●●●●
Legal ●
Human Resources ●●●
Planning & Zoning ●●●●
City Hall ●●
Economic Development ●●●
PUBLIC SAFETY
Law Enforcement ●
Fire & Rescue ●●●●●
Fire Relief ●
Building Inspections ●●●
Emergency Management ●●●
Animal Control ●●●
National Guard ●
PUBLIC WORKS
PW Administration ●●●●
Engineering & Inspections ●●●●●
Streets & Alleys ●●●●●●
Ice & Snow ●●
Shop & Garage ●●●●●
Street Lighting ●●●
Refuse Collection ●
Water Utility ●● ●
Sewer Utility ●● ●
Stormwater Utility ●●
Fiber Optics Utility ●●●
RECREATION AND CULTURE
Senior Center ●●
Park Operations ●●●●●
Park Improvements ●●
Park Ballfields ●
Public Arts ●●
Shade Tree ●
Library ●●
Cemetery ●●
Community Center ●● ●
FUND
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BASIS OF BUDGETING
The City of Monticello budget serves several purposes:
•For the residents, it presents a picture of the city government operations and
intentions for the year.
•For the city council, it serves as a policy tool and as an expression of goals and
objectives.
•For city management, it is used as an operating guide and a control mechanism.
The city's budget encompasses both the operating budget and the capital improvement
budget, which is the first year of the multi-year Capital Improvements Plan (CIP) updated
annually. Each budget unit includes amounts appropriated for both operating expenditures
and capital acquisitions and improvements. Accompanying narrative for each budget unit
briefly explains the items included.
BASIS OF BUDGETING
The city’s accounts are categorized by funds, each of which is accounted for like an individual
entity. The operations of each fund are accounted for with a separate set of self-balancing
accounts that comprise its assets, deferred inflow/outflows, liabilities, fund equity, revenues,
and expenditures.
Governmental funds (the General, special revenue, debt service, and capital project funds)
use the modified accrual basis for budgeting and accounting. Revenues are recognized in the
accounting period in which they become measurable and available. Expenditures are
recognized when liabilities are incurred.
Proprietary funds (enterprise and internal service funds) use the modified accrual basis for
budgeting and the full accrual basis for accounting for financial reporting. In the full accrual
basis of accounting, revenues are recognized in the accounting period in which they are
earned, and expenses are recognized in the accounting period in which they are incurred,
regardless of when the actual cash flow occurs. For example, the full accrual basis accounting
differs from the modified accrual basis by recording expenses for depreciation and
compensated absences but not debt principal payments, whereas the modified accrual basis
of accounting would classify the original capital cost as an expenditure (and would therefore
have nothing to depreciate), the compensated absence payment as an expenditure at the
time of payment rather than when earned, and debt proceeds as revenue when received and
expenditures when repaid. Each proprietary fund’s financial statements, located in the city’s
Annual Comprehensive Financial Report (ACFR), are reported on the full accrual basis.
WORKLOAD/PERFORMANCE BUDGETING
The City of Monticello strives to develop a budget focused on workload/performance outputs
rather than incrementally budget based on the prior year. This type of budgeting shifts the
emphasis away from describing what will be purchased (inputs) towards describing what will
be accomplished (outputs and outcomes). While this budgeting process faces numerous
structural and cultural hurdles, this work-in-progress continues today with both an
organization-wide and budget-unit specific focus on outcomes.
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FINANCIAL POLICIES
The overall goal of the city's financial policies is to establish and maintain effective
management of the city's financial resources. Formal policy statements and major objectives
provide the foundation for achieving this goal. Accordingly, this section outlines the policies and
practices used in guiding the preparation and management of the city's overall budget and the
major objectives to be accomplished. In addition, the rationale which led to the establishment
of the fiscal policy statements is also identified.
Budget Development & Administration Practices
1.A comprehensive annual budget will be prepared for all funds expended by the city.
The City Council shall have full authority over the financial affairs of the city and shall
provide for the collection of all revenue and other assets, the auditing and settlement of
accounts, the safekeeping and disbursement of public monies, and, in the exercise of a sound
discretion, shall make appropriations for the payment of all liabilities and expenses. Inclusion of
all funds in the budget enables the council, administration, and the public to consider all
financial aspects of city government when preparing, modifying, and monitoring the budget,
rather than deal with the city's finances on a "piece meal" basis.
2.The budget will be prepared in such a manner as to facilitate its understanding by
residents and elected officials.
One of the stated purposes of the budget is to present a picture of city government
operations and intentions for the year to the residents of Monticello. Presenting a budget
document that is understandable to the residents furthers the goal of effectively
communicating local government finance issues to both elected officials and the public.
3.Budgetary emphasis will focus on providing those basic municipal services that provide
the maximum level of services, to the most residents, in the most cost-effective manner, with
consideration being given to all costs - economic, fiscal, and social.
Adherence to this basic philosophy provides the residents of Monticello assurance that
their government and elected officials are responsive to the basic needs of the residents and
that their city government is operated in an economical and efficient manner.
4.The budget will provide for adequate maintenance of capital, plant, and equipment and
for their orderly replacement.
All governmental entities experience prosperous times as well as periods of economic
decline. In periods of economic decline, proper maintenance and replacement of capital, plant,
and equipment is generally postponed or eliminated as a first means of balancing the budget.
Recognition of the need for adequate maintenance and replacement of capital, plant, and
equipment, regardless of the economic conditions, will assist in maintaining the government's
equipment and infrastructure in good operating condition.
5.The city will avoid budgetary practices that balance current expenditures at the expense
of meeting future year expenditures.
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Budgetary practices such as postponing capital expenditures, accruing future years'
revenues, or rolling over short-term debt are budgetary practices which can solve short-term
financial problems. However, they can create much larger financial problems for future
administrations and councils. Avoidance of these budgetary practices will assure residents that
current problems are not simply being delayed to a future year.
6.The city will give highest priority in the use of one-time revenues to the funding of capital
assets or other non-recurring expenditures.
Utilizing one-time revenues to fund on-going expenditures results in incurring annual
expenditure obligations, which may be unfunded in future years. Using one-time revenues to
fund capital assets or other non-recurring expenditures better enables future administrations
and councils to cope with the financial problems when these revenue sources are discontinued,
since these types of expenditures can more easily be eliminated.
7.The city will maintain a budgetary control system to help it adhere to the established
budget.
The budget passed by the council establishes the legal spending limits for the city. A
budgetary control system is essential to ensure legal compliance with the city's budget.
8. The city will exercise budgetary control (maximum spending authority) through City
Council approval of appropriation authority for each appropriated budget unit.
Exercising budgetary control for each appropriated budget unit satisfies requirements of
state law. It also assists the council in monitoring current year operations and acts as an early
warning mechanism when departments deviate in any substantive way from the original
budget.
9.Reports comparing actual revenues and expenditures to budgeted amounts will be
prepared monthly as practical and formally reported to City Council quarterly.
The city's budget is ineffective without a system to regularly monitor actual spending
and revenue collections with those anticipated at the beginning of the year. Monthly and
quarterly reports comparing actual revenues and expenditures to budget amounts provide the
mechanism for the council and administration to regularly monitor compliance with the
adopted budget.
10.State Requirement: Truth-in-Taxation
The Truth in Taxation (TNT) law requires the city to hold a series of public hearings to
present the proposed levy and budget, and to provide an opportunity for the public to
comment and make recommendations. The city’s proposed general levy and the EDA
(economic development authority)’s proposed HRA (housing and redevelopment authority) levy
must be certified to the county auditor by September 30th. The final levies for both must be
certified by December 29th.
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Revenue Collection Practices
1.The city will seek to maintain a diversified and stable revenue base.
A city dependent upon a few volatile revenue sources is frequently forced to suddenly
adjust tax rates or alter expenditure levels to coincide with revenue collections. Establishment
of a diversified and stable revenue base, however, serves to protect the city from short-term
fluctuations in any one major revenue source.
2.The city will estimate revenues in a realistic and conservative manner.
Aggressive revenue estimates significantly increase the chances of budgetary shortfalls
occurring during the year--resulting in either deficit spending or required spending reductions.
Realistic and conservative revenue estimates, on the other hand, will serve to minimize the
adverse impact of revenue shortfalls and will also reduce the need for mid-year spending
reductions.
3.The city will pursue an aggressive policy of collecting revenues.
An aggressive policy of collecting revenues will help to ensure the city's revenue
estimates are met, all taxpayers are treated fairly and consistently, and delinquencies are kept
to a minimum.
4.The city will aggressively pursue opportunities for federal or state grant funding.
An aggressive policy of pursuing opportunities for federal or state grant funding
provides residents assurance that the city is striving to obtain all state and federal funds to
which it is eligible--thereby reducing dependence upon local taxpayers for the support of local
public services.
5.User fees and charges will be used, as opposed to general taxes, when distinct beneficiary
populations or interest groups can be identified.
User fees and charges are preferable to general taxes because user charges can provide
clear demand signals which assist in determining what services to offer, their quantity, and
their quality. User charges are also more equitable, since only those who use the service must
pay--thereby eliminating the subsidy provided by nonusers to users, which is inherent in
general tax financing.
6.User fees will be collected only if it is cost-effective and administratively feasible to do so.
User fees are often costly to administer. Prior to establishing user fees, the costs to
establish and administer the fees will be considered to provide assurance that the city's
collection mechanisms are being operated in an efficient manner.
Expenditures & Payments Practices
1.Ongoing expenditures will be limited to levels which can be supported by ongoing
revenues.
Utilization of reserves to fund on-going expenditures will produce a balanced budget,
however, this practice will eventually cause severe financial problems. Once reserve levels are
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depleted, the city would face elimination of on-going costs to balance the budget. Therefore,
the funding of on-going expenditures will be limited to current revenues.
2.Minor capital projects or recurring capital projects, which primarily benefit current
residents, will be financed from current revenues.
Minor capital projects or recurring capital projects represent relatively small costs of an
on-going nature, and therefore, should be financed with current revenues rather than utilizing
debt financing. Those who benefit from a capital project should pay for the project.
4.Major capital projects, which benefit future residents, will be financed with other
financing sources (e.g., debt financing) as appropriate.
Major capital projects represent large expenditures of a non-recurring nature which
primarily benefit future residents. Debt financing provides a means of generating sufficient
funds to pay for the costs of major projects. Debt financing also enables the costs of the project
to be supported by those who benefit from the project, since debt service payments will be
funded through charges to future residents.
5.Construction projects and capital expenditures of $10,000 or more will be included in the
Capital Improvement Plan (CIP) and related capital outlay line item; minor capital outlays
(less than $10,000) will be included in the operating budget as small tools & equipment or
repairs & maintenance.
The Capital Improvement Plan (CIP) differentiates the financing of high-cost, long-lived
physical improvements from low cost "consumable" equipment items contained in the
operating budget. CIP items may be funded through debt financing, a planned buildup of
reserves, or current revenues. Operating budget items are annual or routine in nature and
should only be financed from current revenues.
6.Spending Policy: Resources will be categorized according to Generally Accepted
Accounting Principles (GAAP) for state and local governments, with the following general
definitions:
•Restricted: Amounts constrained to specific purposes by their providers (such as
grantors, bondholders, and higher levels of government) through constitutional
provisions or by enabling legislation.
•Committed: Amounts constrained to specific purposes by the City Council by Resolution;
to be reported as committed, amounts cannot be used for any other purpose unless the
City Council takes action to remove or change the constraint also by Resolution.
•Assigned: Amounts the city intends to use for a specific purpose; intent can be
expressed by the council or by a designee to which the council delegates the authority.
The City Council delegated this authority to itself, City Administrator, or Finance
Director.
•Unassigned: Amounts that are available for any purpose; these amounts are reported
only in the General Fund.
When multiple sources of funding are available, spending will occur in the following order:
Restricted, Committed, Assigned, Unassigned.
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Capital Assets Policy – Adopted July 28, 2008
1.The city will be categorized by classes of capital assets.
The classes of capital assets will be land, parking lots, buildings, infrastructure,
improvements (other than buildings), machinery and equipment, office equipment and
furniture, and motor vehicles. Construction in Progress will be recognized as an asset but is not
eligible to be depreciated until the project is completed and/or asset is transferred to the city.
2.The city will capitalize items by classification as summarized in the Capitalization
Thresholds & Useful Lives in the Appendix of this document.
3.Donations of capital assets will be recorded at estimated fair market value at the date of
acquisition.
4. Straight-line depreciation will be the method used per the useful lives summarized in the
Capitalization Thresholds & Useful Lives in the Appendix of this document.
Land, easements and construction in progress are not considered depreciable assets.
5. The finance department will distribute an inventory list, by department, to each
department head annually.
It will be the department head’s responsibility to verify the inventory form, accounting
for any changes in their department’s inventory, and return it to the finance department. The
finance department will then make any necessary adjustments, transfers, or disposals to the
capital assets system, to account for these changes.
6.A physical inventory of the City’s capital assets will be conducted periodically by the
finance department staff in conjunction with the various departments.
Random inventories may be conducted by staff at any time also. The appropriate
adjustments will be made to the capital asset system. Any significant variances will be
investigated, and policies and procedures will be adjusted accordingly, if necessary.
Debt Administration Practices
1.The city will limit long-term debt to capital improvements which cannot be financed from
current revenues.
Incurring long-term debt serves to obligate future taxpayers. Excess reliance on long-
term debt can cause debt levels to reach or exceed the government's ability to pay. Therefore,
conscientious use of long-term debt will provide assurance that future residents will be able to
service the debt obligations left by former residents.
2.The city will repay borrowed funds within a period not to exceed the expected useful life
of the asset.
This policy reflects the view that those residents who benefit from a project should pay
for the project. Adherence to this policy will also help prevent the government from over-
extending itself regarding the incurrence of future debt.
3.The city will not use long-term debt for financing current operations.
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This policy reflects the view that those residents who benefit from a service should pay
for the service. Utilization of long-term debt to support current operations would result in
future residents supporting services provided to current residents.
4.The city will adhere to a policy of full public disclosure regarding the issuance of debt.
Full public disclosure regarding the issuance of debt provides assurance that the
incurrence of debt, for which the public is responsible, is based upon a genuine need and is
consistent with underwriter guidelines.
Reserves and Fund Balances Policy – Adopted September 12, 2011
1.Reserves and Fund Balances will be properly designated into the following categories:
•Nonspendable: Amounts that are not in a spendable form (such as inventory) or are
required to be maintained intact (such as the principal of an endowment fund).
•Restricted: Amounts constrained to specific purposes by their providers (such as
grantors, bondholders, and higher levels of government) through constitutional
provisions or by enabling legislation.
•Committed: Amounts constrained to specific purposes by the City Council by Resolution;
to be reported as committed, amounts cannot be used for any other purpose unless the
City Council takes action to remove or change the constraint also by Resolution.
•Assigned: Amounts the city intends to use for a specific purpose. The City Council, City
Administrator, or Finance Director can express intent.
•Unassigned: Amounts that are available for any purpose; these amounts are reported
only in the General Fund or a deficit in other fund types.
2.A minimum level of general fund reserve of 60-75% of annual operating expenditures will
be maintained. This reserve is committed to be used for cash flow purposes, unanticipated
equipment acquisition and replacement, and to otherwise enable the city to meet
unexpected expenditure demands (natural disasters, catastrophic events, etc.) or revenue
shortfalls.
Property taxes represent the city's primary source of general fund revenue. Property
taxes are collected in June and December of each fiscal year. Since the city's fiscal year begins
on January 1st, the city must maintain an adequate cash balance to meet its expenditure
obligations between semi-annual collections of property taxes.
Accrued employee payroll benefits, such as paid time off, represent a significant
obligation of the city. The city will maintain sufficient reserves to meet its annual expenditure
obligations in the Benefit Accrual internal service fund.
The city recognizes the need to maintain adequate equipment to carry out required
public services. Equipment acquisition and replacement represent on-going costs of a minor
nature, as compared to major capital purchases. The city plans for equipment replacement
within the Capital Improvement Plan. However, unforeseen equipment problems will arise. The
reserve will provide resources for the immediate, unanticipated replacement of critical
equipment.
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The city is subject to revenue shortfalls and unexpected expenditure demands during the
fiscal year. An unassigned general fund reserve will be maintained to be able to offset these
revenue shortfalls or meet unexpected demands occurring during the year, without suddenly
adjusting tax rates or reducing expenditures.
Financial Reporting & Accounting Practices
1.The city will manage and account for its financial activity in accordance with Generally
Accepted Accounting Principles (GAAP) as set forth by the Governmental Accounting
Standards Board (GASB).
GASB is recognized as the authority with respect to governmental accounting. Managing
the city's finances in accordance with GAAP and in accordance with the rules set forth by GASB
provides the Monticello residents assurance that their public funds are being accounted for in a
proper manner.
2.The city will maintain its accounting records for general governmental operations on a
modified accrual basis, with revenues recorded when available and measurable, and
expenditures recorded when services or goods are received, and liabilities incurred.
Accounting records for proprietary fund types will be maintained on an accrual basis, with all
revenues recorded when earned and expenses recorded when liabilities are incurred, without
regard to timing of cash receipt or payment.
Adherence to this policy will allow the city to prepare its financial statements in
accordance with Generally Accepted Accounting Principles as set by the Governmental
Accounting Standards Board.
3.The city of Monticello will prepare an Annual Comprehensive Financial Report (ACFR) in
conformity with Generally Accepted Accounting Principles (GAAP). The report will be made
available to the public. The ACFR shall be prepared in accordance with the standards
established by the GFOA for the Certificate of Achievement for Excellence in Financial
Reporting Program.
The Certificate of Achievement represents a significant accomplishment for a
government and its financial leadership. The program encourages governments to prepare and
publish an easily readable and understandable comprehensive annual financial report covering
all funds and financial transactions of the government during the year. The ACFR provides users
with a wide variety of information useful in evaluating the financial condition of a government.
The program also encourages continued improvement in the city's financial reporting practices.
4.The city will ensure the conduct of timely, effective, and annual audit coverage of all
financial records in compliance with Local, State, and Federal laws.
Audits of the city's financial records provide the public assurance that its funds are being
expended in accordance with Local, State, and Federal laws and in accordance with Generally
Accepted Accounting Principles. Audits also provide management and the City Council with
suggestions for improvement in its financial operations from independent experts in the
accounting field.
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5.The city of Monticello will maintain a policy of full and open public disclosure of all
financial activity.
Full and open public disclosure of all financial activity provides the public with assurance
that its elected officials and administrators communicate fully all financial matters affecting the
public.
6.The modified accrual basis of accounting and budgeting is used for the governmental
funds.
Under the modified accrual basis of accounting, revenues are recorded when
susceptible to accrual, i.e., both measurable and available. Available means collectible within
the current period or soon enough thereafter to be used to pay liabilities of the current period.
Expenditures are recorded when the related liability is incurred. Employee compensated
absences and principal and interest on long-term debt expenditures are recorded when due in
the current period.
7.The full accrual basis of accounting is used for proprietary funds for financial reporting
purposes.
Under this method, revenues are recorded when earned and expenses are recorded
when the related liability is incurred. For budget preparation and presentation, the proprietary
funds’ expenses are converted to expenditures and follow the same budget format as the
governmental fund types. Capital outlays in the enterprise funds are presented as expenditures
for budget basis but are recorded as assets along with associated depreciation expense on the
GAAP basis. Debt service principal payments in the enterprise funds are accounted for as
expenditures for budget purposes but are reported as reduction of long-term debt liability on
the GAAP basis. Recording capital outlays and principal payments on long-term debt as
expenditures for budget purposes, presents a clearer picture of the city’s financial operations, is
easier to administer for cash flow purposes, and is easier for the lay person to understand.
Cash Management & Investment Policy – Adopted October 23, 2017
SCOPE
This policy applies to all activities with regards to managing and investing the financial assets of
the City of Monticello. This policy pertains to the financial assets of all funds including the
General Fund, special revenue funds, capital project funds, debt service funds, enterprise funds,
and internal service funds. The covered funds are defined in the city’s Annual Comprehensive
Financial Report.
Except for cash in certain restricted funds, the City of Monticello consolidates all cash balances
from all funds into one central set of accounts. Each fund’s participation in this cash pool is
denoted by its equity-in-pooled-cash account. Investment income is allocated to the various
funds based upon the average monthly balance of each fund’s account. Use of this pooling-of-
funds method of accounting allows the city of Monticello to manage its cash more efficiently
and to maximize its investment earnings.
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OBJECTIVES
The primary objectives, in priority order, of city of Monticello’s investment activities shall be
safety, liquidity, and yield:
a.Safety
Safety of principal is the foremost objective of the investment program. Investments shall be
undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio.
The objective will be to mitigate credit risk and interest rate risk.
1.Credit Risk The city will minimize credit risk by
•Limiting investments to the safest types of securities;
•Pre-qualifying the financial institutions, brokers/dealers, intermediaries, and advisers
with which the city of Monticello will do business; and
•Diversifying the investment portfolio so that potential losses on individual securities
will be minimized.
2.Interest Rate Risk The city will minimize interest rate risk by:
•Structuring the investment portfolio so that securities invested from operating funds
mature to meet cash requirements for ongoing operations, thereby minimizing the
need to sell securities on the open market prior to maturity; and
•Investing operating funds primarily in shorter-term maturities, money market funds,
or similar investment pools.
b. Liquidity
The investment portfolio shall remain sufficiently liquid to meet all operating requirements that
may be reasonably anticipated. This will be accomplished by structuring the portfolio so that
securities mature concurrent with cash needs to meet anticipated demands (static liquidity). In
addition, since all possible cash demands cannot be anticipated, the portfolio shall consist
largely of securities with active secondary or resale markets (dynamic liquidity).
c.Yield
The City of Monticello’s investment portfolio shall be designed with the objective of attaining a
market rate of return throughout budgetary and economic cycles, commensurate with
Monticello’s investment risk constraints and the cash flow characteristics of the portfolio.
Return on investment is of least importance compared to the safety and liquidity objectives
described above. The core of investments is limited to relatively low risk securities in
anticipation of earning a fair return relative to the risk being assumed. Securities shall not be
sold prior to maturity with the following exceptions:
•a declining credit security may be sold early to minimize the loss of principal;
•a security may be sold to maximize gain, when appropriate;
•a security swap may be appropriate to improve the quality, yield, or target duration in
the portfolio; or
•a security may be sold based upon liquidity demands of the portfolio.
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AUTHORITY
Management responsibility for the investment program and for ensuring compliance with this
policy is hereby delegated to the Finance Director and is derived from Minnesota statutes and
mayor & council actions. The Finance Director shall be responsible for all transactions
undertaken and shall establish a system of procedures and internal controls for the operation
of the investment program consistent with this policy. No person may engage in an investment
transaction except as provided under the terms of this policy and the procedures established by
the Finance Director. All participants in the investment process shall seek to act responsibly as
custodians of the public trust. No officer or designee may engage in an investment transaction
except as provided under the terms of this policy and supporting procedures.
The Finance Director shall establish written statements of investment policy procedures for the
operation of the investment program consistent with this policy. Such procedures shall include
explicit delegation of authority for persons responsible for investment and cash management
transactions. The Finance Director is responsible for establishing and maintaining an internal
control structure designed to ensure that the assets of the city of Monticello are protected
from loss, theft, or misuse. The internal control structure shall be designed to provide
reasonable assurance that these objectives are met. The concept of reasonable assurance
recognizes that the cost of control should not exceed the benefits likely to be derived and that
the valuation of costs and benefits requires estimates and judgments by management.
The internal controls shall address the following points at a minimum: control of collusion,
separation of transaction authority from accounting and recordkeeping, custodial safekeeping,
avoidance of physical delivery securities, clear delegation of authority to subordinate staff
members, written confirmation of transactions for investments and wire transfers, dual
authorizations of wire transfers, staff training, and review, maintenance and monitoring of
security procedures both manual and automated.
The city may engage the services of one or more external investment managers to assist in the
management of the city’s investment portfolio in a manner consistent with the city’s objectives.
Such external managers may be granted discretion to purchase and sell investment securities in
accordance with this Investment Policy. Such managers must be registered under the
Investment Advisers Act of 1940.
ETHICS & CONFLICTS OF INTEREST
The Finance Director and other employees involved in the investment process shall refrain from
personal financial activity that could conflict with the proper execution and management of the
investment program, or which could impair their ability to make impartial investment decisions.
The Finance Director and other employees involved in the investment process shall disclose to
the mayor & council any material financial interests in financial institutions with which they
conduct business. They shall further disclose any personal financial/investment positions that
could be related to the performance of the city’s portfolio. The Finance Director and other
employees involved in the investment process shall subordinate their personal investment
transactions to those of the city of Monticello shall refrain from undertaking personal
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investment transactions with the same individual with whom business is conducted on behalf
of the city.
PRUDENCE
The general investment policies of the city of Monticello will be guided by the "prudent person"
standard. Those with investment responsibility for public funds are fiduciaries and, as such,
shall exercise the judgment and care, under circumstances then prevailing, which persons of
prudence, discretion, and intelligence exercise in the management of their own affairs, not for
speculation, but for investment, considering the probable safety of their capital as well as the
probable income to be derived.
The standard of prudence shall be applied in the context of managing the overall portfolio.
Investment officers, acting in accordance with this investment policy and exercising due
diligence, shall be relieved of personal responsibility for an individual security's credit risk or
market price changes, provided significant deviations from expectations are reported in a
timely fashion and appropriate action is taken to control adverse developments. Investment
officers acting in good faith are not personally liable for investment or deposit losses.
AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The Finance Director shall designate and maintain a list of financial institutions and depositories
authorized to provide investment services. In addition, a list will also be maintained of
approved security brokers/dealers that maintain an office within the State of Minnesota. These
may include "primary" dealers or regional dealers that qualify under Security and Exchange
Commission's Uniform Net Capital Rule (Rule 15C3-1). The mayor & council shall designate the
financial institution for the city’s operating account.
All financial institutions and brokers/dealers that wish to become qualified bidders for
investment transactions must supply the following:
•a copy of the latest audited financial statements demonstrating compliance with state
and federal capital adequacy guidelines
•proof of state registration,
•evidence of adequate insurance coverage,
•certification of having read, understood, and agree to comply with Monticello’s Cash
Management and Investment Policy,
•proof of National Association of Securities Dealers (NASD) or Financial Industry
Regulatory Authority (FINRA) certification (brokers/dealers only), and
•completed broker/dealer questionnaire (brokers/dealers only).
An annual review of the financial condition and registration of qualified financial institutions
and broker/dealers may be conducted by the Finance Director.
Financial institutions, which serve as depositories of city funds, shall comply with all prevailing
provisions of Minnesota statutes, and shall meet the established criteria for overall financial
strength, adequate capitalization, appropriate liquidity, and proper collateralization to
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reasonably ensure the safety and availability of such deposits. To monitor and assess the overall
financial strength of current and potential depositories, the city will utilize third-party rating
agencies.
AUTHORIZED AND SUITABLE INVESTMENTS
Authorized investments for municipalities in Minnesota are stipulated in Minnesota State
Statutes. Although the following lists of authorized and prohibited investments for the city of
Monticello is slightly more restrictive than what is allowed under state law, it is in full
compliance with Minnesota State Statutes.
The Finance Director is authorized to invest in the following:
•Demand deposits, of commercial banks, saving and loan associations, and federal savings
banks authorized to do business in the State of Minnesota and authorized as described
above, and to the extent that the deposit is fully insured by the Federal Deposit Insurance
Corporation or collateralized as required in Minnesota State Statutes.
•Time deposits and certificates of deposit of commercial banks, saving and loan
associations, and federal savings banks authorized to do business in the United States or
its territories to the extent that the investment is fully insured by the Federal Deposit
Insurance Corporation or collateralized as required in Minnesota State Statutes.
•Governmental bonds, notes, bills, mortgages, and other securities, which were direct
obligations or are guaranteed or insured issues of the United States, its agencies, its
instrumentalities, or organizations created by an act of Congress, excluding mortgage-
backed securities
•State and local government obligation as follows:
o an obligation of the State of Minnesota or any of its municipalities,
o obligation of other state and local governments that have taxing power and are rated
“A” or better by a national bond rating service.
o general obligations of the Minnesota Housing Finance Agency that are rated “A” or
better by a national bond rating service.
o general obligations of housing finance agencies of other states, provided that they
include a moral obligation of the state, and they are rated “A” or better by a national
bond rating service,
o general revenue obligation of any agency or authority of the State of Minnesota other
than those found already mentioned above that are rated “AA” or better by a national
bond rating service.
o Repurchase agreements whose underlying purchased securities consist of U.S.
government obligations, U.S. government agency obligations, or U.S. government
instrumentality (including government sponsored enterprises) obligations. Adoption
of a master repurchase agreement by the mayor & council is required before the
Finance Director is authorized to enter into a repurchase agreement.
o Banker’s Acceptances of United States Corporation or their Canadian subsidiaries that
are rated “A1” by Moody’s Investors Service and/or P1 by Standard and Poor’s
Corporation and matures in 270 days or less. Banker’s Acceptances can only be
48Table of Contents
purchased if the yield is greater than the United States Treasury obligations or Federal
Agency issues.
o Guaranteed investment contracts if issued and guaranteed by a United States
commercial bank or a United States insurance company. The credit quality of the
issuer and guarantor shall be rated in the highest category by the major national rating
services. The contract shall provide the governmental entity a non-penalized right of
withdrawal of the investment if the credit quality of the investment is downgraded.
o Commercial Paper issued by United States corporations or their Canadian subsidiaries
that are rated “A1” by Moody’s Investors Service and/or “P1” by Standard and Poor’s
Corporation and matures in 270 days or less.
o Money market funds consisting of United States Treasury Obligations and/or Federal
Agency Issues.
PROHIBITED INVESTMENTS
The Finance Director is currently prohibited from investing in securities that are considered
highly sensitive, including the following:
•Purchases on margins or short sales.
•Derivative securities that are, in effect, a leveraged bet on future movements of interest
rates or some price index.
•Mortgage-backed securities due to their complexity and prepayment rate uncertainty.
•Reverse repurchase agreements (lending securities with an agreement to buy them back
after a stated period of time).
COLLATERALIZATION
The provisions of Minnesota State Statutes require that banks and savings and loan institutions
collateralize all deposits of public funds. The city also requires collateralization of time deposits
and repurchase agreements. Banks and savings and loan associations are authorized to use any
of the investments as specified by Minnesota State Statutes as collateral. In order to anticipate
market changes and provide a level of security for all funds, the collateralization level will be
110% of the market value of principle and accrued interest. Collateral will always be held by a
third party. A clearly marked evidence of ownership (safekeeping receipt) will be supplied to
the city and retained.
SAFEKEEPING AND CUSTODY
Pledged collateral consisting of instruments of the United States Government, U.S. government
agencies, and U. S. government sponsored enterprises will be safe kept at a Federal Reserve
Bank Branch. Other acceptable collateral that cannot be held by the Federal Reserve shall be
held by a non-affiliated, independent, third-party safekeeping institution with whom the city
has a current custodial agreement. A clearly marked evidence of ownership (safekeeping
receipt) will be supplied to the city and retained. The right of collateral substitution upon prior
notification and acceptance by the city is granted.
49Table of Contents
All securities transactions, including collateral for repurchase agreements shall be conducted on
a delivery-versus-payment (DVP) basis to ensure that securities are deposited in the city’s
safekeeping institution prior to the release of funds.
DIVERSIFICATION
Diversification of investments reduces overall portfolio risks while attaining market average
rates of return. The city of Monticello will diversify its investments by security type, sector
(excluding U.S. Treasury securities), maturity, and institution. With the exception of U.S.
government securities, U.S. government agency securities, U.S. government sponsored
enterprise securities, certificates of deposit, collateralized bank money market accounts, and
authorized local government investment pools, no more than 25% of the city of Monticello’s
total investment portfolio will be invested in a single security type. To provide assurance that
the city will be able to continue financial operations without interruption and dependent upon
interest rates, satisfaction with services, and practicality, the city of Monticello may utilize more
than one financial institution as its depository.
MAXIMUM MATURITIES
To the extent possible, the city of Monticello will attempt to match its investments with
anticipated cash flow requirements. Unless matched to a specific cash flow, the city will not
directly invest from operating funds in securities maturing more than five (5) years from the
date of purchase. However, the city of Monticello may collateralize its repurchase agreements
using longer-dated investments not to exceed fifteen (15) years to maturity.
Reserve funds and other funds with longer-term investment horizons may be invested in
securities exceeding five (5) years if the maturity of such investments is made to coincide as
nearly as practicable with the expected use of funds. No investment shall have a maturity
exceeding twenty (20) years from the time of purchase. The intent to invest securities with
longer maturities shall be approved by the Finance Director.
Because of the inherent difficulties in accurately forecasting cash flow requirements, a portion
of the portfolio shall be continuously invested in readily available funds such as demand
accounts, local government investment pools, money market funds, or overnight repurchase
agreements to ensure that appropriate liquidity is maintained to meet ongoing obligations. The
city will not actively buy and sell investments but realizes the risk of not seeking higher market
returns for longer maturities outweighs occasional liquidity demands exceeding cash and
money market investments.
PERFORMANCE STANDARDS
The investment portfolio will be managed in accordance with the parameters specified within
this policy. The portfolio should obtain a market average rate of return during a
market/economic environment of stable interest rates. The Finance Director will establish a
series of appropriate benchmarks which portfolio performance shall be compared on a regular
basis. The benchmarks shall be reflective of the actual securities being purchased and risks
undertaken, and the benchmarks shall have a similar weighted average maturity and credit
profile as the portfolio.
50Table of Contents
REPORTING
The Finance Director will maintain investment reports that provide a clear picture of the status
of the current investment portfolio. The report shall include a management summary that will
allow the city of Monticello to ascertain whether investment activities during the reporting
period have conformed to the investment policy. Information contained within the reports shall
include the following:
•A listing of the individual securities held at the end of the reporting period by authorized
investment category.
•Term and maturity date of all investments listed.
•Par value and current market value of all investments listed.
•Yield to maturity or worse call of portfolio investments.
•Percentage of portfolio represented by each investment category.
POLICY CONSIDERATIONS
Any investment currently held that does not meet the guidelines of this policy shall be
exempted from the requirements of this policy. At maturity or liquidation, such monies shall be
reinvested only as provided by this policy.
This Statement of Cash Management and Investment Policy was adopted by motion/resolution
of the city’s mayor & council. The Finance Director and City Administrator will review this policy
annually. Any modifications made to this policy must be approved by resolution of the mayor &
council.
51Table of Contents
Balanced Budgets Practices
A BALANCED BUDGET is a situation where total revenues and other financing sources is equal
to (or greater than) total expenditures and other uses. Revenues and other financing sources
increase financial resources. Expenditures and other financing uses decrease financial
resources.
A balanced budget does not dip into reserves or fund balances. However, an unbalanced
budget (deficit) is not necessarily poor fiscal management. For example, debt service funds
often accumulate resources in the year prior to expenditure, and debt-financed capital projects
frequently stretch over multiple years. The city has never used debt to finance current or
ongoing expenditures.
It is the city’s practice to adopt balanced budgets for the General Fund and the Community
Center Fund, both of which are supported, to some extent, by property taxes.
Property Taxes 9,457,000$ Personnel Services $4,989,172
Franchise & Other Taxes 293,500 Supplies 831,250
Licenses & Permits 580,000 Other Services & Charges 7,365,678
Intergovernmental Revenues 616,000 Capital Outlay 693,900
Charges for Services 1,668,000 Debt Service -
Fines & Forfeits 78,000 Operating Transfers 6,000
Miscellaneous 1,193,500
Total $13,886,000 Total $13,886,000
General Fund
Revenues and Other Sources Expenditures and Other UsesB
A
L
A
N
C
E
D
Surplus
Revenues and Other Sources
GREATER than
Expenditures and Other Uses
Deficit
Revenues and Other Sources
LESS than
Expenditures and Other Uses
52Table of Contents
Absence of a line in the chart is due to the fund having a balanced budget (zero effect on Fund
Balance/Working Capital) for 2026. Deficits reflect planned use of fund balance or future bond
issuance to reimburse for upfront costs. The Capital Projects Fund (cutoff above) is budgeted to
increase by $17,987,000 due to a planned bond issuance for construction in 2026 and 2027.
$
(
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Economic Development Authority
Benefit Accrual
Central Equipment
IT Services
Facilities Maintenance
Fiber Optics
Deputy Registrar
Liquor
Stormwater
Sewer
Water
Transportation Improvements
BCOL Sales Tax
Park Dedication
Street Lighting Improvement
Capital Projects
2020A G.O. Bonds
2019A G.O. Bonds
2018A G.O. Bonds
2017A G.O. Bonds
2016A G.O. Bonds
2015B G.O. Bonds
Monticello Community Center
Small Community Development Grant
Cemetery
General Fund
Budgeted Change in Fund Balances/Working Capital
53Table of Contents
THE BUDGET PROCESS
BUDGET DEVELOPMENT PROCESS
To initiate the budget process, the Finance Director grants access for all department heads and
supervisors to submit budget requests via the city’s financial software. Each department works
with its related boards or commissions to ensure the priorities of each recommending body are
reflected in staff’s requests. Department leaders will consider the council’s strategic goals (for
example, invest in people) in relation to their requests (for example, reclassifying positions to
reflect job responsibilities more accurately and to encourage professional growth of staff which
increases contributions to the city). The City Administrator, Finance Director, and Assistant
Finance Director then meet with each department leader to review the requests made. These
meetings are focused on gaining clarity, aligning expectations, and defining how requests
support the city’s mission and goals.
Requests are categorized as personnel, notable operating expenditures, equipment, and capital
expenditures. Each category is discussed at public budget workshops along with new or notable
changes to funding sources and projected changes to the city’s tax capacity and levy. Significant
increases or decreases from the previous budget are highlighted to focus on high-level goals for
the upcoming year. The council then gives feedback and asks questions for staff to research and
present at the next public budget workshop.
Following any adjustments to the proposed budget, a preliminary tax levy resolution is
prepared, and a public hearing is held in September. In December, the Council may again adjust
the levy (lower, not higher) and/or budget following a Truth-In-Taxation public hearing, when
adopting the final tax levy and final budget resolutions.
BUDGET CALENDAR/PROCEDURES
The following budget timeline outlines the process the city followed for creation and adoption
of the 2026 budget.
54Table of Contents
PRESENTATION
The text of each department’s budget summary customarily contains six sections of information
for each activity. Some activities also include highlights or accomplishments for the prior year
and/or the coming year.
•The first section provides a description of the activity.
•The second section describes its major objectives to be accomplished.
•The third section identifies issues/challenges the activity/division faces.
•The fourth section lists the workload/performance indicators for the division.
•The fifth section provides detailed financial information.
•The sixth section provides budget commentary.
The financial information includes expenditure information for the last two audited fiscal years,
the budgeted and draft yearend amounts for the previous year (i.e. amounts will not match the
final 2025 Annual Comprehensive Financial Report due to outstanding yearend entries still
Date Activity
April 25, 2025 2026 & Future capital equipment/projects (CIP) request forms and 2026 budget
request portal open to department heads.
June 13, 2025
1.Department heads meet with various advisory boards and commissions for
input into 2026 budget and CIP requests.
2.New CIP and personnel requests due to finance department.
June, 2025
1.Department directors and supervisors meet with administration and finance
to develop 2026 preliminary budget and CIP.
2.Finance department develops initial revenue estimates and 2026
preliminary property tax levy.
July, 2025 Public City Council Budget Workshop #1 held to discuss 2026 goals and
priorities and review operations budget requests.
August, 2025
1.Public City Council Budget Workshop #2 held to discuss capital requests.
2.Public City Council Budget Workshop #3 held to discuss estimated tax base
and preliminary levy information.
September, 2025
1.Public City Council Budget Workshop #4 held to discuss results of the
classiciation and compensation study
2.Public City Council Budget Workshop #4 held to summarize all information
and provide direction on preliminary levy.
September 22, 2025 Council adopts 2026 preliminary city and HRA property tax levies. (2026
preliminary property tax levy certification due to Wright County by Sept. 30)
October/November 2025 City staff refine 2026 proposed budget and final property tax levy. County
mails TNT notices.
November 25, 2025 Public City Council Budget Workshop #6 held to provide updated information
since preliminary levy was set.
December 8, 2025 Council adopts 2026 property tax levy and budget.
December 9, 2025 City certifies final 2026 property tax levy to Wright County auditor and files
TNT Compliance and Tax Levy forms with the MN Department of Revenue.
January 1, 2026 2026 fiscal year begins.
55Table of Contents
needed), and the amounts for the 2026 budget year. Costs are segregated into six basic
classifications: personnel services (wage & benefits); supplies; other services and charges;
capital outlay; debt service; and operating transfers. Appropriation control is exercised only at
the activity unit level and not at the individual object of expenditure level.
The narrative information is presented together with the financial detail to assist readers in
understanding the planned outcomes for each activity/division, the purpose of each budget
unit, and major changes or expenditures for the coming year.
MONITORING AND REPORTING PROCESS
As the budget year proceeds, individual departments and the finance department have dual
responsibility over budgetary control. Departments have primary responsibility for monitoring
the status of expenditures against their budget. This responsibility includes informing the
finance department of any significant departures from the plans anticipated in the budget.
The finance department has overall responsibility for monitoring the budget-to-actual status of
all departments and funds. This is accomplished primarily through analysis of computerized
budget performance reports which compare appropriation amounts on a line-item basis with
actual expenditures throughout the year. These reports aid department staff in controlling
costs and function as an early warning system for the finance department. Department staff
may exercise their judgment in exceeding expenditures by object code, provided they do not
exceed the total amount appropriated for the budget unit.
The finance department reviews the budget reports and discusses any variances from expected
performance with the department staff. The finance department conducts budget reviews of
expenditures and revenues in its quarterly report to the council.
Significant changes in either expenditures or revenues may require a budget revision.
Recommendations are also made by the Finance Director for any recommended corrective
actions. However, the City of Monticello does not typically amend the budget.
BUDGET AMENDMENT PROCESS
State statute provides various ways to amend the budget. This first involves a reallocation of
existing appropriations among the line items within a specific fund. The second defines a series
of scenarios where the governing body has authority to amend the budget without a hearing
for donations, land sales, and fee-based budgets. All other increases in appropriation authority
that are not specifically permitted by statute must be approved through a public process.
The Finance Director is responsible for ensuring compliance with spending limitations imposed
by the budget. Accordingly, the Finance Director submits a quarterly financial report to the City
Council after three-, six-, and nine-month periods, with the audit report serving as the twelve-
month report. The budget-to-actual reports evaluate overall revenues and expenditures in
comparison to the budgeted amounts. In cases where it appears the original spending authority
authorized will not prove sufficient, transfers of spending authority or additional spending
authority would be requested together with explanations for the requests. The public approval
process for budget amendments would be held if necessary.
56Table of Contents
2026 Adopted Budget
Financial Summaries
ALL FUNDS SUMMARY BY FUND TYPE
The city adopts a balanced budget for the General Fund and the Monticello Community Center
(MCC) special revenue fund. A budget is balanced when revenues and other sources equal
expenditures and other uses. Fund balances/working capital increase with surpluses and
decrease with deficits.
Debt amortization and early redemption of issues can lead to a decline in fund balance for the
Debt Service Fund. Multiple debt service sub-funds are aggregated into one debt service fund
for reporting purposes. Prepaid assessments collected in prior years, included in the Jan 1
beginning fund balance, will be used in 2026 as a way to manage the property tax levy.
Capital Project Funds commonly accumulate resources in one budget period and expend those
resources over multiple budget periods. An accumulation of fund balance is anticipated in 2026
due to anticipated debt proceeds for the multi-year construction of a new public works facility.
There are also projects with expenditures in 2026 that will receive intergovernmental funding in
future years.
Enterprise funds budget debt service and capital acquisitions as expenditures under the
modified accural basis. While that typically contributes to a budgeted negative net change in
fund balance/working capital, the budgeted expenditures increase assets or decrease liabilities
in the fund’s net position reported in the Annual Comprehensive Financial Report. The decrease
budgeted in 2026 is for the use of accumulated funds in the utility trunk funds in prior years.
Special Debt Capital Internal Discretely 2026
General Revenue Service Project Enterprise Service Presented Total
Fund Funds Funds Funds Funds Funds Component Unit Budget
Fund Balance/Working Capital - Jan. 1 8,535,654$ 1,309,724$ 391,313$ 11,645,323$ 47,010,380$ 6,780,482$ 6,712,123$ 82,384,999$
Revenues and Other Sources
Property Taxes 9,457,000$ 552,000$ 2,305,511$ 2,844,489$ -$ -$ 504,000$ 15,663,000$
Tax Increments - - - - - - 789,000 789,000
Franchise & Other Taxes 293,500 - - 825,000 - - - 1,118,500
Sales & Use Tax - - - 2,250,000 - - - 2,250,000
Sale of Goods - - - - 6,428,000 - - 6,428,000
Licenses & Permits 580,000 - - - 2,500 - - 582,500
Intergovernmental Revenues 616,000 - - 2,161,000 2,445,625 - - 5,222,625
Charges for Services 1,668,000 1,504,000 - - 9,098,500 2,002,400 5,000 14,277,900
Fines & Forfeits 78,000 - - - - - - 78,000
Special Assessments - - 179,308 237,058 26,000 - - 442,366
Miscellaneous 1,193,500 69,000 28,181 437,453 1,017,375 60,600 75,000 2,881,109
Contributed Capital - - - - 225,000 5,000 - 230,000
Operating Transfers In - 100,000 - 25,000 - - 6,000 131,000
Debt Proceeds - -- 35,000,000 12,800,000 - - 47,800,000
Total Revenues and Other Sources 13,886,000$ 2,225,000$ 2,513,000$ 43,780,000$ 32,043,000$ 2,068,000$ 1,379,000$ 97,894,000$
Expenditures and Other Uses
Personnel Services 4,989,172 1,320,745 - - 2,911,486 442,706 241,454 9,905,563
Supplies 831,250 124,000 - - 5,262,600 78,596 550 6,296,996
Other Services & Charges 7,365,678 734,255 5,812 - 4,709,872 805,418 687,996 14,309,031
Capital Outlay 693,900 - - 24,646,000 19,016,000 552,280 264,000 45,172,180
Debt Service - - 2,606,188 - 371,042 - - 2,977,230
Operating Transfers Out 6,000 - - 25,000 100,000 - - 131,000
Total Expenditures and Other Uses 13,886,000 2,179,000 2,612,000 24,671,000 32,371,000 1,879,000 1,194,000 78,792,000
Net Change in
Fund Balance/Working Capital -$ 46,000$ (99,000)$ 19,109,000$ (328,000)$ 189,000$ 185,000$ 19,102,000$
Fund Balance/Working Capital - Dec. 31 8,535,654$ 1,355,724$ 292,313$ 30,754,323$ 46,682,380$ 6,969,482$ 6,897,123$ 101,486,999$
All FUNDS SUMMARY - BY FUND TYPE
57Table of Contents
Internal service funds provide services primarily to other funds and typically function on a cost
recovery basis. The city has four: Facilities Maintenance, IT Services, Central Equipment, and
Benefit Accrual. Central Equipment Fund leaseback charges will exceed equipment purchases in
2026 as the fund is intended to keep a steady revolving net position. The Benefit Accrual Fund is
the only internal service fund that does not record capital asset acquisitons.
58Table of Contents
REVENUES BY CATEGORY AND FUND TYPE
Revenues are classified under one of fourteen major categories: property taxes, tax increments,
franchise & other taxes, sales & use tax, sale of goods, licenses & permits, intergovernmental
revenues, charges for services, fines & forfeits, special assessments, miscellaneous, contributed
capital, operating transfers in, and debt proceeds. The chart below shows the relative
percentage of 2026 budgeted revenues by category for all funds combined. Fines & forfeits,
special assessments, contributed capital, and operating transfers in are not shown in the chart
below because each has less than 0.5% of budgeted revenues, however, all categories have a
budgeted amount.
REVENUES BY TYPE, GENERAL FUND ONLY – Using those same revenue categories, the relative
percentages for the General Fund are shown below. The General Fund is comprised of a much
higher percentage of property taxes compared to other funds, comprising 65% of the budgeted
General Fund revenues, which is an increase from 63% in 2025.
