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u HUTCHINSON A CITY ON PURPOSE, CITY OF HUTCHINSON MCLEOD COUNTY HUTCHINSON, MINNESOTA NOTICE OF A SPECIAL CITY COUNCIL WORKSHOP Tuesday, July 14, 2026 4:30 p.m. Council Chambers —Hutchinson City Center Notice is hereby given that the Hutchinson City Council has called a special workshop meeting for Tuesday, July 14, 2026, at 4:30 p.m. in the Council Chambers at the Hutchinson City Center,111 Hassan Street SE, Hutchinson, Minnesota for the following purpose: REVIEW OF 2025 COMPREHENSIVE FINANCIAL REPORT Matthew Jaunich, Cite" Administrator DATED: July 9, 2026 POSTED: City Center HUTCHINSON CITY COUNCIL MEETING AGENDA TUESDAY, JULY 14, 2026 CITY CENTER — COUNCIL CHAMBERS (The City Council is provided background information for agenda items in advance by city staff, committees and boards. Many decisions regarding agenda items are based upon this information as well as: City policy and practices, input from constituents, and other questions or information that has not yet been presented or discussed regarding an agenda item) 1. CALL MEETING TO ORDER — 5:30 P.M. (a) Approve the Council agenda and any agenda additions and/or corrections 2. INVOCATION — Faith Lutheran Church (The invocation is a voluntary expression of the private citizen, to and for the City Council, and is not intended to affiliate the City Council with, or express the City Council's preference for, any religious/spiritual organization. The views or beliefs expressed by the invocation speaker have not been previously reviewed or approved by the Council or staff) 3. PLEDGE OF ALLEGIANCE 4. RECOGNITION OF GIFTS, DONATIONS AND COMMUNITY SERVICE TO THE CITY (a) Resolution No. 16053 — Resolution Accepting $6813.53—Donation from Paul Wright (Wright Farms) to Hutchinson Fire Department For Safety Equipment and Other Firefighting Matenal/Equipment PUBLIC COMMENTS (This is an opportunity or members of the public to address the City Council. If the topic you would like to discuss is on the agenda, please ask the Mayor if he will be accepting public comments during the agenda item if not a public hearing. If you have a question, concern or comment, please ask to be recognized by the mayor — state your name and address for the record. Please keep comments under 5 minutes. Individuals wishing to speak for more than five minutes should ask to be included on the agenda in advance of the meeting. All comments are appreciated, but please refrain from personal or derogatory attacks on individuals) 5. CITIZENS ADDRESSING THE CITY COUNCIL 6. APPROVAL OF MINUTES (a) Regular Meeting of June 23, 2026 CONSENT AGENDA (The items listedjbr consideration will be enacted by one motion unless the Mayor, a member of the City Council or a city staff member requests an item to be removed. Traditionally items are not discussed) 7. APPROVAL OF CONSENT AGENDA I (a) Consideration for Approval of Resolution No. 16049 - Resolution Approving Authorization to Apply for Redevelopment Grant from the Minnesota Department of Employment and Economic Development for the Jorgensen Hotel Redevelopment Project (b) Consideration for Approval of Resolution No. 16050 — Resolution Approving Commitment to Provide Local Match and Authorizing Contract Signatures for Jorgensen Hotel Redevelopment Proj ect CITY COUNCIL AGENDA -July 14, 2026 (c) Consideration for Approval of Resolution No. 16052 — Resolution Appointing Election Judges for Primary Election (d) Consideration for Approval to Authorize an Application for a Request for U.S. Army -Owned Equipment to be Used for Static Display Purposes at the Hutchinson Municipal Airport (e) Consideration for Approval of Grant Amendment for Snow Removal Equipment Shed (f) Consideration for Approval of Amending South Park Water Tower Lease Agreement With Midwest Wireless dba Verizon Wireless (g) Consideration for Approval of Out -of -State Travel for Miles Seppelt to Attend the Economic Development Council's Centennial Summit in Rapid City, South Dakota (h) Consideration for Approval of Issuing Caterer's Permit to Marshall Paulsen of Picnic Linden Hills on August 15, 2026, at McLeod County Fairgrounds (i) Consideration for Approval of Issuing Temporary Liquor License to McLeod County Agriculture Association from August 20 — 23, 2026, for McLeod County Fair (j) Consideration for Approval of Issuing Temporary Liquor License to St. Anastasia Catholic Church on September 12 & 13, 2026, for Fall Festival (k) Consideration for Approval of Issuing Short -Term Gambling License to St. Anastasia Catholic Church on 12 & 13, 2026 (1) Consideration for Approval of Issuing Short -Term Gambling License to Hutchinson Fire Department Relief Association on September 12, 2026 (m) Claims, Appropriations and Contract Payments — Register A APPROVAL OF CONSENT AGENDA II (a) Claims, Appropriations and Contract Payments — Register B PUBLIC HEARINGS — 5:30 P.M. - NONE COMMUNICATIONS, REQUESTS AND PETITIONS (I he purpose o t is portion o the agenda is to provi e t e ounci with information necessary to craft wise policy. Includes items like monthly or annual reports and communications from other entities) 9. EMERALD ASH BORER (EAB) UPDATE 10. PRESENTATION OF CITY OF HUTCHINSON 2025 YEAR END REPORT UNFINISHED BUSINESS 2 CITY COUNCIL AGENDA —July 14, 2026 NEW BUSINESS 11. APPROVE/DENY 2025 COMPREHENSIVE FINANCIAL REPORT 12. APPROVE/DENY RESOLUTION NO. 16051 — RESOLUTION AUTHORIZING THE SALE OF GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2026A AND PUBLIC UTILITY REVENUE BONDS, SERIES 2026B GOVERNANCE (The purpose of this portion of the agenda is to deal with organizational development issues, including policies, performances, and other matters that manage the logistics of the organization. May include monitoring reports, policy development and governance process items) 13. MINUTES/REPORTS FROM COMMITTEES, BOARDS OR COMMISSIONS a) 2025 General Fund Financial Results b) Hutchinson Utilities Commission Minutes from May 27, 2026 c) Liquor Hutch Quarterly Report NHSCELLANEOUS 14. STAFF UPDATES 15. COUNCIL/MAYOR UPDATE ADJOURNMENT Resolution No. 16053 RESOLUTION ACCEPTING DONATION WHEREAS, The City of Hutchinson is generally authorized to accept donations of real and personal property pursuant to Minnesota Statutes Section 465.03 for the benefit of its citizens; and WHEREAS, the following organization has offered to contribute the cash amount set forth below to the City of Hutchinson: Name of Donor Amount Paul Wright (Wright Farms) $6,813.53 WHEREAS, the donation is being made to assist the Hutchinson Fire Department with the purchase of safety equipment and other firefighting material/equipment; and WHEREAS, The City Council hereby finds that it is appropriate to accept the donation offered, NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, NHNNESOTA: THAT, the donation described above is hereby accepted by the City of Hutchinson with the conditions as laid out in the resolution. Adopted by the City Council this 14'' day of July 2026. Gary T. Forcier, Mayor Matthew Jaunich, City Administrator HUTCHINSON CITY COUNCIL MEETING MINUTES TUESDAY, JUNE 23, 2026 CITY CENTER — COUNCIL CHAMBERS (The City Council is provided background information for agenda items in advance by city staff, committees and boards. Many decisions regarding agenda items are based upon this information as well as: City policy and practices, input from constituents, and other questions or information that has not yet been presented or discussed regarding an agenda item) CALL MEETING TO ORDER — 5:30 P.M. Mayor Gary Forcier called the meeting to order. Members present were Tim Burley, Pat May, Dave Sebesta and Chad Czmowski. Also present was Marc Sebora, City Attorney. (a) Approve the Council agenda and any agenda additions and/or corrections Motion by Czmowski, second by Burley, to approve the Council agenda as presented. Motion carried unanimously. 2. INVOCATION — A moment of silence was held in lieu of an invocation. (The invocation is a voluntary expression of the private citizen, to and for the City Council, and is not intended to affiliate the City Council with, or express the City Council's preference for, any religious/spiritual organization. The views or beliefs expressed by the invocation speaker have not been previously reviewed or approved by the Council or staff) 3. PLEDGE OF ALLEGIANCE 4. RECOGNITION OF GIFTS, DONATIONS AND COMMUNITY SERVICE TO THE CITY Council Member Burley recognized the American Legion Auxiliary which donates books to the public library in memory of veterans. Mayor Forcier recognized the successful Jaycee Water Carnival week held June 15-21. PUBLIC COMMENTS (This is an opportunity or members of the public to address the City Council. If the topic you would like to discuss is on the agenda, please ask the Mayor if he will be accepting public comments during the agenda item if not a public hearing. If you have a question, concern or comment, please ask to be recognized by the mayor — state your name and address for the record. Please keep comments under 5 minutes. Individuals wishing to speak for more than five minutes should ask to be included on the agenda in advance of the meeting. All comments are appreciated, but please refrain from personal or derogatory attacks on individuals) 5. CITIZENS ADDRESSING THE CITY COUNCIL 6. APPROVAL OF MINUTES (a) Regular Meeting of June 9, 2026 Motion by May, second by Czmowski, to approve the minutes as presented. Motion carried unanimously. CONSENT AGENDA (The items listedjbr consideration will be enacted by one motion unless the Mayor, a member of the City Council or a city staff member requests an item to be removed. Traditionally items are not discussed) 7. APPROVAL OF CONSENT AGENDA I (a) Appointment of Julie Johansen to Pioneerland Library Board CITY COUNCIL MINUTES — June 23, 2026 (b) Consideration for Approval of Resolution No. 16045 — Resolution Appointing an Interim City Engineer (c) Consideration for Approval of Resolution No. 16046 — Approving Disposal of Surplus Street Department Property (d) Consideration for Approval of Resolution No. 16047 - Resolution Adopting Findings of Fact and Reasons for Approval of a Conditional Use Permit for a Truck Terminal in an I-1 Zoning District Located at 1060 and 1064 Adams Street SE With Favorable Planning Commission Recommendation (e) Consideration for Approval of Resolution No. 16048 — Resolution Approving Donation of Surplus Fire Department Equipment (f) Consideration for Approval of RiverSong Music Festival July 9-11, 2026, in Masonic West River Park (g) Consideration for Approval of Minnesota Pottery Festival July 24-26, 2026, in Masonic West River Park (h) Consideration for Approval of Issuing Temporary Liquor License to Minnesota Pottery Festival on July 25 & 26, 2026 (i) Claims, Appropriations and Contract Payments — Register A Motion by May, second by Sebesta, to approve Consent Agenda I. Motion carried unanimously. APPROVAL OF CONSENT AGENDA II (a) Claims, Appropriations and Contract Payments — Register B Motion by Burley, second by Sebesta, with Czmowski abstaining, to approve Consent Agenda II. Motion carried unanimously. PUBLIC HEARINGS — 5:30 P.M. - NONE purpose o t is portion o t e agenda is to provi e the ounci with information necessary to craft wise policy. ides items like monthly or annual reports and communications from other entities.) 9. UPDATE FROM RIVERSONG MUSIC FESTIVAL COMMITTEE Leah Kamrath, Community Outreach Coordinator for RiverSong Music Festival, presented before the Council. Ms. Kamrath provided an update on the festival which will be held July 10 & 11, 2026, at Masonic West River Park including vendors, artists, security, lighting, parking and tickets. 2 CITY COUNCIL MINUTES — June 23, 2026 UNFINISHED BUSINESS 10. APPROVE/DENY SECOND READING AND ADOPTION AND SUMMARY FOR PUBLICATION OF ORDINANCE NO. 26-877 — AN ORDINANCE AMENDING CHAPTER 53 OF THE CITY CODE - SEWERS Mike Stifter, Public Works Manager, noted that the first reading of this ordinance was held at the last meeting and no changes have been made to it. Motion by Czmowski, second by May, to approve second reading and adoption and summary of Ordinance No. 26-877. Motion carried unanimously. NEW BUSINESS 11. APPROVE/DENY 2026 SAFE ROUTES TO SCHOOL PLAN Mike Stifter, Public Works Manager, presented before the Council. Mr. Stifter provided a brief overview of the 2026 Safe Routes to School Plan. Mr. Stifter introduced Blake Barnard from the Mid -Minnesota Development Commission who reviewed the plan in more detail. The plan document will be used to guide future projects as well as help leverage potential grant funds for identified projects. Motion by Burley, second by May, to approve 2026 Safe Routes to School Plan. Motion carried unanimously. 12. APPROVE/DENY LABOR AGREEMENT WITH POLICE SERGEANT'S UNION (LELS) Kellie Wendland, Human Resources Director, presented before the Council. Ms. Wendland explained that the City and the sergeant's union have agreed on an updated labor agreement which is a three-year contract. The agreement is similar to wage increases that non -union employees received except for the fact that it includes a $1.00 per hour adjustment to eligible employees who received an outstanding performance review, an exceeds expectations review, or a solid performer review in 2025. Additional changes include adding that the sergeant assigned to the investigate functions will receive an additional $200/month for additional duties with no sunset; removed old language related to a uniform allowance in 2022; removed old language on holiday hours that hadn't included the addition of the Juneteenth holiday; and updated vacation and sick leave/bereavement language to match the City's updated policy that went into effect in January 2024. Motion by May, second by Czmowski, to approve labor agreement with police sergeant's union. Motion carried unanimously. 13. APPROVE/DENY SETTING PRIMARY CANVASSING BOARD FOR AUGUST 14, 2026 Melissa Starke, City Clerk, explained that due to the primary election for City Council Seats 1 and 2, the City Council will need to canvass those election results. State law requires that the primary CITY COUNCIL MINUTES — June 23, 2026 canvassing be completed on either August 13 or 14, 2026. The county auditor requires that the City does not canvass until they have completed county canvassing which is scheduled for August 14, 2026, at 9:30 a.m. Motion by Czmowski, second by May, to set primary canvassing board for August 14, 2026, at 11:00 a.m. Motion carried unanimously. 14. APPROVE/DENY RE -SETTING AUGUST 11, 2026, CITY COUNCIL MEETING Marc Sebora, City Attorney, explained that August 11, 2026, is primary election day and state law prohibits city meetings between 6:00-8:00 p.m. Motion by May, second by Sebesta, to re -set August 11, 2026, City Council meeting to 4:00 p.m. Motion carried unanimously. GOVERNANCE (The purpose of this portion of the agenda is to deal with organizational development issues, including policies, performances, and other matters that manage the logistics of the organization. May include monitoring reports, policy development and governance process items) 15. MINUTES/REPORTS FROM COMMITTEES, BOARDS OR COMMISSIONS a) City of Hutchinson Financial Report and Investment Report for May 2026 b) Hutchinson Housing & Redevelopment Authority Board Minutes from May 19, 2026 c) Planning Commission Minutes from May 19, 2026 NHSCELLANEOUS 16. STAFF UPDATES Mike Stifter — Mr. Stifter noted that final paving on Edmonton Avenue will be done on Thursday this week and the road should open late Thursday or Friday. Striping on Edmonton Avenue will be conducted next week. Improvement projects on the streets south of Century are progressing well. He also noted that the first round of solar projects reimbursements has been received. Lastly, he noted that the Crow River fountain is under repair due to muskrats eating through the line and creating a short in the wiring. An electrician will be assessing the damage this week. Marc Sebora — Mr. Sebora noted that City offices will be closed on July 3, 2026, in observance of the Fourth of July holiday. 17. COUNCIL/MAYOR UPDATE Tim Burley — Council Member Burley provided an update on all of the activities happening at the public library. Dave Sebesta — Council Member Sebesta provided an update from the Regional Transportation Coordination Program of the Mid Minnesota Development Commission in reference to transportation. Pat May — Council Member May gave an update from the Bicycle/Pedestrian Advisory Committee commenting on the Bike/Walk to School Day and the bike fleet that receives donations for physical education classes. .19 CITY COUNCIL MINUTES — June 23, 2026 Gary Forcier — Mayor Forcier encouraged residents to adopt a storm drain and clear away leaves and debris to keep them clean. ADJOURNMENT Motion by May, second by Czmowski, to adjourn at 6:10 p.m. Motion carried unanimously. HUTCHINSON CITY COUNCIL HUTC HIN SON Request for Board Action A UTY DN PUAPOSE. AUTHORIZATION TO APPLY FOR REDEVELOPMENT GRANT FROM THE Agenda Item: MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT Department: EDA LICENSE SECTION Meeting Date: 7/14/2026 Application Complete N/A Contact: Miles R. Seppelt Agenda Item Type: Presenter: none Reviewed by Staff ❑ Consent Agenda Time Requested (Minutes): 0 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: Redevelopment of the Jorgensen Hotel has been temporarily delayed following the discovery of additional asbestos -containing materials within the building, significantly increasing the projected demolition costs. To help offset these unexpected expenses, the Developer has requested that the City pursue additional funding through the Minnesota Department of Employment and Economic Development's (DEED) Redevelopment Grant Program. The Developer currently anticipates demolishing the Jorgensen Hotel and Kock Jewelry buildings this fall, with construction of the new hotel expected to begin next spring. The attached resolution authorizes City staff to submit an application to DEED for Redevelopment Grant funding on behalf of the project. If you have any questions or would like additional information, please feel free to contact me at (320) 234-4223. BOARD ACTION REQUESTED: Adoption of Resolution Fiscal Impact: Funding Source: FTE Impact: Budget Change: New Bu Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A RESOLUTION NO. 16049 AUTHORIZATION TO APPLY FOR REDEVELOPMENT GRANT FROM THE MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT BE IT RESOLVED that the City of Hutchinson has approved the Redevelopment Grant application to be submitted to the Department of Employment and Economic Development (DEED) on or before August 1, 2026 by the City of Hutchinson for the Jorgensen Hotel site. I CERTIFY THAT the above resolution was adopted by the City Council of the City of Hutchinson on July 14, 2026. Mayor, Gary Forcier ATTEST: City Administrator, Matt Jaunich HUTCHINSON CITY COUNCIL HUTC HIN SON Request for Board Action A UTY DN PUAPOSE. COMMITMENT TO PROVIDE LOCAL MATCH AND AUTHORIZING CONTRACT Agenda Item: SIGNATURES Department: EDA LICENSE SECTION Meeting Date: 7/14/2026 Application Complete N/A Contact: Miles R. Seppelt Agenda Item Type: Presenter: none Reviewed by Staff ❑ Consent Agenda Time Requested (Minutes): 0 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: Redevelopment of the Jorgensen Hotel has been temporarily delayed after additional asbestos was discovered within the building, resulting in a substantial increase in the estimated demolition costs. To help address these unforeseen expenses, the Developer has requested that the City pursue additional grant funding. City staff is currently preparing an application for the Minnesota Department of Employment and Economic Development's (DEED) Redevelopment Grant Program, which provides financial assistance for eligible redevelopment projects. The DEED Redevelopment Grant Program requires a 50 percent local match. For this project, the required match would be funded through Tax Increment Financing (TIF) revenues generated by the development and/or contributions from the Developer. No City general fund dollars would be used to satisfy the local match requirement. The Developer's current schedule anticipates demolition of the Jorgensen Hotel and Kock Jewelry buildings this fall, followed by construction of the new hotel beginning next spring. The attached resolution authorizes the City to provide the required local match through the TIF mechanism described above and authorizes the Mayor and City staff to execute the grant agreement and any other documents necessary to implement the project. If you have any questions or would like additional information, please feel free to contact me at (320) 234-4223. BOARD ACTION REQUESTED: Adoption of Resolution Fiscal Impact: Funding Source: FTE Impact: Budget Change: New Bu Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A RESOLUTION NO. 16050 COMMITMENT TO PROVIDE LOCAL MATCH AND AUTHORIZING CONTRACT SIGNATURES BE IT RESOLVED that The City of Hutchinson act as the legal sponsor for project contained in the Redevelopment Grant Program application to be submitted on or before February 1, 2024 and that the City Administrator is hereby authorized to apply to the Department of Employment and Economic Development for funding of this project on behalf of the Jorgensen Hotel project. BE IT FURTHER RESOLVED that the City of Hutchinson has the legal authority to apply for financial assistance, and the institutional, managerial, and financial capability to ensure adequate project administration. BE IT FURTHER RESOLVED that the sources and amounts of the local match identified in the application are committed to the project identified. BE IT FURTHER RESOLVED that if the project identified in the application fails to substantially provide the public benefits listed in the application within five years from the date of the grant award, the City of Hutchinson may be required to repay 100 percent of the awarded grant per Minn. Stat. § 116J.575, Subd. 4; BE IT FURTHER RESOLVED that the City of Hutchinson has not violated any Federal, State, or local laws pertaining to fraud, bribery, graft, kickbacks, collusion, conflict of interest or other unlawful or corrupt practice. BE IT FURTHER RESOLVED that upon approval of its application by the state, the City of Hutchinson may enter into an agreement with the State of Minnesota for the above -referenced project, and that City of Hutchinson certifies that it will comply with all applicable laws and regulations as stated in all contract agreements. NOW, THEREFORE BE IT FINALLY RESOLVED that the Mayor and City Administrator, are hereby authorized to execute such agreements as are necessary to implement the project on behalf of the applicant. I CERTIFYTHATthe above resolution was adopted bythe City Council of the City of Hutchinson on January 23, 2024. Mayor, Gary Forcier ATTEST: City Administrator, Matt Jaunich HUTCHINSON CITY COUNCIL H UTC H f N a OV Request for Board Action A CITY UN PURPOSE. Agenda Item: Resolution No. 16052 - Appointing Election Judges for Primary Election Department: Administration LICENSE SECTION Meeting Date: 7/14/2026 Application Complete N/A Contact: Melissa Starke Agenda Item Type: Presenter: Reviewed by Staff �1 Consent Agenda Time Requested (Minutes): 0 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: The state/local primary election is being held August 11 2026, at the previously established polling locations of Ridgewater College (Precinct 1) - 2 Century Avenue SE: Days Inn (Precinct 2) - 1000 Hwy 7 West and the Hutchinson Recreation Center (Precinct 3) - 900 Harrington Street. In accordance with State law, cities must appoint election judges for this election by July 17, 2026. Attached is Resolution No. 16052 appointing election judges to serve at the primary election. Election judge appointments for the general election will be made this Fall. BOARD ACTION REQUESTED: Approve Resolution No. 16052 - Appointing Election Judges for Primary Election Fiscal Impact: Funding Source: FTE Impact: Budget Change: No Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: Remaining Cost: $ 0.00 Funding Source: RESOLUTION NO. 16052 RESOLUTION DESIGNATING THE LOCATION OF POLLING PLACE FOR ALL CITY PRECINCTS AND APPOINTING JUDGES FOR THE 2026 PRIMARY ELECTION WHEREAS, Chapter 204B, Section 204B.16, Subd. 1 and Section 204B.21, Subd. 2 of the Laws of Minnesota states that the governing body of any municipality, by resolution adopted prior to the giving of notice of the election, may designate the location of polling place of all precincts (one, two, and three) and naming of judges serving in their municipality. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, MINNESOTA: 1. That the polling places to be used during the 2026 Primary Election are as follows: Precinct 1 — Ridgewater College, 2 Century Avenue SE Precinct 2 — Days Inn, 1000 Hwy 7 West Precinct 3 — Recreation Center, 900 Harrington Street SW 2. That the Election Judges for the Primary Election being held August 11, 2026, are hereby appointed in accordance with the attached list. 3. Be It Further Resolved that the Hutchinson Election Administrator is with this authorized to make any substitutions or additions as deemed necessary. Adopted by the City Council this 14t' day of July, 2026 Gary T. Forcier, Mayor ATTEST: Matthew Jaunich, City Administrator PRIMARY ELECTION AUGUST 11, 2026 ELECTION JUDGES NANCY NACKERUD GLADYS PILGRIM CAROL M. JOHNSON BEVERLY EMME BRUCE DRAHOS KARA SCHMOLL CALYN LIESTMAN JEREMY BOLLING BETTY BRANDT CHARLES BERGUM NELLY MARTINEZ JANET KREIE HOLLY ROSS DAVID LAHR JASON COYLE TERRI ROBBINS TAMMY VLCEK SUE NORDIN KEAGEN PETERSEN ANGIE RADKE JOHN OLSEN *indicates head judge HUTCHINSON CITY COUNCIL HUTCHINSON Request for Board Action A UTY DN PLJAPOSE. Authorizing an Application for a Request for U.S. Army Owned Equipment to be used for Agenda Item: Static Display Purposes at the Hutchinson Municipal Airport Department: Administration LICENSE SECTION Meeting Date: 7/14/2026 Application Complete N/A Contact: Matt Jaunich Agenda Item Type: Presenter: Matt Jaunich Reviewed by Staff ❑� Consent Agenda Time Requested (Minutes): 1 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: The City has been in conversation with Dave Skoog and the Veterans Community about an application for a request for US Army owned equipment on behalf of the City of Hutchinson to be used for static display purposes. I've included a sample letter of what would be sent in regards to this request. I've also attached the Qualification for Donation of Combat Materiel checklist for Veterans Organizations/Municipalities. This form outlines the remaining requirements and proper documents required to qualify for receipt of static display equipment. The city must provide this application along with a copy of the minutes from an official council/ board meeting that shows they permit United States Army owned static display equipment to be displayed on city property. The equipment cannot be placed on private property. After all requirements are on file, our request will be changed to an Open -Wait status. When equipment becomes available, they will post it on their website and email all of the organizations that have a request in an Open -Wait status a notification of equipment availability. Interested organizations will need to email/mail a letter of interest within 30 days of the notification. They will select the recipient from the qualified organizations that submit the letter of interest. We will need to ensure that the email address information that we have on file for our organization remains current. Please note that several variables go into determining where a piece of equipment is placed. Some of these include the date the qualification process was completed, the location of the organization and the number of pieces the organization has already received. Currently, there are approximately 350 qualified organizations that are waiting for US Army static display equipment. Once a piece is offered and accepted, the organization will be required to sign a Conditional Deed of Gift and will need to certify the equipment and provide a current photograph of the display every year for as long as they retain it through an online reporting process. If there are any demilitarization actions that need to be completed, that will be the responsibility of the receiving organization. BOARD ACTION REQUESTED: Approval of an Application for a request for U.S. Army Owned Equipment to be used for Static Display Purposes at the Hutchinson Municipal Airport Fiscal Impact: Funding Source: FTE Impact: Budget Change: No 0 Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A u ON oft HUTCHINSON A CITY ON PURPOSE. July 2026 Community Static Display Program National Museum of the United States Air Force 1100 Spaatz Street Wright -Patterson AFB, Ohio 45433-7102 To Whom It May Concern: On behalf of the Mayor and City Council of the city of Hutchinson, and on behalf of our Veteran's community, we are writing to express our strong desire to secure a static display of a military aircraft for permanent display at the Hutchinson Municipal Airport at Butler Field. Dave Skoog from our Veteran's community has been in contact with Mark Wertheimer about this possibility. The city of Hutchinson is small regional center in south-central Minnesota that is known for its Veteran's support and community pride. Known as a very patriotic city, home of the McLeod County Veterans Memorial Park, we truly believe another static display within the community would be a beautiful addition to the city. We don't have a specific aircraft in mind, but an F-4 or F-16, or some aircraft in that category would be great. We have seen and acknowledge the requirements and qualifications for a donation of combat materiel. The city has no concerns about meeting these requirements and qualifications and will absolutely work with you in accordance with the rules. Please put this letter and application in your files and we would be more than thrilled and honored to have the ability to secure a static display of a military aircraft at the Hutchinson Municipal Airport. Please feel free to contact us if additional information is needed. Sincerely, Matt Jaunich City Administrator mjaunich@hutchinsommn.gov (320) 234-4241 Gary Forcier Mayor Dave Skoog gforcier@hutchinsommn.gov ahc155@yahoo.com (320) 583-8717 (320) 582-3345 United States Army Donations Program Qualification for Donation of Combat Materiel Information Page Please complete the following questionnaire and return this form with the required documents outlined below: Full Name of Organization (ORG): ORG Physical Address: City: Telephone Number: ORG E-mail Address: State: ORG Mailing Address (if different than above): City: ORG Representative (REP): State: y_1:4►111 ii100a Contact Information (If Different than above), Telephone Number: Contact E-mail Address (If Different than above): Name of Organization that owns the display site: Address of Display site (if different from ORG): City: GPS Display Site Coordinates: State: Zip Code: Zip Code: Zip Code: Type of Combat Equipment being requested (check only one): ❑Tracked Vehicle ❑ Towed Artillery ❑ Helicopter ❑ Any Combat Material Size Restrictions, maximum Length and Width: Feet x Feet Do you currently possess combat equipment as static display? Yes No REP's Signature Date August 2022 United States Army Donations Program Qualification for Donation of Combat Materiel Acknowledgements Page Please read the following conditions and initial after each. (1) Combat Material issued to your organization cannot be loaned, sold, transferred, given to or used by any other organization. This equipment remains the property of the United States Government and must be returned to the US Army when no longer needed by your organization. (Initial) (2) Our program does not maintain a stockpile of equipment. The availability of any Army equipment for use as a static display is very limited as most pieces come from organizations that are closing or combining with others. As such, there is an extensive wait time of, potentially, several years. (Initial) (3) Requests made by organizations that are not in compliance with the terms or conditions of previous donations received from this office will not be processed until compliance issues are resolved. (Initial) (4) Multiple factors are assessed when determining how equipment is distributed to qualified organizations. Factors include the age of the request, type of item requested, number of items already issued to the requesting organization, size restrictions, item location, organization's funding, and the urgency of item relocation. (Initial) (5) Combat Material issued to your organization may not be transferred to or displayed on private property. (Initial) (6) Organizations are responsible for all costs regarding static display equipment, which can potentially exceed several thousand dollars. The possible costs include all release, demilitarization, display site preparation and transportation fees associated with the conditional loan of display equipment as well as the maintenance of the piece throughout the duration of the donation. (Initial) (7) Organizations are responsible for the long-term maintenance of any static equipment they are issued as well as all costs incurred providing that maintenance (examples: paint, labor, restoration, etc.). Initial (8) Once you have submitted the requested documentation, a Donations Specialist will review your file to determine if additional information or documentation is required. The point of contact listed on the static checklist will be notified when your organization has qualified to receive equipment and is on the equipment waiting list. (Initial) (9) Once your organization has qualified, you will be offered a suitable display piece when one becomes available. Your request will remain in an open wait status for a period of three years or until an offer has been made to fulfill the request. (Initial) August 2022 United States Army Donations Program Qualification for Donation of Combat Materiel Static Display Requirements Page for Veterans' Service Organizations and Municipalities Documentation may be emailed to usarmy.detroit.tacom.mbx.ilsc-donations(a�army.mil or mailed to our address at: Commander US Army Tank -Automotive and Armaments Command M/S: 419D 6501 E. 11 Mile Road Detroit Arsenal, MI 48397-5000 (1) Qualification Checklist for Donation of Combat Materiel for Veterans' Service Organizations and Municipalities (enclosed) Initial (2) Written Request for combat equipment under 10 USC 2572. The request must be signed by the highest ranking official (Mayor, Village President, County Commissioner, Commander, Commandant, and so on) of the organization. Initial (3) National Headquarters' Endorsement Letter. Only required if your organization is a recognized veterans' service organization such as the American Legion, VFW, DAV, MCL, and so on. Forward a copy of your written request for combat equipment to your national headquarters for verification that your organization is in good standing. Your national headquarters will then endorse and forward your request to the Army Donations Program Office at TACOM for processing. Initial (4) Privacy Act Notice (enclosed) Initial (5) Certificate of Incorporation under State Law, City/County Charter, or other legal documentation substantiating recognition, as a governmental entity of the state. (only required for municipalities) Initial (6) Map of the Local Area/GPS Coordinates with Site Photographs. This map must pinpoint the location of your organization's proposed display site and must be detailed enough to permit visitors and/or inspectors unfamiliar with the local area to easily find the display. Photographs must show where you intend to place the display item and must include surrounding landmarks, such as your facility, park signs, etc. Initial (7) Landowner Approval (required for all municipalities and for organizations that do not own the intended display site). Provide a copy of the approval under the letterhead (i.e., council minutes or resolution) of the City/Township Council, County Board of Commissioners, and/or other appropriate law -making governing body showing that they will allow the static display to be placed on public land. Equipment may never be displayed on private property. Initial August 2022 PRIVACY ACT NOTICE 1. Organization Name: 2. City: 3. State: The Army Donations Program office uses information that may be personal in nature to qualify civilian organizations to receive United States Army property. This personal information may include but is not limited to: name, social security number, driver's license number, taxpayer identification number, private telephone number (cell or home), private fax number, e-mail address, home address, fingerprints, etc. The disclosure of personal information is voluntary. Your organization may choose to provide public information such as your building address, telephone number, fax number, etc. in lieu of personal information with respect to qualifying or retaining government property. In the event your organization decides to use personal information, each individual providing such data is required to complete one of these forms. The individual should fill in the blanks at the bottom of this document, sign the form, and return it to this office for placement in your file. Personal information will only be used with respect to donation program requirements. Personal information will not be disclosed, discussed, or shared with other individuals unless they are directly involved in the donations process and have a direct need -to -know. Any personal information that is provided will be safeguarded and protected to the best of our ability. I hereby request and authorize the donations office to collect, maintain, store, disseminate, and use Personally Identifiable Information (PII) with respect to qualifying the undersigned organization to receive and/or retain United States Army property. 1. Signature: 2. Date: 3. Printed Name of Person Signing (First, Middle Initial, Last): 4. Title of Signer: 5. Street Address: 6. City: 7. State: 8. Zip Code: Email to: usarmy.detroit.tacom.mbx.ilsc-donations@army.mil Mailing Address: US Army Tank -Automotive and Armaments Command, ATTN: Army Donations Program Office, M/S 419D, 6501, East 11 Mile Road, Detroit Arsenal, MI 48397-5000 ADPO Privacy Act, December 2019 KA HUTCHINSON CITY COUNCIL H UTC H I N S ON Request for Board Action A UTY DN PLJAPOSE. Review and Approve/Deny Grant Amendment for Snow Removal Equipment (SRE) Agenda Item: Shed Department: Public Works LICENSE SECTION Meeting Date: 7/14/2026 Application Complete N/A Contact: Mike Stifter Agenda Item Type: Presenter: Mike Stifter Reviewed by Staff ❑� Consent Agenda Time Requested (Minutes): 1 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: Construction bids for the SIRE shed at the airport came in higher than expected. MNDOT aeronautics has agreed to cover 70% of the cost increases with an amendment to the original grant. Staff will be on hand to answer any questions. BOARD ACTION REQUESTED: Accept grant amendment for SIRE shed Fiscal Impact: $ 0.00 Funding Source: FTE Impact: Budget Change: New Bu Included in current budget: No PROJECT SECTION: Total Project Cost: $ 500,919.00 Total City Cost: $ 150,275.70 Funding Source: Miscellaneous infrastructure fund Remaining Cost: $ 350,643.30 Funding Source: MNDOT aeronautics grant MDEPARTMENT OF TRANSPORTATION MnDOT Agreement No.: 1061953 AMENDMENT # A01 to State Airport Fund Grant Agreement #: 1061953 Agreement Start Date: 01/06/2026 Original Agreement Amount: $42,500.00 Orig. Expiration. Date: 06/30/2030 Prev. Amendment(s) Total: $0.00 Amended Exp. Date N/A Current Amendment Amount: $458,419.00 Agreement Total: $500,919.00 This Amendment is by and between the State of Minnesota, through its Commissioner of Transportation ("State") and the City of Hutchinson, 111 HASSAN ST SE, HUTCHINSON, MN, 55350 ("Grantee"). RECITALS 1. The State has an Agreement with Grantee identified as MnDOT Contract Number 1061953 ("Original Agreement"), to provide grant funding for A4304-53 (the "Project") 2. The Project is entering its construction phase, and Grantee has submitted its budget for necessary construction costs. 3. The Original Agreement is being amended to reflect the additional funds being dispersed to Grantee. Accordingly, The Parties are willing to amend the Original Agreement as stated below. AMENDMENT In this Amendment, deleted Agreement terms will be stri -gk ^„+ and the added terms will be underlined. REVISION 1. Subsection 1.5 Exhibits is deleted in its entirety and replaced as follows: 1.5. Exhibits. Exhibit(s) A through B-1 are attached and incorporated into this Agreement. Exhibit A is being added with this amendment as it was inadvertently left out of the Original Agreement. REVISION 2. Section 4.1: Cost Participation is amended as follows: 4.1 Cost Participation. Costs for the Project will be proportionate and allocated accordingly between the federal government, the State, and Grantee as described in Exhibit B-1. REVISION 3. Section 4.3: Total Obligation is amended as follows: 4.3 Total Obligation. The State's total obligation for all compensation and reimbursements to Grantee under this Agreement will not exceed S79,750.00 $350,643.30. The terms of the Original Agreement are expressly reaffirmed and are incorporated by reference. Except as amended herein, the terms and conditions of the Original Agreement and all previous amendments remain in full force and effect. Grant Amendment (Active) (Aero/CM Last Updated 5/7/2026) MnDOT Agreement No.: 1061953 [THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK.] Grant Amendment (Active) (Aero/CM Last Updated 5/7/2026) MnDOT Agreement No.: 1061953 [DELETE IF NOT AMENDING COSTS] MnDOT ENCUMBRANCE VERIFICATION The individual certifies funds have been encumbered as required by Minn. Stat. 16A.15 and 16C.05. By Date Swift Contract #: Swift Purchase Order #: GRANTEE The Grantee certifies that the appropriate person(s) have executed the grant agreement on behalf of the Grantee as required by applicable articles, bylaws, resolutions, or ordinances. By: Title: Date: By: Title: Date: COMMISSIONER OF TRANSPORTATION, as delegated By: Date: MnDOT CONTRACT MANAGEMENT, for form and execution By: Date: Grant Amendment (Active) (Aero/CM Last Updated 5/7/2026) 3 Docusign Envelope ID: CCAOOAFA-OA62-4D6B-B7AE-D997229BFB5E EXHIBIT A u HUTCHINSON PUBLIC WORKS AND ENGINEERING December 1, 2025 Mr. Jason Radde Airport Regional Engineer MnDOT Office of Aeronautics 395 John Ireland Boulevard St. Paul, MN 55155 RE: Grant Application Hutchinson Municipal Airport (HCD) Snow Removal Equipment Building Dear Mr. Radde: Please find enclosed the agreement for professional services for aforementioned project to be completed at the Hutchinson Municipal Airport located in Hutchinson, Minnesota: The project is construction of a snow removal equipment building. The city of Hutchinson requests a State grant agreement in the amount of $29,750.00 for the aforementioned project. Once bids for construction are obtained, the city will request a grant amendment. If you need any further information or documentation, please feel welcome to contact me at dschuette@hutchinsommn.gov or (320) 583-8982. Sincerely, Signed by: "� �� Vbl�bv�A,Vt, Sc.& DDww'.huette Public Works Manager cc: Travis Haskell, MnDOT Aeronautics Arika Johnson, MnDOT Aeronautics Silas Parmar, Bolton & Menk, Inc. Enclosures: • Professional Service Agreement • MnDOT Cost Split Docusign Envelope ID: CCAOOAFA-OA62-4D6B-B7AE-D997229BFB5E QBOLTON & MENK Real People. Real Solutions. November 17, 2025 Mr. Donovan Schuette Public Works Manager City of Hutchinson 1400 Adams Street SE Hutchinson, MN 55350 RE: Hutchinson Municipal Airport— Butler Field {HCD) Snow Removal Equipment Building Proposal for Professional Services Dear Mr. Schuette, 7533 Sunwood Drive NW Suite 206 Ramsey, MN 55303-5119 Ph:1763) 433-2851 Fax:17631427-0833 Bolton-Menk.com Bolton & Menk is pleased to submit our proposal for Professional Services for the Snow Removal Equipment Building project at the Hutchinson Municipal Airport — Butler Field. Our understanding of the project is the city desires to construct a building to store snow removal equipment for the Airport. The building will be located off the Airport Entrance Road and be approximately 40-feet wide by SO -feet deep. The snow removal equipment building will be designed to meet the following minimum standards: • Concrete foundation and floor slab. • Post -frame building construction. • Roll -up entry doors. • Radiant heating system. • in -floor drain. • Connection to water service. • LED light fixtures. • Electrical receptacles. • Embedded pedestrian door. This proposal will include design, bid, and construction administration services. Funding shall be provided by MnDOT at a 70% participation rate with the city share being 30%. U:\SHDriveData\.Airports\AirportCIP-Grant\HUTC\HutchinsonFY2026\SFY 26\SREBldg\HC0-SRE Building_ProposaL111725.doot Bolton & Men', Docusign Envelope ID: CCAOOAFA-OA62-4D6B-B7AE-D997229BFB5E Name: HCD SIRE Building Date: November 17, 2025 Page 2 of 5 SCOPE OF SERVICES: TASK 1 DESIGN, BID, AND CONSTRUCTION ADMINISTRATION: 1.1 Project Scoping Consultant shall confer with the Sponsor on, and ascertain, project requirements, finances, schedules, and other pertinent matters affecting the project and shall arrive at a mutual understanding of such matters with the Sponsor. Consultant shall coordinate with the Sponsor, MnDOT, and other applicable agencies to complete the work elements in Task 1. 1.2 Project Meetings Up to three (3) meetings with the City and MnDOT are included. It is anticipated that these meetings will include appropriate City and MnDOT personnel and be conducted both virtually and in person. Meetings will be scheduled as necessary for work items included in Task 1. 1.3 Topographical Survey Consultant shall establish survey control for the design survey utilizing existing established control points adjacent to the airport. McLeod County coordinates shall be utilized for the survey. Survey work will include all utilities, pavement center, edges, and intermediate shots, ground shots, lights, signs, drainage structures, and buildings. It is anticipated survey fieldwork will require one (1) trip to the airport. Consultant shall convert the survey data into CAD format for use in design. 1.4 Construction Safety and Phasing Plan (CSPP) Consultant will complete FAA Form 7460-1 and the Construction Safety and Phasing Plan (CSPP), through FAA's Obstruction Evaluation /Airport Airspace Analysis (OE/AAA) website portal. The 7460 form and CSPP will be prepared according to current FAA Guidelines. 1.5 Prepare Preliminary Plans, Specifications, and Cost Estimate Consultant will prepare preliminary plans. The plan sheets will be limited to those sheets necessary to carry -out the construction of the proposed project. Preliminary plans will include design services for site preparation, civil site work, erosion control, stormwater management, pavement construction, and building construction. Consultant will prepare preliminary plans. The plan sheets will be limited to those sheets necessary to carry -out the construction of the proposed project and expected to include the following: • Title Sheet • Construction Safety and Phasing Plan • Statement of Estimated Quantities • Storm Water Pollution Prevention Plan (SWPPP) • Erosion Control Plan • Demolition Plan • Typical Sections UASHDrive Data\_Airports\_AirportCIP-Grant\HUTMutchinsonFY 2026\SFY_26\SRE Bldg\HCD_SRE_Buitding-proposal 111725.dooc Holton 6 Menk ts an egwi opporiunity Docusign Envelope ID: CCAOOAFA-OA62-4D6B-B7AE-D997229BFB5E Name: HCD SRE Building Date: November 17, 2025 Page 3 of 5 • Apron Plan and Profile • Building Floor Plan • Building Elevation Details • Building Structural Details • Building Electrical Details • Building Mechanical Details Consultant will assemble the technical specifications necessary for the intended work. Standard MnDOT specifications will be utilized where possible. Additional specifications will be prepared to address work items or materials that are not covered by MnDOT specifications. Consultant will assemble preliminary contract documents including instruction to bidders, proposal, equal opportunity clauses, construction clauses, construction contract agreement, performance bond, payment bond, bid bond, State Requirements, bid schedule, wage rates, and general provisions. Consultant shall prepare preliminary construction cost estimate. 1.6 Final Plans, Specifications, and Cost Estimate Consultant shall submit 90% plans, specifications, and cost estimate to the Sponsor for review. One (1) virtual design review meeting will be held to review the bidding documents and discuss Sponsor comments. A final set of plans, specifications, and cost estimate will be prepared which incorporates revisions, modifications, and corrections determined during the Sponsors review. 1.7 Prepare Final Bidding Documents Consultant shall prepare, reproduce, and distribute 10 sets of bidding documents for the project. In addition, electronic copies of the bid documents will be made available for download through the Quest Construction Document Network website (QuestCDN). Consultant shall keep a current list of plan holders and distribute this to interested parties upon request. This task also includes coordination required to facilitate these requests. Required advertisement dates, and bidding dates will be established. Consultant will submit a copy to the Sponsor for distribution to local and selected publications of the project. The Sponsor shall pay for the associated cost of advertising. 1.8 Pre -Bid and Bid Opening No pre -bid meeting will be scheduled for this project. Consultant shall attend the virtual bid opening and process the bidding proposals. 1.9 Bid Assistance, Review, and Award During the bidding process, Consultant will be available to clarify bidding questions with contractors and suppliers, and for consultation with the various entities associated with the project. This item also includes contacting bidders to generate interest in the project. Consultant shall issue addenda as appropriate to interpret, clarify, or change the bidding documents as required. Addenda will be made available to the plan holders through Quest CDN. U:\SH Drive Data\_Airp0rt6LAirport CIP- Grant\HUTC\Hutchinson FY 2026\5FV_26\SRE_Bldg\HCD SRE Buildin4_Propotal_111725.doa Batton & Menw is an equai opportui / empior Docusign Envelope ID: CCAOOAFA-OA62-4D6B-B7AE-D997229BFB5E Name: HCD SIRE Building Date: November 17, 2025 Page 4 of 5 Any addenda that are generated as a sole result of the Sponsors error or omission will be considered as extra services and Consultant shall be reimbursed for this effort as an amendment to this contract. Consultant shall advise the Sponsor as to the acceptability of any subcontractors, suppliers, and other persons and organizations proposed by the bidders and as to the acceptability of substitute materials and equipment proposed by bidders. Consultant shall prepare a spreadsheet that includes all bid items for the purpose evaluating the lowest bidder. Consultant shall input the as -bid unit prices into the spreadsheet and verify mathematical computations of the bids. Consultant will then provide recommendations to the Sponsor as to the name of the apparent low bidder. Consultant will prepare a recommendation of award for the Sponsor to accept or reject the bids submitted. If rejection is recommended, Consultantwill supply an explanation for their recommendation and possible alternative actions the Sponsor can pursue to complete the project. Once the Contract Award is made, Consultant will distribute the bid tabulations on request of the Sponsor. 1.10 Pre -Construction Meeting Consultant will arrange for and conduct the pre -construction meeting. The Project Manager and the Resident Project Representative will establish this meeting to review local, State, and project specific requirements prior to commencing construction. The meeting will be conducted at the Airport and will include the City, MnDOT, Subconsultants, Contractor, Subcontractors and utility companies. 1.11 Initial Construction Layout Consultant shall layout all proposed improvements for the Contractor. This shall require one (1) trip to the Airport by the licensed surveyor. 1.12 Construction Administration Consultant will be responsible for communication with City staff on Airport project scheduling. Consultant will also address any questions which arise from the Contractor and issue field directives or change orders as necessary. Consultant will review certified payroll documents from Contractor and all subcontractors to ensure compliance with wage rates. Consultant will complete all pay applications for the project. Consultant will prepare MnDOT Credit Applications for City to receive periodic reimbursement throughout the project. Consultant shall provide part-time project representative to be on -site during all critical portions of construction. It is anticipated construction will be completed in 90 calendar days. Project representative will facilitate communication between the Contractor and Project Manager and be available on -site if any questions from the City arises. 1.13 Final Inspection and As -Built Plans Final walk through will be scheduled with Consultant, City, Contractor, and MnDOT personnel to ensure contractor has completed the work in accordance with the plans and specifications. All deficient items will be identified via punch -list for the Contractor to complete to receive final U:\$H Orive Data`Alrports\_AlrportCIP-Grant\HUTC\Hutchinson FY2025\SFY_26\SRE_BIdg\HCO_SRE—BuildirMLPmposal-111725_docx Bolton 6 Monk is an equal opportur r/ empro or. Docusign Envelope ID: CCAOOAFA-OA62-4D6B-B7AE-D997229BFB5E Name: HCD SRE Building Date: November 17, 2025 Page 5 of 5 payment. Final pay application including retainage release will be submitted once project is approved by the Project Manager. As -built plan will be prepared to represent field construction conditions for the project. MnDOT Grant Closeout documents will be assembled for the City to receive final reimbursement. 1.14 Prepare Grant Application Consultant shall prepare the State Grant Application after project design has been completed and the bids accepted. Consultant shall submit the Application to the Sponsor for approval and signatures. After obtaining the necessary signatures, Consultant will forward copies to MnDOT for further processing. CONSIDERATION: The services described above in this proposal shall be completed on a LUMP SUM basis of $42,000. The anticipated funding participation is as follows: • State (70%): $ 29,400.00 • Local (30%): $ 12,600.00 SCHEDULE: We anticipate the work can be performed according to the following schedule. • Design: December 2025 — March 2026 • Bid Letting: April 2026 • Construction: August - October 2026 Bolton & Menk, Inc. puts a high priority on ensuring that our company's efforts are consistent with our clients' needs. If you find this proposal acceptable, please return a signed and dated copy our proposal. Sincerely; Bolton & Menk, Inc. O.. A Silas Parmar, P.E. Aviation Project Manager Authorization and acceptance of this letter proposal. City of Hutchinson, Minnesota s Mr. MattheCrator nich Date f City Admini U:\$HDrive Data\ Airports\ Alrpor1CIP-Grant\HUTC\HutchinscnFY2026\SFY_26\SRE_BIdg\HCD SRE BuilcNnp Proposal_111725.doa Bolton 6 Menk rsan equal opportu ty emp cycr Docusign Envelope ID: CCAOOAFA-OA62-4D6B-B7AE-D997229BFB5E HUTCHINSON MUNICIPAL AIRPORT (HCD) SRE BUILDING (40' X SO') BOLTON HUTCHINSON, MN NOVEMBER 2025 © & MENK F91 6. #r J k F PROPOSED SRE BUILDING APRON I Airport: Hutchinson Municipal Airport Ident: HCD Sponsor: City of Hutchinson, MN State Project: A4304-53 State Agreement a: 1061953 Description: Snow Removal Equipment Building Version Date: 12/5/2025 Construction Engineering Administration EXHIBIT B-1 Description Total State Funding Rate State Local Ram General Contacting Inc. $458,419.00 70% $ 320,893.30 $ 137,525.70 $ 70% $ - $ - $ - 70% $ - $ - CONSTRUCTION SUBTOTAL $ 458,419.00 $ 320,893.30 $ 137,525.70 Description Engineering - Bolton&Menk, Inc. $ $ $ Total 42,000.00 - - 70% 70% 70% $ $ $ State 29,400.00 $ - $ - $ Local 12,600.00 - - ENGINEERING SUBTOTAL $ 42,000.00 $ 29,400.00 $ 12,600.00 Description Total State Local Bid Advertising $ 500.00 70% $ 350.00 $ 150.00 $ - 70% $ - $ - $ - 70% $ - $ - ADMINISTRATION SUBTOTAL $ 500.00 $ 350.00 $ 150.00 Original Grant Amounts $ 42,500.00 $ 29,750.00 $ 12,750.00 Grant Amounts $ 500,919.00 $ 350,643.30 $ 150,275.70 Grant Percentages 100.00% 70.00% 30.00% HUTCHINSON CITY COUNCIL HUTC HIN SON Request for Board Action A UTY DN KJAPOSE. Consideration for Approval of Amending South Park Water Tower Lease Agreement with Agenda Item: Midwest Wireless L.L.C. d/b/a Verizon Wireless Department: PW/Eng LICENSE SECTION Meeting Date: 7/14/2026 Application Complete N/A Contact: Mike Stifter Agenda Item Type: Presenter: Mike Stifter Reviewed by Staff ❑� Consent Agenda Time Requested (Minutes): 0 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: Verizon Wireless recently contacted the City with an amendment of terms for the South Park Water Tower. The current lease was set to expire on 12/31/2029. While previous offers have been provided to the City, the terms of this one were the most favorable. This will provide an additional 5-year term to commence on 1/1/2030 along with up to two additional 5-year terms and again adding 3% annually. Finance has provided a spreadsheet that provides a financial breakdown of the proposed as well as a history of the lease. We recommend that the attached Amendment No. 3 to Site Lease Agreement be approved. Staff will be on hand to answer any questions. BOARD ACTION REQUESTED: Approval of Amendment No. 3 to Site Lease Agreement. Fiscal Impact: Funding Source: FTE Impact: Budget Change: New Bu Included in current budget: Yes PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A VzW Site Name/ID: Hutchinson (MWW) / MDG: 5000048736 AMENDMENT NO.3 TO SITE LEASE AGREEMENT This Amendment No. 3 to Site Lease Agreement ("Third Amendment") is made, and shall be effective, as of the last date of the signatures below ("Effective Date"), between City of Hutchinson, a Minnesota municipal corporation ("Landlord"), and Alltel Corporation d/b/a Verizon Wireless ("Tenant"). Landlord and Tenant (or their predecessors in interest) entered into that certain Site Lease Agreement dated November 22, 2010, as may have been previously amended and/or assigned, (the "Agreement"), pursuant to which Tenant is leasing from Landlord a portion of that certain property located at 200 2nd Avenue Southwest, in the City of Hutchinson, County of McLeod, State of Minnesota as more particularly described in the Agreement. Landlord and Tenant may be referenced in this Third Amendment individually as a "Party" or collectively as the "Parties." In consideration of the mutual covenants and promises contained in this Third Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, the Parties agree to amend the Agreement as follows: 1. Term. Notwithstanding anything contained in the Agreement to the contrary, the Agreement shall expire on December 31, 2029. Commencing on January 1, 2030, the Agreement shall be extended for five (5) years ("Initial Extension Term"). The term of the Agreement shall thereafter automatically extend for two (2) additional terms of five (5) years each (each, an "Additional Extension Term"), unless Tenant terminates the Agreement by giving Landlord notice of such termination at least 30 days prior to the expiration of the Initial Extension Term or then -current Additional Extension Term. 2. Rent. Commencing on January 1, 2030, the annual rent shall be $41,667.66 to be paid on the first day of the month in advance to Landlord or such other person as Landlord may designate in writing at least 30 days in advance of any rental payment date. Thereafter, commencing on January 1, 2031, the annual rent for each year shall increase by 3% upon commencement of each year. 3. Rent Credit. This Third Amendment provides for a reduction in rent, effective January 1, 2030. The Parties acknowledge and agree that Tenant shall be entitled to a credit in the event of any overpayment of rent resulting from said reduction in rent. Such credit shall be applied against Tenant's rent due under the Agreement. 4. Notice Address. The notice address for Tenant in the Agreement is hereby amended as follows: If to Tenant: Verizon Wireless Attn: Network Real Estate 180 Washington Valley Road Bedminster, NJ 07921 With a copy to: Basking Ridge Mail Hub Attn: Legal Intake 1 VzW National Renewal Program Amendment verizon VzW Site Name/ID: Hutchinson (MWW) / MDG: 5000048736 One Verizon Way Basking Ridge, NJ 07920 5. Continued Effect. Except as amended hereby, all of the other terms and conditions of the Agreement shall remain in full force and effect. In the event of a conflict between any term and provision of the Agreement and this Third Amendment, the terms and provisions of this Third Amendment shall control. In addition, except as otherwise stated in this Third Amendment, all initially capitalized terms shall have the same respective defined meaning stated in the Agreement. All captions are for reference purposes only and shall not be used in the construction or interpretation of this Third Amendment. 6. Ratification and Reaffirmation. Landlord and Tenant do hereby ratify, reaffirm, adopt, contract for and agree to be, or continue to be, bound by all of the terms and conditions of the above -referenced Agreement. Except as modified by this Third Amendment, all of the terms and conditions of the Agreement are incorporated by reference herein as if set forth at length. It is acknowledged and agreed that the execution of this Third Amendment by the Parties is not intended to and shall not constitute a release of either Party from any obligation or liability which said Party has to the other pursuant to the Agreement. [SIGNATURE PAGE TO FOLLOW] 2 VzW National Renewal Program Amendment verizon VzW Site Name/ID: Hutchinson (MWW) / MDG: 5000048736 IN WITNESS WHEREOF, this Third Amendment is effective and entered into as of the date last written below. LANDLORD: City of Hutchinson, a Minnesota municipal corporation By: Name: Title: Date: TENANT: Alltel Corporation d/b/a Verizon Wireless, a Delaware corporation By: Name: Title: Date: VzW National Renewal Program Amendment verizon Verizon - Antenna Rent South Park Water Tower Lease Term Prior LEASE AG REEM ENT Start Date End Date Annual Rent Escalator Annual Rent Execution Date: 11/222010 Execution Date: 6/272012 Execution Date: 7/232013 01/012010 - 12/31/2010 N/A N/A $15,000.00 Leased Sq. Ft. 550 Leased Sq. Ft. 550 Leased Sq. Ft. 825 01/012011 - 12/31/2011 $15,000.00 3% $15,450.00 Annual Rent Amount: $15,000.00 Annual Rent Amount: $23,870.25 Add'I Annual Rent Amount: $1,800.00 01/012012-05/31/2012 $15,450.00 3% $15,913.50 Rent Commencement Date: 1/12010 Rent Commencement Date: 6/12012 Rent Commencement Date: 6/12013 06/01/2012 12/31/2012 N/A $23,870.25 Rent Escalator: 3% Rent Escalator: 3% Rent Escalator: 3% 01/01/2013 - 05/31/2013 $23,870.25 3% $24,586.36 Escalator Frequency: Annually Escalator Frequency: Annually Escalator Frequency: Annually 06/012013 - 12/31/2013 N/A $26,386.36 Initial Term: 5 years Initial Term: 5 years Initial Term: 5 years 01/01/2014 - 12/31/2014 $26,386.36 3% $27,177.95 Initial Term Expiration: 12/312014 Initial Term Expiration: 12/31/2014 Initial Term Expiration: 12/312014 01/012015 - 12/31/2015 $27,177.95 3% $27,993.29 # of Renewal Terms: Three (3) # of Renewal Terms: Three (3) # of Renewal Terms: Three (3) 01/012016 - 12/31/2016 $27,993.29 3% $28,833.09 Renewal Periods: 5 years each Renewal Periods: 5 years each Renewal Periods: 5 years each 01/012017 - 12/31/2017 $28,833.09 3% $29,698.08 1 st Renewal 2015-2019 1st Renewal 2015-2019 1st Renewal 2015-2019 01/01/2018 - 12/31/2018 $29,698.08 3% $30,589.02 2nd Renewal 2020-2024 2nd Renewal 2020-2024 2nd Renewal 2020-2024 01/01/2019 - 12/31/2019 $30,589.02 3% $31,506.69 3rd Renewal 2025-2029 3rd Renewal 2025-2029 3rd Renewal 2025-2029 01/01/2020 - 12/31/2020 $31,506.69 3% $32,451.89 Renewal Notification Automatic Renewal Notification Automatic Renewal Notification Automatic 01/012021 - 12/31/2021 $32,451.89 3% $33,425.45 Termination Notification 90 days prior Termination Notification 90 days prior Term ination Notification 90 days prior 01/01/2022-12131/2022 $33,425.45 3% $34,42821 01/012023 - 12/31/2023 $34,428.21 3% $35,461.06 01/012024 - 12/31/2024 $35,461.06 3% $36,524.89 01/012025 - 12/31/2025 $36,524.89 3% $37,620.64 01/012026 - 12/31/2026 $37,620.64 3% $38,74926 New Annual Rent Am ount: $41,667.66 01/012027 - 12/31/2027 $38,749.26 3% $39,911.74 Corn in encem ent Date: 1/1/2030 01/012028 - 12/31/2028 $39,911.74 3% $41,109.09 Rent Escalator: 3% 01/012029 - 12/31/2029 $41,109.09 3% $42,342.36 Escalator Frequency: Annually Initial Term 5years 5-year Term 01/01/2030 - 12/31/2030 $42,342.36 3% $41,667.66 #of Renewals 2 01/012031 - 12/31/2031 $41,667.66 3% $42,917.69 Years in each Renewal term 5 years 01/012032 - 12/31/2032 $42,917.69 3% $44,20522 Renewal terms are automatic unless Ver¢on 01/012033 - 12/31/2033 $44,205.22 3% $45,531.38 terminates by giving written notice to the City, 01/012034 - 12/31/2034 $45,531.38 3% $46,897.32 at least 30 days prior to the expiration of the current term. 1st Renewal 01/01/2035 - 12/31/2035 $46,897.32 3% $48,304.24 01/012036 - 12/31/2036 $48,304.24 3% $49,753.37 01/012037 - 12/31/2037 $49,753.37 3% $51,245.97 01/012038 - 12/31/2038 $51,245.97 3% $52,783.35 01/012039 - 12/31/2039 $52,783.35 3% $54,366.85 2nd Renewal 01/01/2040 - 12/31/2040 $54,366.85 3% $55,997.86 01/012041 - 12/31/2041 $55,997.86 3% $57,677.80 01/012042 - 12/31/2042 $57,677.80 3% $59,408.13 01/012043 - 12/31/2043 $59,408.13 3% $61,190.37 01/012044 - 12/31/2044 $61,190.37 3% $63,026.08 HUTCHINSON CITY COUNCIL HUTC HIN SON Request for Board Action A UTY DN KJAPOSE. REQUEST FOR OUT OF STATE TRAVEL TO ATTEND IEDC CONFERENCE Agenda Item: Department: EDA LICENSE SECTION Meeting Date: 7/14/2026 Application Complete N/A Contact: Miles R. Seppelt Agenda Item Type: Presenter: None Reviewed by Staff ❑ Consent Agenda Time Requested (Minutes): 0 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: I am requesting approval for out-of-state travel to attend the International Economic Development Council's (IEDC) "Centennial Summit: The Future of Economic Development" in Rapid City, South Dakota, on July 13-14. I had originally been unable to attend the IEDC conference because I had committed to assist with another conference here in Hutchinson on July 14. However, I was notified this morning that the Hutchinson conference has been canceled, making it possible for me to attend the IEDC conference after all. Under normal circumstances, this request would be submitted to the City Council for prior approval. However, because I only learned of the cancellation today and the next regularly scheduled City Council meeting is not until July 14—the second day of the conference —I am requesting authorization through an alternative process, if permissible, so that I may participate in this professional development opportunity. If you have any questions or need additional information, please give me a call anytime at 234-4223. BOARD ACTION REQUESTED: Authorization for Out of State Travel Fiscal Impact: Funding Source: FTE Impact: Budget Change: No 0 Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: Remaining Cost: $ 0.00 Funding Source: HUTCHINSON CITY COUNCIL Request for Board Action 79 =-m-7 Agenda Item: Caterer's Permit - Marshall Paulsen of Picnic Linden Hills Department: Administration LICENSE SECTION Meeting Date: 7/14/2026 Application Complete Yes Contact: Melissa Starke Agenda Item Type: Presenter: Melissa Starke Reviewed by Staff 0 Consent Agenda Time Requested (Minutes): 0 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: Marshall Paulsen of Picnic Linden Hills has submitted a caterer's permit application into Administration for review and processing. The applicant would like to provide liquor catering services on August 15, 2026, at the McLeod County Fairgrounds for the Minnesota Garlic Festival. The applicant meets statutory requirements and City requirements to hold a caterer's license. BOARD ACTION REQUESTED: Approve caterer's permit to Marshall Paulsen of Picnic Linden Hills on August 15, 2026. Fiscal Impact: Funding Source: FTE Impact: Budget Change: No Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: Remaining Cost: $ 0.00 Funding Source: &A r•� HUTCHINSON A Cit r ON PURPUSf 111 Hassan street Southeasi HutcNnson, MN S5350 (320) 587 5151 CITY OF HUTCHINSON CATERER'S PERMIT APPLICATION -- License Fees Annual $300.00 One Time $100.00 To obtain a Caterer's Permit, applicant must currently hold a valid retail on -sale intoxicating liquor license at a restaurant All liquor laws and rules apply to both the on -sale license as well as this caterer's permit. Liquor liability and workers compensation insurance are mandatory and a certificate showing off premises coverage must accompany this application for a caterer's permit. Cancellation or suspension of the on -sale license invalidates the caterer's permit also. Only the licensee holding the caterer's permit shall provide food and liquor at catered events. PARP-C, V\ A & e"LffiIJ m-1-1% . a 1 q y 71.15 AWLranr Marne (Irr& dag PJfftx sfarp. Cerp "Wn (If COW-00 in staff U? axyorat>° rid W) D08 Sorrel Sere > Trade Marne cr D64 of Rest&ranf �T q$o -) JP aora (► )._ . 0 ASS -- Address of Resmrarrt rekp4av Ak_1-04j"pat xS 06raWW&W*"ea*Q*,Va coawm ofEbou sure($) of E*WV I certify that the above information provided by the applicant is true, complete, correct and made in good faith and agree to comply with the above paragraph's requirements and all other applicable law in the use of the caterer's permit. S, SS.2o Signature - Authowed Applicant Date Please attach the following documents to this form; Pnnt Full Nan)e of Person Signing 41 A copy of the applicant's caterer's permit issued by the State of Minnesota Of A copy of the applicant's valid on -sale intoxicating liquor license 4A Copy of the applicant's valid restaurant license issued by the Health Depanment Wh3nZpo WS) 1' A a'rbi,cate of liquor haWrty insurance that states "off premises coverage included" (No applications, tinders or declarations) S) Check or money order payable to the City of Hutchinson Z uAz+es AvpiCabons Cattrees Penrit doc 61 r� Minnesota Departmew of Public Safet% :alcohol & Gambling Enforcement Division N %s Rl ISSL'I•'I) 1-1115 I R 1 NSI i'ERMI i BY I'llk STA UE OF MINNI.S,01 A I'L Rs3UA\ I ICE MINNESOTA 5i M1 i ES 'HAP 1't It 341IA :1�D 1�I.A I iaf) R} GI:i,A i lt)N5 ALCOHOL. CATERER'S PERMIT Expiration Date: 4Y 17,2027 Iden: 7"43 Mcnicc Picnic l.LC 4M7 L plan %C 5 ?liinneapolk, NIN 55410 1111_ 1ne'N 1 • Otto- .L W Upton A%c S \i �nnc�pni�s .- r N4,., ` Aicolio) cl' Gambling E-ntorc,:mer.t [)tswty� Minneapolis City of Lakes Iitense Number License TYpe 11(412.184 Liquor 1 I rn t P-011, ut PIE .1 a 10? uur :)n A,. M +nc -, -S MN 55d1S1 Location 4 30 7 urTON Alf � EndorIrmefti s t+Guor, On Sa a Lomiwd Enterta,nment Sund3Y SY, N t tty of MinneapoW, Community Fri noing rad Ecaricomm Development A f Furth Avl, S, 220 Mtrutt 1p,. �t . A 5531-) OFIILr• fit) W i Mfl 1 os 417 673 3399, T 1Y Er1 1 A f.-S(E License Certificate Expires 1/l/2027 POST IN A CONSPiCUOU PICNLLC-01 SWE;AKLY A4�ORO" � CERTIFICATE OF LIABILITY INSURANCE DATE (MMfDDnYYY) �i I 6/23/2026 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW, THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED previsions or be endorsed. If SUBROGATION IS WANED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in Ileu of such endorsement(s). PRODUCER Cholce Insurance, a Vizance Company DO Bon 9396 Minneapolis, MN 55440.9396 INSURED Picnic, LLC 4307 Upton Ave S Minneapolis, MN 55410 INSURERIS) AFFOnOLIG CQVGRAGE .I4TI DIRER •A to -Owners lnSUrance Co IN -SURER 0 iucilnoo c • _— .4vN8aER Q; INSURER E FA AIIC.Not:(701) 3 THIS IS TO CERTIFY THAT THE PCLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM CR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS. EXCLUSIONS AND CCNDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS, INSoR ADOL SUER EFF PaICY EXP TYPE OF INSURANCE POLICY NUMR rw.LIMITS 1 A X COMMERCIAL GENERAL LIABILITY 1,000,000 Ef�HOCCURRENCE, CLAIMS -MADE [X10CCUR 08605621 811/2025 811/2026 DA►AAGETORENTED 300,000 J?RFMIS€fi1Ea ossL�mcEl I--- MFD EXP tAny one Damon) +S 10,000 PIRSONAL&ADVINJURY ,� 1*Oown GFN L AGGREGATE LIMIT APP S PER: _WERAL. AC-GREGATE 3,000,000 3,000,000 x POLICY ❑ jECT I LOC eerDUCTS-,DUCTS ; } I,11WD NON 07MED S 1,000,000 AUTOMOBILE LIABILITY agAaBINNEED�llSINGLE LIMIT ANY AUTO I BODILY INJ.IRY_LP r perSoj4, OWNED SCHEDULED AUIOSONLY AUTOS HIREED NOW WNED BODILYINJURYIPeractldely111 S OPERTY DAMAGE Per S ALI1'p5 ONLY AUTO ONLY eoaderd� _ I 3 _ OCCUR EACHOCCURRENCE �UMBRELLALiAS EXCESS LIAB CLAIMS -MADE e'e' doGr_aTF DEO RETENTION$ _ - WORKERS COMPENSATION ppEER T OT TH- I STATaE ER. AND EMPLOYERS' LIABILITY ANY PROPRIETOR/PARINEWEXECUTIVE Y❑ A106629253 _ 81112025 811 R026 �E.L, EACH ACCIDENT 500,000 �FFIGERIM MBE EXCLUDED9 NIA Alandatay�n NT 500,000 ,B,L. DISEASE - EA E►IPLOYZ!�_S If yes. dr be under f;ESCRIPTION FOPERATIONSbelow _ _ _ DISEASE-F'OLICYLIMIT S 500,000 A Liquor Liability !08fi05621 Ii l 011/2025 811/2026 Liquor Liability � 1,000,000 DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (ACORD 101, Adddlonal Remarks Schedule, may be attached Ifmare space Is required) Event date: August 15th, 2026 Liquor liability IS continuous untll cancelled. Off premise coverage included. CERTIFICATE BOLDER CANCELLATION City of Hutchinson 11i Hassan St SE Hutchinson, MN 55350 SHOULD ANY OF THE ABOVE DESCRI5150 POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF. NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE ACORD 25 (2016103) 01988-2015 ACORD CORPORATION, All rights reserved. The ACORD name and logo are registered marks of ACORD u HUTCHINSON CITY COUNCIL HUTCHINSON Request for Board Action A CITY ON PURPOSE. Agenda Item: Temporary Liquor License - McLeod County Agriculture Association Department: Administration LICENSE SECTION Meeting Date: 7/14/2026 Application Complete Yes Contact: Melissa Starke Agenda Item Type: Presenter: Melissa Starke Reviewed by Staff ✓❑ Consent Agenda Time Requested (Minutes): License Contingency N/A Attachments: Yes ---------------- BACKGROUND/EXPLANATION OFAGENDA ITEM: The McLeod County Agriculture Association has submitted a temporary liquor license application to dispense alcoholic beverages at the McLeod County Fair being held August 20-23, 2026. The McLeod County Agriculture Association is a non-profit organization that meets the requirements for a temporary liquor license. BOARD ACTION REQUESTED: Approve issuing a temporary liquor license to McLeod County Agriculture Association from August 20-23, 2026.. Fiscal Impact: Funding Source: FTE Impact: Budget Change: No Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: Remaining Cost: $ 0.00 Funding Source: Minnesota Department of Public Safety Alcohol and Gambling Enforcement Division - 445 Minnesota Street, Suite 1600, St. Paul, MN 55101 StE_=651-201-7507 M 651-282-6555 Alcohol & Gambling Enforcement APPLICATION AND PERMIT FOR A 1 DAY TO 4 DAY TEMPORARY ON -SALE LIQUOR LICENSE Name of organization Date of organization Tax exempt number McLeo dCounty Agri c utural Associ tion 18T2 _ I 11-0758751 Irganizat ion Add ress (Flo PO 84fentu ry Aernue SW Name of person maki C sey Walters cation Hutchinson State Zip Code Minnes cta 1155350 Business phone Home phone NO-587- 2449 I Fi220-5 83-798' Da t(s) of eve nt Type of organization [] Microdistillery ❑ Small Brewer ur sdly, A u3us, t 1) - S In day,August 23, 2026 1 ❑ Club ❑ Char! tale ❑ Religious F Other non-profit ITh Organization officer' snarne City State Zip Code IDoug las Tu man, Pr esident Hutchinson I Minnesota 1 55350 Organization officer's na me City 5tate Zip Code _ lMa rWa ck Vice President I I aencoe I Minnesota 1 155336 Organizationofficer's name City State Zip Code ICan eLambert,Treasurer IHuthinson Minnesota 1 155350 Location where permit will be used. If an outdoor area, describe. Event is atthe McLeod County Fai rgroundsfor the McLeod County Fair. Sales will be made In the Pavilion and the Grandstand. The entire perimeter of the fai rgroundsis fenced i n. If the applicant will cont ractfor i ntoxi catl rg [i quorservi ce gi ve the name and address of the liquor license providi ng t he serv] ce. If theapplicant will carry liquor liablli tyi nsurance please provide the carrier's name and amount of coverage. ACE American Insurance Company (CHUBB) $1 M / $2M Aggrega to APPROVAL APPLICATION MUST BEAPPROVEO BY CITY OR COUNTY BEFORE SUBMITTING TO ALCOHOL AND GAMBLING ENFORCEMENT - 41 city o I ice nse Date Appr oved nt Event in conjunction with a community festival X Yes ❑ No /-+; !8o Current populationof city 44knw JAAA Id Date City or County E-mail Address Please Print Name of City Clerk or County Official Signature City Clerk or County Official CLERKS NOTICE:, Submit this form to Alcohol and Gambling Enforcement Division 30 days prior to event No Temp, Applications faxed or mailed, Onlyemalled. ONE SUBMISSION PER EMAIL, APPLICATION ONLY. PLEASE PROVIDE A VALID E-MAIL ADDRESS FOR THE CITY/COUNTY AS ALL TEMPORARY PERMIT APPROVALS WILL BE SENT BACK VIA EMAIL. E-MAIL THE APPLICATION SIGNED BY CITY/COUNTY TO AGE. TEMPORARYAPPLICATIONCa)STATE.MN. US Client* 17678 MCLEOCOU ACORD-,. CERTIFICATE OF LIABILITY INSURANCE 1%'M(U WT^' M W3012026 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOTAFFIRMATiVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the cer{Iftcate holder is an ADDITIONAL INSURED, the policy(ias) must have ADDITIONAL INSURED provisions or be endarsea.- If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, cutaln pDBcias may require an endomement A statement on this certificate does not confer any rights to the oeldikats holder in lieu of such endoraoment(a). PRODUCER , Serena Hurtt, AIMS, AU f Haas &Wilkerson Insurance rruc,,L E,,,,. 913 4324MO 4300 Shawnee Mission Parkway E-SAA. 1' V.serena.hurttd-hwins.com Fairway, KS 66205 913 432-4400 DZU ED Mcleod County Agricultbural Association PO Box 142 Hutchinson, MN SS350 U MAZER A: ACM: American Insurance CDmpsny (CJHUBB) 22667 w=RER B. BorkJOY National Insurance CornM 38911 t y=P&R c : ACE Property d Casualty Ins Co. (CHUBB) 20599 RM RER D : COVFRAGFR ec WnFTCATF WI 11MOwn. er,no,nu.n'—ft— THIS 13 TO CE11?TIFY7HAT THE POLICIES OF INSURANCE USTFD BELOW HAVE BEEN ISSUED TO THE eN3URHO NAMI3D ABOVE FOR 7HE POLICY PERIOD INDICATFA NOTWrTMSTANOINO ANY REQUIROuHYi, TERM ORCONDRION OF ANY CONTRACT OROTHER DOCUMENT WITH RESPECT TO WHICH THIS CER7FrA7E MAYBE MED OR MAY PEITrAIN, THE INSURANCE AFFORDED 3Y THE POLICIES OESCRWED HFREIN IS SUBJECT TO ALL THE 3ER)AJ,EXCLIistON8 AND CONOJTLONS OF MJCH PCUCtFA 4-WITS SHOWN MAY HAVE BEEN REDUCED BY PAM CLAIMS. LIM S SHOWN AREINCLUSM OFAM(>UNTS REMIECTW BYT1iE CEIW Rr]RCATE HOLDER AND MAY NOT REFLECT PCCG LTAI MWM W O(CR S OF THOSE RSiIFSTED- "?" A900b)s In WY MIR TYPE OF 115 RAOICe _ POLICY HUgegt P�OLJGV i Laf18 A X aLmNETtALLL►earTr -ZA CLAM -MADE ❑X 0ca111 G71700t331 710112026 101)2026 111710112026 07MI/2027 0710112027 EAcrrocwRRENcE $1 00000 ' coal ] 3500 000 MED LOP IAL , con Drum) s EXCLUDED PEASDNAL a ADY INAW $1 000,000 O9FLACC4f,EGATELWITAPPLFSPER: PCILICr ❑ i ❑ LOC ar> GENERALAGC4*-GATT 65.0001000 PRoatcTS-COMPIOPAGG SS.000,000 Liquor Liab cOMSIN® SUNGLELtmrr 131.000 000 e1,000 000 C I AUTUKN0e U&SILRY ANY A111 D ~ - TAT pp Y . 0 SCHEDUL� X AUTOb ONLY X bN,>a AUTOS ONLY � i N25320621 XCPN17963260 BOOLLY INIURY 1Per Person) f SOOL_Y IN,RJRY NPer&=Ww t) i ILPPetsocwsvuPROP�RTY°AW�Gfi ; S A X IJMeaaLA LIAs OWAOS LIAR X O=R CLAOA3AlADE 07/0112821 EACH OCCO>i F� $1 000 000 s1000 OO $ AGGREGATE DED I I WTE r.M 3 WrIkkaAs GO&VE)WATM AND pE�MpPLpOYETRRVLLAAMM YIN A OFFLCFJtAL1EAftlH2 FJtCLUDEU7 TM� OUndwWry In N IQ m deenibe eider PTIDN OF OPERATIONS bebw = KIA _ PER F I OTH- `.�,IlFTF I L. EAZ$t ACCI Off $ E.LO4SEASE-FAENPLDYEE i E.L. NBEASE - FOLICYLIMIT S B Rntd/Orwd Equip MNP1113361 7/0112026 07/0112027 $50,000 Limit $1,000 Deductible OFACRmTION OF OPERAT0YA i LOCATLONa I MOCIM 0== 401, Add 3J 1 Amnaft soAs&ls, maybe sUmOwd R mom spots is nqu" 'Cho certificate holder is named as Additional Insured on the Genera! Liability policy but only with respect to the liability arising out of the Named Insure* operations or premises owned by or rented to the Named Insured. City of Hutchinson 1f1 Hassan St NE Hutrfiineon, MN 55350 SHOULD ANY OF THE ABOVE DFRCRJHED POLICIES BE CANCELLED BEFORE THE EXPIRATION OAT! THEREOF, NOTICE VALL BE OFIJVERED IN ACCORDAMCE 1RTir THE POLICY PROVISIONS. ru:PR1a3EKTATIVE 1BU-2025 ACORD CORPORATION. All rights reserved. ACORD 25 rAMN12) 1 of 1 The ACORD name and logo are mg1dered marts of ACORD 057249871M724965 JOHND HUTCHINSON CITY COUNCIL HUTCHINSON Request for Board Action A CITV ON PURPOSE. Agenda Item: Short -Term Gambling License/Temp. Liquor License - St. Anastasia Church Department: Administration LICENSE SECTION Meeting Date: 7/14/2026 Application Complete Yes Contact: Melissa Starke Agenda Item Type: Presenter: Melissa Starke Reviewed by Staff 17-7 Consent Agenda Time Requested (Minutes): License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: St. Anastasia Catholic Church has submitted a short-term gambling license application and a temporary liquor license application into administration for review and processing. The applications are for an annual event the church is holding September 12-13, 2026. The applicant has completed the appropriate applications in full and all pertinent information has been received. BOARD ACTION REQUESTED: Approve issuing short-term gambling license and temporary liquor lilcense to St. Anastasia Catholic Church September 12-13, 2026. Fiscal Impact: Funding Source: FTE Impact: Budget Change: No Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: Remaining Cost: $ 0.00 Funding Source: Name of organization C Minnesota Department of Public Safety Alcohol and Gambling Enforcement Division 445 Minnesota Street, Suite 1600, St. Paul, MN 55101 65 1-201-7507 TFY 651-282-6555 APPLICATION AND PERMIT FOR A 7 DAY TO 4 DAY TEMPORARY ON -SALE LIQUOR LICENSE Organization Address (No PO Boxes) � qf0 L"I4. -b�. 5w Name of person making application Date(s) of event ! z 3 7- Organization officer's name anization officer's name Organization officer's name Location where permit will be used, If an outdoor area, describe. Dv�-ct�vr�� on ct1orcA-A P r opus-y Date of organization..Tax exempt number Ii State Zip Code n S o r1 1 1 M Business phone Home phone ��2d �lS��Sb11 l Type of organization ❑ Microdistillery ❑ Small Brewer ❑ Club ❑ Charitable X Religious ❑ Other non-profit Citv State Zip Code State Zip Code MN ,�553 City State Z'Ip Code IMN I - If the applicant will contract for intoxicating liquor service give the name and address of the liquor- license providing the service. N JA If the applicant will carry liquor liability insurance please provide the carrier's name and amount of coverage. C�+4e� %C. fin.0 ��1 APPROVAL APPLICATION MUST BE APPROVED BY CITY OR COUNTY BEFORE SUBMITTING TO ALCOHOL AND GAMBLING ENFORCEMENT city or rovingthe license Date Approved WR6-0 Fee Amount Permit Date Event in conjunction with a community festival ❑ Yes -V No t4-060 Current population of city 1,44 fW f- City or County E-mail Address Please Print Name of City Clerk or County Official Signature City Clerk or County Official CLERKS NOTICE: Submit this form to Alcohol and Gambling Enforcement Division 30 days prior to event No Temp Applications faxed or mailed. Only emailed. ONE SUBMISSION PER EMAIL, APPLICATION ONLY. PLEASE PROVIDE A VALID E-MAIL ADDRESS FOR THE CITY/COUNTY AS ALL TEMPORARY PERMIT APPROVALS WILL BE SENT BACK VIA EMAIL. E-MAIL THE APPLICATION SIGNED BY CITY/COUNTY TO AGE. TEMPORARYAPPLICATION@STATE.MN. US Certificate of Coverage Date: 6f312026 Certificate Holder This Certificate is issued as a matter of information only and The Diocese of New Ulm confers no rights upon the holder of this certificate. This certificate Pastoral Center does not amend, extend or alter the coverage afforded below. 1421 6th Street N. Company Affording Coverage New Ulm, MN 56073 THE CATHOLIC MUTUAL RELIEF SOCIETY OF AMERICA 10843 OLD MILL RD Covered Location St. Anastasia Catholic Church OMAHA, NE 68154 460 Lake Street Southwest Hutchinson, MN 55350 Coverages This is to certifv that the coverages listed below have been issued to the certificate holder named above for the certificate indicated, notwithstanding any requirement, term or condition of any contract or other document with respect to which this certificate may be issued or may pertain, the coverage afforded described herein is subject to all the terms, exclusions and conditions of such coverage. Limits shown may have been reduced by paid claims. Type of Coverage Certificate?Iumber Coverage Effective hate Coverage Expiration Date l,irnits Property P y Real & Personal property D. General Liability Each Occurrence 500,000 General Aggregate Occurrence Products-ComplOP Ago. 85b8 7/112026 7/1/2027 Personal & Adv Injury Claims Made Fire Damage (&nyonc fire) IN -led Exp (Any une person) Excess Liability Each Occurrence 500 000 ' 8568 7/1/2026 7/1f2027 Annual Aggregrate Other Each Occurrence Claims Made Aggregate. Annual Aggregrate Limit/Coverage Description of Operatiuns/LucoitiunslVehiclee/Special Lfems (the following language supersedes any other language in this endorscmcnt or the Certificate in conflict with this language) C.over.tge is verified with regard to Covered Location's Fall Festival, to be beld on churchlsebool grounds, September 11-14, 2026, Includes Liquor Liability and Fidelity for Charitable Gambling Holder of Certificate Cancellation Should any of the above described coverages be cancelled before the expiration date thereof, the issuing company will endeavor to mail 30 days written notice to the holder of City of Hutchinson certificate named to the Iett, but failure to mail such notice shall I I I Hassan Street SE Hutchinson. MN 55350 impose no obligation or liability of any kind upon the company, its agents or representatives. Authorized Representative n �/ ` 0198001268 u QjT(IC I � A CITY ON PURPOSE. 111 Hassan Street Southeast Hutchinson, MN 55350 (320) 587-5151 Fax: (320) 23"240 City of Hutchinson APPLICATION FOR GAMBLING DEVICES LICENSE In provisions of the City of Hutchinson Ordinance Chapter 114 and Minnesota Statutes Chapter 349 All applications are to be received at least 30 days before event in order to be considered Application T ❑ Short Term Date(s) 12 !�i/G�- ��T I��Zb Fee: $35.00 onth Da ear — Month Da ear Or anization _Information _ r Name Phone Number _I—(P O "+ -&Ckr6w Mt-) 5-5-2.5 O Address where regular meeting are held City State Zip Federal or State ID: L4 - o 73 7 5' Day and time of meetings? A/ Is this organization organized under the laws of the State of ❑ yes W no How long has the organization been in existence? 14L�- How may members in the organization? I` LVO What is the purpose of the organization? 01, �'-)cc In whose custody will organization records be kept? Name Phone Number (C'c 5 AjR4�; hSur _)•lej '93S3-D Address city State ZiD Duiv Authorized Officer of the Organization Information I 3 True Name Phone Number -4wa k-C V A)"-n,,%h q Ar 53w Resi Address City State Zip Date of Birth: _oo IWAR -Au � I Place of Birth: Month/day/year fry State Have you ever been convicted of any crime other than a traffic offense? ❑ yes arno If yes, explain: City of Hutchinson Applicadon for Gambling Devices License Page 2 of 3 True Name Phone Number - A ]"�kyt;012 k M Residence Addr City State Zip ALAJ--A Al Date of Birth: Place of Birth: Month/day/year City State Have you ever been convicted of any crime other than a traffic ❑ yes /no If yes, explain: How long have you been a member of the organization? Game Information _5 cation #5kSiA Name of location where game will be played Phone Number -1 (..pO !.>A lie t 4- M 9 553, 5-6 Address of location where game will be played City State Zip Date(s) and/or day(s) gambling devices will be used: through Hours of the day gambling devices will be used: From To Q� AM U _ rpm Maximum number of players: Sd O _ Will prizes be paid in money or merchandise? oney ❑ merchandise Will refreshments be served during the time the gambling devi5es will be used? "es ❑ no If yes will a char a be made for such refreshments? Z1 yes ❑ no Game Information Location #2 Name of location where game will be played Phone Number Address of location where game will be played City State Zip Date(s) and/or day(s) gambling devices will be used: through AM AM Hours of the day gambling devices will be used: From pM_ To RM Maximum number of players: Will prizes be paid in money or merchandise? ❑ ❑ merchandise Will refreshments be served during the time the gambling devices will be used? ❑ yes ❑ no If yes, will a charge be made for such ❑ yes ❑ no City of Hutchinson Application for Gambling Devices License Page 3 of 3 i Officers of the Organization (if necessary, list additional names on separate sheet) I D G a V-e b� il6M -SB�5b Residence Address City state Zip -Name Title I Cf Residence Address City state Zip Name Residence Address Title state Officers or Other Persons Paid for Services Information (ifnecessam list additional names on separate sheet) ' Name Title Residence Address City state Zip Name Title Residence Address City state Zip Name Residence Address Title scare Have you (Gambling Manager and Authorized Officer) read, and do you thoroughly understand the provisions of all laws, ordinances, and regulations governing the operation and use of gambling devices (as outlined in City of Hutchinson Ordinance 114.20 and Minnesota Statutes Chapter 349)? Gambling 1 ' ❑ no v Authorized dyes ❑ no Init�a/ Initial I declare that the information I have provided on this application is truthful, and I authorize the City of Hutchinson to investigate the information submitted. Also, I have received from the City of Hutchinson a copy of the City Ordinance No. 114.20 relating to gambling and I will familiarize myself with the contents thereof. l7 l� officer of of organization Internal Use �`�qf2� Date 2� Z Date City Council ❑ Approved ❑ denied Signature: � HUTCHINSON CITY COUNCIL H UTCH I NSO, Request for Board Action A CITY ON PURPOSE. Agenda Item: Short -Term Gambling License - Fire Dept. Relief Association Department: Administration LICENSE SECTION Meeting Date: 7/14/2026 Application Complete Yes Contact: Melissa Starke Agenda Item Type: Presenter: Melissa Starke Reviewed by Staff 0 Consent Agenda Time Requested (Minutes): License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: The Hutchinson Fire Department Relief Association has submitted a short-term gambling license application into administration for review and processing. The application is for an event the organization is holding on September 12, 2026. The applicant has completed the appropriate application in full and all pertinent information has been received. BOARD ACTION REQUESTED: Approve issuing short-term gambling license to Hutchinson Fire Department Relief Association on September 12, 2026. Fiscal Impact: Funding Source: FTE Impact: Budget Change: No Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: Remaining Cost: $ 0.00 Funding Source: HUTCHINSON A CITY ON PURPOSE. 111 Hassan Street Southeast Hutchinson, MN 55350 (320) 587-5151 Fax: (320) 234-4240 City of Hutchinson APPLICATION FOR GAMBLING DEVICES LICENSE In provisions of the City of Hutchinson Ordinance Chapter 114 and Minnesota Statutes Chapter 349 All applications are to be received at least 30 days before event in order to be considered Application Type Short Term Date(s) 09�21202{o _ 0� ((2�242% Fee: $35.00 MonthvDa /Year - MonthlDa /Year Organization Information 1 CkA 2 Ku-1-z Wt4SaN FiR(E 0VP-MRrW%*-ut 0-m- F ASsac. 32-0- 597-250(p Name Phone Number ZC6 3�'� A,re. sF µ0TrA(M3nti IMN S535,0 Address where regular meeting are held City State zip Federal or State ID: y (- 00 20 L{ 35 Day and time of meetings? 2 M04011 of ♦ -e Z = M OVA 04 eaA qu Is this organization organized under the laws of the State of 0 yes ❑ no How long has the organization been in existence? SD'�How may members in the organization? 20 What is the purpose of the organization? suPft'QT f1r-TwE 4 Rerw&b mt*%6err of 14FD In whose custody will organization records be kept? Kvtc41+4soP4 FaE Or-AEMtY 320-SS7-Z506 Name Phone Number 2015 3r-(' Me— 're _MN_ 55-35-0 Address city State zip Duly Authorized Officer of the Organization Information 9RAtV DON Vac 320-510- 2S'0(p True Name Phone Number I y?d3 23a4-� 5►lLef-T 14WTCKcNF0N Ms 55350 Residence Address City State Zip Date of Birth: 4F J 4F '� _ Place of Birth: Month/day/year City state Have you ever been convicted of any crime other than a traffic offense? ❑ yes no If yes, explain: City of Hutchinson Application fur GunkWbig Devices License Page 2 of 3 Designated Gambling Manager ��.fi�a.