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GOVERNMENT -WIDE FINANCIAL ANALYSIS (CONTINUED)
<br />Governmental Activities — Governmental activities account for a $9,542,743 increase in the City's net position.
<br />Capital grants and contributions decreased by $621,775 due to a decrease in park dedication contributions.
<br />Operating grants and contributions increased by $348,535 as the City received $316,780 from the State of
<br />Minnesota in 2025 for a new program known as the Local Affordable Housing Aid.
<br />Investment earnings decreased $445,425. The City is required per the Governmental Accounting Standards
<br />Board to reflect most investments at fair value as of December 31' of the current year. The City reflects any
<br />changes in fair value against interest earnings. The City also saw a decrease on the interest collected on internal
<br />loans. Property taxes saw an increase of $658,054 or 3% which was the net effect of the City increasing their
<br />2025 tax levy by approximately 8% over the 2024 adopted levy, but lower property tax collections due to the
<br />abatement of 2024 market valuations on several properties. Charges for services decreased by $159,492 as the
<br />City reduced the annual rental license fees in 2025.
<br />Expenses for the general government function increased by $480,565 due largely to personnel costs. The public
<br />safety function increase of $703,857 was also attributed to personnel costs. Highways and streets expense
<br />increased by $1,410,653 due to an increase in the number of street maintenance projects. Culture and recreation
<br />increased $251,262 due largely to the improvements of playground equipment. The economic development
<br />function decreased by $145,984 due to a decrease of expenses in the COR area. Interest had a decrease of
<br />$183,193 for payment of debt service.
<br />Business -Type Activities — Business -type activities, which are the City's utility operations of water, sewer,
<br />street light, recycling, and storm water, increased the City's net position by $10,616,659. Key elements of this
<br />increase are as follows:
<br />• Charges for services increased by $845,981 from the prior year. This is primarily due to an increase in
<br />collections from quarterly utility billing collections related to the water, sewer and storm water utility.
<br />• Capital grants and contributions decreased $1,080,513. In 2024, the City had received a $3.2 million dollar
<br />state grant for the construction of a water treatment plant.
<br />• Investment earnings increased $302,395. The city is required per the Governmental Accounting Standards
<br />Board to reflect most investments at fair value as of December 31' of the current year. The city reflects
<br />any changes in fair value against interest earnings.
<br />Governmental Activities — The following graph illustrates the City's governmental activities:
<br />$10, 000,000
<br />$9,000,000
<br />$8,000,000
<br />$7,000,000
<br />$ 6,000,000
<br />$5,000,000
<br />$4,000,000
<br />$3,000,000
<br />$2,000,000
<br />$1,000,000
<br />$—
<br />Program Revenues and Expenses — Governmental Activities
<br />IF
<br />1
<br />General Public Safety Highways Culture and Economic Interest
<br />Government and Streets Recreation Development
<br />■ Program Revenues • Expenses
<br />31
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