Property Taxes
16%Tax Increments
1%
Franchise &
Other Taxes
1%
Sales & Use Tax
2%
Sale of Goods
7%
Licenses & Permits
1%Intergovernmental
Revenues
5%
Charges for Services
15%
Miscellaneous
3%
Debt Proceeds
49%
2026 Revenues by Category -All Funds
Property Taxes
65%
Franchise &
Other Taxes
2%Licenses &
Permits
6%
Intergovernmental
Revenues
5%
Charges for
Services
12%
Fines & Forfeits
1%Miscellaneous
9%
2026 Revenues by Category -General Fund
59Table of Contents
The General Fund is the city’s primary property tax levying fund, and it accounts for 14%
of the overall budgeted revenues of the city, which is lower than normal due to assumed
bond proceeds in 2026. This is a decrease from 28% in 2025.
Special revenue funds, totaling 2% of appropriations (decreased from 5% in 2025), rely
mainly on property taxes and charges for services.
The Debt Service Fund includes only non-enterprise and non-internal service fund debt.
These funds represent 3% of the city’s 2026 budgeted revenues and are supported with
property taxes and special assessments. This is an increase from 5% in 2025.
Capital project funds total 45% (up from 14% in 2025 due to anticipated bond proceeds)
of budgeted revenues, which includes property taxes, franchise taxes, sales & use taxes,
special assessments, operating transfers in, intergovernmental revenues (grants) for
capital projects and acquisitions, and debt proceeds.
Enterprise funds consist of water, sewer, stormwater, liquor, deputy registrar (DMV), and
fiber optics funds. These funds operate on a self-supporting basis, mostly from the sale of
goods and charges for services. They are responsible for 33% of the overall budgeted 2026
revenue, which is a decrease from 42% in 2025.
Internal Service funds consist of facilities maintenance, IT services, central equipment, and
benefits accrual. These funds are supported by staff allocation or rental charges from
other funds of the city. Appropriations are 2% of the city’s 2026 budget, which is less than
the 4% of budgeted revenues in 2025.
The discretely presented component unit reports on the activities of the Economic
Development Authority (EDA) Fund. Revenues consist of property taxes and tax
increments, which represent 1% of the 2065 budgeted revenues, a decrease from 2% in
2025.
General
14%
Special Revenue
2%
Debt Service
3%Capital Projects
45%
Enterprise
33%
Internal Service
2%
Component Unit
1%
2026 Revenues by Fund Type
60Table of Contents
APPROPRIATIONS BY CATEGORY AND FUND TYPE
Expenditures, often called appropriations, are classified under one of six major categories:
personnel services (wages & benefits), supplies, other services & charges (professional fees,
utilities, etc.), capital outlay, debt service, and operating transfers out (other financing uses).
The chart below shows the relative percentage of 2026 budgeted expenditures for these six
major categories for all funds, combined.
APPROPRIATIONS BY TYPE, GENERAL FUND ONLY— Using those same categories of
expenditure type, the relative percentages of budgeted expenditures for the General Fund are
shown below. As you can see, the General Fund is comprised of a much higher percentage of
personnel services costs compared to all funds. The General Fund’s capital outlay is for rental
payments to the Central Equipment Fund for use of equipment. There are no debt service
expenditures or operating transfers out of the General Fund.
Personnel
Services
13%
Supplies
8%
Other Services &
Charges
18%
Capital Outlay
57%
Debt Service
4%
Operating
Transfers Out
0%
2026 Appropriations by Category -All Funds
Personnel
Services
35%
Supplies
7%
Other Services &
Charges
52%
Capital Outlay
6%
2026 Appropriations by Category -General
Fund
61Table of Contents
In governmental agencies, personnel services (salaries, wages, and benefits) normally represent
the largest of these categories. However, due to the significant investment in infrastructure,
cities have a much higher percentage of the budget devoted to operating and capital costs,
including debt service, than most other governmental entities. One other factor is the city’s
contracts (other services and charges) for law enforcement, legal, and assessing services.
The General Fund (the city’s primary operating fund for general government operations)
accounts for 18% of 2026 appropriations of the city. This is a decrease from 25% in 2025.
Special revenue funds, totaling 3% of 2026 appropriations (a decrease from 4% in 2025),
include a variety of fee-supported funds including the community center and cemetery.
The Debt Service Fund includes only non-enterprise and non-internal service fund debt.
These funds represent 3% of the city’s 2026 appropriations for bond principal and interest
payments. This is an increase from 5% in 2025.
Capital project funds total 31% (up from 14% in 2025) of appropriations, which includes
costs for street improvements, construction of a public works facility, community center
building improvements, public investments near private development, and other
governmental capital asset acquisitions excluding internal service funds.
Enterprise funds consist of water, sewer, stormwater, liquor, deputy registrar (DMV), and
fiber optics funds. These funds operate on a self-supporting basis and are responsible for
41% of the overall 2026 appropriations. This is a decrease from 47% in 2025.
Internal Service funds consist of facilities maintenance, IT services, central equipment,
and benefits accrual. These funds operate to provide services to the other internal
departments of the city. Appropriations are 2% of the city’s 2026 budget, which is an
increase from 4% in 2025.
The discretely presented component unit, which is comprised of the Economic
Development Authority (EDA) activities, accounts for 2% of 2026 budgeted expenditures,
an increase from 1% in the 2025 budget.
General
18%
Special Revenue
3%
Debt Service
3%
Capital Projects
31%
Enterprise
41%
Internal Service
2%
Component Unit
2%
2026 Appropriations by Fund Type
62Table of Contents
INTERFUND TRANSFERS
Interfund transfers support the operations of other funds and provide funding for special
projects. The following schedule provides the 2026 budgeted operating transfers:
Fund No.Transfer Out Fund Amount Fund No.Transfer In Fund Amount
101 General 6,000$ 213 Economic Development Authority 6,000$
403 Street Lighting Improvement 25,000 400 Capital Projects 25,000
653 Deputy Registrar 100,000 226 Community Center 100,000
Total Transfers Out 131,000$ Total Transfers In 131,000$
SCHEDULE OF BUDGETED OPERATING TRANSFERS IN 2026
63Table of Contents
ALL FUNDS SUMMARY BY YEAR
Property taxes increase with a higher levy set by the City Council. Tax increments will increase
in 2026 due to two newly certified TIF districts. Franchise & other taxes increase due to a new
gas franchise fee imposed in 2026 to support the city’s pavement management program. The
city’s local sales & use tax was implemented in April 2025; the increase in 2026 reflects a full
year of collections. Sales of goods decrease to reflect trends in the liquor industry. Licenses &
permits increase to reflect trend information. Intergovernmental revenues are projected to
increase in 2026 based on capital projects receiving grant funding. Charges for services are
budgeted higher with modest increases for garbage and recycling services. Contributed capital
reflects trunk charges for developments assumed in 2026. Operating transfers decrease in 2026
with minimal transfers anticipated for capital project funding between funds. Debt proceeds in
2026 are anticipated for construction of a public works facility and a water treatment plant.
Personnel services budget increased due to a classification and compensation study completed
in 2025, a cost of labor adjustment of 3% and an increase to health benefits in 2026. The
TOTAL ALL FUNDS 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 12,521,763$ 13,692,738$ 14,638,000$ 14,557,664$ 15,663,000$ 7.0%
Tax Increments 550,598 266,105 361,000 573,743 789,000 118.6%
Franchise & Other Taxes 421,246 422,365 452,000 417,341 1,118,500 147.5%
Sales & Use Tax - - 1,000,000 1,420,438 2,250,000 125.0%
Sale of Goods 7,042,543 6,481,607 7,366,428 6,337,632 6,428,000 -12.7%
Licenses & Permits 933,766 929,426 484,000 908,144 582,500 20.4%
Intergovernmental Revenues 2,992,834 2,356,686 4,495,000 701,629 5,222,625 16.2%
Charges for Services 14,775,682 15,686,092 13,712,809 15,259,958 14,277,900 4.1%
Fines & Forfeits 52,413 65,940 78,500 89,628 78,000 -0.6%
Special Assessments 1,239,361 1,308,107 363,578 927,485 442,366 21.7%
Miscellaneous 6,464,720 4,235,054 2,221,585 5,173,174 2,881,109 29.7%
Contributed Capital 1,525,147 625,032 10,100 262,115 230,000 2177.2%
Operating Transfers In 4,753,950 2,305,114 1,388,000 1,838,611 131,000 -90.6%
Debt Proceeds - - - - 47,800,000 ---
TOTAL REVENUES 53,274,023$ 48,374,266$ 46,571,000$ 48,467,562$ 97,894,000$ 110.2%
EXPENDITURES
Personnel Services 7,968,570$ 8,502,066$ 9,092,542$ 9,250,470$ 9,905,563$ 8.9%
Supplies 6,770,056 6,303,637 7,147,516 6,013,333 6,296,996 -11.9%
Other Services & Charges 11,966,791 13,452,731 13,636,162 13,523,701 14,309,031 4.9%
Capital Outlay 13,023,935 9,399,455 18,554,180 7,350,769 45,172,180 143.5%
Debt Service 2,662,401 2,652,899 2,975,600 2,649,512 2,977,230 0.1%
Operating Transfers Out 4,753,950 2,305,114 1,388,000 1,838,611 131,000 -90.6%
TOTAL EXPENDITURES 47,145,703$ 42,615,902$ 52,794,000$ 40,626,396$ 78,792,000$ 49.2%
FUND BALANCE - JANUARY 1 62,657,149$ 68,785,469$ 74,543,833$ 74,543,833$ 82,384,999$
Excess (Deficiency) of
Revenues over Expenditures 6,128,320 5,758,364 (6,223,000) 7,841,166 19,102,000
FUND BALANCE - DECEMBER 31 68,785,469$ 74,543,833$ 68,320,833$ 82,384,999$ 101,486,999$
64Table of Contents
addition of a new full-time city planner (previously only contracted) contributed to the
budgeted increase as well.
Estimated supplies cost decrease to reflect actual trends. Capital outlay expenditures increase
due to anticipated construction of a new public works facility and water treatment plant. Other
projects included in the 2026 budget include street improvements in the River Mill
neighborhood area, community center envelope improvements, Bertram Chain of Lakes (BCOL)
pickleball courts and maintenance facility, utility infrastructure, completion of the Golf Course
Rd trail, extension of utility trunk lines, upgrades to stormwater infrastructure (including Ditch
33), and acquisition of equipment, among other items.
Debt service decreases in 2025 due to amortization of existing debt, however, issuance of debt
in 2026 will require higher debt service in future years. Notable operating transfers are from
the Deputy Registrar Fund to the Community Center Fund for operating support and from the
Street Lighting Improvement Fund to the Capital Projects Fund for lighting costs included in a
street project.
More detailed information on each fund, including the major funds, is included later in this
document.
65Table of Contents
FUND BALANCE/WORKING CAPITAL
FUND BALANCE is calculated as governmental fund assets minus liabilities. WORKING CAPITAL
is the modified accrual balance of resources in enterprise funds after factoring out long-term
assets and liabilities that do not impact current, near-term operations.
The General Fund and Monticello Community Center adopt balanced budgeting, meaning fund
balances are projected to remain the same. The Cemetery and Small Community Development
Grant Fund show modest increases to fund balance.
The fund balances in all debt service sub-funds except one are projected to decrease due to the
planned spend down of accumulated fund balance, most notably from prepaid assessment
revenues received.
The Capital Projects Fund, Street Lighting Improvement Fund, BCOL Sales Tax Fund, and
Transportation Improvements Fund are budgeted to increase by more than 10%. The Capital
Projects Fund shows a 300% increase related to debt proceeds in 2026 related to construction
in 2027 and 2028. The other three funds increase due to resources accumulated in advance of
future spending to fund future projects on a pay-as-you-go basis. The City sometimes budgets
the use of reserves in the Capital Projects Fund for some project costs that will be reimbursed
in future years when grant funding is available for reimbursement.
The Water, Sewer, and Stormwater funds are projected to remain fairly consistent in 2026. If
the working capital of these funds shows a decrease, the fund’s net position as reported in the
City’s Annual Comprehensive Financial Report will typically not decrease since the cash will be
spent to construct a capital asset.
The Liquor Fund and Deputy Registrar Fund working capital balances are estimated to increase
by 24% and 11%, respectively due to net profits being held in the fund until a future project is
specified for use of the funds.
66Table of Contents
Projected Beginning Projected Ending
Fund Balance/Estimated Estimated Fund Balance/
Working Capital Revenues Appropriations Working Capital
General Fund 8,535,654$ 13,886,000$ (13,886,000)$ 8,535,654$
Special Revenue Funds
Cemetery 231,940 50,000 (34,000) 247,940
Small Community Development Grant 1,030,635 30,000 - 1,060,635
Monticello Community Center 47,149 2,145,000 (2,145,000) 47,149
Total Special Revenue Funds 1,309,724 2,225,000 (2,179,000) 1,355,724
Debt Service Funds
2015B G.O. Bonds 61,081 198,000 (215,000) 44,081
2016A G.O. Bonds 62,753 481,000 (529,000) 14,753
2017A G.O. Bonds 41,600 465,000 (474,000) 32,600
2018A G.O. Bonds 56,616 437,000 (448,000) 45,616
2019A G.O. Bonds 59,507 712,000 (712,000) 59,507
2020A G.O. Bonds 109,756 220,000 (234,000) 95,756
Total Debt Service Funds 391,313 2,513,000 (2,612,000) 292,313
Capital Project Funds
Capital Projects 8,864,199 39,668,000 (21,681,000) 26,851,199
Street Lighting Improvement 1,233,064 175,000 (25,000) 1,383,064
Park Dedication 175,000 5,000 - 180,000
BCOL Sales Tax 1,373,060 2,527,000 (1,705,000) 2,195,060
Transportation Improvements - 1,405,000 (1,260,000) 145,000
Total Capital Project Funds 11,645,323 43,780,000 (24,671,000) 30,754,323
Enterprise Funds
Water 14,866,901 15,778,000 (15,472,000) 15,172,901
Sewer 20,113,005 3,870,000 (4,756,000) 19,227,005
Stormwater 5,593,671 2,865,000 (3,257,000) 5,201,671
Liquor 1,673,985 6,478,000 (6,078,000) 2,073,985
Deputy Registrar 1,749,018 1,149,000 (960,000) 1,938,018
Fiber Optics 3,013,800 1,903,000 (1,848,000) 3,068,800
Total Enterprise Funds 47,010,380 32,043,000 (32,371,000) 46,682,380
Internal Service Funds
Facilities Maintenance 48,184 725,000 (725,000) 48,184
IT Services 409,272 594,000 (594,000) 409,272
Central Equipment 5,930,205 719,000 (530,000) 6,119,205
Benefit Accrual 392,821 30,000 (30,000) 392,821
Total Internal Service Funds 6,780,482 2,068,000 (1,879,000) 6,969,482
Discretely Presented Component Unit (1) (1)
Economic Development Authority 6,712,123 1,379,000 (1,194,000) 6,897,123
Total All Funds 82,384,999$ 97,894,000$ (78,792,000)$ 101,486,999$
CHANGES IN FUND BALANCE/WORKING CAPITAL - FISCAL YEAR 2026
67Table of Contents
Adopted
Actual Actual Budget Estimated Budget
2023 2024 2025 2025 2026
General Fund 8,178,673$ 8,124,291$ 8,124,291$ 8,535,654$ 8,535,654$
Special Revenue Funds
Cemetery 148,211 179,272 195,272 231,940 247,940
Small Community Development Grant 939,252 984,152 1,011,152 1,030,635 1,060,635
Monticello Community Center 543,903 336,722 336,722 47,149 47,149
Total Special Revenue Funds 1,631,366 1,500,146 1,543,146 1,309,724 1,355,724
Debt Service Funds
2015B G.O. Bonds 112,172 89,233 59,233 61,081 44,081
2016A G.O. Bonds 158,511 73,016 46,016 62,753 14,753
2017A G.O. Bonds 157,954 60,616 29,616 41,600 32,600
2018A G.O. Bonds 81,849 76,876 50,876 56,616 45,616
2019A G.O. Bonds 53,913 68,002 50,002 59,507 59,507
2020A G.O. Bonds 163,537 106,552 75,552 109,756 95,756
Total Debt Service Funds 727,936 474,295 311,295 391,313 292,313
Capital Project Funds
Capital Project 9,642,528 9,430,170 8,310,170 8,864,199 26,851,199
Street Lighting Improvement 1,697,878 1,377,518 1,157,518 1,233,064 1,383,064
Park & Pathway Improvement 777,439 715,102 486,102 - -
Park Dedication 158,146 166,480 172,480 175,000 180,000
BCOL Sales Tax - - 785,000 1,373,060 2,195,060
Transportation Improvements - - - - 145,000
Total Capital Project Funds 12,275,991 11,689,270 10,911,270 11,645,323 30,754,323
Enterprise Funds
Water 10,077,248 12,125,053 10,837,053 14,866,901 15,172,901
Sewer 14,931,964 17,751,522 14,444,522 20,113,005 19,227,005
Stormwater 3,991,777 4,893,437 3,940,437 5,593,671 5,201,671
Liquor 1,397,075 1,033,596 1,308,596 1,673,985 2,073,985
Deputy Registrar 1,351,671 1,806,699 1,628,699 1,749,018 1,938,018
Fiber Optics 1,767,458 2,248,975 2,215,975 3,013,800 3,068,800
Total Enterprise Funds 33,517,193 39,859,282 34,375,282 47,010,380 46,682,380
Internal Service Funds
Facilities Maintenance 96,275 119,215 119,215 48,184 48,184
IT Services 315,350 373,502 373,502 409,272 409,272
Central Equipment 4,534,085 5,236,448 5,256,448 5,930,205 6,119,205
Benefit Accrual 355,960 373,259 373,259 392,821 392,821
Total Internal Service Funds 5,301,670 6,102,424 6,122,424 6,780,482 6,969,482
Discretely Presented Component Unit
Economic Development Authority 7,152,640 6,794,125 6,933,125 6,712,123 6,897,123
Total All Funds 68,785,469$ 74,543,833$ 68,320,833$ 82,384,999$ 101,486,999$
ENDING FUND BALANCE/WORKING CAPITAL HISTORY
Fiscal Year Ended December 31,
68Table of Contents
REVENUE TRENDS & ANALYSIS
Revenues are conservatively estimated for every fund type. The schedule of revenue estimates
below is supported by detailed revenue estimates for each fund in subsequent sections. This
section of the budget highlights major revenue sources for all the city funds as combined and
for key governmental and enterprise funds: General Fund and Monticello Community Center
Fund (governmental funds), along with the Water, Sewer, Stormwater, Liquor, Deputy Registrar
and Fiber Optics funds (enterprise funds). Trends for these funds and individual revenues are
shown together with estimates for the coming year.
TOTAL CITY REVENUES AND OTHER SOURCES
Property taxes, charged to all non-exempt parcels in city limits, account for the single largest
ongoing revenue source for the city. Property taxes are levied for the following funds: General,
Monticello Community Center, Debt Service, Capital Projects, and Economic Development
Authority. Budget estimates are based off the final levy certified.
After property taxes, tax increments are another key source of revenue for the Economic
Development Authority (EDA) Fund accounting for 57% of 2026 budgeted revenues. Budget
estimates are based on known changes to each district.
Franchise & other taxes are difficult to predict because the cable franchise fees are paid to the
Sherburne-Wright Cable Commission, of which the city is a member. Cable franchise fees are
only remitted to the city if the commission votes to do so. An electric franchise fee has been
utilized for years, however, a new gas franchise fee in 2026 creates an increase in the budget.
An increase to the rate of the electric franchise fee may occur in 2026.
Sales & use tax was a new revenue source for Monticello which began on April 1, 2025. Voters
approved a 0.5% sales and use tax to fund further buildout of the Bertram Chain of Lakes
(BCOL) Regional Athletic Park. The tax will be in effect for 20 years, or until $15 million is raised,
whichever comes first. It is anticipated $15 million will be collected within 6-7 years.
Sales of goods reflect sales at the city’s Hi-Way Liquors off-sale store. Budget estimates are
calculated assuming a modest amount of inflation and using analysis of the actual sales trends
over the past 3-5 years. The sale of tetrahydrocannabinol (THC) beverages, legalized by the
TOTAL ALL FUNDS 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 12,521,763$ 13,692,738$ 14,638,000$ 14,557,664$ 15,663,000$ 7.0%
Tax Increments 550,598 266,105 361,000 573,743 789,000 118.6%
Franchise & Other Taxes 421,246 422,365 452,000 417,341 1,118,500 147.5%
Sales & Use Tax - - 1,000,000 1,420,438 2,250,000 125.0%
Sale of Goods 7,042,543 6,481,607 7,366,428 6,337,632 6,428,000 -12.7%
Licenses & Permits 933,766 929,426 484,000 908,144 582,500 20.4%
Intergovernmental Revenues 2,992,834 2,356,686 4,495,000 701,629 5,222,625 16.2%
Charges for Services 14,775,682 15,686,092 13,712,809 15,259,958 14,277,900 4.1%
Fines & Forfeits 52,413 65,940 78,500 89,628 78,000 -0.6%
Special Assessments 1,239,361 1,308,107 363,578 927,485 442,366 21.7%
Miscellaneous 6,464,720 4,235,054 2,221,585 5,173,174 2,881,109 29.7%
Contributed Capital 1,525,147 625,032 10,100 262,115 230,000 2177.2%
Operating Transfers In 4,753,950 2,305,114 1,388,000 1,838,611 131,000 -90.6%
Debt Proceeds - - - - 47,800,000 ---
TOTAL REVENUES 53,274,023$ 48,374,266$ 46,571,000$ 48,467,562$ 97,894,000$ 110.2%
69Table of Contents
state of Minnesota in 2023, began in the fall of 2025 once federal regulatory complications
were addressed.
Licenses and permits are mostly comprised of building department permit revenue.
Intergovernmental revenues are projected to increase due to higher grants being received to
offset project costs in 2026. Charges for services reflect changes to the city’s fee schedule,
including water, sewer, refuse and recycling charges, and community center membership and
day pass fees.
Fines & forfeits increase to more accurately reflect recent trends. Special assessments will
decrease in future years due to the implementation of the gas franchise fee, however, existing
assessments adopted in previous years continue to be collected. Long-time deferred or prepaid
assessment balances are difficult to predict.
Miscellaneous revenues, including donations, interest earned on investments, and rebates
related to a solar farm investment, are conservatively estimated based on prior year trends.
Known factors, such as the number of kilowatt-hours (kWh) subscribed in the solar program,
were considered in the 2026 budget assumptions. While the investment earnings—the largest
portion of this revenue classification—have increased with higher rates in the market,
adjustments to market value create volatility that makes estimating difficult.
Contributed capital consists of trunk and access fees collected from developers related to
upcoming anticipated projects. Operating transfers are budgeted to decrease in 2026 due to
Liquor Fund profits pooling within that fund rather than transferring out excess balance to the
Capital Projects Fund. Details of the transfers can be found on page 63.
Two new debt issuances are planned in 2026: lease revenue bonds for construction of a new
Public Works Facility and Public Facilities Authority (PFA) notes through the State of Minnesota
for construction of a Water Treatment Plant.
The chart below provides an overall picture of estimated revenues and other sources in 2026.
Any categories showing 0% are simply rounded from less than 0.5%.
Property Taxes
16%Tax Increments
1%
Franchise & Other Taxes
1%
Sales & Use Tax
2%
Sale of Goods
7%Licenses & Permits
1%
Intergovernmental Revenues
5%
Charges for
Services
15%
Fines & Forfeits
0%
Special Assessments
0%
Miscellaneous
3%
Contributed Capital
0%
Operating Transfers In
0%
Debt Proceeds
49%
2026 Revenues by Category -All Funds
70Table of Contents
PROPERTY TAXES
The city relies on property taxes to support functions such as general government, public
safety, public works, recreation and culture, capital outlay and debt service. For 2026, the
council adopted a general levy of $15,137,000, which is $1,020,000 (7.2%) higher than the prior
year. The Economic Development Authority (EDA) and council also adopted a Housing and
Redevelopment Authority (HRA) special benefit levy of $504,000, which is $5,000 (1.0%) greater
than 2025. The HRA levy is recorded in the EDA Fund.
The following chart reflects the changes in the tax levy over the last ten years:
Accounting for a variety of activities, the General Fund will receive 62% of the 2025 combined
property tax levies. However, property taxes provide 68% of the General Fund’s revenue. The
levy for the Monticello Community Center (MCC) increased $10,000 (1.9%) to $535,000. The
following chart represents the distribution of the tax levy for 2025.
When determining the property tax levy, City Council and staff take estimated market values to
calculate tax capacity by using specific state formulas for various types of properties. Discussion
then centers on the impact the levy will have on various property owners. This impact is then
balanced against services provided and service levels.
$-
$2
$4
$6
$8
$10
$12
$14
$16
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Mi
l
l
i
o
n
s
City & HRA Property Tax Levies
City Tax Levy HRA Levy
General Fund
$9,435,000
60%
MCC Operations
$552,000
4%
HRA Levy
$504,000
3%
Capital
$2,844,489
18%
Debt Service
$2,305,511
15%
2026 Property Tax Levy
71Table of Contents
GENERAL FUND
The General Fund is used to account for all financial resources of the city, except for those
required to be accounted for in another fund. Major functions supported by General Fund
revenues include administration and finance, police and fire services, public works, and
recreation and culture.
Revenue is estimated to be $13,886,000 (+5.3%) for the 2026 budget year. The primary General
Fund source of revenue is property taxes at $9,457,000 (+5.0%), which accounts for 68% of
total revenues. At 12%, 9% and 5%, respectively, charges for services, miscellaneous revenues,
and intergovernmental revenues are the only other categories to exceed 5% of total revenues.
The following chart depicts General Fund revenues as shown in the adopted budget for 2026:
The following chart represents General Fund revenues trends:
MONTICELLO COMMUNITY CENTER
The Monticello Community Center (MCC) provides a facility with space for a variety of
recreational, professional, and educational opportunities. Aside from its portion of the property
tax levy and an annual transfer from the Deputy Registrar Fund, the MCC is supported by a
variety of fees for memberships, activities, rentals, and concessions.
General Fund Revenues -2026
Property Taxes (68%)
Franchise & Other Taxes (2%)
Licenses & Permits (4%)
Intergovernmental Revenues (5%)
Charges for Services (12%)
All Other (9%)
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
AC
T
U
A
L
AC
T
U
A
L
BU
D
G
E
T
TH
R
U
1
2
/
3
1
BU
D
G
E
T
2023 2024 2025 2025 2026
Revenues -General Fund
Miscellaneous
Fines & Forfeits
Charges for Services
Intergovernmental
Revenues
Licenses & Permits
Franchise & Other Taxes
Property Taxes
72Table of Contents
WATER AND SEWER FUNDS
Water and sewer charges for services, based partially on level of consumption, come from
water and sewer services provided to Monticello residents and businesses. The city sets rates to
cover operating costs, a portion of depreciation, and debt service. The water and sewer funds
are expected to provide some level of future support for debt service incurred to make water
and sewer system improvements.
With 2026 shown as a projected amount, the following chart plots revenues for water and
sewer services on the left axis against gallons of water sold on the right axis:
In 2018, the sewer fund shows increased revenue because the city sold a parcel of property
that had been used for storage and a bio-solids site.
Water service charges have two components: base charge with a minimum usage amount and
consumption charge for usage above 1,000 each month. Rates have increased steadily over the
last ten years: average annual base and consumption charge increases were around 7.6% in
anticipation of increased operations costs and debt service for a new Water Treatment Plant.
Sewer charges, like water charges, have two components: base charge with a minimum usage
amount and consumption charge for usage above the minimum amount. Rates have increased
steadily over the years: average annual base and consumption charge increases were 4.1%.
The following chart reflects the water and sewer base rates over the last ten years:
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
$2,200,000
$2,400,000
AC
T
U
A
L
AC
T
U
A
L
BU
D
G
E
T
TH
R
U
1
2
/
3
1
BU
D
G
E
T
2023 2024 2025 2025 2026
Revenues -Community Center Fund
Operating Transfers In
Miscellaneous
Charges for Services
Intergovernmental
Revenues
Property Taxes
0
100
200
300
400
500
600
700
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
(Proj)
Ga
l
l
o
n
s
S
o
l
d
(
M
i
l
l
i
o
n
s
)
Re
v
e
n
u
e
s
(
M
i
l
l
i
o
n
s
)
Water & Sewer Revenues
Water Revenue
Sewer Revenue
H20 Sold (Gallons)
73Table of Contents
STORMWATER FUND
The Stormwater Fund was established in 2019 along with the creation of a per drainage unit
user charge. Each residential dwelling is equivalent to one drainage unit, and non-residential
properties are equivalent to 7 drainage units per rounded impervious surface area. The fee
increases to $5/month in 2026.
DEPUTY REGISTRAR (DMV)
The city is authorized by the State of Minnesota to operate a DMV. Fees collected from motor
vehicle licenses are the DMV’s main revenue source. Fees are regulated by the state.
The following chart shows the history of DMV revenues by transaction type over a five-year
period.
Motor vehicle (new and renewals) and the new Electronic Vehicle Title and Registration (EVTR)
service accounted for 90% of DMV transactions in 2025, an increase from 86% in 2024.
$-
$2
$4
$6
$8
$10
$12
$14
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Mo
n
t
h
l
y
B
a
s
e
C
h
a
r
g
e
Water and Sewer Base Charges
Water
Sewer
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
(Proj)
Mo
n
t
h
l
y
B
a
s
e
C
h
a
r
g
e
Stormwater Charges
Non-residential
Residential
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2021 2022 2023 2024 2025
DMV Transactions by Type & Annual Revenues
Drivers License
Game & Fish
DNR
EVTR
Motor vehicle
Annual Revenue
74Table of Contents
LIQUOR FUND
After peak sales in 2020 at $7.4 million, Monticello’s municipal liquor store continues to
weather volatility in customer trends related to liquor consumption. Between concerns about
the economy, changes in product preferences (toward liquor and THC and away from beer),
and shifts in generational habits, sales have fluctuated over the past 5 years. The most recent
Report on Minnesota Municipal Liquor Store Operations published by the Office of the State
Auditor ranked Monticello’s sales in the top 3 Minnesota cities with only one store.
The 2026 Liquor Fund budget reflects a decreased projection in sales based on recent trends,
however, 2025 results show that while sales decreased from 2024, increased purchases of
higher gross profit items still led to an increase in total gross profit from 2025. The Liquor Fund
has one retail outlet: Hi-Way Liquors. This fund has previously provided vital resources for
many community projects including Bertram Chain of Lakes, Downtown Improvements and
other capital items. The budget does not reflect any transfers out for capital projects in 2026.
Beer accounts for approximately 49% of total sales; liquor and wine follow at 35% and 12%,
respectively. Non-alcohol items contribute 4%. Beer typically has the lowest gross margin at
24% and wine the highest at 39%. Liquor is in the middle at about 32%. The new category for
tetrahydrocannabinol (THC) beverages is about 0.5% of sales but is a growing category with a
roughly 35% gross profit margin.
Beer
49%
Liquor
35%
Wine
12%
THC
0%Misc.
4%
Hi-Way Sales by Category -2025
Liquor Store Revenue by Category
Category 2021 2022 2023 2024 2025 5 Yr Chg
Beer 3,665,223$ 3,695,976$ 3,571,363$ 3,306,855$ 3,112,527$ -15%
% Change -4.5% 0.8% -3.4% -7.4% -5.9%
Liquor 2,276,808$ 2,340,709$ 2,350,700$ 2,156,981$ 2,229,011$ -2%
% Change -3.2% 2.8% 0.4% -8.2% 3.3%
Wine 915,444$ 882,772$ 855,693$ 775,979$ 737,970$ -19%
% Change -6.8% -3.6% -3.1% -9.3% -4.9%
THC -$ -$ -$ -$ 32,104$ ---
% Change 0.0% 0.0% 0.0% 0.0%---
Other 253,775$ 257,966$ 276,834$ 247,998$ 230,978$ -9%
% Change 7.6% 1.7% 7.3% -10.4% -6.9%
Total Sales 7,111,250$ 7,177,423$ 7,054,590$ 6,487,813$ 6,342,590$ -11%
% Change -4.0% 0.9% -1.7% -8.0% -2.2%
75Table of Contents
FIBER OPTICS FUND (FiberNet)
Monticello’s telecommunications utility, FiberNet Monticello, provides internet, voice
(telephone) and video (TV) services. City residential and commercial customers can subscribe to
one, two, or all three services. FiberNet continues to face competition from two large private
providers with significant resources and challenges with the societal shift away from traditional
telephone and television services. As a result, subscriber counts for voice and video have
declined in recent years. Internet has shown occasional growth with more customers
streaming video services.
The data in the graphs below shows trends FiberNet subscribers since 2017:
In July 2016, the city contracted with Arvig to manage FiberNet. The contract was renewed in
2021 for an additional 5 years. Through leaner operations, shared resources, and economies of
scale, the Fiber Optics Fund has had positive cash flow from operations since 2019. However,
potential new service areas will cause increases in capital costs. Arvig consistently assesses the
marketplace and service delivery costs and will raise prices as needed.
526 451 385 323 289 256 233 218 194
1,545 1,549 1,631 1,801 1,808 1,752 1,701 1,697 1,708
427 383 354 315 297 275 248 229 201
0
500
1,000
1,500
2,000
2,500
3,000
2017 2018 2019 2020 2021 2022 2023 2024 2025
FiberNet Subscribers By Type
Phone
Internet
Television
76Table of Contents
TAX LEVY HISTORY
2023 2024 2025 2026
General Fund $8,060,000 $8,640,000 $8,985,000 $9,435,000
Percent Change 7.8% 7.2% 4.0% 5.0%
Special Revenue Funds
Monticello Community Center 515,000 525,000 535,000 552,000
Percent Change 6.2% 1.9% 1.9% 3.2%
Debt Service Fund
2015B GO Bonds 164,435 165,223 160,879 193,991
2016A GO Bonds 282,559 357,979 433,189 428,189
2017A GO Bonds 299,532 326,842 403,942 430,832
2018A GO Bonds 444,232 439,337 419,127 433,602
2019A GO Bonds 697,133 711,964 680,836 699,143
2020A GO Bonds 111,690 24,830 98,220 119,754
Total Debt Service Fund 1,999,581 2,026,175 2,196,193 2,305,511
Percent Change -13.5% 1.3% 8.4% 5.0%
Capital Project Funds
Capital Projects Fund 1,475,419 1,882,825 2,400,807 2,844,489
Percent Change 36.4% 27.6% 27.5% 18.5%
Discrete Component Units
Economic Development Authority 402,000 451,000 499,000 504,000
Percent Change 3.6% 12.2% 10.6% 1.0%
Total Tax Levy - All Funds $12,452,000 $13,525,000 $14,616,000 $15,641,000
Percent Change 6.1% 8.6% 8.1% 7.0%
Levy Summary
City General and Debt Levies 12,050,000$ 13,074,000$ 14,117,000$ 15,137,000$
Percent Change 6.1% 8.5% 8.0% 7.2%
HRA Levy 402,000$ 451,000$ 499,000$ 504,000$
Percent Change 3.6% 12.2% 10.6% 1.0%
TAX LEVY HISTORY
77Table of Contents
TAX CAPACITY HISTORY
The Housing Redevelopment Authority (HRA) special benefit levy is capped at 0.0185% of the
city’s taxable market value, which was $2,727,750,300 in 2025. HRA levy proceeds can only be
used for purposes included in the HRA Act (Minnesota Statutes, Section 469.033, subd. 6). Those
purposes include redevelopment to correct or prevent blight and development of, or assistance
to, housing for low- or moderate-income persons.
In 2025 for taxes payable in 2026, Northern States Power (dba Xcel Energy), the city’s largest
taxpayer, initially received a valuation increase of 21.9%; however, through appeal to the
Minnesota Department of Revenue, the valuation was lowered to a 10.2% increase. Increases in
tax capacities of other properties were 2.9% for residential; 3.2% for commercial & industrial;
3.2% for apartments; and 3.6% for new construction of all types leading to a 7.3% citywide tax
capacity. Because other property tax classes increased by a smaller percentage, the tax burden
will shift to Xcel for the first time in nine years.
The graph below reflects the annual change in the city’s property tax levy and the annual
change in Xcel’s property taxes owed. If the green column is larger than the blue column (with
has not occurred in the last 10 years), Xcel absorbed the entire levy and lowered the taxes paid
by others. In the case where the green column is negative, other taxpayers paid for the entire
levy increase plus the amount Xcel’s taxes declined.
2023 2024 2025 2026
Tax Capacity 34,393,769$ 37,843,681$ 37,445,040$ 40,164,721$
Percent Change 10.7% 10.0% -1.1% 7.3%
City Levy - Tax Capacity Rate 35.035 34.547 37.701 37.687
Percent Change -4.1% -1.4% 9.1% 0.0%
HRA Levy - Tax Capacity Rate 1.169 1.192 1.333 1.255
Percent Change -6.4% 2.0% 11.8% -5.8%
TAX CAPACITY HISTORY
$(400,000)
$(200,000)
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
City Levy and Xcel Property Tax Change
City Levy Increase Change in City Taxes Xcel Energy
78Table of Contents
LARGEST PROPERTY TAXPAYER
Current year property taxes are calculated on the taxable market value on January 2 of the
prior year. For tax year 2019, the valuation method for the nuclear power plant changed. As a
result, the plant valuation dropped by nearly $81 million. The below schedule and graph reflect
the importance of the plant to the city’s tax base:
The plant’s percentage of the city’s total tax capacity (and its share of the annual property tax
levies) has been significant for many years. In 2017, the percentage was about 60% and
remained there until 2019, when it dropped to 56%. The percentage continued to decline
through 2025 when it was 37.6%. 2026 estimates calculate Xcel’s percentage of tax base at
38.2%. This overall tax capacity decline means the city’s other taxpayers (including new
construction, however) absorbed more of the tax levy.
Taxes
Payable Year Amount $ Change Amount $ Change % Chg.Amount $ Change % Chg.
2017 832,073,500$ 52,533,600$ 16,641,470$ 1,050,672$ 7% 5,520,059$ 146,014$ 3%
2018 877,855,100$ 45,781,600$ 17,557,102$ 915,632$ 6% 5,676,496$ 156,437$ 3%
2019 789,572,500$ (88,282,600)$ 15,791,450$ (1,765,652)$ -10% 5,410,467$ (266,029)$ -5%
2020 780,422,700$ (9,149,800)$ 15,608,454$ (182,996)$ -1% 5,457,964$ 47,497$ 1%
2021 806,039,800$ 25,617,100$ 16,120,796$ 512,342$ 3% 5,748,515$ 290,551$ 5%
2022 776,200,500$ (29,839,300)$ 15,516,287$ (604,509)$ -4% 5,669,031$ (79,484)$ -1%
2023 796,071,000$ 19,870,500$ 15,905,303$ 389,016$ 3% 5,572,423$ (96,608)$ -2%
2024 761,493,000$ (34,578,000)$ 15,214,102$ (691,201)$ -4% 5,256,016$ (316,407)$ -6%
2025 712,197,300$ (49,295,700)$ 14,228,188$ (985,914)$ -6% 5,364,169$ 108,153$ 2%
2026 785,082,147$ 72,884,847$ 15,701,643$ 1,473,455$ 10% 5,917,478$ 553,309$ 10%
Northern States Power (dba Xcel Energy)
Taxable Market Value Tax Capacity City Property Tax on Plant
$832 $878
$790 $780 $806 $776 $796 $761 $712
$785
$-
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
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Xcel Power Plant -Taxable Market Value
79Table of Contents
REVENUE SOURCES BY FUND
Property Tax Franchise &Sales & Sale of Licenses/
Taxes Increments Other Taxes Use Tax Goods Permits
General Fund 9,457,000$ -$ 293,500$ -$ -$ 580,000$ 616,000$
Special Revenue Funds
Cemetery - - - - - - -
Small Cities Development Program - - - - - - -
Monticello Community Center 552,000 - - - - - -
Total Special Revenue Funds 552,000 - - - - - -
Debt Service Funds
2015B G.O. Bonds 193,991 - - - - - -
2016A G.O. Bonds 428,189 - - - - - -
2017A G.O. Bonds 430,832 - - - - - -
2018A G.O. Bonds 433,602 - - - - - -
2019A G.O. Bonds 699,143 - - - - - -
2020A G.O. Bonds 119,754 - - - - - -
2023A G.O. Bonds - - - - - - -
Total Debt Service Funds 2,305,511 - - - - - -
Capital Project Funds
Capital Project 2,844,489 - - - - - 1,177,000
Street Lighting Improvement - - 150,000 - - - -
Park & Pathway Improvement - - - - - - -
Park Dedication - - - - - - -
BCOL Sales Tax - - - 2,250,000 - - 254,000
Transportation Improvements - - 675,000 - - - 730,000
Total Capital Project Funds 2,844,489 - 825,000 2,250,000 - - 2,161,000
Enterprise Funds
Water - - - - - 2,500 500,000
Sewer - - - - - --
Stormwater - - - - - -1,945,625
Liquor - - - - 6,428,000 - -
Deputy Registrar - - - - - - -
Fiber Optics - - - - - - -
Total Enterprise Funds - - - - 6,428,000 2,500 2,445,625
Internal Service Funds
Facilities Maintenance - - - - - - -
IT Services - - - - - - -
Central Equipment - - - - - - -
Benefit Accrual - - - - - - -
Total Internal Service Funds - - - - - - -
Discretely Presented Component Unit
Economic Development Authority 504,000 789,000 - - - - -
Total All Funds 15,663,000$ 789,000$ 1,118,500$ 2,250,000$ 6,428,000$ 582,500$ 5,222,625$
Revenue Classifications
Inter-
governmental
80Table of Contents
Charges for Fines & Special Miscell- Contributed Operating Debt
Services Forfiets Assessments aneous Capital Transfers Proceeds Total
General Fund 1,668,000$ 78,000$ -$ 1,193,500$ -$ -$ -$ 13,886,000$
Special Revenue Funds
Cemetery 45,000 - - 5,000 - - - 50,000
Small Cities Development Program - - - 30,000 - - - 30,000
Monticello Community Center 1,459,000 - - 34,000 - 100,000 - 2,145,000
Total Special Revenue Funds 1,504,000 - - 69,000 - 100,000 - 2,225,000
Debt Service Funds
2015B G.O. Bonds - - - 4,009 - - - 198,000
2016A G.O. Bonds - - 46,488 6,323 - - - 481,000
2017A G.O. Bonds - - 28,201 5,967 - - - 465,000
2018A G.O. Bonds - - - 3,398 - - - 437,000
2019A G.O. Bonds - - 11,764 1,093 - - - 712,000
2020A G.O. Bonds - - 92,855 7,391 - - - 220,000
2023A G.O. Bonds - - - - - - - -
Total Debt Service Funds - - 179,308 28,181 - - - 2,513,000
Capital Project Funds
Capital Project - - 236,351 385,160 - 25,000 35,000,000 39,668,000
Street Lighting Improvement - - - 25,000 - - - 175,000
Park & Pathway Improvement - - - - - - - -
Park Dedication - - 707 4,293 - - - 5,000
BCOL Sales Tax - - - 23,000 - - - 2,527,000
Transportation Improvements - - - - - - - 1,405,000
Total Capital Project Funds - - 237,058 437,453 - 25,000 35,000,000 43,780,000
Enterprise Funds
Water 2,079,000 - 8,000 338,500 50,000 - 12,800,000 15,778,000
Sewer 3,381,000 - 14,000 425,000 50,000 - - 3,870,000
Stormwater 700,000 - 4,000 90,375 125,000 - - 2,865,000
Liquor - - - 50,000 - - - 6,478,000
Deputy Registrar 1,100,500 - - 48,500 - - - 1,149,000
Fiber Optics 1,838,000 - - 65,000 - - - 1,903,000
Total Enterprise Funds 9,098,500 - 26,000 1,017,375 225,000 - 12,800,000 32,043,000
Internal Service Funds
Facilities Maintenance 700,000 - - 25,000 - - - 725,000
IT Services 584,000 - - 10,000 - - - 594,000
Central Equipment 693,900 - - 20,100 5,000 - - 719,000
Benefit Accrual 24,500 - - 5,500 - - - 30,000
Total Internal Service Funds 2,002,400 - - 60,600 5,000 - - 2,068,000
Discretely Presented Component Unit
Economic Development Authority 5,000 - - 75,000 - 6,000 - 1,379,000
Total All Funds 14,277,900$ 78,000$ 442,366$ 2,881,109$ 230,000$ 131,000$ 47,800,000$ 97,894,000$
Revenue Classifications (continued)
81Table of Contents
LONG RANGE FINANCIAL PLANS
General Fund Community Center Capital Projects EDA
Routine
Expenditures
Expected to rise at the pace of
inflation but mitigated by gains
in productivity. Some capital
expenditures are incorporated
as routine through rental
charges by internal service
funds. Future anticipated
additions to staff and an
increase to the law enforcement
rate and patrol have an impact
going forward.
Expected to rise at the pace of
inflation. Routine major non-
capital expenditures (such as
r epla c ement of fitness
machines) vary by year, but are
being completed modestly and
strategically as the current
ecomony continues to affect
discretionary spending such as
fitness memberships.
N/A Non-TIF expenditures are
expected to rise at the pace of
inflation.
Non-routine
Expenditures
Basic level of non-routine items
are included in overall budget
but vary within each budget
unit from year-to-year.
Large R&M items will be
supported by operations, and
capital expenditures are paid
for by th e city's Capital Projects
Fund. Budgetary constraints
create a limited ability to invest
in non-routine expenditures.
Projects in 2026 include city
facility maintenance and
improvements, transportation
i mprovements (including
completion of the Golf Course
Road trail project), utility
extensions on CSAH 39 and
Ditch 33, construction of new
city facilities, improvements at
BCOL, and development-related
investments near Fallon
Avenue. The CIP includes
additional detail.
Tax increment financing (TIF)
expenditures will vary
considerably from year-to-year
i n each di s trict as development
occurs and depending on
specific agreements with
developers. Increment received
in newer TIF districts for the
first time in 2025 or 2026
creates increase expenditures
for PAYGO notes or interfund
loans.
Revenues
Property taxes of $9,435,000
provide 68% of General Fund
revenue. The budget is
s omewhat limited by
sustainable growth in the tax
levy. The city looks to diversify
revenues by implementing more
charges for services, as
applicable. Additional revenue
is earned from a solar farm
investment that began in 2020.
The property tax levy is set at
$552K in 2026. User fees are
expected to cover a significant
portion of on-going
expenditures. However, the
current ecomony continues to
affect discretionary spending
such as fitness memberships.
Other support includes an
annual transfer from the
Deputy Registrar Fund.
Include tax levy ($2.8M in
2026), grants, debt proceeds for
certain major projects, and
other r evenues.
State street aid will fund the
new Transportation
Improvements Fund beginning
in 2026 rather than being
accounted for in the Capital
Projects Fund. The new fund
will also receive franchise fees
as dedicated funding for
maintaining the city's streets
networks.
Tax increment revenues widely
vary from district to district but
not much from year-to-year
unl ess a new district is created
or an existing district is
decertified. Often reserves
(accumulation of prior year
increments) are used to fund
projects. The 2026 HRA levy is
$504,000.
Debt
None anticipated.None anticipated. To note, debt
for recreational projects either
requires voter approval or must
be incurred as part of a lease-
purchase agreement with the
EDA.
$35M anticipated in 2026 to
fund the 2026-2027
construction of a new Public
Works Facility. The debt needed
to finance this project will be a
significant amount of the city's
debt capacity. Reductions or
limited increases to the general
fund and capital project fund
levies may be used to offset the
overall impacts of additional
debt levies.
None anticipated. To note,
intrafund loans from the EDA
General sub-fund and/or TIF 1-
6 may fi nance some future TIF
activities.
82Table of Contents
Water Sewer Liquor Fiber Optics Central Equipment
Routine
Expenditures
Expected to rise at the
pace of inflation but
somewhat mitigated by
reinvestment in plant
and equipment. A new
Treatment Plant (2026-
2028 construction) will
require future increases
in operating
expenditures. Average
annual capital
expenditures are
estimated at $160,000.