�►. ,--t✓{ �,; �f�yrr- 32c°�-- s�`7 - 2sGtp_ True Name Phone Number Z 5 w K+*sxoN MN SS5?5o Residence Address City State Zip Date of Birth: tW 'JOL /Place of Birth:' Month/day/year City State Have you ever been convicted of any crime other than a traffic ❑ yes Xno If yes, explain: How long have you been a member of the organization? rrrt, Game Information Location #1 "-tcKINSoN sofe Name of location where game will be played Phone Number ioS 3=#' Aut SE MN 953Sy Address of location where game will be played City State Zip 2 OQl1 Z�Z(� Date(s) and/or day(s) gambling devices will be used: OQ _ through AM AM gambling devices will be used: From i[•oo � To Hours of the day— �M Maximum number of players: 5,06 t Will prizes be paid in money or merchandise? Odmoney ❑ merchandise Will refreshments be served during the time the gambling devices will be used? Dyes ❑ no If yes will a charge be made for such refreshments? ❑ yes 14 no '%O�Giu-AttoHoL�� Game Information Location #2 Name of location where game will be played Phone Number Address of location where game will be played City State Zip Date(s) and/or day(s) gambling devices will be used: through AM AM Hours of the day gambling devices will be used: From PM To PM Maximum number of players: Will prizes be paid in money or merchandise? ❑ ❑ merchandise Will refreshments be served during the time the gambling devices will be used? ❑ yes ❑ no If yes, will a charge be made for such ❑ yes 3 no City gfHutchinsnn ApplicationjbrGambling DevicesLicm�e Page 3oj3 Officers of the Oraanization (if lgQaw+mooN VW - f RE S l DF-N T Name 7tle I �20 3 23 0 -i—l' 5-rater AtATC-IoN se N %A+4 55,35`0 Residence Address City State Zip T StiN Stv RGEs vtcc- 1P.4�P- Ng ' Name Title ll4y3 -T-kGu !S W&r SS3s4 Residence Address City State Zip Name Title Residence Address City State Zia Officers or Other Persons Paid for Services Information if necessary, list additional names on senaratesheet Name Title Residence Address City State Zip Name Title Residence Address City State Zip Name Title Residence Address City 5itate zip Have you (Gambling Manager and Authorized Officer) read, and do you thoroughly understand the provisions of all laws, ordinances, and regulations governing the operation and use of gambling devices (as outlined in City of Hutchinson Ordinance 114.20 and Minnesota Statutes Chapter 349)? Gambling yes ❑ no p,,— Authorized Ryes ❑ no Initial Initial I declare that the information I have provided on this application is truthful, and I authorize the City of Hutchinson to investigate the information submitted. Also, I have received from the City of Hutchinson a copy of the City Ordinance No. 114.20 relating to gambling and I will familiarize myself with the contents thereof. Signature of authorized ofTtcer of organization Signature of organization &--a(e Date Date J Internal Use Only J City Council ❑ Approved ❑ denied Signature: CHECK REGISTER A FOR CITY OF HUTCHINSON CHECK DATES 6/24/26 - 7/14/26 Check Date Check# Name Description Amount 6/26/2026 EFT EFTPS Payroll Report 6/7/26 - 6/20/26 93,439.01 6/26/2026 EFT MN Dept of Revenue Payroll Report 6/7/26 - 6/20/26 18,258.38 6/26/2026 EFT VOYA (Hutch City of) MNDCP Payroll Report 6/7/26 - 6/20/26 425.00 6/26/2026 EFT Child Support Payroll Report 6/7/26 - 6/20/26 287.03 6/26/2026 EFT PERA Payroll Report 6/7/26 - 6/20/26 68,421.53 6/26/2026 EFT Health Equity Payroll Report 6/7/26 - 6/20/26 18,371.21 6/26/2026 EFT Mission Square Payroll Report 6/7/26 - 6/20/26 4,760.52 6/26/2026 EFT VOYA (CITY OF HUTCH) Payroll Report 6/7/26 - 6/20/26 250.00 6/26/2026 EFT UNUM Vision Payroll Report 6/7/26 - 6/20/26 172.55 6/26/2026 EFT MIL MN Paid Leave Payroll Report 6/7/26 - 6/20/26 4,069.22 6/26/2026 306060 Manual Employee Check Payroll Report 6/7/26 - 6/20/26 7.63 6/26/2026 306061 Manual Employee Check Payroll Report 6/7/26 - 6/20/26 954.97 6/26/2026 306062 Manual Employee Check Payroll Report 6/7/26 - 6/20/26 54.38 6/26/2026 306063 Manual Employee Check Payroll Report 6/7/26 - 6/20/26 13.12 6/26/2026 306064 Manual Employee Check Payroll Report 6/7/26 - 6/20/26 423.70 6/26/2026 306065 Manual Employee Check Payroll Report 6/7/26 - 6/20/26 13.78 6/26/2026 306066 HART Payroll Report 6/7/26 - 6/20/26 456.40 6/26/2026 306067 LELS Union Dues Payroll Report 6/7/26 - 6/20/26 511.00 6/26/2026 306068 MNPEA Payroll Report 6/7/26 - 6/20/26 624.00 7/14/2026 306069 ABDO LLP AUDIT SERVICES YE 2025 13,323.30 7/14/2026 306070 ACE HARDWARE -1315 REPAIR & MAINT SUPPLIES - MULTIPLE DEPTS 1,805.90 7/14/2026 306071 ACE HARDWARE - 1790 FLOWER POTS, SUPPLIES, DUSTERS, POSTAGE, SOAP - FIRE 174.20 7/14/2026 306072 ACE HARDWARE - 6762 WEED KILLER FOR GARDEN PLOT-CREEKSIDE 16.02 7/14/2026 306073 ALNES,JOSHUA REIMB:SAFETYFOOTWEAR-STREETS 184.99 7/14/2026 306074 ALTA FALLS DISTRIBUTING FILTER FOR LIB SQUARE FOUNTAIN 244.09 7/14/2026 306075 AMERICAN BOTTLING CO COST OF GOODS SOLD - LIQUOR HUTCH 269.27 7/14/2026 306076 ARMSTRONG SOFTWARE DOWNTOWN APP DEVELOPMENT - EDA 5,400.00 7/14/2026 306077 ARTISAN BEER COMPANY COST OF GOODS SOLD - LIQUOR HUTCH 2,902.96 7/14/2026 306078 AUTO-CHLOR SYSTEM DISH MACHINE CONTRACT - SR DINING 257.05 7/14/2026 306079 B & C PLUMBING & HEATING INC AC UNIT FOR ENTERPRISE CENTER BAY 1, MISC REPAIRS 17,642.23 7/14/2026 306080 B&B SPORTS & RV BOAT SAFETY TETHER - FIRE 19.22 7/14/2026 306081 BAKER, DALE SIGN & AWNING GRANT - EDA 2,000.00 7/14/2026 306082 BECKER ARENA PRODUCTS SEAT BOARD REPAIRS - ARENA 3,380.00 7/14/2026 306083 BELLBOY CORPORATION COST OF GOODS SOLD - LIQUOR HUTCH 7,192.55 7/14/2026 306084 BERNICK'S COST OF GOODS SOLD - LIQUOR HUTCH 5,500.94 7/14/2026 306085 BEYOND BROKEN ORANGE SPECTACULAR SHOW GUIDE ADV - LIQUOR HUTCH 165.00 7/14/2026 306086 BLACK GOLD ENVIRONMENTAL SERVICES OIL BURNER CLEANOUT - HATS 678.00 7/14/2026 306087 BOBBING BOBBER BREWING CO COST OF GOODS SOLD - LIQUOR HUTCH 830.64 7/14/2026 306088 BOLTON & MENK INC LAKES AND RIVERS, WATER TOWER - ENG 11,891.50 7/14/2026 306089 BRAUN INTERTEC CORP MATERIALS TESTING - EDMONTON 9,460.00 7/14/2026 306090 BREAKTHRU BEVERAGE MN WINE & SPIRITS COST OF GOODS SOLD - LIQUOR HUTCH 27,954.98 7/14/2026 306091 BROOKAI RE CORPORATION FILTERS - CITY CENTER 128.80 7/14/2026 306092 C & L DISTRIBUTING COST OF GOODS SOLD - LIQUOR HUTCH 93,842.55 7/14/2026 306093 CARS ON PATROL SHOP LLC SQUAD PARTS & CAMERA INSTALLATION - POLICE 287.95 7/14/2026 306094 CENTRAL HYDRAULICS PARTS - HATS 761.53 7/14/2026 306095 CENTRAL UNITED COOPERATIVE DIESEL, UNLEADED - HATS 51,696.60 7/14/2026 306096 CINTAS CORPORATION SUPPLIES & SERVICE - MULTIPLE DEPTS 824.04 7/14/2026 306097 CITIZENS BANK & TRUST CO 1ST HALF TIF PAYMENT 22,339.74 7/14/2026 306098 CLARKE ENVIRONMENTAL MOSQUITO MGMT MOSQUITO CONTROL MAY/DUNE - STREETS 24,712.80 7/14/2026 306099 CM2 SUPPLY WELDING SUPPLIES - HATS 711.25 7/14/2026 306100 COLDSPRING NICHE PLAQUE - CEMETERY 399.67 7/14/2026 306101 COLUMN SOFTWARE PBC PUBLICATION -ADMIN 670.69 7/14/2026 306102 CORE & MAIN LP MEASURING CHAMBER, HYDRANT SUPPLIES - MULTIPLE DEPTS 10,807.93 7/14/2026 306103 CREEKSIDE SOILS MULCH - CITY CENTER 375.20 7/14/2026 306104 CRESTED RIVER COST OF GOODS SOLD - LIQUOR HUTCH 340.00 7/14/2026 306105 CROW RIVER FLORAL & GIFTS BIRTH ARRANGEMENT - STREETS 58.00 7/14/2026 306107 CROW RIVER OFFICIALS ASSN OFFICIALS FOR PRCE PROGRAMS 5,100.00 7/14/2026 306108 CROW RIVER WINERY COST OF GOODS SOLD - LIQUOR HUTCH 154.00 7/14/2026 306109 CUSTOMIZED FIRE RESCUE TRAINING INC FFI-FFII TRAINING, TRAINING ROPE RESCUE - FIRE 7,500.00 7/14/2026 306110 DAHLHEIMER BEVERAGE COST OF GOODS SOLD - LIQUOR HUTCH 119,062.87 7/14/2026 306111 DEBRUYNE,HILDE SCULPTURE STROLL2026 1,000.00 7/14/2026 306112 DELL MARKETING LP DELL MONITORS - MULTIPLE DEPTS 693.70 7/14/2026 306113 DESIGN ELECTRIC INC AC UNIT FOR BAY 1 - EDA 1,549.55 7/14/2026 306114 E2 ELECTRICAL SERVICES INC REPAIRS- MULTIPLE DEPTS 612.50 7/14/2026 306115 ECOLAB PEST ELIMINATION PEST CONTROL- MULTIPLE DEPTS 348.91 7/14/2026 306116 ECOSAFE ZERO WASTE USA INC COMPOSTABLE BAG/LINERS - CREEKSIDE 246.85 7/14/2026 306117 EMBROIDERY PLUS POLO UNIFORM SHIRTS - FIRE 334.00 7/14/2026 306118 FAIR MANUFACTURING INC REPAIR PARTS - STREETS EQUIPMENT 10,446.36 7/14/2026 306119 FALCON MECHANICAL FURNACE REPAIR BAY 2 - EDA 921.00 7/14/2026 306120 FARM -RITE EQUIPMENT REPAIRS TO SKIDSTER 5610 - PARKS 1,048.12 7/14/2026 306121 FASTENAL COMPANY MISC SUPPLIES - PARKS 1,260.72 7/14/2026 306122 FENSKE'S STUMP REMOVAL STUMP REMOVALS -STREETS 29,725.00 7/14/2026 306123 FLEXIBLE PIPE TOOLS& EQUIPMENT GRENADE BOMB NOZZLE - STORM WATER 1,729.50 7/14/2026 306124 FOSTER MECHANICAL REPAIRS - MULTIPLE DEPTS 656.76 7/14/2026 1306125 FUZE LOGISTICS SERVICES USA INC ICREEKSIDE BAGGED FREIGHT 3,825.00 CHECK REGISTER A FOR CITY OF HUTCHINSON CHECK DATES 6/24/26 - 7/14/26 Check Date Check# Name Description Amount 7/14/2026 306126 GALLS LLC UNIFORMS, ARMOR, BADGES, BELTS- MULTIPLE DEPTS 4,287.34 7/14/2026 306127 GARAGE DOOR STORE REPLACE CABLE ON TIP BLDG DOOR #2 - CREEKSIDE 2,545.00 7/14/2026 306128 GARICK LLC CYPRESS MULCH - CREEKSIDE 271.20 7/14/2026 306129 GAVIN, JANSSEN, STABENOW, & MOLDAN LTD PROSECUTIONS - LEGAL 3,700.00 7/14/2026 306130 GLENCOE LAW OFFICE PREPARES & REVIEWS - LEGAL 929.25 7/14/2026 306131 GLOBAL RESERVE LLC COST OF GOODS SOLD - LIQUOR HUTCH 550.00 7/14/2026 306132 GRAINGER REPAIR&MAINTSUPPLIES - MULTIPLEDEPTS 887.97 7/14/2026 306133 GRANDOME CINEMAS LLC JUNE TAX SETTLEMENT 6,328.56 7/14/2026 306134 GREEN EARTH LAWN CARE INC CONTRACTED LAWN SERVICE - EDA 115.13 7/14/2026 306135 H2O INNOVATION USA SPECTRAGUARD 100 ANTISCALANT - WATER 8,168.96 7/14/2026 306136 HACH COMPANY HACH ANNUAL SERVICE CONTRACT - WWTP 16,481.00 7/14/2026 306137 HAGER JEWELRY INC WATER CARNIVAL GIFTS - GENERAL 115.50 7/14/2026 306138 HALL, MARK V SCULPTURE STROLL 2026 1,000.00 7/14/2026 306139 HANSON PAVING 2026 ASPHALT SPOT REPAIRS, HANGAR/TAXIWAY REHAB 187,033.35 7/14/2026 306140 HARTFORD, THE INLAND MARINE POLICY -SOLAR ARRAY 4,858.00 7/14/2026 306141 HAWKINS INC CHEMICALS - MULTIPLE DEPTS 39,994.80 7/14/2026 306142 HIGHFI ELD APARTMENTS OF HUTCHINSON 1ST HALF TI F PAYMENT 62,040.90 7/14/2026 306143 HILLCRETE CONSTRUCTION SIDEWALK REPLACEMENT - STREETS 4,900.00 7/14/2026 306144 HILLYARD/HUTCHINSON OPERATING SUPPLIES - MULTIPLEDEPTS 1,833.13 7/14/2026 306145 HJERPE CONTRACTING CATCH BASIN REPAIR, MISC REPAIRS - MULTIPLE DEPTS 74,389.09 7/14/2026 306146 HK SOLUTIONS GROUP L5/P26-05: 2026 CURED IN PLACE PIPE LINING 143,663.32 7/14/2026 306147 HMAARCHITECTS LTD CITY CENTER NEEDS STUDY 42,354.98 7/14/2026 306148 HOFFMAN ELECTRIC MN LLC ELECTRICAL REPAIRS - MULTIPLE DEPTS 1,633.32 7/14/2026 306149 HOISINGTON KOEGLER GROUP INC FESTIVAL STREET / WAYFINDING PROJECT 3,321.35 7/14/2026 306150 HOME CITY ICE COMPANY COST OF GOODS SOLD - LIQUOR HUTCH 1,638.52 7/14/2026 306151 HORIZON COMMERCIAL POOL SUPPLY CHEMICALS, FILTERS, SUPPLIES - WATERPARK 5,462.34 7/14/2026 306152 HUTCHINSON CHAMBER & TOURISM MAY LODGING TAX 14,186.57 7/14/2026 306153 HUTCHINSON CO-OP FUEL&SUPPLIES -MULTIPLEDEPTS 10,750.87 7/14/2026 306154 HUTCHINSON FIRE DEPT RELIEF ASSN LOCAL FIRE PENSION CONTRIB 37,500.00 7/14/2026 306155 HUTCHINSON HEALTH PRE -EMPLOYMENT PHYSICALS - MULTIPLE DEPTS 69.30 7/14/2026 306156 HUTCHINSON UTILITIES TGB CONTRACT - WATER/WWTP 7,672.26 7/14/2026 306157 HUTCHINSON UTILITIES SOLAR PROJECT GRANT REIMB 54,992.84 7/14/2026 306158 HUTCHINSON WHOLESALE #1550 EQUIPMENT PARTS - MULTIPLE DEPTS 259.91 7/14/2026 306159 HUTCHINSON WHOLESALE #1551 BCI 51 BATTERY FOR FORKLIFT 645 - CREEKSIDE 189.99 7/14/2026 306160 HUTCHINSON WHOLESALE #1552 AIR FILTER MOWERS - PARKS 31.34 7/14/2026 306161 HUTCHINSON WHOLESALE #2520 SHOP SUPPLIES - FIRE 32.98 7/14/2026 306162 ICE SPORTS INDUSTRY ICE SHOW -ARENA 25.00 7/14/2026 306163 INDUCTIVE AUTOMATION LLC SCADA SUPPORT PLAN IGNITION - WATER/WWTP 5,877.00 7/14/2026 306164 INDUSTRIAL PNEUMATIC SYSTEMS AIR DRYER, FILTERS - WATER 6,955.19 7/14/2026 306165 INGSTAD BROADCASTING ADVERTISING - LIQUOR HUTCH 353.00 7/14/2026 306166 INTERSTATE BATTERY SYSTEM OF MPLS BATTERY STOCK - HATS 476.85 7/14/2026 306167 INTERSTATE BEARING SYSTEMS INC MCCLOSKEY & STACKING CONVEYOR PARTS - CREEKSIDE 589.45 7/14/2026 306168 JAMES, TIMOTHY PAUL SCULPTURE STROLL 2026 1,000.00 7/14/2026 306169 JAUNICH, MATT REIMB: LMC CONF - ADMIN 218.95 7/14/2026 306170 JAY MALONE MOTORS UTILITY 3 TAILGATE PARTS - FIRE 45.90 7/14/2026 306171 JAYTECH INC COOLING TOWER INSPECTION - ARENA 453.30 7/14/2026 306172 JEFFERSON FIRE & SAFETY INC FIRE GEAR REPAIR 345.00 7/14/2026 306173 JOHNSON BROTHERS LIQUOR CO COST OF GOODS SOLD - LIQUOR HUTCH 43,308.02 7/14/2026 306174 KAHL, DENNIS WEED CONTROL- STORM WATER 700.00 7/14/2026 306175 KATZ-JAMES, GAIL SCULPTURE STROLL 2026 1,000.00 7/14/2026 306176 KERI'S CLEANING & HANDYMAN SERVICES CLEANING SERVICES - MULTIPLE FACILITIES 6,424.20 7/14/2026 306177 KGB CORNERSTONE COMMONS LLC JUNE TAX SETTLEMENT 17,812.15 7/14/2026 306178 KNIFE RIVER CORPORATION WASHED ROCK -STREETS 380.80 7/14/2026 306179 KOHLS SWEEPING SERVICE 2026 SHORT LINE STRIPING PROGRAM - STREETS 19,074.05 7/14/2026 306180 KRANZ LAWN & POWER MOWER PARTS - MULTIPLE DEPTS 1,612.29 7/14/2026 306181 L & P SUPPLY OF HUTCHINSON INC WEED WHIPPER, FUEL, FRONT HITCH - MULTIPLE DEPTS 707.92 7/14/2026 306182 LAKELAND MEDIA LLC ADVERTISING - LIQUOR HUTCH 320.00 7/14/2026 306183 LANDSKAPINGS LANDSCAPING REPAIR- MULTIPLE DEPTS 2,025.00 7/14/2026 306184 LIND, TERESA SCULPTURE STROLL 2026 1,000.00 7/14/2026 306185 LITTLE CROW SHOOTING SPORTS AMMUNITION - POLICE 2,690.00 7/14/2026 306186 LITTLE SMILES DAYCARE CHILDCARE BUSINESS ASSIST - EDA 2,250.00 7/14/2026 306187 LOGIS DOMAIN NAME RENEWAL, LICENSING, CONSULT- MULTIPLE DEPTS 1,567.10 7/14/2026 306188 MARCO TECHNOLOGIES LLC PRINTING CONTRACTS - MULTIPLE DEPTS 2,981.85 7/14/2026 306189 MARCO TECHNOLOGIES LLC-131411 PRINTING CONTRACT - EDA 46.93 7/14/2026 306190 MAVERICK WINE COST OF GOODS SOLD - LIQUOR HUTCH 1,554.00 7/14/2026 306191 MCKIMM MILK TRANSIT CREEKSIDE BAGGED FREIGHT 421.20 7/14/2026 306192 MCLEOD COUNTY RECORDER RECORDING FEES - P/Z 92.00 7/14/2026 306193 MENARDS HUTCHINSON REPAIR & MAINT SUPPLIES - MULTIPLE DEPTS 1,389.52 7/14/2026 306194 MI DWAY FORD COMPANY 2026 F150 & 2026 F350 - STREETS 101,603.56 7/14/2026 306195 MIN, SUNG-HEE SCULPTURE STROLL 2026 1,000.00 7/14/2026 306196 MINI BIFF PORTARENTALS- MULTIPLEDEPTS 541.62 7/14/2026 306197 MINNESOTA DEPT OF MOTOR VEHICLE TITLES & REG - STREETS 7,096.50 7/14/2026 306198 MINNESOTA MUNICIPAL BEVERAGE ASSOC MMBA ANNUAL DUES - LIQUOR HUTCH 5,700.00 7/14/2026 306199 MINNESOTA VALLEY TESTING LAB LAB SAMPLE TESTING - MULTIPLE DEPTS 1,180.00 7/14/2026 1306200 MN STATE BAR ASSOCIATION DUES & SUBSCRIPTIONS - LEGAL 290.00 CHECK REGISTER A FOR CITY OF HUTCHINSON CHECK DATES 6/24/26 - 7/14/26 Check Date Check# Name Description Amount 7/14/2026 306201 NELSEN, TIM SCULPTURE STROLL 2026 1,000.00 7/14/2026 306202 NELSON, JUDD SCULPTURE STROLL 2026 1,000.00 7/14/2026 306203 NEWMAN SIGNS INC SCHOOL ZONE SIGNS - STREETS 352.42 7/14/2026 306204 NORTH CENTRAL INC RUNNING BOARDS, BACKRACKS, JOYSTICK CONTROLS - STREETS 2,462.90 7/14/2026 306205 NORTH CENTRAL LABORATORIES LAB SUPPLIES - WWTP 527.71 7/14/2026 306206 NORTHERN SAFETY TECHNOLOGY MS163T & MS339T AMBER LIGHTS -STREETS 1,207.80 7/14/2026 306207 NUSS TRUCK & EQUIPMENT MS812T SHOCK/SPRING/RPR KIT - STREETS 336.69 7/14/2026 306208 NUVERA PHONE SERVICES - MULTIPLE DEPTS 4,561.78 7/14/2026 306209 OFFICE DEPOT MARKERS, RECEIPT BOOKS, PENS, MOUSE/ARMS - MULTIPLE DEPTS 353.28 7/14/2026 306211 PARK NICOLLET CLINIC CAM - EVENT CTR 1,500.00 7/14/2026 306212 PAULSON, DEB REIMB: WATER LICENSE - WWTP 23.00 7/14/2026 306213 PAUSTIS WINE COMPANY COST OF GOODS SOLD - LIQUOR HUTCH 1,806.00 7/14/2026 306214 PEDERSEN, JAMES SCULPTURE STROLL 2026 500.00 7/14/2026 306215 PEDERSEN, RYAN SCULPTURE STROLL 2026 500.00 7/14/2026 306216 PEOPLEREADY INC CREEKSIDE TEMP STAFFING 4,972.80 7/14/2026 306217 PETTIT, MICHAEL R SCULPTURE STROLL 2026 1,000.00 7/14/2026 306218 PHILLIPS WINE & SPIRITS COST OF GOODS SOLD - LIQUOR HUTCH 19,576.87 7/14/2026 306219 PINE PRODUCTS INC COMPOST 5,850.00 7/14/2026 306220 PIONEER ATHLETICS / PIONEER MFG ATHLETIC FIELDMARKING PAINT225GLTOTE -PARKS 2,900.00 7/14/2026 306221 PIONEERLAND LIBRARY SYSTEM 2ND QTR FUNDING REQUEST- LIBRARY 54,812.00 7/14/2026 306222 PLUNKETTS PEST CONTROL PEST CONTROL -ARENA 114.37 7/14/2026 306223 PREMIER TECH SYSTEMS & AUTOMATION EQUIPMENT PARTS - CREEKSIDE 3,837.82 7/14/2026 306224 QUALITY FORKLIFT SALES & SERV INC FORKLIFT SERVICE & TIRES - CREEKSIDE 1,214.51 7/14/2026 306225 QUILL LLC FILE LABEL STICKERS, PAPER - POLICE 101.18 7/14/2026 306226 R&R SPECIALTIES OF WISCONSIN ZAMBONI PARTS -ARENA 251.57 7/14/2026 306227 RAHN PAINTING & CONTRACTING LLC MULCH, SPRING CLEANUP - MULTIPLE DEPTS 5,135.00 7/14/2026 306228 RD MACHINE INC 1ST HALF TIF PAYMENT 8,355.88 7/14/2026 306229 RED BULL DISTRIBUTION COMPANY INC COST OF GOODS SOLD - LIQUOR HUTCH 127.23 7/14/2026 306230 REINDERS CHEMICAL FOR PARKS & UTILITIES 2,417.95 7/14/2026 306231 REV] ER WELDING MS116TPLATE/CUT -STREETS 184.06 7/14/2026 306232 RICE LAKE CONSTRUCTION GROUP L3/P24-09 WWTF SOLIDS IMPV PROJECT 710,165.20 7/14/2026 306233 ROTOCHOPPER GRINDER PARTS - CREEKSIDE 24,266.09 7/14/2026 306234 ROULEAU, VICTOR SCULPTURE STROLL 2026 1,000.00 7/14/2026 306235 RUNNING'S SUPPLY REPAIR & MAINT SUPPLIES - MULTIPLE DEPTS 626.76 7/14/2026 306236 S&S TRUCKING LLC FLATBED TRUCKING FOR BAGGED PRODUCTS - CREEKSIDE 4,670.00 7/14/2026 306237 SECURITY BANK & TRUST CO GENERAL OBLIGATION IMPRV BONDS, SERIES 2020A 9,058.75 7/14/2026 306238 SIGMA CONTROLS INC SIGMA 5000MPWELL TRANSDUCERS -WATER 3,888.18 7/14/2026 306239 SIR LINES -A -LOT 2026 LONG LINE STRIPING PROGRAM - STREETS 25,397.65 7/14/2026 306240 SITEONE LANDSCAPE SUPPLY LIGHTPOLE PADS FOR ROBERTS PARK, WEED CONTROL - PARKS 2,428.29 7/14/2026 306241 SKYLINE AGGREGATE WASHED SAND - CREEKSIDE 2,847.13 7/14/2026 306242 SOUTHERN GLAZER'S WINE AND SPIRITS COST OF GOODS SOLD - LIQUOR HUTCH 37,122.81 7/14/2026 306243 SOUTHERN MINNESOTA INSPECTION ANNUAL HOOP AND LIFT INSPECTION -ARENA, REC BLDG 1,115.60 7/14/2026 306244 STANDARD PRINTING-N-MAILING UB BILLS, POSTAGE - MULTIPLE DEPTS 4,632.48 7/14/2026 306245 STAPLES ADVANTAGE OFFICE SUPPLIES- MULTIPLE DEPTS 130.10 7/14/2026 306246 STREICH TRUCKING LYNDESFREIGHTOUT- CREEKSIDE 1,460.00 7/14/2026 306247 SUMMER LAKES BEVERAGE LLC COST OF GOODS SOLD - LIQUOR HUTCH 724.50 7/14/2026 306248 SYSCO WESTERN MN CONCESSIONS -MULTIPLE DEPTS 5,890.69 7/14/2026 306249 TACTICAL SOLUTIONS CERTIFICATION OF RADAR- POLICE 344.00 7/14/2026 306250 TERMINAL SUPPLY CO ROCKER SWITCHES - HATS 271.31 7/14/2026 306251 THOMSON REUTERS-WEST OPERATING SUPPLIES - LEGAL 1,528.43 7/14/2026 306252 TRI COUNTY WATER SOFTENER SALT, WATER - MULTIPLE DEPTS 308.90 7/14/2026 306253 TRUE NORTH CONTROLS MAIN LIFT STATION ANTENNA- WWTP 345.00 7/14/2026 306254 TURF TANK PARKING LOT FEATURE, TURF TANK RENTAL - MULTIPLE DEPTS 13,500.00 7/14/2026 306255 TWO-WAY COMMUNICATIONS INC MS163T & MS339T SPLIT - STREETS 771.50 7/14/2026 306256 UPONOR INC 1ST HALF TAX ABATEMENT 11,907.72 7/14/2026 306257 VESSCO INC QDOS 30 PUMPHEADS - WATER 1,624.28 7/14/2026 1306258 VIKING BEER COST OF GOODS SOLD - LIQUOR HUTCH 22,164.75 7/14/2026 306259 VI KING COCA COLA COST OF GOODS SOLD - LIQUOR HUTCH 1,016.25 7/14/2026 306260 VINOCOPIA INC COST OF GOODS SOLD - LIQUOR HUTCH 3,422.75 7/14/2026 306261 VOELKER, JAMIE LEE MAY & JUN PICKLEBALL INSTR - REC 1,680.00 7/14/2026 306262 WASTE MANAGEMENT OF WI -MN REFUSE & BIOSOLIDS TAKEN TO LANDFILL 38,942.56 7/14/2026 306263 WATER CONSERVATION SERVICE INC LAKEWOOD DR LEAK LOCATE - WATER 956.79 7/14/2026 306264 WELCOME NEIGHBOR ADVERTISING - LIQUOR HUTCH 70.00 7/14/2026 306265 WILSON'S NURSERY INC TREES -STREETS 1,903.79 7/14/2026 306266 WINE COMPANY, THE COST OF GOODS SOLD - LIQUOR HUTCH 3,103.00 7/14/2026 306267 WM MUELLER & SONS L1/P26-01 EDMONTON AVE SE 356,392.22 7/14/2026 306268 WM MUELLER & SONS L2/P26-02 2026 STREET IMPRV PROJECTS 379,629.44 7/14/2026 306269 WM MUELLER & SONS 1/4 VIRGIN SAND BLACKTOP - STREETS 1,281.28 7/14/2026 306270 WMS GROUND LOG MULCH - CREEKSIDE 38,911.50 7/14/2026 306271 BUBOLTZ, CHERYL UB REFUND 36.34 7/14/2026 306272 HOMAN, HOLLY UB REFUND 145.37 7/14/2026 306273 HUGHES, JOHN UB REFUND 1.98 7/14/2026 306274 HULS, RUSTEN & CHERYL UB REFUND 33.46 7/14/2026 306275 PAUL, RICHARD UB REFUND 98.00 7/14/2026 1306276 PIPPENGER, JACKIE G JUB REFUND 1 95.30 CHECK REGISTER A FOR CITY OF HUTCHINSON CHECK DATES 6/24/26 - 7/14/26 Check Date Check# Name Description Amount 7/14/2026 306277 WRASTIR, LUWAYNE UB REFUND 75.00 7/14/2026 306278 HUTCHINSON CHAMBER & TOURISM SHAMROCK INN LODGING TAX RESTITUTION REIMBURSEMENT 12,119.77 Total - Check Register A: $ 3,557,363.02 CHECK REGISTER B FOR CITY OF HUTCHINSON CHECK DATES 6/24/26 - 7/14/26 Check Date Check# Name Description Amount 7/14/2026 306106 CROW RIVER GLASS & SIGNS DOOR FELT - REC BLDG 300.00 7/14/2026 306210 OUTDOOR MOTION BIKE PARTS - POLICE 398.00 Total - Check Register B: $ 698.00 HUTCHINSON CITY COUNCIL HUTC HIN SON Request for Board Action A UTY DN KJAPOSE. Emerald Ash Borer (EAB) Update Agenda Item: Department: P Wx/Eng LICENSE SECTION Meeting Date: 7/14/2026 Application Complete N/A Contact: Mike Stifter Agenda Item Type: Presenter: Mike Stifter Reviewed by Staff ❑� Communications, Requests Time Requested (Minutes): License Contingency N/A Attachments: No 0 BACKGROUND/EXPLANATION OFAGENDA ITEM: City staff have found definitive evidence of EAB in Hutchinson. It was first noticed in the backyards of Rose Lane NE. Some of the trees showed signs of being affected for multiple years but it hadn't progressed beyond this area. We've aggressively pursued ash removals in this neighborhood so the initial impact to publicly owned trees won't be as significant. The impact on private property owners however may be significant. The presence of EAB will initiate our Orders to Remove Policy which was added to the nuisance vegetation ordinance several years ago. Unlike Dutch Elm Disease Orders to Remove, the goal of the ash removal orders is focused on public and private safety issues. Trees affected by EAB can quickly become unstable and pose a hazard to anything within the fall radius in the event of a tree failure. The sooner they can be removed, the less risk of causing injury and damage. BOARD ACTION REQUESTED: Communication to Council Fiscal Impact: $ 0.00 Funding Source: FTE Impact: Budget Change: New Bu Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A HUTCHINSON CITY COUNCIL HUTC HIN SON Request for Board Action A UTY DN KJAPOSE. 2025 Year End Report Agenda Item: Department: Administration LICENSE SECTION Meeting Date: 7/14/2026 Application Complete N/A Contact: Matt Jaunich Agenda Item Type: Presenter: Matt Jaunich Reviewed by Staff ❑� Communications, Requests Time Requested (Minutes): 5 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: City staff is happy to present to the City Council our fifth annual comprehensive annual city report for the year ending 2025. The intent of this report is to measure the City's "performance" on an annual basis. Information contained within the report is data and information from January 1 to December 31, 2025. The report is really a collection of department year end reports into one document. It is our goal to build upon this report in the years to come. Staff is always open for thoughts and recommendations from the City Council to build upon this report. BOARD ACTION REQUESTED: No action. Presentation of the year-end report. Fiscal Impact: Funding Source: FTE Impact: Budget Change: No 0 Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A *2n�r% nNNiini CITY OF HUTCHINSON 2025 ANNUAL REPORT TABLE OF CONTENTS OVERVIEW 2 EXECUTIVE SUMMARY 3 Our Story 5 Broad Indicators 7 Community Surveys 12 Organization of the City 16 Grants and Donations 17 City Partnerships 19 Awards and Recognitions 24 DEPARTMENTS Administration 25 Economic Development 27 Finance 43 Fire 50 Housing & Redevelopment Authority 58 Human Resources 68 Information Technology (IT) 73 Legal 76 Parks/Recreation/Community Education 80 Planning/Zoning/Building 122 Police 135 Public Works 153 2025 Annual Report Overview The City of Hutchinson's Annual Report provides an overview of the services provided over the previous year. This report is attempting to measure the "performance" of the city on an annual basis. All data and information referenced is accurate from January 1, 2025, through December 31, 2025. To the extent possible, information is compared with the previous year(s) to provide a base from which to measure services and accomplishments. Organization of Report This annual report is arranged according to the City's organizational department model, with data reported by the major departments within the city. This report is intended to show: • Alignment of City services with the City's Core Values, Mission Statement and Vision Statement • Priorities within the annual budget • Trend data impacting City services Limitations of Performance Measure Applying performance measures in the public sector presents a number of limitations: • Information can be subjective and highly dependent upon each individual's source used • There is no single measure of success, such as profit in the private sector • Data is not all-inclusive, a precise science, a quick fix nor the only tool available for decision - making Even with these limitations, there is still a need to measure performance and develop standards for comparing Hutchinson to other cities. The city has historically used the other 18 outstate small regional centers' as market comparisons for a variety of data points. Performance measurement can mean different things to different people. One of the goals of this report is to tell a story about whether or not the City and its activities are achieving the objectives of and if progress is being made toward attaining city policies and/or goals. Another goal of this report is to provide the Hutchinson City Council with information to help them determine if their desired results are accomplished. 1 Albert Lea, Alexandria, Austin, Bemidji, Brainerd, Cloquet, Fairmont, Faribault, Fergus Falls, Hibbing, Marshall, New Ulm, Northfield, Owatonna, Red Wing, Willmar, Winona, Worthington 2 2025 Annual Report Executive Summary I'm pleased to present to you the sixth annual City of Hutchinson Annual Report. It is the City's intention to produce this report on an annual basis so that the City Council, residents and businesses of Hutchinson can be informed of and engaged in city services and the measurement of how the city is performing. We continue to build upon this report and will continue to do so in the future. Any suggestions for additional information and/or measurements are more than welcomed. While 2024 was a year of anticipating what that future will look like, 2025 was a year of unexpected growth within the community. We spent a lot of time in 2024 planning for the future of Hutchinson. The fruits of our labor seem to come to fruition in 2025 with several projects taking place. We saw our first new housing development in over 20 years get built in the Elk Ridge Estates. On top of that, we also saw work start on the 81-unit apartment complex, the Landing, in downtown Hutchinson. We also saw interest in new retail in the south side of town and new businesses opened in our downtown main street district. The future of the city looks to be exciting and bright with more growth planned for next year. The City's average monthly unemployment rates continue to remain low with an average monthly rate of 3.8% in 2025. These rates continue to remain in line with the State (3.4%) percentages and below the Federal (4.2%) percentages. Vacancy rates for our market rate rental units also continue to be at historic lows and our median sales price of our residential homes continue to rise, having increased from $257,450 last year to $279,5002 in 2025, the thirteenth straight year of an increase. Home resales continue to remain steady (as inventory presents itself) and home foreclosures (lack thereof) continue to remain low. While home resales continue to remain steady, we have seen a tighter housing market, which has resulted in new homes continuing to be constructed in town. Although the lack of available lots has made the housing market tighter, a new housing development in 2025 with the possibility of more next year will assist in relieving this pressure throughout town. We issued 23 building permits for new homes in 2025. 2025 was the thirteenth straight year in where we have issued 20 or more new home permits. The new homes being built this past year will push our ten-year total to over 270. Along with new housing, we saw the completion of the Les Swab Tire building on Highway 15 south, and the Family Dollar building on Highway 7 west. Main Street saw The Book Keepers, Sips, Grounded Gardens, Rowen and Raye, and Garden Nook Tea & Gifts all open in the past year. Smokey Dukes and Deimos Materials moved into the Enterprise Center. Zephyr Wind Services expanded their operations into the Z Source: Minneapolis Area Realtors 3 old Hutchinson Manufacturing site, and Miller Manufacturing expanded their operations from Glencoe into the old Rite Way building in the industrial park. Outside of private investment, construction was finished this past spring on a new grandstand at VMF, and the city successfully hosted the 2025 State Amateur Baseball Tournament this past August/ September. The city has added over $380 million in new value to the community over the past ten years as well, and we are anticipating continued growth in the next year. 2026 hopes to continue the recent trend of investments within the community. 2026 should see the completion of the Sherwin Williams Paint Store on Highway 15 south, and the Landing Apartment complex in the downtown area. The hospital is working on an emergency room expansion, and the Mall is working on a large renovation project in advance of a new tenant moving into the space. We are also expecting a new Cannabis Testing Facility to come into town, along with the construction of a Data Center out in the industrial park. New businesses (Scooters Coffee?) and business expansions continue to explore Hutchinson, with interest in the community continuing to be high. More single- family homes will be constructed and the construction of a new 126-unit (3 buildings) apartment complex at the old Burns Manor site could start in 2026 as well. Demolition of the old Jorgenson Hotel has begun, and we could see development on that site as early as next year. The city will continue to market the Industrial Park, and we are hoping that a lot of the interest that is brewing currently in Hutchinson will result in projects or the start of projects in 2026. One of the goals I have for this City is for it to be the best and most attractive small regional center in outstate Minnesota. In an effort to be the most attractive small regional center, it is our responsibility to create an atmosphere that is conducive to growth and achievement throughout the community. This report is a culmination of the effort staff put forth in 2025 in providing quality services hopefully at a cost of government similar to, or less than, comparable outstate regional centers. As we look at the year ahead of us, many projects that were started in 2025 will continue into 2026 and rumors of projects from 2025 will become a reality in 2026. I strongly believe that the year ahead of us will be better than the previous one. There is a lot to be excited about, and I look forward to what the future holds! Matt Jaunich City Administrator E 2025 Annual Report Our Story In late 2019, the City of Hutchinson embarked on a community branding initiative, along with a marketing strategy to assist city staff and elected officials in promoting the city of Hutchinson to new residents and young families along with prospective businesses and developers. The study was to provide insights regarding current perceptions of the city and help to drive the recruitment of new residents and young families; energize current residents and instill a sense of pride in the community; and position the city as a desirable place for relocation and redevelopment to increase new resident attraction and economic growth. Below is the City's brand story or message. Brand Message On a late November afternoon standing on the crest of a hill overlooking the Crow River, three Hutchinson brothers knew they had found what they had been looking for: the perfect place to establish a community that stood for the values and human rights they had been expounding for years through their popular music. Only now they could actually put those lyrics into practice by advocating for principles, such as the abolition of slavery and women's equal rights through laws enacted on the town's very first day. So it was, long before the rest of the country would come around to their forward -thinking ideas, Hutchinson, Minnesota established a reputation for blazing trails as a town ahead of its time. More than 160 years later, Hutchinson still stands apart as a city with a vision for the future. A city that thinks and acts differently because of its solid commitment to plans and decisions that first and foremost improve the quality of life — the economic, physical, social, emotional and environmental wellness for all its residents, workers and visitors. Like the Crow River, generations of wisdom have flowed through this area's rich history, gleaning and drawing deeply from its abundant woods, wildlife and surrounding lakes. Here is a community shaped not only by the natural beauty and forces that come together only here in this part of rural Minnesota, but also by its legacy and its people. Somewhere between small town and big city, farm community and metropolis, lies Hutchinson. Though a small town by some standards, it's more big city in its vision for the future and ability to get things done. You'll find small town charm in its historic downtown where quaint shops, local businesses, a cozy coffee shop and restaurants line Main Street. But you'll also find big city appeal in an exceptional school system and a vibrant arts and cultural community that includes the Hutchinson Center for the Arts, Hutchinson Theater Company, the Minnesota Pottery Festival, Orange Spectacular, Minnesota Garlic Festival and celebrated RiverSong Music Festival. A friendly, personalized, supportive approach to doing business, more indicative of a small-town welcoming spirit is alive and well in this community. Yet, it's also recognized as a pioneering, highly productive, forward -thinking manufacturing, agricultural and industrial regional hub that finds creative ways of working with new businesses and entrepreneurs. In fact, Hutchinson is already preparing tomorrow's workforce today with the state's most ambitious skilled workforce development initiative, 5 TigerPath, where high school students discover their interests and talents by learning, exploring and building career and technical skills. Some cities talk. Hutchinson acts. Wasting no time doing things "because that's the way it's always been done", over the years the city's leaders have seen the opportunity in challenges instead, acting decisively on the most efficient, effective solution for all. The fact that they hatched the idea of selling their own compost is certainly testament to that. Much can be owed to a local spirit of cooperation and collaboration. And the ability to discern what is worth saving, such as the State Theater, and what can fall away. Hutchinson is a micropolitan that has managed to balance growth with preservation. Where development doesn't compromise its cultural or environmental character. The downtown redevelopment project is a great example of that, going forward even in the midst of challenging times. Just as the Hutchinson brothers first recognized, the city's abundant natural resources and beauty greatly add to a higher quality of life. With hiking, biking and snowmobiling trails, such as the Luce Line Trail, walking paths, a wildlife sanctuary and access to fishing, boating, kayaking and water sports on the area's more than 50 lakes, there are ample opportunities to experience Minnesota's great outdoors right out your back door. Or, as a great escape from bigger cities. Here you'll find a community confident in itself and its direction. Unwavering in its focus and sense of mission. With a way of thinking about the world that inspires them to set their sights on noble and bold, but also achievable goals. This is a city whose marching orders are clear: to serve its people, commerce and industry with a clear focus, staying on point with intention and purpose. Charting a better course for the future while still cherishing what is right before us. The City of Hutchinson A City On Purpose MISSION STATEMENT The City of Hutchinson exists so that residents, businesses, property owners and visitors are provided with quality services and programs that support a safe, healthy, sustainable and business -friendly community with a small-town atmosphere, for a cost of government similar to, or less than, comparable out -state Minnesota Cities L VISION STATEMENT Our vision for the City of Hutchinson is that we will continue to be an involved, progressive and innovative community that promotes our regional prominence while preserving our hometown character and delivering quality, cost effective services 2025 Annual Report Broad Indicators Assessed Market Value One of the most significant indicators of Hutchinson's success is demonstrated in the consistent growth in total assessed market value. The total assessed market value of the city increased 1.7% in 2025. Residential values increased 1.4%, commercial/industrial values increased 4.1%, apartment values remained steady, and agricultural values saw a decrease in value to the tune of 9.7%. 2025 was the thirteenth straight year that the assessed market value of the city increased. The bottom year of 2015 reflect the end of the "great recession", and values have increased 83% since that time; an average of 6.3% each year. Current values are at all-time high for the city. The market value for each year is determined as of January 1 based on prior year sales. It is anticipated that the 2026 assessed market values will also show an increase. Price of Government In recent years the city has tracked it's "Price of Government" as a means to measure local government affordability. The "Price of Government" involves examining how much residents pay for all City services compared to the estimated income in the community. This analysis allows the city to compare how much residents pay for those municipal services on an annual basis and see how that amount has changed over time. 7 The graph below shows the City's price of Government since 2006. The price has been stable throughout the analysis period but did increase during the recession to its highest level in 2010. Since 2010, the price has slowly decreased and somewhat leveled off in recent years, indicating that personal income is growing at a faster rate or at the same level as the cost of city services. Data is always a year behind due to the lag in the availability of data from the U.S. Bureau of Economic Analysis. For 2024, Hutchinson Citizens spent 1.5% of each dollar earned on the day-to-day operations of the City and 1.0% on the City's enterprise funds. In total, approximately 2.5% of each dollar earned by Hutchinson citizens was spent on City services. Price of Government for the City of Hutchinson (percent of every dollar earned going to pay for City services, excluding Electric and Gas Utilities) Enterprise Funds amomGovernmental Funds 3.5% 3.6% 3.3% 3.2% 3.3% 3.3% 3.3% 3.3% 3.10/0 3.00/0 3.00/0 3.00/0 2.90/0 2.9% 2.50/0 2.4% 2.4% 2.5% 2.5% 2.0% 0 1.9% 2.0% 2.1% 1.9% 1.9% 2.0% o 0 0 0 1.8 /o � 1.9 /0 1.8 /0 1.8 /0 1.8 /0 1.80/0 1.7% _ 1.50/0 1.50/0 1.50/0 1.50/0 1.50/0 1.3%1.3%1.4%1.5%1.6%1.4%1.3%1.3%1.2%1.2%1.2%1.20/01.10/01.10/01.00/00.90/00.90/01.00/01.00/0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Bond Rating An important indicate of financial stability is the credit rating assigned by independent rating agencies. In 2025, Standard & Poor's (S&P) Rating Services reaffirmed its AA- rating for the City of Hutchinson. This rating is 4th strongest on S&P's rating scale and identifies the city has having a "stable outlook". The independent evaluation of a municipalities credit risk is one of the single most important indicators of prudent financial and administrative management. The evaluation considers many factors including the local economy, budgetary management, debt load, and budgetary performance. Poverty Levels and Household Incomes3 The City of Hutchinson monitors poverty levels and household income levels in an effort to gauge the economic strength of the community. Historically the City has had poverty levels below that of the 3 Poverty and household income data was from the 2024 Census Estimate information. N. State and Regional Center averages. While household incomes have been below that of the state average, it has remained in the upper third and above average of the outstate regional centers that Hutchinson compares itself to. % of Population Below Poverty Level 25.0% 20.0% 21.3% 17.6% 0 6.4 15.9%16.2 /o 1016.9% 15.00/o15.3% 15.0% 13.8 014.2% 12.0% 12.40/o12.5% 12.8% 13.1% 10.0% 8.8% 9.1% 9.2% 9.2% 9.3% 5.0% I � 0.0% eeb Qa\y "P J01 ��� cA�c �0�01 cps 1�1Q� oe t s\ P ��� ��� RQ�� Median Household Income $100,000 $89,062 $90,000 $84,895 $80,750 $80,000 $72,836 $68,566 $68057,$67,192 $70,000 $64,603$64,449$63,816$62 280$61,797$61,449$61,374$61,367 $60,000 ,$56,337$56,162$56,111$55,789$55,405$53,084 $50,000 $40,000 $30,000 $20,000 $10,000 $0 cb \\ Qo�c 3�cAc3P �i �'011 Crime Rates4 The City of Hutchinson monitors crime rates in an effort to gauge the safety of the community. Historically the City has had crime rates below that of the State and Regional Center averages. Crime rates are a combination of violent and property crimes per 1,000 residents. Total Crime Rate (per 1,000 residents) 60.00 50.00 40.00 54.41 30.00 22.44 23.59 24.72 25.67 20.00 14.15 14.21 14.87 16.90 16.94 17.01 17.57 17.76 18.37 18.63 9.69 9.94 10.81 11.85 10.00 7.05 7.28' ' ' ' " I 0.00 ppA c� a�� J�F 4F o�` �ytc I �v� cA� v� �t� �c� Qa�yia1 �P City Tax Rates The following tables show a comparison of city tax rates to other outstate small regional centers. The first table shows the trend of the City's tax rate since 2015. The second is a comparison of the 2025 tax rates of out -state regional centers. The following tables reflect only the city portion tax levies and do not include special levies that cities may also certify. 90.00% 80.00% • ° 73.97% 71.950/0 71.14% 4 2024 Calendar Year Data; released by the FBI in October 2025 10 90.00% 2025 City Tax Rates 84.03% 80.00% 72.25% 70.00/o 0 66.92% 67.07% 68.61% 0 (0,00% 56.53% 56.84% 57.22% 57.48% 58.13 /o 58.77% 60.13% 60.58% 53.39% 50.15% 50.60% 50.00% 44.50/o ° 46.54% 40.00% 35.04% 32.00% 30.00% 20.00% 10.00% 0.00% - aS ��t� P C a�J� \ fa �\ -PGA tIle J Ja Ica �gP oe -611 le Q�• The table below shows a comparison of Hutchinson's 2025 city tax rate for city services with other outstate regional centers. Hutchinson's tax rate was the eighth lowest out of the 19 regional centers. 19 Reciional Centers 2025 Tax Rate 2024 Tax Rate 1 Cloquet 32.00% 29.07% 2 Alexandria 35.04% 35.94% 3 Bemidji 44.50% 44.12% 4 Winona 46.54% 42.64% 5 Austin 50.15% 45.88% 6 Faribault 50.60% 46.73% 7 Brainerd 53.39% 53.71% 8 Hutchinson 56.53% 54.32% 9 Willmar 57.22% 54.02% 10 Fergus Falls 57.48% 54.32% 10 Owatonna 58.13% 57.62% 12 Worthington 58.77% 55.16% 13 Albert Lea 60.13% 54.03% 14 Fairmont 60.58% 56.57% 15 Red Wing 66.92% 67.19% 16 Marshall 67.07% 62.78% 17 Northfield 68.61% 62.16% 18 New Ulm 72.25% 68.54% 19 Hibbing 84.03% 77.54% Average of 19 Regional Centers 56.84% 53.81% 11 2025 Annual Report Community Surveys Feedback from the community is also an important measuring tool for the city. The City of Hutchinson conducts statistically valid community surveys every four years through the National Community Survey (NCS). The community survey assesses aspects of community life, local government service quality, and resident participation in community activities. The survey captures residents' opinions, and the results are based on resident perceptions. Overall, the survey describes areas where the community believes things are going well and sheds light on the areas that could benefit from improvement. When it comes to aspects of making a community livable, attractive and a place where people want to be, the latest survey (2023) showed that the percentage of residents responding 'excellent" or "good" stayed pretty steady from previous years. The majority of our residents (84%) rated the quality of life in Hutchinson as excellent or good; 88% rated the city as an excellent or good place to live; 84% rated Hutchinson as a place to raise children as excellent or good; and 68% viewed Hutchinson as an excellent or good place to retire. of Population Rating Community Characteristics Positively 100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%• Overall Quality of Life Hutchinson as a Place to Live Hutchinson as a Place to Raise Children 0 2007 0 2011 0 2015 0 2019 0 2023 12 Hutchinson as a Place to Retire When it comes to how well the government of Hutchinson meets the needs and expectations of its residents, the latest survey showed that the percentage of residents responding "excellent" or "good" remained relatively steady from previous years. The majority of our residents (74%) rated the overall quality of services provided by the City of Hutchinson as excellent or good; 52% rated the value of services for taxes paid as excellent or good. 59% rated the overall direction city government is taking as excellent or good, and 51% viewed confidence in city government as excellent or good. 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% of Population Rating General Governance Positively Services Provided by Value of Services for Taxes Overall Direction the City is Confidence in City Hutchinson Paid Taking Government ■ 2007 ■ 2011 ■ 2015 ■ 2019 ■ 2023 When it comes to how well the residents of Hutchinson are connected to the community and each other, the survey showed that the percentage of residents responding 'excellent" or "good" improved from the previous surveys. 64% of our residents rated the overall sense of community as excellent or good, while 88% of the residents would recommend living in Hutchinson to someone else and another 90% planned to remain in the community for the next five years. 13 100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% of Population Rating Community Participation Positively Sense of Community Would Recommend Hutchinson Planning to Remain in Hutchinson ■ 2007 ■ 2011 ■ 2015 ■ 2019 ■ 2023 The last two graphs show how residents feel about two important aspects of the community, the economy and safety. The data highlights that the percentage of residents responding 'excellent" or "good" remained steady or improved from the previous surveys on these two important topics. of Population Rating Economic Facets Positively 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Overall Economic Health of the City Would Recommend Hutchinson as a Place to Work ■ 2007 ■ 2011 ■ 2015 ■ 2019 ■ 2023 14 III Would Recommend Hutchinson as a Place to Visit of Population Rating Safety within the Community Positively 100.00% 90.00% 80.00% m o m 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Overall Feeling of Safety Feeling Safe in their within the City Neighborhood IGII 10 1 Feeling Safe in the Feeling Safe from Property Downtown/Commericial Area Crime ■ 2007 ■ 2011 ■ 2015 ■ 2019 ■ 2023 15 2025 Annual Report Organization of the City The city of Hutchinson is governed by a home rule charter and operates as a Council- Manager/Administrator form of local government. The city council consists of a mayor and four designated council seats, all elected at large. The city council serves as the governing authority in the "weak mayor -council" form of government. The mayor serves as the chair of the council but does not have greater authority than the other council members do. The mayor and council are responsible for making policy and legislative decisions that govern the City, while relying on the city administrator and staff to handle the administrative and day-to-day operations of the City. As chief executive officer, the city administrator is the sole employee of the city council and is responsible for ensuring the day-to-day operations of the city are being met. The city administrator is appointed annually by the city council. The city of Hutchinson has approximately 140 regular staff, who provide residents with a wide array of municipal services including administration/legal, finance, public safety (police & fire), streets, economic development, culture/parks/recreation, engineering, public improvements, building permits/inspections, planning and zoning, and motor vehicle/DNR licensing. The city also operates public water, sanitary and storm sewer collection and treatment utilities, a soils manufacturing/compost business, an off -sale liquor store, and owns a municipal airport. 1:7 Citizens of Hutchinson Airport Commission Bicycle/Pedestrian Advisory Committee Charter Commission City/School/Community Advisory Committee Library Board Economic Development Authority (EDA) Housing & Redevelopment Authority (HRA) Economic Human Resot Development Director Director PoliceChlef/ Fire Emergengr Mgmt Chief Lieutenant Sergeants Mayor and City Council FCity dministrator City Attomey Planning Director Building Officials Fadlities Manager Liquor Sales Manager Parks/Recreation/Comm Ed. Advisory Board T Planning Commission Police Civil Service Commission Senior Advisory Board Sustalnability Committee Utilities Commission Compost F otorVehicle upervisor Information pRCE Finance Public Works Technology Lirector Director Director Director Rec Fadlltles Malnt Mgr Asst. Fin Director Public Works Manager Recreation Manager Gty Engineer Parks Supervisor Water Manager Wastewater Manager 16 2025 Annual Report Grants and Donations Another way to consider the effectiveness of how a community is built is by how the city leverages its resources. How does the city save local tax dollars through grants, donations, sponsorships and state and federal assistance? The following are major grants, donations and state or federal aid from the past year that help fund major services provided by the City: Parks & Art • Various donations for Fireman's Park — $9,446.36 • Donation for Rotary Park — $1,500 • Donation for VMF netting over grandstand — $1,000 • Various grants and donations for Bike Fleet project — $1,125 • Hutch Huskies banner monies for future VMF expenses — $5,800 • State grant for prairie grass maintenance/restoration — $18,842.50 • Grants and donations for the new VMF Grandstand — $84,881.92 • Grants and donations for the new reader board outside Civic Arena — $40,000 • Grants and donations for boy's locker room upgrades at Civic Arena — $10,631.10 • Private donations to the public arts sculpture stroll — $500 • SWIF grant for public arts statue maintenance — $1,500 Public Safety • General donations to police department equipment needs — $3,000 • VMF donation for rifle suppressors — $14,000 • Federal grant for bulletproof vests — $7,205.18 • State Training Aid for police department — $21,877.45 • State DARE monies — $822.70 • State grant to police department vests and body armor — $12,548.46 • State grant to police department for "Toward Zero Deaths" — $453.78 • General donations to the fire department — $50 • State grants for fire training — $17,736.23 Transportation • Municipal State Aid (General Maintenance) — $29,280 • State Transportation Advancement Account (delivery fees) — $22,221 • 2025 Dale Street roadway improvement project (MSA) — $1,265,898.28 • Bridge inspection signing — $2,293 • State grant — new plow for 1-ton truck — $13,676.47 • Grants for 2023 airport new hanger construction — $309,969.83 17 • Airport Aid — $23,595.50 • Airport runway obstruction removals grant — $19,006.97 • Airport runway 15/33 RSA Grading project grant — $59,431.19 Recreational Proaram Sponsorships/Contributions • Youth Sports — $32,750 • Senior Center activities — $1,624 • Civic Arena sponsorships — $11,650 • Sponsorships of various PRCE programs — $3,891.60 • PRCE brochure sponsorships — $14,368.32 State Pension Aid • Police Pension Aid — $292,183.68 • Fire Pension Aid — $192,033.94 Housing • State Affordable Housing Aid — $30 649 Other • EDA — childcare grants (pass-thru to Guiding Light — $14,650.75 • EDA — grant for downtown app development — $10,000 • EDA — grant for 5th Ave property improved for future development — $26,483.62 • State MPCA grant for new SSOM process — $12,870.28 • State Bonding Grant — Lakes & River Basin Project — $82,079.50 • State grant for storm water resiliency study — $81 200 • Cemetery general donation — $900 In total, the city received $2,805,627.61 in grants, donations, and state and federal aid in 2025. 18 2025 Annual Report City Partnerships Partnerships save city resources and help ease the tax burden on city residents. The city has pursued partnerships with a variety of other government agencies as well as private groups and community service organizations to provide for better community services. All city departments take advantage of opportunities to join forces with different agencies and groups on an on -going basis. Below is a list of many of the partnerships that have had and will continue to impact city operations: Administration • Member of the MCMA — Information and Resource Sharing Network • Member of the ICMA — Information and Resource Sharing Network • Member of LMC — Information and Resource Sharing Network • Member of CGMC — Information and Resource Sharing Network • McLeod County Administrators/Clerks (quarterly meetings/resources) Finance Department • Partners with the County in the area of Assessing Services. This service includes on -site property reviews of approximately 25-30% of total parcels each year. Creekside • Per the McLeod County Solid Waste Plan, Creekside receives organic waste material from all McLeod County residents at no charge. • Creekside also provides a disposal service to all McLeod County municipalities' compost sites. Fire Department • Mutual aid agreements with all neighboring fire departments (frequently utilized for large scale events) • McLeod County Fire Chief's Association (quarterly meetings, resources) • Minnesota Fire Chief's Association (membership, meetings, training, resources) • Minnesota State Fire Marshal's Office (fire code review) • Meeker/McLeod Fire Safety Trailer (shared regional trailer for teaching fire safety, resources housed at our station and used throughout our multi -county region) • Minnesota Department of Human Services (conduct fire safety inspections for daycare and foster care centers and homes) • McLeod County Fair (inspections, grandstand event coverage, facility usage for training) • McLeod County Sheriff's Dept. (emergency calls, resources & equipment) • McLeod County Social Services (protection services, child/vulnerable adult) • McLeod County (community service partnership for troubled youth) • Project Life Savor (McLeod County partnership, resources housed at our station) • Regional Disaster Response Unit (Partnership with Immanuel -St. Joseph's Hospital Mankato, resources housed at our station) • Allina ambulance (emergency calls, joint training) • 3M (promoting community fire safety and awareness with the use of the jointly owned, "Bullex" digital/electronic fire extinguisher training device). 19 Village Ranch, Inc. (projects and assistance for young men) Internal — Police Dept. (emergency calls, training site, resources & equip., EOC) Internal — Building Dept. (shared resources for rental inspections, new building plan reviews and final inspections) Human Resources • HRA — Provide bi-weekly payroll and all payroll related services. HRA is included in our employee insurance benefit plans and work comp coverage. • Member of SHRM — Information and Resource Sharing Network • Complete salary related and other surveys or provide other information as requested — annual LMC survey, ICMA, federal govt. requests, other MN cities, unions, etc. Information Technology • Provide, for a fee, fiber connectivity for McLeod County Solid Waste and the fairgrounds for the County network. • Provide, for a fee, fiber connectivity to Ridgewater East campus for the State of Minnesota network. Legal Hutchinson Utilities Commission — Provide all legal related services as needed through the City Attorney. Planning & Zoning • Hutchinson Area Joint Planning Board — City of Hutchinson, McLeod County, Acoma Township, Lynn Township, Hassan Valley Township. • Backup building inspection services with Meeker County on an as needed basis (has not been utilized recently but contract is in place). • Partnership with Pioneerland Library services to manage and operate the Hutchinson Public Library. City owns building, provides custodial staff, and manages building and associated improvements. Partnership with Lutheran Social Services for Senior Dining Service at Evergreen. Partnership with Hutchinson HRA to provide rental rehab inspections both in Hutchinson and County wide for HRA rental rehab projects. Police Department • Mutual Aid: An agreement with McLeod County including all municipalities, all emergencies as needed. Emergency Management: o McLeod County including all municipalities o Planning o Training for licensed and civilian staff o Civil Defense siren testing and alerts o Coordinated County -wide response o Weather spotters through the county o County -wide inventory of equipment and resources for emergencies both public and private Communication Advisory Board: 20 o Made up of police, fire, and medical agencies throughout McLeod County o Addressing radio programing, radio protocols, call out procedures and priorities, resolving issues • Southwest Metro Drug Task Force: o We currently have one licensed police officer assigned to the Task Force o McLeod, Carver, Scott, West Hennepin, Glencoe, Lester Prairie, Winsted, Brownton, Shakopee, New Prague, Jordan • Monthly McLeod County Chief's Association (Region VI) meetings: o All county Chiefs o Sheriff o County Attorney o State Patrol • County -wide training hosted and supported by McLeod County Chief's Association and MPPOA: o Active Shooter o Mental Health training for licensed and civilian staff • Police and Fire Training facility: o We allow any law enforcement in the state to utilize our range o We allow McLeod County to utilize our range o We allow McLeod County to utilize our EOC • Special Response Team (SRT): o The Hutchinson and McLeod teams train together o Respond to all emergencies together o Share equipment o This approach allows each agency the ability to control costs o This approach allows each agency to manage liability o This approach allows each agency to control utilization of team within their jurisdiction • School Liaison Officer: o Hutchinson School District o High School and Middle School o Shared compensation • Park Patrol Officer: o Park and Rec. Department o Shared compensation • DARE Program: o McLeod County teaches this program to all schools throughout the County o Our contribution is $8,000.00 annually • Project Lifesaver: o All police and fire agencies in the county participate o The equipment is purchased by the County • McLeod County Fair: o The two agencies share a display booth during the fair o We back up the Sheriff's Pose as needed throughout the fair • Susteen Secure view mobile forensic software: o Shared service allowing access to mobile phone data o Shared fee • Safe and Sober: o Headed up by the State 21 o Enforcement program partnered with agencies throughout the state • ICAC: o Computer forensics partnered with the BCA • CARE Council: o HPD has an officer on the Board o County -wide participation • Parent Connection Team: o HPD has an officer on the Board o County -wide participation • McLeod County Public Health Nuisance Provider Roundtable: o HPD has an officer on the Board o County -wide participation • Adult Protection Team: o HPD has an officer on the Board o Courts, Prosecutors, Social Services, Probation, Advocates • Child Protection Team: o HPD has an officer on the Board o Courts, Prosecutors, Social Services, Probation, Advocates • Take it to the box program: o Hutchinson PD, Winsted, and the Sheriff's Office have drop boxes in their lobbies • MEADA Coalition (Meth Education and Drug Awareness): o HPD has an officer on the Board o County -wide participation Park & Rec • ISD 423 PRCE Joint Powers Agreement • ISD 423 Grounds Maintenance Agreement • ISD 423 Partnership on the Safe Routes to School Program • Hutch Utilities Maintenance Agreement • HPD shared Bike Patrol • Youth Associations: Shared programming for Baseball, Softball, Hockey, Figure skating, Basketball, High Tides, Wrestling, Volleyball, Lacrosse, and Soccer • Fraternal Organizations: Park Development/Maintenance: Rotary, Oddfellows, Masons, VFW, Legion, Elks, Kiwanis, Jaycees, Boy Scouts, Girl Scouts Lions, Maplewood Academy, and Historic Hutchinson • Associations: Programs and Events: Chamber of Commerce, River song, Center for the Arts, Little Crow Archery, EDA and Hutch Health • Adopt -a -Park with the Hutchinson Huskies on Veterans Memorial Field Public Works • Engineering — The engineering department staff utilizes and is utilized as a resource to the local MNDOT District 8 and McLeod County Highway Department staffs on projects impacting the city and the region. These projects have leveraged city resources to achieve significant infrastructure improvements. • Work with the MNDNR — City staff has worked well with MNDNR to address the replacement of the Crow River Dam and improve the Luce Line/River trails corridor, and for improvements to our Lakes/River Basin. 22 • Area Transportation Partnership (ATP) — City staff is continually engaged in ATP activities to promote MNDOT trunk highway system improvements in our region and to capitalize on Federal Aid funds to assist in City projects. • Hutchinson Area Transportation Services (HATS) — HATS as facilitated the establishment of a great working relationship with McLeod County and MNDOT. Equipment is shared routinely at the operator/lead level. Examples include the city routinely using a county dump truck to haul biosolids and having MNDOT assist the city by coring concrete for sign installations. MNDOT provides facility maintenance assistance. Fuel purchases are made jointly, and fuel is purchased by the State, County and City departments. We are also reimbursed by the State for spring sweeping and snow removal operations and trade for materials with the County to offset spring sweeping costs. We also routinely share aggregate materials stockpiled at HATS amongst the three entities. The City and County jointly purchase winter salt. • Airport — At the airport there is significant cooperative efforts between the FAA and MNDOT. Without these entities, it would be unfeasible for the City to effectively operate an airport. Both FAA & MNDOT personnel routinely assist us in troubleshooting problems, determining cost-effective solutions and helping ensure the airport is safe. • Cemetery — The chapel at the Cemetery is a joint venture with Dobratz-Hantge Chapel. The Cemetery also partners with local businesses to provide employee parking • Safety — Public Works is part of a network made up of other Public Works Departments that serve as a 'think-tank" for safety/operational issues related to Public Works operations. While this group meets regularly, off-line various entities are able to provide resources to each other and act as a sounding board for safety/operational issues. • Signs — The City has a great working relationship with the County when it comes to utilizing one another's sign inventory and equipment. This helps to offset the typical lead time or ordering signs. • Equipment — The City is part of the MNDOA Cooperative Purchasing Agreement (State Bid) for purchasing equipment other items. This saves a significant amount of time as staff does not have to prepare separate bid documents for each purchase • Streetlights — They City has a relationship with HUC relative to energizing and maintaining streetlights. • Snow Removal — The County snow blower serves as the City's backup snow blower. • Wastewater — City staff administers an industrial waste permitting process which allows for the city to collect materials from other agencies and organizations for an established fee resulting in City revenues. Also, city staff coordinates a biosolids spreading program with local farmers to cost-effectively dispose of sludge materials. • MNWARN — The City is part of MNWARD (Minnesota Water/Wastewater Agency Response Network). This is a formal emergency response program in MN which is facilitated by a standard mutual aid agreement. All of the communities with a 25-mile radius of Hutchinson are part of this network. 23 2025 Annual Report Awards and Recognitions One way to consider the effectiveness of city services is through independent awards and recognitions received by the city and its departments over the past year. Public Works Department • Received the 2025 Merit Award for Bituminous Surfacing for the Dale Street Project that was completed in 2025. Environment • City reconfirmed its status as a step 4 & 5 city of the Green Steps City Program • 46t" year as a Tree City USA Community Finance 29t" Straight year being recognized by GFOA for Excellence in Financial Reporting W Citv Administration Primary Services The city administrator and the administration department provide the following services: • Directs the general operation of city government and oversees the day-to-day operations of the City • Provides overall organizational leadership and direction • Provides direct supervision to all department directors • Provides staff assistance to the mayor and city council in research, investigation, and resolution of problems, budget analysis, policy review, and public relations • Assists the City Council in preparation of public meetings • Responsible for implementing the City Council's vision (programs & policies) • Responsible for seeing that City Charter and laws (ordinances) are enforced • Serves as the city's Chief Negotiator for Union contracts and has ultimate authority over the hiring and firing of city employees • Provides direction to Human Resources on the functions, policies and procedures of the City (Human Resources is a component of administration) • Works in conjunction with the finance department on preparing and managing the development of the city budget and CIP • Provides recommendations on policies that govern the financial affairs of the City • Oversees municipal elections • Oversee the City's permitting processes (except for building & planning/zoning) 2025 Staffing Levels 3.40 Full-time Equivalent Staff Budget General operations of this department total $531,493 in 2025 $700,000 $600,000 $500,000 $400,000 Operational Expenses $300,000 Wages & Benefits $200,000 $100,000 $0 2023 Actual 2024 Actual 2025 Actual 2026 Budget 25 2025 Accomplishments • Worked with the City Council on putting together the City's "Legislative Priorities" for 2025. • Completed 14 employee performance reviews of the City's Management Team, along with mid -year check -ins. • Worked with city staff and our new architect to complete a City Center Space Needs Study. • Conducted a work session with the City Council on the City's compensation system and pay philosophy. • Successfully contested the City's population estimate provided by the State Demographer's office. • Established a plan for use of the Housing Aid money. • Began preparing for the 2026 Wage Study • Assisted the City Council in adopting a 'Chicken Ordinance" for the community. • Continued attending Compass Peer Group Meetings in 2025 (once a month). • Completed strategic planning sessions with the Council and established a new 5-year plan. • Worked with the police and legal to put together a Downtown Business Toolkit for the Chamber to assist business owners with homelessness and loitering • Oversaw the 2026 budget preparation process and delivery of a balanced budget with a tax levy increase at 6.3% • Put together the Truth -in -Taxation presentation and budget message for the 2026 budget. • Produced several reports as requested by the Council on various issues relating to the city and the budget process. The 2026 goals for the Administration Department are as follows: • Evaluate what it would take to renew the City's Sales Tax • Determine what to do with the Event Center • Update the City's lodging tax to include short-term rentals (VRBO's, airBNB's, etc.) • Complete a Wage and Classification Study for the entire organization • Complete the next phase of the City Center remodel (Plans and Specs and bidding documents) • Conduct a "So you want to be a council member" class • Explore hiring a Communication's Director in 2027 • Update the City's Performance Review System • Continue work on the next Steps of the City's Branding and Marketing Plan • New Employee Orientation from the City Administrator • Create a 'Policy Book" or "Archive" for the City 26 Economic Develo EXECUTIVE SUMMARY Overall, 2025 was a transformational year for economic development in Hutchinson. The year was marked by major downtown redevelopment milestones, the launch of significant new housing construction, expansion of childcare capacity, continued industrial growth, and strengthening of workforce initiatives. Highlights of 2025 included: • Acquisition of the Kock Jewelry building and demolition start of the Jorgensen Hotel • Construction launch of The Landing, an 81-unit market -rate apartment development • Completion of the Festival Street & Public Parking Wayfinding schematic design • Relaunching the Downtown Association • Launch ofthe Downtown Smartphone App (hutch -in -Hutch) • Recruitment of Deimos Materials to the Enterprise Center, occupying 2,000 sf • Opening of a new childcare center: Guiding Light Early Learning • Expansion of childcare grant programs DOWNTOWN DEVELOPMENT Downtown Hutchinson is the economic and cultural heart of the community - a place where public investment, private development, small business vitality, housing growth, and community identity intersect. 2025 projects advanced by the EDA and Chamber of Commerce reflect a coordinated strategy to strengthen downtown as a destination and economic engine for the community. The Landing In 2025, The Landing redevelopment emerged as the most consequential and complex economic development initiative undertaken by the Hutchinson Economic Development Authority in decades. After 10 years of work, The Landing apartment development advanced from concept and planning into active construction, marking one of t h e m o st significant housing investments in Hutchinson in recent years ($20 million}. Developed by GC Real Estate Partners, The Landing is an 81-unit market -rate apartment complex located on a former professional building/ residential site overlooking the Crow River. The project represents a central component of the City's broader 27 strategy to address workforce housing needs while strengthening downtown vitality and activating the riverfront. Early in the year, the developer met with City staff to refine project details and establish a construction timeline. By spring, site plans had been submitted and planning processes were moving forward. Preliminary and final plat approvals were granted by the Planning Commission in July, followed by review of variances and a Conditional Use Permit in August. A public hearing to establish a Housing Tax Increment Financing (TIF} District was held in September, after which the land sale closed and building permits were issued. Construction commenced in October 2025, on schedule with earlier projections. The public assistance package for The Landing was carefully structured to support project feasibility while protecting public interests. Key elements included establishment of a Housing TIF District, sale of the City -owned lot for $1, and approximately $930,000 in present -value tax increment assistance to help the developer achieve a competitive rate of return. Additional City contributions included funding for construction of a stormwater retention pond, realignment of a sanitary sewer line that bisected the site, and initial soil correction allowances. Importantly, EDA discussions emphasized that tax increment financing derives from new property taxes generated by the project itself and does not divert existing taxpayer resources. 28 As construction began, unforeseen soil conditions were encountered that required additional site preparation work. In response, the developer requested an additional $263,563 in tax increment support. The EDA reviewed the request and unanimously recommended approval, extending the projected duration of the TIF district from approximately 16 years to roughly 211/2 years. While this adjustment increased total public participation to approximately $1.55 million over the life of the district, the Board determined that additional assistance was necessary to address legitimate site conditions and keep the project moving forward. The Landing has been designed as an amenity -rich residential development intended to attract and retain workforce residents. Plans include a rooftop patio, an outdoor patio with firepit, an enclosed dog park, and river -facing trail connections. The project also incorporates improvements to surrounding public infrastructure, including removal of the former Glen Street boat landing and installation of new curb and gutter. These features are intended not only to serve residents but to enhance the broader downtown and riverfront environment. -d When completed, The Landing will be home to approximately 140 people, adding considerable vibrancy to downtown Hutchinson. By the end of 2025, construction was well underway, with completion projected for December 2026, following an approximately 15-month construction schedule. In sum, 2025 marked the transition of The Landing from planning -stage redevelopment to visible, active construction. The $20 million project stands as a major step forward in addressing housing availability, supporting workforce development, and advancing long-term downtown revitalization. 29 Jorgensen Hotel Redevelopment Rivaling The Landing in complexity and scope, the Hotel Jorgensen redevelopment project reached a pivotal turning point in 2025. Long regarded as the most prominent stalled redevelopment site in downtown Hutchinson, the Jorgensen property has remained underutilized for more than forty years. In 2025, meaningful and measurable progress was finally achieved. Early in the year, Titanium Partners advanced plans for construction of a new 45-room upscale hotel on the combined Jorgensen and Kock sites. As negotiations progressed, it became clear that full control of the Kock Jewelry building was essential to assembling a viable redevelopment footprint. With considerable EDA assistance, the developer reached agreement with the Kock family on a purchase price of $350,000 for the property. In discussions with the EDA at the same time, the developer noted that the project pro - forma would not support this level of investment in property acquisition. Financial assistance would be needed to keep the project economically viable. As project underwriting evolved, the developer formally requested a $350,000 loan structured at zero percent interest with no payments for five years and full loan forgiveness tied to completion timelines. After extensive review by both the EDA Board and Finance Team, the EDA authorized a $350,000 forgivable loan package. Final terms required that a Certificate of Occupancy be obtained within sixty months for loan forgiveness eligibility, and the loan was secured by a first mortgage on the Kock property, a second mortgage on the Jorgensen property, and a personal guaranty from the developer. A funding model was adopted utilizing $250,000 from the Downtown Revolving Loan Fund and $50,000 each from the EDA Operations Fund and Economic Development Loan Fund. In parallel, the project relied upon a $150,000 demolition grant from the Minnesota Department of Employment and Economic Development (DEED). The grant required that demolition activity occur and invoices be submitted before year-end 2025. Throughout the fall, milestones were revised to maintain grant eligibility, and the first demolition invoice was successfully submitted prior to the deadline. 30 Originally built in 1917, the Kock and Hotel Jorgensen buildings will pass into history in early 2026. Tax increment financing (TIF) also played a central role in the project's feasibility. Updated financial analysis by Ehlers & Associates, the city's TIF consultants, concluded that the full 26 years of projected increment would be required to support the development, totaling approximately $2.27 million over the life of the district. By the end of 2025, the Kock building had been acquired, development and loan agreements were executed, TIF approvals were in place, and demolition was imminent. While the total public participation - including the DEED grant, forgivable loan, and projected TIF - represents a significant investment, the EDA structured the assistance with clear performance benchmarks, collateral protections, and site stabilization requirements. In sum, 2025 marked the most substantial forward movement on the Jorgensen site in more than four decades. Through careful structuring of financial tools, strategic risk management, and sustained commitment, the EDA positioned the property for transformative redevelopment and long-awaited revitalization of a cornerstone downtown location. Festival Street & Public Parking Wayfinding In 2025, the EDA continued advancing implementation of the Downtown Plan through design work on the festival street and downtown wayfinding signage projects. These initiatives are intended to strengthen downtown functionality, improve visitor experience, and support increasing activity levels driven by new 31 housing and redevelopment. While much of the year's public attention focused on downtown building construction projects, the Festival Street and signage efforts represent foundational infrastructure investments that will help downtown operate more effectively as density and event programming grow. The festival street concept centers on improvements to 1st Avenue SE to better accommodate community events, pedestrian activity, and creating a downtown "sense of place." The goal is to create a more flexible and inviting public space capable of hosting festivals, markets, and gatherings while maintaining accessibility and safety. In 2025, the City's consultant, Hoisington- Koegler Group, completed design concepts and submitted a final report outlining recommended improvements. Complementing festival street is the downtown parking & wayfinding signage initiative. As new residential units and redevelopment projects increase traffic downtown, clear and intuitive navigation becomes increasingly important. The signage project is designed to improve visibility of public parking areas, reduce visitor confusion, and create a cohesive wayfinding system that enhances the overall visitor experience. Together, these projects reflect a strategic approach to downtown revitalization that extends beyond individual buildings. By pairing physical redevelopment with thoughtful infrastructure planning, the EDA is working to ensure that downtown Hutchinson remains accessible, vibrant, and prepared to support continued growth. With design work completed in 2025, both initiatives are well -positioned for future implementation as part of the City's long-term investment in a stronger, more dynamic downtown. KEY FEATURES ESTIVAL STREET 00 FL 1I �I� I e eJ neI... C, Proposed seatwaHs foradded public LLUSTRATIVE PLAN 8 Main St. intersection is raised in conjunction with Firs[ space and gathering areas 8 Decorative pavement integrated DAILY USE Q Ave.. or at a later phase (may require a new RRFB) throughout th<I G Gateway feature introduced at street entrance corridor 0 U Parking provided only on the south side Square concrete planters Q Catenary lights spanning the entire street 8 Round concrete planters and potential location for public art display 9 L L I �1 C Y ffi 6 i ■�'.� G 32 Hutchinson Downtown Association In 2025, the Hutchinson Downtown Association underwent an important organizational reset that positioned it to more effectively support the community's broader downtown n �� revitalization efforts. A new board was �® QQ QO mom DO established during the year, stabilizing leadership and reenergizing the organization's role within they I1�� wyl downtown business community. The " SS O C I AT 1 p N Downtown Association serves as a critical partner focused on merchant coordination, promotion, and event support. The re-establishment of an active and engaged board aligns with expanded marketing initiatives such as increased social media outreach and the launch of the Much -in -Hutch app. As downtown Hutchinson experiences new residential density and redevelopment momentum, a strong Downtown Association provides the grassroots structure necessary to enhance branding, organize events, improve communication among businesses, and sustain long-term vitality. By the close of 2025, the Association was better positioned to play an active and complementary role in shaping the next phase of downtown growth. Downtown Grant & Loan Programs Downtown Hutchinson remains central to the community's long-term competitiveness, tax base stability, and civic pride. In recognition of this, the EDA operates three downtown financial assistance programs designed to maintain and enhance the downtown area. Sign & Awning Grant Program The EDA's Sign & Awning Grant program provides grants up to $2,000 for business owners to purchase signs and/ or awnings for their downtown businesses. No match is necessary. In 2025, six grants were awarded totaling $10,698. These are shown in Table 1, on the following page: 33 March 26, 2025 April 23, 2025 September 24, 2025 November 26, 2025 December 23, 2025 December 23, 2025 Table 1- Sign & Awning Grants, 2025 The Book Keepers $2,000 Atlantic Properties $2,000 Act Your Age $2,000 Grandome Cinemas (State Theatre) $2,000 Firefly Adventures, LLC $2,000 Rowen & Raye $698 TOTAL $10,698 Facade Improvement Matching Grant Program The Facade Improvement Program is a matching grant whereby property owners can receive a dollar -for -dollar match up to $7,500 to make necessary repairs and/ or improve the curb appeal of their buildings. In 2025 five matching grants were awarded totaling $27,108 as detailed in Table 2, below. Table 2 - Facade Improvement Matching Grants, 2025 April 23, 2025 May 28, 2025 September 24, 2025 November 26, 2025 November 26, 2025 Grand Lodge of Minnesota Grounded Gardens Act Your Age Main Street Antiques Grandome Cinemas (State Theatre) TOTAL Commercial Rehabilitation Loan Program $4,375 $7,500 $3,333 $4,400 $7,500 $27,108 The purpose of the Commercial Rehabilitation Loan Program is to preserve the building stock of downtown Hutchinson by providing subordinate loans to complement traditional bank financing. Loans are made at the prime interest rate. For the year, two loans were authorized totaling $97,000. These are detailed in Table 3, on the following page: 34 Table 3 - Commercial Rehabilitation Loans, 2025 October 22, 2025 8 Main Street North $37,000 December 23, 2025 River House - Eric Labraaten $60,000 TOTAL $97,000 Community Smartphone App The EDA partnered with the Hutchinson Chamber of Commerce to launch the "Much -in - Hutch" Community Smartphone App as part of its broader strategy to strengthen downtown vitality through modern marketing tools. The app was developed to provide a centralized digital platform promoting downtown businesses, events, and special promotions. Designed to enhance connectivity between merchants and consumers, the platform allows for business listings, advertising opportunities, and push notifications to keep users informed of sales, happenings, and community activities. The Much -in -Hutch app serves as a complementary tool aimed at increasing foot traffic, supporting small businesses, and reinforcing the downtown brand. By leveraging digital technology to promote local commerce, the EDA added an important layer to its efforts to ensure downtown Hutchinson remains vibrant, competitive, and well -positioned for continued growth. CHILDCARE BUSINESS DEVELOPMENT In 2025, Guiding Light Early Learning Center became one of the Hutchinson Economic Development Authority's most significant workforce -support initiatives, reflecting the community's growing recognition that childcare availability is directly tied to economic vitality. Located in the former Peace Lutheran Church daycare facility, the Guiding Light project reopens an existing facility and expands childcare capacity at a time when local employers continue to face workforce shortages. The project will create approximately 46 childcare slots initially, with capacity to ramp up to roughly 62 slots over time. At the outset of the year, the Center required approximately $80,000 in capital to launch operations. The EDA played a central role in assembling a multi -source funding package. In 2024 the EDA obtained a $40,000 Childcare Economic Development Grant from the Minnesota Department of Employment and Economic Development (DEED). To provide the local match the EDA authorized the use of $19,919 from a First Children's Finance grant obtained previously. To close the remaining funding gap, additional 35 support was pursued from local and regional partners. The Southwest Initiative Foundation committed $5,000, and the Burich Foundation provided $5,000. To complete the local match, the EDA approved $10,081in local assistance under its Childcare Business Assistance Grant Program. By mid -year, the full $80,000 funding package had been secured. Operational progress was monitored throughout the year. Early timelines targeted a late spring opening; however, hiring and licensing processes extended the schedule. An Executive Director was hired mid -year, and a State licensor was assigned to oversee compliance requirements. By fall, an early November opening was anticipated, though final preparations pushed the launch into December. Despite modest delays, the Center officially opened before year-end. Throughout EDA discussions, childcare was consistently framed as "workforce behind the workforce." Local employers have reported ongoing difficulty filling positions, and the lack of childcare capacity has been identified as a contributing factor. By increasing the number of available slots, the Center directly supports parents' ability to participate in the labor force, strengthens employee retention for local businesses, and enhances Hutchinson's overall economic competitiveness. By the close of 2025, Guiding Light Early Learning Center had transitioned from concept and funding assembly to operational reality. With full funding secured, leadership in place, licensing approved, and doors open, the project stands as a clear example of strategic economic development intervention. - targeted not at buildings or infrastructure, but at removing a critical barrier to workforce participation and long-term community growth. Additionally, the EDA enacted broader policy adjustments to strengthen its childcare incentive tools. In February, the Board revised the Childcare Business Assistance Grant formula from $200 per childcare slot to $225 per slot, with a maximum grant amount of $15,000. The program language was expanded to provide additional flexibility and to allow grant funds to be used for staffing expenses. This latter change recognized that obtaining qualified workers was a common barrier faced by childcare centers. These program enhancements not only supported Guiding Light but also positioned the community to respond more effectively to future childcare expansion efforts. For the year the EDA approved four grants though its Childcare Business Assistance Grant Program totaling $16,381. These are detailed in Table 4, on the following page. 36 Table 4 - Childcare Business Assistance Grants, 2025 February 26, 2025 Paityn's Childcare $1,800 February 26, 2025 Guiding Light ELC $10,081 August 27, 2025 Carol Harder Day Care $2,250 August 27, 2025 Bright Beginnings $2,250 TOTAL $16,381 INDUSTRIAL DEVELOPMENT Business Retention & Expansion Business Retention & Expansion (BR&E) is arguably the single most important and cost- effective economic development strategy available to a community. While business recruitment often receives public attention, the majority of job growth typically comes from existing employers. By maintaining regular communication with local companies, identifying operational challenges, and connecting businesses with resources, communities can help firms expand, modernize, and remain competitive. BR&E efforts strengthen relationships, identify workforce or infrastructure concerns early, and reduce the risk of unexpected closures or relocations. In short, supporting the success of existing businesses protects the tax base, sustains employment, and builds long-term economic resilience. Recognizing these benefits, the EDA maintains a robust BR&E program. In 2025 EDA staff conducted 10 BR&E visits, detailed in Table 5, below. Table 5 - Business Retention & Expansion Visits, 2025 2/19/2025 Innovative Foam 4 Busy, doing well 2/20/202S GVL Medical, Inc. 3 2/27/2025 Titan Machinery 90 Doing well 2/27/202S Hillyard 30 Business steady 3/13/202S MITGI 75 Steady. Childcare / housing concerns 3/31/202 S Pride Solutions 31 Ag economy down a bit 4/2/2025 Redline Systems 2 Needs more physical space 4/9/2025 Resonetics 174 Growing/ need more workers 10/3/2025 Zephyr Wind Services 29 300-400% growth in past 2 years 11/20/202S 3-1) CNC 16 Needs 4 more workers 37 Hutchinson Enterprise Center In 2025, the Hutchinson Enterprise Center continued to serve as a cornerstone of the City's industrial and small business development strategy. As a municipally owned incubator, the Enterprise Center provides low-cost, flexible space for startup and early - stage companies. After one year of residency, Smokey Dukes Pretzels remained an active and productive client, with steadily growing demand for its products. Similarly, GVL Medical (dba Laser Dynamics) had a successful year, with its third and fourth quarters being the best in company history. Towards the end of the year, Deimos Materials, a new business start-up founded by a group of University of Minnesota PhDs, was granted a lease for 2,000 square feet of incubator space. The company has developed bio-degradable resins that other companies will use to make products out of plastic. At the end of 2025 the company was setting up operations and hoped to be in production sometime during the first half of 2026. The Enterprise Center finished the years with an occupancy rate of 100%. WORKFORCE DEVELOPMENT Workforce development remains one of Hutchinson's most pressing economic priorities. Local manufacturers continue to report difficulty filling open positions, and a spring employment survey identified approximately 97 to 150 unfilled manufacturing jobs. These ongoing labor shortages underscore the importance of building a stronger local talent pipeline and expanding participation in high -demand career fields. One key response has been the EDA-funded Women -to -Workforce internship program at Hutchinson High School, which is designed to encourage female participation in skilled trades and manufacturing - fields that have historically been male -dominated. The program has produced measurable results, including record female enrollment in welding classes at the high school. In the fall, Jocelyn Christensen was hired as the 2025-2026 intern. Beyond immediate workforce recruitment, the internship serves as a strategic effort to diversify the local labor force and broaden career pathways for young women in Hutchinson. Collectively, the EDA's 2025 workforce initiatives (including TigerPath, the Women -to - Workforce internship, housing development, and childcare expansion) reflect a coordinated, multi -layered approach to resolving the workforce shortage problem. 38 -Y_ -3 Through the efforts of the EDA's Women -to -Workforce intern (Lauren, extreme right) Hutchinson High School has more young women taking welding classes than ever before. MARKETING For the year the EDA maintained a strong emphasis on digital engagement, with 67 Facebook entries and 22 website updates completed. By the end of the year, cumulative Facebook engagement has surpassed 1,100 followers. In addition, the EDA maintained its membership in the Community Venture Network (CVN) and leveraged its relationships with the Southwest Initiative Foundation (SWIF), Mid -Minnesota Development Commission (MMDC), and the Minnesota Department of Employment and Economic Development (DEED) to promote Hutchinson as an attractive option for manufacturing expansion. 39 BUDGET & FUND REPORT The Hutchinson Economic Development Authority concluded 2025 in a financially stable and strategically positioned condition. While the General Fund experienced a modest reduction in unreserved fund balance due to higher -than -budgeted grant activity and interfund transfers, overall reserves remain solid and sufficient to support ongoing operations. Revenues performed well and routine operating expenses remained within a manageable range relative to total fund balance. The EDA's Revolving Loan Funds remain healthy and continue to function as effective tools for economic development. The Economic Development Loan Fund and Downtown Loan Fund both show strong equity positions, steady interest income, and performing loan portfolios. Firel-ake Manufacturing and MOXY paid off their loans during the year. Although significant capital was deployed in 2025 - most notably the Jorgensen Hotel forgivable loan and expanded childcare and downtown grant programs - these investments were structured within the EDA's financial capacity. The Enterprise Center improved operationally during the year, generating positive net revenue while reducing its debt to the Economic Development Loan Fund. Overall, the EDA's financial condition reflects a transition from reserve accumulation toward strategic capital deployment. The organization remains liquid, loan funds are stable, and fund balances - while selectively reduced to support catalytic projects - remain strong. Going forward, steps will need to be taken to restore the cash position of the Downtown Revolving Loan Fund so the EDA will be adequately positioned to take advantage of future downtown redevelopment opportunities. Table 6, below, summarizes the change in cash position of each EDA fund over the past 12 months. Table 6 - Fund Cash Position Changes, 2024 to 2025 EDA General Fund $224,769 $228,583 1.7% Economic Development Loan Fund $120,079 $184,530 53.7% Downtown Loan Fund $341,643 $61,158 -82.1% Minnesota Investment Loan Fund $7,991 $10,750 34.5% Hutchinson Enterprise Center $11,104 $30,489 174.6% TIF #4-5 - Shopko Redevelopment $7,471 $16,789 124.72% GOVERNANCE EDA Board of Directors The Hutchinson Economic Development Authority is governed by a seven -member board appointed by the City Council for six -year terms. Two City Council members serve as liaisons. After many years of service, Mike Cannon retired from the board, with the open slot being filled by Anthony Hanson, President of Citizens Bank. Membership for 2025 is detailed in Table 7 below. Table 7 - Economic Development Authority Board of Directors, 2025 Mike McGraw President 21 State Farm Insurance Jonny Block Vice -President 13 Hillyard Chad Czmowski City Council Liaison 17 City Council / Outdoor Motion Jack Daggett Commissioner 4 Pride Solutions Pat May City Council Liaison 3 City Council Corey Stearns Commissioner 11 Stearnswood / Retired Anthony Hanson Commissioner 1 Citizens Bank Jeremy Carter Ex-Officio Hutchinson Utilities Commission Overseeing the financial aspects of the Economic Development Authority is the EDA Finance Team. Comprised of two EDA Board members and six other members of the community, the Finance Team provides recommendations to the EDA Board on everything from budgets to proposed financial incentives. Mike Cannon retired, reducing the number of Finance Team members from eight to seven in May. Anthony Hanson was selected to be the new Finance Team chair. Finance Team membership for 2025 is detailed in Table 8 below: Mike Cannon Scott Ziegler Anthony Hanson Jack Daggett Josh Karg Eric Lipke Josh Laffen Dan Mahon Table 8 - EDA Finance Team, 2025 Chair / EDA Board Member Member / EDA Board Member / EDA Board Member Member Member Member 41 Citizens Bank Piehl, Hanson, Beckman Citizens Bank Pride Solutions Heartland Ag Systems MITGI MBFC McGraw -Mahon Law Office SUMMARY Characterized by a strong emphasis on downtown redevelopment, 2025 was a very busy year for the Hutchinson Economic Development Authority. Key accomplishments included launching construction of The Landing, advancing the long- awaited Jorgensen Hotel redevelopment, completing design work for a Festival Street and wayfinding signage, relaunching the Downtown Association, and introducing the Much -in -Hutch smartphone app to strengthen digital engagement. In addition, the EDA facilitated the opening of a new childcare center and identified a new client for the Hutchinson Enterprise Center. In many ways, 2025 was a transformational year for economic development in Hutchinson. 42 Finance Primary Services The Finance Department provides customer service to all city departments as well as the city's residents and businesses. The department operates under the management of the Finance Director and is guided by Generally Accepted Accounting Principles, Minnesota State Statutes, City Policy and departmental procedures. Finance's various functions include: • Accounts payable, Accounts receivable and Payroll • Utility billing for Water, Sewer, Storm Water and Refuse services • Submit work orders to Public Works staff for Water and Sewer services and repairs • Coordinate with the refuse hauler for carts related to new service or change in cart sizes • Financial analysis and reporting for the City, EDA and HATS Facility • TIF administration and reporting to the State • Tax levy administration • Certification of Special Assessments and Delinquent Utility Billing amounts to the County for collection on the following year's property tax statements • Maintain and manage the Special Assessment database • Administer the Assessment Search process for title companies • Certifications to the County and State for the City's budgets, tax levies, truth in taxation meetings, outstanding debt and annual financial reports • Administration of the EDA and HRA grant and loan programs • Administration of the City's lodging tax, cable TV franchise tax and excise tax • Grant administration and reporting • Budget development • 5-Year Capital Improvement Plan (CIP) • Annual debt issuance, debt covenant compliance, debt service analysis and bond payments • Long-range financial planning • Cash and investment management • Banking relations • Administration and oversight of departmental purchasing cards • Risk Management and insurance coverage • Budgetary and policy support for other city departments Finance Budget Other than labor, auditor fees ($52,500) and software costs ($18,879) represent the largest expenditures for the 2026 Finance budget. 2024 Actual 2025 Actual 2025 Budget 2026 Budget Wages & Benefits $345,615 $357,885 $358,120 $378,352 Supplies 1,597 2,201 2,800 2,000 Services & Charges 95,174 81,582 86,461 82,729 Miscellaneous Expenses 1,459 1,320 1,450 1,450 $443,845 $442,988 $448,831 $464,531 Full-time Equivalent Staffing 43 General Fund 3.0 Finance Director, Payroll Specialist, Senior Accounting Specialist Enterprise Funds 2.0 Assistant Finance Director, Utility Billing Specialist 2025 Accomplishments 1) Received the GFOA's Certification of Achievement for Excellence in Financial Reporting for the 2024 audit report. We have received this award each year since 1996. 2) Received an unmodified (clean) opinion from the City's independent auditors that the 2024 financial statements were fairly presented in conformity with Generally Accepted Accounting Principles. 3) Reaffirmed the City's AA- bond rating. 4) Formulated our debt needs using Statute 429 bonding authority (Special Assessment Improvement bonds). 5) Reinvested $4,291,000 from matured investments for an average annual return of 4.37%, which increased our interest revenue by $49,300. The average return for the matured investments was 3.22%. The City is well positioned over the next 5 to 6 years with higher interest earnings to help fund operations in the various City departments/funds. 6) Renewed the City's insurance policies for general liability, property, airport liability, solar array liability and workers compensation. 7) Coordinated with LMCIT for the appraisal of all city -owned facilities covered by our property insurance policy. This is done every seven years. 8) Worked with LMCIT insurance adjusters on various auto, property and liability claims. 9) Managed the water meter replacement project, working with Water department staff and the company contracted to perform the replacements. 10) Completed all required financial reporting to the State and the County for the City's annual budget, tax levies, indebtedness, annual financial audit and TIF districts. 11) Guided city departments through the process for the following annual documents, creating several iterations prior to being approved by council. a. General and Enterprise fund budgets b. 5-Year CIP C. Fee Schedule 12) Established the reporting process for use of the State's affordable housing monies. Reporting is required each December until the monies have been fully spent. 13) Updated the City's plan for use of the State's public safety monies for Police and Fire projects. 14) Developed funding plans for the new fire ladder truck, potential remodel of City Center, major repairs to the Civic Arena and Aquatic Center, and the lighting project at Roberts Park. 2025 Performance Measurement Monitoring Data Accounts Payable Use of automated payment solutions continues to provide efficiencies to departmental purchasers and enhances internal controls through established approval processes. • Processed 123 electronic purchase orders totaling $5,036,626, compared to 152 totaling $8,668,702 in 2024. The fire ladder truck totaling $2,094,304 contributed to the larger amount in 2024. • Issued 4,090 disbursement checks totaling $28,983,749 compared to 4,196 checks totaling $30,065,860 in 2024. • Issued electronic payments related to payroll taxes and benefits totaling $4,809,888 compared to $4,677,818 in 2024. • Use of departmental procurement cards totaled $311,338, down 2.2% from 2024. Utility Billing • Monthly billed an average of 5,365 accounts compared to 5,282 in 2024, with 23 new accounts added during the year due to new construction. • Averaged 11 accounts per month (18 in 2024) that had water disconnected due to failure to pay balances delinquent for two months. o Averaged 124 shut-off letters each month (133 in 2024), resulting in 113 accounts resolving their delinquency prior to a shut-off event • Coordinated the monthly billing process with the third -party printer/mailer. • Coordinated 385 work orders related to Water, Sewer and Refuse service. • Monitored water usage for large fluctuations or leaks, and informed customers. • Provided notes or inserts within the utility bill mailings for City related information. • Managed and promoted the various electronic payment options available to customers. o We increased our electronic payers by 3.9% in 2025 0 80% of our accounts are now paying electronically, up from 77.8% last year • Increased the number of paperless customers to a total of 2,132, up 10.3% from last year's total of 1,933. • Mailed 281 letters to certify delinquent balances to next year's property tax statements, compared to 290 letters last year. Payroll • Issued 343 W2s compared to 389 in 2024. Last year was higher due to an election year and having election judges on the payroll. • Gross wages totaled $9,346,754 compared to $8,822,921 in 2024. • Issued 5,264 total paychecks compared to 5,334 in 2024 (election year). • Hired and terminated 110 summer seasonal employees compared to 117 in 2024. Insurance The City's insurance policies are administered by the finance department. Other than a few exceptions, the City's policies are with the League of Minnesota Cities Insurance Trust (LMCIT). LMCIT is a self-insurance pool of cities, formed to meet the specific coverage and risk management needs of cities. The coverage included in the City's policies are property, crime, bond, petrofund, automobile damage, liability, equipment breakdown, municipal liability, liquor liability, volunteer accident coverage and workers' compensation. The finance staff processes loss claims, premium payments, deductible payments, and coordinates the insurance renewal process each year. The City's human resource staff processes workers' compensation claims. LMCIT requires that cities retain a representative insurance agency. The City's agent is Arthur J. Gallagher & Co (AJG), whose staff is extremely helpful in analyzing the City's coverage and explaining areas where the City may have increased or decreased liability/risk. AJG also serves as the liaison between the City and LMCIT's underwriters for renewals and questions related to coverage or claims. The City also administers the insurance coverage for the HATS Facility through LMCIT and AJG. The facility, which is co -owned by the State, County and City, consists of five buildings. Two buildings are shared by all three entities for office space, a mechanics bay and salt storage. The other three buildings are separately owned by each entity for equipment storage. This policy includes property coverage only for the two buildings that are shared by all three entities. The individually owned storage buildings are insured 45 separately by the applicable entity's own insurance coverage. This policy also covers crime, petrofund for the fuel system and some minor shared equipment. The City's LMCIT policy has automatic builders risk coverage for building projects with total estimated cost less than $3,000,000. For projects estimated to exceed $3,000,000, finance staff must procure a separate policy, with AJG's assistance, through another insurance provider prior to the start of construction. The City has three other insurance policies for specialized facilities not normally covered by LMCIT. The solar array located at the Wastewater Treatment Facility has a policy through The Hartford, which covers equipment damage and breakdown. The City has a policy for the municipal airport through Old Republic Insurance Co, which includes coverage for liability, property, and terrorism. The third policy is for FEMA flood coverage for the new police facility as it sits within the 100-year floodplain. Banking and Investments City monies are deposited locally at Citizen's Bank. We maintain several accounts to manage our various operations, including a high -yield money market account. Sufficient cash balances are available to address our working capital needs and capital improvement projects, with idle cash invested in various options as highlighted below. The City's bank balances above the $250,000 FDIC limit are protected by pledged securities held by the bank, with those securities monitored on a monthly basis by both bank officials and the City's finance staff. Finance staff strives to maximize investment income by actively managing the City's cash. We maintain a portfolio with our investment custodian (Oppenheimer & Co.) consisting of Certificates of Deposit, Municipal bonds, Federal Agency bonds and a money market account. Investment yields continued to drop in 2025, driven by three reductions to the federal lending rate. The federal rate ended the year at 3.75%, down from 4.50% in December 2024. Finance was able to reinvest $4,254,000 during the year for an average annual return of 4.37%. For comparison purposes, investments that matured in 2025 totaled $4,918,000 and had an average annual return of 3.21%, so we picked up more than 1.1%. We locked into higher rates for 5 to 7 years, setting us up well for higher interest revenue into 2030 and 2031. The table below shows the total interest earnings for the past two years along with the earnings for the City's General fund. The earnings for our investment account increased due to matured investments with lower rates being replaced by higher rate investments. Additionally, we shifted more idle cash to the investment account money market as the rates continued to out -perform the Citizen's Bank rates throughout 2025, by as much as 0.75%. This equates to additional annual revenue of $37,500 on a $5,000,000 balance. The significant decrease in earnings from Citizen's Bank in the table is due to the rate decreases during the year in addition to moving monies to the investment account money market. Annual Investment Earnings 12/31/2024 12/31/2025 Change % Change Investment Account $790,181 Citizen's Bank $650,670 Tota 1 $1,440,851 General Fund $291,449 Budget $140,000 $886,243 $96,062 12.2% $489, 952 -$160, 718 -24.7% $1,376,195-$64,656 -4.5% $284, 910 -$6, 539 -2.2% $140,000 $0 0.0% Budget Surplus $151,449 $144,910-$6,539 -4.3% Debt Issuance and Debt Management The City annually issues General Obligation to finance street and utility infrastructure improvements. Finance staff works closely with Engineering and the Resource Allocation Committee to determine the appropriate bond issuance amount to finance the estimated project costs. Finance consults with its financial advisor, Ehlers & Associates, while structuring the debt to fit within the parameters of the City's Debt Management Plan. Finance, with the assistance of Ehlers, holds a bond rating phone call with Standard & Poor's (S&P) prior to each year's bond issuance. The purpose of the call is to discuss the bonded projects in addition to the City's financial policies, financial health and economic outlook in order for S&P to determine the City's bond rating. The City's current bond rating of AA- has been reaffirmed by S&P for the past several years and is likely the highest rating we can attain. The bond rating is an important factor used by potential investors in assessing the risk related to the City's ability to pay its debts. Financial Reporting Finance staff annually prepares two major documents related to the City's finances. The first and perhaps most important document is the annual budget. Finance coordinates the budgeting process in accordance with the City Administrator's calendar and direction. Five budgets are created throughout the year: • Initial budget — late May • Department budget — July/August • Preliminary budget — September • Truth in Taxation budget — early December • Final Approved budget — end of December The initial budget consists of the same revenue and expense levels as the previous year's budget with the exception of updated assumptions for wage and benefit increases. Any one-time budget amounts are removed. Departments use the initial budget to work through their operating needs and submit a Department budget to Finance. Finance and the City Administrator review and meet with departments to discuss budgetary needs. Any changes are reflected in the Preliminary budget which is used to certify preliminary tax levies to the county auditor by September 30. Further discussion with departments occur after the preliminary budget in order to produce a budget that falls within the parameters directed by city council. That budget is presented at the annual truth in taxation (TNT) public hearing. The final budget, which may include revisions from 47 the TNT budget, is approved by council in December. Final tax levies are certified to the county by the end of December. The second major finance document is the annual comprehensive financial report. Finance begins planning and performing initial audit work in December of each year. The process continues through the end of March, leading up to the auditor fieldwork in early April. The audit report itself is produced by the auditors in late May or early June, with review performed by the lead auditor, the audit firm's partner and city staff. We are required to submit the audit report to the State Auditor by June 30 of each year. We are also required to publish summary audited financial statements in the local newspaper by the end of July. The cost of the audit is expensed to the Finance department each year. Financial reporting to the State for the City's tax increment financing (TIF) districts is required by July 31. We contract with Ehlers & Associates to prepare the reports based on data provided by Finance, which can be a complex process. Finance staff ensures that the audited financial statements for the TIF districts are complete and accurate. Finance also performs a thorough review of Ehlers reports prior to the data being transmitted to the State Auditor. Fees charged by Ehlers are paid by the TIF districts, utilizing 10% of the TIF revenue that can be dedicated to administrative costs, per State statute. Other important reporting functions include the financial and investment reports provided on a monthly basis to the city council, the five-year capital improvement plan and the fee schedule. S&P and the city's auditors confirm each year that these reports are being provided to the city council. 2026 Finance Department Goals 1) Formulate financing for the 2026 roadway and infrastructure improvements, fire ladder truck and the wastewater biosolid project. This includes issuing tax exempt bonds in addition to other internal funding sources. 2) Determine appropriate funding sources for the anticipated renovation to City Center and other potential projects, such as the river trail between Girl Scout and Cedar parks, the festival street and the downtown parking lot signs. 3) Procure separate insurance coverage for the solar arrays being installed at various City facilities. 4) Implement the updated lodging tax ordinance to begin capturing taxes from short-term residential rentals. 5) Look at having departments itemize budgetary needs for certain expense accounts as opposed to a lump sum amounts that can be used for anything that may arise in the year. This would lead to greater accountability by departments for planned spending versus reactionary spending. Likely areas of concentration include: a. Contract R&M b. Professional Services c. Operating Supplies d. Small Tools & Equipment e. Street Maintenance Materials 6) Continue to look for process efficiencies and budgetary savings. Right -sizing charges for services (fee schedule increases) would help take pressure off the increasing tax levy. W. 7) Analyze and propose a revision to the Debt Management Policy to increase the annual cost limit of $1.9Million to address the impact of rising costs on our roadway projects. 8) Continue to increase the number of utility customers receiving bills electronically and paying electronically. 9) Receive the GFOA's Certification of Achievement for Excellence in Financial Reporting for the 2025 audit report. 10) Receive an unmodified (clean) opinion from the City's independent auditors for the 2025 financial statements. 11) Reaffirm the City's AA- bond rating. Fire Department Accomplishments -We completed a hiring and took on four new Firefighter recruits. We were able to quickly get them into an Emergency Medical Responder (EMR) program which they completed and are now certified and responding to medical calls. -Working with a local fire education company we planned out and began a FFI-FFII class hosted here at our station and training facility. There are 18 local Firefighters enrolled in the class (including our four) meeting twice a week and occasionally on Saturday's. The class runs through May 2026 at which time they will all be certified and licensed. -Hosted the first ever Region 10 one day spring fire school. We had over 40 Firefighters attend this 8-hour session with a variety of educational course options. Feedback received was excellent and we are looking to make this an annual event with 2026 plans already in the works. -Five of our Firefighters completed intensive Technical Rescue Training partnering with Firefighters from Winsted, Silver Lake and Lester Prairie. They have now formed a county -wide Technical Rescue Response Team. We will also be looking for future additions to the team. -Installed additional I -pads in several trucks which we use for emergency alert notification, navigation, preplans, underground utility mapping and ERG lookups. A couple of our oldest I -pads were also updated with new ones. 50 -Worked on maintaining compliance with many of the new OSHA and NFPA requirements that have recently been put into effect. -Approximately every 10 years we have to complete an ISO audit which we successfully did. We are still working through some follow-up items with them that will continue into 2026. -All final details and specifications were completed for the NEW ladder truck and the contract was signed. Phase one production build was just getting under way as 2025 came to a close. -Lieutenant Eric Inselmann was hired as a second full time person to fill a new Firefighter/Inspector position. His job duties are a combination of emergency response, commercial inspections and fire safety education/public relations. This first full year will also be focused heavily on developing better building pre -plans and working on technology options to get that information more easily assessable to the Firefighters in the trucks and on scene. This position will also allow for the two of us to take some more of the less emergent calls that come in and not have to page out the whole department... we expect our % of officer only calls to increase and our full page out % of calls to decrease. We are excited the opportunities this position brings to our organization. GUIDING MINCIPLES: PRIDE, DONOR, INTEGRIT IV -Fitness area/gym was installed in the apparatus bay as another way to improve on fitness, promote health and wellness and promote team building. This project was funded 100% with donations. -Prepped, trained all officers on the new NERIS fire reporting system and implimented. -The temporary Assistant Lieutenant position was filled by Matt Schmidt. This provided another opportunity for a Firefighter to build leadership skills and help themselves as well as the department. -Final touches were completed on Fireman's Park bringing that project to a close. Special thanks to Assistant Chief Abelson and his committee seeing this through to the end. 51 Operational Data Emergency Call Breakdown Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 FIRE- 42 40 41 33 27 47 57 35 28 34 41 General FIRE- 12 16 19 17 7 12 11 8 18 13 21 Structure Rescues & 46 75 81 69 70 74 81 71 73 86 66 MVA Medicals 125 156 167 170 155 155 178 190 213 227 227 Alarms & 105 92 83 91 70 85 63 90 85 61 76 Sprinklers Hazardous 87 78 89 64 95 67 60 60 55 61 77 Condition Other 50 48 52 48 39 44 48 43 45 1 40 71 Emergency Calls Total Year 1990 1 2000 2010 2018 2019 2020 2021 2022 2023 2024 2025 City 156 215 319 307 318 332 318 318 350 329 371 Rural 76 132 117 185 145 152 180 179 167 193 208 Total 232 347 436 492 463 484 498 497 517 522 579 Structure and General Fires Year 2001 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 General 56 60 50 34 59 68 43 46 47 62 Fires Firefighter Injuries (per OSHA) Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Injuries 1 0 2 2 1 4 1 1 3 2 0 Fire Event Fatalities Year 1 2001 1 2002 1 2003-2010 1 2011 1 2012-2020 1 2021 1 2022-2024 2025 Fatalities 1 *3 1 1 1 0 1 1 1 0 1 2 1 0 0 Response Time (Alarm to Truck Out the Door for All Full Page Out Calls) Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Time 4:27 5:06 5:33 6:10 5:50 5:39 5:17 5:21 5:18 5:33 1 5:43 Officer Only Calls (*Indicates Hourly Pay Multiplier Increase) Year 2015 *2016 2017 2018 2019 2020 2021 *2022 2023 2024 2025 Number 143 156 161 130 130 135 126 123 101 128 134 of Calls Dollars $26,026 $30,576 $31,564 $25,480 $25,480 $26,460 $24,696 $27,675 $22,725 $28,800 $30,150 Saved Hours 2,145 2,340 2,415 1,950 1,950 2,025 1,890 1,845 1,515 1,920 2,010 Saved 52 Total Emergency Calls 700 600 Soo aoo 300 � 350 200 319 307 318 332 318 3-18 329 371 215 156 100 1990 2000 2010 2018 2019 2020 202 2022 2023 2024 2025 - City - Rural Officer Only Calls ReSpOn5e TIMe (alarm tirne to truck out the door) 7:12 • 130-1i2fi #3i3 } LM 600 I l0i 4:48 5 3:36 2:24 1:12 2016 2017 2018 2019 2020 20212022 2023 2024 2025 Operational Data: 00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Emergency Calls by Time of Day and Day of Week Monday Tuesday Wednesday Thursday Friday Saturday Sunday Tuesday Wednesday Thursday Friday Saturday Emergency Calls by District Acoma Twp: 43 Boon Lake Twp: 8 City of Biscay: 3 City of Cedar Mills: 3 Collins Twp: 1 Ellsworth Twp: 1 Hutchinson Twp: 59 Lynn Twp: 25 54 Key 00:00 ■ 90th percentile 01:00 80th percentile 02:00 70th percentile 03:00 04:00 60th percentile 05:00 ■ 50th percentile 06:00 ■ 40th percentile 07:00 30th percentile 08:00 20th percentile 09:00 10:00 10th percentile 11:00 1st percentile 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Cedar Mills Twp: 24 City of Hutchinson: 371 Hassan Valley Twp: 29 Mutual Aid Given: 12 Estimated Property Value Saved: $2,376,000 Lives Saved: 7 Property Value Lost: $1,022,650 Emergency Call Hours: City- 3,048 Rural- 3,434 Total Training Hours: 3,103 Total Training Events: 61 Public Relations and Fire Safety Education We hosted multiple tours and education events at the fire station as well as on location at businesses and schools as requested. We appreciate the relationship we have with the Hutchinson Schools including fire safety education for the 2"d graders at Tiger Elementary School and kindergartners at the West Elementary School as normal. We provided a Fire Safety Day at the Fire Station for all private, perochial and charter schools. Education also provided for many senior living, childcare and other such facilites. 43 Public Relations Events / 787 Hours 14 Fire Safety Education Events / 76 Hours 1,875 Total Students Inspections and Permits -Continue to assist the City of Hutchinson Building Department utilizing a hybrid model to conduct rental inspections in large 10+ unit apartment buildings and other rental type properties. -Daycare and Foster Care facilties were inspected (13) as requested through our partnership with the county/state. We completed commercial inspections (46on new and remodeled construction propertites to ensure proper installation and operations of fire alarm, sprinkler systems, egress components and other life safety requirements as identified in MN building and Fire Code. 55 -Building plan reviews were also conducted jointly with the City of Hutchinson Building Department. -Paperless burn permit system for Mcleod County continues to function well with no changes. Goals for 2026 -Finish all training and certifications for the four new Firefighter recruits that just started. -Expand on technology upgrades where possible for apparatus and tools. -Work with our MCSO partner and all McLeod Fire Departments to finalize last details fully implementing a new high tech emergency resource management system. This will be used by all Fire emergency response stakeholders to expedite and streamline, mutual aid, box alarms, etc. McLeod will be the pilot county in Minnesota with presumably many more to follow. -Continue our Firefighter health and safety initiative by making facility and equipment improvements and by proving opportunities for improved personal health and well-being. -Ensure timely replacement of PPE items as needed to ensure NFPA compliance. -Utilize and fill the temporary Assistant Lieutenant position each year as an opportunity for a Firefighter to build leadership skills, gain confidence, better themselves as well as the department and get them ready to go for future officer positions as they arise. A'IISSION STATEM EN.1 To HELL' PEOPI -Proactively conduct maintenance and upgrades to all apparatus and analyze future CIP needs. -Continue to monitor and adjust staffing needs and response capabilities to ensure we can provide the community we serve with the best possible product. -We need to prepare and be ready for several Firefighter and Officer retirements coming in the next few years. -Utilize grant opportunities to offset costs whenever and wherever possible. -Modernize building pre -plan information to all the truck I -pads (new FF/Insp position). 56 -Fully implement the new NERIS fire reporting system and work through any and all hurdles. -Research and implement new monthly truck/small tools maintenance process and tracking. -Draft, review, gather feedback and implement new fire service agreements/contracts for all the rural partners we serve. -Draft, review, gather feedback and implement new mutual aid agreements for all the fire departments in McLeod County. -Promote growth and training for the county -wide Technical Rescue Response Team. -Add additional props at our training facility with the addition of a grain bin and possible burn room options for our training tower. -Host 2"d annual Region 10 one day fire school in May with expanded courses/curriculum. -Finalize rescue boat shared ownership -Finalize specifications and install project with MCSO and put into service. emergency power generator utilizing a -Finish 2"d phase of the station overhead door enlargement project. -Continue to promote Firefighter & Officer participation in Regional/State training school opportunities and remain active in the MCFCA and MCFCA. -Continue with summer duty crews on weekends from Memorial Day to Labor Day. Primary Services public safety grant. -Finalize and implement SOG/policies project ... hard copies and on I -pads. -Increased focus on officer development by delivering more frequent leadership training opportunities. -Work through all phases of the new ladder truck build with the manufacturer. We will continue to delivery excellent emergency response with a focus on professionalism and consistency. Community fire safety education will remain one of our cornerstone programs. Utilizing technology, analytics, thoughtful planning and hard work, we will strive to make improvements to our operations whenever and wherever possible. High quality and frequent training will continue ensuring Firefighter proficiency in all duties. Firefighter health and safety is, and will continue to be, our #1 priority to ensure that "Everyone Goes Home." 57 Hutchinson Housing & Redevelopment Authority Executive Summary The Hutchinson HRA (HHRA) was formed by the Hutchinson City Council in 1969 to address a shortage of housing for low to moderate income families and to address substandard housing in areas of Hutchinson. The HHRA owns and manages Park Towers Apartments, plus administers other housing rehabilitation programs throughout the city to preserve housing stock. 2025 Hutchinson Yearly Comparisons: • Below 5% apartment vacancy rate for the last 12 years • A full-time worker in McLeod County must earn an hourly wage of $19.21 to afford a 2- bedroom apartment with a rent of $999 • Hutchinson's average annual wage for Manufacturing in 2024 was $77,792, which would afford a monthly rent of $1,945 • Hutchinson's average annual wage for Retail Trade in 2024 was $30,992, which would afford a monthly rent of $775 • Median home sale price of $265,500 • The lowest home mortgage interest rate was 6.15% for a 30-year mortgage • 23 newly constructed single-family units, plus 43 Manufactured Home Installation Permits • 87 vacant residential lots • Foreclosures doubled in 2025 to 10 sales Summary of HHRA Activities and Accomplishments: Park Towers: • 16 move -ins, 22 move -outs in 2025 • Management worked on the relocation of the AT&T antenna on the roof at Park Towers; getting an updated office copier/printer; started digital marketing with 8Bitstudio; updated 2 desktop computers and started IT services with West Central Technology • Updated/Repaired/Installed: Installed 5 new washers & 5 new dryers; installed a mini -split in the second -floor laundry for supplemental heating and cooling; total building door lock system replacement; all unit smoke detectors replacement; replaced the front entry handicapped door opener; replaced the laundry handicapped door opener; multiple boiler & exhaust system repairs; installed vinyl planking in 6 units at unit turns; installed 4 power flush water saver toilets and 1 standard toilet; replaced 4 units' 110 AC's; replaced 5 units' zone valves; repaired 2 units' shower drains; repaired 1 unit's water damaged kitchen cabinets; repaired multiple unit bathroom ceilings when exhaust fan motors stopped working; re -striped all 3 parking lots; and coordinated with the Hutchinson Chamber's Leadership Group to cleaned up landscaping, painted patio furniture, painted exterior light poles and prepared the raised gardens. City Center: • City Council approved the use of the SCDP Revolving funds for Hutchinson Downtown Housing Rehabilation Program. Rental Rehabilitation is Phase I and if the funds are not used, Phase II is Owner Occupied Rehabilitation. • City Council approved the use of State Affordable Housing Funds for the continuation of the City Home Improvement Program in 2026. • City HIP Programs — 11 applicants: 6 approved (4 complete; 2 open) 58 Hutchinson HRA Priorities for 2026: Park Towers: • Reach a vacancy Rate above 89%. • Administer the RAD Multifamily, Section 8 PBRA program at Park Towers. • Staff training in new HUD programs. • Housing Specialist acquire a Minnesota Department of Labor and Industry issued Special Engineer boiler license. • Continue to install vinyl planking and power flush water saver toilets at unit turns. • If needed, start re -facing kitchen cabinets, replacing A/C and Refrigerators at unit turns. • Potential improvements: Repacking of fire pump, sewer main lining coordinated with City of Hutchinson, common areas flooring replacement near the elevators and new fire door system. • Start process to replace oldest boilers and improve ventilation system. • Start process to repair/replace concrete walkways and steps around the building. • Continue to work with AT & T on relocation of antennas on the roof. Possible coordination with roof replacement. • Survey tenants on needs for community room. • Follow legislation for grant funds to retrofit sprinklers in high rise residential buildings. • Support the Tenant Council activities. City Center: • Administer the City Home Improvement Grant Program, the Hutchinson Downtown Housing Rehabilitation Program and the Minnesota Housing Rehab Loan Program. • Market available programs throughout the community. • Identify and determine interest of potential SCDP owner occupied rehab project. • Identify and determine interest of potential SCDP rental rehab projects. • Explore other housing resources available to address the housing needs identified in the Maxfield Comprehensive Housing Study/Market Analysis for the City of Hutchinson • Build houses on the remaining 2 HHRA Island View Heights lots. Hutchinson Yearly Comparisons Rental Data from the 2025 Apartment Survey: Market Rate General Occupancy Vacancy Rate 12.00% 10.31% 10.00% 8.38% 8.00% 6.00 % 5.30% 4.08% 3.60% 3.82% 3.26% 4.00% 2.00% 1.89% 1.85% ° o •76% ° 1.76 /° 1.76 /° 1.83 /° ' r_ 10% .0.7W Ogg . 0.00% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2021 2022 2023 2024 2025* * Oct/Nov. 2025 Survey of General Occupancy properties 59 Hutchinson 2025 Vacancy Rates 0 Market -rate Gen. Occupancy (33 out of 6.85% 1,011 units) 8.00% Subsidized Gen. Occupancy (22 out of 6.00% 321 units) 4.00% L11.05% A ■ Senior - Market -rate 1.300%o (2 out of 190 units) 2.00 0.00% 1 ■ Senior - Subsidized (1 out of 77 units) 2025 Vacancy Rates Income and Rent Average Rents* Size Ave. Rent Increase from 2024 Studio $600 +$120 1 Bedroom $858 +$132 2 Bedroom $1 029 +$107 3 Bedroom $1 204 +$63 * Oct/Nov 2025 survey. A full-time worker (40 hours/week for 52 weeks) in McLeod County must earn an hourly wage of 19.21 to afford a 2-bedroom apartment with a monthly rent of $999, which is the McLeod County Fair Market Rent (FMR) set by HUD effective 10/1/2025. Annualized household income would be $39,960. Rent is calculated at 30% of the household's monthly income. To afford the average 2- bedroom rent of $1,029 (Oct/Nov 2025 Hutchinson survey) a worker would need to earn an hourly wage of $19.78. Using the State of MN's FMR, a full-time worker must earn an hourly wage of $28.23 to afford a 2- bedroom apartment with a monthly rent of $1,468. If a person is working at the 2025 MN minimum wage 11.13 , they would have to work 69.04 hours per week to afford a 2-bedroom apartment at the McLeod County FMR. DEED's Quarterly Census of Employment and wages (QCEW) data for 2024 employment reports that the State average annual wage for Manufacturing is $83,252. Using 30% of this household's monthly income, the household could afford a rent of $2,081. Hutchinson's average annual wage for Manufacturing is $77,792 which would equate to a rent of $1,945. The State's average annual wage for Retail Trade is $39,312 which would equate to a rent of $983 vs. Hutchinson's average annual wage for Retail Trade is $30,992 which would equate to a rent of $775. Home Resales Data from McLeod County Assessor's Office; HOME RESALES CITY OF HUTCHINS ON 2025through 2015 Year 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 Price Range No. Pct. No Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. Under$50,000 3 1.2% 0.0 . 2 0.8% Z 0.7% 4 L1% 7 Z.0 o 1 0.3% 7 L9% 9 2.7% 10 3.0% 15 4.Z% $50,000 to $74,999 7 2.8% 0 0.0'o 3 1.1% 4 1.3% 5 1.3% 10 2.9'o 5 1.610 11 3.1% 10 3.0% 15 4.6o+o 26 7.3% $75,000 to $99,999 7 2.8% 3 1.3o/o 11 4.2% 11 3.7% 13 3.5% 10 2.9'o 8 2.5% 15 4.2'o 22 6.6% 38 11.6o+o 39 11.0% $100,000 to $124,999 8 3.2% 2 0.9o( 6 2.3% 7 2.3% 10 2.7% 19 5.5'o 27 8.6% 46 12.8% 46 13.8% 54 16.4o+o 58 16.3% $125,000 to $149,999 12 4.8% 12 5.2o/o 7 2.7% 12 4.0% 29 7.8% 49 14.3% 50 15.9% 67 18.7% 70 21.0% 76 23.1o+o 68 19.1% $150,000 to $174,999 16 6.4% 101 4.3o/0 12 4.5% 21 7.Oo+o 34 9.1% 51 14.90+0 64 20.3"o 70 19.5% 73 21.9% 55 16.7% 60 16.9% $175,000 to $199,999 22 8.8% 17 7.3% 22 8.3% 30 10.Oo+0 58 15.5% 55 16.0% 59 18.7% 55 15.3% 39 11.7% 23 7.0% 27 7.6% $200,000 + 175 70.0% 188 81.0% 201 76.1% 212 70.9o+o 220 59.0% 142 41.4% 101 32.1% 88 24.5o+o 64 19.2% 58 17.6% 63 17.7% Total 2501100.0%1 2321 100.075 264 100.0%1 2991 100.Oool 3731 100.0%1 3431 100.0o.1 3151 100%1 3591 100ool 3331 100%1 329 100% 3561 100% Median $265,500.00 $257,450 1 S246,250 I S244,000.00 S215,400 S186,000 S175,000 S161,900 S153,500 S140,000 S138,750 Percenthicrease 1 3.1% 1 4.5% 1 0.9% 1 13.3% 15.8% 6.3% 8.1% 5.5% 9.6% 0.9% .e Home Resale Price vs. Median Income $300,000 $215,400 r $244,000 r $246,250 $257,450 $186,000 $200,000 130/0 1% 1% 1(,% $100,000 $71,730 $72,836 �- $56,083 r $58,795 1- $64,635 J j $0 5% 10% 11% 2% 2020 2021 2022 2023 2024 tMedian Home Resale Price -e-Median Income *Median Income data from USCB 2025 Hutchinson Home Sale Price Ranges ■ Under $50,000 = 07o ■ $50,000 to 74,999 = 1.2% 3.2% ■ $75,000 to 99,999 = 2.89/c $100,000 to 124,999 = 2.8% ■ $125,000 to 149,999 = 3.2% ■ $150,000 to 174,999 = 4.8% ■ $175,000 to 199,999 = 6.4% ■ $200,000 to 224,999 = 8.8% ■ $225,000 to 249,999 = 11.2% ■ $250,000 to 274,999 = 13.6% ■ $275,000 to 299,999 = 12.4% ■ $300,000 to 399,999 = 20.0% ■ $400,000 to 499,999 = 6.4% ■ $500,000 plus = 6.4% Hutchinson Median Sales Price $265,500$257,450 $280,000 $246, $244,000 $230,000 $215,400 $175,000 $186, 00 $161,900 $180,000 153,500 $130,000 $140,000 $80,000 $138, 750 2025 2024 2023 2022 20212020 2019 2018 2017 2016 2015 -am-Hutchinson Median Sales Price Year End Hutchinson Home Resales Data from the Minneapolis Area Association of Rea/tors; 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 Median Sales Price $279,500 $268,900 $261,750 $262,900 $236,250 $200,000 $181,000 $170,000 $161,750 $147,200 $145,000 # of Sales 234 198 236 265 317 324 315 330 318 315 338 • 18.2% more home sales in 2025 than in 2024. • 47 days on the market in 2025 vs. 35 in 2024. The Minneapolis Area Association of Realtors Annual Housing Market Report, reports that by mid-2025 the typical age of a first-time homebuyer in the U.S. reached a record high of 40. The median age of all U.S. homebuyers reached 59. Also, U.S. homeowners are staying in their homes longer: median of 11 years before selling now. 2025 Home Mortgage Rates; The 30-year fixed home mortgage rate was highest in the third week of the year at 7.04% and ended the year at 6.15%, the lowest of the year according to Freddiemac.com. New Construction Units (the following 4granhs are based on information from the Department of Planning, Zoning and Building Department): 61 Number of New Construction Sinale-Family Dwellina Units 40 34 30 27 24 23 23 20 21 20 20 ]tin 0 1 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Manufactured Home Permits (Installation of Manufactured Home in a Park) October — December 2024: 20 permits January — December 2025: 43 permits Number of Certificate of Occupancy for General Occupancy Multi -Family Dwelling Units 100 0 T13 96 18 8_1 48 70 3 0 0 1994 1996 1999 2017 2018 2019 2020 2021 2021 2022 2023 2024 2025 Ridgedale Deer Park Century Highfield Highfield Highfield Century Century Highfield 101 Park Michel Ct Square Court TH Court Court Place NW East West West Apts. Residential Lots Available 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 McLeod County & Hutchinson Foreclosures: 60 44 ■ McLeod County 40 34 27 ■ Hutchinson 125 24 19 21 20 18 1 A 16 12 6 10 10 53 4 L 5 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Summary of HHRA 2025 Accomplishments: Park Towers Apartments Management - Multifamily, Section 8 Project Based Rental Assistance Program (PBR4): Park Towers Property Management • 16 move -ins; 22 move -outs in 2025. Reasons for move -outs: 2 Owner initiated nonpayment of rent 3 Owner initiated other than nonpayment of rent 17 Tenant initiated 62 • November 2025, annual unit inspections were completed. • Working with AT&T and Bolton & Menk, Inc. on the relocation of the antenna on the roof at Park Towers. • Updated office copier/printer. • Started digital marketing with 8Bitstudio • Updated 2 desktop computers and started IT services with West Central Technology Asset Preservation, Property Improvements and Energy Conservation • Installed 5 new washers & 5 new dryers • Installed a mini -split in the second -floor laundry for supplemental heating and cooling • Total building door lock system replacement • All unit smoke detectors replacement • Replaced the front entry handicapped door opener • Replaced the laundry handicapped door opener • Boiler & Exhaust System repairs: repaired/replaced some of the boilers' controls, auto vents & gaskets; replaced 1 exhaust fan; repaired north stairwell heater; and repaired the north & south hallway makeup air circulation pumps; repaired the water heater boiler assembly and repaired the elevator room AC unit. • Installed vinyl planking in 6 units at unit turns • Installed 4 power flush water saver toilets and • Replaced 4 units' 110 AC's • Replaced 5 units' zone valves • Repaired 2 units' shower drains • Repaired 1 unit's water damaged kitchen cabinets Misc-man. • Repaired multiple unit bathroom Drywall - n ceilings a result of the exhaust fan si motors not working properly. • Re -striped all 3 parking lots • The Hutchinson Chamber's Leadership Group project: cleaned up landscaping, painted patio furniture, painted exterior light poles and prepared the raised gardens. Tenant Demographics • Average age of head -of -household is 53. 0 32 Sixty-two or older 0 40 Disabled 0 33 No special status • Income Categories: 0 6% = $0 - $1,999 0 4.8% = $2,000 - $3,999 0 2.4% = $4,000 - $5,999 0 1.2% = $6,000 - $7,999 0 1.2% = $8,000 - $9,999 0 84.3% = $10,000+ (below $35,900) 1 standard toilet I ife-safety. 30/ Electrical & 2025 Park Towers Service Requests Average/month = 25 service requests Total = 296 service requests 63 Tenant Services • Hosted National Night Out and a Christmas Dinner for the tenants. • Park Towers continued as a Senior Dining Program Site through a lease with Lutheran Social Services. Meals are prepared offsite and delivered to Park Towers Monday through Friday. There were 16 unduplicated Park Towers residents receiving meals in 2025 (average 11 per month). • Throughout the year different community organizations, such as the Elks and the youth from Foundation Church brought care packages to the residents. • Coordinated activities with the Tenant Council. City Center Operations: Operations• In June, a Public Hearing on housing was held. The City Council approved the use of the SCDP Revolving funds for Hutchinson Downtown Housing Rehabilation Program. Phase I is Rental Rehabilitation and if the funds are not used, Phase II will be Owner Occupied Rehabilitation. October 2025 City Council approved the use of State Affordable Housing Funds for the continuation of the City Home Improvement Program in 2026. Owner Occupied Rehabilitation Programs Available: 1. City Home Improvement Program Grants (HIP): This program was established in 2015 as a flexible tool, consisting of four targeted programs (Live and Work in Hutchinson, jst Time Homebuyer Workforce Initiative, City Home Repair Grant Program {50% owner match}, CityAccessibiiity Grant Program & Hutchinson Emergency Home Repair Grant Program) to assist with owner -occupied housing improvements/repairs. City HIP Programs — 11 applicants: 6 approved (4 complete; 2 open) Address Amount Program Project Description App. Date Completed 1162 Oakwood Ct SW 10,000.00 HRGP Replace windows 06/17/25 8/26/25 231 Monroe St SE 6,572.50 HRGP Replace furnace & AC, plumbing repairs 06/17/25 10/08/25 586 Jefferson St SE 9,590.00 HRGP Replace roof decking, install roofing 07/15/25 08/15/25 302 Dale St SW 5,000.00 Emerg Replace furnace, HVAC work 11/18/25 12/29/25 534 Bluff St SW 6,213.50 HRGP Install Accessible shower 09/16/25 Open 417 Boulder St SW 7,507.86 1 HRGP Replace windows 10/21/25 Open 44,883.86 64 aceroof decking, remove chimney, roofing. HRGP - 534 Bluff St NE: Install accessible shower. 2. Minnesota Housing Rehab Loan Program (RLP) — One applicant in 2024, closed/completed in early 2025. Total Proiect Cost $33,920 Hutchinson Downtown Housing Rehabilitation Program (Revolving SCDP Funds) After the Public Hearing at the City Council meeting on 6/24/2025 the City Council approved the use of the City '- Revolving SCDP Funds for the Hutchinson Downtown Housing - . -- Rehabilitation Program. Once the environmental review process =' was complete, DEED gave approval to use funds on 8/4/25. Phase I, Rental Rehabilitation: - 72 letters sent to rental property owners of 4 units or less: • 7 property owners returned interest = . .. 1 property preliminarily met all qualifications but at the -_ end of the year the owner decided not to move forward with the application. Phase II Owner Occupied Rehabilitation: 247 homeowners notified: 0 9 preapplications returned 0 7 potential projects 65 Status of Hutchinson HRA Priorities Park Towers Apartments Management: Status Administer the RAD Multifamily, Section 8 PBRA On -going program at Park Towers. Staff training for RAD Multifamily, Section 8 PBRA Staff attended various training through the year. program and new HUD program changes such as AFFH rule, HOTMA, VAWA and NSPIRE. Housing Specialist attain a Minnesota Department of Scheduled in 2026 Labor and Industry issued Special Engineer boiler license. Continue to install vinyl planking and power flush water On -going; 2025: 6 vinyl planking & 4 pf toilets saver toilets at unit turns. Potential improvements: new door card entry system, Done except common areas flooring & sewer main lining. installation of mini split, heating/cooling system in the laundry room, unit smoke detectors, common areas flooring replacement near the elevators and sewer main lining coordinated with City of Hutchinson. Follow legislation for grant funds to retrofit sprinklers in Nothing new in 2025 that Park Towers was eligible for. high rise residential buildings. Support the Tenant Council activities. On -going City Center Operations, Owner Occupied Rehab: Status Administer the City Home Improvement Grant Program, 4 CHIGP and I MH RLP Minnesota Housing Rehab Loan Program and the Fix Up Fund Home Improvement Loan Program Follow rollout of new State housing programs and City Council approved State funds to continue CHILP. determine interest/need in Hutchinson. Market available programs throughout the community. Hired 813itstudio for digital marketing. Identify and determine interest of potential SCDP owner Focusing on Hutchinson Downtown Housing occupied rehab project I Rehabilitation Program City Center Operations, SCDP Rental Rehab Program: Status Identify and determine interest of potential SCDP rental rehab projects. Focusing on Hutchinson Downtown Housing Rehabilitation Program City Center Operations. Housing Development Status Explore other housing resources available to address the Private Developers are working with the City to address housing needs identified in the Maxfield Comprehensive some of the housing needs. Housing Study/Market Analysis for the City of Hutchinson Determine best use of the remaining 2 HHRA Island View Working on house plans and budgets for new construction Heights lots. Ion the lots. .a Hutchinson HRA Priorities for 2026: Park Towers Apartments Manaciement: • Reach a vacancy Rate above 89%. • Administer the RAD Multifamily, Section 8 PBRA program at Park Towers. • Staff training in new HUD programs. • Housing Specialist acquire a Minnesota Department of Labor and Industry issued Special Engineer boiler license. • Continue to install vinyl planking and power flush water saver toilets at unit turns. • If needed, start re -facing kitchen cabinets, replacing A/C and Refrigerators at unit turns. • Potential improvements: Repack of fire pump, sewer main replacement coordinated with City of Hutchinson, common areas flooring replacement near the elevators and new fire door system. • Start process to replace oldest boilers and improve ventilation system. • Start process to repair/replace concrete walkways and steps around the building. • Continue to work with AT & T on relocation of antennas on the roof. Possible coordination with roof replacement. • Survey tenants on needs for community room. • Follow legislation for grant funds to retrofit sprinklers in high rise residential buildings. • Support the Tenant Council activities. City Center Operations, Owner Occupied Rehab: • Administer the City Home Improvement Grant Program, the Hutchinson Downtown Housing Rehabilitation Program and the Minnesota Housing Rehab Loan Program. • Market available programs throughout the community. • Identify and determine interest of potential SCDP owner occupied rehab project. City Center Operations, SCDP Rental Rehab Proclram: • Identify and determine interest of potential SCDP rental rehab projects. City Center Operations, Housinci Development • Explore other housing resources available to address the housing needs identified in the Maxfield Comprehensive Housing Study/Market Analysis for the City of Hutchinson • Build houses on the remaining 2 HHRA Island View Heights lots. 67 Human Resources Primary Services Under the direction of the Human Resources Director, the human resources department provides the following organizational development and services: • Recruitment • Compensation • Benefit administration • Employment policies and laws • Workers' compensation • Employee safety • Labor relations • Performance evaluations • Organizational development • Training and development • Employee and Supervisor support 2025 Human Resources Staffing 1.875 Full-time Equivalent Staff — Human Resources Director and Human Resources/Administrative Technician Budget The Human Resources budget is contained within the City Administration budget. Alignment with Council CORE VALUES and OUTCOMES The primary purpose of the Human Resources Department is to provide strategic management of the City's workforce by giving information, support and consultation to internal customers to assist them in delivering quality, cost effective City services to the public and accomplishing the ends and outcomes identified by the City Council. 2025 Accomplishments • Completed 17 recruitment processes o Aquatics & Recreation Programmer o City Engineer/Asst. Public Works Director o Community Service Officer (2) o Compost Equipment Operator o Compost Facility Maintenance Assistant o EDA Intern o Women to Workforce Intern o Fire Inspector/Firefighter o Parks Maintenance Operator o Compost Sales & Marketing Coordinator o Senior Engineering Specialist 99 o Senior Public Works Maintenance Operator (internal) • Hired approximately 145 summer seasonal employees • Launched 'Health Insights" monthly newsletter, New Employee Questionnaire • Organized 1st annual UCAP holiday gift drive • Completed internal I9 audit for compliance • Finalized and communicated new Minnesota Paid Leave policy • Maintained quality benefits offered to employees, transitioned to MetLife for Life and LTD in order to offer Minnesota Paid Leave through MetLife • Planned and hosted successful employee events, including the Summer Picnic and Holiday Party 2025 Performance Measurement Monitoring Data Consistent with the council's adopted governance statements, priority indicators follow: Employee Efficiency The department provides human resource services to all City employees and strives to assist them in increasing productivity, and balancing resource constraints and increased demand for services. POPULATION PER EMPLOYEE ' • 14,282 14,599 14,703 14,703 14,828 14,910 • 125 124 124 130 130 124 '•114 118 118 114 116 121 * The employee numbers include full-time and regular part-time employee Full Time Equivalents (FTE) only, includes HRA Employees. FTE's are not calculated for seasonal part-time staffing. The population is based on best available estimates provided by the Minnesota State Demographer. ** 2025 population estimates are not available via the Minnesota State Demographer or US Census Bureau at the time of this report (April 2026) Employee Decision -Making In order to accomplish the City's mission, employee involvement in the decision -making process as well as employee feedback and participation is essential. Employees participate in significant decision -making processes such as: • Evaluation and selection of new employees • Employee Wage Committee recommendations • Employee benefit program provider and program selections • Development of safety program components and safety program administrative functions • City website and social media content • Leadership Team and Executive Team participation • HR Director open door policy Cost of Employee Services For 2025, Employee Expenses continued to be a large percentage of the city budget at 67.3%, or $10,630,785. This includes all wages, taxes, health insurance and other benefits, and PERA. For 2025, all Other General Fund Expenses are estimated to cost $5,167,129 (32.9%). In comparison, 2026 Employee Expenses are estimated to cost $11,157,239, or 67.5%. 2025 Actual Expenses 2026 Budgeted Expenses 32.S% 67.5% :i Non Employee Expenses Employee Expenses ■ Non Employee Expenses ■ Employee Expenses Health Insurance A portion of employee costs are for health insurance premiums. Each year, the City considers vendor and plan design changes in order to keep premium costs as low as possible while maintaining meaningful coverage. Hutchinson strives to keep premiums competitive with the market average. Similar to last year, the City was not in a position of power to renegotiate for 2026 based on claims utilization data. For 2026, the City plans saw a total premium increase of approximately 14%, compared to the 25% increase for 2025. The increase that Health Partners initially proposed was 21%, but our benefit brokers, USI, were able to negotiate down to 14%. In comparison, the USI fully insured book of business saw increases as high as 50% and as low as single digits, with an average increase around 15%, putting the City's increase just below average. After the plan adjustments in 2025, the City opted to keep the plan design and deductibles the same, only increasing premiums. Though Health Partners applies premium increases to each level of coverage at a different rate, the City opted to apply the average premium increases (14%) evenly to all deductibles and groups. As a reminder, the plan adjustments for the 2025 plan year included increasing the deductible for the higher deductible plan to make it the "base plan" and adjusted the premium split for the lower deductible plan, the "buy -up plan", so the employee cost between the two plans encouraged election of the "base plan". That strategy worked and there is more even participation between the two plans, which was the goal. 70 There appears to be little relief in the future, considering the ongoing challenges with the health care industry, so the Wage Committee and City Leadership is prepared to consider alternative plans in the near future to ensure costs remain manageable while still offering a solid benefit. 2k 4k 3.5k 7k 2k 4k 3.5k 7k 2k 4k 3.5k 7k • • $206.13 $154.40 $ 618.38 $ 617.58 $824.51 $771.98 • • • $566.86 $424.59 $ 1700.56 $ 1698.36 $2267.42 $2122.95 • 5350.42 $262.48 $ 1051.26 $ 1049.88 $1401.68 $1312.36 $597.78 $447.75 $ 1793.32 $ 1790.99 $2391.10 $2238.74 • • 2k 4k . 3.5k 7k We • 2k 4k 3.5k 7k 2k 4k 3.5k 7k • • $180.92 $135.29 $542.75 $541.17 $723.67 $676.46 • • • $497.52 $372.06 $1,492.58 $1,488.22 $1,990.10 $1,860.28 • $307.56 $230.00 $922.68 $919.99 $1,230.24 $1,149.99 $524.66 $392.35 $1,573.99 $1,569.40 1 $2,098.65 $1,961.75 EMPLOYEEREGULAR • 2019 2020 2021 2022 2023 2024 2025 Health Plan Participants ����� • • of Eligible Employees • • • • • • • • •' . Labor Contracts Two bargaining units represent two groups within the Hutchinson Police Department. Labor contracts are negotiated and administered by the City and one contract has gone to arbitration since the first unit was organized. 2025 brought another round of settled wage reopeners for both the MNPEA Police Officers and LELS Police Sergeants. Labor Measurements REGULAR FULL TIME AND REGULAR PART TIME RECRUITMENTS 2018 2019 2020* 2021* 2022* 2023** 2024** 2025 Recruitments 71 # of Applications MMMMMMMM Received * Includes Hutchinson Utilities Commission and/or Hutchinson Redevelopment Authority position recruitments. ** Includes Hutchinson Redevelopment Authority position recruitments `81 applications were submitted for the Utility Billing Specialist position ATTRITION * Includes Hutchinson Utilities Commission and/or Hutchinson Redevelopment Authority position recruitments. ** Includes Hutchinson Redevelopment Authority position recruitments `81 applications were submitted for the Utility Billing Specialist position ATTRITION • 5.6% 13.7% 10.5% 15.0% 13.8% 17.9% 9% 9% • 5.8% 7.2% 10.1% 8.3% 7.4% 11.4% 9% 7.3% * Includes full-time and regular part-time employees and no seasonal/temporary employees. ** Hospital security is included in these numbers 2025 Employee Retirements: • Peter Dehn — Public Works Streets • Jody Harms — PRCE • Eric Kilian — Police • Keith Messner — Engineering 89.5 years of experience! The 2026 human resources department budget allows for continued services including: • Negotiation of new labor contracts with the Police Officer and LELS groups for 2026 • Annual employee insurance renewals. • MN Paid Leave implementation (Live Jan. 1, 2026) • Personnel policy review, updates, and implementation (in process from 2025) • Updates to Drug and Alcohol Testing policy and other related policies/procedures (in process from 2025) • Finalize Wage Study and Compensation Plan updates (eff. Jan 1, 2027) • Identify solution for seasonal background checks • Review and purge files/documents to ensure compliance with record retention schedule; transfer permanent documents to Laserfiche 72 Information Technology Primary Services Under leadership from the Information Technology Director, the Information Technology (IT) Department is responsible for most technology systems across all City departments including Hutchinson Utilities. The range of items supported is technologically diverse and includes: • Retail Point of Sale systems (Liquor Hutch) • Manufacturing process software (Creekside) • Law Enforcement applications with strict security standards imposed by the FBI • Electrical Generation systems (Hutchinson Utilities Production) • Mobile work systems (Field Crews) • Network Architecture for Electric, Gas, Water and Waste Water SCADA systems • General Government applications • Voice Over Internet Protocol (VOIP) phone systems and related contracts • Radio Systems for Emergency Services. (IT supports the network, server and workstations) • Cell phones and related contracts • Cyber Security • Managing, supporting & expanding, when appropriate, City owned fiber optic network. (Hutchinson is unique in that the City owns, manages, and leases fiber to other entities) • We are available 24x7 to support law enforcement, Liquor Hutch and Hutchinson Utilities. • Manage 50+ yearly software contracts • Web page management and upkeep • Credit Card Processing & Security • PD Body camera support for PD & Legal • 55 Security Cameras throughout City Buildings and Parks • GIS 2025 Information Technology Budget General Operating: $723,131 Revenue: $155,545 Water: $29,521 Waste Water: $28,060 Liquor Hutch: $9,444 EDA: $17,723 HRA: $19,653 Creekside: $10,546 73 2024 LOADING ........ ZUFZW HUC: $283,391 Total Managed Budget $1,121,019 Staffing 3.5 Full -Time Equivalent Staff including GIS 2025 Narrative The IT industry is ever changing and Cyber Security continues to be the top issue. Much of our time is focused on network security to protect employees and customers. Day to day support end user tends to demand the majority of our time, which is a good indicator of how technologically sophisticated the City has become. All departments embrace technology in an effort to create efficiencies and increase service to the public. 2025 Accomplishments • Converted to Microsoft 365 o This project consumed the bulk of our time • Core host servers were upgraded and expanded to fulfill current growth • Rewrite of all web pages which included formatting to comply with 2027 ADA laws • Continued automation for desktop setup and rebuilds • Desktop and network security upkeep • Expanding network to the Civic Arena to monitor the compressors remotely • Expanded the network to the Water Park Pump House to monitor pool systems remotely • Ongoing Cyber Security Programs IT Systems and Devices 350 300 250 200 150 100 50 0 Desktop Computers Mobile Devices Phones: Desk and Mobile 74 IoT and Network Devices 2026 Information Technology Budget General Operating: $833,733 Revenue: $193,974 Other General Fund $99,849 Water: $25,758 Waste Water: $27,228 Liquor Hutch: $18,680 EDA: $14,876 HRA: $9,753 Creekside: $12,374 HUC: $134,386 Total Managed Budget $1,176,636 Looking Forward to 2026 2025 LOADING ........ 46.vd6.v 2026 will include an additional Network Administrator to expand our network security program and work closely with the Police Department on digital evidence gathering. Projects for 2026: • Adding a Sr. Network Administrator • Upgrade of 34 desktops/Laptops • Upgrade of 1 network switch • Continue efforts to leverage the network against Cyber Security attacks • Door access system upgrade for the Police Department • Upgrade Video Surveillance system at the Liquor Hutch • Extend the fiber network to the new Hutchinson Substation Technology Department Philosophy Information technology is a cornerstone of all modern organizations, supplying the communication and business systems necessary to perform daily tasks in the most efficient manner possible. IT provides a central coordination point to technology solutions and services for both internal and external customer needs. The IT Department has made great strides in implementing new technology solutions, enhancing the technology environment, and collaborating with other departments to provide cost efficient and effective solutions to their technology needs. 75 Legal Department The City of Hutchinson's Legal Department's duties are divided into two main areas — one pertaining to civil law and the other pertaining to criminal law. Regarding civil law, the City of Hutchinson Legal Department provides legal advice to the City Council, Economic Development Authority, Housing and Redevelopment Authority, Creekside Soils, Liquor Hutch, city administration, city departments, and the other 11 boards and commissions of the city. The legal department reviews and negotiates contracts, provides ordinance interpretation to city staff, serves as the revisor of city ordinances, assists in fulfilling data practices requests and serves as the City Parliamentarian. The city's legal department also serves as the general counsel for the Hutchinson Utilities Commission. Some of the activities of the legal department pertaining to civil law in 2024 included: 1. Attending City Council meetings, planning commission meetings, charter commission meetings, airport commission meetings, and police commission meetings. 2. Fulfilling data practices requests. 3. Drafting and revising city ordinances. 4. Conducting three dangerous animal hearings. 5. Assisting city administration in the purchase and sale of real property. 6. Assisting the Hutchinson housing and redevelopment authority with landlord — tenant issues. 7. Assisting the Hutchinson economic development authority in developing tax increment financing districts, the purchase and sale of property for economic development in the city and with landlord -tenant issues. 8. Assisting Hutchinson Police Services and the planning and zoning and building department with nuisance property abatement. 9. Assisting the city public works department with airport, property acquisition and city development matters. 10. Drafting or reviewing 89 contracts on behalf of city departments, The Economic Development Authority, The Housing and Redevelopment Authority and Hutchinson Utilities. Concerning criminal law, the legal department also serves as the criminal prosecutor for the City of Hutchinson; prosecuting violations of city ordinances, misdemeanor crimes and some gross misdemeanor offenses that occur within the city limits of Hutchinson. The city has a contract with the Gavin Law office in Glencoe to assist in criminal prosecution work. In 2025 the legal department prosecuted 263 criminal cases against 204 different individuals. The prosecution of these individuals required the attendance by the legal department at 799 court hearings an increase of 13% from 2024. The legal department also conducted 14 court trials and one jury trial. 76 The following table illustrates the number of cases prosecuted by the legal department over the past few years. Year Number of Cases Prosecuted 2019 357 2020 306 2021 235 2022 343 2023 183 2024 193 2025 263 As shown above, there was a 36% increase in the number of charges prosecuted between 2024 and 2025, but overall, prosecutions have decreased the past few years. While it is too early to say that it is an ongoing trend, the drop in the number of prosecutions may be linked to a few possible factors. First, the legislature has decriminalized cannabis and several other drug related offenses and has made some misdemeanor driving offenses payable without requiring court appearances. Second, the way local merchants take payments from customers is changing in that many merchants no longer accept checks (reducing the number of bad check offenses) and gas stations now mainly require pre -payment for gasoline (which reduced the number of gas drive -off offenses) Criminal Charges Filed by The City Attorney's Office In 2025 Crimes Aciainst the Administration of Justice Charge Violate Domestic Abuse No Contact Order Flee Police Officer Violate Order for Protection Violate A Harassment Restraining Order Obstruct Legal Process Charge Domestic Assault Disorderly Conduct 5th Degree Assault Assault Related Crimes 77 Number of Violations 5 3 3 2 9 Number of Violations 17 23 2 Driving Related Crimes Charge Number of Violations Driving After License Revocation 13 Driving After License Cancellation — Inimical 4 to Public Safety Driving After License Suspension 4 Hit and Run 7 Failure to Yield the Right -Of -Way 5 4th Degree Driving While Impaired 17 4th Degree Driving While Impaired - Cannabis 3 3rd Degree Driving While Impaired 2 2"d Degree Driving While Impaired 2 Refusal to Submit to Chemical Testing 2 Open Bottle 3 Failure to Drive with Due Care 5 Illegal Transportation of Cannabis 1 School Bus Stop Arm Violation 2 No Insurance in Possession 7 No Valid Driver's License 1 Window Tint Violation 4 Open Package of Cannabis in Vehicle 2 Follow Too Close 4 Open Container of Cannabis in Motor Vehicle 3 Fail to Obey Traffic Control Device 8 Violation of Learner's Permit 2 Improper Lane Change 2 Expired Registration 1 Seatbelt Violation 2 Display Cancelled License Plates 1 Speeding 4 Illegal Backing 1 Cell Phone Hands Free Violation 4 Charge Trespassing Criminal Damage to Property Motor Vehicle Tampering Property Related Crimes m Number of Violations 13 3 1 Theft Related Crimes Charge Misdemeanor Theft -Shoplifting Possession of Stolen Property Misdemeanor Theft NSF Check Animal Related Crimes Charge Animal Running At Large No Animal License Attack by Animal Animal Neglect Animal Cruelty Excessive Dog Barking Possession of Dangerous Animal Miscellaneous Crimes Charge Minor Consumption of Alcohol Open Burning Maintain hazardous building Failure to Obtain Building Permit Building Maintenance Code Violation Nuisance Storage Possession of Alcohol Under 21 Urinating in Public Failure to Pay Lodging Tax Reckless Handling of a Firearm Possess False Vehicle Insurance Card Violation of No Smoking Ordinance Maintain Public Nuisance Park Hours Violation Harassing Phone Calls Nuisance Violation- Inoperable Vehicle 79 Number of Violations 28 2 16 1 Number of Violations 2 2 5 1 1 1 2 Number of Violations 2 2 2 2 1 4 1 2 1 1 1 1 19 14 2 1 Parks, Recreation, Community Education Hutchinson PRCE System at a Glance • 41 City Parks • 4 Shared School -Park sites • Aquatic Center • Recreation Center • Ice Arena with 2 Sheets of Ice • Farmers Market • Overnight Campground • 237.5 Acres of Park • 138 Acres of Natural Areas/Open Space • 35.5 Miles of Paved Trails • 3 Miles of Un-paved Trails • 16 Miles of Bike -Friendly Streets • 33.5 Miles of Sidewalks • Terrain Park and Skate Park • 3 Miles of Bike Lanes Bike and Pedestrian Network Hutchinson has made it a priority to create a connected system of bike trails, sidewalks, and on - street bike lanes. Paved trails are typically along major collector roads and through parkland. Sidewalks and bike lanes are mainly within the core downtown neighborhoods. The existing system includes: • 33.5 miles of sidewalks • 35.5 miles of paved trails + 3 miles of unpaved trails • 16 miles of bike -friendly streets • 3 miles of bike lanes • Luce Line State Trail The City is served regionally by the Luce Line State Trail, a 63-mile-long former railroad grade which was developed for biking, hiking, horseback riding, mountain biking, snowmobiling, and skiing. The trail connects the western Twin Cities with Independence, Watertown, Winsted, Silver Lake, Hutchinson, Cedar Mills, and Cosmos. The trail surface varies along its course, including limestone, with a parallel treadway of horseback riding, paved bituminous, crushed granite, and natural (mowed grass). Snowmobiles are allowed on the trail west of Stubbs's Bay Road. (Source: wwwdnr statemn, us/state trails//uce line) k Hutchinson PRCE Advisory Board The PRCE Board meets at 5:15 p.m. on the first Monday of the month at the City Center. The PRCE Board shall be composed of seven representatives from the community at large, one representative from the School Board, and one representative from the City Council. Except for the School Board and City Council representative, all members shall be jointly appointed by the Mayor and the School Board President, with the consent of the respective boards and Council, and shall serve staggered three-year terms. The Board shall study and determine the park, recreational, and community education needs of the city and make recommendations to the City Administrator relating thereto, and shall submit an annual operating budget to the City Administrator. In addition to the PRCE Advisory Board, there is an opportunity for involvement on the Senior Advisory Board. PRCE Advisory Board Members; Lynn Neumann — PRCE Director Leslie Alberts — PRCEAdministrative Specialist Erin Knudtson — Hutchinson Public Schools Representative Chad Czmowski — City Council Representative Member Term Expires Steve Kropp August 2027 First Full- term Elizabeth Stearns August 2025 First Full -term Margo Kaping August 2025 First Unexpired Term Joshua Kamrath August 2026 Second Full -term Ann Lamecker August 2026 First Unexpired Term Kyle Wendling August 2027 Second Full -term Eric Thovson August 2027 First Full -term Hutchinson PRCE Senior Advisory Board The Senior Advisory Board meets at 10:00 a.m. on the fourth Monday of the month at the Senior Center. The Board consists of seven members who serve staggered three-year terms. The board shall advise the PRCE Board and staff concerning the management and use of the multi -purpose senior center and shall develop and maintain a management plan that provides the opportunity for all senior -related activities to flourish. 81 Senior Advisory Board Members; Jennifer Behrendt — Event Center/Senior Center Programmer Susan Cosner Kathy Hochsprung Connie Dahl Priscilla Rauch Dave Husfeldt Ced Steinkraus Jody Stoffels Public Arts Commission The Public Arts Commission shall be composed of seven members, six of whom shall serve staggered three-year terms and one of whom shall be a member of the City Council. Commission members shall be appointed by the Mayor with Council approval. The Director of Planning/Zoning/ Building and the Director of Parks/Recreation/Community Education shall be ex officio members. The Public Arts Commission shall act in an advisory capacity to the City Council for the city and shall make recommendations to the City Council on issues regarding public art within the city limits. The Public Arts Commission may develop and implement policies and procedures, as necessary, with approval by the City Council, to meet the purpose and objectives of the Commission. The Public Arts Commission shall review all projects that meet specific criteria in accordance with its written Policies and Procedures. Commission Members: Public Arts Commission Members; Lynn Neumann — PRCE Director Pat May — City Council Representative Vacant Seat Andrew Webster Patrick Hiltner Kris Haag Justin Beck Wanda Lambert 82 Bike and Pedestrian Committee The Hutchinson Bicycle -Pedestrian Advisory Committee (BPAC) serves as an advisory committee to the City Council and the Park, Recreation, and Community Education Board. The BPAC provides advice on bicycling and pedestrian needs in Hutchinson, advocates for pedestrian and bicycling infrastructure improvements, and promotes recreational walking and bicycling in the city. Bike and Pedestrian Committee Members; Sara Witte - Parks Manager Lynn Neumann — PRCE Director Mike Stitfer — Public Works Director Donovan Schuette- Public Works Manager Pat May - City Council Representative Deb Card Mark Hanneman Mike McDowell Tracy Marquardt Heidi Tague Silver Bicycle Friendly Community Designation Hutchinson is proud to be recognized as a Silver Bicycle Friendly Community by the League of American Bicyclists! This certification, awarded in spring 2023, highlights our commitment to making biking safer, more accessible, and enjoyable for all. We believe that safer streets for cyclists mean safer streets for everyone, from kids riding to school to commuters and recreational riders. As one of 506 certified Bicycle Friendly Communities, we are working to create a more connected, active, and bike -friendly Hutchinson. Let's keep pedaling toward a healthier, more vibrant community! Sponsorships and Donations The Parks, Recreation, and Community Education Department wishes to express our heartfelt gratitude for the generous sponsorships and donations received from local businesses, organizations, and individuals throughout the year. Your support directly contributes to the enhancement of our parks, programs, and facilities, making Hutchinson a better place for all. We would also like to extend our sincere thanks to the numerous volunteers who have dedicated their time and energy to our programs, events, and facilities. Your commitment strengthens our community, and we truly could not accomplish this without you! Together, we are creating a stronger, more vibrant Hutchinson — one park, program, and partnership at a time. Thank you! 83 General Fund Sponsorships/Donations Department Fund Park & Recreation Admin Recreation Senior Center Civic Arena Parks Department Water Park TOTAL Donations/Sponsorships Donation/Sponsorship Amount $16,368 $32,750 $1,624 $11,650 $7,517 $2,500.00 $72,409 "Donation/sponsorship amounts do not reflect donations/sponsorships collected and utilized for capital ,projects or community Improvement funds Tarv�Togk 0 Environmentally friendly Introducing Frank the Tank! With staffing changes and improvements in park maintenance operations, Hutchinson PRCE was fortunate to add a Turf Tank One to our operations in 2025. Turf Tank One Overview 0 Saves time and money 0 Improves field quality 0 Supports student athletics 0 Reduces staff strain Veteran's Memorial Field Project In 2025, the Hutchinson Huskies, Hutchinson's local amateur "town ball" team, played a dual role as both a competitor and host of the Minnesota Baseball Association (MBA) State Amateur Baseball Tournament. Hutchinson was a primary venue for the tournament, with games taking place at Veterans Memorial Field (Dave Mooney Baseball Complex). Additional co -hosting cities included Brownton at Barney Tadsen Field, Gaylord at Walsh Field, and Glencoe at Vollmer Field. 84 The 2025 Minnesota Baseball Association (MBA) State Amateur Baseball Tournament was held over three consecutive weekends during late summer, concluding on Labor Day. The Huskies managed the state tournament with considerable support from the City of Hutchinson, contributing to its success. The Huskies reported an attendance of 9,261 at the Veterans Memorial Field (VMF), just shy of the 10,000 mark. Overall, the total attendance for the entire tournament across all locations, including VMF, reached 23,744 participants. In preparation for the 2025 state tournament, the City of Hutchinson and the Huskies organization undertook several enhancements to the complex: New Grandstand; The existing 250-seat grandstand is being replaced with a larger, ADA- compliant structure that features handrails and accessible seating. The grandstand project also included the addition of new concrete walkways. Beneath the grandstand, a stunning new wooden wall has been crafted, providing the Huskies with a dedicated space to express gratitude to sponsors and donors who contributed to the renovations at the complex. Enhanced Landscaping; Landscaping has been finalized to improve the aesthetics of the facility alongside the new grandstand. Artificial turf has been installed in high -traffic areas, with plans for its addition to the batting cage as well. A row of Arborvitae has been planted along the fence line, and as they mature, they will offer natural screening for the complex. Comp/ex Lighting; The lighting systems were upgraded in 2024 to align with modern illumination standards for evening games. Restroom Renovations; The restroom facilities have been renovated to meet ADA compliance. New Speakers and Sound System; Enhanced sound systems have been installed throughout the complex. New Entrance Walk Gate; Custom-made walk gate enhances facility entrance while maintaining original look. Existing Building Structures Updated; The concessions stand and restroom building, along with the picnic shelter, were painted gray to modernize their exterior appearance. Additionally, the City -owned facility adjacent to these structures, as well as the Huskies' maintenance garage, received new gray siding to create a cohesive aesthetic throughout the complex. This upgrade has successfully established a uniform look for the entire facility. To support these improvements ahead of the tournament, the City of Hutchinson received a total of $134,882 from the Huskies during 2024 and 2025. The City of Hutchinson will receive another $50,000 in 2026 to complete the donations for the project. 85 Park, Recreation, and Community Education Administration Staff Responsible: Lynn Neumann, PRCE Director The Hutchinson Parks, Recreation, and Community Education Department is dedicated to enhancing Hutchinson's parks, trails, open spaces, and recreational facilities, while also providing community education programs. With nearly 401 acres of parks and 38 miles of trails, PRCE works to maintain, improve, and expand opportunities for residents of all ages. Our work is funded through city taxes, grants, program fees, sponsorships, and donations, allowing us to offer high -quality recreation and educational programs while maintaining beautiful, accessible spaces for the community. Hutchinson Parks, Recreation, and Community Education Administration: O Park Maintenance — Keeping parks, trails, and green spaces safe and enjoyable. O Recreation Programs — Offering activities for all ages and interests. O Community Education — Providing learning opportunities for residents. O PRCE Facilities — Managing event spaces, sports complexes, and public amenities. O Capital Improvements — Planning and executing park and facility upgrades. PRCE collaborates with City departments and Hutchinson Public Schools (District 423) to ensure efficient use of facilities, resources, and funding. The department also works with the City Council, PRCE Advisory Board, and School Board to make strategic decisions that benefit the community. PRCE Administration Objectives: Establish and build upon the Joint Powers Agreement between the City of Hutchinson and Hutchinson Public Schools. Provide excellent customer service and public relations in representation of the City of Hutchinson and Hutchinson Public Schools. Prepare all PRCE department budgets. Expand sources of revenue by promoting sponsorship and donations. Solicit and apply for grants, donations, and other funding for park improvements and activities. Provide for a safe and efficient delivery of program services. Nurture collaborations between service agencies in the community. Plan and provide park development, capital improvement plans, construction, renovation, and maintenance for all PRCE facilities and parks. Monitor and evaluate all department personnel and activities. Plan and implement recreational programs for the community that reach a diverse population with a wide variety of ages and cultures represented. Encourage activities that promote intergenerational participation and strengthen community, families, and neighborhoods. Hutchinson Parks, Recreation, and Community Education is committed to making Hutchinson a great place to live, work, and play. m Parks and Natural Resources Staff Responsible: Sara Witte, Parks Manager The Hutchinson Parks Department takes pride in partnering with groups, classes, and organizations to extend our impact and efforts throughout the community. Each year, the Hutchinson Chamber Leadership Institute offers local employees and business owners the opportunity to participate in a nine -month leadership program, culminating in a capstone project and a large -group volunteer activity on the morning of graduation. The Parks Department benefits from both small and large groups, as substantial projects can be completed in just one or two days with many hands. Funding from Meeker, McLeod, and Sibley SHIP (Statewide Health Improvement Partnership) and the Hutchinson Health Foundation has allowed us to add additional adaptive bikes to the community bike fleet. This funding also supports ongoing maintenance for the bikes, ensuring they remain operational for schools and activities. Hutchinson schools, as well as nearby community schools, have greatly benefited from the Community Bike Fleet, which is used to teach the BIKEMN's Walk!Bike!Fun! curriculum. For the first time last summer, Hutchinson Community Education utilized the bike fleet for a community education class. Additionally, New Discoveries Montessori Academy benefited from the bikes during their annual June safety camp. As in previous years, staffing changes and challenges arose just before the busy season began. In May 2025, long-time Parks Maintenance employee Brian Magnusson departed. Brian had overseen many athletic field operations within the department for 15 years. Other full-time employees, along with seasonal staff, needed to step up to fill the void during one of the busiest times of the year. Multiple Park projects were put on hold to accommodate the daily schedule of ball games and field maintenance. Contractors were also hired to complete projects that could be outsourced. Despite these staffing changes in the PRCE Department, the Parks Division was pleased to welcome two new employees, Eric Stiles and Becky Kobow. Both have extensive experience in golf course maintenance, farming operations, equipment management, and possess a variety of strong skill sets necessary for the diverse operations within parks. New innovations and equipment have improved the efficiency of park maintenance, allowing us to accomplish more in a day, week, month, and year. Using the appropriate tools for the right tasks reduces waste and increases productivity. Due to staffing changes early in the summer of 2025, we added the lease of an automated robot painter to our fleet. This robot allowed our full-time maintenance staff to focus on other essential maintenance tasks while it handled most of the painting work. We also continued to seek out durable materials that require less ongoing maintenance. For the first time, artificial turf was installed in a park setting as part of the VMF renovations, in the high -traffic area just inside the main gate. We received many positive comments about this new surface and its user-friendly design in a busy area. Looking 87 ahead to 2026, we plan to explore the use of synthetic turf around the Middle School baseball field. 2025 Parks and Natural Resources Accomplishments General Site Improvements • Bike Fix It Station installed at Depot Farmers Market location • Roberts Park parking lot seal -coated and new diagonal lines • Nature panel installed at Shady Ridge Park playground through donations • Three ADA fire rings installed at Masonic West River full hook-up sites: 4, 5, and 6 • Plumbing improvements completed at Rotary Park restrooms • Kiwanis shelter building improvements completed • New asphalt connecting trail added in Kimberly Park between Luce Luce/Hilltop Dr NE • Northwoods Park shelter: new windows installed • Bike Fleet Program: fleet was utilized in spring and fall at surrounding schools that support Walk!Bike!Fun! curriculum: Dassel/Cokato MS, Litchfield MS, ACGC, Sibley East, Howard Lake/Waverly/Winsted, Hutchinson HS, and MS. The addition of 3 inclusive bikes added to the fleet with SHIP funds • Completion of VMF improvements: front entrance gate, landscaping/turf, restroom renovations, umpire space, residing of old Parks garage building, new sound system etc. • Remote Control (RC) track constructed at the stie of the old terrain bike park in Tartan Park • Fireman's Park sidewalk was installed around the perimeter of the playground to allow for ADA accessibility • Contracted restoration of public bronze art sculptures throughout the City of Hutchinson • Engineered playground safety surfacing delivered to various playground locations • New playground modular systems and swing set installed at Oddfellows Park • Trail lighting installed along the trail on south side of the Gopher Campfire Sanctuary Athletic Field/Court Maintenance • One load of ag-lime was applied on various PRCE fields • ISD#423 irrigation project on football practice fields #145 and soccer field #2 • Lighting project commenced at Roberts Park complex- completion spring 2026 • Infield edging done at both Northwoods, Tartan & Riverside ballfields- including backfilling with ag-lime material • Replacement of damaged Disc Golf baskets and components at South Park • Provided weekend field maintenance at seven summer baseball/softball tournaments • 'Frank the Tank" robot field painter leased for the season and used to put REACH logo on HHS main field for last Chad Greenway football camp • Additional maintenance supplies ordered to support MN State Amateur Baseball Tournament at VMF baseball field • 2.5 bulk totes (225 gallons each) or 565 gallons of white field marking paint were applied for activities in 2025: baseball, softball, football, lacrosse, PRCE soccer, etc. Approximately 105 gallons of yellow paint applied for the HHS soccer/lacrosse 20 totes (2.5 gallon) Starliner paint used at VMF for regular season and State Tournament E. Landscaping • Harrington Merrill Outdoor classroom installation, continuation of perimeter split rail fence, tree plantings, and completion of paver sidewalk, etc. (HLI small groups) • Two panels from the traveling Vietnam Wall Memorial exhibit installed at McLeod County Veterans Park • Park bench memorial pavers installed at Fireman's Park (2), Linden Park, and Hwy 15 South- Legion Park west • Middle School sign planted and replacement plants added to other school signs • Planting of perennial plants at South Grade/Dale intersection after completion of Dale Street project Forestry/Natural Resources • 50 trees planted in various Parks/School District properties with forestry/park staff, volunteer groups, and Park Elementary students • Tree removals: 93 in various Parks/School District properties • Tree plantings in park locations, from ash removal operations in South Park (HLI small group and New Century students) and Library Square, etc. • HHS students mulched around entire ISD#423 campus and cleaned up around Police Memorial berm - added mulch to all areas where needed • Invasive willow tree removal at AFS & Eheim Parks along the riverbank with help from Hutchinson High School Landscape and Natural Resource Classes and Faith Lutheran MS Youth • Annual spring maintenance conducted at Depot rain garden with help from HHS Landscape students • Hutchinson Prairie Management Grant completed and submitted for final funding from MN DNR Conservation Partners Legacy Grant Program. Prairie locations benefited: Roberts, Millerwood's, East River Park, and Riverside • Hutchinson Fire Department conducted native prairie burns along riverbank from Eheim Park - heading west to Masonic West River boat landing and Northwoods Park and stormwater pond spring 2025; then HMS pond, Roberts Park west prairie, Riverside prairie and berm, and Miller Woods large center section, fall 2025 Shelter Reservations 2025 200 183 180 160 140 120 100 80 63 60 35 42 49 40 27 18 19 25 28 29 20 1 ! , , 1 I 1 i I 1 3 0 i f GHQ°� G�tp� p' �.��a� ��e�ac� �ti�°�4 ��'ac�� �}'o��� �,��' ��� °L�r'�° a�i�\\° �et" e Q-°� J�rQ�t� Je`� J � Q. 2026 Parks and Natural Resources Goals • IPAD implemented for park maintenance tasks, playground inspections, etc. (March) • Completion of block work on Library Square pump house (March) • Research and implement Limble Maintenance tracking program, along with potential mowing operations app (March) • AFS Park Improvements with HLI small group (April) • Harrington Merrill property and barn improvements with HLI small group (April) • New exterior doors to Northwoods enclosed shelter (April) • Campground Host program implemented at Masonic West River Campground (May) • Miller Woods entrance improvements, boundaries identified, media promotions with HLI small group (May) • McLeod Veterans' Park improvements with Hutchinson Leadership Institute large group project day (May) • Lighting Projects completed at Roberts Park 4-plex multi -use fields, along with new lighting added to sand volleyball courts (June) • North Park Elementary Playground installation (July) • Middle School East Baseball field -rebuild pitching mound (August) • JC Women's Club: construction of an accessible trail from the road up to the playground (August) • Northwoods Park batting cage project (August) • Drift Rider Park metal overlook railing installed (Oct) • Continue Prairie Maintenance plan implementation- prepping and seeding identified areas in the grant, along with additional burns and mowing conducted by city staff, along with additional prairie funding opportunities (Nov) .E ISD 423 Maintenanc L 2009 hours Landscaping 213, 11% General Snor Maintenance 181,' 182,8% Athletic Fielus 725, 36% Parks Maintenance Functions 13495 hours General 6894.51% e4uipment Meieenenee 561, 4% Forestry 332, 3% Pmide Grant Mgmt 4 0% Snow AMletic Fields 365, 3% 1647, 12% wi Mcng Lendnmpe 2341.17% 1346,10% Mowing & Weedwhipping 3148 hours Utilities 79, 3% city Parks/Boutevards 2341, 74% SCh001 D191dCt 728,23% 91 Hutchinson Utilities Maintenance 239 hours Mowing 79, 33% Forestry 6, 3% General Maintenance Landscaping 55,23% 99.41% Non -Park Functions 3454 hours Training/Meetings Public rL 404, 13% 658.2, Liquor Store 2, 0% � Police Dept. 38, 1% River Rentals 2, 0% Warming House 292.9% 4 2025 Park Highlights DNR Prairie Maintenance Grant In 2022, Hutchinson received a $50,000 Prairie Maintenance Grant from the Minnesota Department of Natural Resources. The grant was designated for prairie restorations in specified parks throughout Hutchinson and was successfully completed in 2025. Several parks in Hutchinson benefited from these funds, allowing for essential maintenance and enhancement of the existing native areas in our community: • Roberts Park— west parcel • Miller Woods — center section • Riverside Park • East River Park South Park — Disc Golf Course Impact Report Unique players Holes Throws 154 5,256 16,695 Total rounds played in 2025 = 625 A total of 472 hours were logged on the course, with players collectively taking an impressive 1,318,841 steps. The easiest hole was identified as hole 7, while hole 9 proved to be the most challenging. The busiest day recorded was Saturday, September 20th, with 59 rounds tracked on the U-Disc app. Notably, September emerged as the busiest month overall. In 2025, the course welcomed 92 new players, including six newcomers to the sport of disc golf. It was surprising to find that many visitors traveled from beyond 30 miles, with 81 players coming from that distance, 13 from over 150 miles, and six from more than 300 miles away. Additionally, nine players hailed from other states, and one even came from a different country. *Information furnished by U-Disc LLC- North Branch, MN 92 Hutchinson Community Bike Fleet The Hutchinson Community Bike Fleet was rolled out in 2023 to support schools in the Meeker, McLeod, and Sibley County School - Districts. Currently, the fleet comprises 50 bikes of various sizes, 7 strider bikes, and 3 inclusive bikes, all utilized by local school districts as part of the Walk! Bike! Fun! Curriculum is integrated into Physical Education classes. This program serves as a vital resource, enhancing community programs, recreational :..x opportunities, and active transportation initiatives within schools. Y.. In addition to its physical benefits, biking significantly contributes to mental health and well-being. Riding outdoors helps to reduce stress, elevate mood, and cultivate social connections through group rides, programs, and events. A reliable bike fleet ensures that individuals of all ages and backgrounds —including those without the resources to purchase or maintain a bike - can enjoy these advantages. Since the program's inception, approximately 6,535 students have taken part in utilizing the bike fleet, alongside other opportunities related to community events and education classes. Physical education teachers have expressed their gratitude for this initiative, which provides students with a safe environment to learn and practice this lifelong activity. One of the primary challenges moving forward will be the ongoing maintenance and upkeep of the bike fleet. PRCE staff and partners are continuously seeking funding opportunities to ensure the sustainability of the fleet, allowing us to continue providing access to it free of charge for local school districts. 93 Burich Arena Staff Responsible: Randy Carter, PRICE Facilities Maintenance Manager In 2025, Hutchinson PRCE concentrated on finalizing the new message board display to replace the previous one that had malfunctioned. The staff collaborated with the Burich Family Foundation to facilitate the installation of a new LED sign, along with new entrance signs. Ongoing landscaping around both arenas will ensure easier maintenance and enhance the overall appearance. The new HVAC equipment has been operating efficiently, maintaining the building's temperature at a consistent 55 degrees and relative humidity levels at 26%. �N■ In June, Sam Sjoberg transitioned from the Parks ` Department to fill an open position as the Facilities Maintenance and Operations Specialist. The staff has been working closely with multiple user groups to gather insights and ideas regarding the needs of various programs to optimize space utilization within both arenas. The facilities plan for the Burich Arenas seeks to develop a comprehensive Facility Management Plan that encompasses a higher level of scheduled maintenance, a cleaner and more inviting environment for activities, and enhanced safety for all spectators, players, and employees. The staff will evaluate all aspects of the buildings to optimize space usage, improve user safety, and establish a routine maintenance schedule while aiming to attract additional user groups. Furthermore, they are collaborating with existing user groups to upgrade the sound systems in both the East and West Arenas. In May, the refrigeration system of the ice arena underwent significant repairs and inspections carried out by Gartner Refrigeration. One compressor received a complete overhaul, accompanied by a glycol analysis to assess the quality of the glycol. Additional necessary repairs included replacing the oil separator filter and addressing electrical issues caused by undersized wiring. The cooling tower was inspected and cleaned by staff in preparation for the upcoming season. TOTAL ICE TIME 3000 2500 00 1500 1000 500 0 2019 2020 2021 2022 2023 2024 2025 ■ Total Ice Time 2134 1003 1709 1988 2478 2472 2426 94 2025 Burich Arena Accomplishments • Ice time sold totaled 2,426 hours. A little down from previous years due to now including 2 months of overlapping maintenance to both rinks. • The East Rink underwent a cleanup: removing old heaters and electrical items to enhance cleanliness. • Zamboni Maintenance occurred during the 2 months of overlapping downtime. • New advertising panels were relocated to the north wall instead of the dasher boards. • Gartner Refrigeration conducted a comprehensive analysis of the refrigeration systems in both arenas. • Staff is working on improving the functionality of the West Arena dehumidifier by connecting it to the East HVAC control system and the BAC network. • Continuing to enhance our partnership with HFSA, Hutchinson Figure Skating Association, as participation numbers remain strong. PRCE offers the Ice Sports Industry (ISI) program for younger skaters, while HFSA provides a competitive program for more experienced skaters. The annual ice show is made possible through the city's support and volunteer assistance from HFSA. • Working with the Burich family and the Hutchinson Hockey Association on funding for improvements to Burich Arena, including upgrading the sound system. These groups have committed to contributing to future enhancements at the facility. • Collaborating with all user groups to implement new policies regarding safety practices, building policies, user group contracts, and special event opportunities. 