Expected to rise at the
pace of inflation but
mitigated by
reinvestment in plant
and equipment. Average
annual capital outlays
financed on a pay-as-you-
go basis estimated at
$270,000.
Expected to rise at the
pace of inflation and
changes in demand. Cost
of sales are typically
passed onto customers
through higher sales
prices. The Liquor Store
maintains a consistent
gross profit margin near
26%, which is sufficient
to cover other operating
costs, such as staff
wages.
Routine expenditures are
expected to rise at the
pace of inflation and
continue to be fully
covered by operating
revenues.
The current management
agreement with Arvig
expires on June 30,
2026.and is expected to
be extended.
N/A
Non-routine
Expenditures
2026: $1M CSAH 39 West
utility extensions.
2026-2028: $45M water
treatment facility.
2026-2010: $5.4M Fallon
Avenue trunk line
improvements phased
with associated
development.
2026: $700 WWTP
gasifier tank
replacement.
2026-2031: $8.0M Fallon
Avenue trunk line
improvements phased
with associated
development.
The fund generates
sufficient annual
revenues to support its
needs.
Nothing planned in 2026.
Non-routine expenditures
are currently fully
supported by operating
revenues. However, non-
routine expenditures are
tied to development,
which is unpredictable.
Reserves from recent
operating revenues
provide a safety net.
2026: $200k extensions
to new neighborhoods.
Estimated future
investments in
equipment average
$430,000 annually.
Amounts for future years
in the CIP reflect ideal
timing for replacement of
equipment, but will be
adjusted as equipment is
evaluated or as financing
allows.
Revenues
In anticipation of new
construction and growth,
the city increased usage
rates by 8% and
access/trunk fees by 27%
in 2026.
A formal rate study for
base, usage, and
development-related
charges was completed
showing a need to
increase development-
related rates was needed
to support associated
costs of growth.
User rates are expected
to rise to provide for pay-
as-you-go routine system
replacement or
regulatory upgrades.
System expansion is
funded by access and
trunk charges on
development. Anticipated
rate increases are 3% for
usage and 4% for
trunk/access charges
annually based on a rate
study completed in 2026.
Sales grew signficantly in
2020 and have cooled in
the years since. Future
sales are projected
conservatively as
economic fluctuations
are difficult to predict.
The liquor store began
sales of low-potency
hemp (THC) beverages in
the fall of 2025 to reflect
market trends.
Revenues mainly consist
of charges for services to
those subscribers to
FiberNet's services.
Rental revenues
(expenditures in other
funds, funded by
revenues sources in
other funds) rise with
equipment purchases.
However, once equipment
is paid for, rental
charges cease for that
piece of equipment.
Debt
The city was awarded
$11M from the State of
Minnesota to support
construction of a water
treatment plant. An
additional $2M in
emerging contaminent
support is anticipated. A
Minnesota Public
Facilities Authority
(MPFA) loan for the
remaining $32M
construction costs will
commence in 2026.
The Minnesota Public
Facilities Authority
(MPFA) may provide
funding for future
projects. Revenue bonds
may be sold if reserves
are depleted, however
none are anticipated.
None anticipated.None anticipated.
However, the requirement
to install service to all
new developments could
call for issuing debt in
the future.
None anticipated.
83Table of Contents
As part of the budget process, council and staff review service needs, growth trends, and capital
investment requirements. A long-term financial plan (LTFP) model was developed in 2022 and is
updated annually. However, the following discussion will focus on the city’s four main operating
funds: General, Monticello Community Center, Water, and Sewer. This is done in conjunction
with the Capital Improvement Plan (CIP), which is a ten-year forecast for capital investments.
Financial planning for purposes of this budget document is segregated into two components:
operations for the four main operating funds and capital investments (CIP).
The Stormwater, Liquor, Deputy Registrar, and Fiber Optics enterprise funds are not specifically
covered in this discussion. The Stormwater Fund is still relatively new, and the capital needs
and planning are still being developed. The liquor store and DMV are retail operations with no
major forecasted capital investment needs. The Fiber Optic Fund presents challenges in a
dynamic and competitive market where the strategies and business plan need consistent
refinement, especially considering the influence of development and industry trends, both of
which are outside of the city’s control.
Items impacting long range financial planning:
•Current financial position (fund balances) and growth trends, inflation, and aspirations
•Condition of existing capital assets
•Debt burden
•Tax base considerations and concentration
•Regulatory environment
84Table of Contents
The city annually adopts a balanced budget for the General Fund. However, after 2026, annual
expenditure and revenue increases are projected to change at differing rates. Therefore, the
expenditure line in the following graph doesn’t always match the height of the revenue column.
The property tax levy and all other revenues are projected to increase at the same rate as
expenditures. According to policy, the city will maintain a fund balance of 60-75% of the
following year’s budgeted expenditures. The following charts assume the city will continue to
provide the same current levels of service.
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
$20.0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
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Chart 33.
General Fund
Expenditures and Revenues
All other revenues
Property tax
Expenditures
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
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Chart 32.
General Fund
Ending fund balance is projected to continue to be at levels above the minimum required
Ending Fund Balance
Ending Cash Balance
85Table of Contents
Like the General Fund, the Monticello Community Center (MCC) Fund adopts a balanced
budget. Changes caused by the COVID-19 pandemic created budgetary challenges for the fund,
relying on American Rescue Plan Act (ARPA) funding from 2021 – 2023 to support the MCC
Fund. The following charts show a significant tightening in the budget beginning in 2026 with
increased user fees, adjusted facility hours, and limited non-critical investments to operations.
Future planning and budgets, including timing and magnitude of capital improvements, will
continue to be considered.
$0.0
$0.1
$0.2
$0.3
$0.4
$0.5
$0.6
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
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Community Center Fund
Projected Ending Fund Balances and Cash Balances
Ending Fund Balance
Ending Cash Balance
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
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Community Center Fund
Projected Expenditures and Revenues
All other revenues
Property tax
Expenditures
86Table of Contents
The Water Fund has future funding challenges with plans to construct a water treatment facility
in 2026-2028. The fund has no direct debt and has adequate reserves to cover almost any
expenditure for other major capital projects. However, the city’s share of costs for the water
treatment plant will require the issuance of debt, which will be in the form of a State of
Minnesota Public Facilities Authority (PFA) loan. Additionally, with significant development
interest, it is anticipated the city will contribute to oversizing utility trunk lines in the next 3-5
years. While the budget focuses on working capital, the LTFP presents net position which
includes long-term assets and debt as applicable.
-$15.0
-$10.0
-$5.0
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
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Chart 46.
Water Fund
Ending Cash Balance by Purpose
Cash available for future
capital / unassigned
Cash for 3-months
operating reserve
Cash for next year debt
service
Cash for next year planned
capital
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
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Chart 48.
Water Fund
Revenues and Expenses
Revenues
Expenses
87Table of Contents
The Sewer Fund has its own funding challenges. Environmental regulatory changes and/or
development growth may require large investments in the wastewater treatment plant in the
future. Wastewater treatment plant improvements are already planned for 2026 through 2029,
and the model shows the Sewer Fund’s current projections are sustainable. Like the Water
Fund, the LTFP presents net position which includes long-term assets and debt as applicable
rather than working capital which is reported in the budget.
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LONG-TERM FISCAL OBJECTIVES
The city council and staff are committed to expending public resources in the most cost-
effective and economical manner possible to ensure the stability of the city property tax levy,
user rates, and financial position. Considering changes to tax policy, state aid reductions for
various purposes, state-imposed levy limits in the past, and the potential of future levy limits,
fiscal strategies will need to be continuously monitored to ensure a balanced approach in
providing sufficient revenues to fund services.
1.Employ a strategy aimed at reducing the city’s reliance on the property tax levy to fund
basic services through sustainable revenue sources such as franchise fees, special revenues,
user fees, and charges for services.
The city’s property tax levy generates 68% of the General Fund’s revenue. This
dependence is largely attributable to state statute limits on how cities are allowed to generate
funding. Monticello has a healthy tax base, which includes a nuclear power plant. The city’s tax
levy has recently been above inflation, however, that has not always been the case. The
assessed value at the nuclear power plant has declined in recent years while all other property
tax classes increased, which caused another tax shift to other property taxpayers in the city,
although that was not the case for taxes payable in 2026.
The city’s 2026 levy is set at a 7.2% increase, which maintains the city’s tax rate,
responds to the city’s significant forecast of upcoming costs, and controls the impact on
property taxpayers who are also feeling the effects of inflation. The city recently implemented a
gas franchise fee to minimize the widespread use of sizable special assessments to benefiting
properties for road construction projects.
The current council’s philosophy indicates a desire to balance the impact on taxpayers
while not delaying necessary spending. While a growth plus inflation tax levy formula would not
reduce the dependence on property taxes, it would alleviate the strain placed on city finances
by inflation. City services will continue to be evaluated in relation to relevant funding sources,
promoting alternatives to traditional funding methodologies, and encouraging public-private
partnerships in service delivery systems.
2.The development and use of appropriate cost accounting structure which will lead to the
creation of individual cost centers for all city department activities to accurately reflect the
true cost of providing specific services.
The city strives for a cost accounting system that is department specific and attempts to
accurately reflect service delivery costs at the department and division levels. By including all
supplemental services as they relate to personnel, charges and services, supplies, and capital
outlays, the city will further distinguish the total cost of services provided. The city analyzes
these costs at the sub-category detail levels in support of overall policy goals.
3.The adoption of a financial philosophy that seeks to spread the cost of significant capital
outlay expenditures over an extended period to ensure that current and future taxpayers
share equally in underwriting those costs.
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The city continues to capitalize the cost of significant capital expenditures over several
years to ensure that both existing and future taxpayers share equally in the cost. In addition,
the city has dedicated a portion of the tax levy to support the cost of selected capital projects
and equipment, avoiding a fiscal environment based on reactive tax and spending policies. The
capital improvement planning process is critical in achieving these results.
4.The development of a long-term financial model (proforma) that identifies anticipated
trends in community growth and establishes a link between fiscal targets and budgetary
expenditures.
The city contracted with Northland Public Finance in 2022 to develop a financial model,
which is used to determine the long-term impacts of present-day expenditures and financing
decisions. Fiscal assumptions are based upon a complex set of financial data including growth
factors, tax capacity valuations, spending, and debt ratios. The proforma is utilized as a tool in
the budget planning process to ensure that key short-term fiscal targets are in line with long-
term fiscal projections. The proforma is updated annually to ensure that long-term fiscal
outcomes remain supported by current council budgetary policies.
5.The development of work performance goals for each department to ascertain and
measure how each operating division contributes to the city’s overall public service mission.
Each department is responsible for identifying relevant performance data to allow for an
independent analysis of specific service outcomes. Data is reviewed to provide the council and
public with a better understanding of the operational demands, resource inputs, and
performance outcomes associated with a specific service delivery system. These performance
measures continue to be assessed to ensure the data presented is useful and relevant.
6.The aggressive and appropriate investment of idle city funds to maximize the generation
of interest income, while ensuring adequate cash flow requirements.
Investment of city funds is controlled by state statute and managed by the Finance
Director guided by policy set by city council. Idle funds are invested in a variety of financial
instruments such as certificates of deposit, federal agencies, and appropriately rated bonds.
Long-term investing is designed to achieve the best yield in the current market, following a
strategy that structures long-term investments in ladder format and reinvests short-term
investment in rotating terms. However, safety and liquidity are the top priorities prior to
consideration of return on investment. While volatility from year to year is seen as interest
rates fluctuate and market values of investments in the city’s portfolio change, investing brings
solid returns in the long run.
7.Greater reliance on technology to enhance employee productivity in all areas of city
operations and improve customer communications.
The city has taken steps to invest additional time and energy on labor-saving technology,
such as software programming and electronic file storage. Imaging city records enables the city
to reduce storage areas presently dedicated to paper files and to more efficiently retrieve data.
8.Involving all employees in the process of re-engineering the work environment by
encouraging cross-training opportunities, reducing and eliminating bureaucratic barriers,
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streamlining public process requirements, prioritizing transparency with the public, and
adopting private sector customer service business values in city operations.
City staff is encouraged to identify work practice issues that are inefficient or overly
bureaucratic. The management team is committed to involving their employees and fostering
an environment that challenges the status quo of city operations.
9.Continuously reviewing opportunities to form partnerships with other community
stakeholders and neighboring communities to share services and equipment, jointly contract
with vendors and purchase equipment, and develop strategies to deal with local issues using
a regional approach.
The city has established several equipment and service delivery sharing arrangements
with other community stakeholders and neighboring communities and has joint powers
agreements in place on a variety of local and regional issues in planning, public safety, public
works, and recreational initiatives.
Recent steps taken to achieve long-term fiscal objectives:
The city has shifted its focus from issuing debt for all street projects in the Pavement
Preservation Program to funding those projects on a pay-as-you-go basis due to the relatively
routine nature of road improvements throughout the city. The debt level and debt levy
capacities are reserved for major projects that are truly unique such as the anticipated Public
Works Facility construction and Water Treatment Plant construction. A gas franchise fee will
take effect in 2026 which will allow for dedicated funding to match grants and state aid for
upkeep of city streets in lieu of burdening property owners with special assessments when a
project occurs on their street.
In 2021, the city created the Facilities Maintenance internal service fund. This allows costs for
city facility repairs and maintenance to be viewed across the board while also seeing each
department’s impact through the internal charges paid by each cost center. A new software
program, Cartegraph, was implemented to track work orders to provide the breakdown of costs
to each facility and department. A shift in 2024 brought the maintenance staff previously
operating solely out of the community center facility into further integration with the
centralized Facilities Maintenance department. This area of operations is still being streamlined
for best workflow and facility upkeep.
In 2023, the city increased its applications for external funding. Most notably, the city was
awarded $11 million from the State of Minnesota towards the cost of constructing a new water
treatment facility with at least $2 million of additional funding for emerging contaminants also
in progress. Other funding was secured for capital projects like improvements to ADA
accessibility and underpass safety under TH 25 at the river crossing but also operating initiatives
like combating Emerald Ash Borer in our community. The city continues to request and
advocate for additional external funding for priority projects and initiatives, both directly and
through a sales tax exemption for construction projects.
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CAPITAL EXPENDITURES & CAPITAL IMPROVEMENT PLAN
INTRODUCTION
Capital expenditures (also called capital outlays) are the purchases of capital assets, which are
used in operations and have initial useful lives extending beyond a single reporting period.
These assets must also meet capitalization thresholds (see Appendix), which vary by asset
classification and typically cost more than $10,000.
Capital expenditures can be classified as either recurring or non-recurring. Large projects
adding to or replacing infrastructure are usually non-recurring in nature. Water utility
extensions and stormwater expansion at Chelsea Road/CSAH 39, design/construction of a
Water Treatment Plant and Public Works Facility, building envelope improvements to the
Community Center, and improvements and oversizing in conjunction with development on
Fallon Avenue and 85th Street account for the bulk of the major 2026 non-recurring projects.
Large non-recurring projects are typically financed by debt, intergovernmental revenue
(state/federal grants and aids) or reserves accumulated in anticipation of the project.
The capital improvements presented in this section comprise the 2026-2030 Capital
Improvements Plan (CIP). Monticello’s CIP identifies capital and certain major noncapital
expenditures in a comprehensive plan to forecast future resources needed to acquire or build
assets used in municipal operations. By integrating major noncapital expenditures, such as
maintenance items or asset purchases not meeting specific dollar thresholds, the city can better
plan and prepare for future financial challenges. However, the creation of a long-term financial
plan has allowed for some expenditures of this nature to be removed from the CIP.
WHAT IS A CAPITAL IMPROVEMENT PLAN?
A capital improvement plan is a multi-year projection for the evaluation of the city's capital
needs. It serves as a guide for construction, development, and maintenance of the city's
infrastructure assets, as well as other less expensive assets, in the most cost-efficient manner
possible. It is the result of systematic review of each project, as it relates to the city council
goals and the established priority scheme, to maximize the use of all financial resources. The
Monticello CIP has four expenditure categories: capital improvements, vehicles and major
equipment, major repair and maintenance items, and small tools and equipment. Capital asset
classes also include land acquisitions.
While the plan serves as a long-range plan, it is reviewed annually and revised based on current
circumstances and opportunities. Priorities may change due to grant opportunities,
circumstances that caused a more rapid deterioration of an asset, or in response to
development interest. Projects may be revised for significant cost variances. The council holds
an annual goal setting workshop that ensures these projects and purchases continue to align
with the long-term vision.
WHAT ARE THE OBJECTIVES OF A CAPITAL IMPROVEMENT PLAN?
· To forecast public facilities and improvements in a timely and systematic manner while
providing an opportunity for residents and interest groups to provide input.
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· To strike a balance between needed public improvements and the present financial capability
of the city to provide for these improvements.
· To anticipate and project financing needs to maximize available federal, state, and county
funds, and enhance and protect future bonding capacity and ratings.
· To implement city council objectives as outlined in the Purpose and Mission and serve as a
guide for local officials in making budgetary decisions.
· To promote and enhance the economic development of the city of Monticello while balancing
the needs of new development with existing development.
The CIP is developed with the intent of improving the reliability of cost estimates and funding
forecasts by focusing on five years rather than only the upcoming year. This will enable decision
makers to identify opportunity costs of shifting priorities. It creates a better understanding of
the balancing act that is required to allocate scarce resources to capital improvement efforts.
WHAT IS THE CAPITAL IMPROVEMENT PLAN DEVELOPMENT PROCESS?
Assign Project Titles
Make the title descriptive of the nature and scope of work.
Group projects in a meaningful way by category or initiative. Identify responsible staff and
comprehensive plan goals achieved with completion or acquisition of the project.
Formulate Project Descriptions
Include the target activities to be completed each year on the project. This is a brief statement
of the work that will be performed and its location.
Formulate Project Cost Estimates
Project costs are broken down into Land Acquisition, Planning/Design/Construction, and
Vehicles/Equipment/Furnishing
Document Operating Impact
Record the costs in the year they will initially occur. It will be assumed that the costs continue
from that point on unless information is provided otherwise. The following possibilities exist:
· Maintenance project that doesn’t require any more than is already in the budget for
maintenance.
· Maintenance project that replaces existing items with a more cost-effective material or
device resulting in a slight savings in operating dollars. Examples: more energy efficient
heating, ventilation, and air conditioning (HVAC) unit resulting in an electricity savings.
· New project will always have an operating impact.
Note Unfunded Projects
· All projects not funded are placed on an unfunded list.
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Document Project Justifications
The following things are considered:
· Reason the project is necessary
· Related projects (timing issues)
· Coordination efforts required with other agencies (timing issues)
· Mandates and deadlines for compliance (timing issues)
· Service impact (number of participants impacted)
· New fees that could be generated because of the project (funding/cost recovery)
· Community goal references (refer to Strategic Goals & Strategies section)
· Safety requirements
Prioritize Projects
Priorities: required on all projects based on the following considerations:
1.Does this project preserve or improve public health and safety?
2.Does this project support the city’s strategic transition plan for economic development?
3.Does this project align with Council’s strategic priorities and/or the Comprehensive
Plan?
4.Does this project support redevelopment and reinvestment by maintaining what we
already have?
5.Does this project reduce operating and maintenance costs or provide for other
efficiencies?
6.Does this project create a new service or improve current service levels?
7.Does this project promote recreation and/or support natural resources?
Discuss draft CIP with the city council for review throughout budget workshops
·Multi-year anticipated capital improvements
· Ranked list of unfunded needs
HOW DOES THE CAPITAL IMPROVEMENT PLAN IMPACT THE OPERATING BUDGET?
All capital improvement projects must show the operating budget impact at the time the
projects are submitted for consideration in the CIP. This includes the number of full-time
equivalent positions that would be needed or could be eliminated and the cost or savings for
salaries/benefits, supplies/services, and equipment. It would not be prudent to make funding
decisions in favor of a project the city could not afford to staff or maintain.
Capital improvements can impact the budget by increasing or decreasing revenues and
expenditures, for example by attracting new businesses; by requiring new employees or
additional maintenance or utility costs; or by reducing maintenance costs, utility costs, or
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personnel costs (reduction in overtime or man-hours). Specifically, new equipment may be
more productive and less expensive to operate.
Many projects are associated with prevention of future excessive costs that are difficult to
measure. The cost of the maintenance should not exceed the benefit of the asset. The projects
may have maintenance costs, but the existing maintenance budgets are sufficient. The priority
for available capital project funds has been maintenance of existing facilities and infrastructure.
Many of Monticello’s projects fall into this category.
One capital asset that requires a delicate balance of operating maintenance and capital
replacement is the city’s more than 80-mile street system. For more durable mill and overlay,
the city budgets regularly for chip sealing and crack sealing. These operating and capital
expenditures work together to prevent more expensive street reconstruction projects.
Finally, the city annually budgets for repairs or replacement of water and sewer mains through
each respective enterprise fund. For public utilities, customer satisfaction is difficult to quantify
in dollars. However, a generally satisfied customer may be less likely to complain about the rate
increases needed to support those services.
In the following table, items with an increase in operating costs are additional equipment or
new projects/improvements. Items with a decrease in operating costs are replacement
equipment with lower R&M in the near term. Items with both increases and decreases to
operating costs are noted with (+) and (-) in the Comment column. R&M expenses for roads
include estimates for snow removal, boulevard maintenance, street sweeping, crack sealing,
and striping. Listed amounts are for expenses more than those already being incurred. With no
impact on expenditures, some are replaced due to obsolescence or aesthetics. The amounts
listed are estimated; many of these amounts may or may not be close to those actually
incurred.
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HOW IS INPUT FROM RESIDENTS INCORPORATED IN THE CIP DEVELOPMENT PROCESS?
Residents are involved in the capital improvements plan through participation at council
meetings, work sessions and public hearings, and through boards and commissions. Beyond
participation in boards and public meetings, the city makes a considerable effort to inform the
citizens through various publications, news releases, and the website along with holding public
input meetings for major projects and setting up booths at various city events to garner
feedback from residents and routine community visitors.
Investment
Department - Operating Fund Amount Starting Year Amount Comment
Public Works - General Fund
Public Works Facility 17,500,000$ 2028 38,750$ Utilities and R&M
City Street Mill & Overlays 1,260,000$ 2027 (6,300)$ R&M
Golf Course Road Trail - Elm to 7th (C24001)900,000$ 2027 4,500$ Pathway maintenance
Public Parking Lot Expansion - Block 51 175,000$ 2027 5,875$ Maintenance & snow removal
Haven Ridge Roundabout Oversizing 610,000$ 2027 6,100$ R&M
Fallon Avenue Reconstruction- Chelsea Rd to Fallon Dr 150,000$ N/A -$ Planning stage only
Mack Hook/Plow/Dump Truck #116 400,000$ 2026 31,800$ CE lease (+) and R&M (-)
Asphalt Roller #128 90,000$ 2026 10,800$ CE lease (+) and R&M (-)
Skid Loader Plow Attachment 25,000$ 2026 2,950$ CE lease (+) and R&M (-)
Loader Grapple Attachment 15,000$ 2026 1,750$ CE lease (+) and R&M (-)
Recreation & Culture - General Fund
Library Parking Lot Repaving 325,000$ 2027 (1,625)$ R&M
Soccer Facility Roof Repairs 100,000$ 2027 (500)$ R&M
4th Street Park Hockey Board Replacement 65,000$ 2027 (650)$ R&M
MCC Building Envelope 1,500,000$ 2027 (30,000)$ R&M
East Bridge Park Sidewalk & Underpass Improvements 150,000$ N/A -$ No change in R&M
Front Street Pier Replacement 65,000$ 2027 (1,300)$ R&M
BCOL Maintenance Shop 950,000$ 2027 10,500$ Utilities and R&M
BCOL Pickleball Courts 755,000$ 2027 7,550$ R&M
Haven Ridge Pathway Oversizing 141,000$ 2027 1,410$ R&M
Public Works - Water Fund
Water Treatment Plant 12,800,000$ 2027 161,500$ Staffing & operations
CSAH 39 West Utility Extension 1,000,000$ 2027 1,000$ R&M
Haven Ridge Trunk Oversizing 405,000$ 2027 2,025$ R&M
Public Works - Sewer Fund
Haven Ridge Trunk Oversizing 1,060,000$ 2027 5,300$ R&M
Wastewater Treatment Plant Gasifier Tank 700,000$ 2026 (3,500)$ R&M
Sewer Camera & Trailer 166,000$ N/A -$ No change in R&M
Public Works - Stormwater Fund
Ditch 33 Improvements 2,000,000$ 2027 10,000$ Cleaning & outfall inspections
Karlsburger Pond Expansion 300,000$ 2027 1,500$ R&M
Fallon Avenut Pond Outlet 300,000$ 2027 1,500$ R&M
Haven Ridge Trunk Oversizing 85,000$ 2027 425$ R&M
Fiber Optics Fund
Expansion to New Neighborhoods 200,000$ N/A -$ No routine R&M
Impact on
Operating Expense
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HOW IS THE CAPITAL IMPROVEMENT PLAN FINANCED?
In analyzing the financial viability of the capital improvements in the 2026-2030 CIP, the city has
three basic choices for methods of financing: pay-as-you-go, joint power agreement
development authority capital leasing, and debt financing. The following sources provide
revenue for the three financing methods:
General Fund revenues, such as property taxes, local government aid (not applicable to
the City of Monticello), and service charges are current revenues used to finance
relatively small capital outlays. For example, replacement of the library fire system.
The Central Equipment Fund, created for the purpose of establishing a revolving fund
for future equipment purchases, reduces the impact of large equipment purchases on
annual budget units. This fund purchases equipment and leases it back to the benefiting
budget units. The lease payments assure that equipment purchases will receive annual
funding and are set at rates to recover depreciation plus inflation but not operating
costs such as repairs and maintenance (R&M), gas, or insurance. Similarly, internal
service funds have been established for Facilities Maintenance and IT Services, which
also incur equipment purchases related to each respective fund.
Enterprise fund revenues, derived from user charges, are used to finance capital
improvements and equipment necessary for delivering a specific service. Additionally,
accumulated revenues in enterprise funds can be transferred to other funds, specifically
the Capital Projects Fund, to provide financing for capital asset acquisitions. For
example, the utility service lines installed under a street.
Federal and state grants provide funding for various capital improvement projects.
Other sources include local grants, donations, reserves, and other governmental units.
Debt issuance is used to finance large, non-recurring capital improvements. General
obligation improvement bonds and general obligation revenue bonds are mainly used to
finance improvements to the city’s infrastructure. Items identifying the Capital Project
Fund as funding source may need some level of debt issuance.
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The below graphs provide a breakdown of expenditures and funding sources within the CIP:
The large increase of capital activity in 2026-2028 anticipates construction of facilities for Water
Treatment and Public Works. Notable 2026 projects include pickleball court installation and
maintenance facility construction at Bertram Chain of Lakes (BCOL) Regional Park,
design/construction of a Water Treatment Plant and Public Works Facility, building envelope
improvements to the Community Center construction of a roundabout and pathway and
oversizing of utility trunk lines at Fallon Avenue and 85th Street in conjunction with
development, and the Ditch 33 Improvements.
Additional 2026-2027 capital outlays consist of additional construction of the Water Treatment
Plant and Public Works Facility, continued mill & overlay per the Pavement Preservation
Program, expansion or repaving of city parking lots, further buildout at BCOL, and continued
public investments near private development along Fallon Avenue/85th.
Funding in 2026-2028 includes a sizable amount of bond proceeds consisting of $35 million in
bond for the Public Works Facility and $32 million for the Water Treatment Plant, and
potentially $3.2 million for Fallon Avenue improvements. External grants include $2.2 million
for transportation improvements; $254,000 for pickleball courts; $2.4 million for utility
infrastructure; and $13 million for the Water Treatment Plant.
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CIP -Expenditures for FY 2023 -2030
Buildings Infrastructure - Streets Infrastructure - Utilities Improvements - Parks Vehicles & Equipment Land
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CIP -Funding Sources for FY 2023 -2030
Capital Projects Transportation Improvements BCOL Sales Tax Central Equipment Enterprise Funds Bond Proceeds External Grants Other Funds
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2026 through 2030
Capital Improvement Plan
Monticello, MN Funding Source Summary
Source 2026 2027 2028 2029 2030 Total
BCOL Sales Tax 1,451,000 3,000,000 3,000,000 7,451,000
Capital Project Fund 3,381,000 2,105,000 2,473,700 4,376,000 100,000 12,435,700
Cemetery Fund 70,000 70,000
Central Equipment Fund 530,000 675,000 393,557 440,395 830,000 2,868,952
Debt Proceeds 30,300,000 36,700,000 3,200,000 70,200,000
DMV Fund 45,000 45,000
Facility Maintenance Fund 58,000 45,000 103,000
Federal Grants 1,054,000 1,054,000
Fibernet Fund 200,000 200,000 200,000 200,000 200,000 1,000,000
IT Services Fund 117,350 117,350
Municipal Liquor Fund 150,000 150,000 300,000
Sewer Fund 866,000 195,000 283,000 1,315,000 4,300,000 6,959,000
Sewer Trunk Fund 1,060,000 235,000 3,850,000 250,000 5,395,000
State Grants 3,175,625 900,000 12,200,000 16,275,625
Stormwater Fund 454,375 400,000 854,375
Stormwater Trunk Fund 385,000 55,000 100,000 120,000 600,000 1,260,000
Street Lighting Improvement Fund 500,000 500,000
Transportation Improvements Fund 530,000 2,500,000 3,105,000 2,625,000 2,145,000 10,905,000
Water Fund 175,000 50,000 333,000 157,512 715,512
Water Trunk Fund 805,000 305,000 2,400,000 260,000 150,000 3,920,000
GRAND TOTAL 44,192,000 47,690,350 28,405,257 12,909,395 9,232,512 142,429,514
Produced Using Plan-It CIP Software 99Table of Contents
2026 through 2030
Capital Improvement Plan
Monticello, MN Projects By Funding Source
Source Project # Priority 2026 2027 2028 2029 2030 Total
BCOL Sales Tax
Ballfield Future Phases BCOL-01 3,000,000 3,000,000 6,000,000
Maintenance Shop BCOL-02 950,000 950,000
Pickleball Courts BCOL-03 501,000 501,000
BCOL Sales Tax Total 1,451,000 3,000,000 0 3,000,000 0 7,451,000
Capital Project Fund
4th Street Park Improvements PAR-01 65,000 65,000 130,000
Block 51 Public Parking Lot
Expansion DT-01 175,000 175,000
CSAH 39 Pedestrian Pathway - Elm
to 7th (C24001) TRAN-01 100,000 100,000
East Bridge Park Accessibility
Improvements TRAN-15 150,000 50,000 200,000
Ellison Playground Equipment PAR-04 600,000 600,000
Engine 12 FLT-20 1,300,000 1,300,000
Fallon Ave Reconstruction -
Chelsea to Fallon Dr FAL-02 150,000 150,000 300,000
Fallon Ave Reconstruction - Fallon
Dr to 85th FAL-03 3 100,000 100,000
Fob Access & Security Cameras -
Library FAC-11 45,000 45,000
Front Street Pier PAR-05 65,000 65,000
Furnace & AC Replacement - West
Bridge Park Shelter FAC-05 25,000 25,000
Furnace Replacement - Building
Garage FAC-15 22,000 22,000
Great River Regional Trail TRAN-14 75,000 1,778,700 1,853,700
Haven Ridge Oversizing &
Landscaping FAL-01 751,000 205,000 75,000 1,031,000
Hunters Crossing Trail TRAN-13 20,000 300,000 320,000
Library Lighting FAC-04 35,000 35,000
Make Up Air Unit - Parks Barn FAC-03 35,000 35,000
MCC Building Envelope FAC-17 1,500,000 1,500,000
MCC Generator FAC-20 200,000 200,000
MCC Gym Acoustic Panels FAC-19 75,000 75,000
MCC Mississippi Room Carpet FAC-16 50,000 50,000
MCC Parking Lot Resurface FAC-08 800,000 800,000
MCC Pool Deck Resurface FAC-18 100,000 100,000
MCC Pool Filtration System FAC-22 150,000 150,000
MCC Pool Play Structure FAC-21 400,000 400,000
MCC Skate Park Area PAR-08 100,000 100,000
Park Building Sign FAC-13 23,000 23,000
Parking Lot Improvements -
Library FAC-29 325,000 325,000
Parking Lot Paving - Animal Shelter
& Well Houses FAC-23 50,000 50,000
Parkland Acquisition - Southern
Pond PAC-01 600,000 600,000
Pioneer Park Disc Golf Course PAR-02 15,000 15,000
Pioneer Park Play Structure PAR-10 800,000 800,000
Produced Using Plan-It CIP Software hggTable of Contents
Source Project # Priority 2026 2027 2028 2029 2030 Total
Professional Services Contract -
Phase I PAC-02 606,000 606,000
River Mill Sidewalk to Playground PAR-09 20,000 20,000
River Walk Pier PAR-03 45,000 45,000
Road Paving BCOL-04 100,000 100,000
Roof Repairs - PW FAC-26 40,000 40,000
Soccer Building Repairs FAC-24 100,000 100,000
Capital Project Fund Total 3,381,000 2,105,000 2,473,700 4,376,000 100,000 12,435,700
Cemetery Fund
Riverside Cemetery Columbarium PAR-06 70,000 70,000
Cemetery Fund Total 0 70,000 0 0 0 70,000
Central Equipment Fund
Asphalt Roller #128 FLT-10 90,000 90,000
Bobcat A770 #121 FLT-05 100,000 100,000
Dump Truck #145 FLT-31 120,000 120,000
JD Gator FLT-34 30,000 30,000
Loader Grapple Attachment FLT-01 15,000 15,000
Mack Hook/Plow/Dump Truck
#116 FLT-02 400,000 400,000
MCC Floor Scrubber FLT-25 15,000 15,000
Plow Truck #109 FLT-08 450,000 450,000
Plow Truck #110 FLT-35 300,000 300,000
Skid Loader Plow Attachment FLT-03 25,000 25,000
Skid Steer FLT-16 98,557 98,557
SUV #552 FLT-26 50,000 50,000
Tender 11 FLT-23 500,000 500,000
Truck #550 FLT-13 60,000 60,000
Truck #555 FLT-14 50,000 50,000
Truck #556 FLT-32 60,000 60,000
Truck #613 FLT-27 45,000 45,000
Utility 11 & UTV FLT-21 200,000 200,000
Utility 12 FLT-22 250,000 250,000
Zero Turn Mower #167 FLT-33 10,395 10,395
Central Equipment Fund Total 530,000 675,000 393,557 440,395 830,000 2,868,952
Debt Proceeds
Fallon Ave Reconstruction -
Chelsea to Fallon Dr FAL-02 3,200,000 3,200,000
Public Works Facility FAC-01 17,500,000 17,500,000 35,000,000
Water Treatment Plant FAC-02 12,800,000 19,200,000 32,000,000
Debt Proceeds Total 30,300,000 36,700,000 3,200,000 0 0 70,200,000
DMV Fund
SUV #800 FLT-44 45,000 45,000
DMV Fund Total 0 0 0 45,000 0 45,000
Facility Maintenance Fund
Floor Scrubber FLT-30 30,000 30,000
Scissor Lift & Trailer FLT-24 28,000 28,000
Produced Using Plan-It CIP Software 101Table of Contents
Source Project # Priority 2026 2027 2028 2029 2030 Total
SUV #702 FLT-43 45,000 45,000
Facility Maintenance Fund Total 0 58,000 0 45,000 0 103,000
Federal Grants
CSAH 39 Pedestrian Pathway - Elm
to 7th (C24001) TRAN-01 800,000 800,000
Pickleball Courts BCOL-03 254,000 254,000
Federal Grants Total 1,054,000 0 0 0 0 1,054,000
Fibernet Fund
Fiber to New Developments UTIL-05 200,000 200,000 200,000 200,000 200,000 1,000,000
Fibernet Fund Total 200,000 200,000 200,000 200,000 200,000 1,000,000
IT Services Fund
Fob Access & Security Cameras
(Additional) - MCC FAC-14 11,000 11,000
MCC Recreation Software PAR-07 77,200 77,200
Server Hardware FLT-04 29,150 29,150
IT Services Fund Total 0 117,350 0 0 0 117,350
Municipal Liquor Fund
Liquor Store Parking Lot Resurface FAC-07 150,000 150,000
Liquor Store Roof FAC-06 150,000 150,000
Municipal Liquor Fund Total 0 0 150,000 150,000 0 300,000
Sewer Fund
Camera Trailer #430 FLT-28 75,000 75,000
CCTV #405 FLT-29 120,000 120,000
Chelsea Rd Lift Station Expansion UTIL-06 300,000 300,000
F350 Truck #401 FLT-15 83,000 83,000
Fob Access - WWTP FAC-10 40,000 40,000
Security Cameras - WWTP FAC-28 25,000 25,000
Sewer Camera & Trailer FLT-09 166,000 166,000
WWTP Gasifier Tank UTIL-08 700,000 700,000
WWTP Generator Upgrades FAC-12 200,000 1,000,000 1,200,000
WWTP Influent Lift Station UTIL-11 250,000 4,000,000 4,250,000
Sewer Fund Total 866,000 195,000 283,000 1,315,000 4,300,000 6,959,000
Sewer Trunk Fund
Fallon Ave Reconstruction -
Chelsea to Fallon Dr FAL-02 3,850,000 3,850,000
Fallon Ave Reconstruction - Fallon
Dr to 85th FAL-03 3 250,000 250,000
Haven Ridge Oversizing &
Landscaping FAL-01 1,060,000 235,000 1,295,000
Sewer Trunk Fund Total 1,060,000 235,000 3,850,000 0 250,000 5,395,000
State Grants
CSAH 39 West Utility Extension UTIL-01 3 900,000 900,000
Ditch 33 Improvements UTIL-02 1,545,625 1,545,625
East Bridge Park Accessibility
Improvements TRAN-15 100,000 100,000
Produced Using Plan-It CIP Software 102Table of Contents
Source Project # Priority 2026 2027 2028 2029 2030 Total
Mill & Overlay - River Mill TRAN-09 730,000 730,000
Water Treatment Plant FAC-02 800,000 12,200,000 13,000,000
State Grants Total 3,175,625 900,000 12,200,000 0 0 16,275,625
Stormwater Fund
Ditch 33 Improvements UTIL-02 454,375 454,375
Street Sweeper #150 FLT-40 400,000 400,000
Stormwater Fund Total 454,375 400,000 0 0 0 854,375
Stormwater Trunk Fund
Chelsea Rd Outlet Control UTIL-04 100,000 100,000
Fallon Ave Pond Outlet UTIL-07 300,000 300,000
Haven Ridge Oversizing &
Landscaping FAL-01 85,000 55,000 140,000
Prairie Road Pond Outlet UTIL-10 120,000 600,000 720,000
Stormwater Trunk Fund Total 385,000 55,000 100,000 120,000 600,000 1,260,000
Street Lighting Improvement Fund
Traffic Signal at Hwy 25/4th St TRAN-07 500,000 500,000
Street Lighting Improvement Fund Total 0 0 0 0 500,000 500,000
Transportation Improvements Fund
Chelsea Road Improvements - Hwy
25 to CSAH 39 TRAN-05 350,000 2,950,000 3,300,000
Mill & Overlay - 7th St - Minnesota
St to Fenning TRAN-06 300,000 300,000
Mill & Overlay - Cardinal Hills TRAN-10 60,000 600,000 660,000
Mill & Overlay - Carlisle Village TRAN-12 85,000 850,000 935,000
Mill & Overlay - Groveland TRAN-18 100,000 1,900,000 2,000,000
Mill & Overlay - Hunters Crossing TRAN-20 55,000 550,000 605,000
Mill & Overlay - Klein Farms TRAN-21 100,000 1,550,000 1,650,000
Mill & Overlay - River Mill TRAN-09 370,000 370,000
Mill & Overlay - School Blvd West TRAN-22 90,000 900,000 990,000
Mill & Overlay - Sunset Ponds TRAN-23 95,000 95,000
Transportation Improvements Fund Total 530,000 2,500,000 3,105,000 2,625,000 2,145,000 10,905,000
Water Fund
125kw Generator #310 FLT-06 150,000 150,000
200kw Portable Generator FLT-12 150,000 150,000
F250 Truck #303 FLT-18 87,512 87,512
Parking Lot Paving - Animal Shelter
& Well Houses FAC-23 25,000 25,000
Truck #303 FLT-52 70,000 70,000
Truck #401 FLT-53 50,000 50,000
Well #3 Generator FLT-17 183,000 183,000
Water Fund Total 0 175,000 50,000 333,000 157,512 715,512
Water Trunk Fund
CSAH 39 West Utility Extension UTIL-01 3 400,000 400,000
Fallon Ave Reconstruction -
Chelsea to Fallon Dr FAL-02 2,400,000 2,400,000
Fallon Ave Reconstruction - Fallon
Dr to 85th FAL-03 3 150,000 150,000
Produced Using Plan-It CIP Software 103Table of Contents
Source Project # Priority 2026 2027 2028 2029 2030 Total
Haven Ridge Oversizing &
Landscaping FAL-01 405,000 305,000 260,000 970,000
Water Trunk Fund Total 805,000 305,000 2,400,000 260,000 150,000 3,920,000
GRAND TOTAL 44,192,000 47,690,350 28,405,257 12,909,395 9,232,512 142,429,514
Produced Using Plan-It CIP Software 104Table of Contents
2026 through 2030
Capital Improvement Plan
Monticello, MN Projects By Department
Department Project # Priority 2026 2027 2028 2029 2030 Total
01: City Facilities Maintenance
Fob Access & Security Cameras
(Additional) - MCC FAC-14 11,000 11,000
Fob Access & Security Cameras -
Library FAC-11 45,000 45,000
Fob Access - WWTP FAC-10 40,000 40,000
Furnace & AC Replacement - West
Bridge Park Shelter FAC-05 25,000 25,000
Furnace Replacement - Building
Garage FAC-15 22,000 22,000
Library Lighting FAC-04 35,000 35,000
Liquor Store Parking Lot Resurface FAC-07 150,000 150,000
Liquor Store Roof FAC-06 150,000 150,000
Make Up Air Unit - Parks Barn FAC-03 35,000 35,000
MCC Building Envelope FAC-17 1,500,000 1,500,000
MCC Generator FAC-20 200,000 200,000
MCC Gym Acoustic Panels FAC-19 75,000 75,000
MCC Mississippi Room Carpet FAC-16 50,000 50,000
MCC Parking Lot Resurface FAC-08 800,000 800,000
MCC Pool Deck Resurface FAC-18 100,000 100,000
MCC Pool Filtration System FAC-22 150,000 150,000
MCC Pool Play Structure FAC-21 400,000 400,000
Park Building Sign FAC-13 23,000 23,000
Parking Lot Improvements -
Library FAC-29 325,000 325,000
Parking Lot Paving - Animal
Shelter & Well Houses FAC-23 75,000 75,000
Roof Repairs - PW FAC-26 40,000 40,000
Security Cameras - WWTP FAC-28 25,000 25,000
Soccer Building Repairs FAC-24 100,000 100,000
WWTP Generator Upgrades FAC-12 200,000 1,000,000 1,200,000
01: City Facilities Maintenance Total 1,925,000 741,000 745,000 2,165,000 0 5,576,000
02: Transportation
Chelsea Road Improvements -
Hwy 25 to CSAH 39 TRAN-05 350,000 2,950,000 3,300,000
CSAH 39 Pedestrian Pathway - Elm
to 7th (C24001) TRAN-01 900,000 900,000
East Bridge Park Accessibility
Improvements TRAN-15 150,000 150,000 300,000
Great River Regional Trail TRAN-14 75,000 1,778,700 1,853,700
Hunters Crossing Trail TRAN-13 20,000 300,000 320,000
Mill & Overlay - 7th St - Minnesota
St to Fenning TRAN-06 300,000 300,000
Mill & Overlay - Cardinal Hills TRAN-10 60,000 600,000 660,000
Mill & Overlay - Carlisle Village TRAN-12 85,000 850,000 935,000
Mill & Overlay - Groveland TRAN-18 100,000 1,900,000 2,000,000
Mill & Overlay - Hunters Crossing TRAN-20 55,000 550,000 605,000
Mill & Overlay - Klein Farms TRAN-21 100,000 1,550,000 1,650,000
Mill & Overlay - River Mill TRAN-09 1,100,000 1,100,000
Mill & Overlay - School Blvd West TRAN-22 90,000 900,000 990,000
Mill & Overlay - Sunset Ponds TRAN-23 95,000 95,000
Traffic Signal at Hwy 25/4th St TRAN-07 500,000 500,000
Produced Using Plan-It CIP Software hgmTable of Contents
Department Project # Priority 2026 2027 2028 2029 2030 Total
02: Transportation Total 2,310,000 2,745,000 5,183,700 2,625,000 2,645,000 15,508,700
03: Utilities Infrastructure
Chelsea Rd Lift Station Expansion UTIL-06 300,000 300,000
Chelsea Rd Outlet Control UTIL-04 100,000 100,000
CSAH 39 West Utility Extension UTIL-01 3 1,300,000 1,300,000
Ditch 33 Improvements UTIL-02 2,000,000 2,000,000
Fallon Ave Pond Outlet UTIL-07 300,000 300,000
Fiber to New Developments UTIL-05 200,000 200,000 200,000 200,000 200,000 1,000,000
Prairie Road Pond Outlet UTIL-10 120,000 600,000 720,000
WWTP Gasifier Tank UTIL-08 700,000 700,000
WWTP Influent Lift Station UTIL-11 250,000 4,000,000 4,250,000
03: Utilities Infrastructure Total 4,500,000 200,000 300,000 570,000 5,100,000 10,670,000
04: Parks & Recreation
4th Street Park Improvements PAR-01 65,000 65,000 130,000
Ellison Playground Equipment PAR-04 600,000 600,000
Front Street Pier PAR-05 65,000 65,000
MCC Recreation Software PAR-07 77,200 77,200
MCC Skate Park Area PAR-08 100,000 100,000
Pioneer Park Disc Golf Course PAR-02 15,000 15,000
Pioneer Park Play Structure PAR-10 800,000 800,000
River Mill Sidewalk to Playground PAR-09 20,000 20,000
Riverside Cemetery Columbarium PAR-06 70,000 70,000
River Walk Pier PAR-03 45,000 45,000
04: Parks & Recreation Total 130,000 947,200 0 845,000 0 1,922,200
05: Fleet
125kw Generator #310 FLT-06 150,000 150,000
200kw Portable Generator FLT-12 150,000 150,000
Asphalt Roller #128 FLT-10 90,000 90,000
Bobcat A770 #121 FLT-05 100,000 100,000
Camera Trailer #430 FLT-28 75,000 75,000
CCTV #405 FLT-29 120,000 120,000
Dump Truck #145 FLT-31 120,000 120,000
Engine 12 FLT-20 1,300,000 1,300,000
F250 Truck #303 FLT-18 87,512 87,512
F350 Truck #401 FLT-15 83,000 83,000
Floor Scrubber FLT-30 30,000 30,000
JD Gator FLT-34 30,000 30,000
Loader Grapple Attachment FLT-01 15,000 15,000
Mack Hook/Plow/Dump Truck
#116 FLT-02 400,000 400,000
MCC Floor Scrubber FLT-25 15,000 15,000
Plow Truck #109 FLT-08 450,000 450,000
Plow Truck #110 FLT-35 300,000 300,000
Scissor Lift & Trailer FLT-24 28,000 28,000
Server Hardware FLT-04 29,150 29,150
Sewer Camera & Trailer FLT-09 166,000 166,000
Skid Loader Plow Attachment FLT-03 25,000 25,000
Skid Steer FLT-16 98,557 98,557
Street Sweeper #150 FLT-40 400,000 400,000
SUV #552 FLT-26 50,000 50,000
SUV #702 FLT-43 45,000 45,000
SUV #800 FLT-44 45,000 45,000
Tender 11 FLT-23 500,000 500,000
Truck #303 FLT-52 70,000 70,000
Produced Using Plan-It CIP Software 106Table of Contents
Department Project # Priority 2026 2027 2028 2029 2030 Total
Truck #401 FLT-53 50,000 50,000
Truck #550 FLT-13 60,000 60,000
Truck #555 FLT-14 50,000 50,000
Truck #556 FLT-32 60,000 60,000
Truck #613 FLT-27 45,000 45,000
Utility 11 & UTV FLT-21 200,000 200,000
Utility 12 FLT-22 250,000 250,000
Well #3 Generator FLT-17 183,000 183,000
Zero Turn Mower #167 FLT-33 10,395 10,395
05: Fleet Total 696,000 1,507,150 526,557 2,163,395 987,512 5,880,614
06: Fallon Avenue Improvements
Fallon Ave Reconstruction -
Chelsea to Fallon Dr FAL-02 150,000 150,000 9,450,000 9,750,000
Fallon Ave Reconstruction - Fallon
Dr to 85th FAL-03 3 500,000 500,000
Haven Ridge Oversizing &
Landscaping FAL-01 2,301,000 800,000 335,000 3,436,000
06: Fallon Avenue Improvements Total 2,451,000 950,000 9,450,000 335,000 500,000 13,686,000
07: BCOL Regional Athletic Park
Ballfield Future Phases BCOL-01 3,000,000 3,000,000 6,000,000
Maintenance Shop BCOL-02 950,000 950,000
Pickleball Courts BCOL-03 755,000 755,000
Road Paving BCOL-04 100,000 100,000
07: BCOL Regional Athletic Park Total 1,705,000 3,100,000 0 3,000,000 0 7,805,000
08: Downtown
Block 51 Public Parking Lot
Expansion DT-01 175,000 175,000
08: Downtown Total 175,000 0 0 0 0 175,000
09: The Pointes at Cedar
Parkland Acquisition - Southern
Pond PAC-01 600,000 600,000
Professional Services Contract -
Phase I PAC-02 606,000 606,000
09: The Pointes at Cedar Total 0 0 0 1,206,000 0 1,206,000
10: City Facilities New
Public Works Facility FAC-01 17,500,000 17,500,000 35,000,000
Water Treatment Plant FAC-02 12,800,000 20,000,000 12,200,000 45,000,000
10: City Facilities New Total 30,300,000 37,500,000 12,200,000 0 0 80,000,000
GRAND TOTAL 44,192,000 47,690,350 28,405,257 12,909,395 9,232,512 142,429,514
Produced Using Plan-It CIP Software 107Table of Contents
DEBT
Debt is carried in two fund types: Governmental Funds and Enterprise Funds. Consequently,
debt has a different impact on the operations of each fund type. However, debt service is a
fixed cost that does not vary with activity levels. Debt amortization and redemption reduces
fixed costs, freeing resources for other purposes.
Debt is a valid way to match customers with the cost of providing a particular service. Current
service customers pay for current service delivery with annual debt service payments supported
by user fees and taxes. Future service customers make future debt service payments through
future taxes and user fees.
Governmental Funds
Governmental fund debt service is provided through debt service funds, accumulating money
from various sources for principal and interest payments. Those sources can include property
taxes, special assessments, and transfers from enterprise funds collecting development fees.
The city’s outstanding governmental debt financed street reconstruction projects, construction
of the Fallon Avenue overpass and fire station, along with acquisition of a fire ladder truck.
The debt effect on services delivered through governmental funds with current capital is
somewhat diminished because the city is not constrained by state-imposed levy limits for
property taxes. When levy limits have been in place, statutes have allowed for special levies for
debt service. While there are limits to what taxpayers can bear, Monticello has a competitive
tax capacity rate because of its large commercial tax base, including the Xcel Energy nuclear
power plant. Currently, the power plant absorbs roughly 38% of any tax increase. The General
Fund is primarily supported (about 2/3) by property taxes, and the Monticello Community
Center (MCC) Fund is primarily supported by charges for services but is supplemented by a
property tax levy. High debt levels reduce a city’s ability to issue new debt for capital assets,
which may improve efficiency or meet a growing need.
Enterprise Funds
The Sewer Fund is the only enterprise fund with debt, the 2013B General Obligation (G.O.)
revenue bonds, and a 2015 Public Facilities Authority (PFA) G.O. Sewer Revenue Note. Both
issues were used for improvement at the existing Wastewater Treatment Plant.
All utility rates are reviewed annually and adjusted to cover operating, capital, and debt service
expenses. Additionally, a utility rate study was completed in 2025 to ensure rates support
future operating, capital, and debt service needs of the enterprise funds. According to a survey
by engineering firm AE2S, Monticello has some of the lowest utility rates in Minnesota.
However, the council is aware that the city needs to maintain its competitive position in both
property taxes and utility charges to attract economic development.
Anticipated Borrowing this Fiscal Year
The City of Monticello anticipated debt issuances in 2026 in the Debt Service Fund for
construction of a public works facility and in the Water Fund for construction of a water
treatment plant.
108Table of Contents
Impacts to Operations
The city’s percentage of levy used for debt service payments has decreased over the last ten
years from 27% in 2016 to 15% in 2026, with the portion of the levy used for pay-as-you-go
capital increasing from none to 19%. While not unprecedented, city council is aware of the fact
that issuing the level of debt anticipated in 2026 may create pressure on other areas of the
levy, including to other capital projects and well as operations (i.e. maintaining existing assets
and offering the current level of services).
Bond Rating
The city’s G.O. bond rating was reviewed in October 2023. Moody’s upgraded the city’s prior
G.O. bond rating of A1 to Aa3, which can be described as “high grade”.
Legal Debt Limit
Most Minnesota cities may not incur debt more than three percent of the market value of
taxable property in the city. Eliminated from this overall three percent limit are almost all debt
obligations for which some other source of revenue is pledged as security. The result is that,
with only a few exceptions, the only obligations subject to the debt limit are general obligation
(G.O.) bonds payable solely from ad valorem property taxes. The legal debt limit has nothing to
do with the practical debt limit of a city, which is the debt burden beyond which the
creditworthiness of the city is put into question. (See Minnesota Statutes, Section 475.53)
Moody's S&P Fitch
Aaa AAA AAA Prime
Aa1 AA+AA+
Aa2 AA AA
Aa3 AA-AA-
A1 A+A+
A2 A A
A3 A-A-
Baa1 BBB+BBB+
Baa2 BBB BBB
Baa3 BBB-BBB-
High grade
Upper medium
grade
Lower medium
grade
Market value (payable 2025)*2,727,750,300$
Debt limit (3% of market value)81,832,509$
Total net debt applicable to limit (4,885,000)$
Legal debt margin 76,947,509$
*Final Payable 2026 not yet available.
Legal Debt Margin Calculation for Fiscal Year 2026
109Table of Contents
G.O. Debt Service Levies: Most city debt issues are supported on some level by property taxes.
Annual debt service levies are as follows:
G.O. Debt Service Payments: Annual debt service payments are as follows:
G.O. Debt Outstanding as of 12/31: Projected balances of outstanding debt (excluding PFA G.O.
Revenue Notes, which are not considered bonded debt) are as follows:
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
$5,500,000
20
2
6
20
2
7
20
2
8
20
2
9
20
3
0
20
3
1
20
3
2
20
3
3
20
3
4
20
3
5
20
3
6
20
3
7
20
3
8
20
3
9
20
4
0
20
4
1
20
4
2
20
4
3
20
4
4
20
4
5
20
4
6
20
4
7
G.O. Debt Service Levies
2015B 2016A 2017A 2018A 2019A 2020A PW Facility
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
$5,500,000
20
2
6
20
2
7
20
2
8
20
2
9
20
3
0
20
3
1
20
3
2
20
3
3
20
3
4
20
3
5
20
3
6
20
3
7
20
3
8
20
3
9
20
4
0
20
4
1
20
4
2
20
4
3
20
4
4
20
4
5
20
4
6
20
4
7
G.O. Debt Service Payments
2013B 2015B 2016A 2017A 2018A 2019A 2020A PW Facility
$-
$4
$8
$12
$16
$20
$24
$28
$32
$36
$40
$44
$48
20
2
6
20
2
7
20
2
8
20
2
9
20
3
0
20
3
1
20
3
2
20
3
3
20
3
4
20
3
5
20
3
6
20
3
7
20
3
8
20
3
9
20
4
0
20
4
1
20
4
2
20
4
3
20
4
4
20
4
5
Mi
l
l
i
o
n
s
G.O. Debt Outstanding as of 12/31
2013B 2015B 2016A 2017A 2018A 2019A 2020A PW Facility
110Table of Contents
2026 Adopted Budget
General Fund
GENERAL FUND - SUMMARY
FUND DESCRIPTION
One of five governmental fund types, the General Fund serves as the chief operating fund of
the city. The General Fund accounts for all financial resources not accounted for in another
fund and uses the modified accrual basis of accounting for budgeting and financial reporting
purposes. The adopted General Fund budget is a balanced budget, which means current
revenues and other sources equal expenditures and other uses.
BUDGET SUMMARY
2023 2024 2025 2025 2026 %
GENERAL FUND ACTUAL ACTUAL BUDGET THRU 12/3 BUDGET CHANGE
REVENUES
Property Taxes 8,056,454$ 8,685,314$ 9,007,000$ 8,925,181$ 9,457,000$ 5.0%
Franchise & Other Taxes 243,482 203,292 302,000 247,743 293,500 -2.8%
Licenses & Permits 930,901 924,801 482,000 903,899 580,000 20.3%
Intergovernmental Revenues 1,224,989 854,998 825,000 657,369 616,000 -25.3%
Charges for Services 1,441,924 1,580,872 1,514,900 1,685,433 1,668,000 10.1%
Fines & Forfeits 52,413 65,940 78,500 89,628 78,000 -0.6%
Special Assessments 156 364 - 1,854 - ---
Miscellaneous 1,263,324 1,393,299 971,600 1,306,987 1,193,500 22.8%
Contributed Capital 1,650 - - - - ---
TOTAL REVENUES 13,215,293$ 13,708,880$ 13,181,000$ 13,818,094$ 13,886,000$ 5.3%
2023 2024 2025 2025 2026 %
GENERAL FUND ACTUAL ACTUAL BUDGET THRU 12/3 BUDGET CHANGE
EXPENDITURES BY DEPT
GENERAL GOVERNMENT
Mayor and Council 46,094$ 55,486$ 58,815$ 52,065$ 56,094$ -4.6%
City Administration 958,253 1,054,927 1,022,829 1,058,843 1,103,507 7.9%
City Clerk 217,318 286,124 221,064 243,380 252,636 14.3%
Finance 663,348 703,998 753,232 761,681 789,642 4.8%
Legal 36,802 38,742 35,000 38,338 40,000 14.3%
Human Resources 162,457 179,138 238,507 222,275 237,597 -0.4%
Planning & Zoning 532,437 602,010 632,216 708,171 745,606 17.9%
City Hall 75,872 64,635 93,134 117,390 94,688 1.7%
TOTAL GENERAL GOVERNMENT 2,692,581$ 2,985,060$ 3,054,797$ 3,202,143$ 3,319,770$ 8.7%
PUBLIC SAFETY
Law Enforcement 1,872,417$ 2,496,558$ 2,487,000$ 2,498,578$ 2,596,500$ 4.4%
Fire & Rescue 508,194 438,661 512,719 551,110 498,772 -2.7%
Fire Relief 164,446 183,116 165,000 213,386 185,000 12.1%
Building Inspections 618,254 714,433 711,807 638,688 732,631 2.9%
Emergency Management 6,952 11,173 12,000 6,989 18,542 54.5%
Animal Control 74,648 61,187 65,618 68,998 79,453 21.1%
National Guard 19,068 18,754 19,500 18,913 19,750 1.3%
TOTAL PUBLIC SAFETY 3,263,979$ 3,923,882$ 3,973,644$ 3,996,662$ 4,130,648$ 4.0%
PUBLIC WORKS
Public Works Administration 150,092$ 157,709$ 179,057$ 182,915$ 196,808$ 9.9%
Engineering & Inspections 320,369 520,455 333,501 336,907 340,012 2.0%
Streets & Alleys 1,308,793 1,224,354 1,377,989 1,339,514 1,450,878 5.3%
Ice & Snow 294,882 253,930 475,293 203,934 483,936 1.8%
Shop & Garage 283,711 276,621 339,012 372,665 359,586 6.1%
Street Lighting 243,482 203,178 291,000 250,112 293,500 0.9%
TOTAL PUBLIC WORKS 2,601,329$ 2,636,247$ 2,995,852$ 2,686,047$ 3,124,720$ 4.3%
SANITATION
Refuse Collection 817,199$ 911,886$ 900,000$ 941,458$ 1,038,450$ 15.4%
TOTAL SANITATION 817,199$ 911,886$ 900,000$ 941,458$ 1,038,450$ 15.4%
111Table of Contents
The previous table summarizes General Fund expenditures by activities/divisions and
departments. The table below summarizes expenditures by classifications.
BUDGET COMMENTARY:
Revenues
For 2026, budgeted revenues are estimated to increase by 5.3%. The General Fund portion of
the tax levy is budgeted to increase by 5.0%, which is less than the total (city & HRA) levy
increase of 7.0% due to an 18.5% increase in the levy for capital. Property taxes account for
68% of General Fund revenues. Franchise & other taxes decrease due to a budget reduction in
the street lighting department expenditures. Trends for building permits drive the increase in
Licenses & permits. The decrease in Intergovernmental revenues reflects 2025 non-recurring
state aid from the State of Minnesota for public safety and for response to the Emerald Ash
Borer infestation in city trees. The increase in Charges for Services reflects higher residential
2023 2024 2025 2025 2026 %
GENERAL FUND ACTUAL ACTUAL BUDGET THRU 12/3 BUDGET CHANGE
EXPENDITURES BY DEPT
RECREATION AND CULTURE
Senior Center 102,773$ 104,930$ 107,363$ 106,970$ 107,866$ 0.5%
Park Operations 1,500,932 1,542,782 1,643,054 1,680,389 1,595,806 -2.9%
Park Ballfields 22,667 25,357 34,100 64,138 49,500 45.2%
Public Arts 154,267 154,517 149,128 200,405 148,477 -0.4%
Shade Tree 127,872 174,436 225,936 179,322 270,251 19.6%
Library 41,867 99,051 91,126 95,537 94,512 3.7%
TOTAL RECREATION AND CULTURE 1,950,378$ 2,101,073$ 2,250,707$ 2,326,761$ 2,266,412$ 0.7%
TOTAL OPERATING TRANSFERS 753,950$ 1,205,114$ 6,000$ 253,660$ 6,000$ 0.0%
TOTAL EXPENDITURES 12,079,416$ 13,763,262$ 13,181,000$ 13,406,731$ 13,886,000$ 5.3%
GENERAL FUND 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 8,056,454$ 8,685,314$ 9,007,000$ 8,925,181$ 9,457,000$ 5.0%
Franchise & Other Taxes 243,482 203,292 302,000 247,743 293,500 -2.8%
Licenses & Permits 930,901 924,801 482,000 903,899 580,000 20.3%
Intergovernmental Revenues 1,224,989 854,998 825,000 657,369 616,000 -25.3%
Charges for Services 1,441,924 1,580,872 1,514,900 1,685,433 1,668,000 10.1%
Fines & Forfeits 52,413 65,940 78,500 89,628 78,000 -0.6%
Special Assessments 156 364 - 1,854 - ---
Miscellaneous 1,263,324 1,393,299 971,600 1,306,987 1,193,500 22.8%
Contributed Capital 1,650 - - - - ---
TOTAL REVENUES 13,215,293$ 13,708,880$ 13,181,000$ 13,818,094$ 13,886,000$ 5.3%
EXPENDITURES
Personnel Services 3,969,843$ 4,275,548$ 4,542,664$ 4,611,044$ 4,989,172$ 9.8%
Supplies 798,806 768,769 931,650 837,945 831,250 -10.8%
Other Services & Charges 5,923,817 6,906,087 7,055,786 7,059,182 7,365,678 4.4%
Capital Outlay 633,000 607,744 644,900 644,900 693,900 7.6%
Operating Transfers Out 753,950 1,205,114 6,000 253,660 6,000 0.0%
TOTAL EXPENDITURES 12,079,416$ 13,763,262$ 13,181,000$ 13,406,731$ 13,886,000$ 5.3%
FUND BALANCE - JANUARY 1 7,042,796$ 8,178,673$ 8,124,291$ 8,124,291$ 8,535,654$
Excess (Deficiency) of
Revenues over Expenditures 1,135,877 (54,382) - 411,363 -
FUND BALANCE - DECEMBER 31 8,178,673$ 8,124,291$ 8,124,291$ 8,535,654$ 8,535,654$
112Table of Contents
garbage and recycling charges, mostly due to an increased number of users. Fines & forfeits are
passed through to Wright County for court fines to the Sherriff’s Office and increase due to
recent trends. Miscellaneous Revenues are projected higher, but still conservatively, to reflect
projected earnings in the city’s investment portfolio including in a community solar garden.
Expenditures
Analysis By Department:
Expenditures are budgeted to increase 5.3%. City Administration increases with an assumed
increase in market rate of solar investment rebates. City Clerk expenditures increases because
regular elections are held in even years. The Legal budget increases due to the anticipated
increase of hours needed for legal advice and review. Planning & Zoning expenditures increase
to complete the park dedication study initiated in 2025 and to hire an internal Senior Planner.
The Fire Relief department shows an increase in expenditures, which is offset by an increase in
Fire State Aid in intergovernmental revenues. Emergency Management budget increases with
planned installation of automated external defibrillators (AED) at the fire station and municipal
liquor store. The contract for Animal Control services causes an increase in that department.
Public Works Administration allocation of staff leads to an increase in budget. The Streets
department’s charges for new equipment purchased in the Central Equipment Fund cause a
budget increase. Shop & Garage expenditures increase due to a higher reliance on the Facilities
Maintenance Fund for building upkeep. Sanitation increases with more users as development in
the city continues.
Reclassification of certain costs to Ballfields contributed to a decrease in the Park Operations
department. Purchase of new planters for the downtown in 2025 allow for a budget decrease in
2026. Shade Tree expenditures increase once again due to grant funding received for Emerald
Ash Borer (EAB) response.
Analysis By Category:
The 2026 personnel services budget includes a full step increase, where applicable, and a 3.0%
market rate wage increase along with the addition of a Senior Planner position. The supplies
budget decreased to more accurately reflect spending trends. Other Services & Charges remain
fairly steady overall with a reasonable increase to address inflationary assumptions including
for the law enforcement contract, solar production investment, refuse/recycling services, and
Emerald Ash Borer (EAB) response. The capital outlay amount reflects Capital Equipment Fund
purchases, which are charged back through lease payments and increased due to purchases of
replacement equipment. The operating transfer out to the Capital Projects Fund includes
$750,000 in 2023; $700,000 in 2024; and $250,000 in 2025. An additional $500,000 was
transferred out to the Facilities Maintenance Fund in 2024 to resolve a deficit in that. As in prior
years, the $6,000 Operating transfers out budgeted in 2026 is to the EDA Fund for board
member stipends, which is adjusted to actual cost at yearend.
113Table of Contents
MAYOR AND CITY COUNCIL (101-41110)
DEPARTMENT: General Government SUPERVISOR: City Clerk
ACTIVITY SCOPE:
The mayor and council provide elected representation to the community with control over
policy, goals, budget, administration, and operations. Members participate in various
committees and direct staff through the city administrator.
OBJECTIVES:
1.Adopt policies and ordinances consistent with the council’s positions on growth,
zoning, and financial strategies.
2.Operate the city with transparency which includes public input in decision making.
ISSUES:
1.Capitalize on the city’s uniqueness by communicating a comprehensive vision
statement and setting achievable goals.
2.Examine city facility needs to meet future city operations.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The council’s budget remains consistent with previous years. The mayor earns $700 per month
and each councilmember earns $600 per month. Other services and charges are mainly
comprised of rental charges for the meeting room at the Monticello Community Center.
Measurement 2023 2024 2025 2026
Regular Council meetings 23 23 23 23
Special meetings/workshops 18 20 32 25
Full-Time Equivalents 0.10 0.10 0.10 0.10
GENERAL FUND 2023 2024 2025 2025 2026 %
MAYOR & COUNCIL Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 34,476$ 42,622$ 43,985$ 38,524$ 41,744$ -5.1%
Supplies - - - - - ---
Other Services & Charges 11,618 12,864 14,830 13,541 14,350 -3.2%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 46,094$ 55,486$ 58,815$ 52,065$ 56,094$ -4.6%
114Table of Contents
CITY ADMINISTRATION (101-41310)
DEPARTMENT: General Government SUPERVISOR: City Administrator
ACTIVITY SCOPE:
City administration provides the overall direction of the city, as determined by the mayor and
council. The city administrator serves as the chief administrative officer, ensuring that laws,
ordinances, and resolutions are implemented and enforced. The administrator is also
responsible for managing the operations of all city departments and providing customer
service for general city hall activities, such as reception and communications.
OBJECTIVES:
1.Assist City Council in setting policies and procedures.
2.Provide direction and leadership on major city projects and budget management;
oversee performance evaluation and long-range planning.
3.Provide friendly, knowledgeable customer service to the public during adequate
and consistent hours of business.
4.Communicate mission, vision, and values along with city services and events to
the public.
ISSUES:
1.Leading and focusing council on policy matters.
2.Long-range comprehensive planning, including for development and traffic.
3.Continuing to improve internal and external communication systems, including
management of the Citizen Service Desk.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Newsletters created 2 2 2 2
Newsletters mailed 14,600 14,804 15,023 15,050
Digital marketing subscribers*--9,303 3,524 4,000
Digital marketing emails sent*--50,532 53,974 57,000
Blogs published*--18 23 25
Press releases 21 5 8 10
Website visits 322,996 549,002 609,547 620,000
Utility inserts published 12 10 12 12
Information desk inquiries 107 141 173 200
*Tracking began in 2024.
115Table of Contents
MEASURABLE WORKLOAD DATA (CONTINUED):
BUDGET:
BUDGET COMMENTARY:
The city administration activity is limited to expenditures for daily operations in providing
services and does not include upkeep of the city hall facility. The 2026 personnel services
budget includes a full step increase and a 3.0% market rate wage increase. Reallocating the
general Administrative Assistant position to support City Administration, City Clerk, and Human
Resources and hiring a new Administrative Assistant to support Planning & Zoning, Building,
and the Economic Development Authority occurred in 2025. Other services and charges include
the city’s investments in solar farms, which is budgeted conservatively due to the unknown
production as each solar farm.
Measurement 2023 2024 2025 2026
Social media followers**7,117 7,838 26,064 28,445
City Instagram followers -- --177 200
City LinkedIn followers -- --234 245
City X followers -- --420 450
City Facebook followers 7,117 7,838 8,341 9,000
PAR Facebook followers -- --4,524 5,000
Farmers Market Facebook followers -- --3,999 4,400
MontiArts Facebook followers -- --2,959 3,250
MFD Facebook followers -- --4,224 4,600
Hi-Way Liquors Facebook followers -- --1186 1300
** Incomplete data for social media followers prior to 2025.
Full-Time Equivalents 2.90 2.75 3.00 2.85
GENERAL FUND 2023 2024 2025 2025 2026 %
CITY ADMINISTRATION Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 321,355$ 348,748$ 389,834$ 399,538$ 409,890$ 5.1%
Supplies 12,011 8,226 11,000 7,478 10,000 -9.1%
Other Services & Charges 624,887 697,953 621,995 651,827 683,617 9.9%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 958,253$ 1,054,927$ 1,022,829$ 1,058,843$ 1,103,507$ 7.9%
116Table of Contents
CITY CLERK (101-41410)
DEPARTMENT: General Government SUPERVISOR: City Clerk
ACTIVITY SCOPE:
The city clerk activity is responsible for administering elections, maintaining official records,
updating the city code, improving records management and data practices, and serving as the
data practices compliance officer and responsible authority.
OBJECTIVES:
1.Improve data storage practices and data request responses with digital storage.
2.Administer elections including upgrading election equipment and managing judges.
ISSUES:
1.Manage storage space, including in Laserfiche, while organizing decades of files.
2.Maintain current, accurate information for all public sources.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Regular elections are held in even-numbered years with a Presidential Nominating Primary
election every 4 years. There was a special election in 2025. Off-year election expenditures are
for maintenance contracts on voting equipment. The 2026 personnel services budget includes a
full step increase and a 3.0% market rate wage increase. The general Administrative Assistant
position was reallocated to City Administration, City Clerk, and Human Resources in 2025.
Measurement 2023 2024 2025 2026
Voters, number of 0 7,865 3,245 6,650
Registered voters 8,791 8,972 9,289 9,500
Polling places 4 4 4 4
Election judges 65 60 44 55
Ordinance amendments 25 21 21 20
Council resolutions 113 127 80 100
Council minutes approved 41 43 55 48
Data requests 51 54 74 75
Laserfiche folders 17,410 19,034 20,312 21,500
Laserfiche documents 142,280 173,559 178,646 190,000
Laserfiche pages 1,497,324 1,548,803 1,884,586 2,000,000
Full-Time Equivalents 1.50 2.10 1.90 2.10
GENERAL FUND 2023 2024 2025 2025 2026 %
CITY CLERK Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 172,061$ 227,643$ 188,723$ 208,409$ 214,052$ 13.4%
Supplies 7,241 7,948 500 732 3,000 500.0%
Other Services & Charges 38,016 50,533 31,841 34,239 35,584 11.8%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 217,318$ 286,124$ 221,064$ 243,380$ 252,636$ 14.3%
117Table of Contents
FINANCE (101-41520)
DEPARTMENT: General Government SUPERVISOR: Finance Director
ACTIVITY SCOPE:
The Finance Department conducts the financial affairs of the city in accordance with the
Government Accounting Standards Board (GASB) and Generally Accepted Accounting Principles
(GAAP). This includes protection of the assets of the city, the initiation of financial plans,
investment and debt management, review and implementation of internal controls, and
accounting for every financial transaction of the city including accounts payable, accounts
receivable, payroll, and general ledger accounting control. The preparation of the annual
audited financial report and budget documents are also facilitated through finance. An audit of
city finances must be completed on an annual basis for the city to remain in compliance with
federal and state accounting practices.
OBJECTIVES:
1.Complete financial, payroll, and utility billing transactions to provide meaningful and
timely financial information to council, commissions, and other city departments.
2.Provide reasonable estimates and projections for Council use in decision making.
3.Complete the annual financial audit with no audit findings and adjustments.
4.Updating the long-term financial management plan annually.
5.Develop financial documents eligible for receipt of the Government Finance Officers
Association’s (GFOA) award programs.
ISSUES:
1.Implement improved reporting for the council, boards and commissions, and other
city departments.
2.Comply with changing reporting requirements and auditing standards.
3.Develop methods for simplifying data analysis for various stakeholders.
4.Work with other departments to find ways to reduce costs of city operations.
5.Cross-training of finance team members in core functions.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Outcome/Effectiveness:
GFOA Budget Awards 15 16 17 18
GFOA Certificates of
Achievement 15 16* 17*18
GFOA Popular Annual
Financial Report Awards 9 10* 11*12
Bond Rating Aa3 Aa3 Aa3 Aa3
Audit findings 0 0 0*0
PY Audit Opinion Unmodified Unmodified Unmodified Unmodified
*Not yet available. Value is an estimate.
118Table of Contents
MEASURABLE WORKLOAD DATA (CONTINUED):
BUDGET:
BUDGET COMMENTARY:
The 2026 personnel services budget includes a full step increase and a 3.0% market rate wage
increase. The increase in Other Services & Charges in 2025 reflects contract time to implement
an Accounts Payable (AP) workflow.
Measurement 2023 2024 2025 2026
Work Load:
AP checks, number of 1,457 1,521 1,549 1,500
AP ACHs, number of 1,545 1,672 1,554 1,750
Invoices processed 5,085 5,307 5,597 5,750
1099's 70 68 69 70
Paychecks issued 4,691 4,950 5,508 5,330
W-2s 322 359 346 350
Utility bills generated 55,532 56,408 57,486 58,200
Non-utility charges billed 276 286 363 350
Cash receipts entered 39,646 38,577 38,867 39,000
Journal entries 2,483 2,776 2,775* 2,775
New residential properties 35 44 89 75
New commercial properties 5 7 5 5
Manufactured homes --403 403
Tax exempt parcels 358 356 364 364
Taxable parcels assessed 4,916 4,970 5,003 5,078
*Not yet available. Value is an estimate.
Full-Time Equivalents 3.75 3.65 3.65 3.80
GENERAL FUND 2023 2024 2025 2025 2026 %
FINANCE Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 430,292$ 464,092$ 474,878$ 475,105$ 526,389$ 10.8%
Supplies 2,183 1,364 2,100 5,804 2,100 0.0%
Other Services & Charges 230,873 238,542 276,254 280,772 261,153 -5.5%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 663,348$ 703,998$ 753,232$ 761,681$ 789,642$ 4.8%
119Table of Contents
LEGAL (101-41610)
DEPARTMENT: General Government SUPERVISOR: City Administrator
ACTIVITY SCOPE:
Private legal firms provide all the city’s legal services. Activities include issuance of legal
opinions; preparation and/or review of ordinances, resolutions, contracts, and agreements; and
the conduct of civil litigation. Additional legal expenditures, such as publications, fees, and
other costs are accounted for in the applicable department.
OBJECTIVES:
1.Ensure compliance with applicable state statutes and federal regulations.
2.Minimize risk to the city by consulting with expert legal counsel.
ISSUES:
1.Potentially rising costs associated with the need for existing and new legal services.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The city continues to realize savings from not having full-time counsel. Certain legal services
provided to specific departments, such as to the Building department for code enforcement,
are charged to the applicable budget unit while those services related to planning and
development projects are passed through to the applicant.
Measurement 2023 2024 2025 2026
Billed hours:
City administration 296.8 353.0 389.0 350.0
City planning & zoning --66.5 50.0
City engineering --22.7 20.0
City recreation --2.8 3.0
Code enforcement 5.9 0.0 0.0 2.0
Fiber optics 0.0 0.0 0.0 0.0
Other city activity & initiatives 86.9 0.8 24.8 25.0
All other, including development 35.9 96.5 38.5 40.0
Total 425.5 450.3 544.3 490.0
Full-Time Equivalents 0.00 0.00 0.00 0.00
GENERAL FUND 2023 2024 2025 2025 2026 %
LEGAL Actual Actual Budget Thru 12/31 Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies - - - - - ---
Other Services & Charges 36,802 38,742 35,000 38,338 40,000 14.3%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 36,802$ 38,742$ 35,000$ 38,338$ 40,000$ 14.3%
120Table of Contents
HUMAN RESOURCES (101-41800)
DEPARTMENT: General Government SUPERVISOR: City Administrator
ACTIVITY SCOPE:
Human Resources (HR) activities support the primary mission of the city through the effective
recruitment, selection, training, and assessment of city employees. Employee benefits and
compensation administration, implementation of and compliance with Federal and State
employment laws, labor negotiations, processing of employee grievances, and development of
personnel policies are human resource functions.
OBJECTIVES:
1. Provide recruiting, interviewing, and other personnel services for all city departments.
2. Manage classification and compensation system for all employees in compliance with
pay equity.
3. Plan and coordinate in-house training programs for city staff.
4. Administer city benefit plans.
5. Negotiate union contracts for public works employees.
ISSUES:
1. Update personnel policies to accommodate changing employment law.
2. Communicate benefit changes to employees.
3. Develop and implement city drug and alcohol testing program.
MEASURABLE WORKLOAD DATA:
BUDGET:
Measurement 2023 2024 2025 2026
Full-time positions 63 63 62 63
Part-time positions 146 165 174 174
Full-time positions filled 9 16 6 6
Other positions filled 73 75 69 69
Terminations processed 60 74 79 79
Job Postings 37 38 29 29
Application count - all city 638 725 499 499
Avg. number of employees 196 228 229 229
Full-Time Equivalents 1.00 1.00 1.25 1.20
GENERAL FUND 2023 2024 2025 2025 2026 %
HUMAN RESOURCES Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 125,959$ 128,825$ 163,180$ 157,524$ 172,094$ 5.5%
Supplies 482 1,038 1,050 192 1,100 4.8%
Other Services & Charges 36,016 49,275 74,277 64,559 64,403 -13.3%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 162,457$ 179,138$ 238,507$ 222,275$ 237,597$ -0.4%
121Table of Contents
BUDGET COMMENTARY:
The 2026 budget reflects estimated costs for setting up training, providing city staff with benefit
and compensation information, and other expenses based on experience. The 2026 personnel
services budget includes a full step increase and a 3.0% market rate wage increase. Other
Services & Charges increased in 2025 due to completion of a classification and compensation
study and additional investments in training. The general Administrative Assistant position
began supporting the HR function in 2025.
122Table of Contents
PLANNING, ZONING & COMMUNITY DEVELOPMENT (101-41910)
DEPARTMENT: General Government SUPERVISOR: Community Development Director
ACTIVITY SCOPE:
The Planning, Zoning & Community Development department is responsible for current and
long-range planning efforts for Monticello, including regulating development and use standards
as outlined in the zoning and subdivision ordinance. These standards are aimed at protecting
and promoting public health, safety, and welfare. The department oversees coordination with
regional planning and service providers including Monticello Township Board, Monticello
Orderly Annexation Board, Wright County Planning & Zoning, Sherburne County Planning &
Zoning and regional transit entities. The department also provides residents, business owners,
and developers with current, easily accessible information about Monticello's planning process
and projects happening in the community.
OBJECTIVES:
1. Implementation of Comprehensive Plan objectives, including subdivision ordinance
amendments consistent with the Implementation Chart.
2. Support for downtown redevelopment and revitalization.
3. Involvement in regional planning and its impact on land use and growth objectives.
4. Utilization of the city's GIS system.
5. Improvements to the city's development and planning process.
6. Increased support for neighborhood organizations and involvement.
ISSUES:
1. Zoning compliance and enforcement.
2. Records management and integration for planning and zoning.
3. Land use and transportation relationships.
4. Emerging technology and land use impacts.
123Table of Contents
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Outcome/Effectiveness:
Administrative applications (total)9 6 7 7
Processed within 15 working days 6 6 7 7
Site Plan reviews processed
within 15 working days 0 1 1 1
Change in Use forms 11 16 5 15
reviewed within 15 working days 9 14 5 15
Zoning Confirmation/Request Ltrs 13 10 15 15
processed within 15 working days 12 10 15 15
Sign Permit zoning reviews 21 20 33 22
processed within 15 working days 18 14 24 15
Land Use applications processed 84 70 45 88
within 60 working days 75 67 44 88
Reconciliations processed 19 16 42 40
Annexation petitions 1 1 1 2
Work Load:
Planning Applications:
Variances 0 1 4 2
C UPs 12 10 12 10
PUD/Amendments to PUD 11 19 4 12
Interim Use permits 0 1 1 0
Comp Plan amendments 4 0 2 2
Map amendments 4 6 2 6
Non-city zoning text amendments 4 0 0 0
City zoning text amendments 0 0 6 4
Plats/adminstrative subdivisions 7 10 4 6
Administrative permits 9 6 7 7
Site plan reviews 1 1 1 1
Appeals 0 0 0 0
Vacations 1 1 1 1
Sign permit application review 21 20 33 22
Change in Use review 10 16 4 15
Total applications 84 91 81 88
Planning reconciliations 19 16 42 20
Planning Commission meetings 23 26 26 24
BCOL Advisory Meetings 3 ------
PARC Meetings (Report Prep)1 2 4 4
EDA Meetings 26 32 29 26
IEDC Meetings 11 7 8 7
Full-Time Equivalents 1.90 1.90 2.10 2.95
124Table of Contents
BUDGET:
BUDGET COMMENTARY:
The 2026 personnel services budget includes a full step increase and a 3.0% market rate wage
increase. A new Administrative Assistant supporting Planning & Zoning, Building, and the
Economic Development Authority was hired in 2025, and the general Administrative Assistant
was no longer allocated to this budget. A Community Energy Transitions (CET) grant for
planning studies led to expenditures well over budget. Other Services & Charges in 2025
included $50,000 for a park dedication study. Additionally, plan review for development costs
(which are offset by escrow deposits from developers) have increased the past couple of years.
GENERAL FUND 2023 2024 2025 2025 2026 %
PLANNING & ZONING Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 237,906$ 251,815$ 277,352$ 278,128$ 410,120$ 47.9%
Supplies 60 317 300 384 600 100.0%
Other Services & Charges 294,471 349,878 354,564 429,659 334,886 -5.5%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 532,437$ 602,010$ 632,216$ 708,171$ 745,606$ 17.9%
125Table of Contents
CITY HALL (101-41940)
DEPARTMENT: General Government SUPERVISOR: City Administrator
ACTIVITY SCOPE:
The activity for this department consists of maintenance and upkeep for the city hall suite
within the Monticello Community Center.
OBJECTIVES:
1.Provide adequate and consistent hours of operations throughout the year.
2.Maintain a clean, inviting facility to house meetings and staff.
ISSUES:
1.Depreciation of facility, timely maintenance and rising utility costs.
2.Examining layout to accommodate new uses and trends.
3.Building and office security.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Personnel services are not budgeted in the City Hall activity, however, the actual time of staff
from other departments spent maintaining city hall is allocated to this activity. Supplies
purchased in 2024 include a new conference table and chairs in the Academy conference room.
The increase in Other Services & Charges includes a study to optimize the space in City Hall and
increase security of the Council Chambers reflects a higher contribution to the Facilities
Maintenance internal service fund.
Measurement 2023 2024 2025 2026
Utilities $26,988 $27,138 $26,007 $27,700
Repairs & Maintenance $18,481 $3,357 $35,150 $41,662
Full-Time Equivalents 0.00 0.00 0.00 0.00
GENERAL FUND 2023 2024 2025 2025 2026 %
CITY HALL Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 3,622$ 3,772$ -$ 4,690$ -$ ---
Supplies - 10,681 - - 6,000 ---
Other Services & Charges 72,250 50,182 93,134 112,700 88,688 -4.8%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 75,872$ 64,635$ 93,134$ 117,390$ 94,688$ 1.7%
126Table of Contents
LAW ENFORCEMENT (101-42100)
DEPARTMENT: Public Safety SUPERVISOR: City Administrator
ACTIVITY SCOPE:
All law enforcement services are contracted with the Wright County Sheriff's Department. The
Sheriff’s Department uses space at the Fire Station for staff break time and other officing uses.
The Sheriff sets the hourly rate and the city contracts for the number of hours, which were
increased from 52 hours per day to 60 hours per day effective May 1, 2023.
OBJECTIVES:
1. Protect life and property and improve the quality of community life.
2. Continue contracting for law enforcement services from Wright County.
3. Provide coverage for commercial and residential growth.
ISSUES:
1. Concerns from residents regarding the perception the city does not have its own
police force.
2. Abdication of input in staffing and certain enforcement within the city.
MEASURABLE WORKLOAD DATA:
BUDGET:
Measurement 2023 2024 2025 2026
Efficiency:
Hours contracted 20,940 21,960 21,900 21,900
Calls per hour contracted 0.75 0.67 0.73 0.73
Costs per call for service $115.10 $155.71 $151.46 $157.41
Work Load:
Calls for service 15,783 14,808 15,905 16,000
Patrol case reports 5,812 6,021 6,551 6,600
Traffic stops 4,733 4,714 6,022 5,500
Motor vehicle crashes 360 386 383 380
Arrests 241 283 293 275
Full-Time Equivalents 0.00 0.00 0.00 0.00
GENERAL FUND 2023 2024 2025 2025 2026 %
LAW ENFORCEMENT Actual Actual Budget Thru 12/31 Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies - - - - - ---
Other Services & Charges 1,872,417 2,496,558 2,487,000 2,498,578 2,596,500 4.4%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 1,872,417$ 2,496,558$ 2,487,000$ 2,498,578$ 2,596,500$ 4.4%
127Table of Contents
BUDGET COMMENTARY:
Law enforcement services are contracted in five-hour-per-day increments from the Wright
County Sheriff’s Office (WCSO) Department. Prior to 2023, the WCSO contract was handled in
four-hour-per-day increments. Past hourly rates and contracted hours are presented in the
schedule below:
The city’s contracted daily hours increased from 48 to 52 in July 2018. Daily hours contracted
increased again in May 2023 from 52 to 60. Leap years include one additional day of coverage
(52 hours in 2020, and 60 hours in 2024).
Hourly Daily Hours Annual Hours
Year Rate Contracted Contracted
2017 $69.50 48 17,520
2018 $72.00 48/52 18,256
2019 $74.50 52 18,980
2020 $78.25 52 19,032
2021 $81.75 52 18,980
2022 $84.20 52 18,980
2023 $86.75 52/60 20,940
2024 $105.00 60 21,960
2025 $110.00 60 21,900
2026 $115.00 60 21,900
128Table of Contents
FIRE & RESCUE (101-42200)
DEPARTMENT: Public Safety SUPERVISOR: Fire Chief
ACTIVITY SCOPE:
The Fire Department’s paid-on-call firefighters respond to fire, rescue, hazardous materials,
medical, and accident calls within the city and the surrounding townships.
OBJECTIVES:
1.Provide quick response to emergency situations in the community.
ISSUES:
1.Training, retention, and safety of paid-on-call personnel.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Outcome/Effectiveness:
Respondent-hours on fire calls:
City 3,500 3,291 3,732 3,600
Monticello Township 1,277 1,119 1,138 1,200
Silver Creek Township 417 660 415 500
Mutual Aid 396 168 201 200
Drills & Maintenance 2,462 2,272 2,875 2,750
Total 8,052 7,510 8,361 8,250
Work Load:
N umber of fire calls:
City 266 277 295 285
Monticello Township 82 64 70 75
Silver Creek Township 24 39 28 30
Mutual Aid 17 15 13 15
Drills & Maintenance 61 60 72 65
Total 450 455 478 470
Efficiency:
Average respondent-hours per call
City 13 12 13 13
Monticello Township 16 17 16 16
Silver Creek Township 17 17 15 17
Mutual Aid 23 11 15 13
Drills & Maintenance 40 38 40 42
Total Average 18 17 17 18
Full-Time Equivalents 3.87 3.67 4.09 4.00
Firefighters, number of 30 30 30 30
129Table of Contents
BUDGET:
BUDGET COMMENTARY:
The 2026 personnel services budget includes a 3.0% market rate wage increase for response
calls. Other Services & Charges increased in 2025 due to an increased allocation of costs to the
Facilities Maintenance internal service fund. Capital outlay reflects lease payments to the
Central Equipment Fund for various pieces of equipment; the fire tender truck purchased in
2014 is considered fully paid off which decreased the costs in 2024. A replacement ATV
contributed to the increase in 2025, and Utility 13 concluded its rental payments in 2025.
GENERAL FUND 2023 2024 2025 2025 2026 %
FIRE & RESCUE Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 171,370$ 166,349$ 167,287$ 194,900$ 167,663$ 0.2%
Supplies 72,124 74,589 81,900 78,211 81,900 0.0%
Other Services & Charges 202,000 176,323 229,132 243,599 223,209 -2.6%
Capital Outlay 62,700 21,400 34,400 34,400 26,000 -24.4%
TOTAL EXPENDITURES 508,194$ 438,661$ 512,719$ 551,110$ 498,772$ -2.7%
130Table of Contents
FIRE RELIEF (101-42202)
DEPARTMENT: Public Safety SUPERVISOR: Finance Director
ACTIVITY SCOPE:
Providing a retirement benefit to paid-on-call firefighters, the fire relief activity is specifically
designed to track contributions to the Monticello Fire Relief Association.
OBJECTIVES:
1. Provide pension funds for the Monticello Fire Relief Association.
ISSUES:
1. Balancing pension assets with pension liabilities.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The fire relief budget acts as a conduit for distribution of state fire aid to the pension fund for
volunteer firefighters. State aid revenue equals the contribution to the relief association, and it
is conservatively estimated for budgetary purposes.
Measurement 2023 2024 2025 2026
Pension assets*1,550,728$ 1,783,715$ 2,010,342$ 2,100,000$
Pension liabilities*1,359,149$ 1,237,719$ 1,388,115$ 1,450,000$
Assets-liabilities ratio 1.14 1.44 1.45 1.45
Pension per service year $5,300 $5,300 $5,500 $5,500
Fire state aid $161,446 $183,116 $213,386 $185,000
State aid per firefighter $5,382 $6,104 $7,113 $6,167
Active firefighters 30 30 30 30
Deferred firefighters 4 3 3 3
*2025 assets and liabilities estimated per Form SC-25
Full-Time Equivalents 0.00 0.00 0.00 0.00
GENERAL FUND 2023 2024 2025 2025 2026 %
FIRE RELIEF Actual Actual Budget Thru 12/31 Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies - - - - - ---
Other Services & Charges 164,446 183,116 165,000 213,386 185,000 12.1%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 164,446$ 183,116$ 165,000$ 213,386$ 185,000$ 12.1%
131Table of Contents
BUILDING INSPECTIONS (101-42400)
DEPARTMENT: Public Safety SUPERVISOR: Chief Building Official
ACTIVITY SCOPE:
The Building Department inspects all new and remodeled construction within the city by a state
certified building inspector. The department manages all building permits and fire inspections
and oversees the enforcement of all public nuisance and ordinance issues.
OBJECTIVES:
1.Implementation and enforcement of the building codes.
2.Implementation of the rental licensing program.
3.Management of zoning ordinance and sign ordinance updates.
4.Implement yearly contractor, realtor, and rental property owner workshops.
5.Improve city's public perception image through education and public relations.
ISSUES:
1.Managing and prioritizing department workloads.
2.Meeting the residential and commercial growth challenges as a regional center.
3.Enforcing biennial rental license inspections.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Outcome/Effectiveness:
Value of permits issued 76,068,705$ 33,541,010$ 52,164,306$ 30,000,000$
Value of permits per FTE 14,628,597$ 6,450,194$ 9,842,322$ 5,660,377$
Efficiency:
Rental inspections per FTE 292 138 304 132
Permits per FTE 216 541 347 226
Work Load:
Building permits issued 1,122 2,815 1,839 1,200
Nuisance notices issued 136 91 90 85
Rental inspections 1,519 717 1,610 700
Rental units 1,932 2,046 2,219 2,200
Full-Time Equivalents 5.20 5.20 5.30 5.30
132Table of Contents
BUDGET:
BUDGET COMMENTARY:
The 2026 personnel services budget includes a full step increase and a 3.0% market rate wage
increase. An increase in development led to the hiring of an additional building inspector in
2023. Hiring a new Administrative Assistant to support Planning & Zoning, Building, and the
Economic Development Authority occurred in 2025. Other services & charges reflect higher
costs for information technology (IT) support and credit card processing fees. Capital outlay
includes costs for new or replacement vehicles for inspectors through the Central Equipment
Fund, which are paid for in the year of purchase rather than being spread over multiple years.
GENERAL FUND 2023 2024 2025 2025 2026 %
BUILDING INSPECTIONS Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 546,500$ 620,634$ 651,649$ 577,625$ 673,213$ 3.3%
Supplies 6,208 7,964 7,000 7,441 7,000 0.0%
Other Services & Charges 30,546 45,591 53,158 53,622 52,418 -1.4%
Capital Outlay 35,000 40,244 - - - ---
TOTAL EXPENDITURES 618,254$ 714,433$ 711,807$ 638,688$ 732,631$ 2.9%
133Table of Contents
EMERGENCY MANAGEMENT (101-42500)
DEPARTMENT: Public Safety SUPERVISOR: Emergency Management Coordinator (Fire Chief)
ACTIVITY SCOPE:
The emergency management department provides constant defense coverage for all weather
and power plant related emergency situations within the city.
OBJECTIVES:
1.Complete city hall, community center, and National Guard emergency preparedness.
2.Develop National Incident Management System (NIMS) training for all city
departments.
ISSUES:
1.Preparedness - little or no warning when an emergency occurs.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The 2026 Supplies budget was increased to facilitate the purchase of automated external
defibrillator (AED) devices at the fire station and municipal liquor store. Contributions are
expected to offset a portion of the costs with grant funding being sought for the remainder.
Much of this activity's responsibilities have been transferred to Wright County. However, the
city is an active participant of the emergency management team. The Fire Chief is the
Emergency Management Coordinator for the city.