2026 Burich Arena Goals • Landscape the perimeter of the West Rink, remove shrubs, and align the appearance with the East Rink. • Continue to enhance our partnership with HHA, HFSA, and other user groups. Regular meetings will be held to process feedback and improve our Level of Expectations. • A Facility Asset Sheet and a Key Component Replacement Schedule will be developed. • Collaborate with the Burich family and the Hutchinson Hockey Association to secure funding for improvements at Burich Arena. These groups have committed to contributing to future enhancements at the facility, and we hope to get assistance in replacing the Burich Arena Marquette Sign. • Expand our ice season; This will include later session times and dedicated periods for scheduled maintenance. • Replace the rubber flooring in the West Rink. • Replace the Locker room seating boards with a composite board after the rubber floor is replaced. • A new sound system will be installed in both arenas. • Collaborate with city staff to provide better training in facilities maintenance, including scheduled and routine maintenance, as well as housekeeping. • We will work with staff to find effective solutions for recruiting more employees during the winter months when ice usage is at its peak. • Continued Contracts of inspections with multiple companies and contractors will be used to establish comprehensive records of equipment maintenance. • Integrate the West dehumidifier with the East Rink BAC controller to facilitate easier maintenance and provide alerts for equipment failures. 95 Hutchinson Recreation Center/Hutchinson Aquatic Center Staff Responsible: Randy Carter, Facilities Maintenance Manager Christina Burmeister, Recreation Manager Lyndsey Hodson, Recreation & Aquatics Programmer Aquatic Center Overview: The summer of 2025 was an exciting season for the aquatic center and aquatics programming, featuring new team members, updated staff training, updated processes, and procedural changes. 2025 Leadership Team • li Aquatic Center Supervisor: Lyndsey a_7 ilo�_ Hodson _ • Swim Lesson Supervisor: Abby Radke ;R4 • Concessions Supervisor: Erika Smith • Head Guards: Adeline Lundin, Dane Thovson, Isabelle Schmitz, Jackson Hartman, Madilyn Gherke, and Selma Moore This season, the swimming lesson supervisor worked closely with office staff to oversee swimming lessons. Although the Aquatics Supervisor provided bi-weekly check -ins and support, the Swim Lesson Supervisor coordinated waitlist additions, designated instructors for private lessons, and monitored the quality of lessons being given. The head guards assumed expanded leadership roles, actively participating in the planning and implementation of staff training, assisting with scheduling, coordinating lifeguard re - certifications, and contributing to policy updates. To establish common goals and expectations, the department hosted a welcome orientation for all staff and conducted in-service training every three months, in addition to mandatory pre- season training. These training courses included: Preseason Training — In -Water Skills and CPR Polish Session: During this training, certified LGI (Red Cross Lifeguard Instructors) and head lifeguards evaluated all the Red Cross skills for every lifeguard working in our facility. This ensures our staff can ,perform their skills to the high standard of care required by our facility. Mandatory In -Service #1 (June) — EAPs and First Aid Emergencies: During this training, lifeguards were tested on their group response to a life -threatening emergency in all areas of the Aquatic Center. They were evaluated on their critical thinking, timeliness, and given areas to improve in each scenario. Mandatory In -Service #2 (July) — Preventing Facility Emergencies: During this training, staff were trained in the methods for keeping our facility clean and in identifying hazards in the Aquatic Center. W. (Optional) In -Service #3 (August) — Red Cross Recertifications: Lifeguards were able to take a recertification course in August if their certifications were set to expire before next summer. This was provided by an LGI certified by the Red Cross. Aquatic Center Maintenance and Improvements The 2025 Aquatic Center season commenced with early March meetings involving our IT department to discuss the expansion of our network into the pool house. This initiative aims to bring our complete mechanical system online, allowing for more frequent monitoring to enhance operations and water quality. The online system became operational in late July. In early April, we engaged Horizon Commercial Pools and Aqualogic to inspect and provide estimates for essential repairs identified during a fall 2024 inspection conducted by Minnesota Leak Detection. The following issues were addressed: • A significant foundation crack located in the southwest corner of the lap pool • A large section of the wall in the lap pool that was delaminating from the foundation • Five deteriorating and leaking expansion joints in the Lazy River pool • Replacement of 200 linear feet of delaminating tile along the waterline Additionally, city staff removed two umbrellas due to structural failure and canopy material degradation caused by sun exposure and wind. There have been discussions about replacing them with a more durable structure. Aquatic Center Operations The Aquatic Center was open from June 9th to August 18, with morning lap swim extending to August 29. Total Entries into Facility Summer 2025: 30,808 community members served! Typical Daily Schedule • Lap Swim & Fitness: 5:30-9 am • Swim Team & Lessons: 9:15-11:15 am • Open Public Swim: 12:30-7 pm • Lap Swim & Fitness: 7:30-9 pm Daily Admissions Sales Report: Summer 2025 Type of Pass Quantity Sold 97 $4 Spectator 870 $5 after 5pm 1424 $6 Group Rate (12 or more) 794 $8 Standard Admission 14,235 Special Events and Pool Rentals: • Private Rentals: 20 • Free Family Swim Nights: 6 (Sponsored by Hutchinson Health and Common Cup) • Total Attendance at Free Swim Nights: 2,113 Aquatic Center Memberships Sold - 2025 300 278 250 200 150 100 100 95 a 100 12 70 II��I InI 50 0 n L_J I_ I 0 n 0 4~ 43 4� 4 y 4b 4A 4� ok �� o p o" 0' "' 1b"' of f aft "' 0 It' as o �� c PASS TYPE Facility and Procedural Updates: Several operational changes were implemented: • Head Guard at Facility During Every Shift: A head lifeguard was at the Aquatic Center from 5 a.m. to 9:30 p.m. every day. This ensured that management was always available to staff should the need for assistance arise. • Group Orientation: Visiting groups were required to meet with a head guard before entering, discuss facility rules, and receive wristbands for identifying zip line and slide eligibility. Updated Signage: Signage was redesigned for consistency and clarity. Swim Lesson Program Updates: • Curriculum Shift: Mid -Minnesota Aquatics Swim Lessons continue to please both staff and the public. This curriculum allows for smaller class sizes, more instructor interaction, faster progression, and greater flexibility in instructor hiring. • Staggered Registration: Allowing a staggered registration for swim lessons is still well -liked by both staff and the public. Registration for Sessions A & 6 opened in April, while registrations for Sessions C & D opened in June, allowing families to more accurately register for lessons and provide additional opportunities for registration. 2025 Swim Lesson Participation Session Date # of Participants A June 3-13 170 B June 17-27 163 C July 8-18 98 D July 22-Aug. 1 73 Total 581 Swim Lesson Registrations by Level - 2025 Swim 6 ■ 3 Swim 5 � 28 v Swim 4 65 Swim 3 88 o Swim 2 100 0 J Swim 1 97 E Advanced Preschool 30 NBeginner Preschool 33 Toddler Time 35 Baby Bobbers � 25 0 20 40 60 80 100 120 Number of Participants *77 private lessons offered June August 2025 Concessions Improvements: Menu Simplification: Our new menu, designed last season, worked well. PRCE surpassed overall sales from last season, while lessening staff frustrations and the lengthy product ordering process for our staff. • Enhanced Training: Staff received coaching on time management techniques and speed of service. • Higher Quality Food: Invested in better food products and preparation equipment. 2025 Concession Sales • Total Items Sold: 24,580 • Total Sales: $75,682.00 • • Concessions: Top Selling Items 2025 Ice Cream: Sundae 2,013 � Slushie 2,103 o Ice Cream: Cake Cone 891 .N Ice Cream: Waffle Cone 2,392 c U Pizza Slice U 1,733 Pretzel w/ Cheese 3,201 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Number Sold Hutchinson Recreation Center Overview: The Recreation Center continues to promote healthy lifestyles and community engagement through various programs and community partnerships: Programs Offered: • Open Pickleball • Walking • Indoor Playground • Open Soccer • Open Gym • Adult Leagues • Youth Programming Private Rentals & Community Groups: • Birthday parties, tournaments, and special events • Middle school sports and youth athletic associations Pickleball continues to be one of our most popular programs, boasting 2,858 participants in the 2025 season. To enhance accessibility within the community, a season pass has been introduced to help reduce costs for players. Furthermore, recent investments in equipment — including top -tier nets at Park Elementary, a paddle rotation cart, balls, and a dedicated ball cart —have significantly improved the overall player experience, reflecting our commitment to quality and engagement. The indoor playground program remains highly successful, primarily due to a generous grant from the Hutchinson Health Foundation in 2024. This funding facilitated the acquisition of new play equipment aimed at enriching the experience for children and families alike. Among these enhancements are the 'Big Blue Blocks,' which foster social interaction, aid in soft skills development, and promote gross motor skills. Additionally, we have replaced broken and outdated equipment with commercial -grade riding toys, ensuring a safer and more engaging play environment. Beyond our internal programs, the Rec Center Gymnasium plays an active role in supporting the community by hosting a variety of groups, including middle school sports teams and youth 100 athletic associations. Throughout the school year, the facility serves as the home for numerous middle school sports —such as girls volleyball, girls basketball, boys basketball, and softball — accommodating daily practices and a multitude of games. Youth associations also extensively utilize the gymnasium, scheduling practices and tournaments throughout the year. Hutchinson Recreation Center/Hutchinson Aquatic Center 2025 Accomplishments • Hired a full-time Aquatics/Recreation Programmer who is certified in LGI (Lifeguard Instructor— Red Cross) and AFO (Aquatics Facility Operator). Lyndsey can offer Lifeguard courses year-round and help monitor pool chemistry. • Head Guards given more control of scheduling and more responsibility in leadership roles • Offered one extra week of private swimming lessons from August 7-11 • Extended morning lap swim by two weeks to continue service through August • Expanded scheduled opportunities for public gym access • Implemented new aquatic center policies for improved safety • Continued to a new swimming lesson curriculum • Continued new swimming lesson registration process • Implementation of online scheduling software for all positions and seasonal team members Aquatic Center Maintenance and Improvements Goals for 2026 • Substitute gas chlorine with a safer and more user-friendly liquid chlorine option • Replace umbrella structures with appropriate sunshade solutions • Complete repairs to the pool in collaboration with Horizon Pools • Arrange for contractors to inspect the waterslides and potentially carry out repairs • Finalize the inspection and repairs of the mechanical room, including pool heaters and VFDs • Complete the online adaptation for the new equipment to be added Hutchinson Recreation Center/Hutchinson Aquatic Center 2026 Goals • Explore options for school -year swim lessons • Revamp private pool party rental process for better scheduling and consistency • Continue developing head guard roles to encourage leadership and accountability • Further improve efficiency in concessions 101 • Crosstrain staff to enhance teamwork and flexibility • Enhance data tracking for employee scheduling, group visits, and facility attendance M Hutchinson Health 14 HUTOHMSON R.an�N M Hmhi—Huhh fouada Recreational Programming Staff Responsible: Christina Burmeister, Recreation Manager Lyndsey Hodson, Recreation & Aquatics Programmer PRCE offers a variety of programs for all age groups while also working with and supporting community organizations to meet the needs of the community. Youth Programs PRCE is a primary provider of programming for elementary -aged children, promoting physical activity and exploration in a low -stress, low -commitment, and cost -friendly atmosphere. Many of the PRCE programs have been a part of the community for years, including basketball, flag and tackle football, soccer, baseball, and more. In 2025, PRCE focused on minor adjustments based on feedback and observations rather than drastic changes to improve program opportunities and participant experience. One adjustment included modifying the length and time for certain programs. • T-ball: The program length was slightly reduced to better align with participants' attention spans, aiming to maintain engagement and ensure a positive experience. • Flag Football: Multiple age groups were previously scheduled in 1.5-hour blocks with a 30-minute overlap between groups, causing congestion and parking issues. Adjustments 102 reduced congestion and improved safety while aligning program length with age -group attention spans. In addition to youth league -style programming, PRCE oversees lesson -based opportunities such as tennis and skate lessons and manages the youth fastpitch program, coordinating teams from 8U through high school. Youth Program Participation - 2025 250 201 200 162 0 144 156 150 114 121 bb 100 81 � 50 '30 0 <'c' `cep ell ell tea\\ 00 Warming Houses: Winter 2025 o North Park (Park Elementary) Ice Arena • January Total Attendance — 616 attendants ■ February Total Attendance — 173 attendants o Kiwanis Sledding Hill (Rocket Hill) • January Total Attendance -0 attendants ■ February Total Attendance -0 attendants ■ Hill Closed most of the Winter due to lack of snow! Winter 2026 o North Park (Park Elementary) Ice Arena ■ Opened January 201h — Closed February 81h • December Total Attendance — 0 attendants (warm weather delayed freezing the arena). • January Total Attendance — 106 attendants • February Total Attendance — 151 attendants o Kiwanis Sledding Hill (Rocket Hill) • Opened December 151h-Closed February 141h • December Total Attendance — 514 attendants • January Total Attendance — 689 attendants • February Total Attendance — 244 attendants 103 Tournaments: Local organizations utilize PRCE facilities to host tournaments such as baseball, basketball and volleyball. PRCE not only hosts tournaments but also plans and runs multiple in-house and league tournaments. • 45th Annual Hutchinson Fastpitch Tournament 10U & 12U - June 14 • 45th Annual Hutchinson Fastpitch Tournament 14U & High School - June 21 • Crow River Baseball League Tournament 12A - July 19 & 20 • Crow River Softball League Tournament 12U - August 2 & 3 Fastpitch Participation - 2025 30 28 28 24 25 20 o 20 16 Z 15 EA 10 a: 5 0 8u 10u 12u 14u HS Age Group Skate School Participation - 2025 25 21 20 20 17 18 c M0 15 - m a 10 8 v a: 5 4 0 1 1 1 , Tots Alpha Beta Delta Gamma Pre -Alpha Skate Program Adult Leagues PRCE provides recreational opportunities for all age groups. In 2025, offerings included men's and co-rec summer softball leagues, sand volleyball leagues, and fall and winter volleyball leagues. 104 PRCE ended up with a waitlist for the adult women's volleyball league due to increased interest in the program. We will continue to look for solutions for a.) more space, or b.) scheduling changes to allow all teams the ability to participate in the program in the future. Adult Sport Leagues: Number of Teams - 2025 18 12 16 12 8 E 14 12 uf°i 12 p 10 11 9 8 - � 6 E - - - = 4 2 0 - — Sand Fall Fall Winter Winter Softball - Volleyball - Volleyball - Volleyball - Volleyball - Volleyball - Men's Co-Rec Co-Rec Women's Co-Rec Women's League 13 Softball - Co-Rec Partnerships PRCE plays a vital role in supporting community organizations by assisting with registrations, co -managing programs, providing, maintaining, and scheduling fields and facilities. Facility & Field Scheduling Scheduling fields and facilities is a key PRCE responsibility. Due to high demand and accessibility, field scheduling is complex and time -intensive. • PRCE establishes which fields are best suited for different activities and age groups. • Internal programs are scheduled first, followed by coordination with user groups such as VFW Baseball, Hutchinson Junior League Baseball, and Crow River Athletics. • Baseball and softball games are scheduled through Crow River Athletics, and individual coaches schedule practices through PRCE. • The master field schedule is updated accordingly, aiding the Parks Department in maintenance and setup. Efficient scheduling reduces conflicts, enhances user experience, and ensures effective maintenance. 105 *Example of the June field maintenance schedule oil Alm - BE 2025 Recreational Programming Accomplishments • Adjusted programs to better align formats with participant age groups • Developed partnership contracts & agreements • Overhauled the sponsorship program • Improved communication and processes with maintenance team members 2026 Recreational Programming Goals • Provide paid coaching positions for youth sports — better quality instruction • Use our partnership with the school district to provide more space for growing activities • Provide one "Point of Contact" person for each activity; Avoid confusion from the public • Renew facility and field sponsorship agreements • Improve data tracking • Continue to develop and implement policies & procedures to improve services • Continuing efforts to improve concession stand operations • Implement an equipment replacement program Hutchinson Event Center/ Hutchinson Senior Center Staff Responsible: Jennifer Behrendt, Senior Center/ Event Center Programmer The Hutchinson Event Center continues to operate in a modified fashion, meaning all rentals are to be held A Monday -Friday between the hours of: 9:00 am- 3:00 pm. Throughout 2025, there were 125 requests to use the rental space. The Event Center was a host location for 57 events this past year, including 26 business events, 30 city events, and 106 1 private rental. Even with a limited number of rentals, the Event Center had roughly 9,985 people through the doors. River of Hope continues to lease space from the City of Hutchinson for its worship services. Church meets at the Event Center every Sunday and many times throughout the week for various activities such as confirmation, bible studies, meetings, etc. Event/Senior Center operations continue to be challenging. The facility was without heat for multiple weeks. The existing HVAC units are old and outdated, contributing to ongoing heating failures and service calls. Additionally, the fire alarm panel is outdated and frequently goes into alarm, causing repeated false alarms. Pipes in the kitchen froze up on three different occasions. Thankfully, pipes were able to thaw, and no damage was done. The building's aging roof began leaking during the July rainfall. As a result, several ceiling tiles collapsed inside the River of Hope worship space. Contractors were brought in to assess and repair the roof, during which six holes were identified and sealed to prevent further water leaks. The Senior Center remains a welcoming gathering place for area seniors. The center did see an increase in attendance in 2025; around 14,595 seniors were through the door compared to 13,498 in 2024. The Knot Just Knitters group hosts a knitting project every year to give back to the community. Over 200 handmade/knitted scarves, hats, and mittens were donated. All items were then distributed to the McLeod County Food Shelf and Common Cup to give to those in need. Sr. Programmer, along with a fellow senior, held 7 "make and take" projects. Combined, 38 individuals attended these activities. These classes brought in new seniors who do not frequent the Center otherwise. Several speakers were brought in to present on various topics. Presentations included fall prevention, Lutheran Social Services, advanced care health planning, home care, Dementia Friends, Medicare, wolves, fireflies, and Discovering Spain & Madrid. The firefly presentation had the largest attendance with 31, followed by the wolves with 17 attending. Classes were very informative, and seniors seemed to enjoy them when these resources are available to them. Roughly 118 patrons attended these classes combined. The center offered one new activity in 2025: Mahjong. This group remains strong and has a core group that attends weekly. The River Walking/Lazy River, held at the Aquatic Center, was advertised in the monthly Senior Newsletter; only 6 seniors took advantage. The center handed out a one -day free pool pass for has a solid group that shows up 2 107 times a week. This is a unique group as it is not only seniors who participate. It is one of the few intergenerational activities. Our kayaking group remains strong with participation numbers. Depending on weather conditions, they met in May -September 2-3 times a month. There were 153 patrons who attended these outings combined. The Senior Center Programmer and tour coordinator volunteer, Julie Jensen, attended two Tour Expos in 2025; locations included Plymouth and Bloomington. The expos are held two times a year and are very resourceful in finding new ideas for our tour program. Our tour program is well -received, and most tours sell out at a max of 45 participants. The tour program generated $2,447.27 in 2025. October 2025 marked an incredible milestone. Julie has dedicated the last 25 years to planning our senior trips. Her passion shines through every itinerary she creates. Her tireless efforts have provided many opportunities for people to connect and explore. A "Thank you" party was held to show our appreciation; 70+ people attended. The Card Making Club meets every Tuesday at 9:15 am. They recycle old, donated greeting cards into new ones and sell them for $0.60 each. This is a fundraiser for the Senior Center. In 2025, they brought in $727.20 (1,212 cards). The Center held its 5th Annual Book & Puzzle Sale on August 25 & 26. This is a fundraiser that was started 5 years ago and continues to be very successful. All books and puzzles are donated. It takes roughly one week to set up for the two-day sale; this includes taping all puzzle boxes shut, pricing, and organizing all items. All books are $0.25, and puzzles range from $0.25- $1.00. In 2025, the Book & Puzzle sale brought in $1,624.00 for the Senior Center. 2025 Hutchinson Event Center/ Senior Center Accomplishments • The Event Center was a host location for 57 events, including 26 business and 30 city events, and 1 private event; 4 events were canceled. • Roughly 9,984 people went through the Event Center for rentals. • The Senior Center had roughly 14,595 participants in 2025. This is up from last year, with 13,498 participants. • The Senior Center donated 22 books to the Hutchinson Library. They will use these for book club kits. 108 • The knitting project was completed. The project brought in over 100 items that were donated to the McLeod County Food Shelf and Common Cup. • One new activity was established, Mahjong. This has a solid group that shows up weekly. • Held 7 different "make & take" classes; 33 people participated in these classes. • 9 speakers were in to hold informational classes for seniors. Talks included fall prevention, Lutheran Social Services, advanced care health planning, home care, Dementia Friends, Medicare, wolves, fireflies, and Discovering Spain & Madrid. • The Senior Center held its fifth annual Book and Puzzle Sale in August. The sale profited $1,624.00. • The Senior Center raised $727.20 in card sales (1,212 cards), $156.50 in hand-knit items, and $84.79 in miscellaneous donations. Senior Activity Participation for 2025 14,595 1,294216 28 945 136 55 276 154 202 117 318 153 256 677 117 2-9- ,439 44913781332565632 2;'6,333 665 5751913 h00 j`.1010a4P 01p `J�p t`aaOa aety �a�e to�Q oA" ``c�c .101 ``c�c 101 >o01 o,`a \a�a5 Qo9�6 �`ocy t``ye reab, ell ``� OJty woe icy �Qy p ac 8 0� 0 �� 0 `ye e a� �c ar Q Q, .c wa +e eQ L�• QS� 0e �o ata �' ae� eta `ac .c Jyw J Q`c Q eyes qre aP ayt. �Q Senoirs per Month in 2025 14,595 1122 1018 1,216 1,345 1,257 1,216 1,306 1,311 1333 1,512 944 1,015 lil � Vr cJa� cJa� atr PQ�\ �aJ >Jce >J>J � � O 2026 Hutchinson Event Center/Senior Center Goals • Accommodate as many Event Center rentals as possible with limited staffing • Continue to offer more "active" Senior Programming 109 • Continue to look at establishing new activities, as space allows • Recruit more educational speakers for seniors • Continue to keep Seniors updated on the future of the Senior Center via the Senior Newsletter • Hold Annual Book and Puzzle Sale Fundraiser • Continue to work with PRCE Director on the future of the Event Center and Senior Center • Attend MASS conferences for ideas and connections Type of Event Number of Events Business Events 26 City Events 30 Private 1 TOTAL Event Rentals 57 Total Number of Rental Requests 1 125 Senior Programming: More Than Just the Numbers Being a senior center programmer is about so much more than planning activities or filling a calendar. It's about showing up —especially when no one else does. It's being there for seniors who may feel invisible, forgotten, or alone. It's knowing that sometimes the most important "program" you offer isn't a class, a game, or an event, but your time and your presence. A senior center programmer is a listener before anything else. You notice when someone lingers after an activity, not quite ready to go home. You sit with them 110 . You listen to their stories, their worries, their grief, and their joys. You become a familiar face they trust, a steady voice in a world that can feel like it's moving too fast without them. You are a shoulder to cry on during moments of loss, illness, or change. You celebrate milestones that might otherwise go unmarked. You create a space where seniors feel seen, valued, and understood —not for what they used to do, but for who they are right now. The activities matter, yes. But what matters more is the care behind them. Being a senior center programmer means building community, offering dignity, and reminding every person who walks through the door that they are not alone. Helping a 95-year-old man learn to use a smartphone isn't really about the phone. It's about patience —sitting beside him as he learns how to tap a screen that feels unfamiliar, celebrating small victories like sending his first text or seeing a loved one's face on a video call. It's about respecting a lifetime of experience while gently guiding him through a world that has changed faster than anyone expected. And then there are the moments that have nothing to do with technology. It's being there when a spouse, child, or friend dies, and the silence feels too heavy to bear. When words are hard to find, and all you can offer is your presence. It's listening to stories of love, of decades shared, of loss that reshapes everything. Sometimes you don't fix anything, you just stay. It's being there for diagnoses that change how someone sees their future. Sitting quietly as fear, confusion, or sadness settles in. Answering questions when you can and holding space when you can't. Offering reassurance, not false hope, but kindness and steadiness. In these moments, help looks simple but means everything. A chair pulled close. A patient explanation. A handheld a little longer. These are the things that remind people — even at 95—that they are not alone, that they still matter, and that someone is willing to walk beside them through whatever comes next. Hutchinson Public Schools ISD 423 Community Education Staff Responsible: Amy Scheele, Community Education Program Coordinator (hired July 2024) Data for the 2024 2025 Fiscal Year ISD 423 Community Education Accomplishments and Highlights: • That's Community Ed! • Winter -Spring 2025: Season length - January, February, March, April, and May. Community Education offered 92 activities, 20 new, with a total of 3,010 participants (up from 2,218 the prior year). Total includes attendance at open swim and lap swim. III Summer 2024: Season length - June, July, and August. Community Education offered 86 camps and classes, 17 new, with a total of 1,637 participants (up from 1,218 the prior year). Fall 2024: Season length — September, October, November, and December. Community Education offered 59 activities, 2 new, with a total of 1,151 participants. Total includes lap swim Summary: The numbers for FY2025: 237 Activities and camps offered with 5,798 participants (FY24=201 Activities and camps offered with 4,708 participants) Hutchinson Community Education provides lifelong learning experiences for people of all ages, abilities, and cultures through programs and services. Classes are creatively designed and generated from interests and trends. Instructors and coaches offer activities in which they have -t knowledge, experience, or a skill creating a positive impact in our community with an opportunity to grow as individuals. Community Education is located in the Recreation Center and activities are held at Hutchinson Public Schools, Recreation Center, park shelters, and local businesses. Participation in activities is climbing! People are registering upon receiving the new brochures, but we still see some registrations closer to the start date of an activity. Communication with instructors continues to flow back and forth to assist in making decisions regarding holding or canceling their activity, requesting additional social media advertisements, and in some cases, direct email to past participants. Online activities are less popular with participants. Instructors like offering online classes because they can host multiple schools with combined registrations. In -person activities are still a favorite for providing wonderful, hands-on opportunities. Monthly newsletters are emailed to all families in the school district through Campus Messenger, posted on several Facebook sites, posted on the ISD423.org/Community Ed page, in the school staff Tiger Tidbits, and on the bulletin board in the rec center. We are searching for new CE instructors through Facebook posts, Tiger Tidbits newsletter for school employees, and wanted posters. I've found many instructors by striking up conversations with people and their interests. 112 400 350 300 250 � zoo 150 100 50 Classes/Camps 2024 Et 2025 Comparison Community Education Classes & Camps: New Program Growth 2024 +7560% 2025 383 +550% 65 10 5 'W aw-poo W.ter tww Can'muniry Education Classes & camps Overall Growth 2024 2025 2500 1500 1000 500 urr"`�� �tneo�°t5°ns Several pairs of snowshoes were purchased for rentals and a snowshoe class. We cancelled the Snowshoe Exploration class in 2025 due to lack of snow. Offered again in 2026. Community Education is required to submit an annual report to the Minnesota Department of Education (MDE) from school districts having community education levy. Report period is July 1 to June 30. This report is available to view at the Community Education office. PRCE continued using CivicRec for registrations. The program is fairly user-friendly. We are working on categories for the activities to clean up the system. There are a lot of random activities that make finding items more difficult as more are created. This is a work in process. School Facility Rentals and Usage HUTCHINSON PUBLIC SCHOOLS Community Education coordinates all rentals and facility use for Hutchinson Public Schools. What began as a = simple, handwritten process has evolved into a detailed - online system. Over the years, school renovations and expansions such as renumbered or removed classrooms, the construction of a new school, and changes to outdoor fields and parking lots —have required continual updates within rSchool Today. These updates ensure accurate layouts, room availability, and location details for each building. rSchool Today, recently acquired by Arbiter, also requires ongoing calendar maintenance. This includes entering school -approved academic dates such as the first and last day of school, non- 113 school days, workshop and conference days, holidays, and scheduled late start or early release days. Each date is designated as reservable or non -reservable to help staff and customers easily understand building availability when creating reservations for the 3uly 1-3une 30 school year. Staff are asked to enter their facility reservations for the upcoming school year by June 30. Public rentals typically open around 3uly 15 each year. The Activities Department proposed transitioning to Bound, as the Wright County Conference has moved from Arbiter to Bound. This change is being considered to avoid maintaining two separate facility scheduling systems. In the past, associations holding weekend practices were required to pay for a custodian to be on site, which often resulted in concerns about custodial costs. This year, we introduced a Facility Use Agreement and Waiver that allows eligible associations to avoid this expense. Associations may participate if they have district employees within their group who are willing to complete building supervisor training and are available to supervise weekend practices. This process has been working well. The Facility Use Agreement and Waiver applies only to associations connected to school - sponsored activities and to practices where only participants are present. It does not apply to events open to the public or to private rentals, such as dance studios. The chart below shows the number of rooms within each building: BUILDING/LOCATION # ROOM WITHIN 1 High School 81 2 Middle School 59 3 Park Elementary 30 4 West Elementary 31 5 Tiger Elementary 66 6 Parking Lot 8 7 Field - Outdoor School Campus 23 8 Field - Northwoods 2 9 Field - Roberts Park 4 10 Field - Veteran's Memorial 1 1 1 Recreation Center 5 TOTAL 310 Facility Use by Building Building Groups Permits Est. # of Participants High School 25 376 96,513 Middle School 26 147 37,745 Park Elementary 18 63 55,309 Tiger Elementary 14 77 29,145 West Elementary 7 44 48,381 Fields -Outdoor Campus 12 79 6,200 Parking Lot 4 4 50 TOTALS 106 790 273,343 114 Breakdown of reservation permits: ISD 423 staff (24) submitted 532 permits, Community Education submitted 79 permits, Rental Customers (27) submitted 149 permits, and Personnel Charges Only customers (3) submitted 12 permits. In summary, Hutchinson Public Schools' primary use is for school -related items. Upcoming Facility Happenings Submitted by Justin TenEyck The School District, in partnership with PRCE, continues to make strategic investments in athletic fields that support �- - MIA students, athletes, and the greater community. In the fall of 2025, irrigation systems were installed on the last soccer _ field, as well as all football and lacrosse practice fields. This-�~ important improvement promotes healthier turf, more consistent playing conditions, and an enhanced experience for all users. Looking ahead to the spring and summer of 2026, the School District and PRCE will build on this momentum through planned overseeding and proactive field maintenance. These efforts will improve turf quality, extend the life of the fields, and ensure safe, high -quality surfaces for practices, games, and community use. As part of a shared three-year maintenance plan, the School District and PRCE are in the third year of collaboratively managing maintenance, budgets, and long-term field care. This forward -looking approach reflects a strong commitment to sustainability, responsible stewardship, and providing top-quality athletic and recreational spaces for the community now and into the future. No big projects. We are doing some mechanical upgrades to the pool, Spring 2026. Middle School Activities (CE Fund Since 2003) Submitted by William Tschida Middle School Activities opportunities are offered to students in grades 6, 7, and 8. They are under the Community Education funding umbrella and managed by the Activities Director at Hutchinson High School. Middle School Participation Numbers: • Fall 2024 season: Seven activities were offered with 167 participants. • Winter 2025: Four activities were offered with 71 participants. • Spring 2025: Seven activities offered with 182 participants. • All Season Activities: Two activities with 50 participants • Five fall activities were run as a 9-12 program. 6t" Grade Participation Numbers: Fall 2024 season: Four activities were offered with 31 participants. 115 Hutchinson Adult Basic Education Submitted by Shari Brunes Hutchinson Adult Education is located at Ridgewater College in room 445. Our mission is to provide adults age 17+ with educational opportunities to acquire and improve literacy skills. Licensed teachers are in the room to meet the needs of learners four days a week. Our schedule includes both daytime and evening hours and provides a total of 25 in -person instructional hours weekly for students. Additional hours are available for students who want to work remotely. Programming is offered twelve months a year. The Hutchinson Adult Education site is co -located with Ridgewater College and the CareerForce Center. Because of this, we have been able to develop programs to assist learners with academic skills, employment preparation, obtaining certifications, and college readiness goals. We continue to build relationships with groups in the community, including the public library, employers, and community organizations. Adult Education is a valuable component of Hutchinson's Community Education program, meeting the needs of many individuals from the surrounding area by making them better family members, employees, and citizens. Adult Basic Education 2024-2025 For the 2024-2025 state academic year (May 1, 2024, to April 30, 2025), 191 students attended for a total of 4,270 contact hours. Students who attend 12 or more hours are considered participants. Hutchinson Adult Education had 79 participants for the year. The average student attended for 22.5 hours. The big news this year is that we moved! Ridgewater College and Central Minnesota Jobs and Training Services invited us to relocate to room 445. The college remodeled the new space to better meet our needs, and we are excited to be closer to our CareerForce partners. We launched in the new space on Monday, January 12, 2026. Working with our Regional Transitions Coordinator, we have designed and delivered online career pathway courses with other Adult Education programs in Southwest Minnesota. We have received Transitions grant funding to offer courses in Paraprofessional Training, Child Development, Professional Leadership, English for Driving, and Digital Literacy Skills. We d also continued to offer online GED courses in the evenings. Statewide courses in Commercial Driver's License Prep, Engage, Equip, Empower Paraprofessional Prep, Personal Care Assistant, and Microsoft Office Certifications were also available. These courses are Glacial Lakes Consortium offered at no cost to qualified adults throughout Minnesota. Locally, Glacial Lakes Adult Education worked with Weaving Cultures to offer a Community Interpreter training course and certification testing for students in the spring of 2025. Fourteen students completed this course, and 100% passed their testing for certification. We plan to offer this course again in 2025-2026. 116 Regional Online English Language classes are offered three evenings per week. There are 5 different levels to meet the needs of all English language learners. These classes are very popular and are often full. Students continue to take and pass GED tests. 21 Hutchinson Adult Education students earned a GED Diploma this year. The state of Minnesota has legislative appropriation this year that provides one free test in each subject area. Our local Adult Education Student Support Fund, in partnership with the Ridgewater College Foundation, is being used to provide free GED Ready practice tests. We worked closely with Ridgewater College to hire and train a GED Test Administrator. Nikki Mallak served in this position for one year. The college is committed to hiring someone new for this position and we hope to have this accomplished in the coming months. ABE Staffing Shari Brunes manages the Hutchinson Adult Education program. Ann Trochlil serves as the Glacial Lakes Adult Education Consortium Program Manager. Current staff: Joyce Evenski, Mary Horrocks, Barb Haugen, Jean Abrahamson, Laura Cullip, and Lee Nelson. Most professional development opportunities for staff continue to be offered remotely. Staff attended Summer Institute, Spring and Fall Regional training courses, the Language & Literacy Conference, and many webinars. ABE Data Summary Information Hutchinson Adult Basic Education 2024-2025 Information Notes Total Enrollees 191 214 in 2023-2024 Total Hours 4,270 This is a 2% decrease from the previous year Students who attend 12+ hours Total Participants 79 are considered participants. 87 in 2023-2024 Total GED Earners 21 27 GED earners in 2023-2024 117 Hutchinson Adult Education Program Summary 5/1/2024-4/30/2025 Education Level M Gr 1-5 ,-A Gr 6-8 = Gr 9-12 (No Dipi) = Post Sec or prof Degree J Set Sch Dip or Alt Cred Secondary School Equivalet n(GED/HiSET) J Some Post Sec No degree Race/Ethnicity _Asian 61 adc or African American = Hispanic =Two or MoreRaces J White 118 01 Age Group 16-18 J 19-24 25-44 45-54 _j 55-59 60+ r ,I Gender = Female Male Nonbinary Early Childhood Family Education Submitted by Mary Myers Reinarts Data for January -December 2025 Early Childhood Family Education (ECFE) offers a variety of class options for families with young children. We run during the Hutchinson Public School District's academic school year and also offer a short summer session. Sibling care is available for most classes upon request. A sliding fee scale and scholarships support and encourage families of all income levels to participate in our classes. NO family is ever turned away due to inability to pay. EARLY CHILDHOOD FAMILY EDUCATION ECFE classes include separating and non -separating classes, parent -only classes, family events, and special one-time classes. Offerings this year included parent -child classes that ran for 8 to 16 weeks per session, special one-time events, and an ongoing Open Play class. With the aid of a grant through the Southwest Initiative Foundation, in Spring 2025 we were able to offer the second part of a multilingual class for families with children ages three years through grade three. In June 2025, we offered a free ECFE in the Park opportunity outdoors on three Wednesday mornings. With the aid of a grant through the Hutchinson Health Foundation, in the fall of 2025, we offered a free Parental Wellness & Balance class for parents and children aged two years and up. ECFE recognizes and supports parents/guardians as a child's first and most significant teacher. Our mission is to strengthen each family unit through education and support while providing the best possible environment for the healthy growth and development of their child. Our 2025 offerings included classes for specific age levels, such as Busy Babies, Wonderful Ones, Terrific Twos, and Playful Preschoolers, as well as classes for mixed age groups such as Ones & Twos, Family Times, Lunch Bunch, and Open Play. Our Busy Babies classes had consistent attendance, with both morning and afternoon sessions running. Class registration is left open throughout the session to accommodate families as babies are born. For outreach, we welcome families by mailing parents a postcard offering a free baby class and a baby bag that includes a "Future Tiger" t-shirt, a hardcover children's board book, and assorted pamphlets/gifts from community agencies. Parents are invited to attend a free class with their new baby and to pick up a free baby bag from the Early Learning office. All baby classes are offered free of charge. Our ECFE sliding fee scale keeps classes at a reasonable cost for all s Alk, families. We offer three payment tiers: full, half, and free. Families continue to appreciate the ability to choose their rate at the time of registration, even if they choose the $0 rate, and have been very responsive and respectful of this process. All classes offered in 2025 had enough participants to run the class. There was a particularly high demand for classes for two -year -olds. 119 For special events, in January 2025, ECFE offered Jammin' in Your Jammies. Families enjoyed a pizza supper and a dance parry with a live deejay. In April 2025, we held a successful Week of the Young Child celebration called Work Together Wednesday. Families built structures using large boxes, created and navigated an obstacle course, and then made art projects and shared a snack in the cafeteria. The event was free with a free-will donation option. We also held two specialty "My Grandparent or Special Friend and Me" classes in the fall of 2025. Tree Time and Woodland Animals were both offered as late afternoon sessions, and both were full. Feedback indicated that families would like more of these classes in the future. 2025 was a very successful year for Hutchinson ECFE. Along with classes, we have a robust Parent Advisory Committee that meets on the first Tuesday evening of each month. Input from the members has been very helpful in enhancing programming, and the members are committed volunteers at our special events and with fundraising ventures. u 2025-2026 Community Education Goals Submitted by Amy Scheele • Manage, organize, and develop activities throughout the year for multiple age levels, current trends, and interests to better serve customers and anticipate needs • Network and collaborate with people in businesses or as an individual for community education programming • Organize at least one new activity per brochure targeting community needs • Attend Minnesota Community Education Association (MCEA) Conferences, Leadership Days, training, and classes correlating to Community Education operations • Continue to participate in networking platforms with MCEA groups, sharing programming ideas, information, tips, and facility -use information • Continue ongoing communication with instructors from the idea stage to the actual date of their activity and final payout • Organize and maintain rSchool Today, Hutchinson Public Schools online reservation system • Offer Free Open Swim — applied and received a grant from Hutchinson Health to offer Open Swim free Winter 2026. Grant received for all dates. • Add classes to the Chamber of Commerce's Event Calendar • Create a Google Form for instructors' class proposals • Set up GroupMe or Team Reach app for lap swim communications for late start and closures 120 Open Swim 2023 January 132 February 118 March 121 Open Swim 2024 January 436 February 209 March 238 371 8,33 2025-2026 Adult Basic Education Goals Open SWim 2025 January 294 February 213 March 263 AP-11 305 1075 Submitted by Shari Brunes • Provide a safe, inclusive learning environment that actively engages and supports the diverse needs of all learners • Reach out to learners in the community in need of Adult Education services; ongoing • Pretest and post-test students to successfully meet national targets of 36.8% achieving a measurable skill gain • Collaborate with Southwest Minnesota ABE programs to offer online GED courses (ongoing) • Develop grants with partners to assist students as they explore career pathways; ongoing • Provide distance learning (online) opportunities using state approved platforms; ongoing • Work with Ridgewater to hire and train a new GED Test Center Coordinator • Offer a designated space for learners to take official GED tests via online proctoring • Offer a local, online course and certification testing for Community Interpreter • Redesign our Google site at www.hutchadulted.com • Offer digital literacy classes for CareerForce clients to empower them in their job search and increase employability; ongoing • Collaborate with Ridgewater and CMJTS to offer career pathway training and certifications 2025-2026 Early Childhood Family Education Goals Submitted by Mary Myers Reinarts • Maintain ongoing high quality in our ECFE programming • Continue registration collaboration with PRCE to streamline the process for our families • Continue to keep ECFE offerings affordable • Continue ongoing assessments of our programming • Continue to evaluate and update parent and child class curriculum • Continue to evaluate current class trends through participant surveys and discussions within our collaborative groups and adjust class offerings as needed • Build participation in baby classes 121 Planning/Building/Zoning Department Primary Services Under the direction of the Planning Director, this department provides long-range planning services and reviews land use plans for consistency with the city plans. It also regulates properties to ensure general health, safety, and welfare standards for the community. In addition, it offers services that provide minimum standards to safeguard life or limb, health, property, and public welfare by regulating and controlling the design, construction, quality of materials, use and occupancy, location and maintenance of all buildings within this jurisdiction. Overall Functions include: • Comprehensive Planning ■ Redevelopment Planning ■ Zoning and Subdivision Administration • Administration of State Building Code ■ Building Permit Issuance and Reporting • Plan Review ■ Commercial and Residential Building Inspections • Zoning and Property Maintenance Enforcement • Coordination of City Rental Inspection Program • Education 2025 Accomplishments • Permitted over $37,800,000 worth of construction projects • Approved plats that included over 35 new residential lots. • Worked with several developers on getting new residential developments started. • Elk Ridge Estates was platted — first large scale residential development in Hutchinson in about 20- years. • The Landing Apartment project was approved and construction began. 81-unit apartment project downtown. 2025 Planning/Zoning/Building Department Overview • Local construction activity rebounded somewhat as compared to 2024. • Hopeful that interest rates, inflation, and worker shortages will not impact growth of Hutchinson long term. • Expected Projects o North Maple Apartments o Hospital Emergency Room Renovation o The Farmhouse Memory Care Project o Continued Residential Development 122 PLANNING Primary Services Overview — Planning and Zoning Department staff provide a variety of customer services, coordination, and review services, including processing and reviewing of land use applications. The Department provides long-range planning services and reviews land use plans for consistency with city plans. Demographic information, as well as projections about population growth are monitored and planned for by this department. The Department also drafts policies and revises ordinances to implement the goals of the City regarding growth management and development practices. The Department works closely with the Engineering, Housing and Redevelopment, and Economic Development Departments. Zoning is the regulation of property to ensure general health, safety, and welfare standards for the community. The Zoning Department assists residents and applicants with zoning requests, development requests and flood plain information. Staff coordinates efforts to communicate with the property owner or developer by arranging pre - development meetings "up -front" to get questions answered at the beginning of the project. Department staff issues applications for Conditional Use Permits, Variances, Rezoning, Annexations, Lot Splits, Platting, and Sign permits. 2025 Accomplishments: Reviewed and Processed: • 36 Applications for Planning Commission • 105 City Land Use Applications • 64 zoning reviews of building permits. • 37 sign permits reviewed. • 64 predevelopment/application meetings. The Planning Department provides the following services. 123 • Planning Commission support • Development Review • Long-range/Comprehensive planning • Special land use and redevelopment studies • Point of contact for lands use and zoning inquiries and property research • Document preparation for land -use decisions, ordinance updates and development decisions • Permanent sign and zoning permit coordination and administration • Building permit review for land use and zoning conformity • Zoning, Subdivision and FEMA Flood Ordinance administration 2025 Planning Commission Items o Annexation of the Albrecht property o Rezone properties from R-3 to R-3PD located at 800, 810 and 820 Texas Ave NW o Preliminary Plat for Elk Ridge Estates o Rezone properties from R-2 to C-3 located at 135 and 145 151 Ave NW and 125, 135, 145 Glen St NW o Lot Split located at 216 41h Ave SW o Final Plat for Bergs Properties o Final Plat for Elk Ridge Estates o Amendment to the Zoning Ordinance for the I-1 Light Industrial District o Site Plan Review at 126 Franklin St NW o CUP for a tattoo establishment in C-3 zoning district located at 146 Franklin St SW o Preliminary and Final Plat for The Landing o Site Plan Review for Sherwin William at 1510 Hwy 15 S o Preliminary and Final Plat for Wenwood o CUP for Data Center in I-2 Zoning District located at 1025 51h Ave SE o Variances for The Landing o CUP for PD in Shoreland District for 81-unit apartment building in C-3 zoning district at 126 Franklin St NW o Vacation of Alley located near 126 Franklin St NW o Vacation of Sanitary Sewer located near 126 Franklin St NW o Lot Split located at 951 Golf Course Rd NW o Sketch Plan and Comp Plan Amendment for 135 North High Dr NE o Rezone a property from R-1 to R-2 and Site Plan for 20-unit memory care at 955 Golf Course Rd NW o CUP for analytical testing of recreational cannabis located at 540 3rd Ave NW o Rezoning properties from R-1 to R-3 located at Elk Ridge Estates o Final Plat for High Bar Builders Addition o Rezone a property from R-2 to MXD located at 135 North High Dr NE o Preliminary Plat for Shepards Meadow o CUP for 20-unit memory care at 955 Golf Course Rd NW o Site Plan Review for Scooters Coffee at 15 3rd Ave NW o Rezone a property from MXD to C-3 located at 155 Glen St NW o Final Plat for Shepards Meadow o Comp Plan Amend and Rezoning properties from R-2 to C-4 located at 552, 554, 564 Jefferson St SE o Subdivision Ordinance Agreement section 153.072 124 Building Department Primary Services Overview of Building Department - MN Rule 1300.0030 states that the purpose of the MN State Building Code is to establish minimum requirements to safeguard the public health, safety and general welfare, through structural strength, means or egress facilities, stability, sanitation, adequate light and ventilation, energy conservation, and safety to life and property from fire and other hazards attributed to the built environment and to provide safety to firefighters and emergency responders during emergency operations. The purpose and scope of the MN State Building Code clearly convey the complexity and significance of building code administration. The practical administration of the code includes education, communication, plan review, correspondence, permit administration, field inspection, and enforcement to ensure the purpose of the code is accomplished throughout the breadth of its scope. Under the direction of the Planning Director and the Building Official, protective inspections provide The code applies to the design, construction, the following services: addition, alteration, moving, replacement, demolition, repair, equipment, installation, use and o Plan Review for residential, commercial occupancy, location, maintenance, and inspection properties and State licensed facilities of any building, structure, or building service o Clearinghouse for the issuance of building, equipment in a municipality. mechanical, plumbing, erosion control, grading, and sign permits. The code includes among other provisions: The MN Building Code, the MN Residential Code, the MN Conservation Code for Existing Buildings, the MN Floodproofing Regulations, the MN Accessibility Code, the Prefabricated Structures Code, the Industrialized/Modular Buildings Code, the MN Plumbing Code, the MN Commercial Energy Code, and the MN Residential Energy Code. 2025 Accomplishments o Field Inspections o Enforcement of building, plumbing, and mechanical codes (i.e. new and existing building construction for fire, life, health and safety) o Education of homeowners and contractors on the building code, permits, and process o Provided plan review and building inspection services as required. o Educated property owners regarding permit requirements, licensed contractors and state building codes o Provided Inspection and plan review services. o The following were larger projects: • McKimm Transit Storage Building • The Landing ■ Sherwin Williams Store ■ 3M Stormwater Project 125 Number of Building Permits Issued 2015 Through 2025 2500 2000 1962 1500 1075 1000 788 � 839 747 764 715 674 711 - 635 Aw - r� 500 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 126 80 CONSTRUCTION VALUATION MILLION $ VALUATION 2015-2025 70 60 50 40 30 20 10 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015 — 2025 Total Building Inspections 4000 3500 3000 2500 2000 1500 1000 500 - h 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 127 New Dwelling Unit Construction MIN E ' 1 1 E ME E E NO Staff have researched recent trends of new residential construction in this region by surveying other communities in the area with populations like Hutchinson in an effort to attempt to verify if the level of new residential construction activity in Hutchinson is common to the surrounding regions. Most similarly sized communities in this region indicate construction trends similar to what Hutchinson has experienced in recent years. As may be expected, communities that are metropolitan suburbs or regional hubs have experienced higher total volumes of construction. However, the overall trend of construction activity in the surveyed region is very similar between communities. 200 180 160 140 120 100 80 60 40 20 0 41 � craO ��o� o\\o oo�`a \\mac ca�'J� goo bo10s' 128 ■ 2020 ■ 2021 ■ 2022 ■ 2023 ■ 2024 ■ 2025 Rental License Program The City adopted the rental program in 2008, and the Planning/Building/Zoning Department took it over from the Fire Department in 2014. The rental inspection program data suggests that most property owners/managers are planning and preparing for the inspections. Staff are happy to educate new rental property owners and new managers who are not familiar with the expectations of the rental program. Most experienced property owners are actively checking units ahead of time and preparing them prior to the inspection. They are making repairs to improve the general condition of the units, and this greatly reduces the likelihood of major violations and subsequent enforcement action. City inspectors are now being viewed as a resource to help the business operate successfully and the tenants express the support they receive when there are problems or concern that go uncorrected. It should be noted that the City's new software for inspections/licensing does not have the ability to pull data like we did previously to present it in the annual report format so we will be trying to determine the best way to share data/trends we are seeing. At this point we can say that we inspected about 300 rental units in 2024 and trends were very similar to years past and the primary issues were dead batteries in smoke and carbon monoxide detectors, as well as junk and clutter that needed to be cleaned up. 129 PLANNING, ZONING, BUILDING DEPARTMENT ADDENDA CITY OF HUTCHINSON COUNT OF B UILDING/PL UMBINGIMECHANICAL PERMITS ISSUED AND VAL UATION 2025 Total Number Inspections 1474 Building Permits Issued by Type Year to Date Number Permits & Valuation Commercial/Industrial (new) 6 - $17,145,566.05 Commercial/Industrial Additions/ Remodels 61 - $7,228,087.60 Fire Sprinkling 13 - $321,452.00 Total New Residential Units (Single Family, twins, townhomes) 23 - $7,573,889.95 Residential misc. (additions, repairs, remodels, etc.) 122-$2,001,884.66 Set fee permits (reside, reroof, window replacement, misc.)* 486 Subtotal Building Permits: 711 - $34,270,880.26 Mechanical 235 - $3,538,334.00 Plumbing* 168 Total Permits issued and valuation 1114 - $37,809,214.26 *Set fees not included in valuation 130 Yearly Permit and Valuation Totals YEAR TOTAL NO. OF PERMITS TOTAL VALUATION 2025 Building 711 $34,270,880.26 Mechanical 235 $ 3,538,334.00 Plumbing 168 $ $37,809,214.26 2024 Building 764 $21,329,428 Mechanical 207 $ 2,224,062 Plumbing 162 $ $23,553,490 2023 Building 674 $18,684,425 Mechanical 147 $ 1,485,320 Plumbing 258 $ $20,169,745 2022 Building 635 $35,017,196 Mechanical 157 $ 5,510,224 Plumbing 107 $ $40,527,420 2021 Building 715 $34,346,923 Mechanical 197 $ 5,418,155 Plumbing 148 $ $39,765,078 2020 Building 839 $38,937,108 Mechanical 178 $ 2,495,764 Plumbing 137 $ $41,432,872 2019 Building 747 $42,560,147 Mechanical 198 $ 3,955,457 Plumbing 92 $ $46,515,604 2018 Building 1075 $40,161,512 Mechanical 239 $ 4,147,765 Plumbing 110 $ $44,309,277 2017 Building 1962 $60,949,672 Mechanical 232 $ 6,912,447 Plumbing 97 $ $67,862,119 2016 Building 788 $18,429,091 Mechanical 206 $ 1,000,062 Plumbing 94 $ $19,429,153 2015 Building 865 $13,690,216 Mechanical 166 $ 1,247,905 Plumbing 78 $ $14,938,121 Special permits are fixed fee permits for residential reshingle, resides, window replacements, and excavations, signs, manufactured homes, fences, moving, demolitions, decks, residential sheds, and fire sprinkler permits. 131 New Residential Construction YEAR HOUSING TYPE BUILDINGS UNITS CONSTRUCTION COST 2025 Single Family Dwelling 23 23 $ 7,573,889.95 2024 Single Family Dwelling 21 21 $ 6,098,465 2023 Single Family Dwelling 20 20 $ 5,441,758 2022 Single Family Dwelling 24 24 $ 5,393,727 2021 Single Family Dwelling 35 35 $ 7,397,267 2020 Single Family Dwelling 36 36 $ 7,582,886 2019 Single Family Dwelling 23 23 $ 5,027,559 2018 Single family Dwelling 34 34 $ 6,486,684 2017 Single Family Dwelling 25 25 $ 4,972,795 Twin homes 1 2 373,104 $ 5,234,899 2016 Single Family Dwelling 24 24 $ 4,722,278 Twin homes 3 6 895,100 $ 5,617,378 2015 Single Family Dwellings 20 20 $ 3,623,304 132 2025 Construction Activity NEW CONSTRUCTION STARTS Valuation New Homes $ 7,573,889.95 1700 Butler Field Dr (new hanger) 180,480.00 155 Glen St NW (The Landing) 4,498,839.05 915 Adams St SE (3M Tank Stairs) 248,000.00 915 Adams St SE (stormwater treatment) 800,000.00 1510 Hwy 15 S (Sherwin Williams) 424,375.00 1145 Adams St SE (McKimm Transit storage bldg.) 993,872.00 $24,719,456.00 Detached Garages 835 Brown St SW 18,097.92 1333 Jefferson St SE 28,152.32 175 Arch St SE 54,293.76 100,544.00 Total New Construction 24,820,000.00 COMMERCIAL AND INDUSTRIAL ADDITION AND REMODELS 1300 Adams St SE — WWTF improvements 1,250,520 1300 Hwy 15 S — Walmart improvement 1,100,000 135 Main St N — Wells Fargo interior 671,504 1095 Hwy 15 S — Hutch Health Mobile Imaging 299,250 1105 Benjamin Ave SE - Miller Manufacturing Reno 280,000 1094 Hwy 15 S — Shopko Optical buildout 225,000 48 Main St S — interior framing 200,000 1380 Hwy 15 S — Qdoba interior 169,000 135 Main St N — Wells Fargo exterior 162,027 1015 Century Ave SW — Pines reroof 161,251 1095 Hwy 15 S — Hutch Health Heliport 158,844 720 Century Ave SW— Edward Jones remodel 122,000 1020 Hwy 15 S — Cash Wise front entry 121,000 35 3rd Ave SE — reroof 104,884 125 Main St N — MITGI carport 102,096 170 Shady Ridge Rd — reroof 100,000 766 Century Ave SW — Century 9 Theater upgrades 100,000 Total Addition and Remodel Work $ 5,327,336 All Other Commercial/Industrial Work 1,900,751.60 All Other Residential Work 1,901,340.66 Mechanical 3,538,334 Plumbing 0 Fire Sprinkler 321,452 Total Construction Valuation $ 37,809,214.26 133 New Housing Starts - 2025 Site Address Sub Type Owner Name Valuation Contractor Issued Date 730 Park Island Dr SW Single Family James & Naomi Stinson $376,065.04 Myron Schuette Construction LLC 04/15/2025 133 Denver Ave SE Single Family First Class Builders Inc $319,901.36 First Class Builders LLC 04/16/2025 1160 131 Ave NW Single Family Scott Plowmann Family $377,531.78 Betker Homes Construction LLC 04/28/2025 800 Texas Ave NW Single Family Tyler Schwartz $372,130.42 TTS Construction LLC 06/06/2025 260 IO b Ave NE Single Family Miles Seppelt $315,962.43 Utecht Construction 06/18/2025 1308 Sherwood St SE Single Family First Class Builders Inc $323,001.00 First Class Builders LLC 08/12/2025 1332 Bradford St SE Single Family First Class Builders Inc $296,427.00 First Class Builders LLC 08/12/2025 527 Miller Ave SW Single Family Bergs Properties $292,111.00 Bret Bergs Construction Inc. 08/22/2025 255 Eau Claire Ave SE Single Family BAR Properties LLC $320,805.00 Jeff Frasier Carpentry a Fix -it LLC 08/22/2025 254 Eau Claire Ave SE Single Family BAR Properties LLC $261,454.00 Jeff Frasier Carpentry a Fix -it LLC 08/22/2025 250 Eau Claire Ave SE Single Family BAR Properties LLC $261,454.00 Jeff Frasier Carpentry a Fix -it LLC 08/22/2025 1031 Golf Course Rd NW Single Family Bonneville Land & Cattle LLC $246,126.00 Utecht Construction 07/30/2025 1041 Golf Course Rd NW Single Family Bonneville Land & Cattle LLC $246,126.00 Utecht Construction 07/30/2025 1051 Golf Course Rd NW Single Family Bonneville Land & Cattle LLC $246,126.00 Utecht Construction 07/30/2025 1061 Golf Course Rd NW Single Family Bonneville Land & Cattle LLC $246,126.00 Utecht Construction 07/30/2025 235 10t' Ave NE Single Family Castle Gate Construction Inc $523,721.66 Castle Gate Construction Inc 09/04/2025 225 101 Ave NE Single Family Castle Gate Construction Inc $443,112.20 Castle Gate Construction Inc 09/04/2025 206 101 Ave NE Single Family John & Karen Lange $318,029.99 TLH Construction LLC 09/07/2025 256 101 Ave NE Single Family Eric & Nikki Mallak $435,987.48 Betker Homes Construction LLC 10/08/2025 810 Texas Ave NW Single Family High Bar Builders LLC $372,130.42 TTS Construction LLC 10/20/2025 820 Texas Ave NW Single Family High Bar Builders LLC $372,130.42 TTS Construction LLC 10/20/2025 190 Eau Claire Ave SE Single Family Betker Homes Const LLC $321,623.76 Betker Homes Construction LLC 11/03/2025 164 Denver Ave SE Single Family Betker Builders LLC $285,803.74 Betker Builders LLC 11/13/2025 New Construction Count 23 Total Valuation $7,573,889.95 134 Police Department About the Department Department Staff — As of December 3151, 2025 23 Sworn Officers 10 Civilian Staff 1 Police Chief 1 Lieutenant 4 Patrol Sergeants 1 Investigative Sergeant 12 Patrol Officers 1 General Investigator 1 Child Protection Officer 1 School Liaison Officer 1 Drug Task Force Agent 1 Full-time Community Service Officer 4 Part-time Community Service Officer Fleet — As of December 3151, 2025 2 Police Administrative Specialists 1 Evidence Technician 1 Lead Police Administrative Specialist 1 Police Data Release Coordinator 0 2 4 6 8 10 12 14 16 ■ Marked Squads ■ Unmarked Squads ■ SWAT Vehicles ■ Trailer 135 2025 Crime Statistics Group A Offenses • Animal Cruelty • Arson • Assault o Aggravated Assault o Simple Assault o Intimidation • Bribery • Burglary/Breaking and Entering • Commerce Violations o Import Violations o Export Violations o Federal Liquor Violations o Federal Tobacco Violations o Wildlife Trafficking • Counterfeiting/Forgery • Destruction/Damage/Vandalism of Property • Drug/Narcotic Offenses o Drug/Narcotic Violations o Drug/Narcotic Equipment Violations • Embezzlement • Espionage • Extortion/Blackmail • Fraud Offenses O False Pretenses/Swindle/Confi dence Games O Credit Card/Automatic Teller Machine Fraud O Hacking/Computer Invasion O Impersonation O Identity Theft O Money Laundering O Welfare Fraud O Wire Fraud • Gambling Offenses O Betting/Wagering O Operating/Promoting/As sisting Gambling O Gambling Equipment Violations O Sports Tampering • Homicide Offenses O Murder/Non-Negligent Manslaughter O Negligent Manslaughter O Justifiable Homicide • Human Trafficking O Commercial Sex Acts O Involuntary Servitude The Hutchinson Police Department reports crime data to the Bureau of Criminal Apprehension (BCA) with National Incident -Based Reporting System (NIBRS). NIBRS is used by law enforcement agencies in the United States for collecting and reporting data on crimes. The BCA then reports all NIBRS statistics to the FBI. Local, state and federal agencies generate NIBRS data from their records management systems. In Group A Offenses there are 28 crime categories with 71 offenses. Data is collected on every incident and arrest in this group. In Group B Offenses, there are 10 offenses with only the arrest information Immigration Violations reported in this group. • o Illegal Entry into the US o False Citizenship o Smuggling Aliens o Re -Entry after Deportation • Kidnapping/Abduction • Larceny/Theft Offenses O Pocket Picking O Purse Snatching O Shoplifting O Theft from Building O Theft from Coin - Operated Machine or Device O Theft from Motor Vehicle O Theft of Motor Vehicle Parts or Accessories O All Other Larceny • Motor Vehicle Theft • Pornography/Obscene Material • Prostitution Offenses O Prostitution O Assisting or Promoting Prostitution O Purchasing Prostitution • Robbery • Sex Offenses O Rape O Sodomy O Sexual Assault with An Object O Criminal Sexual Contact O Statutory Rape O Failure to Register as Sex Offender • Stolen Property • Weapon Law Violations o Violation of National Firearm Act of 1934 o Weapons of Mass Destructions o Explosives 136 Key Benefits of NIBRS — 1.) Detailed, high -quality data that provides a more complete and accurate picture of crime. 2.) Additonal context to understand victimization and offending. 3.) Standardized data to compare crime across jursiditctions. 4.) Can be used for tactical or strategic analysis at the local, state, and national levels. Group 6 Offenses • Bond Default • Curfew/Loitering/Vagrancy Violations • Disorderly Conduct • Driving Underthe Influence • Drunkenness (Decommissioned January zozz) • Family Offenses, Nonviolent • Federal Resource Violations • Liquor Law Violations • Perjury • Trespass on Real Property • All Other Offenses Group A Offenses Weapon Violations Stolen Property Offenses Statutory Rape Incest Forcible Fondling Sexual Assault with an Object Forcible Sodomy Forcible Rape Robbery Purchasing Prostitution Assisting or Promoting Prostitution Prostitution Pornography/Obscene Material Motor Vehicle Theft All Other Larceny Theft of Motor Vehicle Parts or Accessories (Larceny -Theft) Theft from Motor Vehicle (Larceny -Theft) Theft from Coin -Operated Machine or Device (Larceny -Theft) Theft from Building (Larceny -Theft) Shoplifting (Larceny -Theft) Purse -Snatching (Larceny -Theft) Pocket -Picking (Larceny -Theft) Kidnapping/Abduction Involuntary Servitude (Human Trafficking) Commercial Sex Acts (Human Trafficking) Negligent Manslaughter Murder & Non -negligent Manslaughter Sports Tampering Gambling Equipment Violations Operating/Promoting/Assisting Gambling Betting/Wager (Gambling) Hacking/Computer Invasions (Fraud) Identity Theft Wire Fraud Welfare Fraud Impersonation (Fraud) Credit Card/Automatic Teller Machine Fraud False Pretenses/Swindle/Confidence Game (Fraud) Extortion/Blackmail Embezzlement Drug Equipment Violations Drug/Narcotic Violations Destruction/Damage/Vandalism of Property Counterfeiting/Forgery Burglary/Breaking & Entering Bribery Intimidation (Assault) Simple Assault Aggravated Assault Arson Animal Cruelty 4 0 10 20 30 40 50 60 ■ 2025 ■ 2024 70 80 137 Group B Offenses by Arrest All Other Offenses Trespass of Real Property Runaway Liquor Law Violations Family Offenses, Nonviolent Driving Under the Influence Disorderly Conduct Curfew/Loitering/Vagrancy Violations 0 5 10 15 20 25 30 35 40 ® 2025 ■ 2024 Patrol 45 The patrol division of the Hutchinson Police Department is the face of the department. Many community members only ever have contact with a patrol officer, making their impact crucial to the integrity of the department. Our patrol officers interact with community members when they respond to calls for service, take reports on incidents that have occurred, patrol neighborhoods, enforce traffic laws, and engage at community events. Our patrol officers also conduct criminal investigations by interviewing victims and suspects, reviewing video surveillance, and collecting evidence. Our patrol officers are very well trained in many areas, including DWI detection and enforcement, mental health crisis, first aid and CPR. They also work closely with businesses on shoplifting and fraud incidents. The department has twelve full-time officers and two part-time officers assigned to the patrol division. This area is led by four patrol sergeants. Citations 464 549 Verbal Warnings 1352 0 200 400 600 800 1000 1200 1400 1600 ■ 2025 ■ 2024 138 During the year 2025, officers arrested 28 people for DUI's. This was 6 less than the previous year. These DUI's are not all alcohol related, some are the result of drugs. The Hutchinson Police Department forfeited 4 motor vehicles. The 4 vehicles forfeited were from DWI/controlled substances related crimes and fleeing offenses. D U I's Ito 2025 ■ 2024 In 2025, officers responded to 381 crashes. 116 of those crashes were minor and didn't require officers to write a state crash report. There were 199 property damage crashes, 13 personal injury crashes and 2 fatal crashes. Of the 381 crashes, 46 of them were hit and runs. Statistical Information In 2025, officers initiated 1760 traffic stops. There were slightly less citations issued in 2025 and 137 more verbal warnings issued in 2025 than 2024. It is important to note that not all citations and verbal warnings issued are from traffic stops. 2025 CRASHES Property Damage Crashes 3-99 Personal Injury Crashes A Hit and Run Crashes 46 The Hutchinson Police Department responds to calls -for -service twenty-four hours a day and seven days a week. The busiest time frames for the officers in 2025 were 10am and 4pm. Calls for Service by Hour 1000 788757 695 800�b1821742 751 800 569 690 604 715 640 606 643 589 600 481 385 400 297191192159224243 200 0 O -1 N m Ill l0 n OC o 0 0 0 0 0 0 0 0 0 0 0 ci ci ci ci ci ci ci N N N N 139 Calls by Month 1400 1220 1232 1256 1170 1128 1178 1157 1200 997 1000 915 800 600 400 200 0 010 °y�. '0ec '0ec '0ec '0ec eQ�eF Oho oJer e`er y � O Friday was the busiest day of the week for calls for service for the Hutchinson Police Department in 2025. Monday through Friday were all very similar for calls. Sunday was slowest day of the week with 1378 calls for service. 2025 started out below average and slowly increased in spring until fall. February was the lowest month for calls -for - service while August was the highest month. Calls by Days of the Week 2500 2118 2117 2186 1993 2029 2000 1622 1500 1378 1000 500 0 o�oek eyaaA eyaaA c5a�� `aa� J`aab I raining Each year the staff of the Hutchinson Police Department participate in various trainings. These trainings allow staff to stay updated on all current policies, information, and technology within law enforcement. The Minnesota Board of Peace Officers Standards and Training (POST) requires officers to complete forty-eight hours of continuing education every three years to renew their POST license. Emergency Vehicle Operations and Police Pursuits (EVOC) Officers shall demonstrate the knowledge and skill needed to reduce criminal and civil liability when involved in emergency and non -emergency vehicle operations mode. This training must be designed to give officers both skill and decision -making ability so that emergency vehicle operations can be resolved safely and successfully. This will be accomplished with a minimum of eight hours of training, which will include a minimum of four hours of in -vehicle operation. Simulators may be used in addition to in -vehicle and classroom training but will not be used to replace the minimum four hours of in -vehicle training. It is recommended that simulator training be used for decision -making training. 140 Field Training The field training process is a 16-week, 640-hour requirement for all new Hutchinson Police Department officer hires. New officers must show progression in job performance and complete all four phases to pass the field training process and become an independent officer. Patrol Online (PATROL) To help cities reduce losses related to police liability, LMCIT has developed PATROL —Peace Officer Accredited Training Online. While PATROL delivers twelve new POST -accredited courses per year, subscribers can earn more than forty POST credits per year when they also take PATROL training on POST mandates for Use of Force and Crisis Intervention and Mental Illness Crisis; Conflict Management and Mediation; Implicit Bias, and Community Diversity and Cultural Differences. PATROL helps officers stay current on Minnesota legal issues and is based on Minnesota case law. Content is developed with input from police liability experts, insurance defense attorneys, and local law enforcement agencies. Each month, a new course is available for one POST credit. Additional Training for 2025: Patrol Online Courses: Use of Force Part 1-4 Serving Those with Autism Spectrum Disorder 1-4 Narcan Carry and Use Immigration Law Basics for MN Officers Transport Holds Mental Health Part 1-3 Officer Safety Searches Consent Searches Vehicle Searches Policing Protests Wellness & Emotional Resilience 1-2 Trust— Part is Inside the Agency Conferences: Executive Training Institute Conference (Chief's Conference) MSANI CANAM Spring Conference (SWMDTF) SOTA Training Conference Other Trainings: Pepperball Initial & Qualification Firearms: Inclement Weather Firearms: Low Light Firearms: Qualifications (x2) Defensive Tactics / Use of Force Lucas 3 DMT-G Certification & Recertification LE Emergency Vehicle Operations Refresher 2025 Legislative & Case Law Updates EMS Refresher Taser Annual Operator Update Evidence Collection: DNA BCA Single Certification Understanding Mental Warfare Alerts: Crime, Missing & Endangered Maxims & Truths in Supervision MN CIT i6-hour Interactive Role Play Active Threat / Critical Incident Patrol Response Practical Training Criminal Interdiction Training Female Arrest and Control Tactics Axon Academy—Taser Instructor Basic School Resource Officer Training Advanced Vehicle Contraband Concealment MN ICAC Basic Investigations Car Seat Basics for Law Enforcement SWAT Team Leader Development GLOCK Armorer's Course Police Response to Active Shooter Instructor 141 Investigations The Hutchinson Police Department Investigations units are comprised of five licensed officers and one Evidence Technician. This unit is supervised by a Sergeant. The four officer positions within the investigation's unit are the School Resource Officer, Drug Task Force Officer, Juvenile/Child Protection Officer, and General Investigator. All these positions are rotating assignments which allow all officers to gain valuable investigative experience. � --* A4.09 4&j The Investigations unit offers valuable support to the patrol officers by following up on investigations that require more time than the patrol officers can give to an incident. The investigations unit is able to spend more time gathering information from witnesses, suspects, and the courts to help solve the crime. The General Investigator position assists the patrol staff with more complex investigations. The General Investigator also works with social services and specializes in working with vulnerable adult cases. The Evidence Technician position maintains the collection of all the evidence and property entered into the evidence/property room by the officers. This position also sends evidence to the MN BCA for lab testing for DUI's, drugs, and fingerprinting. The Evidence Technician also properly stores and preserves all evidence for future investigations and past investigations. Southwest Metro Drug Task Force Officer (SWMDTF) The Drug Task Force position is with the Southwest Metro Drug Task Force. 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PAUL o Q Q ZT Q (D O STEWART fD 0 O VICTORIA c n WACONIA w O (D O WATERTOWN F O !'* n WESTSTPAUL Ln �* UNKNOWN H[VTCIR 4), 75) The School Resource Officer has an office within Hutchinson High School and is in the school buildings daily from 7am to 3pm. The relationship the School Resource Officer builds with the staff and students is a great asset for the Hutchinson School District and the Hutchinson Police Department. There was a total of 280 calls for service at all the schools in the district in 2025. There were 110 incidents at the High School, 58 at the Middle School, 55 at Park Elementary, 50 at Tiger Elementary and 27 at West Elementary. Child Protection Officer The Child Protection Officer is a position that works closely with McLeod County Social Services on a daily basis. This is a close relationship that we have determined works best to help children and families in the City of Hutchinson. The Child Protection Officer is a five-year position in the Investigative Unit. Child Protection Incidences No Specific Allegations Abuse/Neglect Drug/Alcohol Use Abuse/Sexual Abuse/Physical Abuse/Emotional 0 20 40 60 80 100 120 140 144 The Child Protection Officer also works closely with the BCA and the predatory offender compliance program. This position ensures that all the predatory offenders within the city of Hutchinson remain compliant with the BCA. SWAT The Hutchinson Police Department's Special Response Team (SRT) partners with the McLeod County Sheriff Department's Emergency Response Unit (ERU) to provide officers for tactical response services. The joint tactical team operates under the team name, Crow River SWAT. Officers selected to the team receive advanced training to respond to situations needing high -risk warrant services, crowd control, hostage negotiation, snipers, and critical incidents. The Hutchinson Police Department's SRT includes highly trained officers who use specialized weapons and tactics to handle high -risk situations beyond the scope of the patrol and investigative divisions. Examples of situations for which the SWAT team would be used include high -risk arrests and warrants, barricaded and armed „° suspects, hostage rescue, crowd control, dignitary protection, and disaster response. The team's primary goal is to resolve situations as safely as possible for everyone involved. Crow River SWAT has approximately ten officers from each department on the team. The team also includes a separate crisis negotiation team that works with the tactical team to safely resolve these critical incidents. Officers selected and assigned to team training one day per month on skills and equipment special to the tactical team's mission. To be selected, officers need to have been an officer for a minimum of two years, pass the physical fitness assessment, show proficiency with firearms and defensive tactics skills, and have exhibited sound emergency response skills as a patrol officer. 145 2025 Crow River SWAT Year End/Activity Report Personnel: Commander/Team Leader — Billy Kroll (MCSO) Commander/Team Leader —Andrew Erlandson (HPD) Team Leaders: Sergeant B. Erlandson (HPD) Sergeant B. Stiles (MCSO) Sergeant D. Caturia (MCSO) Sergeant K. Jorgenson (MCSO — 2025) Sni er s : Detective A. DeMeyer (MCSO) Investigator T. Fenrich (HPD) Operators: T. Schmeling (HPD) M. Salazar (HPD) B. Hemling (HPD) J. Villarreal (HPD — 2025) N. Draper (MCSO) J. Robbin (MCSO — K9 "Archie") A. Santana (MCSO) J. Fahey (MCSO) Negotiations: Sergeant J. Nagel (HPD) (Retired in December of 2025) Sergeant A. Nortrom (HPD) Sergeant S. Wawrzyniak (MCSO) Detective M. Rolf (MCSO) Deputy A. Malz (MCSO) Officer T. Duenow (HPD) 146 Dispatch: J. Graupmann (MCSO) K. Hildremyr (MCSO) S. Parpart (MCSO) Admin and Team Supervisor(S): Chief T. Gifferson (HPD) Sheriff T. Langenfeld (MCSO) Chief Deputy A. Ward (MCSO) Lieutenant A. Ament (HPD) J. Otto (MCSO — Dispatch Supervisor) Support Staff: Amanda Mayland (HPD) Cindy Bock (HPD) Shannon Schermann (HPD) Sergeant J. Otto (MCSO) Jim Almquist (McLeod County) Callouts: HPD ICR 25005709/MCSO ICR 25005003 — Callout for "Manhunt" in Sibley County (Vance Boelter — Suspect) Address: 20198 3415t Green Isle, MN Close Calls or Near Misses (Personnel or CRS Equipment Used): MCSO ICR 25000021 on 01/01/2025 (ARV Assist in Carver County) MCSO ICR 25003500 (ARV Used in Winsted for a Felony Fleeing Suspect) MCSO ICR 25007683 December 2025 — Sibley County requested CRS for a threats investigation w/ Metro Transit MCSO ICR 25012153 (Sibley County requested CRS for a suicidal male in Arlington, MN) HPD ICR# 25011920 (Weapons Violation — 2nd Degree Assault) MCSO ICR# 25010214 (Weapons Violation) 147 2025 Statistics for Eauiument/Neaotiations reauested MCSO 25000021 Assists 1/1/2025 ARV MCSO 25003098 Training/Meeting 4/17/2025 ARV MCSO 25003500 Traffic Stop 4/29/2025 ARV MCSO 25004063 Training/Meeting 5/15/2025 ARV MCSO 25004298 School Resource 5/22/2025 ARV MCSO 25006803 Training/Meeting 7/31/2025 ARV MCSO 25007645 Training/Meeting 8/21/2025 ARV MCSO 25007683 Assists 8/22/2025 ARV MCSO 25012153 Assists 12/19/2025 ARV MCSO 25002504 Alarms 3/29/2025 UAV MCSO 25003500 Traffic Stop 4/29/2025 UA MCSO 25003710 Assists 5/6/2025 UAV MCSO 25004240 Assists 5/21/2025 UAV MCSO 25004298 School Resource 5/22/2025 UAV MCSO 25004506 Checks 5/29/2025 UAV MCSO 25004739 Missing Person 6/5/2025 UAV MCSO 25005001 School Resource 6/14/2025 UAV MCSO 25005003 Tactical Team 6/14/2025 UAV MCSO 25005759 Assists 7/3/2025 UAV2 MCSO 25006391 Assists 7/19/2025 UAV MCSO 25006803 Training/Meeting 7/31/2025 UAV MCSO 25007348 Traffic Stop 8/13/2025 UAV MCSO 25007683 Assists 8/22/2025 UAV MCSO 25007731 Accident 8/23/2025 UAV MCSO 25008561 Burglary 9/14/2025 UAV MCSO 25008591 Checks 9/15/2025 UAV MCSO 25008594 Alarms 9/15/2025 UAV MCSO 25008599 School Resource 9/15/2025 UAV2 MCSO 25009353 Assists 10/2/2025 UAV MCSO 25009676 School Resource 10/10/2025 UAV MCSO 25010569 Motorist Assist 11/3/2025 UAV MCSO 25010710 Assists 11/7/2025 UAV MCSO 25010868 Mental Health 11/12/2025 UAV MCSO 25012153 Assists 12/19/2025 UAV MCSO 25012493 Assists 12/31/2025 UAV 148 2025 Equipment Upgrades: (2) Mini -Drones - (MCSO) 360 Degree Camera - (MCSO) 40 MM Launcher(s) — (MCSO) Upgraded Light System(s) for Rifles — (HPD) Pepper Ball & Launchers — (HPD) Sniper Rifle Upgrade — (HPD) ARV — Upgrade equipment from J & N Tactical — (MCSO) Rifle Suppressors — (MCSO) 2025 Crow River SWAT Training: The Crow River SWAT trained 11 out of 12 months in 2025, missing the month of June due to special events/schedule conflicts. The synopsis of each month of trainings can be included if requested. Highlights from 2025 Training is as follows: - Annandale Shoothouse (Stress Inoculation Training) - 'Full" Callout training in Sibley County - Vacant property on North High Drive used several times - Gopher Campfire was used (2) times in 2025 including a low -light training in October Officer T. Fenrich attended the SOTA Conference in St. Cloud, MN and was elected to the Board. Included in individual training as well, Officer B. Hemling attended TEMS (Tactical Medic) School hosted at Camp Ripley. 2025 Individual Training: Team Leader Development (NTOA - Sgt. A. Erlandson) Active Shooter Instructor (NTOA — Officer T. Fenrich & Deputy N. Draper) Pepper -Ball Instructor (Pepper -Ball — Sgt. B. Erlandson & Officer M. Salazar) 2025 SOTA Conference (Officer M. Salazar, Officer T. Schmeling, Deputy Robbin, Deputy Santana, Deputy Malz, Investigator Rolf, and Sgt. Kroll) NSSF Shot — Show — (Las Vegas, NV — Sgt. Wawrzyniak and Deputy Draper) Rifle Instructor — (Sgt. Wawrzyniak, Deputy DeMeyer, and Deputy Draper) Less Lethal Munitions — (Deputy Fahey) MN Crisis Intervention Training — (Sgt. A. Erlandson, Sgt. B. Erlandson, Officer B. Hemling, Officer M. Salazar, Officer T. Fenrich, Officer T. Schmeling, Officer J. Villarreal, Deputy Robbin, Deputy Fahey, and Sgt. D. Caturia) TEMS (Tactical Medic) — (Officer B. Hemling) 149 Records Units The records units for the Hutchinson Police Department consists of four full-time employees. The records unit has a variety of tasks and assists the Chief, Lieutenant, Investigations, and patrol officers with daily duties. The records unit answers phone calls from the public and assists the citizens who come into the lobby of the police department. Citizens come into the lobby for a wide variety of reasons, but most common are records requests, animal licenses, and fingerprinting. The records unit is an intricate and vital part of the police department. They ensure reports are processed properly and sent to the City of Hutchinson and McLeod County Attorneys for charges on offenders. They handle the dissemination of officer's reports to social services, probation, and citizens who request data. They also Public Records Request 753 Permit to Purchase/Conceal Carry Background Requests from Other Agencies 420 Other Agency Background Requests (Social Services, Probation, Housing and Redevelopment Authority) 172 complete public data requests, permit to purchase handgun applications, monthly statistical data reports to the State of MN, the billing for the police department, the annual police report, and ensure everyone in the police department is current on their required training through the BCA. Code Enforcement — Nuisance Property The Hutchinson Police Department has a Code Enforcement Officer who is assigned to all the nuisance properties in the City of Hutchinson. The Code Enforcement Officer is a three-year rotating position. This position maintains the files and speaks to the property owners to try and get the properties in compliance with City of Hutchinson Ordinances. The Code Enforcement Officer also does random checks on these properties to try and determine if work is being performed to get these properties in compliance. If the properties are brought into compliance, the officer will close out the report. If the properties are not brought into compliance within the agreed amount of time, the Code Enforcement Officer then issues a citation or sends a report to the City of Hutchinson Attorney requesting charges against the owner. 12 10 150 Open Nuisance Properties 2025 2024 2023 2022 Anon Body Cameras/Fleet The Hutchinson Police Department implemented Axon body cameras in 2016 with a donation from a local area business. This was a great push in getting AXON body cameras for every officer in the department. Hutchinson Police Department policy states that officers must have their body cameras recording during any interaction they are dispatched to or come upon. Total Uploads Number of Videos 16562.0 Hours of Videos 3374.7347305555554 G13 of Videos 6206.527914476581 Active AXON Evidence Number of Active Videos 8633.0 Hours of Active Videos 2109.911088888889 G13 of Active Videos 3870.5118565317243 Average Per Day Number of Videos Uploaded 45.37534246575343 Hours of Video Uploaded 9.245848576864535 G13 of Video Uploaded 17.004186067059127 Categories Files G13 % Files % G13 Report 14833 3478.347663 72.81429483 70.69818352 Traffic Stops 3714 893.3535912 18.23180011 18.1576088 No Action Take 1442 442.0672326 7.078690295 8.985114017 Permanent Retention (Admin Use Only) 248 32.30331513 1.217416916 0.656572006 Accidental Recording 69 34.09566111 0.338716803 0.693001833 Uncategorized 56 36.49537424 0.274900594 0.741776532 Training 5 1.39774049 0.024544696 0.028409384 Administrative (Supervisor Only) 2 1.46776437 0.009817878 2.983263474 Critical Incident 2 1.935211856 0.009817878 0.039333608 151 Citizens Police Academy The original concept of the Citizen Police Academy (CPA) came from Great Britain, where the United Kingdom (UK) Constabulary designed a program to give citizens an overview of British law enforcement operations. Known as "police night school" when it began in 1977, the program was an immediate success. The Hutchinson Citizen Police Academy (CPA) is a community -oriented policing program that is conducted once a year in order to accomplish three goals: • To allow citizens of Hutchinson to meet the men and women who serve them. • To educate in the "how's and why's" of law enforcement. • To provide Hutchinson Police Officers the opportunity to meet and hear from the citizens they serve. The Hutchinson Citizen's Police Academy is ten weeks long and ran from January 2025 through February 2025. CPA Participants are given a realistic view of the Hutchinson Police Department. A wide variety of topics are discussed: department history, organizational structure, police officer selection and training, communications/records, tools and equipment, officer survival, patrol procedures, DUI and traffic enforcement, use of force or deadly force, arrest procedures, handling of traffic accidents and criminal investigations, gangs, pursuit driving, chaplain program, crime prevention, critical incidents, youth issues and liaisons, reserves/volunteer services, and a myriad of other law enforcement subjects. In addition, opportunities to tour the police department and ride along with a police officer are provided to CPA students. CITIZEN HMMNSON POLICE ZEE 152 Public Works (Engineering, Operations & Maintenance, Water, Wastewater) Core Services Essential Services (Programs, services and infrastructure without which the city would not survive) • Snow removal & ice control • Street maintenance • Emergency management • Stormwater & flood management • Wastewater treatment & collection • Water treatment & distribution Critical Services (Programs, services, and infrastructure critical to maintaining essential services or necessary to support essential services) • Bridge maintenance • Engineering services • Forestry operations • Environmental services • Fleet management • Facility management • Planning & Development services • Right -of -Way management • Risk management & legal review • Biosolids management • Dam maintenance • Lift stations, wastewater systems • Meter reading • Environmental regulations • Street sweeping & cleaning • Utility coordination • Utility locating 153 Basic Services (Programs, services and infrastructure that sfgnfficantfy Improve the quality of fife or meet basic needs of the majority of citizens) • Assessment administration • Cemetery services • GIS mapping • Infrastructure planning • Mosquito control • Property data management • Residential leaf vacuum service • Streetlights • Sump pumps & drainage • Traffic operations • Trail/sidewalk maintenance • Transportation planning Targeted Services (Programs, services and infrastructure that significantly Improve the quality of fife or meets special needs of a specific subgroup of citizens) • Airport • Alleys • Parking Lots • Public Event support • General customer service Special Services (Programs, services and infrastructure that, If removed, would not significantly reduce the quality of fife of citizens) • Crow River fountain The majority of Public Works services are classified as Essential or Critical services. Many of the services classified as Basic services and Targeted services either support higher -level services or improve the quality of life within the City. Transfer Supplies 808,314 1,328,983 3% 5% Depr 2,575,000 9% Svc & Chgs 2,707,434 10% CapitaL 1,896,279 7% Wages 3,158,539 11% Misc• 2025 Expense Distribution 89,210 096A P 2,104 .96 2,950,777 11% ■ CIP a Debt pmt ■ Wages Capital ■ Svc & Chgs a Depr ■ Supplies ■ Transfer ■ Misc. 2025 Public Works Budgeted Expenditures (all departments, CIP) $27,896,540 154 Engineering Primary services Under the leadership of the City Engineer, Engineering provides the following primary services: • Work with City departments to develop, design, and deliver public infrastructure projects. • Prepare and administer Capital Improvement Plan (CIP), associated financing. • Oversee public improvement construction contracts and funding from outside sources. • Calculate special assessments associated with improvements and assist with assessment records and searches. • Correspond and coordinate with other agencies and utilities regarding infrastructure improvements affecting the city. • Review and provide support to developments done by private entities and the City's EDA. • Oversee and ensure compliance with environmental regulations for water, wastewater and storm water. Workforce (3.80 FTE): • Mike Stiffer Public Works Director • Brandon Braithwaite, PE City Engineer • Chad Muchow Sr Engr Tech • Corey Kurth Sr Engr Tech • Jocey Jacobson Engr Secretary Seasonal labor0.20 FTE 2025 Engineering budgets Engineering: $ 615,365 CIP-Infrastructure $ 6,019,824 CIP-Wastewater $ 3,606,323 CIP-Water $ 1,220,957 CIP-Storm Water $ 886,000 CIP-Engineering $ - AII Funds: $12,348,469 Engineering 100% 90% 80% 70% Wages, 465,548 60% 50% 40% 30% 20% Supplie Svc & s,... Chgs, Misc., 10% 135,0... 