Measurement 2023 2024 2025 2026
Data under development
GENERAL FUND 2023 2024 2025 2025 2026 %
EMERGENCY MANAGEMENT Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 54$ -$ 3,132$ -$ 1,156$ -63.1%
Supplies - 4,376 2,000 140 10,000 400.0%
Other Services & Charges 6,898 6,797 6,868 6,849 7,386 7.5%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 6,952$ 11,173$ 12,000$ 6,989$ 18,542$ 54.5%
134Table of Contents
ANIMAL CONTROL (101-42700)
DEPARTMENT: Public Safety SUPERVISOR: City Clerk
ACTIVITY SCOPE:
The city contracts with a private individual for animal control services. The city owns and
maintains the animal control facility. The city also contracts with nearby communities, allowing
them to use the city’s services and facility.
OBJECTIVES:
1.Address animal control issues in a timely and courteous manner.
2.Promote simple and efficient billing procedures for animal control issues.
ISSUES:
1.Provide quick response to residents on animal control concerns.
2.Allocation of service costs based on usage by customers (townships and cities).
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The professional service contract to handle all animal control issues is the largest budgeted
item with a 9% projected increase in 2026. The remaining budget items are for supplies and
other charges, such as utilities, related to operating the animal control facility. Rate increases
cause the budgeted increase for offsetting animal control fee revenue.
Measurement 2023 2024 2025 2026
Stray animal reports 491 504 598 500
Barking dog reports 187 201 263 250
Lost/found reports 1,819 2,514 2,714 2,800
Feral cat trapping 151 198 264 225
Unsanitary condition reports 141 101 81 125
Abuse/neglect reports 171 168 183 175
Impounds 469 533 490 500
Dog bite reports 51 71 51 60
Animal control fees $50,598 $53,969 $60,187 $61,000
Full-Time Equivalents 0.00 0.00 0.00 0.00
GENERAL FUND 2023 2024 2025 2025 2026 %
ANIMAL CONTROL Actual Actual Budget Thru 12/31 Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies - 957 1,250 66 850 -32.0%
Other Services & Charges 74,648 60,230 64,368 68,932 78,603 22.1%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 74,648$ 61,187$ 65,618$ 68,998$ 79,453$ 21.1%
135Table of Contents
NATIONAL GUARD (101-42800)
DEPARTMENT: Public Safety SUPERVISOR: Facilities Maintenance Manager
ACTIVITY SCOPE:
The National Guard (NG) facility is housed in the Monticello Community Center complex. The
city will maintain the facility in perpetuity in return for a one-time payment in 1998 that helped
fund construction of the community center. However, the NG will contribute to capital
improvements made to the building. The Guard provides no direct services to the city.
OBJECTIVES:
1. Maintain a clean, modern facility for use by the National Guard.
ISSUES:
1. National Guard use of space eliminates it from possible city use.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The National Guard (NG) operates a security division within the Monticello Community Center
complex. The city maintains the Guard’s site within the complex. The budget for this activity is
relatively static, consisting only of building rent and utilities.
Measurement 2023 2024 2025 2026
Not Applicable
GENERAL FUND 2023 2024 2025 2025 2026 %
NATIONAL GUARD Actual Actual Budget Thru 12/31 Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies - - - - - ---
Other Services & Charges 19,068 18,754 19,500 18,913 19,750 1.3%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 19,068$ 18,754$ 19,500$ 18,913$ 19,750$ 1.3%
136Table of Contents
PUBLIC WORKS ADMINISTRATION (101-43110)
DEPARTMENT: Public Works SUPERVISOR: Public Works Director
ACTIVITY SCOPE:
The public works (PW) administration activity oversees the daily operations of the engineering,
street, water, sewer, and stormwater activities. PW administration also manages all large city
projects and implements all changes to PW operations and policy.
OBJECTIVES:
1.Implementation of the bio-solids management system, major street lighting project
plan, and wellhead protection plan.
2.Manage the development of a new public works facility, expansion of the wastewater
treatment plant, and construction of a water treatment plant.
3.Determine location for future wells, utilizing information gathered from various
sources including grants.
ISSUES:
1.Balance the public works department needs with available funds.
2.Manage city's water and wastewater treatment systems and SCADA system.
3.Implement the capital improvement plan for city infrastructure.
4.Contribute to research and discussions regarding technology-related land uses.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The 2026 personnel services budget includes a full step increase and a 3.0% market rate wage
increase. The public works director/engineering position is spread over four budgets: General
Fund (split between PW Administration and Engineering & Inspections) - 60%, Sewer Fund –
20%, Water Fund – 15%, and Stormwater Fund – 5%. A slight adjustment to the allocation of
certain staff members led to an increase to personnel services.
Measurement 2023 2024 2025 2026
Budget units 15 15 15 15
Employees supervised - FT 17 18 18 18
Full-Time Equivalents 1.10 1.05 1.05 1.10
GENERAL FUND 2023 2024 2025 2025 2026 %
PW - ADMINISTRATION Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 113,391$ 127,093$ 137,787$ 144,683$ 156,321$ 13.5%
Supplies 5,088 4,920 5,000 7,104 5,000 0.0%
Other Services & Charges 31,613 25,696 36,270 31,128 35,487 -2.2%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 150,092$ 157,709$ 179,057$ 182,915$ 196,808$ 9.9%
137Table of Contents
ENGINEERING & INSPECTIONS (101-43115)
DEPARTMENT: Public Works SUPERVISOR: City Engineer
ACTIVITY SCOPE:
The engineering department handles the provision, development, and management of the
city's streets, pathways, public utilities systems, geographic information system (GIS), Storm
Water Pollution Prevention Program (SWPPP), improvement projects, and miscellaneous
mapping. Engineering also issues driveway, grading, and right-of-way permits. Furthermore,
personnel are responsible for managing records retention for plats, city maps, infrastructure
data bases, soil borings, development plans, and as-builts. Using various computer software
programs including ArcGIS and OpenGov, staff provides design and mapping assistance.
OBJECTIVES:
1.Complete cost estimates (capital infrastructure planning and budgeting) and design
for all improvement projects.
2. Improve GIS system and utilization of OpenGov software for the in-house Pavement
Management and Sign Program.
3.Assist with design, implementation and public education of drainage issue solutions.
4.Complete inspections, documentation, and administration of city’s SWPPP.
5.Operate a one-stop shop for city driveway, grading, and right-of-way permits.
6.Work with the State and County to improve the city’s transportation system.
7.Collaborate on public improvements and review development plans and agreements.
8.Apply for grants and track funding for improvement projects.
ISSUES:
1.Workload is unevenly distributed throughout the year.
2.Increasing regulations by MN Pollution Control Agency (MPCA) for stormwater runoff.
3.Lack of public knowledge regarding purposes and practices associated with
conservation and drainage easements and storm water ponds.
4.Increasing phosphorus restrictions by MPCA for wastewater effluent.
5.Volatility in available federal and state funding for transportation improvements.
138Table of Contents
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The 2026 personnel services budget includes a full step increase and a 3.0% market rate wage
increase. The engineering activity predominantly consists of engineering and other professional
service fees including contract time for regional traffic studies. These expenditures include both
reimbursable and non-reimbursable expenditures. The 2026 budget decreases contracted
services as more activity is anticipated for capital (in capital projects funds) rather than planning
or studies in 2026. Capital outlay consists of rental payments to the Central Equipment Fund for
one of the department vehicles.
Measurement 2023 2024 2025 2026
Improvement projects 17 15 13 15
Driveway permits issued 18 16 10 15
Right-of-way permits issued 80 54 52 55
Development applications 6 14 10 10
Grading permits issued 2 3 1 3
NPDES Inspections 434 365 206 350
Outfall Inspections 17 0 2 5
Stormwater Inspections 52 53 53 61
Pond Inspections 35 7 38 20
Inspection revenue $86,097 $60,924 $70,328 $70,000
Inspection hours billed 652.00 375.75 440.75 443.00
Full-Time Equivalents 1.55 1.55 1.55 1.55
GENERAL FUND 2023 2024 2025 2025 2026 %
PW - ENGINEERING & INSPECTIONS Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 211,755$ 221,693$ 233,353$ 237,799$ 254,998$ 9.3%
Supplies 3,301 4,062 8,000 1,813 7,500 -6.3%
Other Services & Charges 99,313 288,700 86,148 91,295 71,514 -17.0%
Capital Outlay 6,000 6,000 6,000 6,000 6,000 0.0%
TOTAL EXPENDITURES 320,369$ 520,455$ 333,501$ 336,907$ 340,012$ 2.0%
139Table of Contents
STREETS & ALLEYS (101-43120)
DEPARTMENT: Public Works SUPERVISOR: Street Superintendent
ACTIVITY SCOPE:
The main responsibility of the streets and alleys activity is to perform the necessary tasks to
reduce the depreciation of the city streets and uphold desirable standards of appearance,
serviceability, and safety. This includes upkeep such as repair of roadway surface areas,
medians, sidewalks, boulevards, alleys, catch basins, and storm sewers.
OBJECTIVES:
1.Street reconstruction of older road surfaces prioritized by evaluating road wear.
2.Utilize street chip seal coating projects and crack sealing program to get the most out
of the city’s street system before full replacement is needed.
ISSUES:
1.Educating the public on what the boulevards are to be used for and on the value of
good maintenance programs for transportation infrastructure.
2.Increased costs of fuel and street products.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The 2026 personnel services budget includes a full step increase and a 3.0% market rate wage
increase. A new streets operator began in May 2023. Street staff allocated actual hours spent
plowing to the Ice & Snow activity, which can create significant fluctuations from year to year.
Increases in capital outlay reflects purchases in the Central Equipment Fund for equipment
leased to the streets department, including a new plow in 2026.
Measurement 2023 2024 2025 2026
Pounds of crack sealer 0 0 12,500 12,500
Sq. yards of chip sealing 0 0 0 0
Miles of streets 81.0 81.0 83.2 83.2
Tons of black top patching 1,053 699 1,451 850
Full-Time Equivalents 4.10 4.10 4.60 4.80
GENERAL FUND 2023 2024 2025 2025 2026 %
PW - STREETS & ALLEYS Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 430,120$ 484,746$ 450,918$ 520,833$ 486,447$ 7.9%
Supplies 253,663 178,631 299,000 278,189 255,000 -14.7%
Other Services & Charges 243,410 166,477 203,471 115,892 218,731 7.5%
Capital Outlay 381,600 394,500 424,600 424,600 490,700 15.6%
TOTAL EXPENDITURES 1,308,793$ 1,224,354$ 1,377,989$ 1,339,514$ 1,450,878$ 5.3%
140Table of Contents
ICE & SNOW REMOVAL (101-43125)
DEPARTMENT: Public Works SUPERVISOR: Street Superintendent
ACTIVITY SCOPE:
The city's ice and snow removal activity is responsible for the control of ice and snow on city
streets, sidewalks, and city-owned public parking lots. The activity provides control in a safe and
cost-effective manner while keeping in mind safety, personnel, and environmental concerns.
OBJECTIVES:
1.Maintain safe and clear transportation routes during the winter season.
ISSUES:
1.Unpredictability of the weather to forecast timing and intensity of snowfall and
required staffing response.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The 2026 personnel services budget includes a full step increase and a 3.0% market rate wage
increase. Weather variability greatly impacts budget-to-actual comparisons.
Measurement 2023 2024 2025 2026
Inches of snow 82 36 41 50
Plowing events 37 22 26 25
Tons of salt used 620 277 514 500
Tons of sand used 29 35 0 0
Full-Time Equivalents 1.10 0.80 1.20 2.55
GENERAL FUND 2023 2024 2025 2025 2026 %
PW - ICE & SNOW Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 131,163$ 95,777$ 290,389$ 140,901$ 313,201$ 7.9%
Supplies 146,402 143,321 159,000 49,944 145,100 -8.7%
Other Services & Charges 17,317 14,832 25,904 13,089 25,635 -1.0%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 294,882$ 253,930$ 475,293$ 203,934$ 483,936$ 1.8%
141Table of Contents
SHOP & GARAGE (101-43127)
DEPARTMENT: Public Works SUPERVISOR: Street Superintendent
ACTIVITY SCOPE:
Shop & Garage maintains all city vehicles and equipment for engineering, streets, ice & snow,
water, and sewer activities in a safe and efficient manner. The department also assists with
equipment maintenance of other city departments including building, DMV, and recreation as
needed.
OBJECTIVES:
1. Maintain equipment and vehicles to maximize efficiencies and safety.
2. Ensure proper maintenance of the public works facility building and grounds.
ISSUES:
1. Aging equipment, and eventual inability to source certain parts.
2. Increased safety regulation for equipment and vehicles.
MEASURABLE WORKLOAD DATA:
BUDGET:
Measurement 2023 2024 2025 2026
Service orders 75 79 97 75
Service order hours 174.5 145 140 150
Hours per service order 2.3 1.8 1.4 2.0
Total service order costs $7,310 $15,332 $43,649 $15,000
Service cost per order $97.47 $194.08 $449.99 $200.00
Repair orders 28 12 17 15
Repair hours 162 91 77 100
Hours per repair order 5.8 7.6 4.5 6.7
Total repair order costs $11,941 $24,998 $935 $12,000
Repair costs per order $426.46 $2,083.17 $55.00 $800.00
DOT inspections*--7 12 10
Inspection hours*--18 60 25
Hours per inspection*--2.6 5.0 2.5
Total inspection costs*--$1,170 $0 $2,500
Inspection costs per order*--$167.14 $0.00 $250.00
*Data was included with repairs through 2023 and was separated out in 2024.
Full-Time Equivalents 1.85 1.35 1.40 1.40
GENERAL FUND 2023 2024 2025 2025 2026 %
PW - SHOP & GARAGE Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 152,844$ 147,860$ 147,330$ 157,029$ 159,528$ 8.3%
Supplies 53,862 55,747 60,500 51,059 52,000 -14.0%
Other Services & Charges 77,005 73,014 131,182 164,577 148,058 12.9%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 283,711$ 276,621$ 339,012$ 372,665$ 359,586$ 6.1%
142Table of Contents
BUDGET COMMENTARY:
The 2026 personnel services budget includes a full step increase and a 3.0% market rate wage
increase; costs decreased slightly in 2024 due to the retirement of the part-time custodian
which is now contracted out through the Facilities Maintenance (FM) Fund. The increase in
other services & charges is due to an increased allocation to the FM Fund for anticipated needs
of the aging facility before construction of a new facility is complete, and potentially thereafter.
143Table of Contents
STREET LIGHTING (101-43160)
DEPARTMENT: Public Works SUPERVISOR: Street Superintendent
ACTIVITY SCOPE:
The street Iighting activity maintains new and existing street lighting within the city. This
includes maintaining installed bulbs and fixtures, as well as the electricity used for keeping the
lights on.
OBJECTIVES:
1.Maintain streetlights and replace them with high-powered, energy efficient LED lights.
2.Draft a new street lighting policy.
ISSUES:
1.Verify lamp and fixtures maintenance by utility companies.
2.Maintenance and upgrades on aging signal systems and streetlights.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Supplies costs increased in 2025 due to costs offset by insurance claims. Electricity for
streetlights is the largest budgeted expenditure at $240,000, which increased in 2025 due to
increased usage and contracted installation of holiday light fixtures in the Downtown. Other
services & charges in 2023 included the cost to refurbish the existing holiday lights.
Measurement 2023 2024 2025 2026
Street lights maintained*973 1,025 1,123 1,123
Utilities expenses $201,180 $171,109 $201,775 $240,000
*Includes those owned by the city and Xcel Energy.
Full-Time Equivalents 0.00 0.00 0.00 0.00
GENERAL FUND 2023 2024 2025 2025 2026 %
PW - STREET LIGHTING Actual Actual Budget Thru 12/31 Budget Change
Personnel Services -$ -$ -$ 361$ -$ ---
Supplies 857 8,099 10,000 26,186 12,000 20.0%
Other Services & Charges 242,625 195,079 281,000 223,565 281,500 0.2%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 243,482$ 203,178$ 291,000$ 250,112$ 293,500$ 0.9%
144Table of Contents
REFUSE COLLECTION (101-43230)
DEPARTMENT: Public Works SUPERVISOR: Refuse Collection
ACTIVITY SCOPE:
The city contracts with a private hauler for residential (up to three-unit properties) refuse and
recycling collection services.
OBJECTIVES:
1.Offer cost-effective, convenient and quality refuse and recycling removal services to
residential properties in the city.
ISSUES:
1.Wear and tear on city streets.
2.Desire to increase recycling efficiency and effectiveness.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Nearly the entire budget is based on the city’s contract obligations with its private refuse
hauler. A new 10-year contract was awarded to LRS in 2025, which expires on May 31, 2035.
The contract increases annually with inflation and the addition of residents/customers.
Implementation of the new contract helped ensure minimal rate increases into the future.
Measurement 2023 2024 2025 2026
Residential refuse collections 52 52 52 52
Residential recycling collections 26 26 26 26
Residential container base 4,192 4,248 4,988 5,050
Additional containers*664 663 ----
Recycling containers 4,790 4,829 4,875 4,925
*New hauler contracted in May 2025 & additional carts are no longer charged differently.
Full-Time Equivalents 0.00 0.00 0.00 0.00
GENERAL FUND 2023 2024 2025 2025 2026 %
REFUSE COLLECTION Actual Actual Budget Thru 12/31 Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies - - - - - ---
Other Services & Charges 817,199 911,886 900,000 941,458 1,038,450 15.4%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 817,199$ 911,886$ 900,000$ 941,458$ 1,038,450$ 15.4%
145Table of Contents
SENIOR CENTER (101-45175)
DEPARTMENT: Recreation and Culture SUPERVISOR: City Administrator
ACTIVITY SCOPE:
The senior center facility is housed in the Monticello Community Center complex. The facility is
maintained by the city, but senior center management is provided by an outside entity.
OBJECTIVES:
1.Maintain a clean, modern facility for use by Monticello’s senior citizens.
2.Engage senior citizen participation in other community center activities.
ISSUES:
1.Limited space within community center facility.
2.Increasing utilities and maintenance costs.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The city maintains and insures the senior center, which requires some community center staff
time. Additionally, the city gives an annual contribution to the board managing the senior
center. The 2026 budgeted contribution is $70,000, which is consistent with 2025.
Measurement 2023 2024 2025 2026
Outcomes/Effectiveness
Volunteers hours 9,485 9,487 8,732 8,800
Noon meals served 3,016 3,441 3,369 3,400
Efficiency:
Unduplicated participants
per activity 19 18 35 35
Duplicated participants
per activity 224 204 197 194
Work Load:
Unduplicated participants 2,495 2,638 5,319 5,400
Duplicated participants 28,918 30,253 29,888 30,000
Received phone calls 3,793 3,759 3,225 3,300
Activities offered 129 148 152 155
Full-Time Equivalents 0.00 0.00 0.00 0.00
GENERAL FUND 2023 2024 2025 2025 2026 %
SENIOR CENTER Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 1,457$ 1,143$ 863$ 475$ 866$ 0.3%
Supplies - - - 400 - ---
Other Services & Charges 101,316 103,787 106,500 106,095 107,000 0.5%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 102,773$ 104,930$ 107,363$ 106,970$ 107,866$ 0.5%
146Table of Contents
PARK OPERATIONS (101-45201)
DEPARTMENT: Recreation and Culture SUPERVISOR: Parks Superintendent
ACTIVITY SCOPE:
The park operations activity maintains the parks and trails within the city and at the city’s area
of the Bertram Chain of Lakes Regional Park (BCOL). This includes maintaining and improving
playground and picnic facilities, fertilizing and mowing grass, maintaining athletic fields,
flooding and maintaining outdoor ice rinks, snow and ice removal on recreational pathways,
and tree preservation within the parks system.
OBJECTIVES:
1.Maintain a high-quality parks and trails system.
2.Improve efficiencies through use of the city’s GIS.
3.Complete master plan update for the Bertram Chain of Lakes Regional Park.
ISSUES:
1.Increase in maintenance costs with acquisition of more park land.
2.Coordination with other entities regarding park use and design.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The 2026 personnel services budget includes a full step increase, and a 3.0% market rate wage
increase. Parks staff assist as needed with plowing in the winter, so wages fluctuate based on
winter weather. Supplies decrease as costs associated with ballfields were more accurately
budgeted in that activity beginning in 2026. Other services & charges also decrease for the
same reason. A parks master plan increased Other services & charges in 2023 and 2024. Capital
outlay reflects the acquisition of vehicles and machinery through the Central Equipment
internal service fund which decreases in 2026 due to rental payments ceasing on a track loader
purchased in 2019.
Measurement 2023 2024 2025 2026
Park land acres maintained 365 365 367 367
Trail miles maintained 43.0 47.0 51.0 52.0
Park events held 225 245 256 300
Winter skating days 75 25 68 75
Full-Time Equivalents 9.20 9.55 11.00 10.30
GENERAL FUND 2023 2024 2025 2025 2026 %
PARK - OPERATIONS Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 808,869$ 865,733$ 814,031$ 970,353$ 896,782$ 10.2%
Supplies 208,369 213,847 254,000 230,390 167,500 -34.1%
Other Services & Charges 335,994 317,602 395,123 299,746 360,324 -8.8%
Capital Outlay 147,700 145,600 179,900 179,900 171,200 -4.8%
TOTAL EXPENDITURES 1,500,932$ 1,542,782$ 1,643,054$ 1,680,389$ 1,595,806$ -2.9%
147Table of Contents
PARK BALLFIELDS (101-45203)
DEPARTMENT: Recreation and Culture SUPERVISOR: Parks Superintendent
ACTIVITY SCOPE:
The park ballfields activity prepares and maintains city athletic fields, including the NSP (Xcel)
Ballfields, Freeway Fields, and soccer/lacrosse fields at Bertram Chain of Lakes Regional Park.
OBJECTIVES:
1.Prepare and maintain city athletic fields to enhance player and visitor experience.
2.Improve the structures at the ballfields.
ISSUES:
1.Demographic and activity trends.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The 2026 budget increases due to allocation of costs from Parks Operations more appropriately
accounted for in the Ballfields activity. An act of vandalism in 2025 increased other services &
charges along with installation of automated external defibrillator (AED) devices at various city
parks. However, the vandalism repairs were offset by insurance claim proceeds.
Measurement 2023 2024 2025 2026
Ball ga mes played, number of 650 680 650 680
Soccer fields maintained 24 24 24 24
Lacrosse fields maintained 10 12 12 12
Football fields maintained 7 7 0 0
Ball fields maintained 12 12 12 12
Number of times mowed 50 50 50 50
Full-Time Equivalents 0.00 0.00 0.00 0.00
GENERAL FUND 2023 2024 2025 2025 2026 %
PARK - BALLFIELDS Actual Actual Budget Thru 12/31 Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies 9,791 15,097 13,000 11,061 18,500 42.3%
Other Services & Charges 12,876 10,260 21,100 53,077 31,000 46.9%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 22,667$ 25,357$ 34,100$ 64,138$ 49,500$ 45.2%
148Table of Contents
PUBLIC ARTS (101-45204)
DEPARTMENT: Recreation and Culture SUPERVISOR: Parks Superintendent
ACTIVITY SCOPE:
The public arts activity is a focused use of arts and culture as a catalyst for economic and
community development. While art in and of itself can be valuable, the purpose is primarily to
harness the creative energy within the community and channel it into revitalizing downtown
and creating connections between people and community.
OBJECTIVES:
1.Enhance the community aesthetics and revitalize downtown.
2.Engage the community in creating public art.
3.Connect people to the community.
ISSUES:
1.Perception of need.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Limited staff time for maintenance of the two arts spaces is reflected in personnel services.
Other services & charges include contracting with two main creative consultants. Additional
costs for art displays and installations in 2025, which were offset by contributions from the
Central Minnesota Arts Board (CMAB), are included in both supplies and other services &
charges. Anticipated projects funded through grants are difficult to predict, however other
services & charges expenditures are budgeted similar to prior year actual costs.
Measurement 2023 2024 2025 2026
Total Public Art Displays 20 34 40 45
Public Art Installations 5 14 6 5
City Events Participated In 6 6 6 6
MontiArts Events 10 26 26 26
MontiArts Attendees 716 2,585 2,800 3,000
Programming Events 261 249 230 250
Programming Attendees 5,234 7,084 7,800 8,000
Full-Time Equivalents 0.00 0.00 0.00 0.00
GENERAL FUND 2023 2024 2025 2025 2026 %
PARK - PUBLIC ARTS Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 1,442$ 1,658$ -$ 2,214$ -$ ---
Supplies 5,361 6,115 7,550 13,350 7,600 0.7%
Other Services & Charges 147,464 146,744 141,578 184,841 140,877 -0.5%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 154,267$ 154,517$ 149,128$ 200,405$ 148,477$ -0.4%
149Table of Contents
LIBRARY (101-45501)
DEPARTMENT: Recreation and Culture SUPERVISOR: City Administrator
ACTIVITY SCOPE:
Library services are contracted through the Great River Regional Library System. The city owns
and maintains the library building and provides programs through the library to residents.
OBJECTIVES:
1. Administer quality programs and life-long learning opportunities for residents.
2. Provide access to global information resources.
ISSUES:
1. Maintaining a relevant role in the community.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Maintenance requires some staff time, which is included in other services & charges to the
Facilities Maintenance internal service fund. 2026 estimated expenditures remain consistent
with the last two years as investments to the facility continue. Recent costs include a re-
carpeting project in 2024 and a fire system replacement in 2025. By state statute, the city must
annually expend at least $35,160 for the library.
Measurement 2023 2024 2025 2026
Checked out items 134,747 123,337 118,904 121,000
Number of requests placed 4,992 4,998 4,132 4,500
Summer reading participants 891 748 934 950
Winter reading participants 80 160 112 125
Patrons using wireless 3,239 4,163 5,201 5,300
Internet sessions used 283 196 239 250
Programs offered 134 122 140 135
Program attendance 2,801 1,734 1,684 1,750
Full-Time Equivalents 0.00 0.00 0.00 0.00
GENERAL FUND 2023 2024 2025 2025 2026 %
LIBRARY Actual Actual Budget Thru 12/31 Budget Change
Personnel Services -$ -$ -$ -$ -$ ---
Supplies 1,552 284 1,500 1,500 1,500 0.0%
Other Services & Charges 40,315 98,767 89,626 94,037 93,012 3.8%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 41,867$ 99,051$ 91,126$ 95,537$ 94,512$ 3.7%
150Table of Contents
SHADE TREE (101-46102)
DEPARTMENT: Recreation and Culture SUPERVISOR: Park Superintendent
ACTIVITY SCOPE:
Shade Tree consists of planting and maintaining trees and shrubbery within the city limits. This
activity provides for regulating, developing, planting, maintaining, and removing of trees in any
street, park, right-of-way, or other public place. Shade trees aid the larger goal of soil
conservation, climate moderation, air quality, and noise reduction. This budget provides the
mechanisms for funding a uniform program for the purpose of beautifying the community as a
whole and increasing property values.
OBJECTIVES:
1.Offer trees for sale for spring tree planting and education for residents.
2.Replace dead and diseased trees throughout the city and parks as part of the Shade
Tree Disease Control Program.
3.Create a boulevard tree planting program.
ISSUES:
1.Funding availability.
2.Managing stress on trees caused by weather and Emerald Ash Borer (EAB) disease.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The presence of EAB in the community was first confirmed in 2022. The 2026 personnel
services budget includes a full step increase and a 3.0% market wage increase. A portion of the
total time spent by park employees is allocated to the Shade Tree activity. The supplies budget
increases in 2026 with planned purchase of tree injection chemicals to treat EAB. Other services
& charges also increase due to state aid received to remove trees infested with and replant
with other species.
Measurement 2023 2024 2025 2026
Trees planted 75 150 308 500
Trees removed 20 60 49 400
Students in programs 0 0 0 0
Trees with Emerald Ash Borer 45 400 1,428 1,500
Full-Time Equivalents 0.90 0.90 0.90 0.90
GENERAL FUND 2023 2024 2025 2025 2026 %
SHADE TREE Actual Actual Budget Thru 12/31 Budget Change
Personnel Services 75,207$ 75,345$ 107,973$ 101,953$ 104,708$ -3.0%
Supplies 10,251 21,186 7,000 66,501 37,000 428.6%
Other Services & Charges 42,414 77,905 110,963 10,868 128,543 15.8%
Capital Outlay - - - - - ---
TOTAL EXPENDITURES 127,872$ 174,436$ 225,936$ 179,322$ 270,251$ 19.6%
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152Table of Contents
2026 Adopted Budget
Special Revenue Funds
SPECIAL REVENUE FUNDS – SUMMARY
DESCRIPTION
The city currently has three active special revenue funds. Special revenue funds are used to
account for the proceeds of specific revenue sources that are restricted, committed, or
assigned to expenditures for specific purposes other than debt service or capital projects.
Unlike the General Fund, the budgets of special revenue funds do not always balance. Special
revenue funds use the modified accrual basis of accounting for both financial reporting and
budgeting purposes.
The Economic Development Authority (EDA) Fund was reclassified from a blended component
unit (special revenue fund) to a discretely presented component unit in the city’s 2021 Annual
Comprehensive Financial Report. It was reclassified as such for the first time in the 2024
budget.
BUDGET SUMMARY
TOTAL SPECIAL REVENUE FUNDS 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 515,000$ 525,000$ 535,000$ 535,000$ 552,000$ 3.2%
Intergovernmental Revenues 415,396 1,500 - - - ---
Charges for Services 1,298,941 1,318,214 1,450,800 1,426,593 1,504,000 3.7%
Miscellaneous 103,894 122,527 60,200 74,208 69,000 14.6%
Operating Transfers In - 100,000 100,000 100,000 100,000 0.0%
TOTAL REVENUES 2,333,231$ 2,067,241$ 2,146,000$ 2,135,801$ 2,225,000$ 3.7%
EXPENDITURES
Personnel Services 1,204,984$ 1,294,820$ 1,195,454$ 1,392,488$ 1,320,745$ 10.5%
Supplies 182,194 138,731 130,700 142,922 124,000 -5.1%
Other Services & Charges 752,315 668,150 756,846 790,813 734,255 -3.0%
Capital Outlay 27,843 96,760 20,000 - - -100.0%
TOTAL EXPENDITURES 2,167,336$ 2,198,461$ 2,103,000$ 2,326,223$ 2,179,000$ 3.6%
FUND BALANCE - JANUARY 1 1,465,471$ 1,631,366$ 1,500,146$ 1,500,146$ 1,309,724$
Excess (Deficiency) of
Revenues over Expenditures 165,895 (131,220) 43,000 (190,422) 46,000
FUND BALANCE - DECEMBER 31 1,631,366$ 1,500,146$ 1,543,146$ 1,309,724$ 1,355,724$
153Table of Contents
CEMETERY FUND (215-49010)
DEPARTMENT: Recreation and Culture SUPERVISOR: Parks Superintendent
ACTIVITY SCOPE:
The Cemetery Fund sustains itself with revenues from plot sales and from services, such as
excavations, staking for monuments, memorial programs, and perpetual care. The city
maintains two cemeteries: Hillside, which is no longer open to burials and operations are
recorded through park operations in the General Fund, and Riverside including an ossuary-
columbarium. Staff assist customers/visitors with memorials and perpetual care for both.
OBJECTIVES:
1.Provide the public with a way to memorialize loved ones after passing away in a
courteous, professional manner.
2.Maintain and beautiful and comforting environment on cemetery grounds and
around grave markers.
ISSUES:
1.Increasing maintenance costs.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Plots occupied 3,670 3,693 3,717 3,740
Plots reserved 663 661 662 660
Plots available for sale 1,086 1,069 1,053 1,033
Number of plots sold 18 17 22 20
Number of internments 19 27 24 25
Number of markers staked 18 18 23 20
Columbarium slots occupied 11 14 17 20
Columbarium slots reserved 20 28 37 45
Columbarium slots available 75 67 58 55
Columbarium slots sold 5 8 10 5
Ossuary slots occupied 4 4 5 5
Ossuary slots reserved 47 47 47 48
Ossuary slots available 272 272 271 270
Ossuary slots sold 0 0 1 1
Full-Time Equivalents 0.00 0.00 0.00 0.00
154Table of Contents
BUDGET:
BUDGET COMMENTARY:
Sales of burial plots and ossuary-columbarium slot remain consistent with prior years but are
budgeted conservatively. Strength in the city’s investment portfolio created positive
miscellaneous revenues, which are mostly comprised of interest earnings. While there are no
city employees specifically dedicated to the Cemetery function, the parks department staff may
sometimes perform tasks which are allocated to this fund.
CEMETERY 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Charges for Services 43,727$ 51,815$ 47,700$ 74,355$ 45,000$ -5.7%
Miscellaneous 10,644 7,999 4,300 10,257 5,000 16.3%
TOTAL REVENUES 54,371$ 59,814$ 52,000$ 84,612$ 50,000$ -3.8%
EXPENDITURES
Personnel Services -$ -$ 2,228$ -$ 2,235$ 0.3%
Supplies 217 1,431 500 213 500 0.0%
Other Services & Charges 23,786 27,322 33,272 31,731 31,265 -6.0%
TOTAL EXPENDITURES 24,003$ 28,753$ 36,000$ 31,944$ 34,000$ -5.6%
FUND BALANCE - JANUARY 1 117,843$ 148,211$ 179,272$ 179,272$ 231,940$
Excess (Deficiency) of
Revenues over Expenditures 30,368 31,061 16,000 52,668 16,000
FUND BALANCE - DECEMBER 31 148,211$ 179,272$ 195,272$ 231,940$ 247,940$
155Table of Contents
SMALL CITIES DEVELOPMENT PROGRAM (SCDP) FUND (221-46500)
DEPARTMENT: Small Cities Development Program Fund SUPERVISOR: Community Development Director
ACTIVITY SCOPE:
Following state and federal guidelines, the SCDP Fund administers loans to local businesses.
OBJECTIVES:
1.Match available funds with qualifying businesses in Monticello.
ISSUES:
1.Number of qualified businesses in Monticello.
2.Loan program and bank requirements.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Repayment of loans and interest earned on investments make up the anticipated activity in
2026. Strength in the city’s investment portfolio created positive miscellaneous revenues,
which are comprised of interest earnings on investments and outstanding loans.
Measurement 2023 2024 2025 2026
Loans outstanding 1 1 1 3
Loans originated 0 0 0 2
SCDP FUND 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Miscellaneous 41,043$ 44,900$ 27,000$ 46,483$ 30,000$ 11.1%
FUND BALANCE - JANUARY 1 898,209$ 939,252$ 984,152$ 984,152$ 1,030,635$
Excess (Deficiency) of
Revenues over Expenditures 41,043 44,900 27,000 46,483 30,000
FUND BALANCE - DECEMBER 31 939,252$ 984,152$ 1,011,152$ 1,030,635$ 1,060,635$
156Table of Contents
COMMUNITY CENTER FUND (226-4512x)
DEPARTMENT: Community Center SUPERVISOR: Parks, Arts & Recreation Director
ACTIVITY SCOPE:
The Monticello Community Center (MCC) provides space for a variety of recreational,
professional, and educational opportunities. Expenditures for the community center are
divided into six activities: administration, rentals and events, aquatics, guest services and
concessions, maintenance, and programming.
OBJECTIVES:
1.Provide a place to facilitate community connection and wellness.
2.Repurpose the area previously used as a wheel park (skateboard, bike, and
rollerblade) including design, financing, construction, and marketing.
3.Streamline the online registration system for program and membership sign up.
4.Invest in facility improvements to increase customers.
5.Improve financial controls and budget management.
ISSUES:
1.Limitations to facility size and maintenance on a 25-year-old building.
2.Competition from other fitness and recreational facilities.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Gross program sales $51,181 $61,504 $76,082 $72,000
Facility rental revenue $214,357 $219,607 $218,489 $227,000
Day passes purchased ---30,689 29,006 30,000
Annual memberships 349 376 487 500
Monthly memberships 1,366 1,677 1,941 1,950
Three-month memberships 203 247 210 220
Ratio of annual memberships
to other memberships 0.22 0.20 0.23 0.23
Full-Time Equivalents 20.75 22.25 25.90 20.55
157Table of Contents
BUDGET:
BUDGET COMMENTARY:
The MCC’s largest revenue sources are charges for services (memberships and day passes) and
property taxes. An operating transfer in from the Deputy Registrar Fund supplements to help
balance the budget. The city was awarded $1.5 million in American Rescue Plan Act (ARPA)
funding in 2021 through 2023, which was all used in the Community Center Fund for wages and
benefits in the aftermath of the COVID-19 pandemic.
Experiencing two years with the need for substantial use of reserves required increased
intensity in setting the 2026 budget. Part-time staff cost-of-labor adjustments were limited,
user rates were increased up to 15%, and facility hours were adjusted to better align with usage
trends. The aging facility has shown wear in a leaky envelope; therefore, the Capital Projects
Fund (which funds major repairs and maintenance of all governmental city facilities) has $1.5
million budgeted in 2026 to upgrade windows, the roof, and caulking as needed to keep
moisture outside.
COMMUNITY CENTER 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 515,000$ 525,000$ 535,000$ 535,000$ 552,000$ 3.2%
Intergovernmental Revenues 415,396 1,500 - - - ---
Charges for Services 1,255,214 1,266,399 1,403,100 1,352,238 1,459,000 4.0%
Miscellaneous 52,207 69,628 28,900 17,468 34,000 17.6%
Operating Transfers In - 100,000 100,000 100,000 100,000 0.0%
TOTAL REVENUES 2,237,817$ 1,962,527$ 2,067,000$ 2,004,706$ 2,145,000$ 3.8%
EXPENDITURES
Personnel Services 1,204,984$ 1,294,820$ 1,193,226$ 1,392,488$ 1,318,510$ 10.5%
Supplies 181,977 137,300 130,200 142,709 123,500 -5.1%
Other Services & Charges 728,529 640,828 723,574 759,082 702,990 -2.8%
Capital Outlay 27,843 96,760 20,000 - - -100.0%
TOTAL EXPENDITURES 2,143,333$ 2,169,708$ 2,067,000$ 2,294,279$ 2,145,000$ 3.8%
FUND BALANCE - JANUARY 1 449,419$ 543,903$ 336,722$ 336,722$ 47,149$
Excess (Deficiency) of
Revenues over Expenditures 94,484 (207,181) - (289,573) -
FUND BALANCE - DECEMBER 31 543,903$ 336,722$ 336,722$ 47,149$ 47,149$
158Table of Contents
2026 Adopted Budget
Debt Service Funds
DEBT SERVICE FUNDS – SUMMARY
DESCRIPTION
Debt services funds are used to account for the accumulation of resources for the payment of
general long-term debt, excluding debt issued by an enterprise or internal service fund. Debt
service funds use the modified accrual basis of accounting for both financial reporting and
budgeting purposes. The city has six active debt service (sub)funds that are combined into one
debt service fund for financial reporting.
The city's bond rating was upgraded to Aa3 in 2023. Fund balances in some (sub)funds declined
with planned use of fund balances built up over time due to items such as prepaid assessments.
The city’s outstanding governmental debt is as follows:
BUDGET SUMMARY
Original Interest Final Balance as of
Bond Issue Issue Rate Maturity 12/31/2025
2015B G.O. Bonds $2,605,000 1.50 - 3.00%12/15/2030 $975,000
2016A G.O. Bonds $4,900,000 2.00 - 3.00%12/15/2030 $755,000
2017A G.O. Bonds $5,000,000 2.00 - 3.00%12/15/2032 $1,960,000
2018A G.O. Bonds $5,000,000 3.00 - 3.38%12/15/2032 $2,770,000
2019A G.O. Bonds $8,000,000 2.00 - 2.30%12/15/2034 $4,585,000
2020A G.O. Bonds $2,200,000 0.40 - 2.70%12/15/2032 $1,125,000
TOTAL DEBT SERVICE FUNDS 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 1,999,581$ 2,026,175$ 2,196,193$ 2,196,193$ 2,305,511$ 5.0%
Special Assessments 300,188 283,443 231,769 275,204 179,308 -22.6%
Miscellaneous 60,046 43,775 21,038 55,954 28,181 34.0%
TOTAL REVENUES 2,359,815$ 2,353,393$ 2,449,000$ 2,527,351$ 2,513,000$ 2.6%
EXPENDITURES
Other Services & Charges 3,000$ 6,200$ 3,000$ 2,574$ 5,812$ 93.7%
Debt Service 2,603,184 2,600,834 2,609,000 2,607,759 2,606,188 -0.1%
TOTAL EXPENDITURES 2,606,184$ 2,607,034$ 2,612,000$ 2,610,333$ 2,612,000$ 0.0%
FUND BALANCE - JANUARY 1 974,305$ 727,936$ 474,295$ 474,295$ 391,313$
Excess (Deficiency) of
Revenues over Expenditures (246,369) (253,641) (163,000) (82,982) (99,000)
FUND BALANCE - DECEMBER 31 727,936$ 474,295$ 311,295$ 391,313$ 292,313$
159Table of Contents
2015B G.O. BOND SUB-FUND (319-47000)
DEPARTMENT: Debt Service SUPERVISOR: Finance Director
ACTIVITY SCOPE:
The 2015B G.O. Street Reconstruction and Improvement Bonds provided financing for School
Boulevard, Fallon Avenue, and 85th Street improvements. This issue also provided financing
for street and other infrastructure improvements in the area east of Highway 25 and north of
Interstate 94. The city levies for the gap between annual debt service payments and annual
assessment collections. The bonds have an average interest rate of 2.5856% and were
redeemable in December of 2022.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
MEASURABLE WORKLOAD DATA:
BUDGET:
Measurement 2023 2024 2025 2026
Assessment balance $34,390 $17,195 $0 $0
Delinquent balance $0 $0 $0 $0
Prepaid assessments $0 $0 $0 $0
Assessment rolls 1 1 --
Assessed parcels 1 1 --
2015B G.O. Bonds 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 164,435$ 165,223$ 160,879$ 160,879$ 193,991$ 20.6%
Special Assessments 31,242 19,000 18,098 18,098 - -100.0%
Miscellaneous 7,290 6,038 5,023 6,725 4,009 -20.2%
TOTAL REVENUES 202,967$ 190,261$ 184,000$ 185,702$ 198,000$ 7.6%
EXPENDITURES
Other Services & Charges 500$ 450$ 500$ 429$ 1,126$ 125.2%
Debt Service 212,000 212,750 213,500 213,425 213,874 0.2%
TOTAL EXPENDITURES 212,500$ 213,200$ 214,000$ 213,854$ 215,000$ 0.5%
FUND BALANCE - JANUARY 1 121,705$ 112,172$ 89,233$ 89,233$ 61,081$
Excess (Deficiency) of
Revenues over Expenditures (9,533) (22,939) (30,000) (28,152) (17,000)
FUND BALANCE - DECEMBER 31 112,172$ 89,233$ 59,233$ 61,081$ 44,081$
160Table of Contents
BUDGET COMMENTARY:
The $2,605,000 2015B G.O. bond issue has two components: $1,885,000 street reconstruction
portion and $720,000 improvement portion. Property taxes support the reconstruction portion
of the debt issue. The improvement portion is supported by a single assessment of $175,000 on
school district property and property taxes. The tax levy covers the gap between assessment
revenue and debt service payments. Expenditures consist of principal and interest payments
and fiscal agent fees.
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2026 -$ 14,162$ 14,162$
12/15/2026 185,000 14,162 2.50% 199,162
6/15/2027 -11,850 11,850
12/15/2027 185,000 11,850 3.00% 196,850
6/15/2028 -9,075 9,075
12/15/2028 195,000 9,075 3.00% 204,075
6/15/2029 -6,150 6,150
12/15/2029 200,000 6,150 3.00% 206,150
6/15/2030 -3,150 3,150
12/15/2030 210,000 3,150 3.00% 213,150
Total 975,000$ 88,774$ 1,063,774$
GO Bonds, Series 2015B
161Table of Contents
2016A G.O. BOND SUB-FUND (320-47000)
DEPARTMENT: Debt Service SUPERVISOR: Finance Director
ACTIVITY SCOPE:
The 2016A G.O. Street Reconstruction and Improvement Bonds financed improvements
included in the 2016 core street project and at the intersection of Highway 25 and 7th Street.
The city levies for the gap between annual debt service payments and annual assessment
collections. The bonds have an average interest rate of 2.1034% and were redeemable in
December of 2023.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
MEASURABLE WORKLOAD DATA:
BUDGET:
Measurement 2023 2024 2025 2026
Assessment balance $182,753 $114,131 $46,744 $2,127
Delinquent balance $177 $2,058 $0 $0
Prepaid assessments $2,703 $8,412 $11,384 $0
Assessment rolls 2 2 2 1
Assessed parcels 64 64 56 2
2016A G.O. Bonds 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 282,559$ 357,979$ 433,189$ 433,189$ 428,189$ -1.2%
Special Assessments 73,894 75,003 65,110 73,392 46,488 -28.6%
Miscellaneous 16,277 9,823 3,701 11,685 6,323 70.8%
TOTAL REVENUES 372,730$ 442,805$ 502,000$ 518,266$ 481,000$ -4.2%
EXPENDITURES
Other Services & Charges 500$ 450$ 500$ 429$ 950$ 90.0%
Debt Service 527,450 527,850 528,500 528,100 528,050 -0.1%
TOTAL EXPENDITURES 527,950$ 528,300$ 529,000$ 528,529$ 529,000$ 0.0%
FUND BALANCE - JANUARY 1 313,731$ 158,511$ 73,016$ 73,016$ 62,753$
Excess (Deficiency) of
Revenues over Expenditures (155,220) (85,495) (27,000) (10,263) (48,000)
FUND BALANCE - DECEMBER 31 158,511$ 73,016$ 46,016$ 62,753$ 14,753$
162Table of Contents
BUDGET COMMENTARY:
The $4,900,000 2016A G.O. bond issue has two components: $770,000 street reconstruction
portion and $4,130,000 improvement portion. Property taxes support the reconstruction
portion of the debt issue. The improvement portion was supported by assessments of
$1,143,000 in the core street reconstruction area. Property taxes are levied for the gap
between assessment revenue and debt service payments. Future levies will be adjusted to
reflect assessment prepayments, interest earned on the prepayments and interest foregone on
the prepayments. Expenditures consist of principal and interest payments and fiscal agent fees.
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2026 -$ 8,775$ 8,775$
12/15/2026 510,000 8,775 2.00% 518,775
6/15/2027 -3,675 3,675
12/15/2027 60,000 3,675 3.00% 63,675
6/15/2028 -2,775 2,775
12/15/2028 60,000 2,775 3.00% 62,775
6/15/2029 -1,875 1,875
12/15/2029 60,000 1,875 3.00% 61,875
6/15/2030 -975 975
12/15/2030 65,000 975 3.00% 65,975
Total 755,000$ 36,150$ 791,150$
GO Bonds, Series 2016A
163Table of Contents
2017A G.O. BOND SUB-FUND (321-47000)
DEPARTMENT: Debt Service SUPERVISOR: Finance Director
ACTIVITY SCOPE:
The 2017A G.O. Improvement and Abatement Bonds financed improvements to rural outlying
roads and various other city street projects. Additionally, the issue provided funding for Fallon
Avenue overpass right-of-way acquisition, engineering, and construction. The bonds have an
average interest rate of 2.443% and are redeemable in December of 2026.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
MEASURABLE WORKLOAD DATA:
BUDGET:
Measurement 2023 2024 2025 2026
Assessment balance $118,456 $87,460 $50,362 $25,872
Delinquent balance $1,046 $314 $0 $0
Prepaid assessments $1,842 $1,382 $7,943 $0
Assessment rolls 2 2 2 2
Assessed parcels 51 50 46 46
2017A G.O. Bonds 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 299,532$ 326,842$ 403,942$ 403,942$ 430,832$ 6.7%
Special Assessments 37,823 37,280 33,612 39,877 28,201 -16.1%
Miscellaneous 13,880 8,330 3,446 8,984 5,967 73.2%
TOTAL REVENUES 351,235$ 372,452$ 441,000$ 452,803$ 465,000$ 5.4%
EXPENDITURES
Other Services & Charges 500$ 450$ 500$ 429$ 860$ 72.0%
Debt Service 467,140 469,340 471,500 471,390 473,140 0.3%
TOTAL EXPENDITURES 467,640$ 469,790$ 472,000$ 471,819$ 474,000$ 0.4%
FUND BALANCE - JANUARY 1 274,359$ 157,954$ 60,616$ 60,616$ 41,600$
Excess (Deficiency) of
Revenues over Expenditures (116,405) (97,338) (31,000) (19,016) (9,000)
FUND BALANCE - DECEMBER 31 157,954$ 60,616$ 29,616$ 41,600$ 32,600$
164Table of Contents
BUDGET COMMENTARY:
The $5,000,000 2017A G.O. bond issue has two components: $2,040,000 improvement portion
and $2,960,000 abatement portion. Property taxes and assessments support the improvement
portion of the debt issue. The abatement portion is supported by a tax abatement levy for bond
principal and a debt service levy for bond interest. Property taxes will be levied for any gap
between assessment revenue and debt service. Expenditures consist of principal and interest
payments and fiscal agent fees.
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2026 -$ 26,320$ 26,320$
12/15/2026 420,000 26,320 2.50% 446,320
6/15/2027 -21,069 21,069
12/15/2027 430,000 21,069 2.50% 451,069
6/15/2028 -15,695 15,695
12/15/2028 210,000 15,695 2.50% 225,695
6/15/2029 -13,070 13,070
12/15/2029 215,000 13,070 2.60% 228,070
6/15/2030 -10,275 10,275
12/15/2030 220,000 10,275 3.00% 230,275
6/15/2031 -6,975 6,975
12/15/2031 230,000 6,975 3.00% 236,975
6/15/2032 -3,525 3,525
12/15/2032 235,000 3,525 3.00% 238,525
Total 1,960,000$ 193,858$ 2,153,858$
GO Bonds, Series 2017A
165Table of Contents
2018A G.O. BOND SUB-FUND (322-47000)
DEPARTMENT: Debt Service SUPERVISOR: Finance Director
ACTIVITY SCOPE:
The 2018A G.O. Abatement Bonds provided $5,000,000 of funding for Fallon Avenue overpass
right-of-way acquisition, engineering, and construction. The bonds have an average interest
rate of 3.151% and are redeemable in December of 2026. Abatement bonds were also issued
in 2017 and 2019 for the remaining costs on the overpass project. All three abatement issues
(2017, 2018, and 2019) have the same redemption date and term with the last payment
occurring in 2032.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The $5,000,000 2018A G.O. bond issue has only one component: Abatement. A debt service
levy covers the annual bond interest payment, and a tax abatement levy covers the annual
bond principal payment. Expenditures consist of principal and interest payments and fiscal
agent fees.
Measurement 2023 2024 2025 2026
Not Applicable
2018A G.O. Bonds 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 444,232$ 439,337$ 419,127$ 419,127$ 433,602$ 3.5%
Miscellaneous 6,056 3,678 2,873 8,430 3,398 18.3%
TOTAL REVENUES 450,288$ 443,015$ 422,000$ 427,557$ 437,000$ 3.6%
EXPENDITURES
Other Services & Charges 500$ 450$ 500$ 429$ 1,164$ 132.8%
Debt Service 447,438 447,538 447,500 447,388 446,836 -0.1%
TOTAL EXPENDITURES 447,938$ 447,988$ 448,000$ 447,817$ 448,000$ 0.0%
FUND BALANCE - JANUARY 1 79,499$ 81,849$ 76,876$ 76,876$ 56,616$
Excess (Deficiency) of
Revenues over Expenditures 2,350 (4,973) (26,000) (20,260) (11,000)
FUND BALANCE - DECEMBER 31 81,849$ 76,876$ 50,876$ 56,616$ 45,616$
166Table of Contents
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2026 -$ 43,143$ 43,143$
12/15/2026 360,000 43,143 3.00% 403,143
6/15/2027 -37,744 37,744
12/15/2027 370,000 37,744 3.00% 407,744
6/15/2028 -32,194 32,194
12/15/2028 385,000 32,194 3.00% 417,194
6/15/2029 -26,419 26,419
12/15/2029 395,000 26,419 3.00% 421,419
6/15/2030 -20,494 20,494
12/15/2030 405,000 20,494 3.13% 425,494
6/15/2031 -14,165 14,165
12/15/2031 420,000 14,165 3.25% 434,165
6/15/2032 -7,341 7,341
12/15/2032 435,000 7,341 3.38% 442,341
Total 2,770,000$ 363,000$ 3,133,000$
GO Bonds, Series 2018A Abatement Bonds
167Table of Contents
2019A G.O. BOND SUB-FUND (323-47000)
DEPARTMENT: Debt Service SUPERVISOR: Finance Director
ACTIVITY SCOPE:
The 2019A bonds financed the completion of the Fallon Avenue overpass (abatement bonds),
purchase of a fire ladder truck, construction of a new fire hall, and street improvements. The
bonds have an average interest rate of 2.0825% and are redeemable in December of 2027. All
three abatement bond issues (2017, 2018, and 2019) have the same redemption date and
term with the last payment occurring in 2032.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The 2019A G.O. Bonds are comprised of four components: $1,040,000 abatement, $1,290,000
equipment, $5,350,000 CIP, and $320,000 street improvement. The revenue sources include a
Measurement 2023 2024 2025 2026
Assessment balance $51,150 $40,920 $30,690 $20,460
Delinquent balance $0 $0 $0 $0
Prepaid assessments $0 $0 $0 $0
Assessment rolls 1 1 1 1
Assessed parcels 9 9 9 9
2019A GO BONDS 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 697,133$ 711,964$ 680,836$ 680,836$ 699,143$ 2.7%
Special Assessments 13,299 12,788 12,276 12,276 11,764 -4.2%
Miscellaneous 6,685 3,125 2,888 11,910 1,093 -62.2%
TOTAL REVENUES 717,117$ 727,877$ 696,000$ 705,022$ 712,000$ 2.3%
EXPENDITURES
Other Services & Charges 500$ 3,950$ 500$ 429$ 1,062$ 112.4%
Debt Service 711,438 709,838 713,500 713,088 710,938 -0.4%
TOTAL EXPENDITURES 711,938$ 713,788$ 714,000$ 713,517$ 712,000$ -0.3%
FUND BALANCE - JANUARY 1 48,734$ 53,913$ 68,002$ 68,002$ 59,507$
Excess (Deficiency) of
Revenues over Expenditures 5,179 14,089 (18,000) (8,495) -
FUND BALANCE - DECEMBER 31 53,913$ 68,002$ 50,002$ 59,507$ 59,507$
168Table of Contents
combination of taxes and special assessments. Expenditures consist of principal and interest
payments and fiscal agent fees.
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2026 -$ 47,694$ 47,694$
12/15/2026 615,000 47,694 2.00% 662,694
6/15/2027 - 41,544 41,544
12/15/2027 630,000 41,544 2.00% 671,544
6/15/2028 - 35,244 35,244
12/15/2028 645,000 35,244 2.00% 680,244
6/15/2029 - 28,793 28,793
12/15/2029 455,000 28,793 2.00% 483,793
6/15/2030 - 24,244 24,244
12/15/2030 465,000 24,244 2.00% 489,244
6/15/2031 - 19,593 19,593
12/15/2031 475,000 19,593 2.10% 494,593
6/15/2032 - 14,606 14,606
12/15/2032 485,000 14,606 2.20% 499,606
6/15/2033 - 9,271 9,271
12/15/2033 405,000 9,271 2.25% 414,271
6/15/2034 - 4,715 4,715
12/15/2034 410,000 4,715 2.30% 414,715
Total 4,585,000$ 451,408$ 5,036,408$
GO Bonds, Series 2019A
169Table of Contents
2020A G.O. BOND SUB-FUND (324-47000)
DEPARTMENT: Debt Service SUPERVISOR: Finance Director
ACTIVITY SCOPE:
The 2020A bonds financed the 2020 and 2022 Street Improvement projects. The revenue
sources include property taxes and special assessments. The city levies for the gap between
annual debt service payments and annual assessment collections. The bonds have an average
interest rate of 1.5067% and are redeemable in December of 2028.
OBJECTIVES:
1.Make scheduled debt payments in a timely manner.
2.Redeem or refund when feasible.
ISSUES:
1.Balancing the property tax levy for this bond with the needs of other debt.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The city issued the $2,155,000 2020A G.O. Bonds to finance the 2020 and 2022 Street
Improvement projects. Property taxes and special assessments also support debt service
payments. Expenditures consist of principal and interest payments and fiscal agent fees.
Measurement 2023 2024 2025 2026
Assessment balance $649,901 $549,232 $438,627 $366,196
Delinquent balance $2,427 $4,362 $1,294 $0
Prepaid assessments $25,429 $36,300 $32,163 $0
Assessment rolls 2 2 3 3
Assessed parcels 420 414 379 379
2020A GO BONDS 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 111,690$ 24,830$ 98,220$ 98,220$ 119,754$ 21.9%
Special Assessments 143,930 139,372 102,673 131,561 92,855 -9.6%
Miscellaneous 9,858 12,781 3,107 8,220 7,391 137.9%
TOTAL REVENUES 265,478$ 176,983$ 204,000$ 238,001$ 220,000$ 7.8%
EXPENDITURES
Other Services & Charges 500$ 450$ 500$ 429$ 650$ 30.0%
Debt Service 237,718 233,518 234,500 234,368 233,350 -0.5%
TOTAL EXPENDITURES 238,218$ 233,968$ 235,000$ 234,797$ 234,000$ -0.4%
FUND BALANCE - JANUARY 1 136,277$ 163,537$ 106,552$ 106,552$ 109,756$
Excess (Deficiency) of
Revenues over Expenditures 27,260 (56,985) (31,000) 3,204 (14,000)
FUND BALANCE - DECEMBER 31 163,537$ 106,552$ 75,552$ 109,756$ 95,756$
170Table of Contents
REMAINING DEBT SERVICE:
Payable Principal Interest Rate Total
6/15/2026 -$ 8,925$ 8,925$
12/15/2026 215,000 8,925 2.00% 223,925
6/15/2027 - 6,775 6,775
12/15/2027 220,000 6,775 2.00% 226,775
6/15/2028 - 4,575 4,575
12/15/2028 225,000 4,575 2.00% 229,575
6/15/2029 - 2,325 2,325
12/15/2029 230,000 2,325 1.00% 232,325
6/15/2030 - 1,175 1,175
12/15/2030 235,000 1,175 1.00% 236,175
Total 1,125,000$ 47,550$ 1,172,550$
GO Bonds, Series 2020A
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172Table of Contents
2026 Adopted Budget
Capital Project Funds
CAPITAL PROJECT FUNDS – SUMMARY
DESCRIPTION
Capital project funds are used to account for financial resources that are restricted, committed,
or assigned to expenditure for capital outlays including the acquisition or construction of capital
facilities and other capital assets—excluding capital assets financed by proprietary funds
(enterprise and internal service). Capital project funds use the modified accrual basis of
accounting for both financial reporting and budgeting purposes. The city has five active capital
project funds, including the newly formed Transportation Improvements Fund. The city closed
its Park & Pathway Improvement Fund at the end of 2025 because it had no dedicated funding
source outside of transfers from other funds or grants, so the activity from that fund will be
recorded in the main Capital Project Fund going forward. Financing capital asset additions or
replacements has been an ongoing challenge, especially in a city with a growing population
while also having reductions in market value of its largest property taxpayer many of the past
few years. This causes volatile fluctuations in taxes paid in relation to the city’s tax levy.
BUDGET SUMMARY
TOTAL CAPITAL PROJECTS FUNDS 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 1,548,989$ 1,996,693$ 2,400,807$ 2,405,561$ 2,844,489$ 18.5%
Franchise & Other Taxes 157,109 205,776 150,000 168,646 825,000 450.0%
Sales & Use Tax - - 1,000,000 1,420,438 2,250,000 125.0%
Intergovernmental Revenues 641,606 1,136,453 1,185,000 18,905 2,161,000 82.4%
Charges for Services 50,247 1,443,826 - 584,817 - ---
Special Assessments 885,287 893,257 101,809 259,776 237,058 132.8%
Miscellaneous 3,067,193 672,725 400,384 909,220 437,453 9.3%
Contributed Capital 32,300 - - - - ---
Operating Transfers In 4,750,000 1,700,000 1,282,000 1,734,951 25,000 -98.0%
Debt Proceeds - - - - 35,000,000 ---
TOTAL REVENUES 11,132,731$ 8,048,730$ 6,520,000$ 7,502,314$ 43,780,000$ 571.5%
EXPENDITURES
Other Services & Charges 45,171$ 33,737$ -$ 146,121$ -$ ---
Capital Outlay 12,246,515 8,601,714 6,918,000 6,317,189 24,646,000 256.3%
Operating Transfers Out - - 380,000 1,082,951 25,000 -93.4%
TOTAL EXPENDITURES 12,291,686$ 8,635,451$ 7,298,000$ 7,546,261$ 24,671,000$ 238.1%
FUND BALANCE - JANUARY 1 13,434,946$ 12,275,991$ 11,689,270$ 11,689,270$ 11,645,323$
Excess (Deficiency) of
Revenues over Expenditures (1,158,955) (586,721) (778,000) (43,947) 19,109,000
FUND BALANCE - DECEMBER 31 12,275,991$ 11,689,270$ 10,911,270$ 11,645,323$ 30,754,323$
173Table of Contents
CAPITAL PROJECT FUND (400-4xxxx)
DEPARTMENT: Capital Project Fund SUPERVISOR: City Engineer/Public Works Director
ACTIVITY SCOPE:
The Capital Project Fund is a generic fund of the same type used to account for capital asset
construction and acquisitions. Capital assets accounted for in this fund include building
construction and major maintenance, street and pathway extensions, parking lots, recreational
infrastructure (excluding that accounted for in the Park Dedication or BCOL Sales Tax funds),
and certain major equipment acquisition such as fire engines.
OBJECTIVES:
1.Complete upgrades or major replacements to existing city infrastructure.
2.Extend city infrastructure to new developments.
3.Acquire large, non-proprietary fund, capital equipment (e.g., fire ladder truck) that the
Central Equipment internal service fund cannot support.
ISSUES:
1.Funding growth and replacement improvements in a stable debt and property tax levy
environment.
2.Prioritizing the city’s capital needs.
3.Competition from other entities for eligible grant funding.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Projects supported 7 8 9 11
Assessment balance $2,761,039 $1,711,408 $1,665,532 $1,446,181
Deferred assessments $1,799,149 $907,083 $907,083 $907,083
Deferred % of balance 65.2% 53.0% 54.5% 62.7%
Delinquent balance $438 $7,389 $15,000 $0
Prepaid assessments $681,695 $786,356 $0 $0
Assessment rolls 21 21 21 19
Assessed parcels 52 41 44 42
174Table of Contents
BUDGET:
BUDGET COMMENTARY:
Consistent debt service levies and healthy tax base growth created capacity for an increase of
$443,682 in the capital portion of the city’s 2026 property tax levy. The 2026 levy allows smaller
capital projects that are recurring in nature to be funded on a pay-as-you-go basis to preserve
the city’s debt capacity for larger, one-time projects. This also stabilizes the overall levy to
accommodate future debt.
2023 transfers were from the Liquor and Deputy Registrar funds for the improvement project in
Monticello’s core downtown. Contributed capital in 2023 was the County’s portion of the costs
for improvements to Broadway West as part of the Downtown Pedestrian & Roadways
Improvements Project. Debt proceeds are anticipated in 2026 for construction of a new Public
Works Facility.
For 2026, notable projects include: Public Works facility construction (completed in 2027),
Community Center envelope improvements, parking lot improvements at the library and in the
downtown, Golf Course Road trail completion from 2025, East Bridge Park trail and underpass
improvements, roundabout construction near Fallon Avenue and 85th Street, planning for
future Fallon Avenue improvements, and recreational upkeep including the soccer building
roof, park hockey board replacement, and pier replacement pending external funding.
CAPITAL PROJECT FUND 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 1,548,989$ 1,996,693$ 2,400,807$ 2,405,561$ 2,844,489$ 18.5%
Intergovernmental Revenues 641,606 1,136,453 1,185,000 18,905 1,177,000 -0.7%
Charges for Services - 1,443,826 - 584,817 - ---
Special Assessments 884,472 892,478 101,066 259,033 236,351 133.9%
Miscellaneous 2,931,447 553,034 100,127 565,410 385,160 284.7%
Contributed Capital 32,300 - - - - ---
Operating Transfers In 3,500,000 1,700,000 880,000 1,332,951 25,000 -97.2%
Debt Proceeds - - - - 35,000,000 ---
TOTAL REVENUES 9,538,814$ 7,722,484$ 4,667,000$ 5,166,677$ 39,668,000$ 750.0%
EXPENDITURES
Other Services & Charges 37,501$ 33,737$ -$ 104,277$ -$ ---
Capital Outlay 10,727,535 7,901,105 5,787,000 5,628,371 21,681,000 274.7%
TOTAL EXPENDITURES 10,765,036$ 7,934,842$ 5,787,000$ 5,732,648$ 21,681,000$ 274.7%
FUND BALANCE - JANUARY 1 10,868,750$ 9,642,528$ 9,430,170$ 9,430,170$ 8,864,199$
Excess (Deficiency) of
Revenues over Expenditures (1,226,222) (212,358) (1,120,000) (565,971) 17,987,000
FUND BALANCE - DECEMBER 31 9,642,528$ 9,430,170$ 8,310,170$ 8,864,199$ 26,851,199$
175Table of Contents
STREET LIGHTING IMPROVEMENT FUND (403-43162)
DEPARTMENT: Public Works SUPERVISOR: City Engineer/Public Works Director
ACTIVITY SCOPE:
The Street Lighting Improvement Fund provides resources for improvements to the street
lighting system. Electric franchise fees are the fund’s primary revenue sources.
OBJECTIVES:
1.Upgrade traditional lights to colonial style lights.
2.Collaborate with MNDOT to add battery back-up to signals on TH25.
3.Replace and modify lighting system in the downtown area.
4.Add/upgrade lighting for pathways and other high use areas.
ISSUES:
1.Project scope and timing.
2.Develop a light replacement program with Wright Hennepin Electric and Xcel
Energy.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Franchise and other taxes come from an electric franchise fee imposed on ratepayers in the
city. The city plans to review the franchise fee rate in 2026.
The capital outlay activity in 2024 was related to the Downtown Pedestrian & Roadways
Improvements project. Operating transfers out were for the costs of street lighting upgrades as
part of the School Boulevard Roundabouts and Improvements project paid for out of the Capital
Project Fund in 2025. Parking lot lighting on Block 51 is the reason for a transfer out in 2026.
Measurement 2023 2024 2025 2026
Projects supported 1 2 2 -
STREET LIGHT IMPROVEMENTS 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Franchise & Other Taxes 157,109$ 205,776$ 150,000$ 168,646$ 150,000$ 0.0%
Miscellaneous 71,449 70,746 10,000 66,900 25,000 150.0%
Operating Transfers In 250,000 - - - - ---
TOTAL REVENUES 478,558$ 276,522$ 160,000$ 235,546$ 175,000$ 9.4%
EXPENDITURES
Capital Outlay 38,563$ 596,882$ -$ -$ -$ ---
Operating Transfers Out - - 380,000 380,000 25,000 -93.4%
TOTAL EXPENDITURES 38,563$ 596,882$ 380,000$ 380,000$ 25,000$ -93.4%
FUND BALANCE - JANUARY 1 1,257,883$ 1,697,878$ 1,377,518$ 1,377,518$ 1,233,064$
Excess (Deficiency) of
Revenues over Expenditures 439,995 (320,360) (220,000) (144,454) 150,000
FUND BALANCE - DECEMBER 31 1,697,878$ 1,377,518$ 1,157,518$ 1,233,064$ 1,383,064$
176Table of Contents
PARK DEDICATION FUND (405-45202)
DEPARTMENT: Public Works SUPERVISOR: Community Development Director
ACTIVITY SCOPE:
The Park Dedication Fund is used to account for funds charged to developers for future city
park areas. Use is restricted to new or expanded recreational amenities.
OBJECTIVES:
1.Provide quality park area within walkable distance to all residential parcels in the
City.
ISSUES:
1.Economic impact on new development and home construction.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The Park Dedication Fund’s main source of revenue is park dedication fees received from
developers based on each development’s impact on the city’s park needs. Park dedication fees
are an irregular source of revenue because of unpredictable economic conditions and sporadic
new development. Because developers can dedicate a portion of the developed land area to
open space or trails, a cash fee is not always collected.
Measurement 2023 2024 2025 2026
Acres deeded to city 1.02 0.00 2.31 6.10
Fees collected*50,247$ -$ -$ -$
*Land may be donated by developer in lieu of paying a park dedication fee.
PARK DEDICATION 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Charges for Services 50,247$ -$ -$ -$ -$ ---
Special Assessments 815 779 743 743 707 -4.8%
Miscellaneous 6,378 7,555 5,257 7,777 4,293 -18.3%
TOTAL REVENUES 57,440$ 8,334$ 6,000$ 8,520$ 5,000$ -16.7%
EXPENDITURES
Capital Outlay -$ -$ -$ -$ -$ ---
TOTAL EXPENDITURES -$ -$ -$ -$ -$ ---
FUND BALANCE - JANUARY 1 100,706$ 158,146$ 166,480$ 166,480$ 175,000$
Excess (Deficiency) of
Revenues over Expenditures 57,440 8,334 6,000 8,520 5,000
FUND BALANCE - DECEMBER 31 158,146$ 166,480$ 172,480$ 175,000$ 180,000$
177Table of Contents
BERTRAM CHAIN OF LAKES SALES TAX FUND (406-45202)
DEPARTMENT: Recreation & Culture SUPERVISOR: Parks, Arts & Recreation Director
ACTIVITY SCOPE:
The BCOL Sales Tax Fund was created in 2025 to account for the city’s 0.50% sales and use tax
that took effect April 1, 2025. Voters approved use of this new tax for the new construction
and rehabilitation of the Bertram Chain of Lakes (BCOL) Regional Athletic Park on either a pay-
as-you-go basis or funds can be pledged to pay bonds issued to build the project.
OBJECTIVES:
1.Utilize restricted sales and use tax funds for the development of Bertram Chain of
Lakes Park.
ISSUES:
1.Prioritization of park buildout with the cost of all proposed improvements, which
exceeds the amount of sales and use tax authorized.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Initial projections showed $1.4 million in sales tax revenue would be raised annually; however,
actual collections are much higher meaning it will not take as long to collect the funds.
The capital outlay budget in 2025 consisted of design costs for projects to occur in 2026 for
pickleball courts and a shared maintenance facility with Wright County. Additional efforts to
identify next priorities in 2027 and beyond are underway.
Measurement 2023 2024 2025 2026
Projects supported ---2
BCOL SALES TAX 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Sales & Use Tax -$ -$ 1,000,000$ 1,420,438$ 2,250,000$ 125.0%
Intergovernmental Revenues - - - - 254,000 ---
Miscellaneous - - - 19,133 23,000 ---
TOTAL REVENUES -$ -$ 1,000,000$ 1,439,571$ 2,527,000$ 152.7%
EXPENDITURES
Other Services & Charges - - - 41,844 - ---
Capital Outlay -$ -$ 215,000$ 24,667$ 1,705,000$ 693.0%
TOTAL EXPENDITURES -$ -$ 215,000$ 66,511$ 1,705,000$ 693.0%
FUND BALANCE - JANUARY 1 -$ -$ -$ -$ 1,373,060$
Excess (Deficiency) of
Revenues over Expenditures - - 785,000 1,373,060 822,000
FUND BALANCE - DECEMBER 31 -$ -$ 785,000$ 1,373,060$ 2,195,060$
178Table of Contents
TRANSPORTATION IMPROVEMENTS FUND (407-43121)
DEPARTMENT: Public Works SUPERVISOR: City Engineer/Public Works Director
ACTIVITY SCOPE:
The Transportation Improvements Fund provides resources for improvements to the city’s
street network. Gas franchise fees and State Aid are the fund’s primary revenue sources.
OBJECTIVES:
1.Consistent funding to maintain the quality of city streets included in the pavement
preservation program.
ISSUES:
1.Project scope and timing.
2.Prioritization of projects.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
The Transportation Improvements Fund was created in 2026 to ensure quality pavement
preservation of the city’s street network. A new gas franchise fee has been implemented and an
increase to the electric franchise fee will be examined in 2026. State aid funding for street
construction will be accounted for in this fund rather than the Capital Projects Fund going
forward.
Expenditures in 2026 include a mill and overlay project in the River Mill neighborhood.
Additionally, design for mill and overlay projects in the cardinal hills and Klein Farms
neighborhoods in 2027 is included in the 2026 budget.
Measurement 2023 2024 2025 2026
Projects supported ---3
TRANSPORTATION IMPROVEMENTS 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Franchise & Other Taxes -$ -$ -$ -$ 675,000$ ---
Intergovernmental Revenues - - - - 730,000 ---
TOTAL REVENUES -$ -$ -$ -$ 1,405,000$ ---
EXPENDITURES
Capital Outlay -$ -$ -$ -$ 1,260,000$ ---
TOTAL EXPENDITURES -$ -$ -$ -$ 1,260,000$ ---
FUND BALANCE - JANUARY 1 -$ -$ -$ -$ -$
Excess (Deficiency) of
Revenues over Expenditures - - - - 145,000
FUND BALANCE - DECEMBER 31 -$ -$ -$ -$ 145,000$
179Table of Contents
CLOSED CAPITAL PROJECT FUNDS
CLOSED FUNDS PRESENTED:
•Park & Pathway Improvement Fund (404-45202)
o Closed at the end of 2025 into the Capital Project Fund
CLOSED FUNDS BUDGET:
PARK & PATHWAY IMPROVEMENT 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Miscellaneous 57,919$ 41,390$ 285,000$ 250,000$ -$ -100.0%
Operating Transfers In 1,000,000 - 402,000 402,000 - -100.0%
TOTAL REVENUES 1,057,919$ 41,390$ 687,000$ 652,000$ -$ -100.0%
EXPENDITURES
Other Services & Charges 7,670$ -$ -$ -$ -$ ---
Capital Outlay 1,480,417 103,727 916,000 664,151 - -100.0%
TOTAL EXPENDITURES 1,488,087$ 103,727$ 916,000$ 1,367,102$ -$ -100.0%
FUND BALANCE - JANUARY 1 1,207,607$ 777,439$ 715,102$ 715,102$ -$
Excess (Deficiency) of
Revenues over Expenditures (430,168) (62,337) (229,000) (715,102) -
FUND BALANCE - DECEMBER 31 777,439$ 715,102$ 486,102$ -$ -$
180Table of Contents
2026 Adopted Budget
Enterprise Funds
ENTERPRISE FUNDS – SUMMARY
DESCRIPTION
Enterprise funds are used to report an activity for which a fee is charged to external users for
goods or services. Unlike governmental funds, enterprise funds focus on the determination of
operating income, changes in net position (or cost recovery), financial position, and cash flows.
Enterprise funds use an accrual basis of accounting for financial reporting purposes. A modified
accrual basis will be used for budgeting purposes in this report. Consequently, the bottom line
for each enterprise fund is labeled fund balance rather than net position, which includes capital
assets, long-term debt, and other noncurrent items. Fund balance in enterprise funds is roughly
the same as working capital. The city has six active enterprise funds: Water, Sewer,
Stormwater, Liquor (Hi-Way Liquors), Deputy Registrar (DMV), and Fiber Optics (FiberNet).
BUDGET SUMMARY
TOTAL ENTERPRISE FUNDS 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Franchise & Other Taxes 20,587$ 12,510$ -$ -$ -$ ---
Sale of Goods 7,042,543 6,481,607 7,366,428 6,337,632 6,428,000 -12.7%
Licenses & Permits 2,865 4,625 2,000 4,245 2,500 25.0%
Intergovernmental Revenues 365,850 69,487 2,485,000 - 2,445,625 -1.6%
Charges for Services 10,370,931 9,743,020 8,853,209 9,561,664 9,098,500 2.8%
Special Assessments 53,730 131,043 30,000 390,651 26,000 -13.3%
Miscellaneous 1,468,842 1,710,620 668,363 2,300,779 1,017,375 52.2%
Contributed Capital 1,373,731 570,027 - 262,115 225,000 ---
Debt Proceeds - - - -12,800,000 ---
TOTAL REVENUES 20,699,079$ 18,722,939$ 19,405,000$ 18,857,086$ 32,043,000$ 65.1%
EXPENDITURES
Personnel Services 2,339,750$ 2,378,856$ 2,726,632$ 2,626,821$ 2,911,486$ 6.8%
Supplies 5,707,491 5,291,930 6,008,500 4,893,045 5,262,600 -12.4%
Other Services & Charges 3,569,636 3,560,853 4,706,268 3,642,369 4,709,872 0.1%
Capital Outlay 22,284 - 10,079,000 - 19,016,000 88.7%
Debt Service 55,170 49,211 366,600 41,753 371,042 1.2%
Operating Transfers Out 4,000,000 1,100,000 1,002,000 502,000 100,000 -90.0%
TOTAL EXPENDITURES 15,694,331$ 12,380,850$ 24,889,000$ 11,705,988$ 32,371,000$ 30.1%
FUND BALANCE - JANUARY 1 28,512,445$ 33,517,193$ 39,859,282$ 39,859,282$ 47,010,380$
Excess (Deficiency) of
Revenues over Expenditures 5,004,748 6,342,089 (5,484,000) 7,151,098 (328,000)
FUND BALANCE - DECEMBER 31 33,517,193$ 39,859,282$ 34,375,282$ 47,010,380$ 46,682,380$
181Table of Contents
WATER FUND (601-4944x)
DEPARTMENT: Public Works SUPERVISOR: Utilities Superintendent
ACTIVITY SCOPE:
The Water Fund is a self-sustaining city utility fund with two divisions: water administration
and water operations. The water department manages the water utility, providing a
continuous supply of high-quality water to customers at a reasonable cost. The water system is
maintained at proper pressure levels and is bacteria-free. Further, metering equipment is
maintained to account for accurate usage and billing.
OBJECTIVES:
1.Supply clean, safe drinking water to the residents and businesses of Monticello.
2.Maintain a complete system inventory by adding all GPS data points to GIS system.
3.Improve well head protection program.
4.Advance installation of radio reading devices on water meters.
ISSUES:
1.Demands on staff including additional state and federal regulations and other
projects.
2.Elevated manganese levels.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Water customers 4,645 4,762 4,767 4,700
Meters read 55,924 57,940 59,386 59,000
Meters replaced 83 59 30 75
New meters installed 48 117 46 100
Avg. daily consumption (MG)1.784 1.592 1.599 1.592
Max. daily gallons pumped (MG)4.133 3.390 3.203 3.500
Gallons pumped (MG)651 581 584 600
Valves maintained 475 173 533 475
Hydrants maintained 468 154 201 225
Number of fire hydrants 1,019 1,027 1,036 1,050
Times mains flushed 2 2 2 2
Mains/wells rebuilt 3 0 0 2
Water towers inspections 2 2 2 2
Reservoir inspections 1 0 1 0
Water samples sent 185 183 185 190
Water locates 1,619 1,341 1,543 1,600
Radio units installed 113 519 676 200
Service shut-offs 22 5 4 25
Full-Time Equivalents 3.80 3.80 3.90 3.80
182Table of Contents
BUDGET:
BUDGET COMMENTARY:
The Water Fund’s main source of revenue is user charges. Rates increase by 8% for the base
charge and usage charges in 2026 in anticipation of the need to fund a future water treatment
plant. Contributed capital is from development access and trunk charges. Due to the unknown
nature of development, these revenues are budgeted conservatively.
The 2026 personnel services budget includes a full step increase and a 3.0% market rate wage
adjustment. Supplies decrease based on previous years’ purchases and anticipated needs.
Capital outlays in 2026 are for construction of a future water treatment plant, and trunk
extensions/improvements on West County Road 39 and Fallon Avenue.
WATER FUND 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Licenses & Permits 2,865$ 4,625$ 2,000$ 4,245$ 2,500$ 25.0%
Intergovernmental Revenues 101,700 - - - 500,000 ---
Charges for Services 2,623,776 2,245,278 1,862,750 2,412,719 2,079,000 11.6%
Special Assessments 26,497 25,698 9,000 312,231 8,000 -11.1%
Miscellaneous 423,607 574,409 210,250 907,219 338,500 61.0%
Contributed Capital 317,493 163,169 - 38,632 50,000 ---
Debt Proceeds - - - -12,800,000 ---
TOTAL REVENUES 3,495,938$ 3,013,179$ 2,084,000$ 3,675,046$ 15,778,000$ 657.1%
EXPENDITURES
Personnel Services 381,293$ 422,069$ 454,477$ 484,466$ 487,904$ 7.4%
Supplies 214,276 176,146 291,000 85,710 241,000 -17.2%
Other Services & Charges 361,835 367,159 524,523 363,022 538,096 2.6%
Capital Outlay - - 2,102,000 - 14,205,000 575.8%
TOTAL EXPENDITURES 957,404$ 965,374$ 3,372,000$ 933,198$ 15,472,000$ 358.8%
FUND BALANCE - JANUARY 1 7,538,714$ 10,077,248$ 12,125,053$ 12,125,053$ 14,866,901$
Excess (Deficiency) of
Revenues over Expenditures 2,538,534 2,047,805 (1,288,000) 2,741,848 306,000
FUND BALANCE - DECEMBER 31 10,077,248$ 12,125,053$ 10,837,053$ 14,866,901$ 15,172,901$
183Table of Contents
SEWER FUND (602-49480 & 602-4949x)
DEPARTMENT: Public Works SUPERVISOR: Utilities Superintendent
ACTIVITY SCOPE:
The Sewer Fund is a self-sustaining city utility fund. The Sewer Fund has three divisions:
sanitary sewer administration, sanitary sewer collection operations and wastewater treatment
plant operations. The water department manages the sanitary sewer system, and a private
vendor provides wastewater treatment plant services.
OBJECTIVES:
1.Collect and treat wastewater from city residents and businesses.
2.Maintain a complete system inventory by adding all GPS data points to GIS system.
3.Advance long-range planning regarding plant capacity and expansion.
4.Monitor infiltration of ground water into the sanitary sewer system.
ISSUES:
1.The treatment plant is nearing capacity and alternatives are costly.
2.Ground water infiltration.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Collection
Sewer mains maintained (miles)26 12 21 28
Liftstations 7 7 7 7
Sewer main locates 1,619 1,341 1,543 2,000
Manholes maintained*828 225 385 325
New service hookups 43 47 46 100
Treatment
Screw press influent flow (gals)5,348,525 6,946,390 9,126,945 8,000,000
Thickened sludge (wet tons)2,132 2,308 2,128 2,200
Thickened sludge (dry tons)303 328 311 315
Dry ton % of wet ton 14.2% 14.2% 14.6% 14.3%
Raw influent flow (million gals)433 459 440 445
* Manholes are maintained by quadrants. Fewer manholes in one quadrant allows
more time for cleaning longer main sewer lines.
Full-Time Equivalents 3.55 3.55 3.45 3.35
184Table of Contents
BUDGET:
BUDGET COMMENTARY:
The Sewer Fund’s main source of revenue is user charges. Rates increase 3% for the base
charge and usage charges in 2026. Miscellaneous revenues are mostly comprised of interest
earnings on investments; however, the 2025 actual balance includes insurance proceeds for
roof damage claims. Contributed capital is from development access and trunk charges. Due to
the unknown nature of development, these revenues are budgeted conservatively.
The 2026 personnel services budget includes a full step increase and a 3.0% market rate wage
adjustment. The city renewed its contract with a third-party provider of wastewater treatment
plant management services for five years for 2023 - 2027. Capital outlays in 2026 include trunk
extensions/improvements on Fallon Avenue, wastewater facility gasifier tank replacement, and
sewer camera trailer acquisition.
REMAINING DEBT SERVICE:
SEWER FUND 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Intergovernmental Revenues 203,400$ -$ 1,000,000$ -$ -$ -100.0%
Charges for Services 4,267,431 3,741,718 3,329,143 3,619,200 3,381,000 1.6%
Special Assessments 20,866 99,967 16,000 61,089 14,000 -12.5%
Miscellaneous 602,672 680,974 249,857 872,831 425,000 70.1%
Contributed Capital 442,406 171,618 - 130,343 50,000 ---
TOTAL REVENUES 5,536,775$ 4,694,277$ 4,595,000$ 4,683,463$ 3,870,000$ -15.8%
EXPENDITURES
Personnel Services 402,942$ 357,211$ 399,842$ 430,388$ 429,356$ 7.4%
Supplies 203,865 169,213 248,000 109,942 246,000 -0.8%
Other Services & Charges 1,358,965 1,299,084 1,745,558 1,739,897 1,783,602 2.2%
Capital Outlay - - 5,142,000 - 1,926,000 -62.5%
Debt Service 55,170 49,211 366,600 41,753 371,042 1.2%
TOTAL EXPENDITURES 2,020,942$ 1,874,719$ 7,902,000$ 2,321,980$ 4,756,000$ -39.8%
FUND BALANCE - JANUARY 1 11,416,131$ 14,931,964$ 17,751,522$ 17,751,522$ 20,113,005$
Excess (Deficiency) of
Revenues over Expenditures 3,515,833 2,819,558 (3,307,000) 2,361,483 (886,000)
FUND BALANCE - DECEMBER 31 14,931,964$ 17,751,522$ 14,444,522$ 20,113,005$ 19,227,005$
Payable Principal Interest Rate Total
6/1/2026 -$ 11,075$ 11,075$
12/1/2026 225,000 11,075 3.00% 236,075
6/1/2027 -7,700 7,700
12/1/2027 230,000 7,700 3.20% 237,700
6/1/2028 -4,020 4,020
12/1/2028 240,000 4,020 3.35% 244,020
Total 695,000$ 45,590$ 740,590$
GO Wastewater Treatment Bonds, Series 2013B
185Table of Contents
Payable Principal Interest Rate Total
2/20/2026 -$ 6,171$ 6,171$
8/20/2026 111,000 6,171 1.06% 117,171
2/20/2027 -5,581 5,581
8/20/2027 112,000 5,581 1.06% 117,581
2/20/2028 -4,985 4,985
8/20/2028 113,000 4,985 1.06% 117,985
2/20/2029 -4,385 4,385
8/20/2029 114,000 4,385 1.06% 118,385
2/20/2030 -3,779 3,779
8/20/2030 115,000 3,779 1.06% 118,779
2/20/2031 -3,168 3,168
8/20/2031 117,000 3,168 1.06% 120,168
2/20/2032 -2,546 2,546
8/20/2032 118,000 2,546 1.06% 120,546
2/20/2033 -1,919 1,919
8/20/2033 119,000 1,919 1.06% 120,919
2/20/2034 -1,286 1,286
8/20/2034 120,000 1,286 1.06% 121,286
2/20/2035 -648 648
8/20/2035 122,000 648 1.06% 122,648
Total 1,161,000$ 68,936$ 1,229,936$
MPFA-15-0004-R-FY16
186Table of Contents
CONTRACTED WASTEWATER TREATMENT PLANT SERVICES:
The city started directly paying for chemicals (polymer) outside of the contract payments in
2018.
Year Service Change $ Change %
2017 593,196$ -$ 1.9%
2018 563,394$ (29,802)$ -5.0%
2019 577,476$ 14,082$ 2.5%
2020 591,913$ 14,437$ 2.5%
2021 606,714$ 14,801$ 2.5%
2022 621,714$ 15,000$ 2.5%
2023 643,648$ 21,934$ 3.5%
2024 666,176$ 22,528$ 3.5%
2025 689,492$ 23,316$ 3.5%
2026 713,624$ 24,132$ 3.5%
Schedule of Non-Reimbursables (O&M Services)
$-
$100
$200
$300
$400
$500
$600
$700
$800
20
1
7
20
1
8
20
1
9
20
2
0
20
2
1
20
2
2
20
2
3
20
2
4
20
2
5
20
2
6
Th
o
u
s
a
n
d
s
O&M Services Costs
Year R&M Polymer Hauling Landfill Total
2017 54,705$ 33,019$ 23,145$ 51,057$ 161,926$
2018 61,020 - 39,249 67,654 167,923
2019 43,570 - 34,073 70,871 148,514
2020 56,583 - 28,842 67,993 153,418
2021 71,362 - 32,571 74,783 178,716
2022 62,704 - 35,966 79,681 178,351
2023 56,394 - 29,640 84,253 170,287
2024 60,623 - 45,080 95,591 201,294
2025* 60,000 - 50,000 70,000 180,000
2026* 60,000 - 50,000 70,000 180,000
Schedule of Reimbursable Costs
$-
$50,000
$100,000
$150,000
$200,000
2017 2018 2019 2020 2021 2022 2023 2024 2025*2026*
Reimbursable Costs
R&M Polymer Hauling Landfill
187Table of Contents
STORMWATER FUND (652-4948x)
DEPARTMENT: Public Works SUPERVISOR: City Engineer
ACTIVITY SCOPE:
The Stormwater Fund is a self-sustaining city utility fund with three divisions: stormwater
administration, stormwater operations and street sweeping. The streets and engineering
departments manage stormwater operations, including street sweeping, MS4 management,
storm sewer televising and cleaning, pond maintenance, and system enhancements.
OBJECTIVES:
1.Protect the city’s natural resources by minimizing the impacts of users on the
environment.
2.Monitor, repair, and clean stormwater trunk lines, laterals, structures, ditches,
holding ponds, and structural pollution control devices.
ISSUES:
1.Continued deterioration of storm water system, without proper funding for repairs,
replacement, or improvements.
2.Educating the public on storm water operations.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Stormwater main miles 74.5 76.5 77.4 77.6
Number of manholes 1,640 1,649 1,663 1,675
Number of ponds 112 112 112 113
Number of outfalls 29 29 29 29
Number of stormwater BMPs*52 53 53 61
*BMPs = structural best management practices (ie. Sumped manhole, infiltration basin)
Full-Time Equivalents 1.55 1.55 1.55 1.50
188Table of Contents
BUDGET:
BUDGET COMMENTARY:
The Stormwater Fund’s main source of revenue is user charges in the form of a stormwater fee,
which is based on 1 drainage unit per residence and 7 drainage units per impervious acre for
non-residential properties. Contributed capital is from development access and trunk charges.
Due to the unknown nature of development, these revenues are budgeted conservatively.
The 2026 personnel services budget includes a full step increase and a 3.0% market rate wage
adjustment. Other services & charges include engineering fees and licenses & permits. Capital
outlays consist of improvements to Ditch 33 to the east of the city, expansion of the
stormwater pond near Otter Creek business park, and trunk line oversizing along Fallon Avenue
and 85th Street.
STORMWATER FUND 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Intergovernmental Revenues 60,750$ 69,487$ 1,485,000$ -$ 1,945,625$ 31.0%
Charges for Services 605,240 663,057 662,791 664,979 700,000 5.6%
Special Assessments 6,367 5,378 5,000 17,331 4,000 -20.0%
Miscellaneous 114,598 131,074 50,209 151,404 90,375 80.0%
Contributed Capital 228,143 235,240 - 93,140 125,000 ---
TOTAL REVENUES 1,015,098$ 1,104,236$ 2,203,000$ 926,854$ 2,865,000$ 30.0%
EXPENDITURES
Personnel Services 181,220$ 166,319$ 172,183$ 185,961$ 181,217$ 5.2%
Supplies 15,198 22,495 19,000 17,912 21,000 10.5%
Other Services & Charges 7,284 13,762 379,817 22,747 369,783 -2.6%
Capital Outlay - - 2,585,000 - 2,685,000 3.9%
TOTAL EXPENDITURES 203,702$ 202,576$ 3,156,000$ 226,620$ 3,257,000$ 3.2%
FUND BALANCE - JANUARY 1 3,180,381$ 3,991,777$ 4,893,437$ 4,893,437$ 5,593,671$
Excess (Deficiency) of
Revenues over Expenditures 811,396 901,660 (953,000) 700,234 (392,000)
FUND BALANCE - DECEMBER 31 3,991,777$ 4,893,437$ 3,940,437$ 5,593,671$ 5,201,671$
189Table of Contents
LIQUOR FUND (609-4975x)
DEPARTMENT: Liquor Fund SUPERVISOR: Liquor Store Manager
ACTIVITY SCOPE:
The Liquor Fund provides customers a place to purchase alcohol, tetrahydrocannabinol, and
other related products safely and responsibly. Profits from store operations are used to
support other city funds and activities.
OBJECTIVES:
1.Promote and control the safe and responsible sale of regulated beverages.
2.Match product selection to changes in demand.
3.Enhance alcohol training program for all liquor store employees.
4.Elevate store attractiveness through customer focused improvements.
5.Boost sales to existing customers.
6.Increase sales per transaction and gross profit margin [1 – (cost/price)].
7.Grow customer base and sales by aggressively marketing the store.
ISSUES:
1.Staff turnover.
2.Limited physical space of the store.
3.Proposed legislative action to allow liquor sales in retail stores, thereby causing
more competition.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Gross profit 1,868,567$ 1,689,384$ 1,741,929$ 1,800,000$
Gross profit % of sales 26.5% 26.1% 27.5% 28.0%
Sales per square foot $800 $737 $720 $730
Total number of sales 240,982 221,133 218,070 220,000
Staff hours worked 21,334 21,829 22,066 22,000
Sales per hour worked 11.3 10.1 9.9 10.0
Average sale (including tax)$32.15 $32.20 $31.93 $32.96
Full-Time Equivalents 10.26 10.49 12.15 14.10
190Table of Contents
BUDGET:
BUDGET COMMENTARY:
Hi-Way Liquors is a profitable city enterprise fund, with excess cash directed toward capital
projects or other needs. Revenues are generated by the sale of alcoholic and
tetrahydrocannabinol (THC) beverages and other liquor-industry related merchandise.
Miscellaneous revenues are comprised of interest earnings on investments.
The 2026 personnel services budget includes a full step increase and a 3.0% market rate wage
adjustment. The 2023-2024 actual operating transfers out are to capital projects funds, most
notably for the Downtown Pedestrian & Roadways Improvements Project. Although budgeted
in 2025, Council elected to hold net profits in the Liquor Fund until it can build up for specific
future projects rather than transferring an amount out annually to the Capital Projects Fund for
general capital investment. Sales fell 8% in 2024 which can be attributed to downtown
construction impacting foot traffic as well as changing trends in the liquor industry. While 2025
sales decreased 2.2%, the trends shifted toward higher profit margin products leading to a 3.1%
increase in gross profit.
LIQUOR FUND 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Sale of Goods 7,042,543$ 6,481,607$ 7,366,428$ 6,337,632$ 6,428,000$ -12.7%
Miscellaneous 81,973 86,727 74,572 62,514 50,000 -33.0%
TOTAL REVENUES 7,124,516$ 6,568,334$ 7,441,000$ 6,400,146$ 6,478,000$ -12.9%
EXPENDITURES
Personnel Services 832,330$ 864,849$ 983,503$ 886,660$ 1,059,862$ 7.8%
Supplies 5,179,601 4,797,888 5,342,000 4,578,405 4,644,000 -13.1%
Other Services & Charges 296,594 269,076 340,497 294,692 374,138 9.9%
Operating Transfers Out 2,250,000 1,000,000 500,000 - - -100.0%
TOTAL EXPENDITURES 8,558,525$ 6,931,813$ 7,166,000$ 5,759,757$ 6,078,000$ -15.2%
FUND BALANCE - JANUARY 1 2,831,084$ 1,397,075$ 1,033,596$ 1,033,596$ 1,673,985$
Excess (Deficiency) of
Revenues over Expenditures (1,434,009) (363,479) 275,000 640,389 400,000
FUND BALANCE - DECEMBER 31 1,397,075$ 1,033,596$ 1,308,596$ 1,673,985$ 2,073,985$
191Table of Contents
DEPUTY REGISTRAR FUND (653-41990)
DEPARTMENT: Deputy Registrar (DMV) SUPERVISOR: DMV Manager
ACTIVITY SCOPE:
The Deputy Registrar (Department of Motor Vehicles, or DMV) is a city-based service entity,
which assists customers with the purchase of vehicle license plates/tabs, DNR licenses, and
other licenses as required by Minnesota state agencies. The Monticello DMV is one of four
limited driver’s license agents in Wright County. A limited agent can process change-of-address
and lost license applications for driver’s licenses but cannot process routine license renewals.
Furthermore, the DMV facility leases space to FiberNet operations, the Community Center, and
the Monticello Chamber of Commerce.
OBJECTIVES:
1.Perform DMV services to the public and dealerships with excellent customer service
in a convenient location.
2.Update employee training and certifications.
ISSUES:
1.Frequent and uncontrollable changes to state licensing regulations.