4,585 0% 01/25 John Paulson departure for Apex Engineering 04/25 Keith Messner departure due to retirement 04/25 Corey Kurth start as Senior Engineering Tech 05/25 Kylie Luedtke start as Seasonal Staff 06/25 Brandon Braithwaite start as City Eng/Asst P Wx Under the guidance of the Public Works Director and City Engineer, working with other agencies and departments, Engineering facilitates cost-effective management of the City's physical infrastructure. To meet the City's vision, goals, policies, ordinances and standards, Engineering works to plan, administer and deliver a variety of improvements that provide for a multi -use transportation system, quality public facilities and quality utility services (water, sanitary sewer, storm water), all while striving to create a functional, connected, clean and healthy environment within the City. 155 Operations & Maintenance Streets & Roadways, Forestry, Cemetery, Airport, HATS Facility and Stormwater Primary services Under the leadership of the Public Works Manager, Operations & Maintenance provides the following primary services: • Roadway maintenance • Snow removal & ice control • Distribution system maintenance • Collection system maintenance • Vehicle & equipment maintenance • Forestry operations • Facility maintenance • Cemetery operations • Traffic operations • Street sweeping & cleaning • General services • Administration & training Workforce (11.35 FTE): • Donovan Schuette Public Works Manager • James Trnka Maint Lead Operator • Hannah Kruger Arborist • Tim Read Equipment Mechanic • Mitchell Thompson Sr PW Maint Operator • VACANT Pete Dehn retirement • Joshua Alnes Sr PW Maint Operator • Goeffrey Hansen Sr PW Maint Specialist • Aron Burmeister PW Maint Operator • Nicholas Pagel PW Maint Operator • Benjamin Schmidt PW Maint Operator • McCoy Zajicek Sr PW Maint Operator • Sonja Muellerleile PW Secretary • Seasonal labor 1.75 FTE 2025 Operations & Maintenance budgets Streets & Roadways: $1,714,063 Stormwater: $1,463,494 HATS Facility: $ 679,845 Cemetery: $ 176,508 Airport: $ 282,815 CIP Airport $ 235,000 CIP-HATS Facility $ 0 CIP Streets $ 354,000 CIP-Cemetery $ 60,000 All funds: $4,965,725 Operations & Maint 100% 90% Wages, 1,165, 455 80% 70% 60% Svc & Chgs, 1,065,822 50% 40% Supplies, 951,256 30% 20% Capital, 399,419 y Debt pmt, Transfer, Depr, 255,000 186,205 10% 249,994 I Misc., 43,574 0% .� Staffing has settled in 2025 after a wave of retirements and backfills from 2024. One vacancy remains as 2026 gets underway. Public Works operations & maintenance employees are involved in providing many different services, routinely working across all divisions performing a wide variety of tasks to support departmental goals. The department's management team consists of the Public Works Director, Public Works Manager, the Water Manager, Wastewater Manager and City Engineer/Asst Public Works Director. 156 Water Primary services 2025 Water budgets Under the leadership of the Water Manager, Water provides operations and maintenance Water: services in the following areas: CIP-Water • Water treatment • Treatment plant operations & maintenance • Water towers and storage • Water meters • Distribution system maintenance • Response to service interruptions • Coordination with improvement projects • Utility locates • Facility maintenance Workforce (5.63 FTE): • Eric Levine Water Manager • Jim Navratil Sr Water Plant Operator • Randy Czech Water Plant Operator • Finance staff 0.60 FTE • Seasonal labor 0.25 FTE • Ops and Maint 2.275 FTE A WIWW Relief Operator was approved for 2025 $4,009,567 $1,220,957 $5,230,524 A half -cent sales tax generates revenue of over $1 million per year. This revenue helps to pay outstanding treatment plant debt. Water 100% 90% Debt pmt, 1,150, 345 80% 70% 60% Depr, 1,120, 000 50% 40% Capital,... 30% Wages, 644,995 Supplies, 168,618 20% Transfer,... 10% Misc., 14,178 0% The Water Manager oversees and coordinates staff involved in day-to-day operations and maintenance of the wells, water treatment plant, water storage, water meters and related process equipment and facilities. The Water and Wastewater divisions work together daily, assisting one another to ensure both plants function properly and meet permit requirements. Major projects in 2025 consisted of a follow-up to the Service Line Inventory as required by the EPA as well as a completion of the Residential Water Meter project that replaced approximately 4200 of the nearly 5000 water meters in the community. 157 Wastewater Primary services Under the leadership of the Wastewater Manager, Wastewater provides operations and maintenance services in the following areas: • Wastewater treatment 6 • Treatment facility operations & maintenance • Collection system maintenance • Response to service interruptions • Coordination with improvement projects • Utility locates • Facility maintenance Workforce (8.425 FTE): • Bruce Frandle Wastewater Manager • Zac Pedersen Wastewater Operator • Eric Moore Sr WW Maint Operator • Deb Paulson Lab Tech/WW Operator • Tim Jarl WW Maint Operator • Jace Drape Wastewater Operator • Finance staff 0.60 FTE • Seasonal labor 0.50 FTE • Ops and Maint 3.475 FTE 01125 Bruce Frandle started as Manager 2025 Wastewater budgets Wastewater: $6,572,779 CIP-Wastewater $3,606,323 $10,179,102 A half -cent sales tax generates revenue of over $800,000 per year. This revenue helps to pay outstanding treatment plant debt. Wastewater 100% Capital, 90% 1,383,99 1 80% Debt 70% pmt, 1,614,22 60% 7 50% Depr, 1,200,00 40% 0 30% 20% Wages, Supplies, Transfer, 882,541 198,872 10% 346,202 [ 1Misc., 0% - 26,873 The Wastewater Manager oversees and coordinates the staff involved in day-to-day operations and maintenance of the wastewater treatment facility, lift stations and related process equipment and facilities. The Water and Wastewater divisions work together daily, assisting one another to ensure both plants function properly and meet permit requirements. While there was a considerable amount of transition in 2024, 2025 was a stable year with the addition of the new Wastewater Manager to start the year. A major Biosolids project kicked off in Fall 2025 to replace two original Belt Presses with Centrifuges. Revenues on hand are expected to cover a portion of the cost. A landscaping project to improve accessibility at the Stoney Point lift station was also completed. 158 2025 Significant Accomplishments Major Improvements • Chip and Fog Seal Lynn Road, Market St, and California Streets • Microsurface asphalt preservative treatment 51" Ave from Lynn Rd to the 3M entrance. • In-house RePlay asphalt sealant of over 2 miles of roads and trails • Reconstruct Water Plant north entrance • Mill and Overlay 1/3 of cemetery roads • Dale Street Full Depth Reclaim • Hassan Street Partial Reclaim • Stoney Point Partial Reclaim • Elk Ridge Estates Housing Development • The Landing infrastructure improvements Utilities Proiects Water • Installed most of the remaining 150 residential water meters • Bleach bulk tank was re -lined • Insurance Services Office survey done • Launched a customer portal for residents to monitor water usage • New gate operator installed • Wellhead protection plan evaluation and inner wellhead management zone inventory completed • GPS located 90% of curb stops city wide Wastewater • Replacement of 4 VFDs at main lift • New access at Stoney Point lift station • Construction of concrete spill pad at septic receiving point • Installation of new roof and siding at main lift station storage building • Cleaning of final clarifiers to inspect and do minor repairs of structure • Cleaning of grit and debris in digesters • Rebuilding of HATS main lift station • Updated multiple valves in clarifier bldg • Solids Improvement project initiated 159 Infrastructure Maintenance • Street repairs and patching • Trail repairs • Alleys & Parking Lots • Storm sewer repairs (various locations) • Water and Sewer service line repairs across 15+ sites Facility Proiects • Airport o Hangar 3 rebuild resulting from storm damage o Private hangar construction o Tree removal in preparation for snow removal equipment shed construction o Ditch cleaning and culvert installation • Cemetery o Mill and overlay of 1/3 of roads Vehicles & Equipment • Ops & Maint o Single -axle snowplow truck o Insert spreader o Water infrastructure service truck o Modular skid steer box plow o Leaf Vacuum • Water o 1/2 ton pickup Sustainability • Submitted 23 solar projects to the State for consideration (19 that were funded, 14 City and 5 HUC) 2026 Major Goals & Objectives Maior Improvements • Edmonton Ave reclaim project bid and complete • 2026 Pavement Improvements bid and complete • Complete The Landing infrastructure improvements • Reclamite asphalt preservative on the last 5 years of road construction projects • Ace hardware parking lot reclaim • Increase ash removals and replacements • Montreal / Edmonton roundabout design • School Road Transportation Study • Michigan Street Pond Design Utilities Proiects Water • Membrane replacement • Replacement of 1.5" to 6" water meters • Biofilter air modifications • Well Rehab • RRA and ERP updates Wastewater • Completion of the biosolids upgrade • Clarifier project design • Replacement of diffusers and cleaning debris in the MBR tanks • Repair and prep west oxidation ditch • Complete PFAS source reduction grant • Complete and submit new wastewater permit Stormwater • New MS4 Permit for 2026-2031 • Review/recommend I and I program 160 Distribution /Collection • Commence system wide sanitary lining project • Review/Budget for purchase of televising system for sanitary and storm Infrastructure Maintenance • Street repairs, patching • 50,000 lineal feet of crack seal • Trail repairs • RePlay 2-3 miles of roads • Alleys & parking lots • Stormwater pond & pipe repair Facility Proiects • Airport o Hangars 1 and 2 reskin and reroof, south taxiway mill and overlay, taxiway crack seal, snow removal shed construction • HATS Facility o New roof, car wash improvements • Water o Ash removal across entire campus Stormwater o Michigan Street Pond continued site prep work Vehicles & Equipment • Ops & Maint o 1-ton pickup, 1/2 ton pickup, toolcat utility vehicle, tracked skid loader Sustainability • Solar installations (14) on city facilities Explore fleet vehicle electrification 2026 Major Goals & Objectives continued Fundinci, Studies, Planninci & Initiatives Street Corridor Project Initiatives • School Rd Corridor Study • Safe Routes to School report completed • 10-year Infrastructure Plan created HATS Facility • Support McLeod County and MnDOT in plan for state bonding for the addition of 18,000 SF vehicle & equipment storage, fueling site construction and mechanics' shop improvements. Airport • Hangar 1 and 2 reroof and reskin, south taxiway mill and overlay, snow removal equipment shed construction, taxiway crack fill. • Support Mn CAP funding requests to complete their training facility. Lakes and River Basin Improvements • Pursue additional funding sources to support improvements. • Identify and coordinate proposed improvements with Mn Dept. of Natural Resources, McLeod County and Renville County Soil & Water Conservation Districts. McLeod County Public Works • Coordinate potential County/City street improvements (Bluff/Waller, N High Drive, South Grade Rd) • Collaborate on School Rd Corridor study • Complete Turnback Agreement for Jefferson Water Distribution System • Phase 2 of a Water Plant Study conducted • Cross-connection/backflow program reviewed and updated • Bulk Fill replacement plan created (combo with new Dump Station) Wastewater • Optimization of biosolids management operations • PFAS monitoring and source reduction efforts; new SIU local limits • Relicensing application completed • Commence system wide pipelining program • Dumpstation replacement plan created (combo with new Bulk Fill Station) Stormwater Collection/Treatment Systems • Stormwater Pollution Plan inhouse reviews City Sustainability Committee • Reinvigorate Sustainability Committee • Support/Promote community solar installations Other • Assist in updating of Safe Routes to School Plan • Assist with development of the City's updated 5-year Strategic Plan On an ongoing basis, Pub/ic Works staff works closely with MnDOT, McLeod County Pub/ic Works, MnDNR, MPCA, MDH, and other government agencies to identify, develop and/or coordinate improvements and initiati ves 161 Community Survey Periodically the City conducts the National Community Survey. In the most recent 2023 survey, citizens identified the Economy and Safety as their two most important issues. Several categories in the survey relate to Public Works, including: Cateaory Score Comparison to national benchmark Overall quality of trans system 63% Similar Ease of walking 84% Higher slight decrease from 2019 Travel by bicycle 78% Higher slight increase from 2019 Travel by public transportation 38% Similar slight decrease from 2019 Travel by car 80% Similar slight increase from 2019 Public parking 70% Similar slight increase from 2019 Traffic flow 53% Similar slight increase from 2019 Street repair 43% Similar scan in X. rom 0 Street cleaning 68% Similar significant incr.from201 Street lighting 74% Similar slight decrease from 2019 Snow removal 76% Similar same as 2019 Sidewalk maintenance 64% Similar slight decrease from 2019 Traffic signal timing 57% Similar same as 2019 Drinking water 84% Similar slight increase from 2019 Sewer services 88% Similar slight decrease from 2019 Storm drainage 86% Higher slight increase from 2019 These surveys help to identify strengths and weaknesses in services provided by the department. Most residents positively assessed the overall quality of the transportation system in Hutchinson. Several categories were rated higher than national benchmarks, including ease of travel by walking, the availability of paths and walking trails and storm water drainage. In 2023, residents gave significantly higher ratings to street repair and street cleaning. There were slight increases in several categories and slight decreases in other categories, but overall, 2023's survey improved. Street repair increased by 17 points, making it the most significant improvement since 2019, resulting in scores comparable to communities nationwide. Street cleaning increased by 10 points, another area of significant improvement compared to 2019. About 65% of residents supported a $250,000 property tax increase dedicated to fixing, repairing and upgrading city streets and related infrastructure. Similarly, 59% of respondents supported a $500,000 tax increase. About 47% of respondents supported a $1,000,000 tax increase. As expected, considering the increase in Street repair scores, these represented a slight decrease. Public Works staff believes that positive street repair responses may have been influenced by several busy, private roadways and private parking lots being repaired in the survey period, following significant frost damage in 2019. The city does not maintain private roadways and parking lots. Several major public capital projects and overlays done in the survey period, which also likely affected improved street repair scores. 162 Pavement Management 30.00 25.00 20.00 15.00 10.00 H z 5.00 J W V x W PCI (by mileage) 75.0 miles 86-100 71-85 0 Excellent 51-70 36-50 22.90 F 2021 est. network PCI = 75 12020 network PCI = 76 13.80 W Q in D Cr O LU � Q Good Adequate 0-35 Miles Category 75.0 — City rated 2.5 — City unrated 6.7—MnDOT 6.1— McLeod Co. 90.3 -Total miles Q 5.90 • 6.80 z_ ♦� 0 Q � a Marginal Poor Since 1996, the city has used a pavement management system to help manage its significant investment in pavements, worth well over $250 million in replacement cost. A Pavement Condition Index (PCI) is determined by periodically conducting physical surveys of each pavement section. Surveyors catalog pavement distresses and assign corresponding deductions. PCI is based on a 100-point scale (100 = no distress; 0 = fully deteriorated street). Further categories are: Excellent, Good, Adequate, Marginal and Poor. The City's goal is to maintain network PCI at 65-75. The current estimated network PCI = 75. In 2023 and 2020, the last surveys, network PCI was 76. Between physical surveys, pavement sections are assigned predetermined deterioration curves to calculate estimated PCI. Maintaining stable scores over the last 7 years shows that spending and project selection are effective and efficient. Using average costs for various maintenance options, a budget is calculated. The budget considers increasing PCI by 10%, decreasing PCI by 10% or keeping PCI scores the same. Projects identified in all three scenarios represent high value projects, so they typically end up in the Capital Improvement Plan (CIP). Other considerations also affect project selection, such as traffic safety, condition of related infrastructure, provision for pedestrian and bicycle facilities, etc. The system continues to indicate a need for more reclaim and overlay projects. Several small maintenance overlay projects have been done recently, and larger reclaim or overlay projects are included in the CIP. Reclaim projects along with spot utility repairs have proven to be very cost-effective. Increasing attention has also been paid to preservation techniques using RePlay or Reclamite as well as more aggressive crack and sealcoating/fog seal applications. 163 m A O. 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O 3 �. Z 07 rt rD Ln (n CD 0 �2 Ln CD 3 CD CD C rr n n: o 0 0 rt N off CD CD N < C n rn-r O 3 Q O r* CD - (7 Q Lo E D 3 �° O CD 7 0) N o O CD C C rt p� rt N 0 7 fl- L n CD fll a Q CD. N Ol Z7 rt V CD Z$ 'p (n CDrtM 6 C '�* rt 0 CD � Ln O CD r�-r C- CL 0 C Ln C rr M C- C `2 6 C- Lo Z rt r�-r Lo O 0 ZT CD (n CD Er C j 3 ZT Z M CD u' n fl r rt no D 0 E O O N Ln a rD rC-r 0) Ln �' o, rt �' O fD O zs Lo Q * a C rt O C C rn-r O Ui 7 rt Q n -p 0 ^ O CD CD CD n 7 `o 3 rC-r Ln N' 0 ZT Co �° R a 0 n Ln Lo CD ZT ZT a CD 0 CD rnr Otsego St Michael Crookston Fairmont Cloquet Elk River Bemidji Alexandria Owatonna Monticello Buffalo Baxter Hutchinson Austin Detroit Lakes Marshall Thief River Falis St Cloud Sartell Farlbault Grand Rapids Fergus Falls Rochester Moorhead East Grand Forks O N A O� 00 O N A 0 0 0 0 0 0 0 0 Ln rt 3 fll N ty M t" ) O 3 N H O 7 HUTCHINSON CITY COUNCIL HUTC HIN SON Request for Board Action A UTY DN KJAPOSE. Summary Review and Approval of the 2025 Audited Comprehensive Financial Agenda Item: Report Department: Finance LICENSE SECTION Meeting Date: 7/14/2026 Application Complete N/A Contact: Justin Juergensen Agenda Item Type: Presenter: Abby Schmidt Reviewed by Staff ❑� New Business Time Requested (Minutes): License Contingency N/A Attachments: No BACKGROUND/EXPLANATION OFAGENDA ITEM: Abby Schmidt, Senior Manager of the City's independent audit firm Abdo, will present a summary review of the City's 2025 annual financial report. A more detailed review will take place at the 4.30PM council workshop prior to the council meeting. Summary financial statements will be printed in the July 16th edition of The Station and an electronic copy of the audited financial report will be available on the City's website tomorrow morning. BOARD ACTION REQUESTED: Approve the 2025 comprehensive financial report. Fiscal Impact: Funding Source: FTE Impact: Budget Change: No Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A 2 0 2 5 Financial Statement Audit City of Hutchinson A It I%f A 0 Introduction • Audit Results • General Fund Results • Other Governmental Funds • Enterprise Funds • Key Performance Indicators Audit Results Auditor's Opinion Minnesota Legal Compliance .� e/ uhVnddI� dW dh Ws�ghcel qlmm m4e/ (ANN? hdhcdw��lighc� r - } RESULTS Fiscal Year 2025 Findings Responsible Contractor Legal Compliance Finding ■ Upw General Fund Fund Balances $18,000,000 $16,Ooo,000 $14,000,000 $$13,963,993 $14,354436 12,000,000 i3,676,142 $10,000,000 �97, 54.9% 54.9% $8,000,000 $6,000,000 40% $4,000,000 4G% 40% 40% $2,000,000 �15,709,729 54.5% 2A21 2(122 20.23 2024 2025 2026. Unrestricted Fund Balance Budget —t Fund Balance Policy Committed for Contingencies and Tax Levy Stabilization General Fund Budget to Actual Revenues Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, January 1 Final Budgeted Actual Variance with Amounts Amounts Final Budget $ 12,897,101 $ 13,414,900 $ 517,799 15,164,187 15,243,121 (78,934) (2,257,086) (1,828,221) 438,865 2,812,628 2,812,628 (545,542) (545,542) 2,267,086 2,267,086 - $ - 438,865 $ 438,865 8,639,018 Fund Balances, December 31 $ 9.077,883 General Fund Revenues by Type $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 Taxes Intergovernmental Charges for Transfers in Other Services ■ 2023 2024 o 2025 General Fund Expenditures by Type $0000,000 $5MOPaa $ADDOAoo $3.00Q000 $z000,000 $1,00gaaa General Public Safety Streets and. Govemmend Highways ■ 2023 12024 ■ 2025 Culture Wor R,eeteatf " Special Revenue Fund Balances Fund Rural Fire Department Hutchinson Area Transportation Facility Economic Development Loan Energy Loan Minnesota Imrairtment Hutchinson FJrterprise Center HRA Loan Housing Rehabilitation Grant Tax Increment Tax Increment 2016 TIF #4-17 Enterprise Center TIF #418 Highfield Housing Development TIF #419 Highway7 & 15Sdis Condition TIF #420 WardorFxpansion TIF #4.21 1105 Benjamin Ave SE TIF #4-22 Jorgenson Hotel TIF #4.23 RD Machine Expansion Work Horse Develop TIF #424 The Landing TIF #425 Jorgenson Hotel Public SRes Tree Disease Mitigation Fund Balances December 31 Increase 2025 2024 (Decrease) $ 21,417 $ 37,270 $ (15,853) 725,720 66B,822 56,098 47797 481,399 (3,602) 1,012,854 881,852 131,002 10,921 10,422 499 (141,205) (180,858) 39,653 94,399 89,784 4,616 399,460 485,311 (85,B51) 113,827 143,222 (29,395) (158,796) (476,627) 317,831 (105,409) (104,924) (405) 16,135 13,118 3,017 7,015 5,305 1,710 68,666 4,961 63,705 4,703 3,300 1,403 - (5,784) 5,784 1,102 (B,100) 9,202 3,831 (3,831) (21,781) - (21,781) (538) - (538) 398,501 369,292 29,209 411,970 420,882 (8,912) Total $ 3,336 558 $ 2,842478 $ 494280 a Capital Projects Fund Balances Fund Balances December 31 Increase Fund 2025 2024 (Decrease) Major Spacial Assessment Improvement2025 $ (70,860) $ (60,960) $ (9,900) Nonmajor Capital Improvements Projects 2,994,615 3,238,593 (243,978) Community Improvement 2075,732 2,532,442 343,290 Airport Renovation (140,694) (455,001) 314,307 Equipment Replacemerrt 513,412 1,006,797 (493,385) Special Assessment Improvement2026 (578) - (570) Special Assessment Improvement2027 (4,993) (4,993) Total $ 6,166,634 $ 6,261,971 $ (95,237) $7,000,000 $6.000,000 S5,000,000 S4,00D,0D0 $3,000,000 S2,DOD,ODD $1,000,000 01 $- $(1 AD0,DDO) $(2,OOD,000) Restricted Cammitt:od Assigned Unassigned ■ 2023 2024 2025 Debt Service Funds Debt Descr G.O. Tax Increment Bonds 2004C G.O. Tax Increment Refunding G.O. Bonds G.D. Improvement Bonds of 2021A- Police Facility G.O. Tax Abatement Bonds of 2021A G.O. Improvement Bonds of 2022A G.O. Improvement Bands of 2024A Total G.O. Bonds G.O. Special Assessment Bonds G.O. Improvement and Refunding Bonds of 2014A (Refunded 20084) G.O. Improvement Bonds of 2015A G.O. Improvement Bonds of 201&A G.O. Improvement Bonds of 2017A G.D. Improvement Bonds of 2018A G.O. Improvement Bonds of 2019A G.O. Improvement Bonds of 2020A G.O. Improvement Bonds of 2021A G.O. Improvement Bonds of 2023A G.D. Improvement Bonds of 2024A G.O. Improvement Bonds of 2025A Total G.O. Special Assessment Bonds Total All Debt Service Funds Future Interest on Debt Total Cash and Total Outstanding Maturity Investments Assets Debt Date S 16,789 $ 123,261 $ . * Matured 737,541 739,304 5,860,000 D2/01/37 - - 405,000 D2/01/37 248,577 291,684 5,525,000 D2/01/52 11080,000 D2/01/40 9%118 1,030,988 12,870,000 128,692 200,551 560,000 D2/01/30 243,051 243,342 820,000 D2/01/31 247,575 271,326 1,040,000 D2/01/32 224,581 380,673 1,270,000 D2/01/33 33Z066 3BZ213 1,295,000 D2/01/34 440,806 486,962 1,620,000 D2/01/35 320,277 455,207 1,775,000 D2/01/36 375,555 48ZB01 1,610,000 D2/01/37 271,147 400,876 1,290,000 D2/01/39 326,396 534,782 995,000 D2/01/40 164,834 562,602 2,195,000 3,094,9130 4,401,335 14,370,000 S 4097,897 S 5,555,584 8 27,240,000 $ 7,292,316 * The debt related to these bonds have been paid and these funds can be closed. $3,OOQ000 $2,500000 $2,000000 $1,50Q000 $1,000,000 $500,000 Debt Service 2026 2027 20n 2029 2030 2031 2032 2033 2034 2035 ■ Principal Interest n j S4,000,000 03,500,000 Ss pOpp00 $2,500,000 $2,000,000 $1,500,000 $7,000A00 5500.00p $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 2022 2022 2023 2023 2024 2024 2025 2p25 �-Operatlng Receipts Seles Tax =Operating Disbursements ■ Debt Peynnents $4,495,762 $3,919,473 $3,785,741 $1,914,638 $1,029,51 2022 2023 2024 2025 Actual Cash -*—Target Balance (Following Year Debt Service Plus 50% of Operating Costs) Water Fund Cash Flows from Operations and Cash Balances (7 $6,000,000 i5 S} $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- $9,000,000 $8,000,000 $7,000,000 $ 6,00 0,000 $ 5,00 0,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- 2022 2022 2023 2023 — Sewer Fund 2024 2024 2025 2025 ■Operating Receipts +Sales Tax ■Operating Disbursements ■Debt Payments 1 2022 2023 2024 2025 iiiiiiiiiiiiiiiiiActua Cash Target Balance (Following Year Debt Service Plus 50% of Operating Costs) Cash Flows from Operations and Cash Balances $50,0O0,O00 $4O,0oo,000 M,000,000 $2O,0O0,O0O $10,000,O00 2022 2022 9 Operating Receipts $ 30,0 00,000 $ 25,0 00,000 $ 20,0 00,000 $15,0 00,000 $10,000,000 $5,000,000 $23,394,283 2023 2023 2024 2024 2D25 2025 Operating Disburaementa ■ Debt Payments $24,524,926 $20,596,789 $22,356,589 2022 2023 2024 2025 Actual Cash Target Balance (Following Year Debt Service Plus 50% of Operating Costs) Public Utilities Commission Fund Cash Flows from Operations and Cash Balances n $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $- 2022 2022 2023 2023 2024 2024 2025 2025 ■ Operating Receipts ■ Operating Disbursements $z00a000 $1,800.0DD $1,600,oDD S1,4C0 M $1,200.0DD $1,D00,0D0 $8011000 5600.000 $400,000 $20aDDo $- 5777,718 $1,003,121 658 505 2022 2023 2024 20U f ActuaI Cash Target Balance (Fallowing Year Debt Service Plus 5096 of operating Costs) Refuse Fund Cash Flows from Operations and Cash Balances $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- $2500,000 $Z0001000 $1,500,000 $1,000,000 MX1300 S- 2022 2022 2023 2023 2024 2024 2025 2025 ■Operating Receipts ■Operating Disbursements ■ Debt Payments $2,403,501 2022 20n ZD24 2025 Actual Cash --*—Target Mews (Following Year Dept Service Plus 50%c f Opersting Costs) ' Composting Fund Cash Flows from Operations and Cash Balances $1,400,UDD $1,204000 $1,DDRODD $e00,000 $600,000 $400,000 $200,000 2022 2022 2023 2023 2024 Operating Receipts Operating Disbursements $,.60g000 $1,400,000 $,.2DQD00 $1,000,ODD $800,D00 $60W100 a� $404000 $200,000 Storm Water 2024 2D25 2025 Fund ■ Debt Payments $1,37AM Cash Flows from $1,109,512 Operations and 86,D24 � an Cash Balances y y� $51 1 1, 2022 2023 2D24 2025 Actual Cash -d—Target 0alance (Following Year Debt Service Plus 50% of 0pereting Costs) $9,0na000 $e,00%000 $7,000A00 MD00,000 IIMP $4DOD,000 $4,DOD,000 $3,DOD,000 SZDUD,000` S1,o0g000o0o $- 1 $4,DUD,oDD "500,oDD $3,000.000 sz500,00D SZOaaow $1,500,oDD $1,000,000 $500,000 2022 2022 2023 2023 2024 2024 2025 2025 yOperaling Receipts - Operaling Disbursements S3,373,079 $3,385,349 S3,W084 $3,420787 %81,729 2022 2023 21124 21325 z Actual Cash Target Balance (50% of Operating Coats) Liquor Fund Cash Flows from Operations and Cash Balances Sales Cost of sales Gross Profit Operating Expenses Operating Income Investment and Other Income Income Before Transfer Transfers Out Change in Net Position Cash and Investmerds Liquor Fund Operations 2023 Total Percent $ 7,516,760 100.0 % (5,827,827) (77.5) 1,608,933 22.5 (1,146,883) (15.3) 54ZO50 7.2 960 - 543,010 7.2 (55Q000) (7.3) S (6,990] (0.1) % $ 583,359 2024 Total Percent $ 7,755,855 100.0 % (5,905,792) (76.1) 1,850,063 23-9 (1,153,852) (14.9) 696,211 9.0 1,401 697,612 9-0 (550,000) (7.1) $ 447,612 1.9 % $ 67ZO32 2025 Total Percent $ 7,568,335 100.0 % (5,725,669) (75.6) 1,842,666 24.4 (1,083,022) (14.3) 759,644 10.1 1,312 - 760,956 10.1 (550,000) (7.3) $ 210,956 2.8 % S 739,771 KEY PERFORMANCE INDICATORS Taxes 7a�i Rate Mb[. 160.00% 140.00% 120.00% 100.00% 80.00% 6a.00% 40.00% 20,00% 0.00% 2022 2023 2024 2025 Special Tex Rate 3.45% 2.90% 2.86% 2.9a% School Tex Rate 30.52% 24.82% 24.09% 30,56% County Tax Rate 57.53% 50.61% 47.19% 45.65% MCity Tax Rate 60.41% 53.65% 54.35% 56.53% 100.00% 90,00% B0.00% 70.00% 60,E sa.anx 4a,an% xl.00% xu,00% 10.00% 00a% I•Claae 3 Cities CttiesIn McLeod County Custom Peer Group City of Hutchinson Tax Rates 2022 2023 2024 2025 48,79% 44,60% 44,02% NIA 90.79% 78.91% 73.96% 76,02% 58.69% 54.75% 53.70% 56.86% 60.41% 53.65% 54.35% 56.53% Custom peer group: Cloquet, Alexandria, Bemidji, Winona, Austin, Faribault, Brainerd, Willmar, Fergus Falls, Owatonna, Worthington, Albert Lea, Fairmont, Red Wing, Marshall, Northfield, New Ulm, Hibbing 3 KEY PERFORMANCE INDICATORS S} Debt Debt Per Capita $5,000 $4, 500 $4,000 $3,500 $3 000 $2,500 $2,000 $1,500 $1,000 III III III $500 $- - 2021 2022 2023 Class 3 Cities $1,918 $1,937 $1,887 Cities in McLeod County $3,150 $2,883 $2,832 t Custonn Peer Group $1,653 $1,552 $1,574 —e—City of Hutchinson $4,388 $4,140 $3,728 Debt Service Expenditures as a Percent of 30.00% Total Expenditures 25.00`.K 20, 00% 15.00% 10.00% 5.00% 0.00% 2024 2025 2021 2022 2023 2024 2025 N/A N/A Cless 3 Glties 14.57% 11.46% 10.74% N/A N/A N/A N/A Cities in McLeod County 23.06% 15.02% 13.26% N/A N/A N/A N/A Custom Peer Group 12.58% 9.21% 8.63% N/A N/A $3,728 $3,114 —6—CityofHutchinson 24.9% 16.7% 15.2% 15.2% 15.3% Custom peer group: Cloquet, Alexandria, Bemidji, Winona, Austin, Faribault, Brainerd, Willmar, Fergus Falls, Owatonna, Worthington, Albert Lea, Fairmont, Red Wing, Marshall, Northfield, New Ulm, Hibbing KEY PERFORMANCE INDICATORS Expenditures Current Expenditures Per Capita $1,200 $1,000 SWO $WO $400 $200 $ 2021 2022 r 2023 Class 3 Cities $753 $843 $896 Cities in McLeod County $992 $1,039 $1,082 Custom Peer Group $936 $1,003 $1,069 ■Cityof Hutchinson $1,037 $1,063 $1,044 2024 2025 N/A N/A N/A N/A N/A N/A $1,103 $1,137 it Custom peer group: Cloquet, Alexandria, Bemidji, Winona, Austin, Faribault, Brainerd, Willmar, Fergus Falls, Owatonna, Worthington, Albert Lea, Fairmont, Red Wing, Marshall, Northfield, New Ulm, Hibbing Andy Abby Chad Mara BERG SCHMIDT GUSE RICHARDSON k4 CITY OF HUTCHINSON HUTCHINSON, MINNESOTA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2025 PREPARED BY: FINANCE DEPARTMENT ANDREW REID Finance Director Member GFOA of U.S. and Canada Published June 18, 2026 THIS PAGE IS LEFT BLANK INTENTIONALLY City of Hutchinson, Minnesota Annual Comprehensive Financial Report Table of Contents For the Year Ended December 31, 2025 Introductory Section Page No. Transmittal Letter 9 Organizational Chart 16 Principal City Officials 17 GFOA Certificate of Achievement for Excellence in Financial Reporting 18 Financial Section Independent Auditor's Report 21 Management's Discussion and Analysis 25 Basic Financial Statements Government -wide Financial Statements Statement of Net Position 41 Statement of Activities 42 Fund Financial Statements Governmental Funds Balance Sheet 46 Reconciliation of the Balance Sheet to the Statement of Net Position 47 Statement of Revenues, Expenditures and Changes in Fund Balances 48 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 49 Proprietary Funds Statement of Net Position 50 Statement of Revenues, Expenses and Changes in Net Position 53 Statement of Cash Flows 54 Fiduciary Funds Statement of Fiduciary Net Position 56 Statement of Changes in Fiduciary Net Position 57 Notes to the Financial Statements 59 Required Supplementary Information Schedule of Employer's Share of Public Employees Retirement Association Net Pension Liability - General Employees Retirement Fund 108 Schedule of Employer's Public Employees Retirement Association Contributions - General Employees Retirement Fund 108 Notes to the Required Supplementary Information - General Employees Retirement Fund 109 Schedule of Employer's Share of Public Employees Retirement Association Net Pension Liability - Public Employees Police and Fire Fund 111 Schedule of Employer's Public Employees Retirement Association Contributions - Public Employees Police and Fire Fund 111 Notes to the Required Supplementary Information - Public Employees Police and Fire Fund 112 Schedule of Changes in the Fire Relief Association's Net Pension Liability (Asset) and Related Ratios 114 Notes to the Required Supplementary Information - Fire Relief Association 116 Schedule of Employer's Fire Relief Association Contributions 118 Schedule of Changes in the City's Total OPEB Liability and Related Ratios 118 Notes to the Required Supplementary Information - City's Total OPEB Liability and Related Ratios 118 Budgetary Comparison Schedules General Fund 120 Notes to the Required Supplemental Information — Budgetary Reporting 121 City of Hutchinson, Minnesota Annual Comprehensive Financial Report Table of Contents (Continued) For the Year Ended December 31, 2025 Page No. Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds Combining Balance Sheet 124 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 125 Nonmajor Proprietary Funds Statement of Net Position 128 Statement of Revenues, Expenses, and Changes in Net Position 129 Statement of Cash Flows 130 Nonmajor Special Revenue Funds Combining Balance Sheet 134 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 138 Schedules of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual Rural Fire Department Fund 142 Hutchinson Area Transportation Fund 143 Nonmajor Capital Projects Fund Combining Balance Sheet 146 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 148 General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual 153 Debt Service Funds Combining Balance Sheet 160 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 162 Discretely Presented Component Unit - Economic Development Authority Balance Sheet/Statement of Net Position 166 Schedule of Revenues, Expenditures and Changes in Fund Balances/Net Position 167 Statistical Section (Unaudited) Table Financial Trends Net Position by Component 1 172 Changes in Net Position 2 174 Governmental Activities Tax Revenues by Source 3 179 Fund Balances of Governmental Funds 4 180 Changes in Fund Balances of Governmental Funds 5 182 Revenue Capacity Assessed Value and Estimated Actual Value of Taxable Property 6 185 Property Tax Rates - Direct and Overlapping Governments 7 186 Principal Property Taxpayers 8 188 Property Tax Levies and Collections 9 189 Debt Capacity Ratios of Outstanding Debt by Type 10 190 Ratios of Net General Bonded Debt Outstanding 11 192 Computation of Direct and Overlapping Debt 12 193 Legal Debt Margin Information 13 194 Pledged -Revenue Coverage 14 196 Demographic and Economic Information Demographic and Economic Statistics 15 198 Principal Employers 16 199 Operating Information Full-time Equivalent City Government Employees by Function 17 201 Operating Indicators by Function 18 202 Capital Asset and Infrastructure Statistics by Function 19 204 all City of Hutchinson, Minnesota Annual Comprehensive Financial Report Table of Contents (Continued) For the Year Ended December 31, 2025 Statistical Section (Unaudited) (Continued) Other Information Combined Schedule of Bonds Payable Operating Expenses by Function - Public Utilities Commission Thousand Cubic Feet (MCF) Sales - Natural Gas Division - Public Utilities Commission Raw Water Finished and Sold Cost Per Thousand Gallons of Finished Water Wastewater Inflow and Cost Per Thousand Gallons Treated Other Reports Independent Auditor's Report on Minnesota Legal Compliance Independent Auditor's Report on Internal Control Over Financial Reporting on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Schedule of Findings and Responses Page No. Table 20 207 21 209 22 210 23 212 24 214 25 215 219 220 223 THIS PAGE IS LEFT BLANK INTENTIONALLY INTRODUCTORY SECTION CITY OF HUTCHINSON HUTCHINSON, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2025 THIS PAGE IS LEFT BLANK INTENTIONALLY HUTCHINSON A CITY ON PURPOSE. June 18, 2026 To the Honorable Mayor, Members of the City Council and the Citizens of the City of Hutchinson: Minnesota statutes require all cities to issue an annual report on its financial position and activity prepared in accordance with generally accepted accounting principles in the United States of America (GAAP), and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants or the Office of the State Auditor. Pursuant to these requirements, we hereby issue the annual financial report of the City of Hutchinson (City) for the fiscal year ended December 31, 2025. This report consists of management's representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed not only to protect the government's assets from loss, theft, or misuse, but also to compile sufficient reliable information for the preparation of the City's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh its benefits, the City's internal controls have been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City's financial statements have been audited by Abdo, a firm of independent licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended December 31, 2025 are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City's financial statements for the fiscal year ended December 31, 2025 are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City was part of a broader, federally mandated "Single Audit' designed to meet the special needs of federal grantor agencies. The standards governing single auditor engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements. The auditor places a special emphasis on internal controls and legal requirements involving the administration of federal awards. The City did not meet the requirement for a Single Audit in 2025. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditors. HUTCHINSON A CITY ON PURPOSE. PROFILE OF THE GOVERNMENT The City of Hutchinson was incorporated in 1855 and exists under the state laws of Minnesota. The City is located in McLeod County in south-central Minnesota, 60 miles west of the Twin Cities at the junctions of Highways 7, 15, and 22 and occupies 4,734 acres. Considered a Greater Minnesota Regional Center, Hutchinson's economy is diverse and includes retail, manufacturing, medical, agricultural and services. For 2025 the latest estimate of the City's population is 14,850. The City is governed under City charter, which was readopted by voters on November 5, 2002. The charter provides for a separate electric and gas commission that oversees its operations but requires Council rate review. The Council is comprised of a mayor, serving a two (2) year term, and four Council members, each serving four (4) year staggered terms. Council members are elected at large but each candidate must file by seat. The City shall hold a primary election if there should be three or more candidates filing for one designated seat. The City Administrator is appointed by the Council and serves as the City Clerk. The City's mission statement is as follows; "The City of Hutchinson exists so that residents, businesses, property owners and visitors are provided with quality services and programs that support a safe, healthy, sustainable and business -friendly community with a small-town atmosphere, for a cost of government similar to, or less than, comparable out -state Minnesota cities". To achieve its mission, the City has established seven core areas of focus: 1) Public Safety • Provide residents and visitors a "safe" environment with protection of property. 2) Health & Recreation a Provide and contribute to a "healthy quality of life". 3) Transportation Provide safe and effective movement throughout the city. 4) Economic Development Provide diversification, job growth and employment opportunities. 5) Environment Provide concepts that are sustainable and environmentally friendly. 6) Good Government Citizens perceive the City is delivering quality services at a reasonable price and that there is adequate planning for the future. 7) Housing The City will advocate for safe and affordable housing and encourage collaboration with other agencies and the private sector to meet community housing needs. The City provides the full range of municipal services prescribed by statute or charter. This includes police and fire protection, construction and maintenance of highways, streets and other infrastructure, and recreational and cultural events. Enterprise activities include water, wastewater, storm water, refuse, HUTCHINS4N A CITY ON PURPOSE. composting services and a municipal off -sale liquor store. The City owns and operates the cemetery, airport, electric and natural gas services. The City's financial statements include all funds and departments of the City (primary government) and its component units. Component units are included in the city's reporting because of the significance of their operational or financial relationship to the City. The City has the following component units and further information regarding these entities can be found within Note 1 to the financial statements: 1) Economic Development Agency (EDA) 2) Housing Redevelopment Authority (HRA) Each year the Council approves an annual budget which serves as the foundation for the City's financial planning and control. The budget process begins in May of each year with a council workshop to discuss expectations for the preliminary budget and to identify any Council initiatives or direction to be included in the budget. Requests from all departments and agencies are submitted and prepared by the City Administrator for presentation to the Council. The Council, following a public hearing no later than December 31, approves the final budgets and tax levies. Page 120 of this 2025 Annual Comprehensive Financial Report provides the General fund budget to actual results. The Council formally approves annual budgets for the following funds: General fund Enterprise funds: Liquor, Water, Wastewater, Storm Water, Compost and Refuse Budgets for the following governmental funds are compiled but not approved by Council: Rural Fire, H.A.T.S Joint Powers Facility and the Hutchinson Enterprise Center The legal level of budgetary control is the department level. The City Administrator is authorized to approve a transfer of funds from one appropriation to another within the budget of any city department. Department means any city function organized under the direct control of a single department head within the same fund. FACTORS AFFECTING FINANCIAL CONDITION Local Economy Hutchinson's economy continued to reflect stability in 2025, and city management believes stability will continue with moderate growth. The 2025 tax base increased from $16,264,288 to $16,410,588, or a 0.9% increase from 2024. The City's overall market value increased 1.7% in 2025. The Ci s market valuation is comprised of Residential (75.8%), Commercial & Industrial (15.5%), Apartments (8.2%) and Agriculture (0.5%). The market values increased for Residential (1.4%), Commercial & Industrial (4.1 %) and Apartments (0.7%) while Agricultural HUTCHINSON A CITY ON PURPOSE. values decreased 9.7%. The 2025 market values serve as the basis for property taxes paid in 2026. Construction continued to be slightly slower than normal, with 23 single family homes built compared to 21 in 2024 and 20 in 2023. The City issued 1,114 building permits in 2025 with an estimated valuation of $37,809,214 compared to 1,133 permits in 2024 with a valuation of $23,553,490. The increase in valuation is due mostly to a new apartment complex in the downtown area valued at approximately $14,500,000. Hutchinson serves as a regional retail -shopping hub with a variety of local retailers as well as national and regional retail stores such as Target, Wal-Mart, and Menards. The City's retail trade area covers a 30-mile radius with an estimated customer base of 130,000 people. A sizable number of fast food franchise restaurants are present in the community along with locally owned full service establishments. Hutchinson is also home to a 233,300 square foot enclosed shopping mall with Marshall's, Running's Fleet and Dunham's Sports as anchor tenants. Several strip malls along with a vibrant downtown add to Hutchinson's retail shopping base. Hutchinson's unemployment rate is 4.3%, which is equal to the Federal rate and moderately higher than the State rate of 3.9%. Long-term Financial Planning The City annually prepares a 5-year capital improvement plan detailing specific projects and proposed financing sources. The plan is a collaborative effort between the City's fleet committee, facility committee, resource allocation committee, department directors and city council. Additionally, as part of the annual General fund budget process, a 5-year financial forecast is updated, trending revenues and expenditures. The intent of the 5-year forecast is to determine how easily a future balanced budget can be achieved based on a set of assumptions. Management can then make operational changes in the near -term that will positively affect the long-term budget outlook. Enterprise funds utilize a 10-year financial forecast to help determine when, or if, user rate increases may be warranted. Relevant Financial Policies The City of Hutchinson's Financial Management Plan is designed to serve as the framework upon which consistent operations may be built and sustained, guides responsible use of municipal resources and contributes to the City's overall financial health. The Plan serves three main purposes: 1) Draws together the City's major financial policies into a single document. 2) Establishes principles to guide both staff and city council members to make consistent and informed financial decisions. 3) Provides guidelines for ensuring and maintaining an appropriate level of funds, unreserved and reserved, to sustain the financial integrity of the City. Management's philosophy used in the General fund budget for City Council consideration and approval HUTCHINSON A CITY ON PURPOSE. included conservative revenue estimates and realistic expenditures. The City's fund balance policy designates 40 percent of General fund reserves for working capital to ensure the City can meet ongoing monthly obligations with cash on hand. Another 10 percent is reserved for budgetary contingencies and tax levy stabilization. In addition, management maintains a philosophy that expenditures included in the budget are not automatically considered "approved'. Capital expenditures as well as other significant expenditures are not approved until it has been determined that adequate monies are available and the expenditure is necessary. The City annually issues 15-year general obligation bonded debt for roadway and infrastructure improvement projects. A debt tax levy and special assessments against benefitting properties are the main revenue sources for debt service payments. Federal and state aid or grants, enterprise fund transfers, and City reserves are other financing sources annually leveraged to reduce project costs to a level supported by the City's Debt Management plan. The Debt Management plan is a mechanism to control long-term debt funded by the debt tax levy and to assist in prioritizing capital infrastructure needs. The City's bond rating was reaffirmed by Standard & Poor's in 2025 at AA-. S&P noted that the City's record of stable financial performance, healthy reserves and sound management framework are key factors supporting the City's creditworthiness. The City uses a "pooled cash" concept of investing, which means that all the funds with cash balances participate in an investment pool. Available cash is invested in short-term government money market accounts, certificates of deposit, obligations of the U.S. Treasury and its agencies, and municipal bonds. Major Initiatives The City is in the final design phase of the Otter Lake and Campbell Lake restoration project. Both lakes are located on the western side of the City, forming a contiguous body of water created by a dam to the east of the lakes on the South Fork Crow River. The project's goals are to improve water quality and habitat, reduce soil loss, increase recreational opportunities and increase access for the public. The City committed $500,000 from its Community Improvement fund and received $3,100,000 of Minnesota State bonding dollars to complete the project. Construction is expected to start in late 2026 on several forebays located on private land to the west of city limits. Water from the Crow River will be diverted through the forebays where sediment is removed resulting in cleaner water entering Otter and Campbell lakes. In 2025, the City sold its Franklin Street development site along the Crow River in the downtown area to GC Real Estate for an 81-unit apartment complex. The City originally purchased the blighted site in 2016 and invested funds to ready it for future development. The City incurred costs in 2025 to reroute a sanitary sewer line that previously went through the middle of the property and will invest additional funds in 2026 to construct a storm water pond adjacent to the site. The developer is utilizing a Housing TIF provided by the City and the completion is expected by December 2026. A new fire ladder truck is being constructed over a 2 to 3-year period, with the chassis being purchased in 2025 and the build -out occurring throughout 2026 and completed in early 2027. The total cost of the truck is just under $2,100,000 and is being financed by cash on hand from various City funds in addition to HUTCHINSON A CITY ON PURPOSE. approximately $850,000 of debt to be issued in 2026. The debt will be repaid by the City's debt tax levy. A major improvement project, with an estimated cost over $5,700,000, commenced in 2025 at the City's wastewater facility. The improvements will address aging equipment within the Solids Process Building. Wastewater reserves will fund approximately 50% of the cost and new debt is expected to be issued in 2026 to finance the remaining costs. The debt will be repaid by revenues generated within the Wastewater fund. The City continued to invest in street improvements as part of its annual pavement management program. The 2025 program included the mill and overlay of Hassan Street, Stoney Point Road and a major portion of Dale Street. A potential remodel of City Center is currently being designed and could be a late 2026 or early 2027 start if approved by the city council. Current cost estimates are in the range of $2,000,000 to $3,000,000. If approved, a combination of cash reserves and new debt would be used to finance the project. The debt would be repaid by the City s debt tax levy. The City updated its strategic plan in 2025, focusing on Housing, Health & Recreation, Environment, Economic Development, Transportation, Public Safety and Good Government. The plan should help guide the work of the City for the next 5-8 years. Tax Abatements The City adopted a resolution on August 8, 2017 to provide a tax abatement subsidy for GF (formerly Uponor, Inc), a global pioneer in intelligent plumbing and climate solutions with a North American headquarters in Apple Valley, Minnesota. The abatement was requested to provide financial assistance to GF for the purchase and expansion of a vacant 237,000 square foot manufacturing facility previously owned by Hutchinson Technology, Inc (HTI). The building was vacant for several years due to HTI downsizing its Hutchinson operations. The City expects the benefits of the abatement to at least equal the costs thereof. Granting the abatement was in the public interest as it will increase or preserve the tax base of the City, help retain and expand commercial and industrial enterprise in the City, and provide employment opportunities. It's important to note that only the City taxes are abated on the property's valuation increase above the base value of $4,702,500. The county and school district are not participating in the abatement. The City s taxpayers continue to receive the tax revenue on the base valuation and will see the benefit of increased valuation after the abatement expires on 12/31 /2033. The annual abatement subsidy amount is included within the City's General fund operations as an expenditure, funded by the tax revenue received from GF. The 2025 valuation of $6,710,400 is $2,007,900 above the base value. AWARDS & ACKNOWLEDGEMENTS The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for on Mu HUTCHINSON A CITY ON PURPOSE. Excellence in Financial Reporting to the City of Hutchinson, Minnesota for its annual comprehensive financial report for the fiscal year ended December 31, 2024. The Certificate of Achievement is a prestigious national award recognizing the City's conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a certificate of achievement, a government must publish an easily readable and efficiently organized financial report, with contents conforming to program standards. Such financial report must satisfy both generally accepted accounting principles and applicable legal requirements. A certificate of achievement is valid for a period of one year. The City of Hutchinson has received a certificate of achievement award each year since fiscal year ended 1996. We believe our current report continues to conform to the Certificate of Achievement program requirements and we are submitting it to GFOA to determine its eligibility for another certificate. We would like to express our appreciation to all members of the finance department who assisted and contributed to the preparation of this report. Without their efficient and dedicated service, this report could not be accomplished. Special recognition is in order for Justin Juergensen, Assistant Finance Director, for his major contribution to the preparation and production of this report. We also thank Mayor Forcier and the City Council members for their interest and support in planning and conducting the financial operations of the City in a responsible manner. Respectfully submitted, CITY OF HUTCHINSON Matthew Jaunich Andrew J. Reid City Administrator Finance Director Airport Commission Bicycle/Pedestrian Advisory Committee Charter Commission City/School/Community Advisory Committee Library Board Economic Development Authority (EDA) Housing & Redevelopment Authority (HRA) City of Hutchinson Organizational Chart Citizens of Hutchinson Mayor and City Council City Administrator Parks/Recreation/Comm Ed. Advisory Board Planning Commission Police Civil Service Commission Senior Advisory Board Sustainability Committee Utilities Commission Economic Development Human Resources City AttorneyDirector Liquor Sales Compost Manager Manager Vehicle LSupervisor Director Police Chief / Fire Planning Information PRCE Finance Public Works Emergency Mgmt Technology Chief Director Director Director Director Director Lieutenant Building Officials Rec Facilities Maint Mgr Asst. Fin Director Public Works Manager Sergeants Facilities Manager Recreation Manager City Engineer Parks Supervisor Water Manager Wastewater Manager 16 CITY OFFICIALS The City of Hutchinson operates under its own Home Rule Charter. The City is governed by the Council, consisting of the mayor (2- year term) and four council members elected at large (4-year staggered terms). The Council exercises legislative authority and determines all matters of oolicv_ Council Members Gary Forcier, Mayor Chad Czmowski Pat May Tim Burley Dave Sebesta City Administrator Matt Jaunich Department Directors Term Expires 12/31/2026 12/31/2028 12/31/2028 12/31/2026 12/31/2026 Police Tom Gifferson Legal Marc Sebora Fire Mike Schumann Informational Tech. Tom Kloss Public Works Mike Stifter Human Resources Kellie Wendland Parks/Recreation Lynn Neumann Finance Andy Reid Planning Dan Jochum Motor Vehicle Mary Filzen EDA Miles Seppelt Liquor Store Candice Woods HRA Judy Flemming Compost/Refuse Andy Kosek 17 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Hutchinson Minnesota For its Annual Comprehensive Financial Report For the Fiscal Year Ended December 31, 2024 Executive Director/CEO 18 FINANCIAL SECTION CITY OF HUTCHINSON HUTCHINSON, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2025 19 THIS PAGE IS LEFT BLANK INTENTIONALLY 20 o4V INDEPENDENT AUDITOR'S REPORT Honorable Mayor and City Council City of Hutchinson, Minnesota Report on the Financial Statements Opinions AbdoSolutionsxom We have audited the accompanying financial statements of the governmental activities, the business -type activities, the discretely presented component units, each major fund and the aggregate remaining fund information of the City of Hutchinson, Minnesota (the City), as of and for the year ended December 31, 2025, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the discretely presented component units, each major fund and the aggregate remaining fund information of the City as of December 31, 2025, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. We did not audit the financial statements of the Hutchinson Public Utilities Commission, which is a major fund and 56 percent, 53 percent and 74 percent, respectively, of the assets, net position and revenues of the business -type activities. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Hutchinson Public Utilities Commission mentioned above, is based solely on the reports of the other auditors. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Cityrs ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Lighting the path forward 21 Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control -related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis starting on page 25 and the Schedules of Employers Share of the Net Pension Liability, the Schedule of Changes in Net Pension Liability (Asset) and Related Ratios, the Schedules of Employers Contributions, the related note disclosures, and the Schedule of Changes in the City's Total OPEB Liability and Related Ratios, the respective budgetary comparison schedules and related note disclosures starting on page 108 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 22 C Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying combining and individual fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and schedules are fairly stated, in all material respects in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information in the annual report. The other information comprises the introductory section and statistical section but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 18, 2026, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. lAr Abdo Mankato, Minnesota June 18, 2026 23 THIS PAGE IS LEFT BLANK INTENTIONALLY 24 Management's Discussion and Analysis As management of the City of Hutchinson, Minnesota (the City), we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2025. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found starting on page 9 of this report. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplemental information in addition to the basic financial statements themselves. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of combining and individual fund financial statements and schedules that further explains and supports the information in the financial statements. Figure 1 reflects how the required parts of this annual report are arranged and relate to one another. In addition to these required elements, we have included a section with combining and individual fund financial statements and schedules that provide details about nonmajor governmental funds, which are added together and presented in single columns in the basic financial statements. Figure 1 Required Components of the City's Annual Financial Report Government -wide Fund Notes to the Financial Financial Financial Statements Statements Statements Summary Detail 25 Figure 2 summarizes the major features of the City's financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management's discussion and analysis explains the structure and contents of each of the statements. Figure 2 Major Features of the Government -wide and Fund Financial Statements Fund Financial Statements Government -wide Governmental Funds Proprietary Funds Statements Scope Entire City The activities of the City that are Activities the City government (except not proprietary or fiduciary, such as operates similar to private fiduciary funds) and police, fire and parks businesses, such as the the City's component water and sewer system units Required financial . Statement of Net • Balance Sheet . Statement of Net statements Position . Statement of Revenues, Position Statement of Expenditures, and Changes in . Statement of Activities Fund Balances Revenues, Expenses and Changes in Net Position Statement of Cash Flows Accounting basis and Accrual accounting Modified accrual accounting and Accrual accounting and measurement focus and economic current financial resources focus economic resources resources focus focus Type of asset/liability All assets and Only assets expected to be used All assets and liabilities, information liabilities, both up and liabilities that come due both financial and capital, financial and capital, during the year or soon thereafter; and short-term and long - and short-term and no capital assets included term long-term Type of deferred All deferred Only deferred outflows of All deferred outflows/inflows of outflows/inflows of resources expected to be used up outflows/inflows of resources information resources, regardless and deferred inflows of resources resources, regardless of of when cash is that come due during the year or when cash is received or received or paid. soon thereafter; no capital assets paid included Type of outflow/inflow All revenues and Revenues for which cash is All revenues and expenses information expenses during the received during or soon after the during the year, regardless year, regardless of end of the year; expenditures when of when cash is received when cash is goods or services have been or paid received or paid received and payment is due during the year or soon thereafter Government -Wide Financial Statements. The government -wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to private -sector business. The statement of net position presents information on all of the City's assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both government -wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City include general government, public safety, streets and highways, culture and recreation and housing and economic development. The business -type activities of the City include electric, natural gas, water, sewer, refuse, composting, storm water, and a municipal liquor store operation. The government -wide financial statements include not only the City itself (known as the primary government), but also two legally separate component units under the community redevelopment agency, the Economic Development Authority (EDA) and the Housing and Redevelopment Authority (HRA). Financial information for these component units is discretely presented in the government -wide financial statements. The government -wide financial statements can be found starting on page 41 of this report. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. These statements focus on individual parts of the City government, reporting the City's operations in more detail than the government -wide statements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financing requirement. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains numerous individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General fund, MSA Construction and Special Assessment Improvement 2025 funds which are considered to be major funds. Data from the other nonmajor governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements or schedules elsewhere in the report. Proprietary Funds. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City uses enterprise funds to account for its residential refuse pickup, compost, water and sewer, electric and gas, storm water, and liquor operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for its insurance operations. Because both of these services predominantly benefit governmental rather than business -type functions, they have been included within governmental activities in the government -wide financial statements. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for each of its operations that are considered to be major funds of the City. Both internal service funds balances have been incorporated into the functions of the governmental activities that benefited from these services. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found starting on page 50 of this report. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found starting on page 59 of this report. 27 Supplementary Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of Hutchinson's share of net pension liabilities (assets) for defined benefit plans, schedules of contributions, and progress in funding its obligation to provide pension and other postemployment benefits to its employees. Required supplementary information can be found starting on page 108 of this report. The City adopts an annual appropriated budget for its General fund. A budgetary comparison schedule has been provided for the General fund on page 120 in this report to demonstrate compliance with this budget. The basic governmental fund financial statements can be found starting on page 46 of this report. Other Information. The combining statements referred to earlier in connection with nonmajor governmental funds are presented immediately following the required supplementary information. Combining and individual fund financial statements and schedules can be found starting on page 124 of this report. Further, a statistical section has been included as part of the annual comprehensive financial report to facilitate additional analysis and can be found starting on page 172 of this report. Government -wide Financial Analysis The two government -wide statements report the City's net position and how they have changed. The table below presents net position -the difference between the City's assets and deferred outflows of resources and liabilities and deferred inflows of resources - is one way to measure the City's financial health, or position. • Over time, increases or decreases in the City's net position are an indicator of whether its financial health is improving or deteriorating, respectively. To assess the overall health of the City consider additional nonfinancial factors such as changes in the City's property tax base and the condition of the City's roads. By far the largest portion of the City's net position reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment), less any related debt used to acquire those assets that are still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. 28 City of Hutchinson's Summary of Net Position Governmental Activities Business -type Activities Increase Increase 2025 2024 (Decrease) 2025 2024 (Decrease) Current and Other Assets $ 29,480,736 $ 29,395,493 $ 85,243 $ 48,323,274 $ 51,873,012 $ (3,549,738) Capital Assets 101,372,040 102,092,516 (720,476) 139,904,995 135,184,423 4,720,572 Total Assets 130,852,776 131,488,009 (635,233) 188,228,269 187,057,435 1,170,834 Deferred Outflows of Resources 2,975,771 3,915,568 (939,797) 731,009 691,829 39,180 Noncurrent Liabilities 33,237,814 33,656,280 (418,466) 24,937,623 31,054,823 (6,117,200) Other Liabilities 1,491,753 1,821,834 (330,081) 4,633,880 5,068,127 (434,247) Total Liabilities 34,729,567 35,478,114 (748,547) 29,571,503 36,122,950 (6,551,447) Deferred Inflows of Resources 5,034,869 5,852,007 (817,138) 2,977,265 3,485,686 (508,421) Net Position Net investment in capital assets 72,479,471 72,865,707 (386,236) 119,511,518 109,119,154 10,392,364 Restricted 9,012,749 9,055,544 (42,795) 3,247,000 - 3,247,000 Unrestricted 12,571,891 12,152,205 419,686 33,651,992 39,021,474 (5,369,482) Total Net Position $ 94,064,111 $ 94,073,456 $ (9,345) $ 156,410,510 $ 148,140,628 $ 8,269,882 Net Position as a Percentage of Total Net investment in Capital assets 77.0 % 77.5 % 76.4 % 73.7 % Restricted 9.6 9.6 2.1 - Unrestricted 13.4 12.9 21.5 26.3 I UU.0 70 I UU.0 70 I UU.0 70 I UU.0 70 An additional portion of the City's net position represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position may be used to meet the City's ongoing obligations to citizens and creditors. At the end of 2025, the City is able to report positive balances in all three categories of net position, both for the City as a whole, as well as for its separate governmental and business -type activities. 29 Governmental Activities. Governmental activities decreased the City's net position as shown below. Key elements of the activities are shown below: City of Hutchinson's Changes in Net Position Governmental Activities Business -type Activities Increase Increase 2025 2024 (Decrease) 2025 2024 (Decrease) Revenues Program Revenues Charges for services $ 4,444,712 $ 4,008,774 $ 435,938 $ 64,936,768 $ 62,298,074 $ 2,638,694 Operating grants and contributions 2,407,403 2,304,013 103,390 93,697 276,960 (183,263) Capital grants and contributions 1,114,264 1,103,452 10,812 272,684 129,550 143,134 General Revenues Property taxes/tax increments 9,307,035 8,870,216 436,819 - - - Othertaxes 689,989 685,939 4,050 1,913,580 1,963,236 (49,656) Grants and contributions not restricted to specific programs 3,104,142 3,184,441 (80,299) - - - Unrestrictedinvestmentearnings 975,840 866,744 109,096 2,036,207 1,956,722 79,485 Other - - - - - - Gain on sale of capital assets 71,245 658,960 (587,715) 145,346 351,121 (205,775) Total Revenues 22,114,630 21,682,539 432,091 69,398,282 66,975,663 2,422,619 Expenses General government 3,379,592 2,866,422 513,170 - - - Public safety 6,497,410 6,277,883 219,527 Streets and highways 6,936,682 6,751,159 185,523 Culture and recreation 4,883,547 4,820,161 63,386 Housing and economic development 548,042 588,546 (40,504) Cemetery, airport and other 1,472,530 1,197,781 274,749 Interest on long-term debt 789,385 738,723 50,662 - - - Electric - - - 29,653,869 27,930,393 1,723,476 Natural gas 11,703,130 11,325,169 377,961 Water 2,543,512 2,767,455 (223,943) Sewer 3,341,583 3,505,360 (163,777) Refuse 1,617,352 1,585,690 31,662 Composting 2,293,036 2,620,997 (327,961) Storm water 783,021 831,213 (48,192) Municipal liquor store - - - 6,809,684 7,060,274 (250,590) Total Expenses 24,507,188 23,240,675 1,266,513 58,745,187 57,626,551 1,118,636 Increase(Decrease)in Net Position Before Transfers (2,392,558) (1,558,136) (834,422) 10,653,095 9,349,112 1,303,983 Transfers 3,354,400 3,839,530 (485,130) (3,354,400) (3,839,530) 485,130 Contributed capital (971,187) (1,625,142) 653,955 971,187 1,625,142 (653,955) Change in Net Position (9,345) 656,252 (665,597) 8,269,882 7,134,724 1,135,158 Net Position -January 1 94,073,456 93,417,204 656,252 148,140,628 141,005,904 7,134,724 Net Position - December 31 $ 94,064,111 $ 94,073,456 $ (9,345) $ 156,410,510 $ 148,140,628 $ 8,269,882 Key elements of this decrease are as follows Increases in expenses related to general government: primarily due to the disposal of City land that was sold to a developer as part of the construction of The Landing, a new downtown apartment complex that began construction in 2025. In 2016 and 2023, the City purchased land with plans for future redevelopment of prime downtown riverfront property, which came to fruition in 2025 with this apartment complex. Increases in expenses related to cemetery, airport and other: due to several projects that took place in 2025. Asphalt repairs at the Cemetery contributed to this increase, but the primary factor in this category's increase was due to several projects at the city -operated airport that included grading and runway improvements, along with the re -roofing of multiple hangars. Decrease in revenues related to gain on sale of capital assets: stems from prior year sales being higher than normal due to the sale of multiple old Police facilities following the construction of the City's new Police Station in 2023. 30 The following graphs depict various governmental activities and show the revenue and expenses directly related to those activities. Expenses and Program Revenues - Governmental Activities $$100A . 7.WQ000 SkOK000 $r;04000 WK000 t000 Oo4oaa $1,Oi0400a General Ccwnmant Public Safety Street and Culture and Highwaya IAcreetfan z Homing and Cemetery. lidoreet an Economic Arrport and Long-term Dwelopmarrt Dthw DW •+Eapene+ea Program Rmenwm Revenues by Source - Governmental Activities Grants and MWbuftons Other Chi for UhraMelled 14.Q11 4.7% Sdrvi � 20.196 other Taxes &1% Property Ts 42. v1 opera" Gnu and Wmlbutlons 1 G.9% Gapkel Gmft aw C"butlam 31 Business -type Activities. Business -type activities increased the Ufa net position as shown in the changes in net position table. Key elements of the activities are shown below: Charges for services for business -type activities increased in large part due to a significant increase in electric sales at the Hutchinson Utilities Commission (HUC). Electric energy prices on the market were extremely high in 2025, which resulted in HUC generating more of their own electricity and selling it into the market. Planned fee increases in the Storm Water fund (8%) and Refuse fund (5%) also contributed towards the increased charges for services. The decrease in composting expenses was primarily attributable to lower cost of sales resulting from a planned decrease of 9ltcon product in 2025. The Cillys compauting fadllty historically gathers enough of this asphalt and concrete material to where it fiscally makes sense to crush and create the finished product for sale every other year. 2025 was an off-year, which is the primary factor in this large decrease in expenses at the facility. • Business -type activity expenses decreased in all areas except for a minor increase in Refuse expenses, along with larger increases in Electric and Gas expenses as an offset to the revenue increases mentioned above. This increased revenue also saw increased expenses to generate product for sale, while still providing for an overall increase in net position. $35.000,ODD i $so�ao�,oao � 825A00,000 8XIA a,oao $1EAOD,000 $10,OOD,OD0 $Rao 1 Expenses and Program Revenues - Business -type Activities Electric Naturd Gsa Water Sewer Reftee Co npm frq ftrm Wmftr • Expenaw "rem Pammiea Revenues by Source Business -type Activities Operedng Crarda -and Cwtribudom 0.1 % Capital Omrds and ConiftMns Sales Tax tkA% 2 Other 3 2% Liquor Maw for Services 93-% 32 Financial Analysis of City's Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental Funds - The focus of the City's governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. The table below outlines the governmental fund balances for the year ending December 31, 2025: Special Assessment Other General Improvement Governmental Prior Year Increase/ Fund 2025 Funds Total Total (Decrease) Fund Balances Nonspendable $ 59,044 $ - $ - $ 59,044 $ 39,045 $ 19,999 Restricted - - 7,163,038 7,163,038 7,445,224 (282,186) Committed 8,274,329 - 1,568,442 9,842,771 9,460,712 382,059 Assigned - - 5,627,694 5,627,694 5,750,955 (123,261) Unassigned 744,510 (70,860) (573,994) 99,656 (547,146) 646,802 Total Fund Balances $ 9,077,883 $ (70,860) $ 13,785,180 $ 22,792,203 $ 22,148,790 $ 643,413 The General fund is the chief operating fund of the City. At the end of 2025, fund balance of the General fund is shown in the table above. As a measure of the General fund's liquidity, it may be useful to compare unassigned fund balance to total fund expenditures. The total unassigned fund balance as a percent of total fund expenditures is shown in the chart below along with total fund balance as a percent of total expenditures. General Fund Fund Balances Nonspendable Committed Unassigned Total Fund Balances General Fund expenditures Unassigned as a percent of expenditures Total Fund Balance as a percent of expenditures Fund Balance qn9g; gn9a Increase/ (Decrease) $ 59,044 $ 39,045 $ 19,999 8,274,329 7,854,865 419,464 744,510 788,482 (43,972) $ 9,077,883 $ 8,682,392 $ 395,491 $ 15,243,121 $ 14,549,942 4.9% 5.4% 59.6% 59.7% The fund balance of the City's General fund increased during the current fiscal year as shown in the table above. Other Major Governmental Fund Analysis The MSA Construction fund is considered a major fund of the City. There were no changes in net position during the year as the fund consists solely of intergovernmental receivables offset with deferred inflows of resources. Other major governmental fund analysis is shown below: Net Position 9n95 2024 Special Assessment Improvement 2025 $ (70,860) $ (60,960) $ The decrease in fund balance during the year was due to capital outlay expenditures outweighing current year revenues. Increase (Decrease) (9,900) 33 Proprietary Funds - The City's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. Net position of the City's proprietary funds increased as follows: Net Position 2025 2024 Increase/ (Decrease) Water Utility $ 22,802,101 $ 21,540,395 $ 1,261,706 The increase is attributed to the collection of sales tax and charges for services in excess of operating expenses. Operating expenses also decreased due in part to fewer meters and related parts purchased than planned. Sewer Utility $ 32,603,349 $ 30,439,203 $ 2,164,146 The increase is attributed to the collection of sales tax and charges for services in excess of operating expenses. Public Utilities Commission $ 82,876,759 $ 79,372,652 $ 3,504,107 The increase is attributed to the collection of charges for services in excess of operating expenses due to increased electric and natural gas sales. This offset the increase in operating expenses caused by production expenses from higher quantities of purchased gas. The Water and Sewer funds saw an increase in their net position due in large part to higher interest earnings than forecasted, while also seeing less than expected contracted repairs & maintenance, along with a smaller portion of contributions to fund construction projects. The local sales tax of 0.5 percent in place since January 1, 2012 resulted in $1.914 million of revenue for these two funds in 2025, a 2.5% decrease from 2024. The local sales tax revenue is being used exclusively for debt service payments on the Water and Sewer facilities General Fund Budgetary Highlights Several positive fluctuations in actual versus budgeted revenues resulted in a positive budget variance of $517,799. Actual expenditures came in greater than budget by $78,934. Significant budget variances are summarized below: • Licenses and Permits exceeded the budget by $116,797, primarily due to building permit revenue being $126,001 higher than budget. • Investment earnings exceeded the budget by $259,1 51. This is the result of true interest earnings being $144,910 higher than budget and the fair value of our investments being $114,241 higher than expected. • Public Safety expenditures exceeded the budget by $79,058. The biggest contributing factors in this overage was unplanned Police Department retirements as well as an increase in officer Overtime pay. • Culture and Recreation expenditures exceeded the budget by $10,954. This is the result of Civic Arena services and charges being $70,299 over budget because of significant maintenance repairs completed throughout the year. 34 Capital Assets and Debt Administration Capital Assets. The City's investment in capital assets for its governmental and business -type activities as of December 31, 2025, is shown below in the capital asset table (net of accumulated depreciation). This investment in capital assets includes land, buildings, infrastructure and improvements, machinery and equipment, office furniture and fixtures, automotive equipment, and construction in progress. The total increase in the City's investment in capital assets for the current fiscal year is due to the major capital asset events noted below. Significant asset additions that occurred during the year are as follows: 2025 Western Star plow trucks • Fountain installed by the dam in the Crow River • Veterans Memorial Field grandstand • Oddfellows Park playground • Sanitary Sewer realignment for The Landing project • Dale Street SW construction — South Grade Rd SW to Roberts Rd SW Hassan Street SE construction — 1 st Ave NE to Oakland Ave SE Land Purchase for storm water pond on Michigan St Creekside Soils cold storage enclosure • X-Treme Leaf Vacuum City -Wide water meter replacement project Significant asset disposals that occurred during the year are as follows: Compost Blending line equipment Old Medical Building lot & 1 st Ave NW land for The Landing project Keene compost containers Bystrom Conveyor Additional information on the City's capital assets can be found in Note 3C starting on page 74 of this report. 35 City of Hutchinson's Capital Assets (Net of Depreciation) Governmental Activities Business -type Activities Total Increase Increase Increase 2025 2024 (Decrease) 2025 2024 (Decrease) 2025 2024 (Decrease) Land $ 9,644,892 $ 10,224,575 $ (579,683) $ 2,214,381 $ 1,994,381 $ 220,000 $ 11,859,273 $ 12,218,956 $ (359,683) Buildings and structures 24,262,366 24,473,793 (211,427) 14,902,866 15,787,167 (884,301) 39,165,232 40,260,960 (1,095,728) Infrastructure and Improvements 60,912,051 61,242,178 (330,127) 106,354,319 107,636,733 (1,282,414) 167,266,370 168,878,911 (1,612,541) Machinery and Equipment 2,827,928 2,881,634 (53,706) 4,304,237 4,744,442 (440,205) 7,132,165 7,626,076 (493,911) Automotive Equipment 2,385,182 1,926,278 458,904 787,568 856,170 (68,602) 3,172,750 2,782,448 390,302 Construction in Progress 1,339,621 1,344,058 (4,437) 11,341,624 4,165,530 7,176,094 12,681,245 5,509,588 7,171,657 Total $ 101,372,040 $ 102,092,516 $ (720,476) $ 139,904,995 $ 135,184,423 $ 4,720,572 $ 241,277,035 $ 237,276,939 $ 4,000,096 Percent increase (decreases 0.7 % 3.5 % 1.7 % Long-term Debt - At the end of the current fiscal year, the City had total bonded debt outstanding consisting of revenue related debt and general obligation debt as noted in the table below. While all of the City's (non -Electric and Gas Utility) bonds have revenue streams, they are all backed by the full faith and credit of the City. City of Hutchinson's Outstanding Debt Governmental Activities Business -type Activities Increase Increase Total Increase 2025 2024 (Decrease) 2025 2024 (Decrease) 2025 2024 (Decrease) G.O. Bonds $ 12,870,000 $ 13,620,000 $ (750,000) $ $ $ $ 12,870,000 $ 13,620,000 $ (750,000) G.O. Improvement Bonds 14,370,000 13,565,000 805,000 14,370,000 13,565,000 805,000 G.O. Revenue Bonds - - - 5,364,000 8,083,000 (2,719,000) 5,364,000 8,083,000 (2,719,000) Revenue Bonds 13,830,000 16,600,000 (2,770,000) 13,830,000 16,600,000 (2,770,000) Financed Purchase Arrangements - 71,666 (71,666) - 71,666 (71,666) Total $ 27,240,000 $ 27,185,000 $ 55,000 $ 19,194,000 $ 24,754,666 $ (5,560,666) $ 46,434,000 $ 51,939,666 $ (5,505,666) Percent increase (decrease) 0.2 % (22.5) % (10.6) % The City's total debt decreased during 2025. Issuances of debt totaled $2,195,000 and long-term debt of $7,700,666 was retired during the year. Standard & Poor's rates the City of Hutchinson's 2025 bonds as "AA-". The revenue bonds of the Electric and Gas Utility fund are separately rated "Aa3" by Moody's Investor Service. Additional information on the City's long-term debt can be found in Note 3G starting on page 82 of this report. Currently Known Facts, Decisions, or Conditions Hutchinson had an average unemployment rate of 4.0 percent during the fiscal year end 2025. This is an estimate based on information obtained from the Minnesota Department of Employment and Economic Development, which compares unfavorably to the average rate of 3.2 percent in the City a year ago. This current rate compares unfavorably to the state average unemployment rate of 3.9 percent and favorably to the federal average unemployment rate of 4.3 percent. Inflationary trends in the region on average for fiscal year 2025 were similar to national indices (i.e. Consumer Price Index). CAL All of these factors were considered in preparing the City's budget for the 2026 fiscal year: City management and City Council continually look at cooperative partnerships as a cost savings measure, reductions in program and service areas, and where personnel cost savings can be achieved while at the same time minimizing service impacts on the community. The City continues to rely on a 5-year budget model to predict long-term challenges that may be faced so that in the near -term they can be addressed. Every effort is made each year to provide a realistic balanced budget to maintain long-term financial viability for the City of Hutchinson. Factors involved in balancing the 2026 General fund budget included a 7.8 percent tax levy increase to address rising costs. Wage and benefit increases, including a 14% increase in health premiums, along with the creation of a new full- time Information Technology position, and budgeting for 2026 election workers led to this increase. Critical repairs at City facilities including the Civic Arena, Recreation Center, and Aquatic Center contributed to this increased tax levy. The City's LGA received from the state increased by just $8,592 in 2026 to a total of $3,112,060. The City continued in 2026 the allocation of LGA as a 50/50 split between the General fund and the Capital Improvement Projects fund. This decision led to an additional $4,296 being allocated to the General fund, for a total of $1,556,030 which is being used to cover operating expenses. The remaining LGA is being reserved in the Capital Improvements Projects fund for General fund facility improvements, miscellaneous infrastructure maintenance, playground replacements, fleet replacements, and other projects as approved by City Council The annual PILOT from the Hutchinson Utilities Commission remained the same in 2026 as it was in 2025. Water, Sewer, and Compost fund business -type activity transfers to the General fund increased by a total of $50,000 in 2026 compared to 2025. The Storm Water fund rates were increased 8% and Refuse fund rates were increased 5% in 2026 to address cash flow needs within the funds. To lessen the General fund tax levy, a substantial amount of other City user -fees were increased for the first time in several years, primarily in the Parks & Recreation area. The Compost pricing has been adjusted either up or down depending on the product line for 2026. Pricing adjustments occurred based on the actual cost to produce a certain product line or to neutralize market pricing from competitors. Requests for Information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director, City of Hutchinson, 111 Hassan Street Southeast, Hutchinson, Minnesota 55350. 37 THIS PAGE IS LEFT BLANK INTENTIONALLY 38 GOVERNMENT -WIDE FINANCIAL STATEMENTS CITY OF HUTCHINSON HUTCHINSON, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2025 39 THIS PAGE IS LEFT BLANK INTENTIONALLY ,e City of Hutchinson, Minnesota Statement of Net Position December 31, 2025 Primary Government Component Units Economic Housing and Governmental Business -type Development Redevelopment Activities Activities Total Authority Authority Assets Cash and temporary investments $ 23,053,534 $ 33,389,261 $ 56,442,795 $ 230,231 $ 3,638,868 Restricted assets - 3,247,000 3,247,000 - 762,289 Receivables Interest 88,264 184,834 273,098 1,012 - Delinquent taxes 133,943 - 133,943 - - Accounts, net of allowances 144,343 4,759,873 4,904,216 2,812 Sales taxes receivable - 121,584 121,584 - Notes 946,707 - 946,707 9,246 Leases 54,491 751,254 805,745 263,837 Special assessments 1,732,612 - 1,732,612 - - Intergovernmental 2,620,496 421,945 3,042,441 592 358 Internal balances (188,218) 188,218 - - - Due from component unit 25 - 25 Inventories 56,802 5,022,903 5,079,705 - Land Held for resale - - - - 60,175 Prepaid items 2,242 236,402 238,644 385 6,192 Net pension asset 835,495 - 835,495 - - Capital assets Nondepreciable 10,984,513 13,556,005 24,540,518 - Depreciable, net of accumulated depreciation 90,387,527 126,348,990 216,736,517 - 866,253 Total Assets 130,852,776 188,228,269 319,081,045 232,220 5,610,030 Deferred Outflows of Resources Deferred pension resources 2,943,325 716,554 3,659,879 9,619 Deferred other postemployment benefit resources 32,446 14,455 46,901 423 Total Deferred Outflows of Resources 2,975,771 731,009 3,706,780 10,042 - Liabilities Accounts payable 741,061 3,306,051 4,047,112 9,916 17,768 Contracts payable 15,411 52,308 67,719 - - Due to primary government - - - 25 - Due to other governments 42,989 106,253 149,242 24 50,860 Accrued interest payable 356,617 109,956 466,573 - - Accrued salaries payable 300,730 241,285 542,015 4,354 7,629 Deposits payable 393 341,674 342,067 - 31,960 Unearned revenue 34,552 476,353 510,905 - 21,396 Noncurrent liabilities Due within one year Long-term liabilities 2,658,051 5,166,531 7,824,582 6,080 13,958 Other postemployment benefits liability 10,939 4,492 15,431 80 - Due in more than one year Long-term liabilities 26,774,410 16,536,680 43,311,090 3,878 323,699 Net pension liability 3,468,593 3,038,162 6,506,755 38,905 - Other postemployment benefits liability 325,821 191,758 517,579 4,314 - Total Liabilities 34,729,567 29,571,503 64,301,070 67,576 467,270 Deferred Inflows of Resources Deferred pension resources 4,805,605 2,194,767 7,000,372 32,983 - Deferred other postemployment benefit resources 176,337 73,291 249,628 2,301 - Deferred lease resources 52,927 709,207 762,134 - 242,704 Total Deferred Inflows of Resources 5,034,869 2,977,265 8,012,134 35,284 242,704 Net Position Net investment in capital assets 72,479,471 119,511,518 191,990,989 553,253 Restricted Pension asset 835,495 - 835,495 - Debt service 5,198,967 3,247,000 8,445,967 Future loans 2,021,608 - 2,021,608 Public sites 327,979 327,979 Rural fire 21,417 21,417 Public safety 239,447 239,447 Drug forfeiture 28,423 28,423 Tax increment activities 211,448 211,448 Affordable housing 127,965 - 127,965 - - Unrestricted 12,571,891 33,651,992 46,223,883 139,402 4,346,803 Total Net Position $ 94,064,111 $ 156,410,510 $ 250,474,621 $ 139,402 $ 4,900,056 The notes to the financial statements are an integral part of this statement. 41 Functions/Programs Primary Government Governmental activities General government Public safety Streets and highways Culture and recreation Housing and economic development Miscellaneous Interest on long-term debt Total Governmental Activities Business -type Activities Electric Natural gas Water Sewer Refuse Composting Storm water Liquor Total Business -type Activities Total Primary Government Component units Economic development Housing and redevelopment Total Component Units City of Hutchinson, Minnesota Statement of Activities For the Year Ended December 31, 2025 Charges for Expenses Services $ 3,379,592 6,497,410 6,936,682 4,883,547 548,042 1,472,530 789,385 tFAIWiIVNRT 7 Program Revenues Operating Capital Grants and Grants and Cnntrihiitinne Cnntrihiitinne $ 812,887 $ 24,773 840,697 592,633 1,023,756 1,227,447 1,298,182 165,080 113,911 76,484 355,279 320,986 d AAA 717 7 an7 dnq 29,653,869 30,937,826 11,703,130 14,666,393 $ 15,402 9,446 713,946 69,100 306,370 1 11 A?AA 2,543,512 2,519,644 120,199 3,341,583 3,984,166 - 152,485 1,617,352 1,532,880 12,690 - 2,293,036 2,518,778 - 783,021 1,208,220 81,007 6,809,684 7,568,861 - - 58,745,187 64,936,768 93,697 272,684 $ 83,252,375 $ 69,381,480 $ 2,501,100 $ 1,386,948 $ 336,000 $ 9,207 $ 24,492 $ 943,449 439,875 518,887 $ 1,279,449 $ 449,082 $ 543,379 $ General Revenues Property taxes, levied for general purposes Property taxes, levied for debt service Tax increments Sales tax Hotel/motel tax Franchise taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on sale of capital assets Transfers Transfers - Capital Assets Total General Revenues and Transfers Change in Net Position Net Position -January 1 Net Position - December 31 The notes to the financial statements are an integral part of this statement. 42 Net (Expense) Revenue and Changes in Net Position Component Units Primary Government Economic Housing and Governmental Business -type Development Redevelopment Activities Activities Total Authority Authority $ (2,526,530) $ $ (2,526,530) $ $ (5,054,634) (5,054,634) (3,971,533) (3,971,533) (3,351,185) (3,351,185) (357,647) (357,647) (489,895) (489,895) (789,385) (789,385) (16,540,809) - (16,540,809) 1,283,957 1,283,957 2,963,263 2,963,263 96,331 96,331 795,068 795,068 (71,782) (71,782) 225,742 225,742 506,206 506,206 759,177 759,177 6,557,962 6,557,962 (16,540,809) 6,557,962 (9,982,847) (302,301) - 15,313 (302,301) 15,313 6,759,656 6,759,656 282,697 170,279 2,547,379 2,547,379 - - 392,466 - 392,466 - 1,913,580 1,913,580 129,688 - 129,688 167,835 167,835 3,104,142 - 3,104,142 - - 975,840 2,036,207 3,012,047 10,539 31,864 71,245 145,346 216,591 - - 3,354,400 (3,354,400) - (971,187) 971,187 - - 16,531,464 1,711,920 18,243,384 293,236 202,143 (9,345) 8,269,882 8,260,537 (9,065) 217,456 94,073,456 148,140,628 242,214,084 148,467 4,682,600 $ 94,064,111 $ 156,410,510 $250,474,621 $ 139,402 $ 4,900,056 The notes to the financial statements are an integral part of this statement. 