2.Competition with other customer options: other DMVs, online, and mail-in.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Outcome/Effectiveness:
License Revenue $944,931 $1,149,199 $1,090,529 $1,100,000
Revenue per staff hour $64.55 $77.56 $67.86 $69.84
Net revenue per staff hour $20.91 $31.26 $21.85 $15.24
Efficiency:
Transactions per hour 6.2 6.2 6.3 6.6
Work Load:
Total transactions 90,410 92,050 100,693 103,825
77,870 79,759 76,631 78,000
EVTR transactions ----13,610 15,000
DNR transactions 8,950 8,058 8,745 9,000
Game & Fish transactions 264 209 327 325
Driver's license transactions 3,326 4,024 1,380 1,500
Staff hours worked 14,639 14,816 16,070 15,750
Dealerships served 74 77 75 78
Full-Time Equivalents 7.04 7.12 8.15 9.35
Motor vehicle transactions*
192Table of Contents
BUDGET:
BUDGET COMMENTARY:
The main revenue source for the DMV is the fees charged for the issuance of various licenses.
Contributed capital in 2023 reflects the formal recording of the transition from the old DMV
building to the new one. Miscellaneous revenues are primarily interest earnings on
investments.
The 2026 personnel services budget includes a full step increase and a 3.0% market rate wage
adjustment. The 2023 operating transfers out was to the Capital Projects funds for the
Downtown Pedestrian & Roadways Improvements project. 2024-2026 transfers include
$100,000 to the Community Center Fund to support its operations. An additional $402,000 was
transferred out to a capital projects fund for acquisition and installation of a new playground
structure in West Bridge Park.
DEPUTY REGISTRAR FUND 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Charges for Services 945,987$ 1,149,908$ 1,100,750$ 1,091,644$ 1,100,500$ 0.0%
Miscellaneous 168,655 72,751 33,250 92,111 48,500 45.9%
Contributed Capital 385,689 - - - - ---
TOTAL REVENUES 1,500,331$ 1,222,659$ 1,134,000$ 1,183,755$ 1,149,000$ 1.3%
EXPENDITURES
Personnel Services 541,965$ 568,408$ 710,352$ 635,609$ 746,867$ 5.1%
Supplies 8,004 9,865 8,500 7,131 10,600 24.7%
Other Services & Charges 84,567 89,358 91,148 96,696 102,533 12.5%
Capital Outlay 22,284 - - - - ---
Operating Transfers Out 1,750,000 100,000 502,000 502,000 100,000 -80.1%
TOTAL EXPENDITURES 2,406,820$ 767,631$ 1,312,000$ 1,241,436$ 960,000$ -26.8%
FUND BALANCE - JANUARY 1 2,258,160$ 1,351,671$ 1,806,699$ 1,806,699$ 1,749,018$
Excess (Deficiency) of
Revenues over Expenditures (906,489) 455,028 (178,000) (57,681) 189,000
FUND BALANCE - DECEMBER 31 1,351,671$ 1,806,699$ 1,628,699$ 1,749,018$ 1,938,018$
193Table of Contents
FIBER OPTICS FUND (656-4987x)
DEPARTMENT: Fiber Optics Fund SUPERVISOR: City Administrator/Finance Director
ACTIVITY SCOPE:
The Fiber Optics Fund is a self-sustaining enterprise fund. Fiber Optics delivers internet, phone,
and cable television services to customers within the city. Residential and commercial
customers can subscribe to individual or bundled services.
OBJECTIVES:
1.Offer a variety of internet speeds and cable packages to customers.
2.Increase subscribers and subscriptions.
ISSUES:
1.Industry trends (cord cutting, etc.) and competition from other service providers.
2.Various legal aspects of operating a telecommunication business.
MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Revenues in the Fiber Optics Fund come from charges to subscribers. Miscellaneous revenues
include interest earnings on investments.
Measurement 2023 2024 2025 2026
Internet subscibers 1,701 1,697 1,708 1,715
Phone subscribers 248 229 201 200
Cable TV subscribers 233 218 194 185
Full-Time Equivalents 0.00 0.00 0.00 0.00
FIBER OPTICS FUND 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Franchise & Other Taxes 20,587$ 12,510$ -$ -$ -$ ---
Charges for Services 1,928,497 1,943,059 1,897,775 1,773,122 1,838,000 -3.1%
Miscellaneous 77,337 164,685 50,225 214,700 65,000 29.4%
TOTAL REVENUES 2,026,421$ 2,120,254$ 1,948,000$ 1,987,822$ 1,903,000$ -2.3%
EXPENDITURES
Personnel Services -$ -$ 6,275$ 3,737$ 6,280$ 0.1%
Supplies 86,547 116,323 100,000 93,945 100,000 0.0%
Other Services & Charges 1,460,391 1,522,414 1,624,725 1,125,315 1,541,720 -5.1%
Capital Outlay - - 250,000 - 200,000 -20.0%
TOTAL EXPENDITURES 1,546,938$ 1,638,737$ 1,981,000$ 1,222,997$ 1,848,000$ -6.7%
FUND BALANCE - JANUARY 1 1,287,975$ 1,767,458$ 2,248,975$ 2,248,975$ 3,013,800$
Excess (Deficiency) of
Revenues over Expenditures 479,483 481,517 (33,000) 764,825 55,000
FUND BALANCE - DECEMBER 31 1,767,458$ 2,248,975$ 2,215,975$ 3,013,800$ 3,068,800$
194Table of Contents
Expenditures are primarily made up of supplies (“drops” to new service addresses) and other
services & charges, which is the cost to outsource operations to a third party. The 2026 budget
includes $200,000 in capital outlay for system extensions to new service areas associated with
new developments within city limits. However, capital costs are accounts for as assets in the
city’s financial statements, so actual values show as $0 even though new service lines have
been installed.
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196Table of Contents
2026 Adopted Budget
Internal Service Funds
INTERNAL SERVICE FUNDS – SUMMARY
DESCRIPTION
Internal service funds are a proprietary fund type that may be used to report any activity that
provides goods or services to other funds, departments, or agencies of the primary government
and its component units, or to other governments, on a cost-reimbursement basis. Internal
service funds use an accrual basis of accounting for financial reporting purposes. A modified
accrual basis is used for budgeting purposes in this report. Consequently, the bottom line for
each fund is labeled fund balance rather than net position, which includes capital assets, long-
term debt, and other noncurrent items. Fund balance in an internal service fund is roughly the
same as working capital. The city currently has four active internal service funds: Facilities
Maintenance, IT Services, Central Equipment, and Benefit Accrual.
BUDGET SUMMARY
TOTAL INTERNAL SERVICE FUNDS 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Charges for Services 1,612,358$ 1,580,914$ 1,893,900$ 1,995,810$ 2,002,400$ 5.7%
Miscellaneous 257,255 85,609 70,000 178,481 60,600 -13.4%
Contributed Capital 117,466 55,005 10,100 - 5,000 -50.5%
Operating Transfers In - 500,000 - - - ---
TOTAL REVENUES 1,987,079$ 2,221,528$ 1,974,000$ 2,174,291$ 2,068,000$ 4.8%
EXPENDITURES
Personnel Services 267,205$ 370,097$ 399,330$ 398,875$ 442,706$ 10.9%
Supplies 81,530 104,207 76,166 139,315 78,596 3.2%
Other Services & Charges 673,735 943,580 811,224 958,043 805,418 -0.7%
Capital Outlay 18 36 667,280 - 552,280 -17.2%
Debt Service 4,047 2,854 - - - ---
TOTAL EXPENDITURES 1,026,535$ 1,420,774$ 1,954,000$ 1,496,233$ 1,879,000$ -3.8%
FUND BALANCE - JANUARY 1 4,341,126$ 5,301,670$ 6,102,424$ 6,102,424$ 6,780,482$
Excess (Deficiency) of
Revenues over Expenditures 960,544 800,754 20,000 678,058 189,000
FUND BALANCE - DECEMBER 31 5,301,670$ 6,102,424$ 6,122,424$ 6,780,482$ 6,969,482$
197Table of Contents
FACILITIES MAINTENANCE FUND (701-00000)
DEPARTMENT: Public Works
SUPERVISOR: Facilities Maintenance Manager
ACTIVITY SCOPE:
The Facilities Maintenance Fund is a self-sustaining internal service fund. The Public Works
Director oversees a Facilities Maintenance Manager who manages the city’s various facilities.
The fund’s revenues are derived from service charges to the budget unit of each facility that
receives services. Service charges are adjusted annually to cover all operating maintenance
costs.
OBJECTIVES:
1.Centralize and standardize management of city facilities.
2.Provide cost savings by coordinating similar costs across city buildings.
3.Provide financial management stability to each budget unit.
ISSUES:
1.Appropriate cost distribution.
2.Coordination of service delivery to multiple departments and budget units.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Buildings maintained 21 31 31 31
R&M orders 509 809 922 900
R&M order hours 117 152 526 500
Hours per R&M service order 0.2 0.2 0.6 0.6
Total R&M service order costs $286,374 $437,327 $485,806 $475,000
R&M service cost per order $562.62 $540.58 $526.90 $527.78
Full-Time Equivalents 1.10 1.10 2.00 2.00
198Table of Contents
BUDGET:
BUDGET COMMENTARY:
The Facilities Maintenance Fund’s main source of revenue is internal user charges, and the fund
accounts for all activities supporting the city’s facilities, including the Community Center/City
Hall, Public Works facility, Fire station, Hi-Way Liquors store, the DMV, Facilities maintenance
office, animal control facility, library, and others. Transfers in from the General Fund in 2024
helped the fund stabilize its fund balance. Revenues and expenditures were both over budget in
2023 due to repair costs for a vehicle crashing into a community center entrance, which was
offset by insurance proceeds.
Expenditures were over budget in 2024 due repairs to the Walnut Street entrance of the
Community Center as well as the transition of various items that operated differently from how
the budget was created. For example, only 10% of a second staff member was allocated to the
Facilities Maintenance Fund in the 2024 budget; however, during the year the Maintenance
Supervisor at the Community Center facility (previously accounted for in the Community Center
special revenue fund) was transitioned to the Facilities Maintenance department. In 2025,
other services & charges included repairs to the Public Works facility; a new Public Works
facility is anticipated to begin construction in 2026 due to the age and limitations of the existing
building.
As the balance of work between the Facilities Maintenance Manager and the staff at each city
facility is determined, the fund will see more stable year-to-year budgets and actual amounts.
FACILITIES MAINTENANCE 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Charges for Services 423,592$ 385,000$ 650,000$ 734,000$ 700,000$ 7.7%
Miscellaneous 165,966 14,010 50,000 97,856 25,000 -50.0%
Operating Transfers In - 500,000 - - - ---
TOTAL REVENUES 589,558$ 899,010$ 700,000$ 831,856$ 725,000$ 3.6%
EXPENDITURES
Personnel Services 135,968$ 221,015$ 264,077$ 261,876$ 282,721$ 7.1%
Supplies 53,117 70,566 49,000 104,161 64,000 30.6%
Other Services & Charges 340,103 584,489 386,923 536,850 378,279 -2.2%
TOTAL EXPENDITURES 529,188$ 876,070$ 700,000$ 902,887$ 725,000$ 3.6%
FUND BALANCE - JANUARY 1 35,905$ 96,275$ 119,215$ 119,215$ 48,184$
Excess (Deficiency) of
Revenues over Expenditures 60,370 22,940 - (71,031) -
FUND BALANCE - DECEMBER 31 96,275$ 119,215$ 119,215$ 48,184$ 48,184$
199Table of Contents
IT SERVICES FUND (702-00000)
DEPARTMENT: Information Technology
SUPERVISOR: IT Coordinator
ACTIVITY SCOPE:
The IT (Information Technology) Services Fund is a self-sustaining internal service fund. The IT
Coordinator manages the network of servers and peripheral equipment to provide continuity
and accountability for IT related services. The fund’s revenues are derived from service charges
to each budget unit receiving IT services. Service charges are adjusted annually to cover all
current costs plus a portion of capital outlays.
OBJECTIVES:
1.Centralize management of IT services and resources into one department.
2.Provide financial management stability to each budget unit by distributing capital costs
over multiple periods.
ISSUES:
1.Appropriate costs distribution.
2.Coordination of service delivery to multiple departments and budget units.
3.Increasing threats to cyber security.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Work Load:
Number of users 109 140 141 142
Number of computers & phones 207 209 213 215
Number of back-end support
network devices 62 64 66 70
Network availability (estimate)99% 99% 99% 99%
Full-Time Equivalents 1.00 1.00 1.00 1.00
200Table of Contents
BUDGET:
BUDGET COMMENTARY:
The IT Services Fund’s main source of revenue is internal user charges. The IT Services Fund
accounts for all activity supporting the city’s information technology infrastructure, including
servers, routers, personal computers (PCs), printers, copiers, phones, and professional services.
A desire to account for all departments’ IT-related purchases, managed by the IT Coordinator,
through this internal service fund has led to an increased budget over the past few years.
IT SERVICES 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Charges for Services 529,009$ 550,263$ 584,000$ 597,496$ 584,000$ 0.0%
Miscellaneous 14,536 11,832 10,000 12,206 10,000 0.0%
TOTAL REVENUES 543,545$ 562,095$ 594,000$ 609,702$ 594,000$ 0.0%
EXPENDITURES
Personnel Services 104,480$ 111,175$ 120,253$ 117,585$ 129,985$ 8.1%
Supplies 28,413 33,641 27,166 35,154 14,596 -46.3%
Other Services & Charges 333,632 359,091 424,301 421,193 427,139 0.7%
Capital Outlay 18 36 22,280 - 22,280 0.0%
TOTAL EXPENDITURES 466,543$ 503,943$ 594,000$ 573,932$ 594,000$ 0.0%
FUND BALANCE - JANUARY 1 238,348$ 315,350$ 373,502$ 373,502$ 409,272$
Excess (Deficiency) of
Revenues over Expenditures 77,002 58,152 - 35,770 -
FUND BALANCE - DECEMBER 31 315,350$ 373,502$ 373,502$ 409,272$ 409,272$
201Table of Contents
CENTRAL EQUIPMENT FUND (703-00000)
DEPARTMENT: Public Works
SUPERVISOR: Finance Director
ACTIVITY SCOPE:
The Central Equipment Fund is a self-sustaining internal service fund. The finance department
participates along with various department directors and division leaders in the acquisition of
capital assets. The acquired capital asset is charged back against the benefitting budget unit
through rental charges over a set number of years. The rental charge reflects depreciation plus
inflation. Service charges for each asset are fixed for the duration of rental payments.
OBJECTIVES:
1.Maintain a reliable inventory of equipment for staff use in providing city services.
2.Provide financial management stability to each budget unit by distributing capital costs
over multiple annual reporting periods
ISSUES:
1.Appropriate cost distribution over multiple accounting periods.
2.Efficient coordination of asset replacement activities between departments.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Outcome/Effectiveness:
Annual cost recovery 633,000$ 607,744$ 644,900$ 693,900$
Total costs of assets acquired 1,080,599$ 718,317$ 627,624$ 530,000$
Efficiency:
Cost recovery as % of
acquired assets 59% 85% 103% 131%
Work Load:
Number of fund assets 74 83 90 93
202Table of Contents
BUDGET:
BUDGET COMMENTARY:
The Central Equipment Fund’s main source of revenue is internal rental charges. The city
issued $515,000 in G.O. bonds in 2014 to finance the acquisition of a fire tender and a plow
truck; these bonds were fully paid off in 2024.
The 2026 budgeted equipment acquisitions: [public works equipment] Mack Hook/Plow/Dump
Truck- $400,000; Asphalt Roller - $90,000; Skid Loader Plow Attachment - $25,000; Loader
Grapple Attachment - $15,000.
CENTRAL EQUIPMENT FUND 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Charges for Services 633,000$ 607,744$ 644,900$ 644,900$ 693,900$ 7.6%
Miscellaneous 62,023 42,468 10,000 48,857 20,100 101.0%
Contributed Capital 117,466 55,005 10,100 - 5,000 -50.5%
TOTAL REVENUES 812,489$ 705,217$ 665,000$ 693,757$ 719,000$ 8.1%
EXPENDITURES
Capital Outlay -$ -$ 645,000$ -$ 530,000$ -17.8%
Debt Service 4,047 2,854 - - - ---
TOTAL EXPENDITURES 4,047$ 2,854$ 645,000$ -$ 530,000$ -17.8%
FUND BALANCE - JANUARY 1 3,725,643$ 4,534,085$ 5,236,448$ 5,236,448$ 5,930,205$
Excess (Deficiency) of
Revenues over Expenditures 808,442 702,363 20,000 693,757 189,000
FUND BALANCE - DECEMBER 31 4,534,085$ 5,236,448$ 5,256,448$ 5,930,205$ 6,119,205$
203Table of Contents
BENEFIT ACCRUAL FUND (704-00000)
DEPARTMENT: Finance
SUPERVISOR: Finance Director
ACTIVITY SCOPE:
The Benefit Accrual Fund is a self-sustaining internal service fund. The finance department,
supervisors and the human resources manager oversee paid-time-off (PTO) benefits. The non-
enterprise fund liability for this benefit is recorded in the Benefit Accrual Fund. Enterprise funds
maintain the liability for employees involved in enterprise operations. Expenditures in each
governmental fund budget unit are adjusted annually to reflect changes to the liability
attributable to the employees of that budget unit.
OBJECTIVES:
1.Provide a mechanism for recording and funding governmental fund liabilities for paid
leaves.
2.Provide financial management stability to each budget unit.
ISSUES:
1.Increasing cost of paid leave benefits.
MEASURABLE WORKLOAD DATA:
Measurement 2023 2024 2025 2026
Outcome/Effectiveness:
Annual hours accrued:
PTO 11,057 11,929 11,475 11,750
Comp Time 810 674 1,013 1,000
Vacation & Sick Leave 272 - - -
Emergency Sick & Safe Time - 2,311 2,729 2,750
Balance of accrued hours:
PTO 10,033 9,364 9,395 9,500
Comp Time 434 200 270 -
Vacation & Sick Leave 378 - - -
Emergency Sick & Safe Time - 1,798 2,816 3,200
Efficiency:
Annual hours accrued per employee:
PTO 191 196 182 184
Comp Time 23 18 25 24
Vacation & Sick Leave 272 - - -
Emergency Sick & Safe Time - 8 10 11
204Table of Contents
BUDGET:
BUDGET COMMENTARY:
The Benefit Accrual Fund’s main source of revenue is internal charges to personnel services in
the General Fund, Monticello Community Center Fund, and Economic Development Authority
Fund. Personnel services expenditures in each governmental fund budget unit are adjusted up
or down based on the change in liability caused by each unit. The liability is based on the
number of hours accrued multiplied by the hourly compensation for each employee.
In 2024, the city’s personnel policy was updated to transition one final employee from the
vacation and sick leave benefits to the paid time off (PTO) benefit. Also changed in 2024 was
the payout of accrued compensatory (comp) time with the final paycheck of the year for non-
union employees. The union’s bargaining agreement for 2026-2027 allows payout of comp time
before year end as well. All employees can carry over up to 320 hours of accrued PTO. The State
of Minnesota implemented mandatory Emergency Sick & Safe Time, including part-time and
seasonal staff, which is now included in the balance of hours reflected in the accrued liability.
Measurement 2023 2024 2025 2026
Work Load:
Employees accruing hours:
PTO employees 58 61 63 64
Full-time hourly employees 35 38 40 41
Vacation & Sick Leave
employees (pre-1990)1 - - -
Emergency Sick & Safe Time - 275 261 261
Starting in 2024:
1.U nused Comp Time are paid out before year end for non-union employees.
Comp Time for union employees will be paid out before year end beginning in 2026.
2.The State of Minnesota implemented Emergency Sick & Safe Time for all
employees working more than 80 hours per year.
3.The employee previously on the vacation & sick leave plan was transtioned to PTO.
BENEFIT ACCRUAL FUND 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Charges for Services 26,757$ 37,907$ 15,000$ 19,414$ 24,500$ 63.3%
Miscellaneous 14,730 17,299 - 19,562 5,500 ---
TOTAL REVENUES 41,487$ 55,206$ 15,000$ 38,976$ 30,000$ 100.0%
EXPENDITURES
Personnel Services 26,757$ 37,907$ 15,000$ 19,414$ 30,000$ 100.0%
TOTAL EXPENDITURES 26,757$ 37,907$ 15,000$ 19,414$ 30,000$ 100.0%
FUND BALANCE - JANUARY 1 341,230$ 355,960$ 373,259$ 373,259$ 392,821$
Excess (Deficiency) of
Revenues over Expenditures 14,730 17,299 - 19,562 -
FUND BALANCE - DECEMBER 31 355,960$ 373,259$ 373,259$ 392,821$ 392,821$
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2026 Adopted Budget
Discrete Component Unit Fund
DISCRETELY PRESENTED COMPONENT UNIT FUND – SUMMARY
DESCRIPTION
The city currently has one discretely presented component unit fund. Component units are
legally separate entities for which the city (primary government) is financially accountable, or
for which the exclusion of the component unit would render the financial statements of the
primary government misleading. Criteria used to determine if the primary government is
financially accountable for a component unit includes whether or not the primary government:
•appoints the voting majority of the potential component unit’s governing body
•is able to impose its will on the potential component unit
•is in a relationship of financial benefit or burden with the potential component unit, or
•is fiscally depended upon by the potential component unit
The Monticello Economic Development Authority (EDA) is a legally separate entity created
pursuant to Minnesota Statutes § 469.090 through § 469.108 to carry out economic and
industrial development and redevelopment within the city in accordance with policies
established by the City Council. The seven-member board consists of two council members and
five members from the community appointed by the City Council. Management of the city has
complete operational responsibility of the EDA’s activities, and the City Council reviews and
approves the tax levy and all expenditures for the EDA.
Because the council does not make up a majority of the EDA board and there is no financial
burden or benefit relationship between the city and EDA, the EDA is reported as a discretely
presented component unit of the city. The EDA discretely presented component unit fund uses
the modified accrual basis of accounting for both financial reporting and budgeting purposes.
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ECONOMIC DEVELOPMENT AUTHORITY FUND (213-46301)
DEPARTMENT: Economic Development SUPERVISOR: Economic Development Manager
ACTIVITY SCOPE:
The Monticello Economic Development Authority (EDA) is responsible for the on-going housing
and redevelopment efforts within the city. This consists of housing and businesses, including all
related public improvements and land acquisitions. These programs are administered, based
on direction of the EDA board, by the Economic Development Manager. In addition, all tax
increment financing (TIF) districts are initiated and administered by the EDA.
There are 8 active TIF districts and 3 decertified but active districts. 1 additional TIF district has
been authorized by the EDA Board and certified to the Office of the State Auditor (OSA) but
has not started receiving increment.
The EDA also administers loans to city businesses, based on local, state, and federal criteria.
Businesses who will generate higher paying jobs in the community are prime candidates for
these loans.
OBJECTIVES:
1.Attract new businesses to Monticello, including manufacturing, retail, and industrial
facilities.
2.Support existing businesses through training/education programs or assisting with
expansion or relocation efforts within the city.
3.Implement short, intermediate, and long-term objectives outlined in the TIF Analysis
and Management Plan and the Downtown Small Area Plan.
4.Acquire land that makes sense for redevelopment purposes.
5.Utilize resources to initiate private development/redevelopment.
6.Work with community development department and developers to create high quality
housing in Monticello.
7.Explore options to generate additional electrical supply to industrial areas.
8.Explore options to relocate electrical substation from Cargill's downtown site to create
expansion opportunities.
9.Implement recommendations from consultants regarding uses of funds available.
10.Implement monitoring/tracking methods for EDA programs.
ISSUES:
1.Consistent administration of city and EDA policies, plans, ordinances, guidelines,
statutes, etc.
2.Need for higher wage jobs in the community.
3.Need for a variety of housing throughout the community.
4.Timeline for plans to come to fruition.
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MEASURABLE WORKLOAD DATA:
BUDGET:
BUDGET COMMENTARY:
Under Section 469.033, subd. 6, of the HRA Act, the HRA’s special benefit tax is levied annually
and is limited to 0.0185% of the city’s taxable market value. The main revenue sources are
property taxes and tax increments from the various TIF districts. Two districts decertified in
2023. Intergovernmental revenues reflect Minnesota Investment Fund (MIF) grants passed
through from the state to private developers. Miscellaneous revenues fluctuate based on
returns on investments.
Measurement 2023 2024 2025 2026
Properties acquired 3 1 0 0
Properties sold 0 0 0 7
GMEF loans outstanding 3 4 4 6
GMEF loans originated 0 2 0 2
Façade loans originated 0 2 3 2
Façade loans outstanding 0 2 3 2
Misc. other ED subsidy
loans/grant originated 0 3 0 6
Misc. other ED subsidy
loans/grant outstanding 0 5 5 7
TIF Districts newly created 1 0 0 3
Active TIF districts 11 9 9 12
Full-Time Equivalents 1.60 1.60 2.00 2.00
ECONOMIC DEVELOPMENT AUTHORITY FUND 2023 2024 2025 2025 2026 %
REVENUES ACTUAL ACTUAL BUDGET THRU 12/31 BUDGET CHANGE
Property Taxes 401,739$ 459,556$ 499,000$ 495,729$ 504,000$ 1.0%
Tax Increments 550,598 266,105 361,000 573,743 789,000 118.6%
Franchise & Other Taxes 68 787 - 952 - ---
Intergovernmental Revenues 344,993 294,248 - 25,355 - ---
Charges for Services 1,281 19,246 - 5,641 5,000 ---
Miscellaneous 244,166 206,499 30,000 347,545 75,000 150.0%
Operating Transfers In 3,950 5,114 6,000 3,660 6,000 0.0%
TOTAL REVENUES 1,546,795$ 1,251,555$ 896,000$ 1,452,625$ 1,379,000$ 53.9%
EXPENDITURES
Personnel Services 186,788$ 182,745$ 228,462$ 221,242$ 241,454$ 5.7%
Supplies 35 - 500 106 550 10.0%
Other Services & Charges 999,117 1,334,124 303,038 924,599 687,996 127.0%
Capital Outlay 94,275 93,201 225,000 388,680 264,000 17.3%
TOTAL EXPENDITURES 1,280,215$ 1,610,070$ 757,000$ 1,534,627$ 1,194,000$ 57.7%
FUND BALANCE - JANUARY 1 6,886,060$ 7,152,640$ 6,794,125$ 6,794,125$ 6,712,123$
Excess (Deficiency) of
Revenues over Expenditures 266,580 (358,515) 139,000 (82,002) 185,000
FUND BALANCE - DECEMBER 31 7,152,640$ 6,794,125$ 6,933,125$ 6,712,123$ 6,897,123$
209Table of Contents
Expenditures mainly include administrative costs, pay-as-you-go TIF payments to various
development projects (reported as capital outlay), and forgivable loans to businesses in the
downtown as part of the façade improvements program. Other services & charges include
contracts services for items such as legal or financial advisors, or for use of pooled TIF funding.
210Table of Contents
STAFFING SUMMARY
Staffing, as measured by full-time equivalents, has been increasing each year since the
pandemic. Many employees perform across multiple activities/divisions and funds. The budget
reflects updates to the allocation of time spent in various departments by all staff. The 2026
budget includes:
•Creation of a Senior Planner position to begin the transition away from the city’s long-
time contracted Planner who is nearly retirement.
•A decrease in assumed part-time hours at the Community Center due to adjusted hours
of the facility.
Actual Actual Actual Budget Change
2023 2024 2025 2026 2023-2026
General Fund
City Council 0.10 0.10 0.10 0.10 -
City Administration 2.90 2.75 3.00 2.85 (0.05)
City Clerk 1.50 2.10 1.90 2.10 0.60
Finance 3.75 3.65 3.65 3.80 0.05
Human Resources 1.00 1.00 1.25 1.20 0.20
Planning & Zoning 1.90 1.90 2.10 2.95 1.05
Fire & Rescue 3.90 3.95 4.05 3.85 (0.05)
Building Inspections 5.20 5.20 5.30 5.30 0.10
Public Works Administration 1.10 1.05 1.05 1.10 -
Engineering & Inspections 1.55 1.55 1.55 1.55 -
Streets & Alleys 4.10 4.10 4.60 4.80 0.70
Ice & Snow 1.10 0.80 1.20 2.55 1.45
Shop & Garage 1.85 1.35 1.40 1.40 (0.45)
Park Operations 9.20 9.55 11.00 10.30 1.10
Shade Tree 0.90 0.90 0.90 0.90 -
Total General Fund 40.05 39.95 43.05 44.75 4.70
Special Revenue Funds
Monticello Community Center 20.75 22.25 25.90 20.55 (0.20)
Total Special Revenue Funds 20.75 22.25 25.90 20.55 (0.20)
Enterprise Funds
W ater 3.80 3.80 3.90 3.80 -
Sewer 3.55 3.55 3.45 3.35 (0.20)
Stormwater 1.55 1.55 1.55 1.50 (0.05)
Liquor 10.26 10.49 12.15 14.10 3.84
Deputy Registrar 7.04 7.12 8.15 9.35 2.31
Total Enterprise Funds 26.20 26.51 29.20 32.10 5.90
Internal Service Funds
Facilities Maintenance 1.10 1.10 2.00 2.00 0.90
IT Services 1.00 1.00 1.00 1.00 -
Total Internal Service Funds 2.10 2.10 3.00 3.00 0.90
Discrete Component Units
Economic Development 1.60 1.60 2.00 2.00 0.40
Total Discrete Component Units 1.60 1.60 2.00 2.00 0.40
Total All Funds 90.70 92.41 103.15 102.40 11.70
NUMBER OF FULL-TIME EQUIVALENTS
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2026 Adopted Budget
Appendix
COMMUNITY, DEMOGRAPHIC, AND STATISTICAL INFORMATION
Classified as a 501(a) entity under the Internal Revenue Code, the city of Monticello was
organized as a municipality in 1856. Monticello is located approximately 45 miles northwest of
the Minneapolis-St. Paul metropolitan area along the I-94 corridor in Wright County. The 2020
U. S. Census estimated Monticello's population at 14,455, and the city encompasses an area of
8.87 square miles. The city operates under a statutory form of government. The mayor and four
councilmembers (together known as "City Council") govern the city. The councilmembers are
each elected to staggered, four-year terms and the mayor a two-year term. The mayor presides
over and is a voting member of the City Council. The mayor is the chief authority for
administering city government and appoints department heads, various board members and
commission members. The City Council is the legislative body and meets twice per month. The
City Council's main responsibilities are guiding the growth and development of the City using
the Monticello 2040: Vision + Comprehensive Plan, appropriating funds, setting salaries,
adopting ordinances and resolutions, and approving the budget.
Monticello has a varied business community with a healthy mix of retail and manufacturing.
City unemployment rates are similar to, or below, that of the state.
Home to one of the two nuclear electric generation plants in Minnesota, Monticello’s second
largest employer is Xcel Energy, not far behind the Monticello School District. Regional medical
provider CentraCare and Agri-giant Cargill also maintain a strong presence in the city.
Yearend Employment
Year Wright County Wright County State of Minnesota
2016 72,016 4.1%4.1%
2017 73,741 3.4%3.4%
2018 75,041 3.5%3.4%
2019 76,685 3.6%3.4%
2020 74,171 4.6%4.9%
2021 77,878 2.6%2.7%
2022 80,141 3.0%2.8%
2023 81,804 2.7%2.6%
2024 82,741 2.7%2.6%
2025 81,753 4.5%4.3%
HISTORICAL EMPLOYMENT/UNEMPLOYMENT DATA
(Rates are not compiled for individual communities within counties)
Yearend Unemployment
Employer Employees
ISD No. 882 (Monticello)684
Xcel Energy (Northern States Power)650
CentraCare Health - Monticello 577
Cargill Kitchen Sol. (Sunny Fresh)425
Target 307
Walmart Supercenter 225
Ultra Machining Corporation 215
City of Monticello 176
Home Depot 157
WSI Industries 120
TOP TEN CITY EMPLOYERS
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Monticello’s population and households are roughly 0.25% of the state’s total for both
measures. With Target, Walmart, Home Depot, Runnings, and Mills Fleet Farm, it is no surprise
that retail sales per capita are higher than the state average. The following table contains
selected facts about the city:
The nuclear plant accounts for approximately 38% of the city’s net tax capacity for taxes
payable in 2026. Xcel’s tax capacity and the council’s conservative tax levy philosophy are the
main reasons the city tax capacity rate is one of the lowest in Wright County. An increase of
10.2% in the net tax capacity of Xcel along with an increase in net tax capacity of all other city
property types of about 3% led to a citywide tax capacity increase of 7.3%. With a 7.2% levy
increase, the 2026 tax rate is projected to decrease minimally. The overall tax base is about
one-third residential and two-thirds commercial (including the electric generating plant).
People QuickFacts Monticello Minnesota
Population, 2024 estimate July 1 15,482 5,793,151
Population, Census, April 1, 2020 14,455 5,706,494
Population, percent change, April 1, 2020 to July 1, 2024 7.0% 1.5%
Persons under 5 years, percent 6.1% 5.6%
Persons under 18 years, percent 26.4% 22.4%
Persons 65 years and over, percent 10.8% 18.2%
Female persons, percent 50.7% 49.9%
White persons, percent 85.3% 81.5%
Hispanic or Latino, percent 8.6% 6.7%
Homeownership rate, 2020-2024 64.7% 72.2%
Median value of owner-occupied housing units, 2020-2024 $323,700 $329,300
Households, 2020-2024 5,695 2,307,955
Persons per household, 2020-2024 2.59 2.43
Retail sales per capita, 2022 $49,852 $23,565
Median household income, 2020-2024 $79,534 $89,062
Population per square mile, 2020 1,629.8 71.7
Land area in square miles, 2020 8.87 79,626.68
2023 2024 2025 2026 2025-26 2025-26
City Tax Rate Tax Rate Tax Rate Tax Rate Change Change %
City of St. Michael 27.132 25.715 26.821 26.138 -0.683 -2.6%
City of Otsego 29.572 23.109 24.352 26.872 2.520 9.4%
City of Dayton 35.109 35.653 35.394 35.944 0.550 1.5%
City of Hanover 38.223 38.015 37.681 36.485 -1.196 -3.3%
City of Monticello 34.991 34.547 37.701 37.687 -0.014 0.0%
City of Annandale 47.741 42.945 43.340 42.480 -0.860 -2.0%
City of Rockford 41.278 36.599 40.742 44.091 3.349 7.6%
City of Delano 42.657 41.419 44.509 44.497 -0.012 0.0%
City of Albertville 41.794 41.954 42.861 44.809 1.948 4.3%
City of Waverly 44.630 41.147 44.412 44.896 0.484 1.1%
City of Buffalo 50.562 47.867 51.965 51.638 -0.327 -0.6%
City of Maple Lake 59.182 52.694 58.896 56.371 -2.525 -4.5%
City of Clearwater 63.657 52.292 55.526 57.435 1.909 3.3%
City of Montrose 47.934 44.208 56.824 61.444 4.620 7.5%
City of Cokato 60.436 55.238 64.148 63.751 -0.397 -0.6%
City of Howard Lake 62.009 57.926 65.772 70.117 4.345 6.2%
City of South Haven 81.173 74.141 76.154 74.136 -2.018 -2.7%
CITY TAX RATES IN WRIGHT COUNTY, MINNESOTA
214Table of Contents
The top ten taxpayers within the City of Monticello are as follows:
Monticello’s population grew by almost 18% in the last ten years. The city has undeveloped
commercial and residential real estate and is positioned well to benefit from more urban flight
from the Twin Cities. Access to major transportation corridors makes the city an ideal location
for future growth. The following table includes population statistics over the last ten years:
As statistics show, Monticello is unique with a very different set of circumstances from many
other communities of 15,000 in population. Operating a municipal liquor store, deputy
registrar, telecommunications network, and community center create additional workload from
a staffing perspective and demand more management and oversight. Its location on an
interstate brings commuters from outside the city, which is beneficial for businesses but creates
additional wear and tear on city streets and demand for public safety and recreational services.
For this reason, the city implemented a 0.5% Local Sales Tax in 2025. The city is also growing
with new development. However, the city is not in control of the timing of development, which
in many instances requires public investment in addition to private investment.
Additionally, the city having one major taxpayer with complex regulations creates risk and
uncertainty. Xcel’s plant is valued using complicated information and with considerations by the
State of Minnesota’s Department of Revenue. Long-term planning is especially challenging
because while the plant’s license for operation was recently extended to 2050, changes in the
energy and technology industries create additional unknowns. Having one large and unique
taxpayer causes differences in per capita figures, which makes it difficult to find comparison city
data. Additionally, it creates uncertainty in future impacts to other taxpayers whether the levy
is raised annually or not.
Taxpayer
Percentage of
Net Tax Capacity
Xcel Energy (Northern States Power)37.3%
IRET Properties 1.5%
Deephaven Development LLC 1.1%
Mills Fleet Farm 0.8%
Block 52 Holdings 0.7%
Target Corporation 0.7%
CentraCare 0.7%
Clear Creek Land Company LLC 0.6%
Walmart Real Estate Trust 0.6%
UMC Real Estate LLC 0.5%
TOP TEN CITY TAXPAYERS
Year Population Change
2016 13,311 186
2017 13,409 98
2018 13,553 144
2019 13,782 229
2020 13,886 104
2021 14,455 569
2022 14,619 164
2023 14,764 145
2024 14,840 76
2025 15,464 624
215Table of Contents
PROPERTY TAX BASICS
Assessment and Classification
The property tax system is a continuous cycle, but it effectively begins with the estimation of
property market values by local assessors. Assessors attempt to determine the approximate
selling price of each parcel of property based on the current market conditions.
Along with the market value determination, a property class is assigned to each parcel of
property based on the use of the property. For example, property that is owner-occupied as a
personal residence is classified as a residential homestead. The “use class” is important because
the Minnesota system, in effect, assigns a weight to each class of property. Generally,
properties that are associated with income production (e.g., commercial, and industrial
properties) have a higher classification weight than other properties.
The property classification system defines the tax capacity of each parcel as a percentage of
each parcel’s market value. For example, a $250,000 home which is classified as a residential
homestead has a class rate of 1.0 percent and therefore has a tax capacity of $250,000 x .01 or
$2,500. (A sample of the class rates is included in the table on page 213.)
[parcel market value] * [class rate] = [parcel tax capacity]
The next step in calculating the tax burden for a parcel involves the determination of each local
unit of government’s property tax levy. The city, county, school district, and any special
property taxing authorities must establish their levy by December 28 of the year preceding the
year in which taxpayers will pay the levy. The property tax levy is set after the consideration of
all other revenues including state aids such as LGA.
[city budget] - [all non-property tax revenues] = [city levy]
Local Tax Rates
Local governments do not directly set a tax rate. Instead, the tax rate is a product of the levy
and the total tax base. To compute the local tax rate, a county must determine the total tax
capacity to be used for spreading the levies. The total tax capacity is computed by first
aggregating the tax capacities of all parcels within the city. Several adjustments to this total
must be made because not all tax capacity is available for general tax purposes. The result of
this calculation produces taxable tax capacity. Taxable tax capacity is used to determine the
local tax rates.
[city levy] / [taxable tax capacity] = [city tax rate]
Parcel Tax Calculations
The property tax bill for each parcel of property is determined by multiplying the parcel’s tax
capacity by the total local tax rate. The tax statement for each individual parcel itemizes the
taxes for the county, municipality, school district, and any special taxing authorities.
[parcel tax capacity] * [total local tax rate] = [parcel property tax bill]
216Table of Contents
217Table of Contents
Terms Defined
Class rates - The percent of market value set by state law that establishes the property’s tax
capacity subject to the property tax. See table below for a sample list of class rates.
Local tax rate - The rate used to compute taxes for each parcel of property. Local tax rate is
computed by dividing the certified levy (after reduction for fiscal disparities distribution levy
and disparity reduction) by the taxable tax capacity.
Homestead Market Value Exclusion (HMVE) – Starting with taxes payable in 2012, eligible
homesteads will pay property taxes on only a portion of the value of their homes. The
maximum exclusion was increased in 2024 so that 40% of value is excluded at a home value of
$95,000 and phases out as home value grows, up to a value of $517,200.
Property class - The classification assigned to each parcel of property based on the use of the
property. For example, owner-occupied residential property is classified as homestead.
Tax capacity - The valuation of property based on market value and statutory class rates. The
property tax for each parcel is based on its tax capacity.
Truth-in-Taxation - The “taxation and notification law” which requires local governments to set
estimated levies, inform taxpayers about the impacts, and announce which of their regularly
scheduled council meetings will include a discussion of the budget and levy. Taxpayer input is
taken at that meeting.
Property Class Local Taxes
Payable 2026
State Tax Payable 2026
Residential Homestead: No state tax
1st $500,000 1.00%
>$500,000 1.25%
Non-homestead Residential: No state tax
Single unit:
1st $500,000 1.00% >$500,000 1.25%
2–3-unit buildings 1.25%
Market-rate Apartments: 1.25% No state tax
Commercial/Industrial:
1st $150,000 1.50% Subject to state levy
>$150,000
Electric generation machinery
2.00%
2.00% (Commercial-industrial rate)
Seasonal Recreational Residential: 1st $500,000 1.00% Subject to state levy
>$500,000 1.25% (Commercial-industrial rate)
218Table of Contents
TRUTH-IN-TAXATION (TNT)
Summary Chart for Taxes Payable 2026
Date Action
On or Before
Sept. 30
All cities and special taxing districts (EDAs, HRAs, port authorities, etc.) must
adopt any proposed property tax levy and certify the proposed levy to the
county auditor. (September 22, 2025)
On or Before
Sept. 30
At one meeting, the city council adopts the proposed property tax levy and
announces the time and place of a future city council meeting at which the
budget and levy will be discussed, and public input allowed, prior to final
budget and levy determination. (September 22, 2025)
On or before
Sept. 30
Cities must provide the county auditor with the following information:
•The time and place of the meeting at which the budget and levy will
be discussed, and public input allowed. (This public input meeting must
occur after Nov. 24 and must start at or after 6 p.m. The time and place of
the public input meeting must be included in the minutes.)
•A phone number that city taxpayers may call if they have questions
related to the auditor’s property tax notice; this does not require listing a
private phone number.
•An address where comments will be received by mail; this does not
require listing a private address.
(September 23, 2025)
Nov. 11 - Nov. 24 County auditor prepares and sends parcels specific notices.
Nov. 25 - Dec. 28 City council holds meeting to discuss the budget and property tax levy and,
before a final determination, allows public input. (December 8, 2025)
On or before Dec.
28
Cities must certify final property tax levy to the county auditor. Cities must
also file the certificate of compliance (Form TNT) with the Department of
Revenue by December 28th. (December 9, 2025)
**The date activity actually occurred is (noted).
219Table of Contents
DEBT GUIDE
Equipment Certificates/Capital Notes
A statutory city may issue certificates of indebtedness or capital notes (Section 412.301) to
purchase:
Public safety equipment, ambulance, and other medical equipment; road construction and
maintenance equipment; and other capital equipment.
Computer hardware and software, whether bundled with machinery or equipment or un-
bundled, together with application development services and training related to the use of
the computer hardware or software.
The statute does not define “other capital equipment.” Cities seeking to borrow for equipment
not specifically listed should work with bond counsel to determine eligibility.
The term of the Certificates/Notes cannot exceed 10 years from the dated date of the obligations.
This limitation may affect the timing of principal and interest payments. This debt is subject to
the debt limit.
A reverse referendum provision applies if the amount of the borrowing exceeds 0.25% of the
estimated market value of taxable property within the city. An election is required if a petition
signed by voters equal to 10% of the voters in the last regular municipal election is submitted to
the city clerk within 10 days after publication of the resolution authorizing the issuance of the
Certificates/Notes.
Different statutory authority exists for home rule charter cities (Section 410.32). Capital Notes
issued by charter cities are subject to the same statutory requirements as statutory cities with
the following exceptions:
The total principal amount of the capital notes issued in a fiscal year shall not exceed 0.03%
of the estimated market value of taxable property in the city.
No reverse referendum provision applies, but issuance must be approved by a two-thirds vote
of the city council.
Unless prohibited by the charter, these cities may also issue Capital Notes under the authority
granted to statutory cities.
Tax Abatement Bonds
Tax Abatement Bonds (Section 469.1814) may be used to finance a variety of development
activities and public improvements. The statute allows proceeds of Tax Abatement Bonds be used
to (1) pay for public improvements that benefit the property, (2) to acquire and convey land or
other property, as provided under this section, (3) to reimburse the property owner for the cost
of improvements made to the property, or (4) to pay the costs of issuance of the bonds.
Tax Abatement Bonds are often used to facilitate economic development in ways not allowed by
tax increment financing. They have also evolved into a tool for financing community recreation
and cultural facilities. The statutory authority creates an abatement levy based on the property
value of parcels subject to the abatement. The authority to use tax abatement applies separately
220Table of Contents
to each taxing jurisdiction. If other jurisdictions (county and school district) approve an
abatement, this revenue may be pledged to bonds issued by the city.
The principal amount of the bonds may not exceed the sum of the authorized abatements.
A debt service levy may be used to pay interest on the bonds.
The annual amount of all abatements cannot exceed the greater of 10% net tax capacity
value of the jurisdiction or $200,000.
The parameters of the abatement and authorization for the bonds are set by resolution.
The resolution cannot be approved until after a public hearing is held.
Street Reconstruction Bonds
Street Reconstruction Bonds are an example of debt issuing authority found in unusual places.
The statutory provisions for Street Reconstruction Bonds appear in the portion of Chapter 475
dealing with election requirements for debt issuance (Section 475.58, Subd. 3b).
Street Reconstruction Bonds can be used to finance the reconstruction and bituminous overlay
of existing city streets. Eligible improvements may include turn lanes and other improvements
having a substantial public safety function, realignments, other modifications to intersect with
state and county roads, and the local share of state and county road projects. Except in the case
of turn lanes, safety improvements, realignments, intersection modifications, and the local share
of state and county road projects, street reconstruction and bituminous overlays does not include
the portion of project cost allocable to widening a street or adding curbs and gutters where none
previously existed. The enabling statute sets forth specific requirements for the issuance of Street
Reconstruction Bonds:
The projects financed under this authority must be described in a street reconstruction
plan. The plan must describe the street reconstruction or overlay to be financed, the
estimated costs, and any planned reconstruction or overlay of other streets in the
municipality over the next five years
The city must hold a public hearing on the proposed plan and the related issuance of bonds.
The plan and the issuance of bonds must be approved by the city council by a vote of all the
members of the governing body present at the meeting.
The issuance of bonds is subject to a reverse referendum. An election is required if voters
equal to 5% of the votes cast in the last municipal general election file a petition with the
city clerk within 30 days of the public hearing. If the city decides not to undertake an
election, it may not propose the issuance of Street Reconstruction Bonds for the same
purpose and in the same amount for a period of 365 days from the date of receipt of the
petition. If the question of issuing the bonds is submitted and not approved by the voters,
the provisions of section 475.58, subdivision 1a, shall apply (no resubmission for same
purpose/ amount for 180 days).
Street Reconstruction Bonds are subject to the debt limit.
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Revenue Bonds
One exception to the previous statement is the issuance of Revenue Bonds. Chapter 475
authorizes borrowing for “any utility or other public convenience from which a revenue is or may
be derived”. This authority is sufficient when the sole security is the pledge of revenue from a
public enterprise. Although this debt is most frequently associated with municipal utilities, any
“public convenience” with a pledge-able source of revenue may use this authority. Minnesota
cities do not frequently issue Revenue Bonds. Most borrowing needs have separate statutory
authority that allows a general obligation pledge. The most common Revenue Bonds are for
electric utilities, sales taxes, and liquor stores.
Improvement Bonds
One of the most used tools is General Obligation (G.O.) Improvement Bonds issued pursuant to
Chapter 429. Improvement Bonds can be issued for a wide range of public improvements.
Eligible Improvements
The types of improvements specifically authorized in Chapter 429 can be found in Section
429.021. It is important to read and understand the specific statutory provisions. Some provisions
are broader than the basic improvement. For example, a “street improvement” may also include
streetscape (beautification), storm sewers and utility connection lines. Other provisions may
contain important expansions or limitations on the authority. Sanitary and storm sewer
improvements may be made outside of the city limits.