43 THIS PAGE IS LEFT BLANK INTENTIONALLY 44 FUND FINANCIAL STATEMENTS CITY OF HUTCHINSON HUTCHINSON, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2025 m Assets Cash and investments Receivables Interest Delinquent taxes Accounts Notes Special assessments Intergovernmental Leases Due from other funds Advances to other funds Inventory Prepaid items Total Assets Liabilities Accounts payable Contracts payable Due to other funds Advances from other funds Due to other governments Accrued salaries payable Deposits payable Unearned revenue Total Liabilities Deferred Inflows of Resources Unavailable revenue Loan interest receivable Taxes Special assessments Intergovernmental Deferred lease resources Total Deferred Inflows of Resources Fund Balances Nonspendable Restricted Committed Assigned Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Balances City of Hutchinson, Minnesota Balance Sheet Governmental Funds December 31, 2025 (Formerly Nonmajor) Special Assessment Other MSA Improvement Governmental General Construction 2025 Funds Total $ 9,435,136 $ $ $ 13,202,184 $ 22,637,320 43,392 42,777 86,169 133,943 - 133,943 137,448 6,895 144,343 - 946,707 946,707 - 1,732,612 1,732,612 139,453 2,351,873 129,170 2,620,496 54,491 - - 54,491 - 225,341 225,341 - 277,213 277,213 56,802 - 56,802 2,242 - - 2,242 $ 10,002,907 $ 2,351,873 $ $ 16,562,899 $ 28,917,679 $ 372,894 $ $ 7,367 $ 351,054 $ 731,315 - - 15,411 15,411 63,493 361,848 425,341 - - 277,213 277,213 42,989 - 42,989 287,326 13,404 300,730 393 - 393 34,552 - - 34,552 738,154 70,860 1,018,930 1,827,944 - - 26,177 26,177 133,943 - 133,943 - - 1,732,612 1,732,612 - 2,351,873 - 2,351,873 52,927 - - 52,927 186,870 2,351,873 1,758,789 4,297,532 59,044 - 59,044 - 7,163,038 7,163,038 8,274,329 1,568,442 9,842,771 - 5,627,694 5,627,694 744,510 (70,860) (573,994) 99,656 9,077,883 - (70,860) 13,785,180 22,792,203 $ 10,002,907 $ 2,351,873 $ - $ 16,562,899 $ 28,917,679 The notes to the financial statements are an integral part of this statement. 46 City of Hutchinson, Minnesota Reconciliation of the Balance Sheet to the Statement of Net Position Governmental Funds December 31, 2025 Amounts reported for governmental activities in the statement of net position are different because Total Fund Balances - Governmental Funds $ 22,792,203 Net capital assets used in governmental activities are not financial resources and therefore are not reported as assets in the funds. 101,372,040 Noncurrent liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Noncurrent liabilities at year-end consist of Severance payable (762,405) Other postemployment benefit liability (336,760) Net pension liability (2,633,098) Bonds payable (27,240,000) Bond premiums issued, net of accumulated amortization (1,430,056) Long-term assets are not available to pay current -period expenditures and, therefore, are unavailable in the funds. Interest receivable 26,177 Delinquent property taxes receivable 133,943 Special assessments receivable 1,732,612 Intergovernmental receivable 2,351,873 Governmental funds do not report long-term amounts related to pensions and other post employment benefits. Deferred outflows of pension resources 2,943,325 Deferred inflows of pension resources (4,805,605) Deferred outflows of other postemployment benefit resources 32,446 Deferred inflows of other postemployment benefit resources (176,337) Governmental funds do not report a liability for accrued interest until due and payable. (356,617) Internal service funds are used by management to charge the costs of various services to individual funds. The assets and liabilities of certain internal service funds are included in governmental activities in the statement of net position. 420,370 Total Net Position - Governmental Activities $ 94,064,111 The notes to the financial statements are an integral part of this statement. 47 City of Hutchinson, Minnesota Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended December 31, 2025 (Formerly Nonmajor) Special Assessment Other MSA Improvement Governmental General Construction 2025 Funds Total Revenues Taxes $ 7,069,631 $ $ $ 2,944,936 $ 10,014,567 Special assessments - 69,665 729,775 799,440 Licenses and permits 531,322 - - 531,322 Intergovernmental 2,284,156 1,265,898 2,342,799 5,892,853 Charges for services 2,533,456 - 607,632 3,141,088 Fines and forfeits 43,585 - - 43,585 Investment earnings 399,151 425 584,109 983,685 Miscellaneous 553,599 - 357,283 910,882 Total Revenues 13,414,900 1,335,988 7,566,534 22,317,422 Expenditures Current General government 2,808,809 - - 2,808,809 Public safety 5,710,420 182,538 5,892,958 Streets and highways 2,169,956 665,414 2,835,370 Culture and recreation 3,557,424 108,845 3,666,269 Housing and economic development - 476,686 476,686 Miscellaneous 917,750 - 917,750 Capital outlay General government 15,500 150,280 165,780 Public safety - - 818,073 818,073 Streets and highways 40,189 4,144,459 1,182,919 5,367,567 Culture and recreation 23,073 - 1,189,641 1,212,714 Housing and economic development - 6,438 6,438 Miscellaneous 241,131 241,131 Debt service Principal 2,140,000 2,140,000 Interest and other 861,908 861,908 Bond issuance costs - 76,763 - 76,763 Total Expenditures 15,243,121 4,221,222 8,023,873 27,488,216 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,828,221) (2,885,234) (457,339) (5,170,794) Other Financing Sources (Uses) Sale of capital assets - - 71,245 71,245 Transfers in 2,812,628 486,772 1,134,239 4,433,639 Bonds issued - 2,195,000 - 2,195,000 Premium on bonds issued 193,562 193,562 Transfers out (545,542) - (533,697) (1,079,239) Total Other Financing Sources (Uses) 2,267,086 2,875,334 671,787 5,814,207 Net Change in Fund Balances 438,865 (9,900) 214,448 643,413 Fund Balances, January 1, as Previously Reported 8,639,018 13,509,772 22,148,790 Change to the financial reporting entity (Note 10) Change from nonmajor to major fund - (60,960) 60,960 - Fund Balances, January 1, as Adjusted 8,639,018 (60,960) 13,570,732 22,148,790 Fund Balances, December 31 $ 9,077,883 $ $ (70,860) $ 13,785,180 $ 22,792,203 The notes to the financial statements are an integral part of this statement. 48 City of Hutchinson, Minnesota Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Governmental Funds For the Year Ended December 31, 2025 Amounts reported for governmental activities in the statement of activities are different because Net Change in Fund Balances - Governmental Funds $ 643,413 Governmental funds report capital outlay as expenditures. However, in the statement of activities the cost of those assets is allocated over the estimated useful lives and reported as depreciation expense. Capital outlay 6,725,899 Depreciation expense (5,893,707) The net effect of various miscellaneous transactions involving capital assets is to increase (decrease) net position. Sale/disposal of capital assets (581,481) Capital contributions from business -type activities, net (971,187) The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Principal repayments 2,140,000 Debt issued or incurred (2,195,000) Premium on bonds issued, net of amortization expense (34,420) Interest on long-term debt in the statement of activities differs from the amount reported in the governmental fund because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. (9,856) Long-term pension activity is not reported in governmental funds. Pension expense 425,330 Direct aid contributions 24,846 Certain revenues are recognized as soon as they are earned. Under the modified accrual basis of accounting certain revenues cannot be recognized until they are available to liquidate liabilities of the current period. Property taxes/tax increments (17,543) Special assessments (85,494) Intergovernmental (188,001) Interest earnings (28,492) Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences 18,686 Other postemployment benefits costs 4,638 Internal service funds are used by management to charge the costs of various services to individual funds. The net revenues of certain activities of internal service funds is reported with governmental activities. 13,024 Change in Net Position - Governmental Activities $ (9,345) The notes to the financial statements are an integral part of this statement. Assets Current Assets Cash and investments Receivables Interest Accounts, net of allowances Sales tax Leases Intergovernmental Due from other funds Inventories Prepaid items Total Current Assets Noncurrent Assets Restricted assets Cash and investments Lease receivable Capital assets Land Buildings and structures Infrastructure and improvements Machinery and equipment Automotive equipment Construction in progress Less accumulated depreciation Total Capital Assets (Net of Accumulated Depreciation) Total Noncurrent Assets Total Assets Deferred Outflows of Resources Deferred pension resources Deferred other postemployment benefit resources Total Deferred Outflows of Resources City of Hutchinson, Minnesota Statement of Net Position Proprietary Funds (Continued on the Following Page) December 31.2025 Business -type Activities - Business -type Activities - Governmental Enterprise Funds Enterprise Funds Activities - Other Internal Public Utilities Enterprise Service Fund Water Sewer Commission Funds Total Self Insurance $ 4,687,915 $ 7,729,017 $ 15,311,768 $ 5,660,561 $ 33,389,261 $ 416,214 23,738 37,719 99,570 23,807 184,834 2,095 231,390 349,705 3,794,475 384,303 4,759,873 - - - 121,584 - 121,584 86,665 - - - 86,665 169,342 170,821 81,782 421,945 - 200,000 - - 200,000 - 2,785,157 2,237,746 5,022,903 3,247,000 3,247,000 664,589 - 664,589 16,282 311,915 559,528 1,326,656 2,214,381 17,698,455 28,303,744 - 4,262,107 50,264,306 21,916,500 28,977,388 143,621,333 11,064,154 205,579,375 3,707,362 7,013,444 - 4,805,116 15,525,922 169,595 826,047 - 836,711 1,832,353 21,818 1,298,639 9,896,637 124,530 11,341,624 (24,247,951) (37,984,835) (74,325,474) (10,294,706) (146,852,966) 19,282,061 28,746,342 79,752,024 12,124,568 139,904,995 19,946,650 28,746,342 82,999,024 12,124,568 143,816,584 - 25,145,700 37,233,604 105,341,580 20,519,167 188,240,051 418,309 38,142 49,037 495,019 134,356 716,554 - 2,528 3,370 969 7,588 14,455 40,670 52,407 495,988 141,944 731,009 The notes to the financial statements are an integral part of this statement. 50 City of Hutchinson, Minnesota Statement of Net Position Proprietary Funds (Continued) December 31.2025 Business -type Activities - Business -type Activities - Governmental Enterprise Funds Enterprise Funds Activities - 601 602 Other Internal Public Utilities Enterprise Service Fund Water Sewer Commission Funds Total Self Insurance Liabilities Current Liabilities Accounts payable $ 35,759 $ 224,551 $ 2,670,293 $ 375,448 $ 3,306,051 $ 9,746 Contracts payable - 52,308 - - 52,308 - Due to other governments 1,999 969 - 103,285 106,253 Accrued interest payable 14,375 47,388 38,805 9,388 109,956 Accrued salaries payable 17,752 24,732 140,081 58,720 241,285 Accrued vacation payable 32,385 31,874 198,526 106,148 368,933 Deposits payable - - 341,674 - 341,674 Unearned revenue 9,251 - 467,102 - 476,353 Other postemployment benefit liability 830 1,205 - 2,457 4,492 Current portion of debt 275,000 1,254,000 3,103,598 165,000 4,797,598 - Total Current Liabilities 387,351 1,637,027 6,960,079 820,446 9,804,903 9,746 Noncurrent Liabilities Accrued vacation payable 23,929 - 1,085,895 29,521 1,139,345 - Other postemployment benefit liability 25,406 33,776 56,282 76,294 191,758 Net pension liability 165,360 200,464 2,113,771 558,567 3,038,162 Bonds payable 1,209,143 3,879,996 14,398,836 706,958 20,194,933 Less current portion of debt (275,000) (1,254,000) (3,103,598) (165,000) (4,797,598) Total Noncurrent Liabilities 1,148,838 2,860,236 14,551,186 1,206,340 19,766,600 - Total Liabilities 1,536,189 4,497,263 21,511,265 2,026,786 29,571,503 9,746 Deferred Inflows of Resources Deferred pension resources 125,135 167,082 1,449,544 453,006 2,194,767 - Deferred other postemployment benefit resources 13,738 18,317 - 41,236 73,291 Deferred lease resources 709,207 - - - 709,207 Total Deferred Inflows of Resources 848,080 185,399 1,449,544 494,242 2,977,265 Net Position Net investment in capital assets 18,072,918 24,667,802 65,353,188 11,417,610 119,511,518 Restricted Debt service - - 3,247,000 - 3,247,000 - Unrestricted 4,729,183 7,935,547 14,276,571 6,722,473 33,663,774 408,563 Total Net Position $ 22,802,101 $ 32,603,349 $ 82,876,759 $ 18,140,083 156,422,292 $ 408,563 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds. (11,782) Net position of business -type activities $ 156,410,510 The notes to the financial statements are an integral part of this statement. 51 THIS PAGE IS LEFT BLANK INTENTIONALLY 52 City of Hutchinson, Minnesota Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds For the Year Ended December 31.2025 Business -type Activities Business -type Activities- Governmental Enterprise Funds Enterprise Funds Activities - Other Internal Public Utilities Enterprise Service Fund Water Sewer Commission Funds Total Self Insurance Operating Revenues Sales $ $ $ $ 10,076,840 $ 10,076,840 $ Cost of sales (7,288,345) (7,288,345) Gross Profit 2,788,495 2,788,495 - Charges for services 2,358,740 3,906,200 42,439,754 2,721,928 51,426,622 111,364 Penalties 13,904 18,490 - 12,189 44,583 - Other operating revenue - - 3,033,038 16,883 3,049,921 - Total Operating Revenues 2,372,644 3,924,690 45,472,792 5,539,495 57,309,621 111,364 Operating Expenses Personal services 590,650 816,402 1,793,998 3,201,050 Supplies and maintenance 168,618 199,007 333,250 700,875 - Other services and charges 582,367 929,084 1,381,613 2,893,064 122,175 Depreciation 1,167,196 1,336,034 4,233,121 685,048 7,421,399 - Production - - 6,021,891 - 6,021,891 Purchased power/gas 20,128,147 20,128,147 Transmission 3,440,382 3,440,382 Distribution 3,609,834 3,609,834 Customer accounts expense 602,137 602,137 Sales expense 187,304 187,304 Administration and general 2,730,123 2,730,123 - Total Operating Expenses 2,508,831 3,280,527 40,952,939 4,193,909 50,936,206 122,175 Operating Income (Loss) (136,187) 644,163 4,519,853 1,345,586 6,373,415 (10,811) Nonoperating Revenues (Expenses) Sales tax 956,790 956,790 - - 1,913,580 Intergovernmental - - - 94,070 94,070 - Interest earnings 218,732 394,907 1,177,065 245,503 2,036,207 20,647 Rents 96 6,858 - - 6,954 - Lease revenue 105,340 - 105,340 Merchandise and contract work, net - - (46,200) (46,200) Other income 41,564 52,618 177,627 - 271,809 Gain (loss) on sale of capital assets 43,905 - 22,450 78,991 145,346 Interest expense- bonds (48,887) (129,543) (623,125) (24,253) (825,808) Bond premium amortization 14,785 69,327 219,065 5,653 308,830 - Total Nonoperating Revenues (Expenses) 1,332,325 1,350,957 926,882 399,964 4,010,128 20,647 Income (Loss) Before Contributions and Transfers $ 1,196,138 $ 1,995,120 $ 5,446,735 $ 1,745,550 $ 10,383,543 $ 9,836 Capital Contributions From (To) Other Funds 157,487 361,743 - 451,957 971,187 - Other Capital Contributions Connection fees 120,199 152,485 - 272,684 Transfers In - - 50,000 50,000 Transfers Out (212,118) (345,202) (1,942,628) (904,452) (3,404,400) - Change in Net Position 1,261,706 2,164,146 3,504,107 1,343,055 8,273,014 9,836 Net Position, January 1 21,540,395 30,439,203 79,372,652 16,797,028 148,149,278 398,727 Net Position, December 31 $ 22,802,101 $ 32,603,349 $ 82,876,759 $ 18,140,083 $ 156,422,292 $ 408,563 Change in net position as shown above $ 8,273,014 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (3,132) Change in net position of business -type activities $ 8,269,882 The notes to the financial statements are an integral part of this statement. 53 City of Hutchinson, Minnesota Statement of Cash Flows Proprietary Funds (Continued on the Following Page) For the Year Ended December 31.2025 Business -type Activities - Business -type Activities - Governmental Enterprise Funds Enterprise Funds Activities - Other Internal Public Utilities Enterprise Service Fund Water Sewer Commission Funds Total Self Insurance Cash Flows from Operating Activities Receipts from customers $ 2,386,104 $ 3,911,239 $ 42,447,593 $ 12,853,299 $ 61,598,235 $ - Receipts from interfund services provided - - - - - 111,364 Other receipts 41,660 59,476 3,308,686 - 3,409,822 - Payments to vendors and suppliers (806,643) (1,107,126) (31,526,364) (8,857,637) (42,297,770) (122,683) Payments to or on behalf of employees (641,630) (874,247) (6,455,501) (2,028,118) (9,999,496) Net Cash Provided by Operating Activities 979,491 1,989,342 7,774,414 1,967,544 12,710,791 (11,319) Cash Flows from Noncapital Financing Activities Transfers out (212,118) (345,202) (1,942,628) (904,452) (3,404,400) Transfers in - 50,000 50,000 Lease receipts 93,259 - 93,259 Grants received - - 94,070 94,070 Other noncapital income 131,427 - 131,427 Net Cash Used by Noncapital Financing Activities (118,859) (345,202) (1,811,201) (760,382) (3,035,644) Cash Flows from Capital and Related Financing Activities Acquisition of capital assets (144,633) (1,311,437) (9,101,053) (653,523) (11,210,646) Proceeds from sale of capital assets 43,905 - 22,448 78,991 145,344 Sales tax received 956,790 956,790 - 1,913,580 Special assessments received 181 - 181 Connection fees collected 120,199 152,485 272,684 Principal paid on long-term debt (1,090,000) (1,469,000) (2,770,000) (231,666) (5,560,666) Interest paid on long-term debt (60,346) (145,227) (634,008) (28,348) (867,929) Interfund advance activity for capital improvements 200,000 200,000 Net Cash Used by Capital and Related Financing Activities (173,904) (1,616,389) (12,482,613) (834,546) (15,107,452) - Cash Flows from Investing Activities Interest received on investments 215,446 395,901 1,226,123 245,182 2,082,652 20,752 Net Increase (Decrease) in Cash and Cash Equivalents 902,174 423,652 (5,293,277) 617,798 (3,349,653) 9,433 Cash and Cash Equivalents, January 1 3,785,741 7,305,365 23,852,045 5,042,763 39,985,914 406,781 Cash and Cash Equivalents, December 31 $ 4,687,915 $ 7,729,017 $ 18,558,768 $ 5,660,561 $ 36,636,261 $ 416,214 Cash and Cash Equivalents, Reported on Statement of Net Position Unrestricted cash and investments $ 4,687,915 $ 7,729,017 $ 15,311,768 $ 5,660,561 33,389,261 $ 416,214 Restricted cash and investments - - 3,247,000 - 3,247,000 - Total Cash and Cash Equivalents $ 4,687,915 $ 7,729,017 $ 18,558,768 $ 5,660,561 $ 36,636,261 $ 416,214 The notes to the financial statements are an integral part of this statement. 54 Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities Other income related to operations Depreciation Depletion (Increase) decrease in assets Accounts receivable Due from other governments Inventories Prepaid items (Increase) decrease in deferred outflows of resources Deferred pension resources Deferred other postemployment benefit resources Increase (decrease) in liabilities Accounts payable Due to other governments Accrued salaries payable Accrued vacation payable Deposits payable Other postemployment benefit liability Net pension liability Unearned revenue Increase (decrease) in deferred inflows of resources Deferred pension resources Deferred other postemployment benefit resources Net Cash Provided by Operating Activities Schedule of Noncash Investing, Capital and Financing Activities Capital contributions from (to) other funds Book value of disposed/traded capital assets Capital assets acquired on account Amortization of bond premium City of Hutchinson, Minnesota Statement of Cash Flows Proprietary Funds (Continued) For the Year Ended December 31, 2025 Business -type Activities - Business -type Activities - Governmental Enterprise Funds Enterprise Funds Activities - 601 602 Other Internal Public Utilities Enterprise Service Fund Water Sewer Commission Funds Total Self Insurance $ (136,187) $ 644,163 $ 4,519,853 $ 1,345,586 $ 6,373,415 $ (10,811) 41,660 59,476 - - 101,136 1,167,196 1,336,034 4,233,121 685,048 7,421,399 - - - 181,773 181,773 8,038 22,920 185,998 (63,489) 153,467 5,422 (36,371) - 88,948 57,999 - (241,513) 35,646 (205,867) - (137,426) (1,154) (138,580) (147) (1,497) (38,897) 1,052 (39,489) 73 98 (79) 217 309 - (55,764) 19,996 (290,436) (75,721) (401,925) (508) 106 969 5,027 6,102 - 2,765 7,464 (250,560) 4,449 (235,882) 1,344 (1,807) 299,369 (26,503) 272,403 - - 47,064 - 47,064 122 163 3,109 411 3,805 (32,321) (36,690) (329,226) (125,675) (523,912) 50,425 50,425 (21,233) (23,465) (276,388) (83,342) (404,428) (1,583) (2,111) (4,729) (8,423) $ 979,491 $ 1,989,342 $ 7,774,414 $ 1,967,544 $ 12,710,791 $ (11,319) $ 157,487 $ 361,743 $ $ 451,957 $ 971,187 $ 198,544 198,544 (14,785) (69,327) (219,065) (5,653) (308,830) The notes to the financial statements are an integral part of this statement. 55 City of Hutchinson, Minnesota Statement of Fiduciary Net Position Fiduciary Fund December 31, 2025 Assets Cash and investments Liabilities Due to primary government Net Position Restricted Other governments Custodial Fund State 16,782 10,000 $ 6,782 The notes to the financial statements are an integral part of this statement. W. City of Hutchinson, Minnesota Statement of Changes in Fiduciary Net Position Fiduciary Fund For the Year Ended December 31, 2025 Custodial Fund State Additions Fees collected on behalf of the state $ 5,339,685 Deductions Payments to state 5,338,750 Net Increase (Decrease) in Fiduciary Net Position 935 Net Position, January 1 5,847 Net Position, December 31 $ 6,782 The notes to the financial statements are an integral part of this statement. 57 II11MWRIaMENOaI *1Wil01:l101911019us] ►FilIWA 58 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 1: Summary of Significant Accounting Policies A. Reporting Entity The City of Hutchinson (the City) operates under its own Home Rule Charter. The City is governed by an elected mayor and a four -member council. The Council exercises legislative authority and determines all matters of policy. The Council appoints personnel responsible for the proper administration of all affairs relating to the City. The City has considered all potential units for which it is financially accountable, and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City's financial statements to be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria to be considered in determining financial accountability. These criteria include appointing a voting majority of an organization's governing body, and (1) the ability of the primary government to impose its will on that organization or (2) the potential for the organization to provide specific benefits to, or impose specific financial burdens on the primary government. Each discretely presented component unit is reported in a separate column in the combined financial statements to emphasize it is legally separate from the City. Each discretely presented component unit has a December 31 year end. Discretely Presented Component Units. The Hutchinson Housing and Redevelopment Authority (HRA) was created pursuant to Minnesota statutes to carry out housing and redevelopment within the City in accordance with policies established by the City Council. The HRA is presented as a discretely presented component unit as a proprietary fund type. It is classified as a discretely presented component unit because the five -member board consists of five mayor - approved members, the HRA may not exercise any of the powers enumerated by the authorizing statutes without prior approval of the City Council, the HRA does not provide services entirely, or almost entirely, to the City and there is no debt that is expected to be repaid almost entirely with the City's resources. Separate financial statements for the HRA may be obtained at the City's offices. The Hutchinson Economic Development Authority (EDA) was 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 EDA is presented as a discretely presented component unit as a governmental fund type. It is classified as a discretely presented component unit because the seven -member board consists of two Council members and five other Council approved members, the EDA may not exercise any of the powers enumerated by the authorizing statutes without prior approval of the City Council, the EDA does not provide services entirely, or almost entirely, to the City and there is no debt that is expected to be repaid almost entirely with the City's resources. Separate financial statements are not issued for this component unit. Other Agencies. The Hutchinson Public Utilities Commission (PUC) was established and statutory authority is provided in accordance with chapter 412.321 of the Minnesota statutes. The Commission has five Council approved members who serve overlapping five-year terms for no more than two successive terms. The statutes provide the City Council all the discretionary authority necessary to operate the utilities except as its powers has been delegated to the Commission. The PUC fund is considered to be part of the primary government and is included with the enterprise funds of this report. Separate financial statements are issued for the PUC and may be obtained at the City's offices. Joint Ventures The City has entered into a joint powers agreement with the Minnesota Department of Transportation and McLeod County. The purpose of the agreement is to provide policies and procedures for the joint operation of the Hutchinson Area Transportation Facility. The Joint Powers Board consists of four members. Two members are appointed by the Hutchinson City Council, one member is appointed by the Minnesota Commissioner of Transportation, and one member is appointed by the McLeod County Commissioners. The present budget funding for the operation is as follows: City of Hutchinson 36 % State of Minnesota 32 % McLeod County 32 % 59 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 1: Summary of Significant Accounting Policies (Continued) The City is the fiscal agent for the venture, whose operations are reported as a special revenue fund of the City. Since inception in 1996, the joint venture has accumulated sufficient financial resources from the funding sources to provide for operations. No separate financial statements are issued for this joint venture. B. Government -wide and Fund Financial Statements The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the activities of the primary government and its component units. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the custodial fund financial statements and the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, other postemployment benefits, and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the year in which the resources are measurable and become available. .f City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 1: Summary of Significant Accounting Policies (Continued) Non -exchange transactions, in which the City receives value without directly giving equal value in return, include property taxes, grants, entitlements and donations. On an accrual basis, revenue from property taxes is recognized in the year for which the tax is levied. Revenue from grants, entitlements and donations is recognized in the year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the year when use is first permitted, matching requirements, in which the City must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the City on a reimbursement basis. On a modified accrual basis, revenue from non -exchange transactions must also be available before it can be recognized. Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and entitlements received before eligibility requirements are met are also recorded as unearned revenue. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The City reports the following major governmental funds: The General fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The MSA Construction fund is used to account for future Municipal State Aid funding that has been allocated to the City. The Special Assessment Improvement 2025 fund is used to account for the resources provided and improvements related to the City's 2025 roadway projects. The City reports the following major proprietary funds: The Water fund is used to account for the operation, maintenance, and capital improvements of the City's water, system. The Sewer fund is used to account for the operation, maintenance, and capital improvements of the City's sewer system. The Public Utilities Commission fund is used to account for the operation, maintenance, and capital improvements, of the municipally owned electric and natural gas systems in the City. Additionally, the City reports the following fund types: Internal service funds account for operations that provide insurance services to other departments or agencies of the City, or to other governments, on a cost reimbursement basis. Fiduciary Funds Custodial funds are used to report fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds or private -purpose trust funds. The City's Custodial fund accounts for activities of State of Minnesota's motor vehicle, licensing and DNR services. Enterprise funds are used to account for those operations that are financed and operated in a manner similar to private business or where the Council has decided that the determination of revenues earned, costs incurred and/or net income is necessary for management accountability. 61 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 1: Summary of Significant Accounting Policies (Continued) As a general rule the effect of interfund activity has been eliminated from government -wide financial statements. Exceptions to this general rule are payments in lieu of taxes and charges between the City's water, sewer, refuse, electric and natural gas functions and various other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise funds and of the City's internal service funds are charges to customers for sales and services. The City also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position/Fund Balance Deposits and Investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Certain restricted assets are included in cash and cash equivalents. The proprietary funds' portion in the government -wide cash and temporary investments pool is considered to be cash and cash equivalents for purposes of the statements of cash flows. Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit and other authorized investments. Earnings on investments are allocated to the individual funds based upon the average of month - end cash and investment balances. The City may also invest idle funds as authorized by Minnesota statutes, as follows: 1. Direct obligations or obligations guaranteed by the United States or its agencies. 2. Shares of investment companies registered under the Federal Investment Company Act of 1940 and received the highest credit rating, rated in one of the two highest rating categories by a statistical rating agency, and have a final maturity of thirteen months or less. 3. General obligations of a state or local government with taxing powers rated "A" or better; revenue obligations rated "AA" or better. 4. General obligations of the Minnesota Housing Finance Agency rated "A" or better. 5. Obligation of a school district with an original maturity not exceeding 13 months and (i) rated in the highest category by a national bond rating service or (ii) enrolled in the credit enhancement program pursuant to statute section 126C.55. 6. Bankers' acceptances of United States banks eligible for purchase by the Federal Reserve System. 7. Commercial paper issued by United States banks and corporations or their Canadian subsidiaries, of the highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less. 8. Repurchase or reverse repurchase agreements and securities lending agreements with financial institutions qualified as a "depository" by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker -dealers. City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 1: Summary of Significant Accounting Policies (Continued) 9. Guaranteed investment contracts (GICs) issued or guaranteed by a United States commercial bank, a domestic branch of a foreign bank, a United States insurance company, or its Canadian subsidiary, whose similar debt obligations were rated in one of the top two rating categories by a nationally recognized rating agency. Investment Policy The purpose of this policy is to establish specific guidelines the City of Hutchinson will use in the investment of City funds. It will be the responsibility of the City Administrator to invest City Funds in order to attain the highest market rate of return with the maximum security while meeting the daily cash flow demands of the City and protecting the capital of the overall portfolio. Investments will be made in accordance with all state and local statutes governing the investment of public funds. Investment officers acting in accordance with this policy, with Minnesota statutes, chapter 118A, and exercising due diligence shall be relieved of personal responsibility for an individual security's risk or market price change, provided that reasonable action is taken to control adverse developments and unexpected deviations are reported in a timely manner. Objective A. Safety - Safety of principal is of critical importance to the investment program. Investments of the City shall be undertaken in a manner that seeks to ensure the preservation of principal in the overall portfolio. The objective will be to mitigate credit risk and interest rate risk. 1. Credit Risk -the risk of loss due to failure of the security issuer or backer, will be minimized by: Limiting investments to the types of securities listed in Section VIII of this investment policy. • Pre -qualifying the financial institutions, broker/dealers, intermediaries, and advisors with which the City will do business in accordance with Section VII. Diversifying the investment portfolio so that the impact of potential losses from any one type of security or from any one individual issuer will be minimized. Insurance or collateral may be required to ensure return of principal. 2. Interest Rate Risk - the risk that the fair value of securities in the portfolio will fall due to changes in market interest rates will be minimized to: Provide for liquidity by reviewing cash flow requirements and make investments to meet the shorter cash flow needs, thereby avoiding the need to sell securities in the open market prior to maturity. Manage the average maturity of the overall portfolio to be consistent with the risk of the City. B. Liquidity - The City s investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements reasonably anticipated. The portfolio will be structured so that the portfolio emphasizes liquidity and consists largely of securities with active secondary or resale markets (dynamic liquidity). A portion of the portfolio may be placed in money market mutual funds or local government investment pools which offer same day liquidity for short-term funds. C. Yield - The City's investment portfolio shall be designed with the objective of attaining a market rate of return. The core of investments is limited to low -risk securities in anticipation of earning a fair return relative to the risk being assumed. Securities shall generally be held until maturity with the following exceptions: A security with declining credit may be sold early to minimize loss of principal. 63 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 1: Summary of Significant Accounting Policies (Continued) A security swap would improve the quality, yield, or target duration in the portfolio. Liquidity needs of the portfolio require that the security be sold. The City Administrator or investment designee will attempt to diversify its investments according to type and maturity. The City will attempt to match its investments with anticipated cash flow requirements. Extended maturities may be utilized to take advantage of higher yields. Diversification strategies shall be determined and revised periodically by the City Council for all funds. Broker money market funds operate in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the shares. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. There were no changes in valuation techniques that have a significant impact to the City and there are no nonrecurring fair value measurements. The City has the following recurring fair value measurements as of December 31, 2025: • Negotiable certificates of deposit $7,394,623, Municipal bonds of $24,414,651, Government bonds of $490,240, FHLB bonds of $2,578,129, FFCB bonds of $1,062,850, US treasury notes of $940,992 are valued using a matrix pricing model (Level 2 inputs) Property Taxes The City Council annually adopts a tax levy and certifies it to the County in December for collection the following year. The County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on taxable property within the City on January 1 and are payable by the property owners in two installments in May and October. The taxes are collected by the County Treasurer and tax settlements are made to the City during January, June and November each year. Delinquent taxes receivable include the past six years' uncollected taxes. Delinquent taxes have been offset by a deferred inflow of resources for delinquent taxes not received within 60 days after year end in the governmental fund financial statements. Accounts Receivable Accounts receivable include amounts billed for services provided before year end. Unbilled utility enterprise fund receivables are also included for services provided in 2025. All trade receivables are shown net of an allowance for uncollectible accounts. The allowance in the Public Utilities Commission enterprise fund at December 31, 2025 was $136,688. The other utility funds do not record an allowance because uncollected bills may be certified to the County for collection. Special Assessments Special assessments represent the financing for public improvements paid for by benefiting property owners. These assessments are recorded as receivables upon certification to the County. Special assessments are recognized as revenue when they are received in cash or within 60 days after year end. All governmental special assessments receivable are offset by a deferred inflow of resources in the fund financial statements. 64 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 1: Summary of Significant Accounting Policies (Continued) Interfund Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "interfund receivables/payables" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non -current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Advances between funds are offset by a fund balance nonspendable account in applicable governmental funds to indicate they are not available for appropriation and are not expendable available financial resources. Inventories and Cost of Goods Sold The inventories are stated at cost on the first -in, first -out (FIFO) method. The cost of inventory is recorded as an expenditure at the time inventory is purchased in the General fund and as an expense when consumed in the proprietary fund types. The City's compost enterprise fund allocates payroll, supplies, other costs and depreciation to the cost of producing compost. These costs are included in inventory and transferred to cost of goods sold when the compost is sold. The allocation of these costs ensures that the financial statements accurately reflect the cost of production and sale of compost. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased. Lease Receivable The City's lease receivable is measured at the present value of lease payments expected to be received during the lease term. A deferred inflow of resources is recorded for the lease. The deferred inflow of resources is recorded at the initiation of the lease in an amount equal to the initial recording of the lease receivable. The deferred inflow of resources is amortized on a straight-line basis over the term of the lease. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of $1 for land and more than $5,000 (amount not rounded) for all other assets and an estimated useful life in excess of one year. The City reports infrastructure assets on a network and subsystem basis. Accordingly, the amounts spent for the construction or acquisition of infrastructure assets are capitalized and reported in the government -wide financial statements. In the case of initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the City chose to include items dating back to June 30, 1980. The City had already accounted for its prior infrastructure at historical cost for the initial reporting of these assets. As the City constructs or acquires capital assets each period, including infrastructure assets, they are capitalized and reported at historical cost. The reported value excludes normal maintenance and repairs which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful life beyond the original estimate. In the case of donations the City values these capital assets at the acquisition value of the item at the date of its donation. City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 1: Summary of Significant Accounting Policies (Continued) Property, plant and equipment of the primary government, as well as the component units, are depreciated using the straight-line method over the following estimated useful lives: Assets Years Land Improvements 20 Buildings and Improvements 15 - 40 System Improvements/Infrastructure 40 Office Furniture and Fixtures 7 Machinery and Equipment 3 -10 Automotive Equipment 3 - 20 Deferred Outflows of Resources In addition to assets, the statements of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has two items which qualify for reporting in this category. Accordingly, the items, deferred pension resources and deferred other postemployment benefit resources, are reported only in the statement of net position. These items result from actuarial calculations and current year pension contributions and OPEB contributions made subsequent to the measurement dates. Pensions For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA's fiduciary net position have been determined on the same basis as they are reported by PERA except that PERA's fiscal year end is June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the defined benefit plan administered by Hutchinson Fire Department Relief Association and additions to and deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by the plan. Investments are reported at fair value. For the most part, the General fund is typically used to liquidate governmental net pension liability. The total pension expense for the General Employee Plan (GERP), Police and Fire Plan (PEPFP), Defined Contribution Plan (DCP) and Hutchinson Fire Relief Association is as follows: City's proportionate share Proportionate share of State's contribution Total pension expense GERF PEPFF PEDCP FRA Total $ (202,119) $ 345,371 $ 1,090 $ 60,639 $ 204,981 (9,621) 30,772 - - 21,151 $ (211,740) $ 376,143 $ 1,090 $ 60,639 $ 226,132 -I City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 1: Summary of Significant Accounting Policies (Continued) Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. A liability is recognized for the portion of accumulated sick leave that is estimated will be taken as "terminal leave" prior to retirement. All vacation is accrued when incurred. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Due to the implementation of GASB 101, the City also records a liability for the estimated amount of future sick time usage not to be paid out upon resignation or retirement. Compensated absences at year end is shown in the chart below for governmental, business -type and component unit activities. For the most part, the General fund is typically used to liquidate governmental compensated absences payable. Compensated Absences Governmental Business -type Component Unit Activities Activities Activities EDA HRA Total 762,405 $ 1,508,278 $ 9,958 $ 24,657 $ 2,305,298 Postemployment Benefits Other Than Pensions Under Minnesota statute 471.61, subdivision 2b., public employers must allow retirees and their dependents to continue coverage indefinitely in an employer -sponsored health care plan, under the following conditions: 1) Retirees must be receiving (or eligible to receive) an annuity from a Minnesota public pension plan, 2) Coverage must continue in group plan until age 65, and retirees must pay no more than the group premium, and 3) Retirees may obtain dependent coverage immediately before retirement. All premiums are funded on a pay-as-you-go basis. The liability was actuarially determined, in accordance with GASB Statement 75, at January 1, 2025. For the most part, the General fund is typically used to liquidate governmental OPEB liabilities. Long-term Obligations In the government -wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as an expense in the period incurred. In the fund financial statements, governmental fund types recognized bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Deferred Inflows of Resources In addition to liabilities, the statements of net position and fund financial statements will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has one type of item, which arises only under a modified accrual basis of accounting that qualifies as needing to be reported in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from four sources: property taxes, special assessments, intergovernmental and interest. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. Additionally, deferred lease resources are reported as deferred inflows resulting from lease amortization calculations on both the statement of net position and in the governmental and business -type fund statements. 67 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 1: Summary of Significant Accounting Policies (Continued) Furthermore, the City has additional items which qualify for reporting in this category on the statement of net position. The items, deferred pension resources and deferred other postemployment benefit resources, are reported only in the statement of net position and results from actuarial calculations involving net differences between projected and actual earnings on plan investments and changes in proportions. Fund Balance In the fund financial statements, fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources reported in the governmental funds. These classifications are as follows: Nonspendable - consists of amounts that cannot be spent because it is not in spendable form, such as prepaid items. Restricted - consists of amounts related to externally imposed constraints established by creditors, grantors or contributors; or constraints imposed by state statutory provisions. Committed - consists of amounts that are constrained for specific purposes that are internally imposed by formal action (resolution) of the City Council. Those committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts. Assigned - consists of amounts intended to be used for specific purposes set by the governing body itself or by an official to which the governing body delegates the authority. Pursuant to the City's fund balance policy, the City Administrator is authorized to establish assignments of fund balance. Unassigned - is the residual classification for the General fund and also reflects negative residual amounts in other funds. When committed, assigned or unassigned resources are available for use, it is the City's policy to use resources in the following order: (1) committed, (2) assigned, and (3) unassigned. The City's fund balance policy requires an unrestricted fund balance in the General fund 40 percent of next year's General fund budgeted expenditures for working capital. This provides adequate cash flow to fund operations since major revenues, including property taxes and other government aid, are received on a biannual basis. The City will also commit 10% of next year's General fund budgeted expenditures to plan for contingencies and tax levy stabilization. Net Position Net position represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources. Net position is displayed in three components: a. Net investment in capital assets - Consists of capital assets, net of accumulated depreciation reduced by any outstanding debt attributable to acquiring capital assets. b. Restricted net position - Consists of net position restricted when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, laws or regulations of other governments. c. Unrestricted net position -All other net position that do not meet the definition of "restricted" or "net investment in capital assets". When both restricted and unrestricted resources are available for use, it is the City's policy to first use restricted resources and then use unrestricted resources as they are needed. City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 2: Stewardship, Compliance and Accountability A. Budgetary Information Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for the General and Rural Fire Department and Hutchinson Area Transportation Facility special revenue funds. All annual appropriations lapse at fiscal year-end. The City does not use encumbrance accounting. In July of each year, all departments of the City submit requests for appropriations to the City Administrator so that a budget may be prepared. Before September 30, the proposed budget is presented to the Council for review. The Council holds public hearings and a final budget is prepared and adopted in early December. The appropriated budget is prepared by fund, function and department. The City's department heads may make transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the Council. The legal level of budgetary control is the department level. Budgeted amounts are as originally adopted, or as amended by the Council. There were no budget amendments made by the City in 2025. B. Excess of Expenditures Over Appropriations For the year ended December 31, 2025, expenditures exceeded appropriations in the following funds: Fund General Special Revenue Rural Fire Department Budget $ 15,164,187 164,906 Excess of Expenditures Over Actual Appropriations $ 15,243,121 182,538 $ 78,934 17,632 The excess expenditures over appropriations were funded by higher revenues than anticipated and available fund balance. C. Deficit Fund Balance The following funds had fund balances at December 31, 2025: Fund Amount Major Funds Special Assessment Improvement 2025 $ 70,860 Special Revenue Hutchinson Enterprise Center 141,205 Tax Increments 2016 158,796 TIF #4-17 Enterprise Center 105,409 TIF #4-24 The Landing 21,781 TIF #4-25 Jorgenson Hotel 538 Capital Projects Airport Renovation 140,694 Special Assessment Improvement 2026 578 Special Assessment Improvement 2027 4,993 The City intends to fund these deficits through future tax increments and special assessment levies, grants, transfers from other funds and various other sources. .• City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds A. Deposits and Investments Deposits Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the City's deposits and investments may not be returned or the City will not be able to recover collateral securities in the possession of an outside party. In accordance with Minnesota statutes and as authorized by the Council, the City maintains deposits at those depository banks, all of which are members of the Federal Reserve System. Minnesota statutes require that all City deposits be protected by insurance, surety bond or collateral. The fair value of collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds, with the exception of irrevocable standby letters of credit issued by Federal Home Loan Banks as this type of collateral only requires collateral pledged equal to 100 percent of the deposits not covered by insurance or bonds. Authorized collateral in lieu of a corporate surety bond includes: • United States government Treasury bills, Treasury notes, Treasury bonds; • Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; • General obligation securities of any state or local government with taxing powers that are rated "A" or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; • General obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity; • Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank's public debt is rated "AA" or better by Moody's Investors Service, Inc., or Standard & Poor's Corporation; and • Time deposits that are fully insured by any federal agency. Minnesota statutes require that all collateral shall be placed in safekeeping in a restricted account at a Federal Reserve Bank, or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. The selection should be approved by the City. At year end, the City's carrying amount of deposits, bank balance, FDIC coverage and collateral pledged in the City's and the Public Utilities Commission's names, including the EDA are shown in the chart below. The primary government and the EDA component unit deposits and investments are pooled. Carrying amount of deposits $ 15,448,584 Bank balance $ 15,981,072 Covered by FDIC (275,561) Collateralized with securities pledged in City's and PUC's names 15,7 5,511 70 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) At year end, the HRA's (discretely presented component unit) carrying amount of deposits, bank balance, FDIC coverage and collateral pledged in the HRA's name are shown in the chart below. Carrying amount of deposits $ 4,401,157 Bank balance $ 4,442,975 Covered by FDIC (750,000) Collateralized with securities pledged in HRA's name 3,692,975 Investments As of December 31, 2025, the City had the following investments that are insured or registered, or securities held by the City or its agent in the City's name: Credit Segmented Quality Time Fair Value Measurement Using Types of Investments Ratings (1) Distribution (2) Amount Level 1 Level 2 Leve-73-- Poo7ea Investments at Amortized Cost Broker Mutual Funds N/A less than 1 year $ 2,337,986 $ $ $ Broker Money Market Funds N/A less than 1 year 5,246,616 Non -pooled Investments at Fair Value Negotiable Certificates of Deposit NA 1 to 5 years 6,883,301 6,883,301 Negotiable Certificates of Deposit NA 5 -10 Years 511,322 511,322 Government Bonds NA 1 to 5 years 490,240 490,240 Municipal Bonds AA+ 1-5 Years 2,274,641 2,274,641 Municipal Bonds AA+ 5 -10 Years 568,053 568,053 Municipal Bonds AA2 1-5 Years 1,309,071 1,309,071 Municipal Bonds AA2 5 -10 Years 556,475 556,475 Municipal Bonds AAA 1-5 Years 3,670,973 3,670,973 Municipal Bonds AAA 5-10Years 1,160,934 1,160,934 Municipal Bonds AA- 1-5 Years 1,567,410 1,567,410 Municipal Bonds AA- 5-10Years 1,766,816 1,766,816 Municipal Bonds AA 1-5 Years 1,715,534 1,715,534 Municipal Bonds AA 5-10Years 391,197 391,197 Municipal Bonds AA1 1-5 Years 189,757 189,757 Municipal Bonds AA1 5 -10 Years 558,280 558,280 Municipal Bonds NA 1-5 Years 10,285 10,285 Municipal Bonds NA 5 -10 Years 448,325 448,325 FFCB Bonds N/A 1 to 5 years 1,062,850 1,062,850 FHLB Bonds N/A 1 to 5 years 2,578,129 2,578,129 US Treasury Note N/A 1 year 940,992 940,992 Municipal Bonds varies 1-10 years 8,226,900 8,226,900 Total Investments $ 44,466,087 $ - $ 36,881,485 $ (1) Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk. (2) Interest rate risk is disclosed using the segmented time distribution method. N/A Indicates not applicable or available. 71 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) The investments of the City are subject to the following risks: Credit Risk. The credit risk for investments is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are provided by various credit rating agencies and where applicable, indicate associated credit risk. Minnesota Statutes limit the City's investments to the list on page 63 of the notes. • Custodial Credit Risk. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. The City typically limits its exposure by purchasing insured or registered investments. • Concentration of Credit Risk. The concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. At December 31, 2025, there were no investments in one issuer (other than investments issued by or explicitly guaranteed by U.S. government, mutual funds, external investment pools, and other pooled investments) that represent 5 percent or more of the City's investments. Interest Rate Risk. In accordance with its investment policy, the City diversifies its investment portfolio to eliminate the risk of loss resulting from over -concentration of assets in a specific maturity. The maturities selected shall provide for stability of income and reasonable liquidity. Cash on Hand Cash in the possession of the City, consisting of petty cash and change funds totals $5,355. Cash and Investments Summary Cash and investments as shown on the statement of net position for the City are as follows: Deposits Investments Cash on Hand Total Cash and Investments Unrestricted Restricted Total Primary Government Component Unit - EDA Component Unit - HRA Total Reporting Entity $ 15,218,353 $ 230,231 $ 4,401,157 $ 19,849,741 44,466,087 - - 44,466,087 5,355 - - 5,355 $ 59,689,795 $ 230,231 $ 4,401,157 $ 64,321,183 $ 56,442,795 3,247,000 230,231 $ 3,638,868 $ 60,311,894 762,289 4,009,289 S 59.689.795 $ 230,231 $ 4,401,157 $ 64,321,183 72 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) Cash and Investments - Restricted Restricted cash and investments are deposits designated by bond covenants in the City's Public Utilities Commission fund for specific purposes. At December 31, 2025, restricted cash and investments consisted of the following: Primary Government Hutchinson Public Utilities Commission Public Utility Revenue Refunding Bonds, Series 2012A Funds required to be held in a debt service account based on criteria set aside in the bond issuance document. $ 2,072,000 Public Utility Revenue Bonds, Series 2017B Funds required to be held in a debt service account based on criteria set aside in the bond issuance document. 1,175,000 Total Restricted Cash and Investments $ 3,247,000 Component Unit - HRA Restricted cash and investments are tenant security deposits in the HRA at December 31, 2025 in the amount of $31,960. B. Notes Receivable Primary Government The City has issued various notes to local residents and businesses which are payable to the City with variable payments and interest rates. The balance on these notes as of December 31, 2025 is $946,707. Most of the notes to local residents do not have to be repaid if they remain property owners for ten years. This applies to Housing Rehabilitation Grant special revenue fund notes totaling $72,450. The Economic Development Loan fund has notes with local businesses outstanding of $122,597. The City also has notes receivable in the Energy Loan fund of $751,660 at year end. Component Unit - HRA The HRA has received grants to be used for economic development and housing redevelopment services. The proceeds of these grants were loaned to individuals and are to be paid back to the HRA. The balances of these notes at December 31, 2025 is $9,246. 73 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) C. Capital Assets Primary Government Capital asset activity for the year ended December 31, 2025 was as follows: Governmental Activities Capital Assets not Being Depreciated Land Construction in progress Total Capital Assets not Being Depreciated Capital Assets Being Depreciated Buildings and structures Infrastructure and improvements Machinery and equipment Automotive equipment Total Capital Assets Being Depreciated Less Accumulated Depreciation for Buildings and structures Infrastructure and improvements Machinery and equipment Automotive equipment Total Accumulated Depreciation Total Capital Assets Being Depreciated, Net Governmental Activities Capital Assets, Net Beginning Ending Balance Increases Decreases Balance $ 10,224,575 $ - $ (579,683) $ 9,644,892 1,344,058 1,339,621 (1,344,058) 1,339,621 11,568,633 1,339,621 (1,923,741) 10,984,513 31,364,419 692,378 - 32,056,797 121,977,746 3,789,176 (57,773) 125,709,149 6,751,140 491,437 (153,899) 7,088,678 5,762,279 786,158 (365,871) 6,182,566 165,855,584 5,759,149 (577,543) 171,037,190 (6,890,626) (903,805) - (7,794,431) (60,735,568) (4,117,505) 55,975 (64,797,098) (3,869,506) (545,143) 153,899 (4,260,750) (3,836,001) (327,254) 365,871 (3,797,384) (75,331,701) (5,893,707) 575,745 (80,649,663) 90,523,883 (134,558) (1,798) 90,387,527 $ 102,092.516 $ 1.205.063 $ (1.925.539) $ 101.372.040 74 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) Business -type Activities Capital Assets not Being Depreciated Land Construction in progress Total Capital Assets not Being Depreciated Capital Assets Being Depreciated Buildings and structures Infrastructure and improvements Machinery and equipment Automotive equipment Total Capital Assets Being Depreciated Less Accumulated Depreciation for Buildings and structures Infrastructure and improvements Machinery and equipment Automotive equipment Total Accumulated Depreciation Total Capital Assets Being Depreciated, Net Business -type Activities Capital Assets, Net Beginning Ending Balance Increases Decreases Balance $ 1,994,381 $ 220,000 $ - $ 2,214,381 4,165,530 10,450,429 (3,274,335) 11,341,624 6,159,911 10,670,429 (3,274,335) 13,556,005 50,116,016 201,364,289 16,199,265 1,781,636 148,290 4,526,953 193,688 58,717 (311,867) (867,031) (8,000) 50,264,306 205,579,375 15,525,922 1,832,353 269,461,206 4,927,648 (1,186,898) 273,201,956 (34,328,849) (93,727,556) (11,454,823) (925,466) (140,436,694) (1,032,591) (5,809,369) (633,893) (127,319) (7,603,172) 129,024,512 (2,675,524) 311,869 867,031 8,000 1,186,900 2 (35,361,440) (99,225,056) (11,221,685) (1,044,785) (146,852,966) 126,348,990 $ 135,184,423 $ 7,994,905 $ (3,274,333) $ 139,904,995 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental Activities General government Public safety Streets and highways, including depreciation of general infrastructure assets Culture and recreation Housing and economic development Miscellaneous Total Depreciation Expense - Governmental Activities $ 107,599 659,257 3,719,433 1,017,146 69,815 320,457 $ 5,893,707 75 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) Business -type Activities Electric $ 3,056,726 Natural gas 1,176,395 Water 1,167,196 Sewer 1,336,034 Refuse 238,084 Composting 97,924 Storm water 289,416 Liquor 59,624 Total Depreciation Expense - Business -type Activities $ 7,421,399 Compost Depreciation The total annual depreciation expense for all capital assets is reported in the capital asset note disclosure. The portion of depreciation allocated to inventory and included in cost of goods sold is reflected in the income statement. The following table reconciles the total depreciation expense to the depreciation included in cost of goods sold: Total depreciation expense (capital asset note) $ 7,603,172 Less: Depreciation allocated to inventory and included in cost of goods sold (181,773) Depreciation expense (income statement) $ 7,421,399 Construction Commitments The City has active projects as of December 31, 2025. At year end the City's commitments with contractors are as follows: Remaining Project Spent -to -Date Commitment WWTF Biosolids Improvement Menards Hangar Total $ 993,861 $ 4,320,731 292,805 15,411 $ 1,286,666 $ 4,336,142 W. City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) Discretely Presented Component Unit Capital asset activity for the HRA for the year ending December 31, 2025 was as follows: HRA Capital Assets Being Depreciated Buildings and structures Machinery and equipment Total Capital Assets Being Depreciated Less Accumulated Depreciation HRA Capital Assets, Net Beginning Ending Balance Increases Decreases Balance $ 5,801,129 $ 99,354 $ (11,075) $ 5,889,408 244,031 28,112 (40,007) 232,136 6,045,160 127,466 (51,082) 6,121,544 (5,153,901) (152,234) 50,844 (5,255,291) S 891.259 $ (24,76@ S (238) S 866,253 Depreciation expense was charged to functions/programs of the discretely presented component unit is as follows: Discretely Presented Component Unit HRA D. Interfund Receivables, Payables and Transfers Advances from/to Other Funds $ 152,234 The Economic Development Loan fund loaned funds to the Hutchinson Enterprise Center fund for construction costs. This balance will be paid back as future funding becomes available. The Energy Loan fund loaned funds to the TIF #4-16 126 Franklin St SW fund to pay for costs identified in the TIF plans. This balance will be paid back as the TIF district generates future tax increment revenues. The Debt Service fund loaned funds to the TIF #4-17 Enterprise Center fund to pay for costs identified in the TIF plans. These balances will be paid back as the TIF district generates future tax increment revenues. Due from/to Other Funds The Energy Loan fund loaned funds to the TIF #4-16 126 Franklin St SW fund for TIF district expenditures, to be reimbursed by future TIF proceeds. The Sewer fund loaned funds to the Airport Construction fund for the new hangar construction to be repaid by future federal aeronautic monies. 77 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) The Economic Development Loan fund loaned funds to the Hutchinson Enterprise Center to finance construction of the Enterprise Center. The Capital Projects fund loaned the funds to the TIF #4-24 — The Landing fund, TIF #4-25 — Jorgenson Hotel fund, Special Assessment Improvement 2025 fund, and the Special Assessment Improvement 2026 fund to cover short-term cash deficits. Receivable Fund Nonmajor Governmental Capital Projects Nonmajor Governmental Energy Loan Economic Development Loan Capital Projects Capital Projects Capital Projects Enterprise Sewer Total Payable Fund Major Governmental Special Assessment Improvement 2025 Nonmajor governmental TIF #4-16126 Franklin St SW Hutchinson Enterprise Center TIF #4-24 - The Landing TIF #4-25 - Jorgenson Hotel Special Assessment Improvement 2026 Nonmajor governmental Airport Construction Amount $ 63,493 12,776 146,435 1,521 538 578 200,000 $ 425,341 Amounts due from/to the EDA component unit representing monthly and year-end charges to other funds are as follows: Receivable Entity Payable Entity Amount Primary Government Component unit Internal service EDA $ 25 W City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) Interfund Transfers The following transfers were made for the year ended December 31, 2025: Transfers are used to 1) move revenues from the fund with collection authorization to the debt service fund as debt service principal and interest payments become due, 2) move restricted amounts from borrowings to the debt service fund to establish mandatory reserve accounts, 3) move unrestricted revenues to finance various programs that the government must account for in other funds in accordance with budgetary authorizations, including amounts provided as subsidies or matching funds for various grant programs. Transfers In Special Assessment Improvement Nonmajor Nonmajor Fund General 2025 Governmental Enterprise Total Transfer Out General $ - $ - $ 545,542 $ - $ 545,542 Nonmajor governmental - 533,697 - 533,697 Water enterprise 90,000 122,118 - - 212,118 Sewer enterprise 110,000 235,202 - - 345,202 Public Utilities Commission enterprise 1,942,628 - - - 1,942,628 Nonmajor enterprise 670,000 129,452 55,000 50,000 904,452 Total $ 2,812,628 $ 486,772 $ 1,134,239 $ 50,000 $ 4,483,639 For the year ended December 31, 2025, the City made the following unbudgeted transfers • From the Water fund ($122,118), Sewer fund ($235,202) and Stormwater fund ($129,452) to the Special Assessment Improvement 2025 fund for project costs. From the Capital Projects fund ($1,465) to the Community Improvement fund to replenish public arts maintenance fund. From the Capital Projects fund ($100,000) to the Equipment Replacement fund for funding related to Fire Ladder truck chassis. • From the TIF #4-19 Highway 7 & 15 Soils Condition fund ($5,226) to the Special Assessment Bonds 2017 fund to reimburse public improvement costs. From the TIF #4-21 1105 Benjamin Ave SE fund ($53,000) to the Community Improvement fund to reimburse land costs. From the G.O. Tax Increment Refunding Bonds 2004 ($324,006) to the 2016 Tax increment fund to write off the interfund loan. • From the Economic Development loan fund ($50,000) to the Energy loan fund for funding related to a forgivable loan to Jnrgenson Hotel developer. 79 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) E. Inventories Inventories at December 31, 2025 consist of the following: Fund Municipal Liquor Store Liquor Wine Beer THC Miscellaneous Total Composting Processed materials Bulk product Bagged product Total Public Utilities Commission Electric division Fuel oil and lubricants Plant systems material Engine parts Distribution materials Transformers Total Natural gas division Fittings Transmission line gas Total Total Amount $ 340,264 210,582 141,037 7,588 31,970 731,441 309,791 593,029 603,485 1,506,305 67,808 19,123 1,105,023 643,216 440,625 2,275,795 205,792 303,570 509,362 $ 5,022.903 E-e City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) F. Lease Receivable Primary Government The City leases various tower sites and airport space. These agreements contain various renewal and extension options. The latest maturity date is projected to be in 2070. Long-term lease activity for the year ended December 31, 2025 was as follows: Current Year Issue Discount Inflow of Balance at Description Date Rate Resources Year End Governmental AJA Aviation - Private Airport Hangar Lot 03/25/08 1.851 % $ 523 $ 17,232 TNT Air - Private Airport Hangar Lot 07/11 /17 1.851 742 32,002 Eastep - Private Airport Hangar Lot 05/24/21 1.851 347 5,257 Total Governmental 54,491 Business -type Verizon - South Park Water Tower Antenna 01 /01 /10 0.476 38,272 49,717 Verizon - Century Water Tower Antenna 06/01 /23 0.250 24,107 157,601 T-Mobile South Park Water Tower Antenna 06/01 /20 1.591 33,191 543,936 Total Business -type 751,254 Total $ 805,745 The annual receipts for governmental and business -type activities to maturity for lease receivables are as follows: Lease Receivables Year Ending Governmental Activities December 31 Principal Interest Total 2026 $ 1,001 $ 1,017 $ 2,018 2027 1,019 998 2,017 2028 1,038 979 2,017 2029 1,058 960 2,018 2030 1,078 940 2,018 2031 - 2035 5,697 4,390 10,087 2036 - 2040 6,248 3,839 10,087 2041 - 2045 6,853 3,234 10,087 2046 - 2050 7,517 2,570 10,087 2051 - 2055 8,245 1,842 10,087 2056 - 2060 6,843 1,084 7,927 2061 - 2065 5,969 518 6,487 2066 - 2070 1,925 67 1,992 Total $ 54,491 $ 22,438 $ 76,929 I -a City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) Year Ending December 31 2026 2027 2028 2029 2030 2031-2035 2036-2040 Total Discretely Presented Component Unit Lease Receivables Business -type Activities Principal Interest Total $ 86,665 $ 9,354 $ 96,019 89,943 8,709 98,652 67,622 8,035 75,657 70,534 7,393 77,927 30,627 6,720 37,347 178,646 25,581 204,227 227,217 9,538 236,755 $ 751,254 $ 75,330 $ 826,584 The HRA leases a tower site to New Cingular Wireless for an antenna. This agreement contained several extension options. The latest maturity date is projected to be in 2031. Long-term lease activity for the year ended December 31, 2025 was as follows: Current Year Issue Discount Inflow of Balance at Description Date Rate Resources Year End New Cingular Wireless Antenna 12/26/06 1.30 % $ 40,493 $ 263,837 The annual receipts for the component unit lease receivables to maturity are as follows: Year Ending December 31 Lease Receivables Component Unit Principal Interest Total 2026 $ 39,267 $ 3,198 $ 42,465 2027 41,062 2,677 43,739 2028 42,919 2,132 45,051 2029 44,840 1,563 46,403 2030 46,827 968 47,795 2031 48.922 348 49.270 Total $ 263,837 $ 10,886 $ 274,723 G. Long-term Debt General Obligation Bonds. The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for both governmental and proprietary activities. These bonds are reported in the proprietary funds if they are expected to be repaid from proprietary fund revenues. In addition, general obligation bonds have been issued to refund both general obligation and revenue bonds. 06 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) General obligation bonds are direct obligations and pledge the full faith and credit of the government. General obligation bonds currently outstanding are as follows: Primary Government Debt - Governmental Activity Debt General Obligation Bonds These bonds were issued to finance various improvements and will be repaid entirely by ad valorem tax levies. Description Improvement Bonds of 2021A Police Facility Tax Abatement Bonds of 2021 A Improvement Bonds of 2022A Improvement Bonds of 2024A Total General Obligation Bonds Balance Authorized Interest Issue Maturity at and Issued Rate Date Date Year End $ 7,320,000 2.00 - 4.00 % 08/19/21 475,000 2.00 - 4.00 08/19/21 5,885,000 4.00 - 5.00 10/06/22 1,080,000 4.00 - 5.00 10/08/24 02/01 /52 $ 5,860,000 02/01 /37 405,000 02/01 /52 5,525,000 02/01 /40 1,080,000 $ 12,870,000 The annual debt service requirements to maturity for general obligation bonds are as follows: Year Ending December 31 2026 2027 2028 2029 2030 2031-2035 2036-2040 2041-2045 2046-2050 2051-2052 Total General Obligation Bonds Governmental Activities Principal Interest Total $ 730,000 $ 440,288 $ 1,170,288 700,000 408,688 1,108,688 615,000 379,413 994,413 560,000 352,413 912,413 515,000 327,363 842,363 3,030,000 1,267,988 4,297,988 2,430,000 781,663 3,211,663 1,620,000 503,253 2,123,253 1,850,000 260,700 2,110,700 820,000 25,018 845,018 $ 12,870,000 $ 4,746,787 $ 17,616,787 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) General Obligation Special Assessment Bonds These bonds were issued to finance various improvements and will be repaid primarily by ad valorem tax levies. Some issues, however, are partly financed from special assessments levied on the properties benefiting from the improvements. Description Improvement and Refunding Bonds of 2014A Improvement Bonds of 2015A Improvement Bonds of 2016A Improvement Bonds of 2017A Improvement Bonds of 201 BA Improvement Bonds of 2019A Improvement Bonds of 2020A Improvement Bonds of 2021 A Improvement Bonds of 2023A Improvement Bonds of 2024A Improvement Bonds of 2025A Balance Authorized Interest Issue Maturity at and Issued Rate Date Date Year End Total G.O. Special Assessment Bonds 3,415,000 2.00 - 3.00 % 11 /04/14 02/01 /30 $ 560,000 2,140,000 2.85-3.00 10/01/15 02/01/31 820,000 3,880,000 2.00 10/06/16 02/01/32 1,040,000 2,445,000 2.00-3.00 10/31/17 02/01/33 1,270,000 2,395,000 3.00-4.00 10/31/18 02/01/34 1,295,000 2,675,000 2.00-3.00 11/05/19 02/01/35 1,620,000 2,405,000 0.35 -1.40 08/06/20 02/01/36 1,775,000 1,825,000 2.00 - 4.00 08/19/21 02/01 /37 1,510,000 1,350,000 4.00 - 5.00 08/31/23 02/01/39 1,290,000 995,000 4.00 - 5.00 10/08/24 02/01/40 995,000 2,195,000 4.00 - 5.00 10/16/25 02/01/41 2,195,000 $ 14,370,000 The annual debt service requirements to maturity for general obligation special assessment bonds are as follows: G.O. Special Assessment Bonds Year Ending Governmental Activities December 31 Principal Interest Total 2026 $ 1,405,000 $ 409,390 $ 1,814,390 2027 1,460,000 389,023 1,849,023 2028 1,490,000 343,791 1,833,791 2029 1,515,000 296,548 1,811,548 2030 1,500,000 249,689 1,749,689 2031 - 2035 5,095,000 688,308 5,783,308 2036 - 2040 1,755,000 165,780 1,920,780 2041 150,000 3,000 153,000 Total $ 14,370,000 $ 2,545,529 $ 16,915,529 Ell City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) Business -type Activity Debt General Obligation Revenue Bonds These bonds were issued to finance capital improvements to the Water, Sewer and Storm Water funds. These bonds will be retired from net revenue of these enterprise funds. Description G.O. Sewer Revenue Bonds of 2007 (PFA) G.O. Storm Water Bonds of 2018B G.O. Water and Sewer Refunding Bonds of 2019A G.O. Wastewater Bonds of 2021 A Total G.O. Revenue Bonds Authorized Interest Issue Maturity and Issued Rate Date Date $ 13,696,602 2.15 % 06/26/07 1,550,000 3.00-4.00 10/31/18 2,790,000 2.00 - 3.00 11 /05/19 3,460,000 3.00 - 4.00 08/19/21 08/20/26 02/01/29 02/01/29 02/01/32 The annual debt service requirements to maturity for general obligation revenue bonds are as follows: Balance at Year End $ 924,000 690,000 1,150,000 2,600,000 $ 5,364,000 G.O. Revenue Bonds Year Ending Business -type Activities December 31 Principal Interest Total 2026 $ 1,694,000 $ 158,721 $ 1,852,721 2027 800,000 111,105 911,105 2028 820,000 83,305 903,305 2029 850,000 54,540 904,540 2030 385,000 32,150 417,150 2031 - 2032 815,000 24,675 839,675 Total $ 5,364,000 $ 464,496 $ 5,828,496 The G.O. revenue bonds were issued to finance capital improvements. The bonds are payable from future revenues pledged from the Water, Sewer and Storm Water funds and are backed by the full faith and credit of the City. Annual revenues from charges for services, restricted sales tax revenues, principal and interest payments, and percentage of revenue required to cover principal and interest payments are as follows: Revenue Principal and Interest Percent of Revenue Water Sewer Storm Water $ 3,329,434 $ 4,881,480 $ 1,208,027 1,150,346 1,614,227 186,205 34.6% 33.1 % 15.4% City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) Revenue Bonds These bonds were issued to finance capital improvements to the Public Utilities Commission. These bonds will be retired from net revenue of this enterprise fund. Balance Authorized Interest Issue Maturity at Description and Issued Rate Date Date Year End Public Utility Revenue Refunding Bonds of 2012A $ 20,720,000 4.00 - 5.00 % 07/19/12 12/01/26 $ 2,080,000 Public Utility Revenue Bonds, 2017B 16,675,000 3.00 - 4.00 10/31/17 12/01/37 11,750,000 Total Revenue Bonds $ 13,830,000 The annual debt service requirements to maturity for revenue bonds are as follows: Revenue Bonds Year Ending Business -type Activities December 31 Principal Interest Total 2026 $ 2,900,000 $ 465,656 $ 3,365,656 2027 850,000 328,856 1,178,856 2028 885,000 294,856 1,179,856 2029 910,000 272,731 1,182,731 2030 930,000 249,981 1,179,981 2031 - 2035 5,100,000 813,408 5,913,408 2036 - 2037 2,255,000 104,865 2,359,865 Total $ 13,830,000 $ 2,530,353 $ 16,360,353 The Revenue bonds were issued to finance capital improvements. The bonds are payable from future revenues pledged from the PUC and are backed by the full faith and credit of the City. Annual revenues from charges for services, principal and interest payments, and percentage of revenue required to cover principal and interest payments for the PUC are as follows: Revenue Principal and Interest Percent of Revenue PUC $ 42,439,754 3,366,256 7.9% City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) Changes in Long-term Liabilities Long-term liability activity for the year ended December 31, 2025 was as follows: Governmental Activities Bonds Payable General obligation bonds General obligation special assessment bonds Bond premium Total Bonds Payable Beginning Ending Due Within Balance Increases Decreases Balance One Year $ 13,620,000 $ - $ (750,000) $ 12,870,000 $ 730,000 13,565,000 2,195,000 (1,390,000) 14,370,000 1,405,000 1,395,636 193,562 (159,142) 1,430,056 - 28,580,636 2,388,562 (2,299,142) 28,670,056 2,135,000 Compensated Absences Payable* 781,091 - (18,686) 762,405 523,051 Governmental Activity Long-term Liabilities $ 29,361,727 $ 2,388,562 $ (2,317,828) $ 29,432,461 $ 2,658,051 Business -type Activities Bonds Payable General obligation revenue bonds $ 8,083,000 $ - $ (2,719,000) $ 5,364,000 $ 1,694,000 Revenue bonds 16,600,000 - (2,770,000) 13,830,000 2,900,000 Bond premium 1,309,763 - (308,830) 1,000,933 203,598 Total Bonds Payable 25,992,763 - (5,797,830) 20,194,933 4,797,598 Financed Purchase Arrangements 71,666 - (71,666) - - Compensated Absences Payable* 1,235,875 272,403 - 1,508,278 368,933 Business -type Activity Long-term Liabilities $ 27,300,304 $ 272,403 S (5,869,496) S 21,703,211 $ 5,166,531 * The change in compensated absences liability is presented as a net change. Conduit Debt Obligations The City has issued Revenue Bonds to provide financial assistance to a local non-profit organization. The note is secured by the property financed and are payable solely by the previously mentioned organization. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the note. Accordingly, the note is not reported as a liability in the accompanying financial statements. Description Senior Housing Facilities Revenue Bond of 2019 Balance Authorized Issue at and Issued Date Year End $ 3,300,000 11/01/19 $ 2,841,364 M. City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) Component Unit Debt Loans Payable The HRA's long-term debt balance as of December 31, 2025, was for the 2013 and 2016 Minnesota Housing Finance Agency Publicly Owned Housing Program. The HRA's long term debt consists of the following: On December 12, 2013, the HRA issued an MHFA loan in the amount of $79,000. The bond is interest free and the loan will be forgiven on December 12, 2033 as long as the HRA complies with the terms and conditions of the loan agreement. On May 31, 2016, the HRA issued an MHFA loan in the amount of $234,000. The bond is interest free and the loan will be forgiven on May 31, 2036 as long as the HRA complies with the terms and conditions of the loan agreement. Description 2013 MHFA Loan - Boiler Replacement Project 2016 MHFA Loan - Elevator Project Total Loans Payable Change in Lonp-term Liabilities Balance Authorized Interest Issue Maturity at and Issued Rate Date Date Year End $ 79,000 0.00 % 12/12/13 234,000 0.00 05/31 /16 Long-term liability activity for the year ended December 31, 2025 was as follows: Beginning Balance Increases Decreases 12/12/33 $ 79,000 05/31 /36 234,000 $ 313,000 Ending Due Within Balance One Year Component Unit Activities (EDA) Compensated Absences Payable* $ 6,782 $ 3,176 $ - $ 9,958 $ 6,080 Component Unit Activities (HRA) Loans Payable $ 313,000 $ - $ - $ 313,000 $ - Compensated Absences Payable* 16,905 7,752 - 24,657 13,958 Total $ 329,905 S 7,752 $ - $ 337,657 $ 13,958 * The change in compensated absences liability is presented as a net change. City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 3: Detailed Notes on All Funds (Continued) G. Fund Balance Classification At December 31, 2025, a summary of the governmental fund balance classifications are as follows: Special Assessment Other Improvement Governmental General 2025 Funds Total Fund Balances Nonspendable Inventory $ 56,802 $ $ $ 56,802 Prepaid items 2,242 2,242 Total Nonspendable 59,044 59,044 Restricted Drug forfeiture 28,423 28,423 Debt service 4,210,928 4,210,928 Parkland dedication 302,782 302,782 Police Memorial Park maintenance 25,197 25,197 Rural fire department 21,417 21,417 Economic development loans 477,797 477,797 Energy loans 1,012,854 1,012,854 HRA loans 94,399 94,399 Housing rehabilitation 399,460 399,460 Minnesota investment 10,921 10,921 Tax increment financing 211,448 211,448 Public Safety 239,447 239,447 Affordable Housing 127,965 127,965 Total Restricted - 7,163,038 7,163,038 Committed Working capital 6,619,463 - 6,619,463 Hutchinson area transportation facility - 725,720 725,720 Budget contingencies & levy stabilization 1,654,866 - 1,654,866 Tree escrow - 55,738 55,738 Tree mitigation 411,970 411,970 Public arts commission - Community Improvement 61111 6,111 Public arts commission - Public Sites 14,784 14,784 Lakes and River Basin project - 354,119 354,119 Total Committed 8,274,329 1,568,442 9,842,771 Assigned Public arts commission (maintenance) - 10,000 10,000 Capital projects 2,598,780 2,598,780 Community improvement 2,505,502 2,505,502 Equipment replacement 513,412 513,412 Total Assigned - 5,627,694 5,627,694 Unassigned 744,510 (70,860) (573,994) 99,656 Total Fund Balance $ 9,077,883 $ (70,860) $ 13,785,180 $ 22,792,203 E�] City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 4: Defined Benefit Pension Plans - Statewide A. Plan Description The City participates in the following cost -sharing multiple -employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). These plan provisions are established and administered according to Minnesota Statutes chapters 353, 353D, 353E, 353G, and 356. Minnesota Statutes chapter 356 defines each plan's financial reporting requirements. PERA's defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code. General Emolovees Retirement Plan (General Plan Membership in the General Plan includes employees of counties, cities, townships, schools in non -certified positions, and other governmental entities whose revenues are derived from taxation, fees, or assessments. Plan membership is required for any employee who is expected to earn more than $425 in a month, unless the employee meets exclusion criteria. Public Emolovees Police and Fire Plan (Police and Fire Plan) Membership in the Police and Fire Plan includes full-time, licensed police officers and firefighters who meet the membership criteria defined in Minnesota Statutes section 353.64 and who are not earning service credit in any other PERA retirement plan or a local relief association for the same service. Employers can provide Police and Fire Plan coverage for part-time positions and certain other public safety positions by submitting a resolution adopted by the entity's governing body. The resolution must state that the position meets plan requirements. B. Benefits Provided PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can only be modified by the state Legislature. Vested, terminated employees who are entitled to benefits, but are not receiving them yet, are bound by the provisions in effect at the time they last terminated their public service. When a member is "vested," they have earned enough service credit to receive a lifetime monthly benefit after leaving public service and reaching an eligible retirement age. Members who retire at or over their Social Security full retirement age with at least one year of service qualify for a retirement benefit. General Emolovees Plan Benefits General Employees Plan requires three years of service to vest. Benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for General Plan members. Members hired prior to July 1,1989, receive the higher of the Step or Level formulas. Only the Level formula is used for members hired after June 30,1989. Under the Step formula, General Plan members receive 1.2% of the highest average salary for each of the first 10 years of service and 1.7% for each additional year. Under the Level formula, General Plan members receive 1.7% of the highest average salary for all years of service. For members hired prior to July 1,1989, a full retirement benefit is available when age plus years of service equal 90 and normal retirement age is 65. Members can receive a reduced retirement benefit as early as age 55 if they have three or more years of service. Early retirement benefits are reduced by .25i for each month under age 65. Members with 30 or more years of service can retire at any age with a reduction of .25i for each month the member is younger than age 62. The Level formula allows General Plan members to receive a full retirement benefit at age 65 if they were first hired before July 1,1989, or at age 66 if they were hired on or after July 1, 1989. Early retirement begins at age 55 with an actuarial reduction applied to the benefit. Benefit increases are provided to benefit recipients each January. The postretirement increase is equal to 50i of the cost -of -living adjustment (COLA) announced by the SSA, with a minimum increase of at least 1 i and a maximum of 1.5 i. The 2025 annual increase was 1.25%. Recipients that have been receiving the annuity or benefit for at least a full year as of the June 30 before the effective date of the increase will receive the full increase. Recipients receiving the annuity or benefit for at least one month but less than a full year as of the June 30 before the effective date of the increase will receive a prorated increase. Police and Fire Plan Benefits Benefits for Police and Fire Plan members hired before July 1, 2010, are vested after three years of service. Members hired on or after July 1, 2010, are 50 i vested after five years of service and 100i vested after ten years. After five years, vesting increases by 10 i each full year of service until members are 100 i vested after ten years. Police and Fire Plan members receive 3% of highest average salary for all years of service. Police and Fire Plan members receive a full retirement benefit when they are age 55 and vested, or when their age plus their years of service equals 90 or greater if they were first hired before July 1,1989. Early retirement starts at age 50, and early retirement benefits are reduced by 0.417 i each month members are younger than age 55. Benefit increases are provided to benefit recipients each January. The postretirement increase is fixed at 1 i. Recipients who have been receiving the annuity or benefit for at least 36 months as of the June 30 before the effective date of the increase will receive the full increase. Recipients receiving the annuity or benefit for at least 25 months but less than 36 months as of the June 30 before the effective date of the increase will receive a prorated increase. C. Contributions Minnesota Statutes chapters 353, 353E, 353G, and 356 set the rates for employer and employee contributions. Contribution rates can only be modified by the state Legislature. General Emolovees Fund Contributions General Plan members were required to contribute 6.50% of their annual covered salary in fiscal year 2025 and the City was required to contribute 7.50% for General Plan members. The City's contributions to the General Employees Fund for the year ended December 31, 2025, were $1,013,629. This includes EDA amounts of $8,366. The Citys contributions were equal to the required contributions as set by state statute. .e City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 4: Defined Benefit Pension Plans - Statewide (Continued) Police and Fire Fund Contributions Police and Fire Plan members were required to contribute 11.80 i of their annual covered salary in fiscal year 2025 and the City was required to contribute 17.70% for Police and Fire Plan members. The City's contributions to the Police and Fire Fund for the year ended December 31, 2025, were $441,239. The City's contributions were equal to the required contributions as set by state statute. D. Pension Costs General Employees Fund Pension Costs At December 31, 2025, the City reported a liability of $4,713,982 for its proportionate share of the General Employees Fund's net pension liability, of which the EDA's portion was calculated at $38,905. The City's net pension liability reflected a reduction due to the State of Minnesota's contribution of $16 million. The State of Minnesota is considered a non -employer contributing entity and the state's contribution meets the definition of a special funding situation. The State of Minnesota's proportionate share of the net pension liability associated with the City totaled $113,716, of which the EDA's portion was calculated at $939. Primary Component Government Unit City's proportionate share of the net pension liability 4,713,982 38,905 State of Minnesota's proportionate share of the net pension liability associated with the City 113,716 939 Total $ 4,827,698 $ 39,844 The net pension liability was measured as of June 30, 2025, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2024 through June 30, 2025, relative to the total employer contributions received from all of PERA's participating employers. The City's proportionate share was 0.1423% at the end of the measurement period and 0.1486% for the beginning of the period. The EDA's proportionate share was calculated at 0.825% of the City's activity at both July 1, 2024 and June 30, 2025. For the year ended December 31, 2025, the City recognized pension expense of negative $281,526 for its proportionate share of the General Employees Plan's pension expense, of which the EDA's portion was calculated at $2,323. In addition, the City recognized an additional negative $17,442 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota's contribution of $16 million to the General Employees Fund, of which the EDA's portion was calculated at $144. At December 31, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources Primary Government Component Unit Deferred Deferred Deferred Deferred Outflows Inflows Outflows Inflows of Resources of Resources of Resources of Resources Differences between expected and actual economic experience $ 449,187 $ - $ 3,707 $ - Changes in actuarial assumptions 113,592 1,084,787 1,464 13,426 Net difference between projected and actual investment earnings - 1,875,939 - 15,482 Changes in proportion 15,928 493,685 131 4,074 Employer contributions subsequent to the measurement date 522,843 - 4,315 - Total $ 1,1 11,550 $ 3,454,411 $ 9,617 $ 32, 882 The $280,210 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2026. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recoqnized in pension expense as follows: Primary Component Government Unit 2026 $ (723,349) $ (5,970) 2027 (1,079,084) (8,906) 2028 (738,159) (6,092) 2029 (335,112) (2,766) 91 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 4: Defined Benefit Pension Plans - Statewide (Continued) Police and Fire Fund Pension Costs At December 31, 2025, the City reported a liability of $1,831,678 for its proportionate share of the Police and Fire Fund's net pension liability. The net pension liability was measured as of June 30, 2025, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportionate share of the net pension liability was based on the City's contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2024 through June 30, 2025, relative to the total employer contributions received from all of PERA's participating employers. The City's proportionate share was 0.1563% at the end of the measurement period and 0.1586% for the beginning of the period. The State of Minnesota contributed $18 million to the Police and Fire Fund in the plan fiscal year ended June 30, 2025. The contribution consisted of $9 million in direct state aid that meets the definition of a special funding situation and $9 million in supplemental state aid that does not meet the definition of a special funding situation. The $9 million direct state aid was paid on October 1, 2024. The direct state aid payment will increase by $17.7 million which was paid on October 1, 2025. Thereafter, by October 1 of each year, the state will pay $26.7 million to the Police and Fire Fund until the fund is 110i funded for a minimum of three consecutive years (on an actuarial value of assets basis). The $9 million in supplemental state aid will continue until the fund and the State Patrol Plan (administered by the Minnesota State Retirement System) are 100i funded for three consecutive years (on an actuarial value of assets basis). The State of Minnesota's proportionate share of the net pension liability associated with the City totaled $63,495. City's proportionate share of the net pension liability State of Minnesota's proportionate share of the net pension liability associated with the City Total 1,831,678 63,495 $ 1,895,173 For the year ended December 31, 2025, the City recognized pension expense of $345,371 for its proportionate share of the Police and Fire Plan's pension expense. The City recognized $30,722 as grant revenue and pension expense for its proportionate share of the State of Minnesota's contribution of $9 million to the Police and Fire special funding situation. The State of Minnesota is not included as a non -employer contributing entity in the Police and Fire Pension Plan pension allocation schedules for the $9 million in supplemental state aid because this contribution was not considered to meet the definition of a special funding situation. The City recognized $14,070 for the year ended December 31, 2025 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesota's on -behalf contributions to the Police and Fire Fund. At December 31, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual economic experience Changes in actuarial assumptions Net difference between projected and actual earnings on investments Changes in proportion Employer contributions subsequent to the measurement date Total Deferred Deferred Outflows Inflows of Resources of Resources $ 846,294 $ - 1,389,000 2,295,016 - 817,504 79,989 129,805 229,564 - $ 2,544,847 $ 3,242,325 The $229,564 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2026. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: 2026 S 426,999 2027 (402,394) 2028 (913,858) 2029 (79,360) 2030 41,571 92 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 4: Defined Benefit Pension Plans - Statewide (Continued) E. Long-term Expected Return on Investment The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness, on a regular basis of the long-term expected rate of return using a building-block method in which best -estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: Long-term Target Expected Return Asset Class Allocation on Investment Domestic Equity International Equity Fixed Income Private Markets 33.5 i 5.10 i 16.5 5.30 25.0 0.75 25.0 5.90 Total 100.0 i F. Actuarial Methods and Assumptions The total pension liability for each of the cost -sharing defined benefit plans was determined by an actuarial valuation as of June 30, 2025, using the entry age normal actuarial cost method. The long-term rate of return on pension plan investments used to determine the total liability is 7 i. The 7% assumption is based on a review of inflation and investment return assumptions from a number of national investment consulting firms. The review provided a range of investment return rates considered reasonable by the actuary. An investment return of 7% is within that range. Inflation is assumed to be 2.25% for the General Employees Plan, and Police & Fire Plan. Benefit increases after retirement are assumed to be 1.50 i for the General Employees Plan and 1 i for the Police & Fire Plan Salary growth assumptions in the General Employees Plan range in annual increments from 11.5% after one year of service to 3 i after 27 years of service. In the Police & Fire Plan, salary growth assumptions range in annual increments from 10.75% after one year of service to 3% after 23 years of service. Mortality rates for the General Employees Plan are based on the Pub-2010 General Employee Mortality Table. Mortality rates for the Police & Fire Plan are based on the Pub-2010 Public Safety Employee Mortality Tables. The tables are adjusted slightly to fit PERA's experience. Actuarial assumptions for the General Employees Plan are reviewed every four years. The General Employees Plan was last reviewed in 2022. The assumption changes were adopted by the board and became effective with the July 1, 2023 actuarial valuation. The Police & Fire Plan was reviewed in 2024. The assumption changes were adopted by the board and became effective with the July 1, 2025 actuarial valuation. The following changes in actuarial assumptions and plan provisions occurred in 2025: General Employees Fund Changes in Actuarial Assumptions: - The combined service annuity loading factors increased from 15% to 19% for vested, terminated members and from 3 i to 44% for non -vested, terminated members. -The assumed post -retirement benefit increase changed from 1.25% to 1.5%. Changes in Plan Provisions: - The post -retirement benefit increase formula changed to 100% of the Social Security annual increase, between 1 i and 1.75%, beginning January 1, 2026. If the funded ratio (on a market value of assets basis) is less than 85% for the last two consecutive annual valuations or is less than 80% in the most recent actuarial valuation, the maximum is reduced to 1.5%. Previously, the benefit increase was 50% of the Social Security annual increase, between 1 i and 1.5%. -The 1 i additional employer contribution is eliminated when the plan reaches 98% funded status (on an actuarial value of assets basis); this contribution was previously scheduled to stop when the plan reached 100% funded status. 93 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 4: Defined Benefit Pension Plans - Statewide (Continued) Police and Fire Fund Changes in Actuarial Assumptions: - Assumed rates of salary increases were reduced slightly. - Assumed rates of retirement were adjusted, resulting in an overall increase in unreduced (full) retirements and an overall increase in reduced (early) retirements. Assumed rates of withdrawal were modified; the new rates will increase predicted terminations, especially in the first few years of employment. Assumed rates of disabled retirement were significantly increased, especially for ages over age 30. Continued use of Pub-2010 Public Safety Mortality Table with rates adjusted to better fit observed experience. Percent married assumption for female retirees lowered from 70%to 65%. Minor changes were made to form of payment assumptions for retirees. Minor changes were made to assumptions made with respect to missing participant data. The combined service annuity load changed from 33%to 13% for vested, terminated members and from 2%to 38% for non -vested, terminated members. Changes in Plan Provisions: - The period of time needed for benefit recipients to receive their first benefit increase was reduced by one year (from 36 months to 24 months for a full increase). The January 1, 2026 benefit increase changed from 1 %to 3%; subsequent January 1 increases will be 1 %. The threshold to end the $9 million annual state aid contribution changed from the earlier of July 1, 2048 or 90 %funded for both PERA Police & Fire and MSRS State Patrol for three consecutive years to 100% funded for both PERA Police & Fire and MSRS State Patrol for three consecutive years (on an actuarial value of assets basis). - The threshold to end the additional $9 million annual state aid contribution changed from the earlier of July 1, 2024 or 100% funded for a minimum of three consecutive years to 110% funded for a minimum of three consecutive years (on an actuarial value of assets basis). An additional $17.7 million in direct state aid will be paid annually each October 1 beginning October 1, 2025 through June 30, 2048. Joint and survivor actuarial equivalent factors were updated to reflect changes in assumptions. G. Discount Rate The discount rate used to measure the total pension liability in 2025 was 7.00%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net position of the General Employees and Police and Fire Plans were projected to be available to make all projected future benefit payments of current plan members. The long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. H. Pension Liability Sensitivity The following presents the City's proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate one percentage point lower or one percentage point higher than the current discount rate: General Employees Fund General Employees Fund (Component Unit Share) Police and Fire Fund I. Pension Plan Fiduciary Net Position 1 Percent 1 Percent Decrease (6.00%) Current (7.00%) Increase (8.00%) 11,449,522 $ 4,713,982 $ (749,967) 94,494 38,905 (6,190) 4,799,386 1,831,678 (605,278) Detailed information about each pension plan's fiduciary net position is available in a separately issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the Internet at www.mnpera.org. M City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 5: Public Employees Defined Contribution Plans (Defined Contribution Plan) The City has City Council members that are covered by the Defined Contribution Plan (DCP), a multiple -employer deferred compensation plan administered by PERA. The PEDCP is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses, therefore, there is no future liability to the employer. Minnesota statutes, chapter 353d.03, specifies plan provisions, including the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5 percent of salary which is matched by the elected official's employer. For ambulance service personnel, employer contributions are determined by the employer, and for salaried employees contributions must be a fixed percentage of salary. Employer contributions for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan, PERA receives 2.0 percent of employer contributions and twenty-five hundredths of 1.0 percent (0.25 percent) of the assets in each member's account annually. The City's contributions to the DCP for the year ended December 31, 2025, was $1,090. The City's contributions were equal to the contractually required contributions for each year as set by Minnesota statute. Contribution Amount Employee $ 1,090 Employer $ 1,090 Percentage of Covered Payroll Employee Employer 5.00% Note 6: Defined Contribution Plans (Component Unit) HRA 5.00% Required Rate 5.00% All eligible employees as determined by the local HRA HUD approved personnel policy are covered by a pension plan with The Housing Renewal and Local Agency Retirement Plan. The HRA's contributions to the DCP for the years ended December 31, 2025, 2024 and 2023 were $16,714, $13,521 and $13,399, respectively. Pension contributions for the year under the plan were as follows: Contribution Amount Employee 14,485 Employer 16,714 Percentage of Covered Payroll Employee Employer 6.50% 7.50% Required Rate N/A W City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 7: Defined Benefit Pension Plans - Fire Relief Association A. Plan Description Firefighters, retired and active, of the City are members of the Hutchinson Fire Department Relief Association (the Association). The Association is the administrator of a single -employer defined benefit pension plan available to firefighters. The Association was established May 6, 1907, and operates under the provisions of Minnesota statutes, chapters 69 and 424. It is governed by a Board of Trustees made up of nine members, of which six are elected by the members of the Association for three-year terms, the Mayor, the City Clerk and the fire chief, who serve as ex -off icio voting members of the board. As of December 31, 2025, the plan covered 30 active firefighters, 2 inactive members, 43 vested terminated fire fighters and 11 surviving beneficiaries whose pension benefits are deferred. B. Benefits Provided A fire fighter who completes at least 20 years as an active member of the Municipal Fire Department (the Department) is entitled, after age 50, to a full service pension upon retirement. The bylaws of the Association also provide for an early vested service pension for a retiring member who has completed fewer than 20 years of service. The reduced pension, available to members with 10 years of service, shall be equal to 60 percent of the pension as prescribed by the bylaws. This percentage increases 4 percent per year so that at 20 years of service, the full amount prescribed is paid. Members who retire at or after age 50 with 10 years of credited service are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to the applicable vesting percentage times $17 per month per year of service up to a maximum benefit of $450 per month. The City has agreed to contribute an annual amount equal to the greater of the statutorily -required amount or $2,500 per active firefighter. In 2020, a lump sum plan was added for active members. The annuity option was eliminated for members hired after October 8, 2020, and survivor benefit was changed from annuity to lump sum. C. Contributions Minnesota statutes, chapters 424 and 424A authorize pension benefits for volunteer fire relief associations. The plan is funded by property taxes, fire state aid, investment earnings and, if necessary, employer contributions as specified in Minnesota statutes and voluntary City contributions (if applicable). The State of Minnesota contributed $191,034 in fire state aid to the plan on behalf of the Hutchinson Fire Department for the year ended December 31, 2025, which was recorded as a revenue. Required employer contributions are calculated annually based on statutory provisions. The City's statutorily -required contributions to the plan for the year ended December 31, 2025 were $191,034. The City's contributions were equal to the required contributions as set by state statute. The City also made $76,000 of voluntary contributions to the plan. Furthermore, the firefighter has no obligation to contribute to the plan. ., City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 7: Defined Benefit Pension Plans - Fire Relief Association (Continued) D. Pension Costs At December 31, 2025, the City reported a net pension liability (asset) of ($835,495) for the plan. The net pension asset was measured as of December 31, 2025. The total pension liability (asset) used to calculate the net pension liability (asset) in accordance with GASB 68 was determined by Van Iwaarden Associates applying an actuarial formula to specific census data certified by the Department as of December 31, 2025. The following table presents the changes in net pension liability (asset) during the year: Beginning Balance January 1, 2025 Changes for the Year Service cost Interest Change in benefit terms Contributions - State and local Net investment income Benefit payments Administrative expense Total Net Changes Ending Balance December 31, 2025 Total Plan Net Pension Fiduciary Pension Liability Net Position Liability (Asset) (a) (b) (a-b) $ 2,397,357 $ 3,143,200 $ (745,843) 40,792 - 40,792 141,646 - 141,646 359,212 359,212 - 267,034 (267,034) - 393,361 (393,361) (154,768) (154,768) - - (29,093) 29,093 386,882 476,534 (89,652) $ 2,784,239 $ 3,619,734 $ (835,495) For the year ended December 31, 2025, the City recognized pension expense of $60,639. At December 31, 2025, the City reported deferred inflows of resources and deferred outflows of resources related to pension from the following sources: Differences Between Expected and Actual Experience Changes in Actuarial Assumptions Net Difference Between Projected and Actual Earnings on Plan Investments Total Deferred Deferred Outflows Inflows of Resources of Resources $ 21,695 $ 1,406 73,319 - 263,300 $ 23,101 $ 336,619 97 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 7: Defined Benefit Pension Plans - Fire Relief Association (Continued) Amounts reported as deferred outflows and inflows of resources related to the plan will be recognized in pension expense as follows: 2026 2027 2028 2029 E. Actuarial Methods and Assumptions $ (47,174) (146,705) (78,256) (41,383) The total pension liability at December 31, 2025 was determined using the entry age normal actuarial cost method and the following actuarial assumptions: Retirement Eligibility at Later of Age 50 and 20 Years of Service Salary Increases N/A Discount Rate 6.00% Inflation Rate 2.50% Expected Return on Plan Assets 6.00% 20 Year Municipal Bond Yield N/A No changes in benefits occurred in 2025. There were no changes in actuarial assumptions in 2025. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best estimates for expected future real rates of return (expected returns, net of inflation) were developed for each asset class using the plan's target investment allocation along with long-term return expectations by asset class. Inflation expectations were applied to derive the nominal rate of return for the portfolio. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Long-term Target Expected Real Asset Class Allocation Rate of Return Domestic Equity 45.00 % 4.52 % International Equity 15.00 5.08 Fixed Income 25.00 2.44 Real Estate - 3.73 Cash and equivalents 15.00 0.99 Total 100.00 % City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 7: Defined Benefit Pension Plans - Fire Relief Association (Continued) F. Discount Rate The discount rate used to measure the total pension liability (asset) was 6.00 percent. The projection of cash flows used to determine the discount rate assumed that contributions to the plan will be made as specified in statute. Based on that assumption and considering the funding ratio of the plan, the fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability (asset). G. Pension Liability Sensitivity The following presents the City's net pension liability (asset) for the plan, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City's net pension liability (asset) would be if it were calculated using a discount rate one percent lower or one percent higher than the current discount rate: Defined Benefit Plan H. Pension Plan Fiduciary Net Position 1 Percent 1 Percent Decrease (5.00%) Current (6.00%) Increase (7.00%) (594,596) $ (835,495) $ (1,041,635) For financial reporting purposes, the Association's financial statements are not included with the City's financial statements because the Association is not a component unit of the City. The financial statements of the Association may be obtained at the City's offices. Note 8: Postemployment Benefits Other Than Pensions A. Plan Description The City administers a single -employer defined benefit healthcare plan ("the Retiree Health Plan"). The plan provides lifetime healthcare insurance for eligible retirees and their spouses through the City's group health insurance plan, which covers both active and retired members. Benefit provisions are established through negotiations between the City and the union representing employees and are renegotiated each three-year bargaining period. The component unit is included in the City's plan. The Retiree Health Plan does not issue a publicly available financial report and is not administered through a trust or equivalent arrangement and thus there are no assets accumulated in a GASB-compliant trust. At December 31, 2025, the following employees were covered by the benefit terms: City PUC Inactive Plan Members or Beneficiaries Currently Receiving Benefit Payments 4 1 Active Plan Members 111 50 Total Plan Members B. Funding Policy 115 51 Contribution requirements also are negotiated between the City and union representatives. The City does not contribute to the cost of current -year premiums for eligible retired plan members and their spouses. For fiscal year 2025, the City did not directly contribute to the Plan, while the implicit contributions totaled $9,567. City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 8: Postemployment Benefits Other Than Pensions (Continued) C. Actuarial Methods and Assumptions The City's total OPEB liability of $537,404 was measured as of January 1, 2025. The EDA's portion of the OPEB liability is $4,394. The total OPEB liability in the January 1, 2025 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: City Plan Discount Rate 4.20% 20-Year Municipal Bond Yield 4.20% Inflation Rate 2.50% Salary Increases Service graded table Medical Trend Rate 6.50% as of January 1, 2025 grading to 5.00% over 6 years and then to 4.00% over the next 48 years PUC Plan 4.08% 4.08% 2.50% Based on the most recently disclosed assumptions for the pension plan in which the employee participates. 8.60% in 2025 decreasing over several decades to an ultimate rate of 3.90% for 2075 and later years The discount rate used to measure the total OPEB liability for the City was 4.20 percent and 4.08 percent for the PUC. Since the plan is not funded (has no assets), the discount rate was developed by estimating the long term investment yield on the employer funds that will be used to pay benefits as they come due. City: Mortality rates were based on the Pub-2010 Public Retirement Plans Headcount -Weighted Mortality Tables (General, Safety) with MP-2021 Generational Improvement Scale. PUC: Mortality rates were based on assumptions for General Employees used in the July 1, 2023 PERA of Minnesota Retirement Plan actuarial valuations, PUB-2010 General mortality tables with projected mortality improvements based on a scale MP-2021, and other adjustments. Economic assumptions are based on input from a variety of published sources of historical and projected future financial data. Each assumption was reviewed for reasonableness with the source information as well as for consistency with the other economic assumptions. 100 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 8: Postemployment Benefits Other Than Pensions (Continued) D. Changes in the Total OPEB Liability Balances at December 31, 2024 Changes for the Year Service Cost Interest Differences Between Expected and Actual Experience Changes in Assumptions or Other Inputs Benefit payments Net Changes Balances at December 31, 2025 Component Unit Economic Primary Development Total OPEB Government Authority Liability $ 518,775 $ 4,352 $ 523,127 34,338 287 34,625 21,590 127 21,717 22,596 208 22,804 (41,087) (366) (41,453) (23,202) (214) (23,416) 14,235 42 14,277 $ 533,010 $ 4,394 $ 537.404 Since the prior measurement date, the following assumptions changed (City): The health care trend rates were changed to better anticipate short term and long term medical increases. The retirement, withdrawal, and salary increase rates for public safety employees were updated to reflect the latest experience study. The discount rate was changed from 4.00% to 4.20%. Since the prior measurement date, the following assumptions changed (PUC): The discount rate was changed from 3.77 percent to 4.08 percent. E. Sensitivity of the Total OPEB Liability The following presents the total OPEB liability of the City and the EDA, as well as what the City's and EDA's total OPEB liability would be if it were calculated using a discount rate that is one -percentage point lower (3.20 percent/3.08 percent) or one -percentage -point higher (5.20 percent/5.08 percent) than the current discount rate: Primary Government Component Unit - EDA Primary Government City Plan 1 Percent 1 Percent Decrease (3.20%) Current (4.20%) Increase (5.20%) 521,148 4,803 476,728 4,394 435,662 4,015 PUC Plan 1 Percent 1 Percent Decrease (3.08%) Current (4.08%) Increase (5.08%) 60,723 56,282 52,049 101 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 8: Postemployment Benefits Other Than Pensions (Continued) The following presents the total OPEB liability of the City and EDA as well as what the City's and EDA's total OPEB liability would be if it were calculated using a Healthcare Cost Trend Rates that is one -percentage point lower (5.50 percent decreasing to 4.00 percent/7.60 percent decreasing to 2.90 percent) or one -percentage -point higher (7.50 percent increasing to 6.00 percent/9.6 percent decreasing to 4.9 percent) than the current cost trend rate: Primary Government Component Unit - EDA Primary Government Citv Plan Healthcare Cost 1 Percent Decrease Trend Rates 1 Percentlncrease (5.50% Decreasing (6.50% Decreasing (7.50% Decreasing to 4.00"%) to 5.00%) to 6.00%) $ 418,659 3,859 476,728 4,394 PUC Plan 545,824 5,031 Healthcare Cost 1 Percent Decrease Trend Rates 1 Percentlncrease (7.60% Decreasing (8.60% Decreasing (9.60% Decreasing to 2.90%) to 3.90%) to 4.90%) $ 49,936 56,282 F. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB 63,537 For the year ended December 31, 2025, the City recognized negative OPEB expense of $28,798. At December 31, 2025, the City and the EDA reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Primary Government Component Unit - EDA Deferred Deferred Deferred Deferred Outflows Inflows Outflows Inflows of Resources of Resources of Resources of Resources Differences between expected and actual experience $ 19,368 $ - $ 178 $ - Changes in Actuarial Assumptions 18,045 77,986 166 719 Net Difference Between Projected and Actual Earnings on Plan Investments - 171,642 - 1,582 Contributions to OPEB Subsequent to the Measurement Date 9,488 - 79 - Total $ 46,901 $ 249,628 $ 423 $ 2,301 102 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 8: Postemployment Benefits Other Than Pensions (Continued) Deferred outflows of resources totaling $9,488 from the City and $79 from the EDA related to the contributions to OPEB subsequent to the measurement date will be recognized as a reduction of the OPEB liability in the year ended December 31, 2026. Year ended December 31 2026 $ (54,060) $ (498) 2027 (44,732) (412) 2028 (44,733) (412) 2029 (33,128) (305) 2030 (33,119) (305) 2031 (2,443) (25) Note 9: Other Information A. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the City carries insurance. The City obtains insurance through participation in the League of Minnesota Cities Insurance Trust (LMCIT) which is a risk sharing pool with approximately 800 other governmental units. The City pays an annual premium to LMCIT for its workers compensation and property and casualty insurance. The LMCIT is self-sustaining through member premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded the City s coverage in any of the past three fiscal years. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The City's management is not aware of any incurred but not reported claims. B. Commitments and Contingencies The City has received Federal and State grants in current and past years for specific purposes that are subject to review and audit by the grantor agencies or their designee. Such audits could lead to a request for reimbursement to the grantor agency for expenditures disallowed under terms of the grant. The City administration believes such disallowances if any, will be immaterial. The PUC is committed to purchase 25 MW of its power requirements from Missouri River Power Company through pursuant to the Power Sale Agreement dated April 28, 2010. This contract is effective through January 1, 2046. C. Self -Insurance - Benefit Plans Self -funded Dental Insurance: The City (internal service self-insurance fund) and Public Utilities Commission (the funds) provide dental insurance coverage to its employees under a self -funded plan. The funds pay the dental insurance claims as they are incurred by the employee up to $1,000. The Funds record a liability for claims incurred but not reported or paid, which is included in accrued expenses on the balance sheet. Settled claims have not exceeded coverage in either of the past three years. 103 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 9: Other Information (Continued) The claims liability at December 31, 2025 is based on requirements of Governmental Accounting Standards Board Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Changes in the funds' claims liability amount in fiscal years 2025, 2024 and 2023 were: Year 2025 2024 2023 D. Major Customers January 1 Claims Liability 10,146 4,503 6,389 Current Year Claims and Changesin Estimates 111,612 108,019 97,984 Current Year December 31 Claim Claims Payments Liability (112,012) $ 9,746 (102,376) 10,146 (97,984) 6,389 For the year ended December 31, 2025, the PUC's Electric Division derived approximately 44.38 percent of utility revenue from the top five major industrial customers. For the year ended December 31, 2025, the PUC's Natural Gas Division derived approximately 50.06 percent of its utility revenue from the top five major industrial customers. E. Tax Increment Districts The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements. City Tax Amount of Rate (Year of District Tax Taxes Abated Establishment) Capacity the Fiscal Year Tax Increment Districts (PAYGO) TIF District 4-13 (Downtown Theater) 56.919% $ 17,460 $ 9,938 TIF District 4-14 (Cornerstone Commons) 59.363% 27,340 16,230 TIF District 4-16 (Old Medical Center) 74.417% 1,960 1,459 TIF District 4-17 (Econ, Industrial Park) 73.966% 3,611 2,671 TIF District 4-18 (Highfield Apartments) 73.966% 98,939 73,181 TIF District 4-19 (Cobblestone Hotel & Suites) 71.953% 40,656 29,253 TIF District 4-20 (Fifth Ave Ind Park) 71.141 % 56,140 39,939 TIF District 4-21 (Energy Park North) 66.473% 42,490 28,244 TIF District 4-22 (Jorgensen Hotel) 63.882% 2,346 1,499 TIF District 4-23 (RD Machine Expansion) 60.407% 14,362 8,676 Total $ 211,089 104 City of Hutchinson, Minnesota Notes to the Financial Statements December 31, 2025 Note 9: Other Information (Continued) F. Tax Abatements As of December 31, 2025, the City has one agreement entered into by the City listed below that abate City property taxes. Below is information specific to the agreement: The City entered into a tax abatement agreement with Uponor Inc., dated 2/13/2018 for a manufacturing project located at 500 Technology Drive. The project includes the acquisition of and improvements to an approximately 36-acre parcel of land and approximately 237,000 square -foot facility. The improvements include the renovation, retrofitting, upgrading and use of the manufacturing facility on said property. The abatement is for the increase in City taxes over and above the taxes based on the payable 2017 market value of $4,702,500, beginning for taxes payable in 2019. The agreement, negotiated under state law (Minnesota Statute 469.1812-469-1815), has a maximum abatement amount of $902,291 and a maximum duration of 15 years (2019-2033). Total taxes abated during 2025 amount to $22,473. G. Legal Debt Margin In accordance with Minnesota statutes, the City may not incur or be subject to general obligation debt in excess of three percent of the market value of taxable property within the City. General obligation debt is payable solely from ad valorem taxes and therefore, excludes debt financed partially or entirely by special assessments, enterprise fund receipts or tax increments. Currently, the City has no general obligation debt outstanding subject to this limit. H. Concentrations The City receives a significant amount of its annual General fund revenues from the State of Minnesota from the Local Government Aid (LGA) program. Total LGA received in 2025 was $3,103,467. Of this amount, $1,551,734 is allocated to the General fund (accounting for 11.6 percent of total General fund revenues), $1,501,733 is allocated to the Capital Improvement Projects fund, and $50,000 is allocated to the Equipment Replacement fund. I. Economic Dependency The programs of the HRA are economically dependent on annual contributions and grants from HUD. Without those contributions and grants, the programs would operate at a loss. Note 10: Adjustments of Beginning Balances Change within Major and Nonmajor Fund Reporting During fiscal year 2025, Special Assessment Improvement 2025 fund was determined to be major. The effects of the change within the financial reporting entity are shown in the corresponding financial statements. 105 THIS PAGE IS LEFT BLANK INTENTIONALLY M. REQUIRED SUPPLEMENTARY INFORMATION CITY OF HUTCHINSON HUTCHINSON, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2025 107 City of Hutchinson, Minnesota Required Supplementary Information For the Year Ended December 31, 2025 Schedule of Employer's Share of PERA Net Pension Liability - General Employees Fund City's State's Proportionate Proportionate Share of the City's Share of Net Pension Proportionate the Net Pension Liability as a Plan Fiduciary City's Share of Liability City's Percentage of Net Position Fiscal Proportion of the Net Pension Associated with Covered Covered as a Percentage Year the Net Pension Liability the City Total Payroll Payroll of the Total Ending Liability (a) (b) (a+b) (c) (a/c) Pension Liability 6/30/2025 0.1423 % $ 4,713,982 $ 113,716 $ 4,827,698 $ 12,907,287 37.4 % 90.8 % 6/30/2024 0.1486 5,492,606 142,028 5,634,634 12,651,993 44.5 86.7 6/30/2023 0.1549 8,661,835 238,971 8,900,806 12,122,039 73.4 83.1 6/30/2022 0.1554 12,307,731 360,700 12,668,431 11,985,561 105.7 76.7 6/30/2021 0.1586 6,772,930 206,903 6,979,833 11,475,587 60.8 87.0 6/30/2020 0.1551 9,298,954 286,598 9,585,552 11,108,419 86.3 79.0 6/30/2019 0.1502 8,304,222 257,988 8,562,210 10,646,616 80.4 80.2 6/30/2018 0.1508 8,365,767 274,506 8,640,273 10,145,597 85.2 79.5 6/30/2017 0.1497 9,556,749 120,135 9,676,884 9,641,342 100.4 75.9 6/30/2016 0.1547 12,560,873 164,029 12,724,902 9,593,197 132.6 68.9 Schedule of Employer's PERA Contributions - General Employees Fund Contributions in Relation to the Contributions as Statutorily Statutorily Contribution City's a Percentage of Required Required Deficiency Covered Covered Year Contribution Contribution (Excess) Payroll Payroll Ending (a) (b) (a-b) (c) (b/c) 12/31/2025 $ 1,013,629 $ 1,013,629 $ $13,515,050 7.50 % 12/31/2024 951,572 951,572 12,687,627 7.50 12/31 /2023 925,201 925,201 12,336,018 7.50 12/31/2022 892,170 892,170 11,895,596 7.50 12/31/2021 860,768 860,768 10,476,908 7.50 12/31/2020 862,466 862,466 11,499,551 7.50 12/31/2019 813,778 813,778 10,850,378 7.50 12/31/2018 782,227 782,227 10,429,696 7.50 12/31/2017 735,179 735,179 9,803,713 7.50 12/31/2016 715,812 715,812 9,544,167 7.50 108 City of Hutchinson, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2025 Notes to the Required Supplementary Information - General Employee Retirement Fund Changes in Actuarial Assumptions 2025 - The combined service annuity loading factors increased from 15% to 19% for vested, terminated members and from 3% to 44% for non - vested, terminated members. The assumed post -retirement benefit increase changed from 1.25%to 1.5%. 2024 - The following changes in assumptions are effective with the July 1, 2024 valuation, as recommended in the most recent experience study (dated June 29, 2023): Rates of merit and seniority were adjusted, resulting in slightly higher rates. Assumed rates of retirement were adjusted as follows: increase the rate of assumed unreduced retirements, slight adjustments to Rule of 90 retirement rates, and slight adjustments to early retirement rates for Tier 1 and Tier 2 members. Minor increase in assumed withdrawals for males and females. Lower rates of disability. Continued use of Pub-2010 general mortality table with slight rate adjustments as recommended in the most recent experience study. Minor changes to form of payment assumptions for male and female retirees. Minor changes to assumptions made with respect to missing participant data. 2023 - The investment return and single discount rates were changed from 6.5 percent to 7.0 percent. 2022 - The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021. 2021 - The investment return and single discount rates were changed from 7.50 percent to 6.50 percent, for financial reporting purposes. The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020. 2020 - The price inflation assumption was decreased from 2.50% to 2.25%. The payroll growth assumption was decreased from 3.25% to 3.00%. Assumed salary increase rates were changed as recommended in the June 30, 2019 experience study. The net effect is assumed rates that average 0.25% less than previous rates. Assumed rates of retirement were changed as recommended in the June 30, 2019 experience study. The changes result in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements. Assumed rates of termination were changed as recommended in the June 30, 2019 experience study. The new rates are based on service and are generally lower than the previous rates for years 2-5 and slightly higher thereafter. Assumed rates of disability were changed as recommended in the June 30, 2019 experience study. The change results in fewer predicted disability retirements for males and females. The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010 General Mortality table, with adjustments. The base mortality table for disabled annuitants was changed from the RP-2014 disabled annuitant mortality table to the PUB-2010 General/Teacher disabled annuitant mortality table, with adjustments. The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019. The assumed spouse age difference was changed from two years older for females to one year older. The assumed number of married male new retirees electing the 100% Joint & Survivor option changed from 35% to 45%. The assumed number of married female new retirees electing the 100% Joint & Survivor option changed from 15% to 30%. The corresponding number of married new retirees electing the Life annuity option was adjusted accordingly. 2019 - The mortality projection scale was changed from MP-2017 to MP-2018. 2018 - The mortality projection scale was changed from MP-2015 to MP-2017. The assumed benefit increase was changed from 1.00 percent per year through 2044 and 2.50 percent per year thereafter to 1.25 percent per year. 2017 - The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for vested and non - vested deferred members. The revised CSA loads are now 0.0 percent for active member liability, 15.0 percent for vested deferred member liability and 3.0 percent for non -vested deferred member liability. The assumed post -retirement benefit increase rate was changed from 1.0 percent per year for all years to 1.0 percent per year through 2044 and 2.5 percent per year thereafter. 2016 - The assumed post -retirement benefit increase rate was changed from 1.0 percent per year through 2035 and 2.5 percent per year thereafter to 1.0 percent per year for all future years. The assumed investment return was changed from 7.9 percent to 7.5 percent. The single discount rate was changed from 7.9 percent to 7.5 percent. Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future salary increases, payroll growth and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 109 City of Hutchinson, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2025 Notes to the Required Supplementary Information - General Employee Retirement Fund (Continued) Changes in Plan Provisions 2025 - The post -retirement benefit increase formula changed to 100% of the Social Security annual increase, between 1 % and 1.75%, beginning January 1, 2026. If the funded ratio (on a market value of assets basis) is less than 85% for the last two consecutive annual valuations or is less than 80% in the most recent actuarial valuation, the maximum is reduced to 1.5%. Previously, the benefit increase was 50% of the Social Security annual increase, between 1 % and 1.5%.The 1 % additional employer contribution is eliminated when the plan reaches 98% funded status (on an actuarial value of assets basis); this contribution was previously scheduled to stop when the plan reached 100% funded status. 2024 - The workers' compensation offset for disability benefits was eliminated. The actuarial equivalent factors updated to reflect the changes in assumptions. 2023 - An additional one-time direct state aid contribution of $170.1 million will be contributed to the Plan on October 1, 2023. The vesting period of those hired after June 30, 2010, was changed from five years of allowable service to three years of allowable service. The benefit increase delay for early retirements on or after January 1, 2024 was eliminated. A one-time non -compounding benefit increase of 2.5 percent minus the actual 2024 adjustment will be payable in a lump sum for calendar year 2024 by March 31, 2024. 2022 - There were no changes in plan provisions since the previous valuation. 2021 - There were no changes in plan provisions since the previous valuation. 2020 - Augmentation for current privatized members was reduced to 2.0% for the period July 1, 2020 through December 31, 2023 and 0.0% after. Augmentation was eliminated for privatizations occurring after June 30, 2020. 2019 - The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per year. The state's special funding contribution was changed prospectively, requiring $16.0 million due per year through 2031. 2018 - The augmentation adjustment in early retirement factors is eliminated over a five-year period starting July 1, 2019, resulting in actuarial equivalence after June 30, 2024. Interest credited on member contributions decreased from 4.0 percent to 3.0 percent, beginning July 1, 2018. Deferred augmentation was changed to 0.0 percent, effective January 1, 2019. Augmentation that has already accrued for deferred members will still apply. Contribution stabilizer provisions were repealed. Postretirement benefit increases were changed from 1.0 percent per year with a provision to increase to 2.5 percent upon attainment of 90.0 percent funding ratio to 50.0 percent of the Social Security Cost of Living Adjustment, not less than 1.0 percent and not more than 1.5 percent, beginning January 1, 2019. For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree reaches normal retirement age; does not apply to Rule of 90 retirees, disability benefit recipients, or survivors. Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions. 2017 - The State's contribution for the Minneapolis Employees Retirement Fund equals $16,000,000 in 2017 and 2018, and $6,000,000 thereafter. The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund changed from $21,000,000 to $31,000,000 in calendar years 2019 to 2031. The state's contribution changed from $16,000,000 to $6,000,000 in calendar years 2019 to 2031. 2016 - There were no changes in plan provisions since the previous valuation 110 City of Hutchinson, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2025 Schedule of Employer's Share of PERA Net Pension Liability - Police and Fire Fund City's State's Proportionate Proportionate Share of the City's Share of Net Pension Proportionate the Net Pension Liability as a Plan Fiduciary City's Share of Liability City's Percentage of Net Position Fiscal Proportion of the Net Pension Associated with Covered Covered as a Percentage Year the Net Pension Liability the City Total Payroll Payroll of the Total Ending Liability (a) (b) (a+b) (c) (a/c) Pension Liability 6/30/2025 0.1563 % $ 1,831,678 $ 63,495 $ 1,895,173 $ 2,372,600 77.2 % 91.8 % 6/30/2024 0.1586 2,085,999 79,517 2,165,516 2,195,611 95.0 90.2 6/30/2023 0.1663 2,871,785 115,678 2,987,463 2,104,185 136.5 86.5 6/30/2022 0.1615 7,027,842 307,097 7,334,939 2,041,857 344.2 70.5 6/30/2021 0.1519 1,172,507 52,736 1,225,243 1,795,809 65.3 93.7 6/30/2020 0.1543 2,033,839 - 2,033,839 1,742,264 116.7 87.2 6/30/2019 0.1672 1,780,013 1,780,013 1,764,991 100.9 89.3 6/30/2018 0.1631 1,738,478 1,738,478 1,719,323 101.1 88.8 6/30/2017 0.1580 2,133,188 2,133,188 1,621,218 131.6 85.4 6/30/2016 0.1590 6,380,947 6,380,947 1,531,607 416.6 63.9 Schedule of Employer's PERA Contributions - Police and Fire Fund Contributions in Relation to the Contributions as Statutorily Statutorily Contribution City's a Percentage of Required Required Deficiency Covered Covered Year Contribution Contribution (Excess) Payroll Payroll Ending (a) (b) (a-b) (c) (b/c) 12/31/2025 $ 441,239 $ 441,239 $ $ 2,492,873 17.70 % 12/31/2024 400,746 400,746 2,264,101 17.70 12/31/2023 380,335 380,335 2,148,788 17.70 12/31/2022 359,318 359,318 2,030,045 17.70 12/31/2021 336,868 336,868 1,903,212 17.70 12/31/2020 322,455 322,455 1,821,781 17.70 12/31/2019 296,227 296,227 1,747,653 16.95 12/31/2018 284,969 284,969 1,759,067 16.20 12/31/2017 270,509 270,509 1,669,810 16.20 12/31/2016 256,640 256,640 1,584,198 16.20 111 City of Hutchinson, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2025 Notes to the Required Supplementary Information - Police and Fire Fund Changes in Actuarial Assumptions 2025 - Assumed rates of salary increases were reduced slightly. Assumed rates of retirement were adjusted, resulting in an overall increase in unreduced (full) retirements and an overall increase in reduced (early) retirements. Assumed rates of withdrawal were modified; the new rates will increase predicted terminations, especially in the first few years of employment. Assumed rates of disabled retirement were significantly increased, especially for ages over age 30. Continued used of Pub-2010 Public Safety Mortality Table with rates adjusted to better fit observed experience. Percent married assumption for female retirees lowered from 70% to 65%. Minor changes were made to form of payment assumptions for retirees. Minor changes were made to assumptions made with respect to missing participant data. The combined service annuity load changed from 33% to 13% for vested, terminated members and from 2% to 38% for non -vested, terminated members. 2024 - There were no changes in actuarial assumptions since the previous valuation. 2023 - The investment return assumption was changed from 6.5 percent to 7.0 percent. The single discount rate changed from 5.4 percent to 7.0 percent. 2022 - The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021. The single discount rate changed from 6.50 percent to 5.40 percent. 2021 - The investment return and single discount rates were changed from 7.5 percent to 6.5 percent, for financial reporting purposes. The inflation assumption was changed from 2.5 percent to 2.25 percent. The payroll growth assumption was changed from 3.25 percent to 3.0 percent. The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010 Public Safety Mortality table. The mortality improvement scale was changed from MP-2019 to MN-2020. The base mortality table for disabled annuitants was changed from the RP-2014 healthy annuitant mortality table (with future mortality improvement according to Scale MP-2019) to the Pub- 2010 Public Safety disabled annuitant mortality table (with future mortality improvement according to Scale MP-2020). Assumed rates of salary increase were modified as recommended in the July 14, 2020 experience study. The overall impact is a decrease in gross salary increase rates. Assumed rates of retirement were changed as recommended in the July 14, 2020 experience study. The changes result in slightly more unreduced retirements and fewer assumed early retirements. Assumed rates of withdrawal were changed from select and ultimate rates to service -based rates. The changes result in more assumed terminations. Assumed rates of disability were increased for ages 25-44 and decreased for ages over 49. Overall, proposed rates result in more projected disabilities. Assumed percent married for active female members was changed from 60.0 percent to 70.0 percent. Minor changes to form of payment assumptions were applied. 2020 - The mortality projection scale was changed from MP-2018 to MP-2019. 2019 - The mortality projection scale was changed from MP-2017 to MP-2018. 2018 - The mortality projection scale was changed from MP-2016 to MP-2017. 2017 - Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates that average 0.34 percent lower than the previous rates. Assumed rates of retirement were changed, resulting in fewer retirements. The Combined Service Annuity (CSA) load was 30 percent for vested and non -vested deferred members. The CSA has been changed to 33 percent for vested members and 2 percent for non -vested members. The base mortality table for healthy annuitants was changed from the RP-2000 fully generational table to the RP-2014 fully generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality improvement scale was changed from Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was changed from the RP- 2000 disabled mortality table to the mortality tables assumed for healthy retirees. Assumed termination rates were decreased to 3.0 percent for the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall. Assumed percentage of married female members was decreased from 65 percent to 60 percent. Assumed age difference was changed from separate assumptions for male members (wives assumed to be three years younger) and female members (husbands assumed to be four years older) to the assumption that males are two years older than females. The assumed percentage of female members electing joint and survivor annuities was increased. The assumed post -retirement benefit increase rate was changed from 1.0 percent for all years to 1.0 percent per year through 2064 and 2.5 percent thereafter. The single discount rate was changed from 5.6 percent to 7.5 percent. 2016 - The assumed post -retirement benefit increase rate was changed from 1.0 percent per year through 2037 and 2.5 percent per year thereafter to 1.0 percent per year for all future years. The assumed investment return was changed from 7.9 percent to 7.5 percent. The single discount rate was changed from 7.9 percent to 5.6 percent. The assumed future salary increases, payroll growth and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 2.5 percent for inflation. 112 City of Hutchinson, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2025 Notes to the Required Supplementary Information - Police and Fire Fund (Continued) Changes in Plan Provisions 2025 - The period of time needed for benefit recipients to receive their first benefit increase was reduced by one year (from 36 months to 24 months for a full increase). The January 1, 2026 benefit increase changed from 1%to 3%; subsequent January 1 increases will be 1%. The threshold to end the $9 million annual state aid contribution changed from the earlier of July 1, 2048 or 90% funded for both PERA Police & Fire and MSRS State Patrol for three consecutive years to 100% funded for both PERA Police & Fire and MSRS State Patrol for three consecutive years (on an actuarial value of assets basis). The threshold to end the additional $9 million annual state aid contribution changed from the earlier of July 1, 20248 or 100% funded for a minimum of three consecutive years to 110% funded for a minimum of three consecutive years (on an actuarial value of assets basis). An additional $17.7 million in direct state aid will be paid annually each October 1 beginning October 1, 2025 through June 30, 2048. Joint and survivor actuarial equivalent factors were updated to reflect changes in assumptions. 2024 - The State contribution of $9.0 million per year will continue until the earlier of 1) both the Police and Fire Plan and the State Patrol Retirement Fund attain 90.0 percent funded status for three consecutive years (on an actuarial value of assets basis) or 2) July 1, 2048. The contribution was previously due to expire after attaining a 90.0 percent funded status for one year. The additional $9.0 million contribution will continue until the Police and Fire Plan is fully funded for a minimum of three consecutive years on an actuarial value of assets basis, or July 1, 2048, whichever is earlier. This contribution was previously due to expire upon attainment of fully funded status on an actuarial value of assets basis for one year (or July 1, 2048 if earlier). 2023 - An additional one-time direct state aid contribution of $19.4 million will be contributed to the Plan on October 1, 2023. The vesting requirement for new hires after June 30, 2014 was changed from a graded 20-year vesting schedule to a graded 10-year vesting schedule, with 50 percent vesting after five years increasing incrementally to 100 percent after 10 years. A one-time non -compounding benefit increase of 3.0 percent will be payable in a lump sum for calendar year 2024 by March 31, 2024. Psychological treatment is required effective July 1, 2023 prior to approval for a duty disability benefit for a psychological condition relating to the members occupation. The total and permanent duty disability was increased, effective July 1, 2023. 2022 - There were no changes in plan provisions since the previous valuation. 2021 - There were no changes in plan provisions since the previous valuation. 2020 - There were no changes in plan provisions since the previous valuation. 2019 - There were no changes in plan provisions since the previous valuation. 2018 - As set by statute, the assumed post -retirement benefit increase was changed from 1.0 percent per year through 2064 and 2.5 percent per year, thereafter, to 1.0 percent for all years, with no trigger. An end date of July 1, 2048 was added to the existing $9 million state contribution. New annual state aid will equal $4.5 million in fiscal years 2019 and 2020, and $9 million thereafter until the plan reaches 100 percent funding, or July 1, 2048, if earlier. Member contributions were changed from 10.8 percent to 11.3 percent of pay, effective January 1, 2019 and 11.8 percent of pay, effective January 1, 2020. Employer contributions were changed from 16.2 percent to 16.95 percent of pay, effective January 1, 2019 and 17.7 percent of pay, effective January 1, 2020. Interest credited on member contributions decreased from 4.0 percent to 3.0 percent, beginning July 1, 2018. Deferred augmentation was changed to 0.0 percent, effective January 1, 2019. Augmentation that has already accrued for deferred members will still apply. Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions. 2017- Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates that average 0.34 percent lower than the previous rates. Assumed rates of retirement were changed, resulting in fewer retirements. The combined service annuity (CSA) load was 30.0 percent for vested and non -vested, deferred members. The CSA has been changed to 33.0 percent for vested members and 2.0 percent for non -vested members. The base mortality table for healthy annuitants was changed from the RP-2000 fully generational table to the RP-2014 fully generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality improvement scale was changed from Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was changed from the RP- 2000 disabled mortality table to the mortality tables assumed for healthy retirees. Assumed termination rates were decreased to 3.0 percent for the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall Assumed percentage of married female members was decreased from 65.0 percent to 60.0 percent. Assumed age difference was changed from separate assumptions for male members (wives assumed to be three years younger) and female members (husbands assumed to be four years older) to the assumption that males are two years older than females. The assumed percentage of female members electing joint and survivor annuities was increased. The assumed postretirement benefit increase rate was changed from 1.0 percent for all years to 1.0 percent per year through 2064 and 2.5 percent thereafter. The single discount rate was changed from 5.6 percent per annum to 7.5 percent per annum. 2016 - There were no changes in plan provisions since the previous valuation. 113 City of Hutchinson, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2025 Schedule of Changes in the Fire Relief Association's Net Pension Liability (Asset) and Related Ratios Total Pension Liability Service cost Interest Changes of benefit terms Differences between expected and actual experience Changes of assumptions Benefit payments Net Change in Total Pension Liability 2025 2024 2023 2022 $ 40,792 $ 45,442 $ 44,334 $ 52,603 141,646 131,499 132,734 131,599 359,212 - - - - 42,790 - 71,965 (160,085) - 48,330 (154,768) (243,168) (160,254) (161,093) 386,882 (183,522) 16,814 143,404 Total Pension Liability - January 1 2,397,357 2,580,879 2,564,065 2,420,661 Total Pension Liability - December 31 (A) $ 2,784,239 $ 2,397,357 $ 2,580,879 $ 2,564,065 Plan Fiduciary Net Position Contributions - State and local $ 267,034 $ 162,393 $ 144,926 $ 130,954 Contributions - employer - 75,000 75,000 76,275 Projected investment return 393,361 327,835 358,874 (376,960) Benefit payments, including refunds of employee contributions (154,768) (243,168) (160,254) (161,093) Administrative expense (29,093) (22,615) (24,851) (11,526) Other - - - Net Change in Plan Fiduciary Net Position 476,534 299,445 393,695 (342,350) Plan Fiduciary Net Position - January 1 Plan Fiduciary Net Position - December 31 (B) Fire Reliefs Net Pension Liability (Asset) - December 31 (A-B) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability (B/A) Covered Payroll Fire Reliefs Net Pension Liability (Asset) as a Percentage of Covered Payroll 3,143,200 2,843,755 2,450,060 2,792,410 $ 3,619,734 $ 3,143,200 $ 2,843,755 $ 2,450,060 $ (835,495) $ (745,843) $ (262,876) $ 114,005 130.01 % 131.11 % 110.19% 95.55% N/A N/A N/A N/A N/A N/A N/A N/A Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available. 114 2021 2020 2019 2018 2017 2016 $ 51,445 $ 37,705 $ 39,252 $ 33,093 $ 32,207 $ 31,267 140,602 155,596 152,579 159,108 158,458 144,254 - (34,805) - - - 165,505 15,323 - (53,618) - 23,647 140,688 (72,427) 240,542 - 114,838 (552,680) (177,560) (178,718) (180,382) (182,707) (176,770) (360,633) 136,947 (59,314) 198,743 7,958 302,741 2,781,294 2,644,347 2,703,661 2,504,918 2,496,960 2,194,219 $ 2,420,661 $ 2,781,294 $ 2,644,347 $ 2,703,661 $ 2,504,918 $ 2,496,960 $ 122,893 $ 117,030 $ 111,162 $ 109,292 $ 108,253 $ 106,662 81,259 75,236 83,074 75,000 75,000 75,000 322,787 243,347 377,486 (83,675) 264,914 165,615 (552,680) (177,560) (178,718) (180,382) (182,707) (176,770) (20,198) (19,969) (20,740) (14,379) (17,714) (16,414) - - - - - (1,534) (45,939) 238,084 372,264 (94,144) 247,746 152,559 2,838,349 2,600,265 2,228,001 2,322,145 2,074,399 1,921,840 $ 2,792,410 $ 2,838,349 $ 2,600,265 $ 2,228,001 $ 2,322,145 $ 2,074,399 $ (371,749) $ (57,055) $ 44,082 $ 475,660 $ 182,773 $ 422,561 115.36% 102.05% 98.33% 82.41 % 92.70% 83.08% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 115 City of Hutchinson, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2025 Notes to the Required Supplementary Information - Fire Relief Association Changes in Benefits 2025 - There were no changes in benefits since the previous valuation. 2024 - There were no changes in benefits since the previous valuation. 2023 - There were no changes in benefits since the previous valuation. 2022 - There were no changes in benefits since the previous valuation. 2021 - There were no changes in benefits since the previous valuation. 2020 - The lump sum option was added for active members. The annuity option was eliminated for members hired after October 8, 2020. Survivor benefit was changed from annuity to lump sum. 2019 - There were no changes in benefits since the previous valuation. 2018 - There were no changes in benefits since the previous valuation. 2017 - There were no changes in benefits since the previous valuation. 2016 - There were no changes in benefits since the previous valuation. 2015 - Monthly benefit was increased from $15 to $17 per month. 116 City of Hutchinson, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2025 Notes to the Required Supplementary Information - Fire Relief Association (Continued) Changes in Assumptions 2025 - There were no changes in assumptions since the previous valuation. 2024 — The expected investment return and discount rate increased from 5.25% to 6.00% to reflect updated capital market assumptions. 2023 - There were no changes in assumptions since the previous valuation. 2022 - The expected investment return and discount rate decreased from 5.50 percent to 5.25 percent to reflect updated capital market assumptions. The mortality assumptions were updated from the rates used in the July 1, 2020 Minnesota PERA Police & Fire Plan actuarial valuation to the rates used in the July 1, 2022 Minnesota PERA Police & Fire Plan actuarial valuation. The inflation assumption decreased from 2.25 percent to 2.50 percent. 2021 - There were no changes in assumptions since the previous valuation. 2020 - The expected investment return and discount rate decreased from 6.00% to 5.50% to reflect updated capital market assumptions. The mortality assumptions were updated from the rates used in the July 1, 2018 Minnesota PERA Police & Fire Plan actuarial valuation to the rates used in the July 1, 2020 Minnesota PERA Police & Fire Plan actuarial valuation. The inflation assumption decreased from 2.50% to 2.25%. The election assumption for future retirees of 50% electing a lump sum plan and 50% electing a monthly plan was added to reflect new pension options for those hired before 10/8/2020. 2019 - The expected investment return and discount rate increased from 5.75% to 6.00% to reflect updated capital market assumptions. The mortality and withdrawal assumptions were updated from the rates used in the July 1, 2018 Minnesota PERA Police & Fire. 2018 - The expected investment return and discount rate decreased from 6.50% to 5.75% to reflect updated capital market assumptions. The mortality and withdrawal assumptions were updated from the rates used in the July 1, 2016 Minnesota PERA Police & Fire Plan actuarial valuation to the rates used in the July 1, 2018 Minnesota PERA Police & Fire plan actuarial valuation. 2017 - There were no changes in assumptions since the previous valuation. 2016 - There were no changes in assumptions since the previous valuation. 2015 - The discount rate was updated to reflect current asset returns. The index rate for 20-year municipal bonds was updated to reflect index rates as of December 31, 2015. Retirement rates were updated to reflect plan experience and expectations. 117 City of Hutchinson, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2025 Schedule of Employer's Fire Relief Association Contributions Actuarial Actual Contribution Determined Contributions Deficiency Year Contribution Paid (Excess) Ending (a) (b) (a-b) 12/31/25 $ 191,034 $ 267,034 $ (76,000) 12/31 /24 162,393 237,393 (75,000) 12/31 /23 142,926 219,926 (77,000) 12/31 /22 127,954 207,229 (79,275) 12/31/21 121,903 204,152 (82,249) 12/31 /20 117,030 192,266 (75,236) 12/31/19 111,163 194,236 (83,073) 12/31 /18 109,292 188,037 (78,745) 12/31 /17 108,253 183,253 (75,000) 12/31/16 144,183 181,662 (37,479) Schedule of Changes in the City's Total OPEB Liability and Related Ratios Total OPEB Liability Service cost Interest Differences between expected and actual experience Changes in assumptions Benefit payments Net Change in Total OPEB Liability Total OPEB Liability - Beginning Total OPEB Liability - Ending Covered -Employee Payroll Cigs Total OPEB Liability as a Percentage of Covered -Employee Payroll 2025 2024 2023 2022 2021 2020 2019 2018 $ 34,625 $ 3Z895 $ 33,173 $ 58,977 $ 56,316 $ 52,612 $ 52,767 $ 56,111 21,717 21,889 15,699 16,271 31,131 30,427 27,430 25,975 2Z804 (4Z280) (182,122) (25,876) (142,260) (10,484) (48,475) (41,453) 8,835 (78,474) (2,021) 56,000 11,924 (30,750) 4,199 23,416 2Z745 47,214 36,673 46,944 31,476 26,943 23,931 14,277 (1,406) (258,938) 10,678 (45,757) 53,003 (25,971) 62,354 523,127 524,533 783,471 772,793 818,550 765,547 791,518 729,164 537 404 523127 524 533 783 471 772 793 818 550 765 547 791518 $ 8,854,161 $ 8,374,092 $ 8,130,186 $ 7,909,611 $ 7,679,234 $ 7,775,549 $ 7,549,077 $ 11,238,479 6.07% 6.256.459.91% 10.06% 10.5310.14% 7.04% Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available. There are no assets accumulated in a GASB-compliant trust. Notes to the Required Supplementary Information - City's Total OPEB Liability and Related Ratios Changes in Plan 2025 - There were no changes in plan provisions since the previous valuation. 2024 - There were no changes in plan provisions since the previous valuation. 2023 - There were no changes in plan provisions since the previous valuation. 118 City of Hutchinson, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2025 Notes to the Required Supplementary Information - City's Total OPEB Liability and Related Ratios (Continued) 2022 - There were no changes in plan provisions since the previous valuation. 2021 - There were no changes in plan provisions since the previous valuation. 2020 - There were no changes in plan provisions since the previous valuation. 2019 - There were no changes in plan provisions since the previous valuation. 2018 - There were no changes in plan provisions since the previous valuation. Chanaes in Assumptions 2025 — The healthcare trend rates were changes to better anticipate short term and long term medical increases. The retirement, withdrawal, and salary increase rates for non -police were updated to reflect the latest experience study. The discount rate was changed from 4.00% to 4.20%. 2024 - The health care trend rates were changed to better anticipate short term and long term medical increases. 2023 - The health care trend rates were changed to better anticipate short term and long term medical increases. The mortality tables were updated from the Pub-2010 Public Retirement Plans Headcount -Weighted Mortality Tables (General, Safety) with MP-2020 Generational Improvement Scale to the Pub-2010 Public Retirement Plans Headcount -Weighted Mortality Tables (General, Safety) with MP-2021 Generational Improvement Scale. The inflation rate was changed from 2.00% to 2.50%. The retirement, withdrawal, and salary increase rates for public safety employees were updated to reflect the latest experience study. The discount rate was changed from 2.00% to 4.00%. These changes decreased the liability $65,565. 2022 - The discount rate was changed from 2.00 percent to 1.84 percent based on the updated 20-year municipal bond rates for the PUC plan. 2021 - The health care trend rates were changed to better anticipate short term and long term medical increases. The mortality tables were updated from the RP-2014 Mortality Tables (Blue Collar for Public Safety, White Collar for Others) with MP-2018 Generational Improvement Scale to the Pub-2010 Public Retirement Plans Headcount -Weighted Mortality Tables (General, Safety) with MP-2020 Generational Improvement Scale. The retirement and withdrawal rates were updated for non -safety personnel. The inflation rate changed from 2.50% to 2.00%. The salary increase rates were changed from a flat 3.00% per year for all employees to rates which vary by service and contract group. The discount rate was changed from 3.80% to 2.00%. The discount rate was changed from 2.75% to 2.00% based on the updated 20-year municipal bond rates for the PUC plan. 2020 - The health care trend rates were changed to better anticipate short term and long term medical increases. The mortality tables were updated from the RP-2014 White Collar Mortality Tables with MP-2016 Generational Improvement Scale (with Blue Collar adjustment for Police and Fire Personnel) to the RP-2014 White Collar Mortality Tables with MP- 2018 Generational Improvement Scale (with Blue Collar adjustment for Police and Fire Personnel). The retirement and withdrawal tables for all employees were updated. PUC: The discount rate was changed from 3.71 % to 2.75% based on the updated 20-year municipal bond rates. Healthcare trend rates were reset to reflect updated cost increase expectations. Mortality and salary increase rates were updated from the rates used in the 7/1 /2017 PERA General Employees Plan valuation to the rates used in the 7/1 /2019 valuation. The inflation assumption was changed from 2.75% to 2.50% based on an updated historical analysis of inflation rates and forward -looking market expectations. 2019 - The discount rate was changed from 3.30 to 3.80% for the City plan. PUC: The index rate for 20 year, tax-exempt municipal bonds used in the determination of the discount rate was changed from 3.31 % to 3.71 %. Healthcare trend rates were reset to reflect updated cost increase expectations, including an adjustment to reflect the impact of the Affordable Care Act's Excise Tax on high -cost health insurance plans. 2018 - The discount rate was changed from 3.50% to 3.30% for the City plan. 119 City of Hutchinson, Minnesota Required Supplementary Information (Continued) Budgetary Comparison Schedule General Fund For the Year Ended December 31, 2025 Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Total Revenues Expenditures Current General government Public safety Streets and highways Culture and recreation Miscellaneous Capital outlay General government Streets and highways Culture and recreation Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, January 1 Fund Balances, December 31 Original and Final Budget $ 7,061,034 414,525 2,224,025 2,554,817 55,000 140,000 n n-7 -7nn 1 L,u J/, IV 1 2,912,008 5,631,362 2,143,989 3,546,470 930,358 15,164,187 Actual Variance with Amounts Final Budget $ 7,069,631 $ 8,597 531,322 116,797 2,284,156 60,131 2,533,456 (21,361) 43,585 (11,415) 399,151 259,151 553,599 105,899 13,414,900 517,799 2,808,809 103,199 5,710,420 (79,058) 2,169,956 (25,967) 3,557,424 (10,954) 917,750 12,608 15,500 (15,500) 40,189 (40,189) 23,073 (23,073) 15,243,121 (78,934) (2,267,086) (1,828,221) 438,865 2,812,628 2,812,628 (545,542) (545,542) 2,267,086 2,267,086 438,865 438,865 8,639,018 8,639,018 $ 8,639,018 $ 9,077,883 $ 438,865 The notes to the financial statements are an integral part of this statement. 120 City of Hutchinson, Minnesota Required Supplementary Information (Continued) December 31, 2025 Notes to the Required Supplemental Information - Budgetary Reporting A. Budgetary Comparison Schedule The budgetary comparison schedule presents the comparison of the original and legally amended budget with actual amounts on a departmental level for the General fund. The departmental level budgets are adopted on a basis consistent with generally accepted accounting principles. The fund balance reports revenue in the period in which they become measurable and available. B. Excess of Expenditures Over Appropriations For the year ended December 31, 2025, expenditures exceeded appropriations in the following funds: Fund General Budget Actual $ 15,164,187 $ 15,243,121 These excess expenditures were funded by excess fund balance and greater than anticipated revenues. C. Summary of Significant Budget Variances The General fund revenues varied significantly from final budget amounts as noted below: Revenues Excess of Expenditures Over Appropriations $ 78,934 Building Permit activity exceeded expectations for 2025, generating excess revenue. Several State grants were received in 2025 which contributed to Intergovernmental revenue exceeding budgeted amounts. These were primarily for Parks prairie restorations, and ongoing projects at the City's airport. Unexpected housing development design work and other planning contributed to the increased miscellaneous revenue collected in 2025. Significant repairs at the Civic Arena's west rink in 2025 led to its closure for a portion of 2025. This resulted in significantly less than budgeted ice rental revenue for charges for services, while also contributing higher than expected repair and maintenance expenses D. Budgetary Compliance There were no budgetary compliance violations for the fiscal year ending December 31, 2025. 121 THIS PAGE IS LEFT BLANK INTENTIONALLY 122 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF HUTCHINSON HUTCHINSON, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2025 123 City of Hutchinson, Minnesota Combining Balance Sheet Nonmajor Governmental Funds December 31, 2025 Nonmajor Nonmajor Nonmajor Special Capital Debt Revenue Projects Service Total Assets Cash and investments $ 2,599,574 $ 6,504,723 $ 4,097,887 $ 13,202,184 Receivables Interest 12,494 30,283 - 42,777 Accounts 6,895 - 6,895 Notes 946,707 - - 946,707 Delinquent special assessments - 33,988 5,881 39,869 Noncurrent special assessments - 353,968 1,338,775 1,692,743 Intergovernmental 63,152 59,449 6,569 129,170 Due from other funds 159,211 66,130 - 225,341 Advances to other funds 170,741 - 106,472 277,213 Total Assets $ 3,958,774 $ 7,048,541 $ 5,555,584 $ 16,562,899 Liabilities Accounts payable $ 143,952 $ 207,102 $ - $ 351,054 Contracts payable - 15,411 - 15,411 Due to other funds 161,270 200,578 - 361,848 Advances from other funds 277,213 - - 277,213 Accrued salaries payable 13,404 - - 13,404 Total Liabilities 595,839 423,091 - 1,018,930 Deferred Inflows of Resources Unavailable revenue Loan interest receivable 26,177 - - 26,177 Special assessments - 387,956 1,344,656 1,732,612 Total Deferred Inflows of Resources 26,177 387,956 1,344,656 1,758,789 Fund Balances Restricted 2,556,275 395,835 4,210,928 7,163,038 Committed 1,208,212 360,230 - 1,568,442 Assigned - 5,627,694 5,627,694 Unassigned (427,729) (146,265) - (573,994) Total Fund Balances 3,336,758 6,237,494 4,210,928 13,785,180 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 3,958,774 $ 7,048,541 $ 5,555,584 $ 16,562,899 124 City of Hutchinson, Minnesota Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended December 31, 2025 Nonmajor Nonmajor Nonmajor Special Capital Debt Revenue Projects Service Total Revenues Taxes Property taxes $ $ 5,091 $ 2,547,379 $ 2,552,470 Tax increment district taxes 392,466 - - 392,466 Special assessments - 312,030 417,745 729,775 Intergovernmental Federal - 306,370 - 306,370 State 133,710 1,727,493 1,861,203 County 107,226 - 107,226 Local - 68,000 68,000 Charges for services Public safety 165,000 - 165,000 Streets and highways 341,609 341,609 Housing and economic development 82,303 - 82,303 Miscellaneous - 18,720 18,720 Investment earnings 159,946 292,722 131,441 584,109 Miscellaneous Contributions and donations - 84,759 - 84,759 Loan interest 22,673 - 22,673 Refunds and reimbursements 58,326 15,489 73,815 Other 64,400 111,636 - 176,036 Total Revenues 1,527,659 2,942,310 3,096,5 55 7,566,534 Expenditures Current Public safety 182,538 - - 182,538 Streets and highways 665,414 665,414 Culture and recreation 108,845 108,845 Housing and economic development 476,686 - 476,686 Capital outlay General government - 150,280 150,280 Public safety - 818,073 818,073 Streets and highways 14,500 1,168,419 1,182,919 Culture and recreation 6,654 1,182,987 1,189,641 Housing and economic development 6,438 - 6,438 Miscellaneous - 241,131 241,131 Debt service Principal - - 2,140,000 2,140,000 Interest and other 13,628 16,000 832,280 861,908 Total Expenditures 1,474,703 3,576,890 2,972,280 8,023,873 Excess (Deficiency) of Revenues Over (Under) Expenditures 52,956 (634,580) 124,285 (457,339) Other Financing Sources (Uses) Sale of capital assets 2 71,243 - 71,245 Transfers in 549,548 579,465 5,226 1,134,239 Transfers out (108,226) (101,465) (324,006) (533,697) Total Other Financing Sources (Uses) 441,324 549,243 (318,780) 671,787 Net Change in Fund Balances 494,280 (85,337) (194,495) 214,448 Fund Balances, January 1, as Previously Reported 2,842,478 6,261,871 4,405,423 13,509,772 Change to the financial reporting entity (Note 10) Change from nonmajor to major fund - 60,960 - 60,960 Fund Balances, January 1, as Adjusted 2,842,478 6,322,831 4,405,423 13,570,732 Fund Balances, December 31 $ 3,336,758 $ 6,237,494 $ 4,210,928 $ 13,785,180 125 THIS PAGE IS LEFT BLANK INTENTIONALLY 126 NONMAJOR ENTERPRISE FUNDS Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises- where the intent of the City s Council is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or where the City's Council has decided that periodic determination of net income is appropriate for accountability purposes. Refuse Fund: This fund is used to account for the operation, maintenance and capital improvements of the City s refuse system. Composting Fund: This fund is used to account for the operation, maintenance and capital improvements of the City's composting system. Storm Water Fund: This fund is used to account for the operation, maintenance, and capital improvement of the City s storm water system. Municipal Liquor Store Fund: This fund is used to account for the operation, maintenance, and capital improvement of the City s liquor store. 127 City of Hutchinson, Minnesota Statement of Net Position Nonmajor Proprietary Funds December 31, 2025 Business -type Activities - Enterprise Funds 603 651 652 609 Municipal Refuse Composting Storm Water Liquor Store Total Assets Current Assets Cash and investments $ 1,003,121 $ 2,544,296 $ 1,373,373 $ 739,771 $ 5,660,561 Receivables Interest 5,236 12,340 6,231 - 23,807 Accounts 139,761 126,458 17,869 100,215 384,303 Intergovernmental - 81,782 - - 81,782 Inventories - 1,506,305 731,441 2,237,746 Prepaid items 300 1,625 4,475 6,400 Total Current Assets 1,148,418 4,272,806 1,397,473 1,575,902 8,394,599 Noncurrent Assets Capital assets Land 10,913 400,608 607,063 308,072 1,326,656 Buildings and structures 2,416,970 214,100 - 1,631,037 4,262,107 Infrastructure and improvements 1,090,916 703,526 8,995,499 274,213 11,064,154 Machinery and equipment 1,165,452 3,177,976 321,517 140,171 4,805,116 Automotive equipment 45,938 437,379 353,394 - 836,711 Construction in progress 13,464 95,676 890 14,500 124,530 Less accumulated depreciation (2,815,285) (3,256,831) (2,745,175) (1,477,415) (10,294,706) Total Capital Assets (Net of Accumulated Depreciation) 1,928,368 1,772,434 7,533,188 890,578 12,124,568 Total Assets 3,076,786 6,045,240 8,930,661 2,466,480 20,519,167 Deferred Outflows of Resources Deferred pension resources 19,191 42,830 11,579 60,756 134,356 Deferred other postemployment benefit resources 843 3,370 1,266 2,109 7,588 Total Deferred Outflows of Resources 20,034 46,200 12,845 62,865 141,944 Liabilities Current Liabilities Accounts payable $ 85,094 $ 104,262 $ 16,784 $ 169,308 $ 375,448 Due to other governments 12,066 136 - 91,083 103,285 Accrued interest payable - - 9,388 - 9,388 Accrued salaries payable 7,011 19,004 5,178 27,527 58,720 Accrued vacation payable 7,720 43,887 8,850 45,691 106,148 Other postemployment benefit liability 476 949 362 670 2,457 Current portion of debt - - 165,000 - 165,000 Total Current Liabilities 112,367 168,238 205,562 334,279 820,446 Noncurrent Liabilities Accrued vacation payable 1,058 9,906 - 18,557 29,521 Other postemployment benefit liability 8,269 34,032 12,778 21,215 76,294 Net pension liability 81,149 174,997 46,284 256,137 558,567 Bonds payable - - 706,958 - 706,958 Less current portion of debt - - (165,000) - (165,000) Total Noncurrent Liabilities 90,476 218,935 601,020 295,909 1,206,340 Total Liabilities 202,843 387,173 806,582 630,188 2,026,786 Deferred Inflows of Resources Deferred pension resources 64,004 145,978 39,989 203,035 453,006 Deferred other post employment benefit resources 4,579 18,317 6,880 11,460 41,236 Total Deferred Inflows of Resources 68,583 164,295 46,869 214,495 494,242 Net Position Net investment in capital assets 1,928,368 1,772,434 6,826,230 890,578 11,417,610 Unrestricted 897,026 3,767,538 1,263,825 794,084 6,722,473 Total Net Position $ 2,825,394 $ 5,539,972 $ 8,090,055 $ 1,684,662 $ 18,140,083 128 City of Hutchinson, Minnesota Statement of Revenues, Expenses, and Changes in Net Position Nonmajor Proprietary Funds For the Year Ended December 31, 2025 Business -type Activities - Enterprise Funds 603 651 652 609 Municipal Refuse Composting Storm Water Liquor Store Total Operating Revenues Sales $ $ 2,515,666 $ $ 7,561,174 $ 10,076,840 Cost of sales (1,562,676) (5,725,669) (7,288,345) Gross Profit 952,990 1,835,505 2,788,495 Charges for services 1,520,691 - 1,201,237 - 2,721,928 Penalties 12,189 - - - 12,189 Other operating revenue (180) 3,112 6,790 7,161 16,883 Total Operating Revenues 1,532,700 956,102 1,208,027 1,842,666 5,539,495 Operating Expenses Personal services 319,135 440,833 181,000 853,030 1,793,998 Supplies and maintenance 44,360 15,787 241,270 31,833 333,250 Other services and charges 1,015,441 174,440 53,197 138,535 1,381,613 Depreciation 238,084 97,924 289,416 59,624 685,048 Total Operating Expenses 1,617,020 728,984 764,883 1,083,022 4,193,909 Operating Income (Loss) (84,320) 227,118 443,144 759,644 1,345,586 Nonoperating Revenues (Expenses) Intergovernmental 12,870 - 81,200 - 94,070 Interest earnings 49,926 133,360 60,905 1,312 245,503 Gain (loss) on sale/disposal of capital assets 67,598 11,393 - - 78,991 Interest expense - bonds - (714) (23,539) (24,253) Bond premium amortization - - 5,653 5,653 Total Nonoperating Revenues (Expenses) 130,394 144,039 124,219 1,312 399,964 Income Before Contributions and Transfers 46,074 371,157 567,363 760,956 1,745,550 Capital Contributions From Other Funds - - 451,957 - 451,957 Transfers In 50,000 50,000 Transfers Out (105,000) (120,000) (129,452) (550,000) (904,452) Change in Net Position (58,926) 251,157 939,868 210,956 1,343,055 Net Position, January 1 2,884,320 5,288,815 7,150,187 1,473,706 16,797,028 Net Position, December 31 $ 2,825,394 $ 5,539,972 $ 8,090,055 $ 1,684,662 $ 18,140,083 129 City of Hutchinson, Minnesota Statement of Cash Flows Nonmajor Proprietary Funds For the Year Ended December 31, 2025 Cash Flows from Operating Activities Receipts from customers Payments to vendors and suppliers Payments to or on behalf of employees Net Cash Provided by Operating Activities Cash Flows from Noncapital Financing Activities Transfers out Transfers in Grants received Net Cash Used by Noncapital Financing Activities Cash Flows from Capital and Related Financing Activities Acquisition of capital assets Proceeds from sale of capital assets Principal paid on long-term debt Interest paid on long-term debt Net Cash Used by Capital and Related Financing Activities Cash Flows from Investing Activities Interest received on investments Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, January 1 Cash and Cash Equivalents, December 31 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities Operating income (loss) Adjustments to reconcile operating income to net cash provided by operating activities Depreciation Depletion (Increase) decrease in assets Accounts receivable Due from other governments Inventories Prepaid items (Increase) decrease in deferred outflows of resources Deferred pension resources Deferred other postemployment benefit resources Increase (decrease) in liabilities Accounts payable Due to other governments Accrued salaries payable Accrued vacation payable Other postemployment benefit liability Pension liability Increase (decrease) in deferred inflows of resources Deferred pension resources Deferred other postemployment benefit resources Net Cash Provided by Operating Activities Schedule of Noncash Investing, Capital and Financing Activities Capital contributions from other funds Amortization of bond (premium) discount Business -type Activities - Enterprise Funds 603 651 652 609 Municipal Refuse Composting Storm Water Liquor Store Total $ 1,660,620 $ 2,472,652 $ 1,210,031 $ 7,509,996 $ 12,853,299 (1,100,641) (1,554,452) (303,101) (5,899,443) (8,857,637) (345,858) (508,329) (231,800) (942,131) (2,028,118) 214,121 409,871 675,130 668,422 1,967,544 (105,000) (120,000) (129,452) (550,000) (904,452) - 50,000 50,000 12,870 81,200 94,070 (92,130) (120,000) 1,748 (550,000) (760,382) (13,464) (220,347) (367,717) (51,995) (653,523) 67,598 11,393 78,991 - (71,666) (160,000) (231,666) - (2,143) (26,205) (28,348) 54,134 (282,763) (553,922) (51,995) (834,546) 49,278 133,687 60,905 1,312 245,182 225,403 140,795 183,861 67,739 617,798 777,718 2,403,501 1,189,512 672,032 5,042,763 $ 1,003,121 $ 2,544,296 $ 1,373,373 $ 739,771 $ 5,660,561 $ (84,320) $ 227,118 $ 443,144 $ 759,644 $ 1,345,586 238,084 97,924 289,416 59,624 685,048 - 181,773 - - 181,773 (8,663) 1,509 2,004 (58,339) (63,489) 136,583 (47,635) - - 88,948 - 4,862 30,784 35,646 (300) (125) - (729) (1,154) 431 (2,674) 3,735 (440) 1,052 (409) 532 35 59 217 (41,270) 11,813 (8,634) (37,630) (75,721) 730 128 - 4,169 5,027 (57) 1,039 (398) 3,865 4,449 (1,062) (17,336) (2,025) (6,080) (26,503) 4,393 (4,189) 83 124 411 (19,189) (25,004) (29,930) (51,552) (125,675) (12,855) (15,199) (21,519) (33,769) (83,342) 2,025 (4,665) (781) (1,308) (4,729) $ 214,121 $ 409,871 $ 675,130 $ 668,422 $ 1,967,544 $ - $ - $ 451,957 $ - $ 451,957 $ $ - $ (5,653) $ - $ (5,653) 130 NONMAJOR SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes. Rural Fire Department Fund: This fund accounts for funds from rural townships to support their equipment and expenditures of the fire department while training and responding to rural fires. Hutchinson Area Transportation Services Facility Fund: This fund accounts for the expenditures and revenues of the transportation building. This building is jointly operated by the City of Hutchinson, McLeod County and the Minnesota Department of Transportation. Economic Development Loan Fund: This fund loans monies which have been originally received by the City from the State of Minnesota. As the original loan is repaid, funds are subsequently loaned under City guidelines as approved by the State of Minnesota. Energy Loan Fund: Revolving loan funds received from the City and State which are under Hutchinson Economic Development Authority (EDA) guidelines are approved by City Council for downtown commercial rehabilitation loans. Minnesota Investment Fund: This fund loans monies which have been originally received by the City from the State of Minnesota. As the original loan is repaid, funds are subsequently loaned under City guidelines as approved by the State of Minnesota. Hutchinson Enterprise Center Fund: This fund accounts for the expenditures and revenues of the Hutchinson Enterprise Center building, a 20,000 square foot business incubator to help small business grow. HRA Loan Fund: This fund accounts for the housing rehabilitation loans with the City and the Minnesota Housing Finance Agency (MnHFA). Housing Rehabilitation Grant Fund: This fund accounts for the Hutchinson housing rehabilitation project grant from the State of Minnesota Department of Trade and Economic Development. Tax Increment Fund: This fund includes TIF districts 7, 8, 13 and 14. Tax Increment Fund 2016 Fund: This fund includes TIF district 16. Tax Increment Fund #4-17 Enterprise Center Fund: This fund includes TIF district 17. Tax Increment Fund #4-18 Highfield Housing Development Fund: This fund includes TIF district 18. Tax Increment Fund #4-19 Highway 7 & 15 Soils Condition Fund: This fund includes TIF district 19. Tax Increment Fund #4-20 Warrior Expansion Fund: This fund includes TIF district 20. Tax Increment Fund #4-21 1105 Benjamin Ave SE Fund: This fund includes TIF district 21. Tax Increment Fund #4-22 Jorgenson Hotel: This fund was set up to track all TIF district 22 activity. Activity did not occur and thus this fund was closed in 2025. Tax Increment Fund #4-23 RD Machine Expansion: This fund includes TIF district 23. 131 II11MWRIaMENOaI *1Wil01:l101911019us] ►FilIWA 132 NONMAJOR SPECIAL REVENUE FUNDS (Continued) Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes. Work Horse Development: This fund was created for a proposed development project, however, this did not result in a valid TIF project and thus the fund was closed in 2025. Tax Increment Fund #4-24 The Landing: This fund includes TIF district 24. Tax Increment Fund #4-25 Jorgenson Hotel: This fund includes TIF district 25. Public Sites Fund: This fund is used to account for payments made by developments in lieu of land contributions for parkland purchases and improvements. Tree Disease Mitigation Fund: This fund is used for the City's efforts in restoring its tree canopy due to tree disease infestation, including proactive plantings of new tree species, treatment or removal of infected trees and future replacements 133 Assets Cash and investments Receivables Interest Accounts Notes Intergovernmental Due from other funds Advance to other funds Total Assets Liabilities Accounts payable Due to other funds Advances from other funds Accrued salaries payable Total Liabilities Deferred Inflows of Resources Unavailable revenue Loan interest receivable Fund Balances Restricted Committed Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Balances City of Hutchinson, Minnesota Nonmajor Special Revenue Funds Combining Balance Sheet (Continued on the Following Pages) December 31, 2025 225 226 231 232 233/234/235 Hutchinson Rural Area Economic Fire Transportation Development Energy Minnesota Department Facility Loan Loan Investment $ 42,932 $ 762,830 $ 187,047 $ 123,932 $ 10,869 87 3,665 977 663 52 - 6,228 - - - - 122,597 751,660 51,930 - - - 146,435 12,776 - - 20,741 150,000 - $ 43,019 $ 824,653 $ 477,797 $ 1,039,031 $ 10,921 $ 9,320 $ 97,811 $ 12,282 1,122 - - 26,177 - 21,417 - 477,797 1,012,854 10,921 - 725,720 - - - 21,417 725,720 477,797 1,012,854 10,921 $ 43,019 $ 824,653 $ 477,797 $ 1,039,031 $ 10,921 134 239 240 241 250 258 259 Hutchinson Housing Tax TIF #4-17 Enterprise HRA Rehabilitation Tax Increment Enterprise Center Loan Grant Increment 2016 Center $ 30,770 $ 93,928 $ 325,352 $ 112,880 $ 3,980 $ 1,063 209 471 1,658 611 - - 667 - - - - 72,450 - - 11,222 $ 31,646 $ 94,399 $ 399,460 $ 124,713 $ 3,980 $ 1,063 $ 5,675 $ $ $ 10,886 $ $ 146,435 - 12,776 - 20,741 150,000 106,472 172,8 11 10,886 162,776 106,472 94,399 399,460 113,827 (141,205) - - - (158,796) (105,409) (141,205) 94,3 99 399,460 113,827 (158,796) (105,409) $ 31,646 $ 94,399 $ 399,460 $ 124,713 $ 3,980 $ 1,063 135 City of Hutchinson, Minnesota Nonmajor Special Revenue Funds Combining Balance Sheet (Continued) December 31, 2025 260 261 262 263 264 TIF #4-18 TIF #4-19 TIF #4-20 TIF #4-21 TIF #4-22 Highfield Housing Highway 7 & 15 Warrior 1105 Benjamin Jorgenson Development Soils Condition Expansion Ave SE Hotel Assets Cash and investments $ 16,048 $ 6,980 $ 68,666 $ 4,686 $ Receivables Interest 87 35 - 17 Accounts - - - Notes Intergovernmental Due from other funds Advance to other funds $ 16,135 $ 7,015 $ 68,666 $ 4,703 $ Liabilities Accounts payable $ $ $ $ $ Due to other funds Advances from other funds Accrued salaries payable Deferred Inflows of Resources Unavailable revenue Loan interest receivable - - - - Fund Balances Restricted 16,135 7,015 68,666 4,703 Committed - - - - Unassigned - - - - 16,135 7,015 68,666 4,703 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 16,135 $ 7,015 $ 68,666 $ 4,703 $ 136 265 266 267 268 270 275 TIF #4-23 TIF #4-25 RD Machine Work Horse TIF #4-24 Jorgenson Public Tree Disease Expansion Development The Landing Hotel Sites Mitigation Total $ 1,102 $ $ $ $ 396,494 $ 410,015 $ 2,599,574 - 2,007 1,955 12,494 - - 6,895 946,707 63,152 159,211 - - - 170,741 $ 1,102 $ $ $ $ 398,501 $ 411,970 $ 3,958,774 $ $ $ 20,260 $ $ $ $ 143,952 1,521 538 161,270 - - 277,213 - - 13,404 21,781 538 595,839 - - - 26,177 1,102 327,979 - 2,556,275 - - 70,522 411,970 1,208,212 - (21,781) (538) - - (427,729) 1,102 (21,781) (538) 398,501 411,970 3,336,758 $ 1,102 $ $ $ $ 398,501 $ 411,970 $ 3,958,774 137 City of Hutchinson, Minnesota Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Continued on the Following Pages) For the Year Ended December 31, 2025 225 226 231 232 233/234/235 Hutchinson Rural Area Economic Fire Transportation Development Energy Minnesota Department Facility Loan Loan Investment Revenues Taxes Tax increment district taxes $ $ $ $ $ Intergovernmental State 107,226 26,484 County - 107,226 - Charges for services Public safety 165,000 - Streets and highways - 341,609 Housing and economic development - - - - - Investment earnings 1,685 36,883 12,864 14,279 499 Miscellaneous Loan interest - - 7,050 15,623 - Refunds and reimbursements 23,326 - - Other - - - 51,100 - Total Revenues 166,685 616,270 46,398 81,002 499 Expenditures Current Public safety 182,538 - - - - Streets and highways - 665,414 Culture and recreation - Housing and economic development - Capital outlay Streets and highways 14,500 Culture and recreation - Housing and economic development Debt service Interest and other - - Total Expenditures 182,538 679,914 - - Excess (Deficiency) of Revenues Over (Under) Expenditures (15,853) (63,644) 46,398 81,002 499 Other Financing Sources (Uses) Sale of capital assets - - - - Transfers in 120,542 50,000 Transfers out - (50,000) - Total Other Financing Sources (Uses) 120,542 (50,000) 50,000 - Net Change in Fund Balances (15,853) 56,898 (3,602) 131,002 499 Fund Balances, January 1 37,270 668,822 481,399 881,852 10,422 Fund Balances, December 31 $ 21,417 $ 725,720 $ 477,797 $ 1,012,854 $ 10,921 138 239 240 241 250 258 259 Hutchinson Housing Tax TIF #4-17 Enterprise HRA Rehabilitation Tax Increment Enterprise Center Loan Grant Increment 2016 Center $ $ $ $ 57,590 $ 2,520 $ 4,642 74,053 - - - - - 1,427 4,615 16,011 6,632 196 208 4,000 79,480 4,615 16,011 64,222 2,716 4,850 31,316 101,862 93,617 1,888 1,076 4,897 1,541 - 3,614 - - 5,464 4,259 39,827 101,862 93,617 8,893 5,335 39,653 4,615 (85,851) (29,395) (6,177) (485) 2 324,006 - - 324,008 - 39,653 4,615 (85,851) (29,395) 317,831 (485) (180,858) 89,784 485,311 143,222 (476,627) (104,924) $ (141,205) $ 94,399 $ 399,460 $ 113,827 $ (158,796) $ (105,409) 139 City of Hutchinson, Minnesota Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Continued) For the Year Ended December 31, 2025 260 261 262 263 264 TIF #4-18 TIF #4-19 TIF #4-20 TIF #4-21 TIF #4-22 Highfield Housing Highway 7 & 15 Warrior 1105 Benjamin Jorgenson Development Soils Condition Expansion Ave SE Hotel Revenues Taxes Tax increment district taxes $ 127,186 $ 52,263 $ 72,167 $ 54,620 $ 3,016 Intergovernmental State - - - - - County Charges for services Public safety Streets and highways Housing and economic development - - - - Investment earnings 1,177 472 1,084 3,571 Miscellaneous Loan interest - - - - - Refunds and reimbursements 2,915 Other - - - - - Total Revenues 128,363 52,735 73,251 58,191 5,931 Expenditures Current Public safety - - - - - Streets and highways Culture and recreation - - - - Housing and economic development 125,346 45,799 9,546 3,788 Capital outlay Streets and highways - - - - Culture and recreation Housing and economic development - Debt service Interest and other - - - - 147 Total Expenditures 125,346 45,799 9,546 3,788 147 Excess (Deficiency) of Revenues Over (Under) Expenditures 3,017 6,936 63,705 54,403 5,784 Other Financing Sources (Uses) Sale of capital assets - - - - - Transfers in Transfers out (5,226) (53,000) Total Other Financing Sources (Uses) - (5,226) - (53,000) - Net Change in Fund Balances 3,017 1,710 63,705 1,403 5,784 Fund Balances, January 1 13,118 5,305 4,961 3,300 (5,784) Fund Balances, December 31 $ 16,135 $ 7,015 $ 68,666 $ 4,703 $ 140 265 266 267 268 270 275 TI F #4-23 TI F #4-25 RD Machine Work Horse TIF #4-24 Jorgenson Public Tree Disease Expansion Development The Landing Hotel Sites Mitigation Total $ 18,462 $ - $ - $ - $ - $ - $ 392,466 133,710 107,226 165,000 - 341,609 - - 8,250 - 82,303 17 80 19,065 39,181 159,946 - - - 22,673 15,000 12,085 1,000 58,326 - - - 13,300 - 64,400 18,479 15,000 12,165 41,615 39,181 1,527,659 182,538 665,414 - - - - 5,752 103,093 108,845 9,133 3,831 36,781 12,703 - - 476,686 - 14,500 6,654 6,654 - 6,438 144 - - - - - 13,628 9,277 3,831 36,781 12,703 12,406 103,093 1,474,703 9,202 (3,831) (21,781) (538) 29,209 (63,912) 52,956 2 55,000 549,548 - (108,226) - - - 55,000 441,324 9,202 (3,831) (21,781) (538) 29,209 (8,912) 494,280 (8,100) 3,831 - 369,292 420,882 2,842,478 $ 1,102 $ $ (21,781) $ (538) $ 398,501 $ 411,970 $ 3,336,758 141 City of Hutchinson, Minnesota Rural Fire Department Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the Year Ended December 31, 2025 Original and Actual Final Budget Amounts Revenues Charges for services Public safety Investment earnings Total Revenues Expenditures Current Public safety Rural fire department Personal services Supplies Other services and charges Total Expenditures Net Change in Fund Balances Fund Balances, January 1 Fund Balances, December 31 Variance with Final Budget $ 165,000 $ 165,000 $ - 1,000 1,685 685 166,000 166,685 685 106,655 115,595 (8,940) 31,700 30,277 1,423 26,551 36,666 (10,115) 164,906 182,538 (17,632) 1,094 (15,853) (16,947) 37,270 37,270 $ 38,364 $ 21,417 $ (16,947) 142 City of Hutchinson, Minnesota Hutchinson Area Transportation Facility Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the Year Ended December 31, 2025 Original and Actual Variance with Final Budget Amounts Final Budget Revenues Intergovernmental State Street maintenance aid $ 107,226 $ 107,226 $ County County shared aids 107,226 107,226 - Charges for services Streets and highways 374,000 341,609 (32,391) Investment earnings 15,000 36,883 21,883 Miscellaneous Refunds and reimbursements 32,000 23,326 (8,674) Total Revenues 635,452 616,270 (19,182) Expenditures Current Streets and highways Streets and alleys Personal services 51,386 51,752 (366) Supplies 436,500 477,259 (40,759) Other services and charges 268,108 136,403 131,705 Capital outlay Streets and highways Streets and alleys - 14,500 (14,500) Total Expenditures 755,994 679,914 76,080 Excess (Deficiency) of Revenues Over (Under) Expenditures (120,542) (63,644) 56,898 Other Financing Sources (Uses) Transfers in 120,542 120,542 - Net Change in Fund Balances - 56,898 56,898 Fund Balances, January 1 668,822 668,822 - Fund Balances, December 31 $ 668,822 $ 725,720 $ 56,898 143 II11MWRIaMENOaI *1Wil01:l101911019us] ►FilIWA 144 NONMAJOR CAPITAL PROJECTS FUNDS Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. 