The public improvements currently authorized in Chapter 429 include the following:
1.Acquire, open, and widen any street, and improve the same by constructing, reconstructing,
and maintaining sidewalks, pavement, gutters, curbs, and vehicle parking strips of any
material, or by grading, graveling, oiling, or otherwise improving the same, including the
beautification thereof and including storm sewers or other street drainage and connections
from sewer, water, or similar mains to curb lines.
2.Acquire, develop, construct, reconstruct, extend, and maintain storm and sanitary sewers
and systems, including outlets, holding areas and ponds, treatment plants, pumps, lift
stations, service connections, and other appurtenances of a sewer system, within and
without the corporate limits.
3.Construct, reconstruct, extend, and maintain steam heating mains.
4.Install, replace, extend, and maintain streetlights and street lighting systems and special
lighting systems.
5.Acquire, improve, construct, reconstruct, extend, and maintain water works systems,
including mains, valves, hydrants, service connections, wells, pumps, reservoirs, tanks,
treatment plants, and other appurtenances of a water works system, within and without
the corporate limits.
6.Acquire, improve, and equip parks, open space areas, playgrounds, and recreational
facilities within or without the corporate limits.
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7.Plant trees on streets and provide for their trimming, care, and removal.
8.Abate nuisances and drain swamps, marshes, and ponds on public or private property, and
fill the same.
9.Construct, reconstruct, extend, and maintain dikes and other flood control works.
10.Construct, reconstruct, extend, and maintain retaining walls and area walls.
11.Acquire, construct, reconstruct, improve, alter, extend, operate, maintain, and promote a
pedestrian skyway system. Such improvement may be made upon a petition pursuant to
section 429.031, subdivision 3.
12.Acquire, construct, reconstruct, extend, operate, maintain, and promote underground
pedestrian concourses.
13.Acquire, construct, improve, alter, extend, operate, maintain, and promote public malls,
plazas, or courtyards.
14.Construct, reconstruct, extend, and maintain district heating systems.
15.Construct, reconstruct, alter, extend, operate, maintain, and promote fire protection
systems in existing buildings, but only upon a petition pursuant to section 429.031,
subdivision 3.
16.Acquire, construct, reconstruct, improve, alter, extend, and maintain highway sound
barriers.
17.Improve, construct, reconstruct, extend, and maintain gas and electric distribution facilities
owned by a municipal gas or electric utility.
18.Purchase, install, and maintain signs, posts, and other markers for addressing related to the
operation of enhanced 911 telephone service.
19.Improve, construct, extend, and maintain facilities for Internet access and other
communications purposes, if the council finds that: (i) the facilities are necessary to make
available Internet access or other communications services that are not and will not be
available through other providers or the private market in the reasonably foreseeable
future; and (ii) the service to be provided by the facilities will not compete with service
provided by private entities.
20.Assess affected property owners for all or a portion of the costs agreed to with an electric
utility, telecommunications carrier, or cable system operator to bury or alter a new or
existing distribution system within the public right-of-way that exceeds the utility’s design
and construction standards, or those set by law, tariff, or franchise, but only upon petition
under section 429.031, subdivision 3.
21.Assess affected property owners for repayment of voluntary energy improvement
financings under section 216C.436, subdivision 7.
Other statutes may also authorize the use of special assessments to pay for improvements. For
example, authorized improvements within a Housing Improvement Area may be paid with special
assessments.
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Minimum Assessment
General Obligation Improvement Bonds require a minimum 20% assessment. It is important to
understand the method for determining the minimum assessment. A common assumption is that
assessments must equal or exceed 20% of the amount to be borrowed. While this calculation
works for Tax Increment Bonds, the 20% calculation for Improvement Bonds is different:
1.The assessment calculation is based on the cost of the improvement to the city. This cost
may or may not equal the amount of the Improvement Bonds.
2.The cost of the improvement does not include activities that will not be assessed to
benefitted property owners and not financed with G.O. Improvement Bonds. These
improvements can be made without following the procedures of Chapter 429. This
exclusion typically applies to utility (sanitary sewer, watermain, and storm sewer) im-
provements paid from reserves or bonds issued under Minnesota Statutes, Chapter 444.
3.The cost to the city excludes all monies contributed by other units of government to pay for
the improvement.
4.The up-front use of city non-utility reserves (both General Fund and capital improvement)
does not reduce the cost to the city.
One exception to this 20% requirement is improvements for automobile parking facilities (Section
459.14). Bonds issued to finance the construction or maintenance of automobile parking facilities
require special assessments in an amount not less than 50% of the amount of the bonds.
Assessment Considerations
State Law does not prescribe assessment methodology. Some cities have formal assessment
policies. Other cities deal with assessments on a project-by-project basis.
A guiding factor in setting assessments is the market value test. The amount assessed to a
property cannot exceed the increase in market value of the property because of the
improvement. There is no requirement to make this finding as part of the improvement process.
The issue comes into play primarily in projects with larger assessments and greater risk of appeal.
Assessments are also constrained by the notice of hearing for the improvement. The total
amount assessed cannot exceed the amount stated in the notice. The area assessed cannot be
larger, but can be smaller, than the area receiving notice of the Hearing.
The special assessment calculation is based on the “improvement.” An improvement may be
more than a single project. There are two ways to manage multiple projects into a single
improvement for the purposes of Chapter 429. Section 429.021, Subd. 2 allows for an
improvement on two or more streets, or two or more types of improvements, in or on the same
street or streets or different streets may be included in one proceeding and conducted as one
improvement. This combining of improvements is typically spelled out in the engineering
feasibility report and considered at the improvement hearing. Projects that are instituted
separately may be subsequently combined under the authority of Section 435.56.
Revenues to pay debt service on the portion that is not assessed may come from any legally
available source including a property tax levy.
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Bond Issues
Planning for the issuance of Improvement Bonds requires a clear understanding of the special
assessments. In addition to the total amount assessed, several other factors are important:
What is the term of repayment? First levy year payable? Total number of years payable?
Will the assessments be repaid with level annual installments of principal or level annual
payments of principal and interest?
What interest rate will be charged on the unpaid balance? Is it tied to the interest rate on
the bonds?
Will any of the assessments be deferred? If so, when will they be paid?
When is the assessment hearing and when will the assessments be certified to the County?
What are the expectations for the initial prepayment of assessments?
The timing of the improvement process is another important consideration. Improvement Bonds
can be issued any time after the city council conducts the improvement hearing and authorizes
the improvements. No improvement hearing is needed if the parties that petition for the
improvement will be assessed 100% of the cost. Each point in time has different implications for
issuing bonds:
Bonds issued soon after the improvement hearing will be based on estimated construction
costs and assumptions about special assessments.
Bonds may be issued immediately after the receipt of bids to provide construction
financing. The finance plan will rely on assumptions about special assessments.
Bonds may be issued after completion of the assessment process. This allows the finance
plan to be based on final construction costs and actual assessments. This approach can also
consider the number of initial prepayments. Delaying financing until after the assessment
process requires city funds to pay for construction and a reimbursement resolution to allow
the repayment of these funds with the proceeds of tax-exempt bonds.
For controversial projects with a higher risk of assessment appeals, cities will conduct the
assessment process during the period between the receipt and award of construction bids. This
approach allows the city to know the appeal risk before committing to undertake the
improvement. Improvement Bonds are not subject to the statutory debt limit.
Utility Revenue Bonds
Minnesota cities rarely issue pure Revenue Bonds to finance sanitary sewer, water, and storm
sewer utility improvements. State Law allows cities to add its general obligation to the pledge of
net utility revenues for these improvements (Section 444.075). G.O. Utility Revenue Bonds may
be issued to build, construct, reconstruct, repair, enlarge, improve, or in any other manner obtain
sanitary sewer, water, and storm sewer facilities, and maintain and operate the facilities inside
or outside its corporate limits.
These bonds are sometimes called “double barreled.” They are secured by both utility revenues
and the city’s general obligation. The bonds may be secured by a single utility or by combined
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utility funds. Debt service on Utility Revenue Bonds is paid from the net revenues of the utilities
pledged to secure the bonds. Special assessments may also be levied and pledged to the bonds.
Unlike Improvement Bonds, property taxes cannot be a permanent and ongoing source of
revenue to pay debt service. Property taxes should only be used on a temporary basis when the
other revenues are insufficient to meet the obligations.
It is important to understand the nature of the revenues that will be used to support the bonds.
How much of the revenue comes from connection charges and other fees associated with
growth?
Are rate increases needed? If so, are there any procedural issues (such as a public hearing
or approval by the utilities commission)?
Are there any large users that constitute a significant portion of the revenue base?
Are there special agreements with large users?
There are no special procedural requirements for the issuance of Utility Revenue Bonds.
Capital Improvement Plan Bonds
Cities may issue Capital Improvement Plan (CIP) Bonds to finance the construction and
maintenance of city hall, town hall, library, public safety facility, and public works facility (Section
475.521). These bonds may not be used to finance any other type of facility or improvement.
Expenditures for eligible capital improvements incurred before adoption of the capital
improvement plan are allowed if included in a plan approved at or prior to the public hearing on
the issuance of bonds.
The projects to be financed must be included in a capital improvements plan (CIP) that meets the
criteria of the statute. The plan must cover at least a five-year period beginning with the date of
its adoption. The plan must set forth the estimated schedule, timing, and details of specific capital
improvements by year, together with the estimated cost, the need for the improvement, and
sources of revenue to pay for the improvement. The CIP should also include information about
the factors required by the statute to be considered by the city council. These factors are:
Condition of the municipality’s existing infrastructure, including the projected need for
repair or replacement;
Likely demand for the improvement;
Estimated cost of the improvement;
Available public resources;
Level of overlapping debt in the municipality;
Relative benefits and costs of alternative uses of the funds;
Operating costs of the proposed improvements; and
Alternatives for providing services most efficiently through shared facilities with other
municipalities or local government units.
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The required CIP may be a document prepared specifically for authorizing the issuance of bonds
or it may be incorporated into other capital improvement planning by the city.
The maximum amount of CIP Bonds is limited. The maximum principal and interest payable in
any year for all outstanding CIP Bonds cannot exceed 0.16% of the estimated market value of
taxable property in the city. This calculation is made using the estimated market value for the
taxes payable year in which the bonds are issued and sold.
The bonds are subject to the debt limit for cities with a population of 2,500 or more. Both
approval of the CIP and the issuance of bonds require a public hearing. A single public hearing
may be held to meet these requirements. The bonds must be authorized by a three-fifths vote of
a five-member city council. If the city council has more than five members, two-thirds approval
is needed.
Issuance of the bonds is subject to reverse referendum. An election is required for the issuance
of the bonds if a petition signed by voters equal to 5% of the votes cast in the city in the last
municipal general election is filed with the city clerk within 30 days after the public hearing. If the
city does not submit the question to the voters, it may not propose the issuance of bonds under
this section for the same purpose and in the same amount for a period of 365 days from the date
of receipt of the petition. If the question of issuing the bonds is submitted and not approved by
the voters, the city must wait 180 days before voting on the same question again.
Lease Revenue Bonds
Lease Revenue Bonds are used by cities to finance public facilities. There is no specific statutory
authority for Lease Revenue Bonds. This form of financing combines two statutory powers.
Economic development authorities (EDA) and housing and redevelopment authorities (HRA)
have the authority to issue Revenue Bonds for their corporate purposes, including the
construction of public facilities. The security for the bonds and the revenue to pay debt service
comes from a lease purchase with the city. Not all public facilities are equally suited for the use
of Lease Revenue Bonds. As a general rule, the more essential the facility, the better the
application of this tool. This is due to the perception of investors that the city is less likely to not
appropriate and walk away from an essential facility.
A similar form of financing is Certificates of Participation. The investor receives a certificate
secured by a share of the lease payments. The underlying security is the same as Lease Revenue
Bonds. The status of the tax levy to make lease payments is another consideration in the use of
Lease Revenue Bonds. Under the most recent version of levy limits, the levy for Lease Revenue
Bonds can be made of a special levy and outside of levy limits. The special levy authority is to pay
debt service of another political subdivision, and the EDA is a political subdivision. Levies to make
lease payments do not currently qualify as a special levy and, therefore, are subject to levy limits.
The taxing power of the EDA may also be pledged to Lease Revenue Bonds.
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Other Debt Terms
Bank Qualified
Issuers that reasonably expect to issue $10,000,000 or less in tax-exempt bonds during a calendar
year may designate bonds as “bank qualified”. The name refers to the fact that banks may deduct
a portion of the interest cost on the carry purchased for its portfolio. This preferential tax
treatment usually results in lower interest rates than bonds that are not bank qualified. The
difference between bank qualified and not bank qualified rates varies over time and is typically
higher for longer maturities. Both the direct debt of the issuer and any conduit debt count against
the issuer’s $10,000,000 annual cap.
Arbitrage
Arbitrage regulations govern the ability to invest the proceeds of tax-exempt bonds. The basic
rule of arbitrage is that the gross proceeds of a bond issue may not be invested at a rate
“materially higher” than the yield on the bonds. The complexities of arbitrage calculation and
compliance are not discussed in this guide. Instead, this guide focuses on the three basic arbitrage
considerations for most Minnesota cities: construction fund, debt service fund, and arbitrage
rebate.
Arbitrage Rebate
Issuers must pay (rebate) to the federal government income earned in excess of the bond yield
unless subject to the small issuer or the spenddown exceptions.
The small issuer exception applies when the total principal amount of tax exempt, non-private
activity bonds does not exceed $5,000,000 in any calendar year. Current refunding bonds up to
the amount of the outstanding principal refunded do not count against this limit. There are three
options for meeting the spenddown exception:
1.6-month exception - gross proceeds and interest earnings are allocated to expenditures for
governmental or qualified purposes that are incurred within 6 months after the date of
issuance.
2.18-month exception - gross proceeds and interest earnings are spent within the following
schedule from date of issuance: (1) 15% within 6 months; (2) 60% within 12 months; and
(3) 100% within 18 months (with a 5% reasonable retainage carryover amount for an
additional 12 month period).
3.2-year spending exception – issue is a “construction issue” (75% of issue is actually spent
on construction) and gross proceeds and interest earnings are spent within the following
schedule from date of issuance: (1) 10% within 6 months; (2) 45% within 12 months; (3)
75% within 18 months; and 4) 100% within 24 months.
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MINNESOTA STATUTES
DEBT LIMIT
475.53 LIMIT ON NET DEBT
Subdivision 1. Terms.
For the purposes of this chapter, the terms defined in this section shall have the meanings given
them.
Subd. 2. Municipality.
"Municipality" means a city of any class, county, town, or school district.
Subd. 3. Obligation.
"Obligation" means any promise to pay a stated amount of money at a fixed future date or
upon demand of the obligee, regardless of the source of funds to be used for its payment,
made for the purpose of incurring debt, including the purchase of property through an
installment purchase contract or any other deferred payment agreement, for which funds are
not appropriated in the current year's budget.
Subd. 4. Net debt.
"Net debt" means the amount remaining after deducting from its gross debt the amount of
current revenues which are applicable within the current fiscal year to the payment of any debt
and the aggregate of the principal of the following:
(1) Obligations issued for improvements which are payable wholly or partly from the
proceeds of special assessments levied upon property specially benefited thereby, including
those which are general obligations of the municipality issuing them, if the municipality is
entitled to reimbursement in whole or in part from the proceeds of the special assessments.
(2) Warrants or orders having no definite or fixed maturity.
(3) Obligations payable wholly from the income from revenue producing conveniences.
(4) Obligations issued to create or maintain a permanent improvement revolving fund.
(5) Obligations issued for the acquisition, and betterment of public waterworks systems,
and public lighting, heating, or power systems, and of any combination thereof or for any
other public convenience from which a revenue is or may be derived.
(6) Debt service loans and capital loans made to a school district under the provisions of
sections 126C.68 and 126C.69.
(7) Amount of all money and the face value of all securities held as a debt service fund for
the extinguishment of obligations other than those deductible under this subdivision.
(8) Obligations to repay loans made under section 216C.37.
(9) Obligations to repay loans made from money received from litigation or settlement of
alleged violations of federal petroleum pricing regulations.
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(10) Obligations issued to pay pension fund or other postemployment benefit liabilities
under section 475.52, subdivision 6, or any charter authority.
(11) Obligations issued to pay judgments against the municipality under section 475.52,
subdivision 6, or any charter authority.
(12) All other obligations which under the provisions of law authorizing their issuance are
not to be included in computing the net debt of the municipality.
PROPERTY TAX LEVY
275.08 AUDITOR TO FIX RATE.
Subdivision 1. Generally.
The rate percent of all taxes, except the state tax and taxes the rate of which may be fixed by
law, shall be calculated and fixed by the county auditor according to the limitations in this
chapter hereinafter prescribed; provided, that if any county, city, town, or school district shall
return a greater amount than the prescribed rates will raise, the auditor shall extend only such
amount of tax as the limited rate will produce.
Subd. 1a. Computation of tax capacity.
The county auditor shall compute the net tax capacity for each parcel according to the
classification rates specified in section 273.13. The net tax capacity will be the appropriate
classification rate multiplied by the parcel's market value.
Subd. 1b. Computation of tax rates.
(a) The amounts certified to be levied against net tax capacity under section 275.07 by an
individual local government unit shall be divided by the total net tax capacity of all taxable
properties within the local government unit's taxing jurisdiction. The resulting ratio, the
local government's local tax rate, multiplied by each property's net tax capacity shall be
each property's net tax capacity tax for that local government unit before reduction by any
credits.
273.032 MARKET VALUE DEFINITION.
For the purpose of determining any property tax levy limitation based on market value or any
limit on net debt, the issuance of bonds, certificates of indebtedness, or capital notes based on
market value, any qualification to receive state aid based on market value, or any state aid
amount based on market value, the terms "market value," "estimated market value," and
"market valuation," whether equalized or unequalized, mean the estimated market value of
taxable property within the local unit of government before any adjustments for tax increment,
fiscal disparity, or powerline credit, but after the limited market adjustments under section
273.11, subdivision 1a, and after the market value exclusions of certain improvements to
homestead property under section 273.11, subdivision 16. Unless otherwise provided, "market
value," "estimated market value," and "market valuation" for purposes of this paragraph, refer
to the taxable market value for the previous assessment year.
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273.13 CLASSIFICATION OF PROPERTY.
Subdivision 1. How classified.
All real and personal property subject to a general property tax and not subject to any gross
earnings or other in-lieu tax is hereby classified for purposes of taxation as provided by this
section.
Subd. 21b. Tax capacity.
"Net tax capacity" means the product of the appropriate classification rates in this section and
taxable market values.
Subd. 22. Class 1.
(a)Except as provided in subdivision 23 and in paragraphs (b) and (c), real estate which is
residential and used for homestead purposes is class 1a. In the case of a duplex or triplex in
which one of the units is used for homestead purposes, the entire property is deemed to be
used for homestead purposes. The market value of class 1a property must be determined
based upon the value of the house, garage, and land.
The first $500,000 of market value of class 1a property has a net classification rate of one
percent of its market value; and the market value of class 1a property that exceeds
$500,000 has a classification rate of 1.25 percent of its market value.
(b) Class 1b property includes homestead real estate or homestead manufactured homes
used for the purposes of a homestead by:
(1) any person who is blind as defined in section 256D.35, or the person who is blind and
the spouse of the person who is blind;
(2) any person who is permanently and totally disabled or by the person with a disability
and the spouse of the person with a disability; or
(3) the surviving spouse of a veteran who was permanently and totally disabled
homesteading a property classified under this paragraph for taxes payable in 2008.
HOUSING AND REDEVELOPMENT AUTHORITY TAX LEVY
469.033 PUBLIC REDEVELOPMENT COST; PROCEEDS; FINANCING.
Subd. 6. Operation area as taxing district, special tax.
All of the territory included within the area of operation of any authority shall constitute a
taxing district for the purpose of levying and collecting special benefit taxes as provided in this
subdivision. All of the taxable property, both real and personal, within that taxing district shall
be deemed to be benefited by projects to the extent of the special taxes levied under this
subdivision. Subject to the consent by resolution of the governing body of the city in and for
which it was created, an authority may levy a tax upon all taxable property within that taxing
district. The tax shall be extended, spread, and included with and as a part of the general taxes
for state, county, and municipal purposes by the county auditor, to be collected and enforced
therewith, together with the penalty, interest, and costs. As the tax, including any penalties,
interest, and costs, is collected by the county treasurer it shall be accumulated and kept in a
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separate fund to be known as the "housing and redevelopment project fund." The money in the
fund shall be turned over to the authority at the same time and in the same manner that the
tax collections for the city are turned over to the city, and shall be expended only for the
purposes of sections 469.001 to 469.047. It shall be paid out upon vouchers signed by the chair
of the authority or an authorized representative. The amount of the levy shall be an amount
approved by the governing body of the city, but shall not exceed 0.0185 percent of estimated
market value. The authority shall each year formulate and file a budget in accordance with the
budget procedure of the city in the same manner as required of executive departments of the
city or, if no budgets are required to be filed, by August 1. The amount of the tax levy for the
following year shall be based on that budget. The requirements of section 275.067 apply to a
housing and redevelopment authority that has not previously certified a levy.
469.001 PURPOSES.
The purposes of sections 469.001 to 469.047 are:
(1)to provide a sufficient supply of adequate, safe, and sanitary dwellings in order to
protect the health, safety, morals, and welfare of the citizens of this state;
(2) to clear and redevelop blighted areas;
(3) to perform those duties according to comprehensive plans;
(4)to remedy the shortage of housing for low and moderate income residents, and to
redevelop blighted areas, in situations in which private enterprise would not act without
government participation or subsidies; and
(5) in cities of the first class, to provide housing for persons of all incomes.
Public participation in activities intended to meet the purposes of sections 469.001 to 469.047
and the exercise of powers confined by sections 469.001 to 469.047 are public uses and
purposes for which private property may be acquired and public money spent.
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UTILITY RATES FOR 2026
0 - 1,000 gallons $11.13
1,001 - 6,500 gallons (5,500 gallons)$2.60/1,000 gallons
6,501 - 11,500 gallons (5,000 gallons)$3.01/1,000 gallons
11,501 - 16,500 gallons (5,000 gallons)$3.32/1,000 gallons
16,501 - 33,000 gallons (16,500 gallons)$3.59/1,000 gallons
33,001 gallons and over $3.84/1,000 gallons
Commercial Water & Sprinklers: 11, 13, 90, 31, 32, 90, 91, 92, 93
0 - 1,000 gallons $11.13
1,001 - 6,500 gallons (5,500 gallons)$2.60/1,000 gallons
6,501 - 33,000 gallons (26,500 gallons)$3.01/1,000 gallons
33,001 gallons and over $3.32/1,000 gallons
Industrial Water: 14 (effective July 1)
All Water Usage $3.16/1,000 gallons
State Water Service Connection Fee: 18
Per Connection $1.27
Sewer Rates - Residential & Commercial: 20, 25, 26
0 - 1,000 gallons $11.54
1,001 gallons and over $7.09/1,000 gallons
Sewer Special Cases: SW21, SW22
Properties with private well $10 per person
Industrial Sewer Rates: 24 (effective July 1)
All Sewer Usage $4.39/1,000 gallons
BOD5 (Biochemical Oxygen Demand)$0.474/lb.
TSS (Total Suspended Solids)$0.651/lb.
Testing Actual cost + 10%
Stormwater Rates:
Residential: 40 $5.00
Non-Residential (7 drainage units per impervious acre): 41 $5.00
Residential Garbage Charges (effective February 1)
Individual Residential Cart (includes solid waste tax)$11.98
Residential Recycling Charges (effective February 1)
Per Cart $5.65
Other:
Water On/Off Charge $25.00/each
Water Availability Charge: 15 $45.00/year
Final Bill Processing Fee $25.00
Obsolete or Refusal of Equipment (manual read) Charge $50.00
Monthly
Residential Water & Sprinklers: 10, 12, 16, 17, 30
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CAPITALIZATION THRESHOLDS & USEFUL LIVES
Class of Asset Details
Useful
Life (Yrs) Threshold
Land N/A $1
Land improvements 10-20 $50,000
Building/building improvements: 12-40 $20,000
Construction Interior & Roof Cover
Heating Ventilation AC & Lighting
Electrical
Elevators, Fire, Piping & Plumbing
Site Preparation
Floor Structure & Cover, Foundation, Roof
Structure, Steel Frame, Walls Exterior
Primary Infrastructure and Utility 10-40 $75,000
Paving Systems
Water, Sanitary & Stormwater
Secondary Infrastructure 10-40 $25,000
Sidewalk, Boardwalk, Pathways
Streetlights, Signage
Equipment 5-20 $10,000
Vehicles
Machinery
Software and
non-tangible 5-20 $10,000
Purchased and internally developed
Construction Work in Progress
Upon completion,
per above class
Equipment expenditures for items between $500 and $10,000 are recorded as small tools and
equipment, which is a supply account. Building and improvement expenditures below the
thresholds are recorded as repairs and maintenance. Current revenues finance expenditures for
supplies, repairs, and maintenance.
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TAX CAPACITY, TAX LEVY, & TAX RATE HISTORY
Tax Capacity City Tax HRA Tax Total Tax City Tax
Year Value Levy Levy Levy Capacity Rate
2017 27,583,160$ 9,150,000$ 280,000$ 9,430,000$ 33.172
2018 29,528,145$ 9,547,000$ 323,000$ 9,870,000$ 32.332
2019 29,076,227$ 9,962,000$ 348,000$ 10,310,000$ 34.262
2020 29,870,392$ 10,445,000$ 355,000$ 10,800,000$ 34.968
2021 31,026,583$ 11,063,700$ 366,300$ 11,430,000$ 35.659
2022 31,073,603$ 11,353,000$ 388,000$ 11,741,000$ 36.536
2023 34,393,769$ 12,050,000$ 402,000$ 12,452,000$ 35.035
2024 37,843,681$ 13,074,000$ 451,000$ 13,525,000$ 34.547
2025 37,445,040$ 14,117,000$ 499,000$ 14,616,000$ 37.701
2026 40,164,721$ 15,137,000$ 504,000$ 15,641,000$ 37.687
$-
$5
$10
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$20
$25
$30
$35
$40
$45
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
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Tax Levies and Tax Capacity History
City Tax Levy HRA Tax Levy Tax Capacity Value
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USEFUL TERMS (GLOSSARY)
ACCOUNT: An organizational or budgetary breakdown found within city funds. A term used to
identify an individual asset, liability, expenditure (and other uses), revenue (and other sources),
or fund balance.
ACCOUNTS PAYABLE: Amounts owed to others for goods or services received.
ACCOUNTS RECEIVABLE: Amounts due from others for goods furnished or services rendered.
ACCOUNTING SYSTEM: The total set of records and procedures which are used to record,
classify, and report information on financial status and operations of an entity.
ACCRUAL BASIS OF ACCOUNTING: The method of accounting under which revenues are
recorded when they are earned, and expenditures are recorded when goods and services are
received.
ACTIVITY: A specific and distinguishable line of work performed by one or more organizational
components of a governmental unit for the purpose of accomplishing a function for which the
governmental unit is responsible. For example, "Ice & Snow Removal” is an activity performed
as part of the "Public Works" function.
AD VALOREM: In proportion to value. The basis for levying taxes on property.
AGENCY FUND: A fiduciary fund used to account for situations where the government’s role is
purely custodial.
AMERICAN RESCUE PLAN ACT (ARPA): Signed into law on March 11, 2021, this $1.9 trillion
funding program provided resources for a wide variety of recipients and for an extensive list of
uses. $350 billion of the funds were provided to state and local governments for emergency
funding in response to the COVID-19 pandemic.
AMORTIZATION: The action or process of gradually writing off the initial cost of an asset.
ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR): A set of financial statements for a
governmental entity that comply with the accounting requirements established by the
Governmental Accounting Standards Board (GASB) and are audited by an independent auditor
using generally accepted government auditing standards.
APPROPRIATION: An authorization granted by a legislative body to make expenditures and to
incur obligations for specific purposes. An appropriation is limited in amount to the time it may
be expended.
ARBITRAGE: The simultaneous purchase and sale of the same asset in different markets in
order to profit from tiny differences in the asset's listed price. In governments, this typically
refers to the investment of funds received as proceeds from bond issuances.
ASSESSED VALUATION: Value placed upon real estate or other property as a basis for levying
taxes.
ASSESSMENTS: Charges made upon parties for actual services or benefits received.
ASSETS: Property owned by a governmental unit, which has a monetary value.
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ASSIGNED FUND BALANCE: Resources the government intends to use for specific purposes but
are neither restricted nor committed.
AUDIT: The examination of documents, records, reports, systems of internal control,
accounting and financial procedures, and other evidence for one or more of the following
purposes: a) To attest to whether the statements prepared from the accounts present fairly the
financial position and the results of financial operations of the constituent funds and balanced
account groups of the city in accordance with generally accepted accounting principles
applicable to city and on a basis consistent with that of the preceding year; b) To determine the
propriety, legality, and mathematical accuracy of a governmental unit's financial transactions;
c) To ascertain whether all financial transactions have been properly recorded; d) To evaluate
the stewardship of public officials who handle and are responsible for the financial resources of
a governmental unit.
BALANCED BUDGET: A budget in which estimated revenues and other sources equals
estimated expenditures and other uses. A balanced budget does not use reserves or retained
earnings to fund expenditures.
BERTRAM CHAIN OF LAKES REGIONAL PARK (BCOL): One of Monticello’s “Big 6” projects which
is a regional park with 4 lakes, acres of undisturbed shoreline, natural habitat, and oak forest,
blending passive natural recreation with active athletic and recreational play areas.
BOND: A written promise, generally under seal, to pay a specified sum of money, called the
face value or principal amount, at a fixed time in the future, called the date of maturity, and
carrying interest at a fixed rate, usually payable periodically.
BONDED INDEBTEDNESS: Outstanding debt by issues of bonds, which are repaid by ad valorem
taxes or other revenue.
BUDGET: A plan of financial operation embodying an estimate of proposed expenditures for a
given period and the proposed means of financing them.
BUDGET MESSAGE: A general discussion of the proposed budget presented in writing as a part
of the budget document. The budget message explains principal budget issues against the
background of financial experience in recent years and presents recommendations made by city
staff.
BUDGET CALENDAR: The schedule of key dates, which a government follows in the preparation
and adoption of the budget.
BUDGETARY CONTROL: The control or management of a governmental unit or enterprise in
accordance with an approved budget for the purpose of keeping expenditures within the
limitation of available appropriations and available revenues.
CAPITAL ASSETS: Assets used in operations and have initial useful lives extending beyond a
single reporting period. These assets must also meet capitalization thresholds, which vary by
asset classification and typically costs more than $10,000. Land, improvements to land,
vehicles, machinery, equipment, infrastructure, and other tangible and intangible assets used in
operations are examples of capital assets.
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CAPITAL EXPENDITURES: A capital expenditure occurs when a capital asset is purchased.
Expenditures that do not benefit more than one reporting period or meet the capitalization
thresholds are classified as current expenditures.
CAPITAL IMPROVEMENT BUDGET: A plan of proposed capital expenditures and a means of
financing them. The capital improvement budget is enacted as part of the complete annual
budget.
CAPITAL INPROVEMENT PLAN (CIP): A plan for capital expenditures to be incurred each year
over a fixed period of years to meet capital needs arising from the long-term work program or
otherwise. It sets forth each project or other contemplated expenditure in which the
government is to have a part and specifies the full resources estimated to be available to
finance the projected expenditures.
CAPITAL PROJECTS FUNDS: A governmental fund type used to account for financial resources
to be expended for the acquisition or construction of major capital assets.
CAPITALIZATION THRESHOLD: The level at which an item is considered either a current
expenditure or a capital expenditure. The threshold for equipment is $10,000.
CASH BASIS: The method of accounting under which revenues are recorded when received in
cash and expenditures are recorded when paid.
CHART OF ACCOUNTS: The classification system used by a government entity to organize the
accounting for various funds and departments.
COMMITTED FUND BALANCE: Resources used for specific purposes pursuant to constraints
imposed by formal action of the government’s highest level of decision-making authority (i.e.,
City Council).
COMPONENT UNIT: A component unit is a legally separate organization for which elected
officials of a primary government are financially accountable.
CONSUMER PRICE INDEX (CPI): A statistical description of price levels provided by the U.S.
Department of Labor. The index is used as a measure of the increase in the cost of living (i.e.,
economic inflation).
CONTINGENCY: Budget for expenditures which cannot be placed in departmental budgets,
primarily due to uncertainty about the level or timing of expenditures when the budget is
adopted. The contingency also serves as a hedge against shortfalls in revenues or unexpected
expenditures.
CURRENT: A term applied to budgeting and accounting, designating the operations of the
present fiscal period as opposed to past or future periods including expenditures that do not
benefit more than one reporting period or meet the capitalization thresholds.
DEBT: An obligation resulting from borrowing money or purchasing goods and services.
DEBT LIMIT: The maximum amount of gross or net debt, which is legally permitted.
DEBT MARGIN: The amount of available debt, which may be issued by a governmental unit
before reaching its debt limit.
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DEBT SERVICE FUND: A governmental fund type used to account for the accumulation of
resources for the payment of general long-term debt principal and interest. Proprietary fund
type debt is accounted for in the enterprise fund or internal service fund receiving the debt
issue proceeds.
DEFICIT: An excess of expenditure or liabilities over income or assets in a given period.
DEPARTMENT: Basic organizational unit of government, responsible for carrying out related
functions. Each department serves a specific function as a distinct organizational unit of
government within the given fund. Its primary purpose is to facilitate organizational and
budgetary accountability.
DEPRECIATION: Expiration in the service life of capital assets attributable to wear and tear,
deterioration, action of the physical elements, inadequacy, or obsolescence.
DEPARTMENT OF MOTOR VEHICLES (DMV): Also known as Deputy Registrar. City service of
processing state-issued licenses for motor vehicles and equipment, such as license plates and
tabs for cars, trucks, trailers, and recreational vehicles.
DISTINGUISHED BUDGET PRESENTATION AWARDS PROGRAM: A voluntary awards program
administered by the Government Finance Officers Association to encourage governments to
prepare effective budget documents.
ECONOMIC DEVELOPMENT AUTHORITY (EDA): A board responsible for the on-going
Development and redevelopment efforts within the city. This consists of housing and
businesses, including all related public improvements and land acquisitions.
ENTERPRISE FUND: A proprietary fund type used to report an activity for which a fee is charged
to external users for goods or services. In theory, these funds operate in a manner similar to
private business enterprises, where the intent of the governing body is to recover the cost of
delivering services through user fees or charges (Water, Sewer, Liquor, Deputy Registrar, and
Fiber Optic funds).
ESTIMATED MARKET VALUE (EMV): Represents the selling price of a property if it were on the
market. Estimated market value is converted to tax capacity before property taxes are levied.
EXPENDITURE: For accounts kept on the accrual or modified accrual basis of accounting, the
cost of goods received, or services rendered whether cash payment have been made or not.
Where accounts are kept on a cash basis, expenditures are recognized only when the cash
payments for the above purposes are made.
FIBERNET MONTICELLO (FNM): The name of the city-owned fiber optic network, which
provides internet, phone, and cable television to residents and businesses of Monticello.
FIDUCIARY FUND: A fund classification used to report assets held in a trustee or agency
capacity for others and therefore cannot be used in the government’s own programs.
FINES: Revenues from penalties imposed for violation of laws or regulations.
FISCAL POLICY: A government’s policies with respect to revenues, spending, and debt
management as these relate to government services, programs, and capital investment. Fiscal
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Policy provides an agreed-upon set of principles for the planning and programming of budgets
and their funding.
FISCAL YEAR: The budget and accounting year that begins on the first day of January and ends
on the last day of December of each year.
FULL TIME EQUIVALENT (FTE): The number of employee hours (2,080) needed to be equal to
one full time employee. Several part time employees may be combined to make one FTE.
FUNCTION: A group of related activities aimed at accomplishing a major service or regulatory
program for which the government unit is responsible.
FUND: A fiscally independent accounting entity with a self-balancing set of accounts recording
cash and/or other resources together with all related liabilities, obligations, and reserves, which
are segregated for the purpose of carrying on specific activities or attaining certain objectives.
Funds in the government model are classified into three broad categories: governmental,
proprietary, and fiduciary. The most common reason for establishing a fund is to separately
account for restricted-use revenue or to comply with state or federal law.
FUND BALANCE: Governmental fund assets and deferred outflows of resources minus liabilities
and deferred inflows of resources.
GENERAL FUND: Accounts for the general operation of the city and all financial resources
except those to be accounted for in another fund.
GENERAL GOVERNMENT: A set of accounts, to which the expenditures for operating the city
are charged.
GENERAL OBLIGATION (GO) BONDS: Bonds for which the government pledges its full faith and
credit to the repayment of the bond’s principal, including interest.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP): A set of accounting rules, standards,
and procedures.
GEOGRAPHIC INFORMATIONS SYSTEMS (GIS): A system that creates, manages, analyzes &
maps all types of data.
GOVERNMENT FINANCE OFFICERS ASSOCIATION (GFOA): A professional association of state,
provincial, and local government finance officers in the United States and Canada.
GOVERNMENTAL ACCOUNTING: The composite of analyzing, recording, summarizing,
reporting, and interpreting the financial transactions of governmental units and agencies.
GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB): A private organization creating
generally accepted accounting principles for state and local governments.
GOVERNMENTAL FUND TYPES: Funds generally used for tax-supported activities. Under
current GAAP, there are five governmental fund types in this: general, special revenue, debt
service, capital projects, and permanent funds. The city has no permanent funds.
GRANT: A contribution of assets by one governmental unit or other organization to another.
HOMESTEAD AND AGRICULTURAL CREDIT (HACA): A form of state-paid property tax relief for
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farm property and owner-occupied homes.
HOUSING AND REDEVELOPMENT ACT – SPECIAL BENEFIT LEVY: Property tax levied against the
city’s taxable market value. The HRA levy limit is .0185% of the taxable market value and must
be used solely for redevelopment purposes.
HOUSING AND REDEVELOPMENT AUTHORITY (HRA): A legally distinct public entity which
undertakes housing, commercial and business redevelopment activities.
IMPROVEMENT BONDS: Bonds payable from the proceeds of special assessments from
properties benefiting from an improvement.
IMPROVEMENTS: Buildings, structures, and other attachments or annexations to land which
are intended to remain so attached or annexed, such as sidewalks, trees, drains, and sewers.
INDUSTIAL & ECONOMIC DEVELOPMENT COMMITTEE (IEDC): A volunteer organization
appointed by the Monticello City Council which advocates for industrial and economic growth
within the city of Monticello by promoting awareness and communication efforts on behalf of
the business community.
INFRASTRUCTURE: The basic physical and organizational structures and facilities (e.g.,
buildings, roads, bridges) needed for the operation of the city. Infrastructure thus consists of
improvements with significant cost to develop or install that return an important value over
time to the city.
INTERFUND OPERATING TRANSFERS: Amounts transferred from one fund to another, shown as
an expenditure in the originating fund and a revenue in the receiving fund.
INTERGOVERNMENTAL REVENUES: Revenues from other governments in the form of grants,
entitlement, or shared revenues.
INTERNAL SERVICE FUNDS: A proprietary fund type used to report activity that provides goods
or services to other funds, departments, or agencies of the primary government and its
component units, or to other governments, on a cost-reimbursement basis.
JOINT VENTURE: A strategic, typically temporary, partnership where two or more parties pool
resources, expertise, and capital to pursue a specific business project or goal.
LEVY: (Verb) To impose taxes, special assessments, or service charges for the support of
governmental activities. (Noun) Taxes, special assessments, or service charges imposed by a
governmental unit.
LEVY LIMIT: The city’s maximum property tax levy without special authorization as defined by
Minnesota State Statue.
LINE ITEM: A specific item or group of related items defined by detail in a unique account in the
financial records.
LOCAL GOVERNMENT AID (LGA): Intergovernmental revenue from the state to municipalities
to help fund general expenditures.
LONG-TERM DEBT: Debt with a maturity of more than one year after the date of issuance.
241dĂďůĞŽĨŽŶƚĞŶƚƐ
MAINTENANCE: The upkeep (repairs and maintenance) of physical properties in condition for
use or occupancy.
MAJOR FUND: For budgetary purposes, a fund whose revenues or expenditures, excluding
other financing sources and uses, constitute more than 10% of the revenues or expenditures of
the appropriated budget.
MARKET VALUE: An assessor’s estimate of what property would be worth on the open market
if sold. The market value is set on January 2 of the year before taxes are payable.
MARKET VALUE EXCLUSION (MVE): Provision in the state property tax system which exempts
or removes a portion of a property’s market value from property taxes.
MISCELLANEOUS: Revenues or expenditures not classified in any other revenue or expenditure
category.
MODIFIED ACCRUAL BASIS: The basis of accounting under which expenditures other than
accrued interest on general long-term debt are recorded at the time liabilities are incurred and
revenues are recorded when received in cash except for material and/or available revenues,
which should be accrued to reflect properly the tax levied, and revenue earned.
MONTICELLO COMMUNITY CENTER (MCC): A beautiful, full-service facility with activities,
programs, and events including a pool & waterslide, fitness center, gymnasium, fitness classes,
climbing wall, indoor play area, and meeting rooms.
NON-MAJOR FUND: For budgetary purposes, a fund whose revenues and expenditures,
excluding other financing sources and uses, are less than 10% of the revenues and expenditures
of the appropriated budget.
NONSPENDABLE FUND BALANCE: Amounts that cannot be spent because they are either (a)
not in spendable form or (b) legally or contractually required to be maintained intact.
Nonspendable fund balances typically include inventory, prepaid items, and land held for
resale.
OBJECT OF EXPENDITURE: Expenditure classifications based upon the types of items purchased
or services obtained. Examples of objects of expenditure include salaries, supplies, contracted
service, etc.
OBJECTIVE: Desired output-oriented accomplishments, which can be measured and achieved
within a given period.
OPERATING BUDGET: A financial plan that estimates revenues and expenditures for a specified
period.
OPERATING EXPENSE: The cost for personnel, materials, and equipment required for a
department to function.
OPERATING REVENUE: Monies received from ongoing operations. Operating revenues are used
to pay for day-to-day services.
ORDINANCE: A formal legislative enactment by the City Council.
PAID TIME OFF (PTO): Compensated time away from work, provided by an employer to
242dĂďůĞŽĨŽŶƚĞŶƚƐ
employees for them to use as they see fit.
PAY-AS-YOU-GO BASIS: A term used to describe a financial policy by which capital outlays are
financed from current revenues rather than through borrowing.
PERSONNEL SERVICES: Expenditures for salaries, wages, and fringe benefits of employees.
PROGRAM: A group of related activities performed by one or more organizational units for the
purpose of accomplishing a function for which the governmental unit is responsible.
PROJECT: A plan of work, job assignment, or task.
PROPERTY TAX LEVY: The total amount to be raised by general property taxes for the purpose
stated in the resolution certified to the county auditor by December 28th. Also see levy.
PROPRIETARY FUNDS: Funds focusing on the determination of operating income, changes in
net position (or cost recovery), financial position, and cash flows. There are two types of
proprietary funds: enterprise funds and internal service funds. For this report, these funds have
the same budgetary basis as governmental funds.
PUBLIC SAFETY: Expenditures related to the protection of persons and property.
PUBLIC WORKS: Expenditures for the maintenance of city property and infrastructure.
REFUNDING BONDS: Bonds issued to redeem outstanding (unpaid) debt.
REIMBURSEMENT: Cash or other assets received as a repayment of the cost of work or services
performed or of other expenditures made for or on behalf of another governmental unit or
department or for an individual, firm, or corporation.
RESERVE: An account which records a portion of the fund balance which must be segregated
for some future use, and which is, therefore, not available for further appropriation or
expenditure.
RESOLUTION: A special or temporary order of a legislative body; an order of a legislative body
requiring less legal formality than an ordinance or statute.
RESOURCES: The actual assets of a governmental unit, such as cash, plus contingent assets such
as estimated revenues applying to the current fiscal year not accrued or collected, and bonds
authorized and not issued.
RESTRICTED FUND BALANCE: Fund balance should be reported as restricted when constraints
placed on the use of resources are either: a) externally imposed by creditors (such as through
debt covenants), grantors, contributors, or laws or regulations of other governments; or b)
imposed by law through constitutional provisions or enabling legislation.
REVENUE: The term designates an increase to a fund's assets which: 1) does not increase a
liability; 2) does not represent a repayment of an expenditure already made; 3) does not
represent a cancellation of certain liabilities; and 4) does not represent an increase in
contributed capital.
REVENUE BOND: A bond that is backed by a particular revenue source such as water user fees,
typically accounted for in proprietary fund types.
243dĂďůĞŽĨŽŶƚĞŶƚƐ
SMALL CITIES DEVELOPMENT PROGRAM (SCDP): A program run by the State of Minnesota
which helps cities and counties with funding for housing, public infrastructure and commercial
rehabilitation projects.
SPECIAL ASSESSMENT: A compulsory levy made by a local government against certain
properties to defray part or all the cost of a specific improvement or service which is presumed
to be of general benefit to the public and of special benefit to such properties.
SUPERVISORY CONTROL AND DATA ACQUISITION (SCADA): System used for controlling,
monitoring, and analyzing industrial devices and processes, including water and sewer services.
SPECIAL REVENUE FUND: A governmental fund type used to account for revenue derived from
specific revenue sources that are legally restricted or committed for specific purposes.
TAX CAPACITY: The valuation of property based on market value and statutory class rates. The
property tax for each parcel is based on its tax capacity. The total tax capacity of all individual
parcels is the basis for determining the tax capacity rate.
TAX CAPACITY RATE: Tax rate applied to tax capacity to generate property tax revenue. The
rate is obtained by dividing the property tax levy by the available tax capacity.
TAX INCREMENT FINANCING (TIF): Financing tool originally intended to combat severe blight in
areas, which would not be redeveloped without government subsidies derived from locally
generated property tax revenues.
TAXABLE MARKET VALUE: The market value of a property less the market value exclusion. This
is the value used to calculate property taxes on a property.
TAXES: Compulsory charges levied by a governmental unit for the purpose of financing services
performed for the common benefit.
TOTAL TAX CAPACITY: The sum of the tax capacities of all parcels of property within a city.
Adjustments for fiscal disparities, tax increment, and a portion of the powerline value are made
to this total since not all tax capacity is available for general tax purposes.
TRUST FUND: A fund consisting of resources received and held by the governmental unit as
trustee, which is to be expended or invested in accordance with the conditions of the trust.
UNASSIGNED FUND BALANCE: This is the residual classification for the General Fund. This is
fund balance that has not been reported in any other classification. The General Fund is the
only fund that can report a positive unassigned fund balance. Other governmental funds would
report deficit fund balances as unassigned.
UNBALANCED BUDGET: A budget in which undesignated fund balance or reserves are used or
increased, to balance estimated revenues to estimated expenditures or expenses.
UNRESTRICTED FUND BALANCE: The portion of a fund’s balance that is not restricted for a
specific purpose and is available for general appropriation.
WORKING CAPITAL: Current assets less current liabilities. The modified accrual balance of
resources in enterprise funds after factoring out long-term assets and liabilities that do not
impact current, near-term operations.
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ACRONYMS
ACFR Annual Comprehensive Financial Report
ARPA American Rescue Plan Act
BCOL Bertram Chain of Lakes
CIP Capital Improvement Plan
CPI Consumer Price Index
CSAH County State Aid Highway
DMV Department of Motor Vehicles
EDA Economic Development Authority
EMV Estimated Market Value
FNM FiberNet Monticello
FTE Full Time Equivalent
GAAP Generally Accepted Accounting Principles
GASB Governmental Accounting Standards Board
GFOA Government Finance Officers Association
GIS Geographic Information System
GO General Obligation (Bonds)
HACA Homestead and Agricultural Credit Aid
HRA Housing and Redevelopment Authority
IEDC Industrial & Economic Development Committee
LGA Local Government Aid
MCC Monticello Community Center
MVE Market Value Exclusion
PERA Public Employees Retirement Association
PTO Paid Time Off
SCADA Supervisory Control and Data Acquisition
SCDP Small Cities Development Program
TIF Tax Increment Financing
WCSO Wright County Sheriff’s Office
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2026
Budget