145 Assets Cash and investments Receivables Interest Delinquent special assessments Noncurrent special assessments Intergovernmental Due from other funds Total Assets Liabilities Accounts payable Contracts payable Due to other funds Total Liabilities Deferred Inflows of Resources Unavailable revenue Special assessments Fund Balances Restricted Committed Assigned Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Balances City of Hutchinson, Minnesota Nonmajor Capital Projects Funds Combining Balance Sheet December 31, 2025 401 405 407 408 Capital Improvement Equipment Community Airport Projects Replacement Improvement Renovation $ 3,054,163 $ 511,213 $ 2,880,355 $ 58,992 15,011 2,199 12,759 314 - - 33,988 - - 353,968 59,449 - 66,130 - - - $ 3,194,753 $ 513,412 $ 3,281,070 $ 59,306 $ 184,727 $ $ 17,382 $ 15,411 - - - 200,000 200,138 17,382 200,000 - 387,956 - 395,835 - - - 360,230 2,598,780 513,412 2,515,502 - - - (140,694) 2,994,615 513,412 2,875,732 (140,694) $ 3,194,753 $ 513,412 $ 3,281,070 $ 59,306 146 446 447 Special Special Assessment Assessment Improvement Improvement 2026 2027 Total 6,504,723 - 30,283 - - 33,988 - - 353,968 - - 59,449 66,130 $ $ $ 7,048,541 $ $ 4,993 $ 207,102 - 15,411 578 - 200,578 578 4,993 423,091 - - 387,956 - 395,835 - 360,230 - - 5,627,694 (578) (4,993) (146,265) (578) (4,993) 6,237,494 $ $ $ 7,048,541 147 City of Hutchinson, Minnesota Nonmajor Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Year Ended December 31, 2025 401 405 407 408 Capital Improvement Equipment Community Airport Projects Replacement Improvement Renovation Revenues Taxes Property taxes Special assessments Intergovernmental Federal State Local Charges for services Miscellaneous Investment earnings Miscellaneous Contributions and donations Refunds and reimbursements Other Total Revenues Expenditures Capital outlay General government Public safety Streets and highways Culture and recreation Miscellaneous Debt service Interest and other Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Sale of capital assets Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, January 1, as Previously Reported Change to the financial reporting entity (Note 10) Change from nonmajor to major fund Fund Balances, January 1, as Adjusted Fund Balances, December 31 $ 5,091 $ $ - $ - 312,030 - - - 306,370 1,591,813 50,000 82,080 3,600 66,500 - 1,500 - - - - 18,720 129,758 41,541 116,306 5,117 84,259 - 500 - 15,489 - 111,636 - - - 2,004,546 91,541 512,416 333,807 150,063 - 217 108,436 645,338 64,299 572,360 480,170 110,318 1,078,569 46,340 58,078 - 237,631 - - 3,500 - - - 16,000 2,147,059 1,171,848 232,912 19,500 (142,513) (1,080,307) 279,504 314,307 61,922 9,321 - 525,000 54,465 (101,465) - - (101,465) 586,922 63,786 - (243,978) (493,385) 343,290 314,307 3,238,593 1,006,797 2,532,442 (455,001) 3,238,593 1,006,797 2,532,442 (455,001) $ 2,994,615 $ 513,412 $ 2,875,732 $ (140,694) 148 (Formerly Nonmajor) 445 446 447 Special Special Special Assessment Assessment Assessment Improvement Improvement Improvement 2025 2026 2027 Total $ $ $ 5,091 312,030 306,370 1,727,493 68,000 18,720 292,722 84,759 15,489 111,636 2,942,310 150,280 818,073 578 4,993 1,168,419 - - 1,182,987 241,131 - - 16,000 578 4,993 3,576,890 (578) (4,993) (634,580) - 71,243 579,465 (101,465) - 549,243 (578) (4,993) (85,337) (60,960) - 6,261,871 60,960 60,960 - 6,322,831 $ $ (578) $ (4,993) $ 6,237,494 149 II11MWRIaMENOaI *1Wil01:l101911019us] ►FilIWA 150 GENERAL FUND The General fund is used to account for resources traditionally associated with the City which are not required legally or by sound financial management to be accounted for in another fund. 151 II11MWRIaMENOaI *1Wil01:l101911019us] ►FilIWA 152 City of Hutchinson, Minnesota General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued on the Following Pages) For the Year Ended December 31, 2025 Budgeted Amounts Actual Variance with Original and Final Amounts Final Budget Revenues Taxes Property taxes $ 6,741,034 $ 6,772,108 $ 31,074 Hotel/motel tax 130,000 129,688 (312) Franchise fees 190,000 167,835 (22,165) Total taxes 7,061,034 7,069,631 8,597 Licenses and permits Business 40,425 44,763 4,338 Nonbusiness 374,100 486,559 112,459 Total licenses and permits 414,525 531,322 116,797 Intergovernmental Federal Other federal aids 11,500 7,205 (4,295) State Local government aid 1,551,734 1,551,734 - Property tax credits - 675 675 Police aid 290,072 292,184 2,112 Fire aid 162,393 191,034 28,641 Street maintenance aid 81,626 53,794 (27,832) Airport aid 26,200 23,596 (2,604) Other state aids 43,000 105,964 62,964 Total state 2,155,025 2,218,981 63,956 Local School liaison program 57,500 57,970 470 Total intergovernmental 2,224,025 2,284,156 60,131 Charges for services General government 379,500 420,039 40,539 Public safety 87,912 93,616 5,704 Streets and highways 558,517 584,974 26,457 Culture and recreation 1,218,988 1,139,506 (79,482) Other charges 309,900 295,321 (14,579) Total charges for services 2,554,817 2,533,456 (21,361) Fines and forfeits 55,000 43,585 (11,415) Investment earnings 140,000 399,151 259,151 Miscellaneous Contributions and donations 38,600 85,859 47,259 Refunds and reimbursements 203,800 255,127 51,327 Other 205,300 212,613 7,313 Total miscellaneous 447,700 553,599 105,899 Total Revenues 12,897,101 13,414,900 517,799 153 Expenditures Current General government Mayor and council Personal services Supplies Other services and charges Total mayor and council City administrator Personal services Supplies Other services and charges Total city administrator Finance Personal services Supplies Other services and charges Total finance Motor vehicles Personal services Supplies Other services and charges Total motor vehicles Legal Personal services Supplies Other services and charges Total legal Planning Personal services Supplies Other services and charges Total planning Information services Personal services Supplies Other services and charges Total information services City hall building Personal services Supplies Other services and charges Total city hall building Total general government City of Hutchinson, Minnesota General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued) For the Year Ended December 31, 2025 Budgeted Amounts Actual Variance with Original and Final Amounts Final Budget $ 42,328 $ 37,304 $ 5,024 100 - 100 5,060 2,262 2,798 47,488 39,566 7,922 514,227 513,065 1,162 1,800 263 1,537 28,835 18,168 10,667 544,862 531,496 13,366 358,120 357,883 237 2,800 2,297 503 87,911 83,417 4,494 448,831 443,597 5,234 361,522 391,211 (29,689) 6,600 3,832 2,768 30,770 27,552 3,218 398,892 422,595 (23,703) 260,539 261,750 (1,211) 22,400 22,792 (392) 65,280 52,609 12,671 348,219 337,151 11,068 176,988 182,194 (5,206) 750 84 666 9,750 7,800 1,950 187,488 190,078 (2,590) 388,686 374,277 14,409 42,400 45,627 (3,227) 292,045 221,049 70,996 723,131 640,953 82,178 112,852 113,296 (444) 16,875 12,025 4,850 83,370 78,052 5,318 213,097 203,373 9,724 2,912,008 2,808,809 103,199 154 City of Hutchinson, Minnesota General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued) For the Year Ended December 31, 2025 Expenditures (Continued) Current (continued) Public safety Police Personal services Supplies Other services and charges Total police Emergency management Supplies Other services and charges Total emergency management Safety council Other services and charges Fire Personal services Supplies Other services and charges Total fire Building inspection Personal services Supplies Other services and charges Total building inspection Total public safety Streets and highways Engineering Personal services Supplies Other services and charges Total engineering Streets and alleys Personal services Supplies Other services and charges Total streets and alleys Total streets and highways Culture and recreation Parks and recreation administration Personal services Supplies Other services and charges Total parks and recreation administration Budgeted Amounts Actual Variance with Original and Final Amounts Final Budget $ 3,952,407 $ 4,041,621 $ (89,214) 137,600 129,517 8,083 315,358 291,040 24,318 4,405,365 4,462,178 (56,813) 500 - 500 13,000 11,542 1,458 13,500 11,542 1,958 14,335 11,855 2,480 625,426 611,891 13,535 57,200 55,926 1,274 100,920 114,494 (13,574) 783,546 782,311 1,235 378,511 381,941 (3,430) 6,025 1,336 4,689 30,080 59,257 (29,177) 414,616 442,534 (27,918) 5,631,362 5,710,420 (79,058) 463,362 465,547 (2,185) 8,725 10,136 (1,411) 75,130 139,605 (64,475) 547,217 615,288 (68,071) 701,307 692,176 9,131 299,300 249,621 49,679 596,165 612,871 (16,706) 1,596,772 1,554,668 42,104 2,143,989 2,169,956 (21967) 237,336 227,671 9,665 1,700 1,774 (74) 60,000 67,581 (7,581) 299,036 297,026 2,010 155 City of Hutchinson, Minnesota General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued) For the Year Ended December 31, 2025 Budgeted Amounts Actual Variance with Original and Final Amounts Final Budget Expenditures (Continued) Current (continued) Culture and recreation (continued) Recreation Personal services $ 128,015 $ 158,161 $ (30,146) Supplies 50,500 33,516 16,984 Other services and charges 58,600 42,465 16,135 Total recreation 237,115 234,142 2,973 Senior citizen center Personal services 40,976 37,702 3,274 Supplies 2,250 886 1,364 Other services and charges 40,200 46,649 (6,449) Total senior citizen center 83,426 85,237 (1,811) Evergreen building Supplies 3,750 1,953 1,797 Other services and charges 32,330 24,822 7,508 Total evergreen building 36,080 26,775 9,305 Civic arena Personal services 195,768 194,233 1,535 Supplies 52,500 42,899 9,601 Other services and charges 197,450 267,749 (70,299) Total civic arena 445,718 504,881 (59,163) Park Personal services 825,428 803,052 22,376 Supplies 223,000 196,034 26,966 Other services and charges 181,900 224,277 (42,377) Total park 1,230,328 1,223,363 6,965 Recreation building Personal services 226,162 203,864 22,298 Supplies 42,600 32,027 10,573 Other services and charges 55,370 86,957 (31,587) Total recreation building 324,132 322,848 1,284 Waterpark Personal services 299,904 294,922 4,982 Supplies 92,750 80,367 12,383 Other services and charges 81,180 75,625 5,555 Total waterpark 473,834 450,914 22,920 Events center Personal services 98,543 97,099 1,444 Supplies 4,250 3,896 354 Other services and charges 56,200 55,165 1,035 Total events center 158,993 156,160 2,833 156 City of Hutchinson, Minnesota General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued) For the Year Ended December 31, 2025 Expenditures (Continued) Current (continued) Culture and recreation (continued) Library Supplies Other services and charges Total library Total culture and recreation Miscellaneous Cemetery Personal services Supplies Other services and charges Total cemetery Airport Personal services Supplies Other services and charges Total airport Unallocated Other services and charges Total miscellaneous Total current Capital outlay General government Streets and highways Culture and recreation Total capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Transfersin Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, January 1 Fund Balances, December 31 Budgeted Amounts Actual Variance with Original and Final Amounts Final Budget $ 3,300 $ 2,423 $ 877 254,508 253,655 853 257,808 256,078 1,730 3,546,470 3,557,424 (10,954) 103,675 133,289 (29,614) 27,275 28,637 (1,362) 26,250 14,580 11,670 157,200 176,506 (19,306) 50,518 56,639 (6,121) 111,900 82,765 29,135 86,470 86,612 (142) 248,888 226,016 22,872 524,270 515,228 9,042 930,358 917,750 12,608 15,164,187 15,164,359 (172) - 15,500 (15,500) 40,189 (40,189) 23,073 (23,073) 78,762 (78,762) 15,164,187 15,243,121 (78,934) (2,267,086) (1,828,221) 438,865 2,812,628 2,812,628 (545,542) (545,542) 2,267,086 2,267,086 - - 438,865 438,865 8,639,018 8,639,018 - $ 8,639,018 $ 9,077,883 $ 438,865 157 II11MWRIaMENOaI *1Wil01:l101911019us] ►FilIWA 158 DEBT SERVICE FUNDS The Debt Service funds are used to account for the accumulation of resources and payment of general obligation bond principal and interest from City resources and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment. 159 City of Hutchinson, Minnesota Assets Cash and investments Receivables Delinquent special assessments Noncurrent special assessments Intergovernmental Advances to other funds Total Assets Deferred Inflows of Resources Unavailable revenue Special assessments Fund Balances Restricted Total Liabilities, Deferred Inflows of Resources and Fund Balances Debt Service Funds Combining Balance Sheet December 31, 2025 383 334 335 336 337 338 G.O. Tax Special Special Special Special Special Increment Assessment Assessment Assessment Assessment Assessment Refunding Bonds Bonds Bonds Bonds Bonds Bonds 2004 2014 2015 2016 2017 2018 $ 16,789 $ 128,692 $ 243,051 $ 247,575 $ 224,581 $ 332,066 - 88 - - 1 - 71,509 - 23,443 155,732 49,864 - 262 291 308 359 283 106,472 - - - - - $ 123,261 $ 200,551 $ 243,342 $ 271,326 $ 380,673 $ 382,213 71,597 23,443 155,733 49,864 123,261 128,954 243,342 247,883 224,940 332,349 $ 123,261 $ 200,551 $ 243,342 $ 271,326 $ 380,673 $ 382,213 160 339 340 341 342 343 344 345 396 Special Special Special Special Special Special Special Assessment Assessment Assessment Assessment Assessment Assessment Assessment Bonds Bonds and G.O. Bonds Bonds Bonds Bonds Bonds G.O. Bonds 2019 2020 2021 2022 2023 2024 2025 2022 Total $ 440,806 $ 320,277 $ 375,555 $ 248,577 $ 271,147 $ 326,396 $ 184,834 $ 737,541 $ 4,097,887 - 2,707 - - 2,917 168 - - 5,881 45,760 131,723 106,896 42,736 125,466 207,878 377,768 - 1,338,775 396 500 350 371 1,346 340 - 1,763 6,569 - - - - - - - 106,472 $ 486,962 $ 455,207 $ 482,801 $ 291,684 $ 400,876 $ 534,782 $ 562,602 $ 739,304 $ 5,555,584 45,760 134,430 441,202 320,777 106,896 42,736 128,383 208,046 377,768 - 1,344,656 375,905 248,948 272,493 326,736 184,834 739,304 4,210,928 $ 486,962 $ 455,207 $ 482,801 $ 291,684 $ 400,876 $ 534,782 $ 562,602 $ 739,304 $ 5,555,584 161 City of Hutchinson, Minnesota Debt Service Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued on the Following Page) For the Year Ended December 31, 2025 383 334 335 336 337 338 G.O. Tax Special Special Special Special Special Increment Assessment Assessment Assessment Assessment Assessment Refunding Bonds Bonds Bonds Bonds Bonds Bonds 2004 2014 2015 2016 2017 2018 Revenues Taxes Property taxes $ - $ 127,890 $ 141,896 $ 150,090 $ 175,038 $ 137,934 Special assessments - 2,960 18,825 21,785 3,488 22,715 Investment earnings 38,252 2,039 5,610 5,575 4,518 9,135 Total Revenues 38,252 132,889 166,331 177,450 183,044 169,784 Expenditures Debt service Principal - 185,000 160,000 185,000 150,000 155,000 Interest and other costs 1,076 20,354 24,709 23,429 41,129 44,579 Total Expenditures 1,076 205,354 184,709 208,429 191,129 199,579 Excess (Deficiency) of Revenues Over (Under) Expenditures 37,176 (72,465) (18,378) (30,979) (8,085) (29,795) Other Financing Sources (Uses) Transfers in - 5,226 Transfers out (324,006) - Total Other Financing Sources (Uses) (324,006) 5,226 Net Change in Fund Balances (286,830) (72,465) (18,378) (30,979) (2,859) (29,795) Fund Balances, January1 410,091 201,419 261,720 278,862 227,799 362,144 Fund Balances, December 31 $ 123,261 $ 128,954 $ 243,342 $ 247,883 $ 224,940 $ 332,349 162 339 340 341 342 343 344 345 396 Special Special Special Special Special Special Special Assessment Assessment Assessment Assessment Assessment Assessment Assessment Bonds Bonds and G.O. Bonds Bonds Bonds Bonds Bonds G.O.Bonds 2019 2020 2021 2022 2023 2024 2025 2022 Total $ 193,152 $ 149,049 $ 170,345 $ 180,986 $ 96,062 $ 165,924 $ - $ 859,013 $ 2,547,379 15,381 26,114 34,471 12,655 34,860 42,067 182,424 - 417,745 8,763 11,580 10,022 5,713 7,707 8,813 2,714 11,000 131,441 210,000 170,000 140,000 105,000 60,000 - - 620,000 2,140,000 46,271 19,952 61,192 85,467 61,529 74,501 304 327,788 832,280 (38,975) (3,209) 13,646 8,887 17,100 142,303 184,834 (77,775) 124,285 5,226 (324,006) (318,780) (38,975) (3,209) 13,646 8,887 17,100 142,303 184,834 (77,775) (194,495) 480,177 323,986 362,259 240,061 255,393 184,433 - 817,079 4,405,423 $ 441,202 $ 320,777 $ 375,905 $ 248,948 $ 272,493 $ 326,736 $ 184,834 $ 739,304 $ 4,210,928 163 THIS PAGE IS LEFT BLANK INTENTIONALLY 164 DISCRETELY PRESENTED COMPONENT UNIT ECONOMIC DEVELOPMENT AUTHORITY CITY OF HUTCHINSON HUTCHINSON, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2025 165 City of Hutchinson, Minnesota Discretely Presented Component Unit - Economic Development Authority Balance Sheet/Statement of Net Position December 31, 2025 Assets Cash and investments $ 230,231 Receivables Interest 1,012 Intergovernmental 592 Prepaid items 385 Total Assets $ 232,220 Liabilities Accounts payable $ 9,916 Due to other governments 24 Accrued salaries payable 4,354 Accrued vacation payable 9,958 Total Liabilities 24,252 Fund Balances Assigned 207,968 Total Liabilities and Fund Balances $ 232,220 Amounts reported for governmental activities in the statement of net position are different because Total Fund Balances - Economic Development Authority $ 207,968 Noncurrent liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Noncurrent liabilities at year-end consist of Other postemployment benefit liability (4,394) Net pension liability (38,905) Governmental funds do not report long-term amounts related to pensions and other postemployment benefits. Deferred outflows of pension resources 9,619 Deferred inflows of pension resources (32,983) Deferred outflows of other postemployment benefits 423 Deferred inflows of other postemployment benefits (2,301) Internal service funds are used by management to charge the costs of various services to individual funds. The assets and liabilities of certain internal service funds are included in governmental activities in the statement of net position. Total Net Position - Governmental Activities (25) $ 139,402 • City of Hutchinson, Minnesota Discretely Presented Component Unit - Economic Development Authority Schedule of Revenues, Expenditures and Changes in Fund Balances/Net Position For the Year Ended December 31, 2025 Revenues Taxes Property taxes Intergovernmental State Charges for services Investment earnings Miscellaneous Total Revenues Expenditures Current Housing and economic development Net Change in Fund Balances Fund Balances, January 1 Fund Balances, December 31 Amounts reported for governmental activities in the statement of activities are different because Net Change in Fund Balances - Economic Development Authority Long-term pension activity is not reported in governmental funds. Pension expense Pension revenue Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Other postemployment benefit costs Internal service funds are used by management to charge the costs of various services to individual funds. The net revenues of certain activities of internal service funds is reported with governmental activities. Change in Net Position - Governmental Activities $ 282,697 24,651 3,864 10,539 5,343 327,094 351,841 (24,747) 232,715 $ 207,968 $ (24,747) 15,697 (159) 200 (56) $ (9,065) 167 THIS PAGE IS LEFT BLANK INTENTIONALLY 168 STATISTICAL SECTION (UNAUDITED) CITY OF HUTCHINSON HUTCHINSON, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2025 169 THIS PAGE IS LEFT BLANK INTENTIONALLY 170 STATISTICAL SECTION (UNAUDITED) This part of the City of Hutchinson's annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. Financial Trends These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt Capacity These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. 171 City of Hutchinson, Minnesota Net Position by Component Last Ten Fiscal Years (Accrual Basis of Accounting) Fiscal Year 2025 2024 2023 2022 Governmental Activities Net investment in capital assets $ 72,479,471 $ 72,865,707 $ 73,577,226 $ 69,226,746 Restricted 9,012,749 9,055,544 8,680,384 7,919,693 Unrestricted 12,571,891 12,152,205 11,159,594 14,121,114 Total Governmental Activities Net Position 94,064,111 94,073,456 93,417,204 91,267,553 Business -type Activities Net investment in capital assets 119,511,518 109,119,154 100,691,199 97,008,636 Restricted 3,247,000 - - - Unrestricted 33,651,992 39,021,474 40,314,705 38,169,684 Total Business -type Activities Net Position 156,410,510 148,140,628 141,005,904 135,178,320 Primary Government Net investment in capital assets 191,990,989 181,984,861 174,268,425 166,235,382 Restricted 12,259,749 9,055,544 8,680,384 7,919,693 Unrestricted 46,223,883 51,173,679 51,474,299 52,290,798 Total Primary Government Net Position $ 250,474,621 $ 242,214,084 $ 234,423,108 $ 226,445,873 Source: Financial Statements 172 Table 1 Fiscal Year 2021 2020 2019 2018 2017 2016 $ 68,307,217 $ 66,566,111 $ 66,499,781 $ 63,850,387 $ 61,255,089 $ 57,290,296 8,963,039 11,102,357 11,088,577 10,716,849 9,853,847 10,680,796 12,894,455 10,926,868 11,057,517 10,919,210 5,478,380 6,860,854 90,164,711 88,595,336 88,645,875 85,486,446 76,587,316 74,831,946 93,747,446 92,049,992 85,016,805 87,042,770 83,793,697 83,737,730 - - - - 3,561,829 2,539,625 41,250,668 39,895,468 39,155,727 31,742,528 26,447,540 24,470,821 134,998,114 131,945,460 124,172,532 118,785,298 113,803,066 110,748,176 162,054,663 158,616,103 151,516,586 150,893,157 145,048,786 141,028,026 8,963,039 11,102,357 11,088,577 10,716,849 13,415,676 13,220,421 54,145,123 50,822,336 50,213,244 42,661,738 31,925,920 31,331,675 $ 225,162,825 $ 220,540,796 $ 212,818,407 $ 204,271,744 $ 190,390,382 $ 185,580,122 173 Expenses Governmental Activities General government Public safety Streets and highways Culture and recreation Housing and economic development Miscellaneous Interest on long-term debt Total Governmental Activities Expenses Business -type Activities Electric Natural gas Water Sewer Refuse Composting Storm water Liquor Total Business -type Activities Expenses Total Primary Government Expenses Program Revenues Governmental Activities Charges for services General government Public safety Streets and highways Culture and recreation Housing and economic development Miscellaneous Operating grants and contributions Capital grants and contributions Total Governmental Activities Program Revenues City of Hutchinson, Minnesota Changes in Net Position Last Ten Fiscal Years (Accrual Basis of Accounting) Fiscal Year 2025 2024 2023 2022 $ 3,379,592 $ 2,866,422 $ 2,729,988 $ 2,800,928 6,497,410 6,277,883 6,066,021 5,620,281 6,936,682 6,751,159 7,069,241 6,270,480 4,883,547 4,820,161 4,173,435 4,074,734 548,042 588,546 1,046,498 792,940 1,472,530 1,197,781 1,012,505 1,407,689 789,385 738,723 822,688 765,216 24,507,188 23,240,675 22,920,376 21,732,268 29,653,869 27,930,393 28,468,795 31,264,423 11,703,130 11,325,169 11, 609,401 13,282, 561 2,543,512 2,767,455 2,567,674 2,513,246 3,341,583 3,505,360 3,092,710 3,027,022 1,617,352 1,585,690 1,458,384 1,318,176 2,293,036 2,620,997 2,615,098 2,830,698 783,021 831,213 911,947 739,985 6,809,684 7,060,274 6,974,709 6,865,015 58,745,187 57,626,551 57,698,718 61,841,126 $ 83,252,375 $ 80,867,226 $ 80,619,094 $ 83,573,394 $ 812,887 $ 755,789 $ 654,979 $ 664,180 840,697 710,306 989,307 1,059,132 1,023,756 781,591 864,339 876,346 1,298,182 1,317,825 1,360,797 1,335,675 113,911 54,110 78,787 97,244 355,279 389,153 284,967 311,443 2,407,403 2,304,013 3,601,631 2,350,909 1,114,264 1,103,452 1,170,545 741,494 7,966,379 7,416,239 9,005,352 7,436,423 174 Table 2 Fiscal Year 2021 2020 2019 2018 2017 2016 $ 2,490,920 $ 3,020,058 $ 2,435,032 $ 2,341,846 $ 2,391,495 $ 2,354,768 4,717,193 4,999,680 4,987,199 4,631,282 4,836,976 5,307,395 6,273,183 5,771,299 5,657,370 5,368,926 5,438,739 5,421,270 3,339,956 3,117,665 3,766,612 3,598,025 3,428,673 2,892,986 859,162 1,332,749 392,392 349,307 280,895 583,421 1,439,747 1,432,116 1,216,593 1,224,478 1,229,192 1,316,993 634,759 496,265 502,343 475,627 477,838 491,730 19,754,920 20,169,832 18,957,541 17,989,491 18,083,808 18,368,563 29,063,843 25,726,245 27,345,524 28,140,954 27,379,450 26,538,262 13,573,448 9,337,234 9,776,175 9,439,397 10,304,619 9,232,357 2,497,449 2,515,244 2,621,826 2,421,732 2,635,888 2,610,633 3,091,075 2,757,621 3,087,632 3,196,430 3,303,898 3,593,584 1,188,408 1,202,458 1,160,163 1,121,538 1,087,830 1,077,519 2,603,527 2,704,006 2,360,824 2,267,201 1,855,135 2,064,529 701,092 794,014 691,435 609,845 632,334 585,575 6,753,197 6,946,464 5,822,275 5,662,393 5,634,824 5,451,353 59,472,039 51,983,286 52,865,854 52,859,490 52,833,978 51,153,812 $ 79,226,959 $ 72,153,118 $ 71,823,395 $ 70,848,981 $ 70,917,786 $ 69,522,375 $ 625,642 $ 625,923 $ 677,525 $ 679,200 $ 696,494 $ 641,899 1,152,422 1,052,079 1,120,786 1,140,667 1,185,169 833,853 808,966 766,131 888,371 883,671 748,479 760,014 1,251,824 615,623 1,268,375 1,384,047 1,311,050 938,724 135,844 74,199 73,746 88,458 18,869 19,076 284,214 214,354 205,034 184,545 231,923 266,494 2,055,168 1,962,884 696,234 767,930 937,732 715,410 906,335 1,759,802 4,367,498 2,453,603 2,428,531 1,823,110 7,220,415 7,070,995 9,297,569 7,582,121 7,558,247 5,998,580 175 City of Hutchinson, Minnesota Changes in Net Position (Continued) Last Ten Fiscal Years (Accrual Basis of Accounting) Fiscal Year 2025 2024 2023 2022 Program Revenues (Continued) Business -type Activities Charges for services Electric $ 30,937,826 $ 27,722,633 $ 28,389,502 $ 30,510,654 Natural gas 14,666,393 15,012,598 13,863,451 15,449,276 Water 2,519,644 2,472,963 2,721,949 2,543,719 Sewer 3,984,166 4,135,840 4,083,883 3,319,500 Refuse 1,532,880 1,438,864 1,352,057 1,331,180 Composting 2,518,778 2,653,750 2,482,978 3,010,654 Storm water 1,208,220 1,120,086 1,087,903 1,053,858 Liquor 7,568,861 7,741,340 7,516,860 7,314,289 Operating grants and contributions 93,697 276,960 44,780 50,639 Capital grants and contributions 272,684 129,550 127,300 161,316 Total Business -type Activities Program Revenues 65,303,149 62,704,584 61,670,663 64,745,085 Total Primary Government Program Revenues $ 73,269,528 $ 70,120,823 $ 70,676,015 $ 72,181,508 Net(Expense)/Revenue Governmental activities $ (16,540,809) $ (15,824,436) $ (13,915,024) $(14,295,845) Business -type activities 6,557,962 5,078,033 3,971,945 2,903,959 Total Primary Government Net Expense $ (9,982,847) $ (10,746,403) $ (9,943,079) $(11,391,886) General Revenues and Other Changes in Net Position Governmental Activities Taxes Property taxes, levied for general purposes $ 6,759,656 $ 6,392,729 $ 5,865,510 $ 5,624,438 Property taxes, levied for debt service 2,547,379 2,477,487 2,409,577 2,348,252 Tax increments 392,466 376,518 354,850 383,359 Hotel -motel tax 129,688 128,700 131,873 134,051 Payment in lieu of taxes - - - - Franchise taxes 167,835 180,721 192,702 207,620 Grants and contributions not restricted to specific programs 3,104,142 3,184,441 3,861,329 2,962,464 Unrestricted investment earnings (loss) 975,840 866,744 916,254 (36,458) Other revenues - - 1,725 2,074 Gain on sale of capital assets 71,245 658,960 98,284 50,007 Transfers 3,354,400 3,839,530 3,376,199 3,831,741 Transfers -capital assets (971,187) (1,625,142) (1,143,628) (108,861) Total Governmental Activities 16,531,464 16,480,688 16,064,675 15,398,687 General Revenues and Other Changes in Net Position Business -type Activities Sales tax 1,913,580 1,963,236 1,880,647 1,947,530 Unrestricted investment earnings (loss) 2,036,207 1,956,722 2,125,693 (952,700) Gain on sale of capital assets 145,346 351,121 81,870 4,297 Transfers (3,354,400) (3,839,530) (3,376,199) (3,831,741) Transfers - capital assets 971,187 1,625,142 1,143,628 108,861 Total Business -type Activities 1,711,920 2,056,691 1,855,639 (2,723,753) Total Primary Government $ 18,243,384 $ 18,537,379 $ 17,920,314 $ 12,674,934 Changes in Net Position Governmental Activities $ (9,345) $ 656,252 $ 2,149,651 $ 1,102,842 Business -type Activities 8,269,882 7,134,724 5,827,584 180,206 Total Primary Government $ 8,260,537 $ 7,790,976 $ 7,977,235 $ 1,283,048 Source: Financial Statements 176 Table 2 (Continued) Fiscal Year 2021 2020 2019 2018 2017 2016 $ 29,763,957 $ 28,208,330 $ 27,965,283 $ 28,780,665 $ 27,804,162 $ 27,207,567 15,264,718 11,636,939 12,501,316 12,830,426 12,440,383 11,658,645 2,533,715 2,461,472 2,278,265 2,321,059 2,380,704 2,355,374 3,165,477 3,144,635 3,204,763 3,145,437 3,138,718 3,194,892 1,304,109 1,258,989 1,237,112 1,213,982 1,187,304 1,172,250 2,868,093 3,112,047 2,423,121 2,544,124 2,036,626 2,143,152 1,019,255 984,216 957,189 929,187 898,137 868,817 7,343,276 7,669,235 6,371,522 6,244,754 6,150,453 5,989,628 16,146 17,483 26,594 36,234 13,505 22,452 227,296 298,848 313,081 353,581 213,389 199,684 63,506,042 58,792,194 57,278,246 58,399,449 56,263,381 54,81 Z461 $ 70,726,457 $ 65,863,189 $ 66,575,815 $ 65,981,570 $ 63,821,628 $ 60,811,041 $ (12,534,505) $(13,098,837) $ (9,659,972) $(10,407,370) $(10,525,561) $(12,369,983) 4,034,003 6,808,908 4,412,392 5,539,959 3,429,403 3,658,649 $ (8,500,502) $ (6,289,929) $ (5,247,580) $ (4,867,411) $ (7,096,158) $ (8,711,334) $ 5,436,822 $ 5,288,603 $ 5,131,925 $ 4,967,617 $ 4,742,969 $ 4,597,702 2,200,000 2,200,000 2,200,000 2,200,000 2,200,000 2,200,000 296,729 207,626 165,193 234,200 271,574 293,878 124,033 86,660 110,155 103,941 100,864 95,133 - - - 260,624 248,213 236,393 21 Z832 192,677 189,233 194,967 192,976 196,777 2,646,782 2,577,193 2,421,043 2,428,676 2,316,429 2,306,470 68,252 539,587 692,739 252,723 155,127 89,916 5,077 - - 5,939,376 18,050 269,357 138,006 97,194 59,757 46,440 242,024 106,699 3,030,570 1,858,758 1,849,356 2,677,936 1,994,792 2,603,373 (169,091) - - - - - 13,990,012 13,048,298 12,819,401 19,306,500 12,483,018 12,995,698 1,751,928 1,571,978 1,537,844 1,482,066 1,308,598 1,270,814 25,400 1,130,054 1,183,696 595,182 265,281 88,542 1OZ802 120,746 102,658 42,961 117,365 84,046 (3,030,570) (1,858,758) (1,849,356) (2,677,936) (1,994,792) (2,603,373) 169,091 - - (981,349) 964,020 974,842 (557,727) (303,548) (1,159,971) $ 13,008,663 $ 14,012,318 $ 13,794,243 $ 18,748,773 $ 12,179,470 $ 11,835,727 $ 1,455,507 $ (50,539) $ 3,159,429 $ 8,899,130 $ 1,957,457 $ 625,715 3,052,654 7,772,928 5,387,234 4,982,232 3,125,855 2,498,678 $ 4,508,161 $ 7,722,389 $ 8,546,663 $ 13,881,362 $ 5,083,312 $ 3,124,393 177 II11MWRIaMENOaI *1Wil01:l101911019us] ►FilIWA 178 Fiscal Year 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 City of Hutchinson, Minnesota Governmental Activities Tax Revenues by Source Last Ten Fiscal Years (Accrual Basis of Accounting) Table 3 Property Taxes Levied for Levied for Hotel- Payment in General Debt Tax Motel Lieu of Franchise Purposes Service Increments Tax Tax Tax Total $ 6,759,656 $ 2,547,379 $ 392,466 $ 129,688 $ $ 167,835 $ 9,997,024 6,392,729 2,477,487 376,518 128,700 180,721 9,556,155 5,865,510 2,409,577 354,850 131,873 - 192,702 8,954,512 5,624,438 2,348,252 383,359 134,051 - 207,620 8,697,720 5,436,822 2,200,000 296,729 124,033 - 212,832 8,270,416 5,288,603 2,200,000 207,626 86,660 - 192,677 7,975,566 5,131,925 2,200,000 165,193 110,155 189,233 7,796,506 4,967,617 2,200,000 234,200 103,941 260,624 194,967 7,961,349 4,742,969 2,200,000 271,574 100,864 248,213 192,976 7,756,596 4,597,702 2,200,000 293,878 95,133 236,393 196,777 7,619,883 Source: Financial Statements 179 City of Hutchinson, Minnesota Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) Fiscal Year 2025 2024 2023 2022 General Fund Nonspendable $ 59,044 $ 39,045 $ 153,714 $ 10,091 Restricted - - - - Committed 8,274,329 7,854,865 7,444,700 5,741,774 Assigned - - - - Unassigned 744,510 745,108 726,817 2,133,808 Total General Fund $ 9,077,883 $ 8,639,018 $ 8,325,231 $ 7,885,673 All Other Governmental Funds Nonspendable, reported in Special revenue funds $ - $ - $ - $ - Capital projects funds - - - - Restricted, reported in Debt service funds 4,210,928 4,405,423 4,313,296 4,245,435 Special revenue funds 2,556,275 2,456,383 2,572,311 2,718,305 Capital projects funds 395,835 583,418 1,429,782 28,273 Committed, reported in Special revenue funds 1,208,212 1,162,388 1,194,769 596,040 Capital projects funds 360,230 443,459 448,842 1,470,661 Assigned, reported in Special revenue funds - - - 506,499 Capital projects funds 5,627,694 5,750,955 6,060,033 4,476,797 Unassigned, reported in Special revenue funds (427,729) (776,293) (753,489) (769,629) Capital projects funds (217,125) (515,961) (1,742,860) (693,955) Total All Other Governmental Funds $ 13,714,320 $ 13,509,772 $ 13,522,684 $ 12,578,426 Source: Financial Statements 180 Table 4 Fiscal Year 2021 2020 2019 2018 2017 2016 $ 4,347 $ 11,371 $ 5,762 $ 2,110 $ 275 $ 4,959 - 220,052 226,754 59,514 59,514 56,607 5,585,597 5,478,457 5,381,040 5,249,917 5,544,809 5,266,128 - - - 113,413 113,413 113,413 2,752,309 2,455,617 2,011,107 1,823,781 1,001,811 1,219,563 $ 8,342,253 $ 8,165,497 $ 7,624,663 $ 7,248,735 $ 6,719,822 $ 6,660,670 $ $ 1,573 $ 260 $ $ $ - 1,062 - - 4,801,759 6,162,692 5,998,978 5,591,291 5,183,989 5,481,226 2,984,407 3,107,146 3,328,125 3,330,716 2,904,796 3,088,961 5,598,270 - - - - 8,999 577,537 583,392 106,017 110,737 118,531 830,372 1,636,785 2,584,308 3,507,022 3,009,837 - 236,293 506,602 453,821 644,870 583,327 566,448 506,798 5,164,053 4,471,954 5,026,875 5,253,983 2,037,769 2,577,499 (748,604) (728,961) (744,370) (1,488,413) (749,137) (298,639) (702,059) (1,189,852) (961,767) (156,631) (199,567) (273,711) $ 19,818,750 $ 15,447,135 $ 16,906,010 $ 16,234,847 $ 9,862,829 $ 12,157,798 181 City of Hutchinson, Minnesota Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) Revenues Taxes Special assessments Intergovernmental revenue Licenses and permits Charges for services Fines and forfeits Investment earnings (loss) Other revenues Total Revenues Expenditures General government Community development Public safety Streets and highways Culture and recreation Miscellaneous Capital outlay* Debt service Principal Interest Bond issuance costs Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Sale of capital assets Transfers in Transfers out Bonds issued Premium on bonds issued Total Other Financing Sources (Uses) Net Change in Fund Balances Debt Service as a Percentage of Noncapital Expenditures Fiscal Year 2025 2024 2023 2022 $ 10,014,567 $ 9,516,897 $ 8,955,547 $ 8,676,773 799,440 446,957 481,036 411,320 5,892,853 4,827,676 9,290,421 4,377,513 531,322 418,429 363,240 492,165 3,141,088 2,896,269 3,140,993 3,111,017 43,585 50,809 52,141 52,902 983,685 832,683 881,480 (40,158) 910,882 907,300 815,643 1,162,041 22,317,422 19,897,020 23,980,501 18,243,573 2,808,809 2,799,988 2,535,334 2,592,288 476,686 516,185 865,513 674,314 5,892,958 5,466,472 5,430,066 5,092,717 2,835,370 2,629,060 2,598,416 2,646,335 3,666,269 3,710,441 3,257,602 3,271,087 917,750 928,128 809,630 1,136,753 7,811,703 7,342,162 10,329,872 17,378,367 2,140,000 2,010,000 1,985,000 2,465,000 861,908 865,171 798,405 649,649 76,763 79,372 63,012 148,090 27,488,216 26,346,979 28,672,850 36,054,600 (5,170,794) (6,449,959) (4,692,349) (17,811,027) 71,245 4,433,639 (1,079,239) 2,195,000 192.562 658,960 5,397,396 (1,557,866) 2,075,000 177,344 98,284 6,340,740 (1,813,749) 1,350,000 100,890 7,950 5,493,791 (1,639,050) 5,885,000 366,432 10.114.123 $ 643,413 $ 300,875 $ 1,383,816 $ (7,696,904) 14.46% 14.44% 14.14% 24.05% Source: Financial Statements * The capital outlay is broken down in the ACFR's by function of government but consolidated on this table. 182 Table 5 Fiscal Year 2021 2020 2019 2018 2017 2016 $ 8,197,347 $ 7,793,254 $ 7,452,325 $ 7,371,440 $ 6,868,189 $ 7,378,523 614,314 612,621 923,986 1,088,178 781,191 2,812,394 4,665,768 4,697,226 6,904,746 5,013,658 4,798,875 1,904,422 564,539 505,409 529,002 561,655 686,987 281,559 2,958,696 2,183,064 2,916,389 2,772,324 2,604,636 2,192,444 45,356 45,158 67,225 55,989 50,233 45,588 127,619 494,380 631,050 218,938 134,569 74,374 940,026 574,710 857,919 7,242,496 1,161,766 1,275,922 18,113,665 16,905,822 20,282,642 24,324,678 17,086,446 15,965,226 2,464,006 2,589,239 2,329,239 2,254,302 2,182,465 2,101,566 775,348 1,259,893 319,328 278,181 242,142 575,177 5,211,278 4,779,423 4,758,499 4,723,644 4,457,700 4,208,847 2,416,990 2,451,698 2,598,778 2,453,797 2,163,764 2,108,807 2,963,694 2,410,610 2,939,353 2,933,982 2,855,857 2,392,960 1,105,590 1,069,735 973,641 914,299 892,511 972,558 6,933,954 6,844,765 9,072,931 7,022,252 9,521,627 8,455,158 4,490,000 2,015,000 2,110,000 1,970,000 1,835,000 2,150,000 510,255 513,545 489,069 475,741 434,866 458,736 143,484 45,400 54,307 36,057 63,431 43,495 27,014,599 23,979,308 25,645,145 23,062,255 24,649,363 23,467,304 (8,900,934) (7,073,486) (5,362,503) 1,262,423 (7,562,917) (7,502,078) 41,628 2,500 2,500 6,495 107,222 2,915 4,776,388 4,659,144 3,779,206 4,193,817 5,585,344 5,926,322 (1,699,818) (1,025,067) (183,091) (1,006,288) (2,893,680) (3,203,949) 9,620,000 2,405,000 2,675,000 2,395,000 2,445,000 2,435,000 711,107 - 135,979 49,484 83,214 64,108 13,449,305 6,041,577 6,409,594 5,638,508 5,327,100 5,224,396 $ 4,548,371 $ (1,031,909) $ 1,047,091 $ 6,900,931 $ (2,235,817) $ (2,277,682) 13.84% 15.19% 14.74% 14.09% 16.15% 23.86% 183 THIS PAGE IS LEFT BLANK INTENTIONALLY 184 City of Hutchinson, Minnesota Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Table 6 Fiscal Year Total Taxable Estimated (') Total Ended Residential Commercial Personal Assessed Actual Taxable Direct December 31 Property Property Property Value Value Tax Rate 2025 $ 1,197,343,000 $ 244,294,000 $ 1,215,600 $ 1,442,852,600 $1,518,792,211 56.527 2024 1,181,151,200 171,676,000 1,086,900 1,353,914,100 1,425,172,737 54.324 2023 1,142,095,200 165,748,600 1,385,700 1,309,229,500 1,378,136,316 53.653 2022 1,077,965,200 163,175,100 2,236,300 1,243,376,600 1,308,817,474 60.407 2021 1,016,610,700 164,429,000 1,995,700 1,183,035,400 1,245,300,421 63.882 2020 898,916,100 165,297,600 1,874,300 1,066,088,000 1,122,197,895 66.473 2019 771,174,100 149,313,600 1,879,200 922,366,900 970,912,526 67.045 2018 740,142,000 151,192,700 1,889,700 893,224,400 940,236,211 71.141 2017 677,811,800 187,632,100 1,673,200 867,117,100 912,754,842 71.953 2016 646,911,200 186,475,400 1,681,000 835,067,600 879,018,526 73.966 Source: County Auditors Office Note: (') According to the Minnesota Department of Revenue, the Assessor's Taxable Market Value for the City of Hutchinson is about 104% of the actual selling prices of property most recently sold in the City. Estimated actual taxable value is calculated by dividing assessed value by the percent (104%). Valuations are determined as of January 1 st of the year preceding the tax collection year. Amounts are shown for the year in which taxes are payable. Assessed value is prior to Fiscal Disparity and Tax Increment District Adjustments. 185 City of Hutchinson, Minnesota Property Tax Rates Direct and Overlapping Governments Last Ten Fiscal Years Overlapping Rates City of Hutchinson County Fiscal Debt Total Debt Total Year Operating Service City Operating Service County 2025 41.004 15.523 56.527 43.902 1.643 45.545 2024 39.092 15.232 54.324 44.737 2.432 47.169 2023 37.972 15.681 53.653 47.889 2.720 50.609 2022 42.573 17.834 60.407 54.257 3.277 57.534 2021 45.464 18.418 63.882 55.112 3.445 58.557 2020 46.867 19.606 66.473 56.305 3.504 59.809 2019 46.867 20.178 67.045 55.248 2.634 57.882 2018 49.139 22.002 71.141 54.253 1.881 56.134 2017 49.182 22.771 71.953 51.660 1.932 53.592 2016 50.112 23.854 73.966 51.002 1.952 52.954 Source: McLeod County Auditor and Treasurers Office URR Table 7 Overlapping Rates School District Total Total Total Direct and Debt Total Special Direct Overlapping Overlapping Operating Service School Districts Rates Rates Rates 5.873 18.164 24.037 2.903 56.527 72.485 129.012 4.510 19.564 24.074 2.858 54.324 74.101 128.425 3.395 21.428 24.823 2.901 53.653 78.333 131.986 7.568 22.947 30.515 3.446 60.407 91.495 151.902 8.746 24.798 33.544 3.559 63.882 95.660 159.542 6.992 27.261 34.253 3.612 66.473 97.674 164.147 8.685 14.870 23.555 3.581 67.045 85.018 152.063 8.206 17.005 25.211 3.608 71.141 84.953 156.094 8.037 17.452 25.489 3.609 71.953 82.690 154.643 9.600 17.772 27.372 3.659 73.966 83.985 157.951 187 City of Hutchinson, Minnesota Principal Property Taxpayers Current Year and Nine Years Ago Taxpayer Type of Business 3M Company (MN Mining & Mfg) Manufacturing Sterling Properties LLLP Apartments City of Hutchinson Retail Building Menards, Inc Commercial/Retail Hutch Ward II LLC Apartments Wal-Mart Commercial/Retail GF (Formerly Uponor) Manufacturing Spirit Realty LP Industrial Bear Paw Properties Senior Living Target (Dayton Hudson Corp) Commercial/Retail TDK Corporation (formerly HTI) Manufacturing NuCrane Manufacturing Manufacturing Crow River Apartments Limited Apartments Coborn Realty Co / Cash Wise Foods Commercial/Grocery Total Source: McLeod County Auditors Office Table 8 2025 2016 Percentage of Percentage of Taxable Total Taxable Taxable Total Taxable Assessed Assessed Assessed Assessed Value Rank Value Value Rank Value $14,858,000 1 1.03 % $16,007,200 1 1.93 % 11,764,900 2 0.82 4,585,700 6 0.55 10,215,900 3 0.71 3,991,400 7 0.48 9,374,200 4 0.65 6,961,900 4 0.83 9,153,500 5 0.63 7,646,900 6 0.53 7,702,200 3 0.92 6,755,500 7 0.47 5,798,800 8 0.40 5,766,100 9 0.40 4,925,400 10 0.34 5,292,700 5 0.63 9,623,200 2 1.15 $ 86,259,200 3,964,100 8 3,955,100 9 3,417,900 10 5.98 % $ 65,501,400 0.47 0.47 0.41 7.84 % 188 City of Hutchinson, Minnesota Property Tax Levies and Collections Last Ten Fiscal Years Table 9 Collected within the Fiscal Year Total Tax Fiscal Year of the Levy Collections in Total Collections to Date Ended Levy for Percentage Subsequent Percentage December 31, Fiscal Year Amount of Levy Years Amount of Levy 2025 $ 9,276,413 $ 9,196,843 99.14 % $ - $9,196,843 99.14 % 2024 8,835,923 8,741,499 98.93 65,664 8,807,163 99.67 2023 8,244,328 8,149,683 98.85 80,628 8,230,311 99.83 2022 7,953,808 7,851,755 98.72 98,537 7,950,292 99.96 2021 7,630,779 7,563,984 99.12 64,225 7,628,209 99.97 2020 7,458,910 7,414,433 99.40 43,990 7,458,423 99.99 2019 7,310,005 7,278,548 99.57 31,457 7,310,005 100.00 2018 7,113,466 7,088,464 99.65 23,963 7,112,427 99.99 2017 6,951,796 6,905,665 99.34 45,111 6,950,776 99.99 2016 6,769,035 6,720,677 99.29 47,376 6,768,053 99.99 Source: McLeod County Tax Settlements and City of Hutchinson Finance Department 189 City of Hutchinson, Minnesota Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities General Special Fiscal Obligation Assessment Notes Year Bonds Bonds Payable 2025 $ 13,564,132 $ 15,105,924 $ 2024 14,384,790 14,195,846 2023 14,012,986 14,531,073 2022 14,505,753 14,653,341 2021 8,272,088 17,236,498 2020 - 19,895,195 2019 - 19,857,912 30,000 2018 - 19,515,584 60,000 2017 - 19,676,467 90,000 2016 - 19,003,047 120,000 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (') Outstanding General Obligation Revenue Bonds are a combination of Water and Sewer Bonds and Minnesota Public Facilities Authority (MPFA) Drinking Water Revolving Fund loans. The Funds from the MPFA are being used to build a new water treatment facility. (2) Outstanding Revenue Bonds reflect bonds issued by the City owned by Public Utilities (3) Business -type financed purchase arrangements reflect equipment in Water, Sewer, Refuse and Compost funds, and the Public Utility Commission. (4) Includes refunded bonds of $15,195,000 190 Business -type Activities General Obligation Revenue Bonds (1) $ 5,796,097 8,604,862 11,544,993 14,358,762 17,170,528 15,815,368 21,369,536 20,934,620 21,817,341 24,240, 591 Revenue Bonds (2) $ 14,398,836 17,387,901 20,261,972 23,036,034 25,685,097 28,144,162 30,463,228 32,677,293 34,191,359 (4) 18,845,615 Financed Total Purchase Primary Arrangements (3) Government $ - $ 48,864,989 71,666 54,645,065 141,251 60,492,275 208,816 66,762,706 274,418 68,638,629 423,600 64,278,325 568,643 72,289,319 249,644 73,437,141 384,487 76,159,654 133,865 62,343,118 Table 10 Percentage of Personal Per Income Capita 5.13 % $ 3,291 5.99 3,686 7.10 4,080 7.83 4,440 8.87 4,668 8.95 4,403 10.31 5,062 10.76 5,150 11.98 5,368 10.12 4,407 191 City of Hutchinson, Minnesota Ratios of Net General Bonded Debt Outstanding Last Ten Fiscal Years Table 11 Less: Amounts Less: Amounts Percentage of General Special Paid from Available in Total Taxable Fiscal Obligation Assessment Revenue Proprietary Debt Service Assessed(') Per Year Bonds Bonds Bonds Revenue Fund Total Value of Property Capita 2025 $ 19,360,229 $ 15,105,924 $ 14,398,836 $ 20,194,933 $ 4,210,928 $ 24,459,128 1.70 % $ 1,647 2024 22,989,652 14,195,846 17,387,901 25,992,763 4,405,423 24,175,213 1.79 1,631 2023 25,557,979 14,531,073 20,261,972 31,806,965 4,313,296 24,230,763 1.85 1,634 2022 28,864,515 14,653,341 23,036,034 37,394,796 4,245,435 24,913,659 2.00 1,657 2021 25,442,616 17,236,498 25,685,097 42,855,625 4,801,759 20,706,827 1.75 1,408 2020 15,815,368 19,895,195 28,144,162 43,959,530 6,162,692 13,732,503 1.29 941 2019 21,369,536 19,857,912 30,463,228 51,832,764 5,998,978 13,858,934 1.50 970 2018 20,934,620 19,515,584 32,677,293 53,611,913 5,591,291 13,924,293 1.56 976 2017 21,817,341 19,676,467 34,191,359 56,008,700 5,183,989 14,492,478 1.67 1,021 2016 24,240,591 19,003,047 18,845,615 43,086,206 5,481,226 13,521,821 1.62 956 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements (') See Table 6 for property value data. 192 City of Hutchinson, Minnesota Computation of Direct and Overlapping Governmental Activities Debt December 31, 2025 Table 12 Estimated Estimated Share of Debt Percentage Overlapping Governmental Unit Outstanding Applicable (2) Debt Direct Debt City of Hutchinson $ 28,670,056 100.00 % $ 28,670,056 Overlapping Debt McLeod County 12,714,531 25.65 3,261,105 Independent School Dist. 423 78,815,000 60.59 47,755,909 Total Overlapping Debt 91,529,531 51,017,014 Total Direct and Overlapping Debt $120,199,587 $ 79,687,070 Sources: (') Outstanding debt data provided by the City, McLeod County Auditors Office and ISD #423. (2) Estimated percentages come from the Local Taxable Tax Capacity numbers supplied annually by the McLeod County Auditors Office. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Hutchinson. This process recognized that, when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt of each overlapping government. 193 Assessed Value (See Table 6) Legal Debt Limit Debt limit (3% of assessed value) Debt Applicable to Limit: (See Table 10) General Obligation Bonds Less: Amount reserved for repayment of general obligation debt Total Net Debt Applicable to Limit Legal Debt Margin Total Net Debt Applicable to the Limit as a Percentage of Debt Limit City of Hutchinson, Minnesota Legal Debt Margin Information Last Ten Fiscal Years 2025 2024 2023 2022 $1,442,852,600 $1,353,914,100 $1,309,229,500 $1,243,376,600 43,285,578 40,617,423 39,276,885 37,301,298 13,564,132 14,384,790 14,012,986 14,505,753 (4,210,928) (4,405,423) (4,313,296) (4,245,435) 9,353,204 9,979,367 9,699,690 10,260,318 $ 33,932,374 $ 30,638,056 $ 29,577,195 $ 27,040,980 21.61 % 24.57% 24.70% 27.51 % Source: Assessed values are provided by McLeod County Auditor's Office. Note: Minn. Stat. Section 475.53, subd. 1 states that except as otherwise provided in Minn. Stat. Sections 474.74 to 475.51, no municipality except a school district or a city of the first class, shall incur or be subject to a net debt in excess of three percent of the estimated market value. 194 Table 13 2021 2020 2019 2018 2017 2016 $1,183,035,400 $1,066,088,000 $ 922,366,900 $ 893,224,400 $ 867,117,100 $ 835,067,600 35,491,062 31,982,640 27,671,007 26,796,732 26,013,513 25,052,028 8,272,088 (4,801,759) (6,162,692) (5,998,978) (5,591,291) (5,183,989) (5,481,226) 3,470,329 (6,162,692) (5,998,978) (5,591,291) (5,183,989) (5,481,226) $ 32,020,733 $ 38,145,332 $ 33,669,985 $ 32,388,023 $ 31,197,502 $ 30,533,254 9.78%-19.27%-21.68%-20.87%-19.93%-21.88% 195 City of Hutchinson, Minnesota Pledged -Revenue Coverage Last Ten Fiscal Years Utility Revenue Bonds (') Net Revenue Operating Operating Available for Debt Service Requirements Year Revenues Expenses(2) Debt Service Principal Interest Coverage 2025 $ 52,978,153 $ 47,507,180 $ 5,470,973 $ 5,560,666 $ 867,929 0.85 2024 49,199,951 45,653,353 3,546,598 5,574,955 1,057,132 0.53 2023 49,728,837 45,764,424 3,964,413 5,346,565 1,237,284 0.60 2022 52,600,144 49,786,385 2,813,759 5,217,602 1,389,589 0.43 2021 51,506,805 47,741,114 3,765,691 5,034,182 1,456,574 0.58 2020 44,458,646 39,878,458 4,580,188 7,746,043 1,611,375 0.49 2019 46,727,885 41,989,301 4,738,584 4,680,776 1,808,777 0.73 2018 47,793,436 42,208,203 5,585,233 3,892,843 1,891,142 0.97 2017 46,345,385 42,834,203 3,511,182 4,372,655 1,600,041 0.59 2016 44,808,639 41,281,522 3,527,117 3,731,422 1,544,312 0.67 Source: City of Hutchinson Financial Records Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (') Utility Revenue Bonds include Water, Sewer, Storm Water and Public Utilities Commission funds (excludes the Municipal Liquor Store, Composting and Refuse funds which have no outstanding debt service requirements) (2) Total operating expenses exclusive of depreciation (3) Debt service requirements for special assessment bonds issued comes from a combination of tax collections, which includes tax credits from the State of Minnesota and special assessment collections. "•: Table 14 G.O. Bonds Special Assessment Bonds Special Debt Service Requirements Assessment and Debt Service Requirements Tax Collections Principal Interest Coverage Tax Collections(3) Principal Interest Coverage $ $ $ $ 2,965,124 $ 2,140,000 $ 831,204 1.00 2,828,401 2,010,000 820,190 1.00 2,790,181 1,985,000 770,323 1.01 297 550 2,650 0.09 2,685,876 2,465,000 601,680 0.88 59,787 2,650 7,300 6.01 2,721,594 4,490,000 475,690 0.55 188,511 7,300 13,650 9.00 2,578,243 1,985,000 483,982 1.04 336,420 13,650 23,138 9.14 2,767,674 2,080,000 463,555 1.09 358,995 23,138 - - 2,601,776 1,940,000 434,862 1.10 - - 2,151,946 1,805,000 416,431 0.97 3,379,975 2,120,000 415,406 1.33 197 City of Hutchinson, Minnesota Demographic and Economic Statistics Last Ten Fiscal Years Fiscal Personal (2) Per Capita School (3) Year Population i�� Income Personal Income Enrollment (K-12) 2025 14,850 $ 952,864,534 (5) 64,168 2,671 2024 14,826 911,860,124 61,504 2,722 2023 14,828 852,335,288 57,481 2,783 2022 15,037 852,912,942 56,721 2,761 2021 14,703 773,937,743 52,638 2,756 2020 14,599 717,936,823 49,177 2,761 2019 14,282 701,366,248 49,108 2,916 2018 14,260 682,417,700 47,855 2,944 2017 14,188 635,803,704 44,813 2,958 2016 14,146 616,179,032 43,559 2,968 Table 15 State National Unemployment Unemployment Unemployment Rate (4) Rate (4) Rate (4) 4.0 3.9 4.3 % 3.2 3.0 4.0 3.1 2.8 3.6 2.4 2.7 3.6 3.5 3.4 5.3 5.7 6.2 8.1 3.7 3.2 3.7 3.0 3.0 3.9 3.4 3.4 4.4 4.2 3.9 4.9 Data Sources:(') United States Census Bureau or Minnesota State Demographer. (2) Personal Income is estimated based on McLeod County numbers, McLeod County population and City of Hutchinson Population. (3) Minnesota Department of Education. (4) Minnesota Department of Employment and Economic Development (DEED); average annual rates (5) 2025 data is not available at time of publication; these are estimated totals 198 City of Hutchinson, Minnesota Principal Employers Current Year and Nine Years Ago Table 16 2025 2016 (2) Percentage Percentage of Total County of Total County Employer Employees (4) Rank Employment (4) Employees (3) Rank Employment (4) 3M Corporation 1,327 1 6.84 % 1,675 1 8.81 % Hutchinson Area Health Care 512 2 2.64 665 2 3.50 Wal-Mart 290 3 1.49 280 6 1.47 Resonetics 199 4 1.03 City of Hutchinson 175 5 0.90 295 5 1.55 Menards 132 6 0.68 144 10 0.76 Cash Wise Foods 125 7 0.64 180 8 0.95 Ridgewater College 125 8 0.64 Target 120 9 0.62 Warrior Mfg 93 10 0.48 Hutchinson Schools - ISD 423 484 4 2.55 TDK Corporation (formerly HTI) 592 3 3.12 Customer Elations 190 7 1.00 National Guard Recruiting 150 9 0.79 Total 3,098 15.96 % 4,655 24.50 % Sources: (1) 2025 Offering Statement on Municipal Bonds sold. (2) 2016 Offering Statement on Municipal Bonds sold. (3) Includes full-time, part-time and seasonal employees. (4) Percentages are compiled based on Total County employment and come from the Minnesota Department of Employment and Economic Development. 199 THIS PAGE IS LEFT BLANK INTENTIONALLY 200 City of Hutchinson, Minnesota Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years Table 17 Full-time Equivalent Employees as of December 31 Function/Program 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 General government Mayor & City Council i�� 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Administration 3.38 3.38 3.38 3.58 3.39 3.48 3.24 3.24 3.25 3.17 Finance 3.00 3.00 3.00 3.01 2.86 3.09 2.99 2.99 2.93 2.98 Attorney 1.50 1.50 1.52 1.53 1.52 1.53 1.49 1.52 1.50 1.50 Planning & zoning 1.31 1.20 1.31 1.70 1.20 1.25 1.20 1.17 1.30 1.22 Information services 3.00 3.00 3.01 3.02 3.02 3.01 2.68 2.77 3.00 3.00 Motor vehicle 4.66 4.11 3.76 4.11 3.93 3.90 3.97 3.82 3.72 3.28 Building maintenance 1.00 1.00 1.00 1.00 1.00 1.04 1.00 1.00 1.19 0.69 Cemetery 1.00 1.00 1.02 2.26 1.01 1.38 1.10 1.02 1.33 0.96 Public safety Police Officers 24.82 23.61 24.96 24.44 25.89 23.66 23.26 22.79 21.91 21.63 Civilians 6.02 6.17 10.60 10.32 11.15 15.60 15.33 17.34 16.53 15.59 Fire Firefighters and officers (2) 6.59 5.49 6.44 5.25 5.72 5.51 5.31 4.62 4.98 4.98 Building inspection 3.52 3.52 3.45 2.80 3.25 3.32 3.91 3.30 2.97 2.50 Streets and highways Engineering 4.27 3.06 3.43 3.12 3.39 4.24 3.71 3.73 3.82 3.77 Maintenance 8.93 9.58 8.16 7.31 7.81 7.76 7.77 7.87 7.20 7.05 Culture and recreation Parks (3) 28.63 30.12 29.43 31.09 28.71 20.48 31.16 33.45 34.84 23.48 Economic development 1.16 1.11 1.20 1.31 1.36 1.35 1.36 1.67 1.42 1.53 Transportation Airport & bus drivers 0.50 0.50 0.57 0.57 0.56 0.55 0.56 0.50 0.20 0.34 Liquor 14.07 14.00 13.66 12.98 12.82 13.19 12.32 12.72 12.52 11.55 Water 5.51 6.18 5.99 5.86 5.52 5.88 5.82 5.90 6.03 7.65 Sewer 9.13 8.27 8.20 8.43 8.59 8.88 8.44 8.50 7.50 6.64 Refuse 3.96 2.73 3.27 2.28 2.30 2.34 2.44 2.51 2.49 1.58 Storm water 1.95 1.71 2.89 3.44 3.20 3.35 2.96 2.34 2.76 2.71 Composting 7.27 8.08 7.46 6.09 6.98 7.27 6.59 6.06 5.99 5.57 Natural gas 9.00 9.00 9.00 9.00 9.00 9.00 9.00 9.00 9.00 9.00 Electric 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00 Total 195.18 192.32 197.71 195.50 195.18 192.06 198.61 200.83 199.38 183.37 Source: City of Hutchinson Budget Books and Public Utilities Commission (1) The City of Hutchinson is comprised of one mayor and four council members. These numbers do not reflect full-time equivalent hours based on actual yearly full-time hours worked. (2) Paid -on -call volunteer firefighters are reflected in full-time equivalent hours on a yearly basis. (3) Seasonal employees were added in 2017 for the new aquatic center operations. 201 City of Hutchinson, Minnesota Operating Indicators by Function Last Ten Fiscal Years Fiscal Year Function 2025 2024 2023 2022 General government Permits issued 1,114 1,133 1,079 899 Building inspections 1,474 2,126 1,956 1,913 Public safety Police Incidents (calls for service) 13,443 13,453 15,331 15,709 Arrests 323 381 421 401 Citations 464 549 622 730 Fire Number of calls answered 579 522 516 497 Code inspections 59 73 87 77 Training hours 3,103 2,475 3,277 3,073 Highways and streets Street reconstruction (miles) 1.52 1.00 1.00 1.00 Street resurfacing (miles) - - 2.20 1.00 Patching material used (tons) 110 156 447 124 Sanitation Raw incoming (tons) Source separated organics 1,478 1,336 1,356 1,355 Leaves, grass, and other wastes 7,403 8,007 6,899 7,010 Culture and recreation Athletic field maintenance hours 2,285 2,605 2,487 2,680 Ice time sold 1,920 2,298 2,362 1,988 Pool admissions (2) 30,808 35,234 38,816 43,120 Shelters reserved 554 579 526 544 Water Average daily consumption (in gallons) 1,324,500 1,287,000 1,433,500 1,476,900 Wastewater Average daily sewage treatment MGD (million gallons/day) 2.14 2.00 2.04 1.96 Public Utilities Kilowatt hours (KWH) generated 70,977,000 38,031,000 56,795,000 43,733,000 Natural gas purchased and generated (MCF) 2,196,817 1,745,716 2,015,172 2,132,094 Liquor Liquor store sales volume ($) 7,561,174 7,729,489 7,507,127 7,298,303 Sources: Various City departments and Public Utilities Commission (') The outdoor pool was closed in 2016 and a new outdoor aquatic center opened in 2017. (2) The majority of City functions and programs in 2020 were severely and negatively impacted by the COVID-19 pandemic. 202 Table 18 Fiscal Year 2021 2020 (2) 2019 2018 2017 2016 (1) 1,060 1,154 1,038 1,424 2,291 1,089 2,099 2,275 3,685 2,737 3,029 1,415 16,329 17,459 20,042 20,116 18,913 17,152 365 360 458 481 422 372 511 631 892 845 757 802 498 484 463 492 532 505 51 46 254 306 233 218 3,066 2,203 3,403 2,793 3,078 3,018 1.00 0.70 1.59 1.35 1.29 1.63 1.00 1.00 3.79 6.09 0.24 8.25 216 399 345 148 123 183 1,437 1,612 1,494 1,597 1,677 1,785 6,728 6,796 7,148 8,292 7,648 8,227 2,475 707 3,271 3,281 2,994 2,811 1,709 1,003 2,134 2,180 2,120 2,222 40,687 - 41,470 48,623 54,937 - 109 249 524 440 439 522 1,506,900 1,490,200 1,356,900 1,347,500 1,430,400 1,418,500 1.91 2.00 2.65 2.28 2.43 2.54 48,269,000 19,844,000 22,900,000 34,524,000 28,605,000 35,823,000 1,988,268 1,770,463 1,925, 515 1,937,455 1,854,437 1,817,631 7,334,887 7,666,596 6,369,376 6,242,500 6,148,149 5,986,472 203 City of Hutchinson, Minnesota Capital Asset and Infrastructure Statistics by Function Last Ten Fiscal Years Function General government City center Public safety Police: Stations Patrol units Fire: Stations Vehicles Highways and streets Miles of street Bridges Parks and recreation Parks Area in acres Indoor ice arena Recreation center (includes pool) Event center Compost/Refuse Compost buildings Liquor Liquor store building Utilities Municipal water: Water treatment plant Water towers Miles of water main Municipal sanitary sewer: Wastewater treatment buildings Miles of sanitary sewer Number of lift stations Storm sewer Holding ponds and lakes Electric division Miles of transmission lines Number of substations (1) Natural gas division Miles of gas lines Source: Various City departments and capital asset system Fiscal Year 2025 2024 2023 2022 1 1 1 1 1 1 1 1 12 12 12 12 1 1 1 1 9 9 9 9 78 78 78 77 6 6 6 6 41 41 41 41 401 401 401 401 2 2 2 2 1 1 1 1 1 1 1 1 2 2 2 2 1 1 1 1 1 1 1 1 3 3 3 3 103 103 103 103 8 8 8 8 92 92 92 92 15 15 15 15 56 55 57 57 17 17 17 17 6 6 6 6 301 299 297 297 204 Table 19 Fiscal Year 2021 2020 2019 2018 2017 2016 1 1 1 1 1 1 1 1 1 1 1 1 12 12 12 12 12 11 1 1 1 1 1 1 9 9 9 9 8 9 77 77 77 77 77 77 6 6 6 6 6 6 41 41 41 41 37 37 401 401 401 401 401 401 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 3 3 3 3 3 3 102 102 100 100 100 99 8 8 8 8 8 8 92 92 91 91 91 91 15 15 15 15 15 13 56 53 53 53 53 53 17 17 17 17 17 17 6 6 6 6 6 6 295 294 294 294 292 292 205 II11MWRIaMENOaI *1Wil01:l101911019us] ►FilIWA m. City of Hutchinson, Minnesota Combined Schedule of Bonds Payable December 31, 2025 Table 20 Year Original Bonds Issued Amount Retired Outstanding Coupon Rates GENERAL OBLIGATION BONDS 2021A $ 7,795,000 $ 1,530,000 $ 6,265,000 2.00 - 4.00 % 2022A 5,885,000 360,000 5,525,000 4.00 - 5.00 2024A 1,080,000 - 1,080,000 4.00 - 5.00 Totals $ 14,760,000 $ 1,890,000 $ 12,870,000 GENERAL OBLIGATION SPECIAL ASSESSMENT BONDS 2014A $ 3,415,000 $ 2,855,000 $ 560,000 2.00 - 3.00 % 2015A 2,140,000 1,320,000 820,000 2.85 - 3.00 2016A 3,880,000 2,840,000 1,040,000 2.00 2017A 2,445,000 1,175,000 1,270,000 2.00 - 3.00 2018A 2,395,000 1,100,000 1,295,000 3.00 - 4.00 2019A 2,675,000 1,055,000 1,620,000 2.00 - 3.00 2020A 2,405,000 630,000 1,775,000 0.35 - 1.40 2021 A 1,825,000 315,000 1,510,000 2.00 - 4.00 2023A 1,350,000 60,000 1,290,000 4.00 - 5.00 2024A 995,000 - 995,000 4.00 - 5.00 2025A 2,195,000 2,195,000 4.00 - 5.00 Totals $ 25,720,000 $ 11,350,000 $ 14,370,000 GENERAL OBLIGATION REVENUE BONDS 2007 PFA $ 13,696,602 $ 12,772,602 $ 924,000 2.15 % 2018A 1,550,000 860,000 690,000 3.00 - 4.00 2019A 2,790,000 1,640,000 1,150,000 2.00 - 3.00 2021 A 3,460,000 860,000 2,600,000 3.00 - 4.00 Totals $ 21,496,602 $ 16,132,602 $ 5,364,000 ELECTRIC UTILITIES REVENUE BONDS 2012A $ 20,720,000 $ 18,640,000 $ 2,080,000 4.00 - 5.00 % 2017B 16,675,000 4,925,000 11,750,000 3.00 - 4.00 Totals $ 37,395,000 $ 23,565,000 $ 13,830,000 207 City of Hutchinson, Minnesota Public Utilities Commission Operating Expenses by Function Last Ten Fiscal Years Electric Division 2025 2024 2023 2022 Production $ 6,021,891 $ 4,888,013 $ 5,147,394 $ 6,721,410 Purchase Power/Gas 12,736,721 12,232,955 12,350,033 13,464,644 Transmission 3,038,448 2,831,249 3,253,936 3,180,332 Distribution 2,300,714 2,327,617 1,926,092 1,954,926 Customer Accounts 325,490 296,201 286,500 253,103 Administrative 1,784,712 1,775,129 1,711,555 1,779,772 Depreciation and Depletion 3,056,726 3,160,016 3,326,461 3,440,752 Total Electric $ 29,264,702 $ 27,511,180 $ 28,001,971 $ 30,794,939 Natural Gas Division Transmission $ 401,934 $ 347,861 $ 202,644 $ 225,561 Purchased Gas 7,391,426 7,263,560 7,635,147 9,356,872 Distribution 1,309,120 1,134,711 1,243,161 1,130,075 Customer Accounts 276,647 242,212 216,110 222,252 Administrative 1,132,715 1,119,226 1,065,890 1,027,270 Depreciation and Depletion 1,176,395 1,124,576 1,097,315 1,092,249 Total Natural Gas $ 11,688,237 $ 11,232,146 $ 11,460,267 $ 13,054,279 208 Table 21 2021 2020 2019 2018 2017 2016 $ 5,052,088 $ 3,483,546 $ 3,776,245 $ 3,883,945 $ 3,071,804 $ 3,387,289 13,740,072 13,175,999 14,037,852 15,162,365 14,634,350 13,889,577 3,110,471 2,334,541 3,064,741 2,652,119 2,707,438 2,376,359 1,446,601 1,485,856 1,368,188 1,321,212 893,411 969,907 240,193 252,606 240,775 223,038 275,042 246,627 1,667,276 1,686,199 1,597,928 1,592,817 2,684,081 2,816,972 3,334,286 2,804,539 2,728,998 2,770,697 2,830,636 2,820,446 $ 28,590,987 $ 25,223,286 $ 26,814,727 $ 27,606,193 $ 27,096,762 $ 26,507,177 $ 229,104 $ 236,423 $ 183,311 $ 148,891 $ 127,459 $ 119,454 9,830,566 5,588,511 5,961,040 6,084,090 6,883,154 5,697,867 984,148 948,091 979,913 838,259 624,192 580,503 197,186 189,536 184,860 192,484 205,154 201,785 942,757 932,864 965,449 656,350 896,901 1,036,110 1,097,263 1,088,555 1,078,481 1,033,788 1,022,038 1,001,952 $ 13,281,024 $ 8,983,980 $ 9,353,054 $ 8,953,862 $ 9,758,898 $ 8,637,671 209 City of Hutchinson, Minnesota Public Utilities Commission Thousand Cubic Feet (MCF) Sales - Natural Gas Division (Continued on the Follwing Page) Last Ten Fiscal Years Table 22 Percent of Revenue Percent of MCF Revenue to Number Type of Service MCF Amount Billed Per MCF to Total MCF Total Revenue of Meters 2025 Residential 419,927 $3,636,316 8.65940 26.8 % 31.0 % 5,475 Commercial 319,004 2,560,549 8.02670 20.3 21.9 575 Large Industrial 829,668 5,515,001 6.64724 52.9 47.1 5 Total Sales 1,568,599 11,711,866 7.46645 100.0 100.0 6,055 2024 Residential 367,176 3,526,225 9.60364 25.8 31.2 5,459 Commercial 282,949 2,526,865 8.93046 19.9 22.4 576 Large Industrial 773,724 5,234,322 6.76510 54.3 46.4 5 Total Sales 1,423,849 11,287,412 7.92739 100.0 100.0 6,040 2023 Residential 397,210 3,949,946 9.60364 25.8 31.2 5,419 Commercial 309,695 2,888,770 8.93046 19.9 22.4 575 Large Industrial 786,469 5,138,193 6.76510 54.3 46.4 5 Total Sales 1,493,374 11,976,909 8.02003 100.0 100.0 5,999 2022 Residential 468,417 4,474,818 9.55306 27.8 33.8 5,396 Commercial 360,647 3,275,405 9.08202 21.4 24.8 580 Large Industrial 854,149 5,483,012 6.41927 50.8 41.4 3 Total Sales 1,683,213 13,233,235 7.86189 100.0 100.0 5,979 2021 Residential 391,998 4,639,771 11.83621 25.8 35.2 5,349 Commercial 302,691 3,469,964 11.46372 19.9 26.3 574 Large Industrial 827,019 5,081,290 6.14410 54.3 38.5 5 Total Sales 1,521,708 13,191,025 8.66857 100.0 100.0 5,928 210 City of Hutchinson, Minnesota Public Utilities Commission Thousand Cubic Feet (MCF) Sales - Natural Gas Division (Continued) Last Ten Fiscal Years Table 22 (Continued) Percent of Revenue Percent of MCF Revenue to Number Type of Service MCF Amount Billed Per MCF to Total MCF Total Revenue of Meters 2020 Residential 406,279 $ 3,663,453 $ 9.01709 26.1 % 37.4 % 5,280 Commercial 309,544 2,597,225 8.39049 19.9 26.5 574 Large Industrial 839,782 3,539,862 4.21522 54.0 36.1 5 Total Sales 1,555,605 9,800,540 6.30015 100.0 100.0 5,859 2019 Residential 458,153 3,981,709 8.69078 27.6 37.4 5,201 Commercial 372,139 2,974,834 7.99388 22.4 28.0 581 Large Industrial 827,804 3,679,890 4.44536 50.0 34.6 5 Total Sales 1,658,096 10,636,433 6.41485 100.0 100.0 5,787 2018 Residential 446,224 4,139,639 9.27704 27.7 38.0 5,127 Commercial 349,806 3,070,904 8.77888 21.7 28.2 570 Large Industrial 817,621 3,696,099 4.52055 50.6 33.8 5 Total Sales 1,613,651 10,906,642 6.75898 100.0 100.0 5,702 2017 Residential 396,762 3,937,048 9.92295 25.8 37.0 5,086 Commercial 325,984 3,019,230 9.26190 21.2 28.5 564 Large Industrial 817,723 3,653,263 4.46760 53.0 34.5 3 Total Sales 1,540,469 10,609,541 6.88721 100.0 100.0 5,653 2016 Residential 382,184 3,839,034 10.04499 26.7 38.9 5,051 Commercial 292,212 2,824,329 9.66534 20.4 28.6 551 Large Industrial 754,604 3,215,714 4.26146 52.9 32.5 3 Total Sales 1,429,000 9,879,077 6.91328 100.0 100.0 5,605 211 City of Hutchinson, Minnesota Raw Water Finished and Sold (Continued on the Follwing Page) Last Ten Fiscal Years Table 23 Volume in Percent of Total Revenue Per Number of Gallons Total Pumped Revenue 1,000 Gallons Water Meters 2025 Net Raw Water 606,584,000 100.0 % Used in Production 122,589,400 20.2 Net Finished Water 483,994,600 79.8 Loss in Distribution System 60,618,600 10.0 Total Sales 423,376,000 69.8 $ 2,253,475 $ 5.322633 5,386 2024 Net Raw Water 591,311,900 100.0 Used in Production 120,060,400 20.3 Net Finished Water 471,251,500 79.7 Loss in Distribution System 62,550,625 10.6 Total Sales 408,700,875 69.1 $ 2,242,880 $ 5.487828 5,323 2023 Net Raw Water 653,033,100 100.0 Used in Production 129,201,000 19.8 Net Finished Water 523,832,100 80.2 Loss in Distribution System 29,098,100 4.5 Total Sales 494,734,000 75.7 $ 2,435,727 4.923306 5,239 2022 Net Raw Water 671,611,600 100.0 Used in Production 131,988,600 19.7 Net Finished Water 539,623,000 80.3 Loss in Distribution System 35,443,000 5.3 Total Sales 504,180,000 75.0 2,332,971 4.627258 5,215 2021 Net Raw Water 688,644,600 100.0 Used in Production 137,984,100 20.0 Net Finished Water 550,660,500 80.0 Loss in Distribution System 46,866,500 6.8 Total Sales 503,794,000 73.2 2,380,002 4.724157 5,196 212 City of Hutchinson, Minnesota Raw Water Finished and Sold (Continued) Last Ten Fiscal Years Table 23 (Continued) Volume in Percent of Total Revenue Per Number of Gallons Total Pumped Revenue 1,000 Gallons Water Meters 2020 Net Raw Water 678,668,700 100.0 % Used in Production 132,921,700 19.6 Net Finished Water 545,747,000 80.4 Loss in Distribution System 36,754,000 5.4 Total Sales 508,993,000 75.0 2,319,635 $ 4.557302 5,149 2019 Net Raw Water 626,882,300 100.0 Used in Production 131,302,800 20.9 Net Finished Water 495,579,500 79.1 Loss in Distribution System 44,378,500 7.1 Total Sales 451,201,000 72.0 2,139,682 4.742193 4,969 2018 Net Raw Water 625,791,600 100.0 Used in Production 133,500,400 21.3 Net Finished Water 492,291,200 78.7 Loss in Distribution System 30,999,200 5.0 Total Sales 461,292,000 73.7 2,171,465 4.707355 4,954 2017 Net Raw Water 666,954,000 100.0 Used in Production 139,553,900 20.9 Net Finished Water 527,400,100 79.1 Loss in Distribution System 44,630,100 6.7 Total Sales 482,770,000 72.4 2,240,319 4.640551 4,933 2016 Net Raw Water 650,851,600 100.0 Used in Production 135,169,452 20.8 Net Finished Water 515,682,148 79.2 Loss in Distribution System 18,056,148 2.8 Total Sales 497,626,000 76.4 2,203,975 4.428979 4,920 213 City of Hutchinson, Minnesota Cost Per Thousand Gallons of Finished Water Last Ten Fiscal Years Table 24 Production Administrative Depreciation Total Operating Cost Per Cost Per Cost Per Cost Per Expenses Per Finished Water M Gallons Year M Gallons M Gallons M Gallons M Gallons Billed Billed 2025 $ 1,182,950 $ 224,922 $1,167,196 $ 2,575,068 483,994,600 2.4441 0.4647 2.4116 5.3204 423,376,000 $ 6.0822 2024 1,341,552 237,040 1,124,286 2,702,878 471,251,500 2.8468 0.5030 2.3857 5.7355 408,700,875 6.6133 2023 1,202,917 149,245 1,080,179 2,432,341 523,832,100 2.2964 0.2849 2.0621 4.6434 494,734,000 4.9165 2022 1,088,102 139,935 1,112,756 2,340,793 539,623,000 2.0164 0.2593 2.0621 4.3378 504,180,000 4.6428 2021 1,069,273 138,255 1,139,426 2,346,954 550,660,500 1.9418 0.2511 2.0692 4.2621 503,794,000 4.6586 2020 1,071,377 152,167 1,115,771 2,339,315 545,747,000 1.9631 0.2788 2.0445 4.2864 508,993,000 4.5960 2019 1,101,304 128,421 1,078,696 2,308,421 495,579,500 2.2223 0.2591 2.1766 4.6580 451,201,000 5.1162 2018 928,774 126,327 1,109,795 2,164,896 492,291,200 1.8866 0.2566 2.2543 4.3975 461,292,000 4.6931 2017 980,529 115,417 1,218,822 2,314,768 527,400,100 1.8592 0.2188 2.3110 4.3890 482,770,000 4.7948 2016 859,423 124,715 1,227,284 2,211,422 515,682,148 1.6666 0.2418 2.3799 4.2883 497,626,000 4.4439 214 Year 2025 (1) 2024 2023 2022 2021 2020 2019 2018 2017 2016 City of Hutchinson, Minnesota Wastewater Inflow and Cost Per Thousand Gallons Treated Last Ten Fiscal Years Table 25 Daily Flow Total M Gallons Treatment/ Administrative Depreciation Gallons to Treatment Collection Cost Cost Per Cost Per Total Cost Per Minimum/ Facility Per M Gallons M Gallons M Gallons M Gallons Maximum 783,522 811,810 763,710 716,572 695,884 780,818 967,934 832,229 889,101 930,509 $ 1,790,976 $ 228,429 2.2858 0.2915 1,973,911 276,286 2.4315 0.3403 1,669,494 233,790 2.1860 0.3061 1,520,840 210,826 2.1224 0.2942 1,573,282 207,780 2.2608 0.2986 1,333,226 221,412 1.7075 0.2836 1,582,066 198,333 1.6345 0.2049 1,437,640 192,026 1.7275 0.2307 1,261,759 174,037 1.4191 0.1957 1,466,815 189,585 1.5764 0.2037 $ 1,336,034 $ 3,355,439 1.7052 4.2825 1,174,021 3,424,218 1.4462 4.2180 1,038,117 2,941,401 1.3593 3.8514 1,082,548 2,814,214 1.5107 3.9273 1,108,375 2,889,437 1.5928 4.1522 1,080,629 2,635,267 1.3840 3.3751 1,053,799 2,834,198 1.0887 2.9281 1,336,076 2,965,742 1.6054 3.5636 1,621,990 3,057,786 1.8243 3.4391 1,621,495 3,277,895 1.7426 3.5227 1,548,000 6,028,000 1,573,000 6,693,000 1,267,000 7,534,000 1,172,000 4,037,000 1,338,000 3,046,000 1,443,000 5,788,000 1,729,000 5,815,000 1,652,000 3,772,000 1,756,000 6,193,000 1,500,000 7,755,000 (1) As part of the Wastewater Infrastructure fund (WIF) grant, the City processed zero gallons related to the grant during 2025. The restricted balance in the System Replacement fund at December 31, 2025 is $350. 215 THIS PAGE IS LEFT BLANK INTENTIONALLY 216 OTHER REQUIRED REPORTS CITY OF HUTCHINSON HUTCHINSON, MINNESOTA FOR THE YEAR ENDED DECEMBER 31, 2025 217 II11MWRIaMENOaI *1Wil01:l101911019us] ►FilIWA 218 A 1r%A0 Me INDEPENDENT AUDITOR'S REPORT ON MINNESOTA LEGAL COMPLIANCE Honorable Mayor and City Council City of Hutchinson, Minnesota AbdoSolutionsxom We have audited, in accordance with auditing standards generally accepted in the United States of America, the financial statements of the governmental activities, the business -type activities, the discretely presented component units, each major fund and the aggregate remaining fund information, of the City of Hutchinson, Minnesota (the City) as of and for the year ended December 31, 2025, and the notes to the financial statements which collectively comprise the City's basic financial statements, and have issued our report thereon dated June 18, 2026. In connection with our audit, nothing came to our attention that caused us to believe that the City of Hutchinson failed to comply with the provisions of the contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing sections of the Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to Minn. Stat. §6.65, except as described in the Schedule of Findings and Responses as items 2025-001. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the City's noncompliance with the above referenced provisions, insofar as they relate to accounting matters. The City's response to the finding in our audit is described in the accompanying Schedule of Findings and Responses. The City's responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them. This report is intended solely for the information and use of those charged with governance and management of the City and the State Auditor and is not intended to be, and should not be, used by anyone other than these specified parties. lir Abdo Mankato, Minnesota June 18, 2026 Lighting the path forward 219 Aw�.ro4V INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and City Council City of Hutchinson, Minnesota AbdoSolutionsxom We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business -type activities, the discretely presented component units, each major fund and the aggregate remaining fund information of the City of Hutchinson, Minnesota (the City), as of and for the year ended December 31, 2025, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated June 18, 202b. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed one instance of noncompliance or other matters that is required to be reported under Government Auditing Standards. Lighting the path forward 220 Response to Findings Government Auditing Standards requires the auditor to perform limited procedures on the City's response to the findings identified in our audit and described in the accompanying schedule of findings and responses. The City's response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. KVAV- My, ZAMA Abdo Mankato, Minnesota June 18, 2026 AbdoSolutionsxom 221 C THIS PAGE IS LEFT BLANK INTENTIONALLY 222 City of Hutchinson, Minnesota Schedule of Findings and Responses For the Year Ended December 31, 2025 Finding Description 2025-001 Responsible Contractor Condition: Auditing for legal compliance requires a review of the City's contracting and bidding. Our study indicated an instance of noncompliance that we believe is required to be remedied. Criteria: Minnesota statute §16C.285 Subd. 3 requires contractors doing public work to verify the minimum criteria for a "responsible contractor" as set forth in the statute if the contract exceeds $50,000. Cause: We noted one contract where the City was not able to provide evidence that appropriate documentation was received. Effect: As a result, the City is not in compliance with the statute. Recommendation: We recommend the City review the statute and obtain such documentation on future contracts. Management Response: Management is aware of the condition and has taken the proper steps to ensure compliance in the future. 223 V HUTCHINSON CITY COUNCIL HUTCHINSON Request for Board Action A UTY DN PLJAPOSE. Authorizing Resolution 16051 for the Sale of General Obligation Improvement Agenda Item: Bonds, Series 2026A and Public Utility Revenue Bonds, Series 2026B Department: Finance LICENSE SECTION Meeting Date: 7/14/2026 Application Complete N/A Contact: Andy Reid Agenda Item Type: Presenter: Nick Anhut Reviewed by Staff ❑� New Business Time Requested (Minutes): 5 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: Nick Anhut from Ehlers will present the 2026 pre -sale report for two bond issuances. Series 2026A with an estimated par value of $5,705,000 will finance the City's roadway improvement projects, fire truck and wastewater facility improvements. 2026B with an estimated par value of $4,295,000 will finance improvements to HUC's electrical system. The first step in this process is for council to authorize a resolution to move forward with providing a bond issuance to finance the improvement costs. Once the resolution is approved, Ehlers, who is the City's financial advisor, will initiate the process. Ehlers will compile documents with city staff assistance, coordinate a bond rating call with city staff and solicit competitive bids on behalf of the City. The proposed Debt Issuance Schedule is provided within the Pre -Sale Report which accompanies this board action form. The bond sale will be awarded to the winning bidder at the August 11 council meeting and the bond proceeds are expected to be received in early September. Debt payments related to the various projects will be funded as follows: 1. Roadway improvements - City's debt tax levy and property owner special assessments 2. Fire Ladder Truck - City's debt tax levy 3. Wastewater facility improvements - solely by Wastewater fund operating revenues 4. HUC Electrical improvements - solely by HUC electric division operating revenues BOARD ACTION REQUESTED: Approve Resolution 16051 Fiscal Impact: Funding Source: FTE Impact: Budget Change: No Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A CERTIFICATION OF MINUTES RELATING TO GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2026A AND PUBLIC UTILITY REVENUE BONDS, SERIES 2026B Issuer: City of Hutchinson, Minnesota Governing Body: City Council Kind, date, time and place of meeting: A regular meeting, held on July 14, 2026, at 5:30 o'clock p.m., in the Council Chambers at the Hutchinson City Center. Councilmembers present: Councilmembers absent: Documents Attached: Minutes of said meeting (pages): RESOLUTION NO. _16051 RESOLUTION PROVIDING FOR THE SALE OF GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2026A AND PUBLIC UTILITY REVENUE BONDS, SERIES 2026B I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the obligations referred to in the title of this certificate, certify that the documents attached hereto, as described above, have been carefully compared with the original records of said corporation in my legal custody, from which they have been transcribed; that said documents are a correct and complete transcript of the minutes of a meeting of the governing body of said corporation, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at said meeting, so far as they relate to said obligations; and that said meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above, pursuant to call and notice of such meeting given as required by law. WITNESS my hand officially as such recording officer this _14th_ day of July, 2026. (SEAL) Matt Jaunich City Administrator 4920-8844-8697\2 Councilmember introduced the following resolution (the "Resolution") and moved its adoption, which motion was seconded by Councilmember RESOLUTION NO. _16051_ RESOLUTION PROVIDING FOR THE SALE OF GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2026A AND PUBLIC UTILITY REVENUE BONDS, SERIES 2026B A. WHEREAS, the City Council (the "Council") of the City has determined that it is necessary and expedient to issue the City's General Obligation Improvement Bonds, Series 2026A (the "Series 2026A Bonds"), in the approximate principal amount of $5,705,000, pursuant to Minnesota Statutes, Chapters 429, 444, and 475, and Section 412.301, to finance (i) the City's 2026 street improvement projects, (ii) improvements to the municipal wastewater system, (iii) the purchase of certain capital equipment, including a new ladder truck, and (iv) costs of issuance of the Series 2026A Bonds; and B. WHEREAS, the City of Hutchinson, Minnesota (the "City") owns and operates through the Hutchinson Utilities Commission (the "Commission"), as a revenue -producing convenience, a system for the generation and distribution of electricity and natural gas for the use of the City and its inhabitants and other customers (the "Utility"); and C. WHEREAS, the Council has determined that it is necessary and expedient to issue the City's Public Utility Revenue Bonds, Series 2026B (the "Series 2026B Bonds," and together with the Series 2026A Bonds, the "Bonds"), in the approximate principal amount of $4,295,000, pursuant to Minnesota Statutes, Chapter 453, to (i) finance various electricity system improvements to the Utility and (ii) pay costs of issuance of the Series 2026B Bonds; and D. WHEREAS, the City has retained Ehlers & Associates, Inc., in Minneapolis, Minnesota ("Ehlers"), as its independent municipal advisor for the Bonds in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9). NOW, THEREFORE, BE IT RESOLVED by the Council of the City, as follows: 1. Authorization, Findings. The City Council hereby authorizes Ehlers to assist the City in the sale of the Bonds. 2. Meeting, Proposal Opening. The City Council shall meet at 5:30 p.m. on August 11, 2026, or on such other date and time as the Council deems appropriate, for the purpose of considering proposals for and awarding the sale of the Bonds. 3. Official Statement. In connection with said sale, the officers or employees of the City are hereby authorized to cooperate with Ehlers and participate in the preparation of an official statement (or official statements) for the Bonds and to execute and deliver it on behalf of the City upon its completion. 4. Staff Authorizations. City staff are authorized and directed to take all other actions necessary to carry out the intent of this resolution. 4920-8844-8697\2 Attest: Mayor City Administrator The motion for the adoption of the foregoing resolution was duly seconded by Councilmember and upon vote being taken thereon, the following Councilmembers voted in favor thereof: and the following Councilmembers voted against the same: whereupon said resolution was declared duly passed and adopted, and was signed by the Mayor, which was attested by the City Administrator. City Administrator 4920-8844-8697\2 2026 Bonded Improvements Let Project 1 Edmonton Ave SE (Montreal to Jefferson) 2 Pavement Management Plan Bonding Contingency G.O. Special Assessment Improvement Bonds COSTS Construction Other 15% 6% Bid Costs Fees Eng Fees Adm Fees TOTAL 742,640 111,396 44,558 898,594 2,129,534 319,430 127,772 2,576,736 100,000 100,000 2,972,174 430,826 172,330 3,575,330 FUNDING SOURCES Storm Other City MSA Water Sewer Water Funding Assmts Bonding TOTAL 885,581 - - - 13,013 - 898,594 254,918 60,405 44,366 645,108 1,571,939 2,576,736 100,000 100,000 885,581 254,918 60,405 44,366 658,121 1,671,939 3,575,330 Fire Ladder Truck 2,094,304 - - - 2,094,304 200,000 200,000 Eq.,p Fund 544,304 850,000 2,094,304 C Pd.l 300,000 G.O. Equipment Bonds 2,094,304 - - - 2,094,304 - 200,000 200,000 - 844,304 - 2,094,304 Wastewater Solids Improvement Project 5,314,592 473,401 5,787,993 3,387,993 2,400,000 5,787,993 G.O. Wastewater Bonds 473,401 5,787,993 3,387,993 2,400,000 5,787,993 TOTAL BONDED DEBT 5,580,060 + Issuance Costs Estimated Timeline: 429 Bonding Summary: 7/14/2026 City Council - Providing for the sale of Bonds Total Costs to Bond $2,330,060 Late July S&P bond rating call Prepaid Special Assessments -$48,552 8/11/2026 City Council- Authorization to Sell Bonds Net Costs to Bond $2,281,508 Early Sept Closing -bond proceeds received Bond Issuance Costs $69,914 Total Bonding Need (rounded up) $2,360,000 Max Bonding per 429, 20% Assessment Rule $3,290,605 429 Bonding Surplus / -Shortfall $930,605 Current Roadway Projects Only Debt Plan City Costs to Finance $1,671,939 Bond Issuance Costs 69,914 Total City Debt $1,741,853d Annual Target Debt Level 1,900,000 Above (Below) Debt Target ($158,147) Cost Chassis and Truck build -out Funding Assumptions Equipment Replacement Fund Capital Projects Fund Water Fund Sewer Fund G.O. Equipment Bonds Total Funding Funding Percentages: Fire Ladder Truck 2025 $600,641 2026 $668,822 2027 $824,841 Total $2,094,304 $500,641 $18,822 $24,841 $544,304 $100,000 $100,000 $100,000 $300,000 $0 $100,000 $100,000 $200,000 $0 $100,000 $100,000 $200, 000 $0 $350,000 $500,000 $850,000 $600,641 $668,822 $824,841 $2,094,304 City Reserves New Debt 59% 41% G.O. Bonds: Annual Avg Debt Levy Impact on Debt Service % Increase Median Home 15-year Debt $87,000 3.3% $14 20-year Debt $75,000 2.9% $12 recommended PROJECTED DEBT LEVY ti t My.1411111111111111111� LE r� 3M :Mpi AMR Rm HER ME ON r r r r r r r r r r r r• r Debt Levy Breakdown: Roadway Improvements New Police Center Fire Truck Total Debt Annual Change Levy%Change 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 $1,786,004 $1,959,084 $2,133,770 $2,324,905 $2,295,183 $2,329,799 $2,351,834 $2,386,535 $2,415,300 $2,468,184 $2,509,283 $2,523,538 $2,537,006 $2,626,374 $2,660,132 $824,788 $699,268 $613,818 $524,843 $574,318 $554,963 $550,513 $522,363 $496,863 $452,063 $423,763 $421,063 $423,263 $115,163 $112,163 $o $86,445 $86,578 $84,898 $93,192 $81,433 $80,830 $78,905 $81,953 $79,793 $77,573 $80,263 $77,598 $79,868 $81,788 $2,610,792 $2,744,797 $2,834,166 $2,934,646 $2,952,693 $2,966,195 $2,983,177 $2,987,803 $2,994,116 $3,000,040 $3,010,619 $3,024,864 $3,037,867 $3,121,405 $3,154,083 $63,413 $134,005 $89,369 $100,480 $18,047 $13,502 $16,982 $1,626 $6,313 $5,924 $10,579 $14,245 $13,003 $93,538 $32,678 2.5% 5.1% 3.3% 3.5% 0.6% 0.5% 0.6% 0.2% 0.2% 0.2% 0.4% 0.5% 0.4% 2.7% 1.0% Potential New Debt: Cry Center Remodel $o $90,000 $145,000 $145,000 $145,000 $145,000 $145,000 $145,000 $145,000 $145,000 $145,000 $145,000 $145,000 $145,000 $145,000 Total Debt $2,61Q792 $2,834,797 $2,979,166 $3,079,646 $3,097,693 $3,111,195 $3,128,177 $3,132,803 $3,139,116 $3,145,040 $3,155,619 $3,169,864 $3,182,867 $3,266,405 $3,299,083 Annual Change $63,413 $224,005 $144,369 $100,480 $18,047 $13,502 $16,982 $4,626 $6,313 $5,924 $10,579 $14,245 $13,003 $83,538 $32,678 Levy %Change 2.5% 8.6% 5.1% 3.4% 0.6% 0.4% 0.5% 0.1% 0.2% 0.2% 0.3% 0.5% 0.4% 2.6% 1.0% WWTP Biosolids Project USES OF FUNDS: Nero Engineering Nero Engineering Nero Engineering Rice Lake Construction Total Uses of Funds SOURCES OF FUNDS: Wastewater reserve funds Preliminary Design Final Design Construction Services Wastewater G.O. Bonds (10-year debt) Total Sources of Funds $37,814 $161,385 $274,202 $5,314,592 $5,787,993 $2,987,993 55% $2,400,000 45% $5,387,993 July 14, 2026 PRE -SALE REPORT FOR City of Hutchinson, Minnesota $5,705,000 General Obligation Improvement Bonds, Series 2026A rZ'%4'EHLERS ft PUBLIC FINANCE ADVISORS Prepared by: Ehlers 3001 Broadway Street, Suite 320 Minneapolis, MN 55413 Advisors: Nick Anhut, Senior Municipal Advisor Bruce Kimmel, Senior Municipal Advisor BUILDING COMMUNITIES. IT'S WHAT WE DO. BUILDING COMMUNITIES. IT'S WHAT WE DO. ® info@ehlers-inc.com % 1 (800) 552-1171 (a www.ehiers-inc.com Proposed Issue: $5,705,000 General Obligation Improvement Bonds, Series 2026A (the "Bonds") Purposes: The proposed issue includes tax-exempt, fixed-rate financing for the City's acquisition of capital equipment, 2026 public improvement projects, and wastewater utility infrastructure. Inclusive of estimated financing costs, the Bonds will be allocated as follows: • $875,000 Equipment Portion to fund the acquisition of a fire ladder truck. Debt service will be paid from an ad valorem property tax levy collected from 2027 to 2042. • $2,355,000 Improvements Portion to fund the and Edmonton Avenue SE and Pavement Management Plan. Debt service for this portion of the Bonds will be paid by a combination of 10-year special assessments levied against properties benefiting from the improvements and an ad valorem property tax levy collected from 2027 to 2042. • $2,475,000 Wastewater Revenue Portion to fund the Wastewater Solids Improvement Project. Debt service for this portion will be paid from pledged net revenues of the City's wastewater utility system over a ten year term. Authority: The Bonds will be general obligations of the City for which its full faith, credit and taxing powers are pledged, and are being issued pursuant to Minnesota Statutes, Chapters 412 (Equipment Portion), 429 (Improvements Portion) and 444 (Wastewater Revenue Portion). Under Chapter 412: as the amount of equipment certificates to be issued is below 0.25% of the City's current Estimated Market Value (EMV) of taxable property, the City has legal authority without requiring a referendum. The City's Pay 2026 EMV is $1,581,405,200, setting the threshold at $3.9 million. The Equipment Portion of the Bonds is under the amount proscribed in statute. The Equipment Portion of the Bonds will also count against the City's statutory Net Debt Limit set at 3% of the current EMV, or $47.4 million. The City currently has $11,765,000 of outstanding debt subject to the limit. Including this issue of Bonds, the City will have over $34.8 million in remaining capacity within the statutory Net Debt Limit for future needs. Under Chapter 429, because not less than 20% of the costs of the Improvement Projects are being assessed, the Improvement portion of the Bonds can be a general obligation without a referendum and will not count against the City's debt limit. Under Chapter 444, cities can authorize debt without limitation for utility system improvements as long as debt service is expected to be paid from utility system revenues. Presale Report July 14, 2026 City of Hutchinson, Minnesota Page 1 Term/Call Feature: The Bonds are being issued for a term of 15 years, five months in total. Principal on the Bonds will be due on February 1 in the years 2028 through 2042. Interest will be due every six months beginning August 1, 2027. The Bonds will be offered with a call option allowing prepayment at the discretion of the City without penalty starting February 1, 2035 or any date thereafter. Bank Qualification: Because the City, inclusive of the 2026A and 2026B Bonds, is expecting to issue no more than $10,000,000 in tax exempt obligations during the calendar year, the City will be able to designate both series of bonds as "bank qualified" obligations. Bank qualified status can broaden the market for the Bonds which can result in more favorable interest rates. Credit Rating: A credit rating provides an independent opinion of risk and can help differentiate the Bonds among other offerings in the marketplace. The City's most recent bond issues were rated by S&P Global Ratings. The current rating on those bonds is "AA-." To enhance marketability of the Bonds, we recommend the City request a new evaluation to update and apply the credit rating to the Bonds. The underwriter on the Bonds may elect to purchase bond insurance. In that instance, the credit rating for the issue may be higher in the event the bond rating of the insurer is higher than that of the City. Method of Sale/Placement: We are recommending the Bonds be issued as municipal securities and offered through a competitive underwriting process. The City will solicit competitive bids, which we will compile on its behalf, for the purchase of the Bonds from underwriters and banks. An allowance for discount bidding will be included in the terms of sale. The discount is treated as an interest item and provides the underwriter with all or a portion of their compensation in the transaction. If the Bonds are purchased at a price greater than the minimum bid amount (maximum discount), unused allowance may be used to reduce the final borrowing amount. Premium Pricing: In some cases, investors in municipal bonds prefer "premium" pricing structures. A premium is achieved when the purchaser pays an amount in excess of the face value of a maturity in return for a higher coupon (the interest rate paid by the issuer) than the prevailing market yield. The sum of the amounts paid in excess of face value is considered "reoffering premium." The amount of the premium varies, but it is not uncommon to see premiums for new issues in the range of 2.00% to 10.00% of the face amount of the issue. This means that an issuer with a $5,000,000 offering may receive bids that result in proceeds of $5,100,000 to $5,500,000. For this issue of Bonds we have been directed to use any net premium to reduce the size of the issue. The resulting adjustments may slightly change the final true interest cost calculation of the issue, either up or down. The amount of premium can be restricted in the bid specifications. Restrictions on premium may result in fewer bids, but may also eliminate large Presale Report July 14, 2026 City of Hutchinson, Minnesota Page 2 adjustments on the day of sale and unintended impacts with respect to debt service payment. Ehlers will identify appropriate premium restrictions for the Bonds intended to achieve the City's objectives for this financing. Review of Existing Debt: We have reviewed all outstanding indebtedness for the City and find that there are no viable refunding opportunities to consider. We will continue to monitor the market and call dates for the City's outstanding debt to alert you to any future refunding opportunities as they arise. Continuing Disclosure: The City will be agreeing to provide certain updated Annual Financial Information and its Audited Financial Statement annually, as well as providing notices of the occurrence of certain reportable events to the Municipal Securities Rulemaking Board (the "MSRB"), as required by rules of the Securities and Exchange Commission (SEC). The City is already obligated to provide such reports for its existing bonds and engages Ehlers as its disseminating agent to prepare and file the reports. Arbitrage Monitoring: The City must ensure compliance with certain sections of the Internal Revenue Code and Treasury Regulations ("Arbitrage Rules") throughout the life of the issue to maintain the tax- exempt status of the Bonds. These Arbitrage Rules apply to amounts held in construction and debt service accounts, along with related investment income on each fund/account. IRS audits will verify compliance with rebate, yield restriction and records retention requirements within the Arbitrage Rules. The City's specific arbitrage responsibilities will be detailed in the Signature, No -Litigation, Arbitrage Certificate and Purchase Price Receipt (the "Tax Compliance Document") prepared by your Bond Attorney and provided at closing. The Bonds may qualify for one or more exception(s) to the Arbitrage Rules by meeting various spend down, debt service fund, or investments yield restrictions. The City is currently receiving arbitrage services from Ehlers. An Ehlers arbitrage expert will contact the City within 30 days after the sale date to review the City's specific responsibilities for the Bonds. Investment of Bond Proceeds: Subject to the Arbitrage Rules and Tax Compliance Document mentioned above, the City may maximize the fund opportunity for its projects by temporarily investing the proceeds until the funds are needed to pay for construction expenses. As a Registered Investment Advisor, Ehlers will be standing by and available to assist the City in developing a strategy to invest your Bond proceeds within the objectives of the City's financial policies and practices. Risk Factors: Special Assessments and Utility Revenues: The proposed Bonds' sizing and repayment structure anticipates special assessment and utility revenues providing for portions of the debt service. Although not anticipated, if the City's future special assessment or utility Presale Report July 14, 2026 City of Hutchinson, Minnesota Page 3 collections fall short of expectations, the City may need to use other general revenues or adjust the debt service levy to make up for the shortfall amount. The Improvement Portion of the Bonds assumes the city will levy $658,121 of special assessments for collection starting in 2027, of which $48,552 have been received as prepayments. If the City reduces the assessment amount or receives a significantly increased amount of pre -paid assessments, it may need to adjust the pledged debt service levy to make up for changes to the expected assessment revenues. Other Service Providers: This debt issuance will require the engagement of other public finance service providers. This section identifies those other service providers, so Ehlers can coordinate their engagement on your behalf. Where you have previously used a particular firm to provide a service, we have assumed that you will continue that relationship. Fees charged by these service providers will be paid from proceeds of the obligation, unless you notify us that you wish to pay them from other sources. Our pre -sale bond sizing includes a good faith estimate of these fees, but the final fees may vary. Bond Counsel: Dorsey & Whitney LLP Paying Agent: Bond Trust Services Corporation Rating Agency: S&P Global Ratings (S&P) Basis for Recommendation: Based on the city's stated objectives; financial situation; risk tolerance; liquidity needs; experience with the issuance of Bonds; long-term financial capacity; as well as the tax status considerations, structure, timing and other similar matters related to the Bonds, we are recommending the issuance of Bonds as a suitable option. • The issuance is consistent with the City's practices for financing its large-scale capital projects and the anticipated repayment is consistent with long-term financial plans. • General Obligation pledge and tax -exemption can result in lower interest costs than most other financing options available to the City. • The expectation is this form of financing will meet the City's objectives for term and prepayment flexibility. • The method of sale process identified complies with City policy as well as best practices endorsed by the Government Finance Officers Association (GFOA). Summary: The decisions to be made by the City Council are as follows: • Accept or modify the finance assumptions described in this report, and • Consider the resolution provided by the City's Bond Attorney to establish an August 11, 2026 competitive bond sale date. Presale Report July 14, 2026 City of Hutchinson, Minnesota Page 4 Pre -Sale Review by City Council: July 14, 2026 Due Diligence Call to Review Official Statement: Week of July 27, 2026 Conference with Rating Agency: Week of July 27, 2026 Distribute Official Statement: By July 31, 2026 City Council Meeting to Award Sale of the Bonds: August 11, 2026 Estimated Closing Date: September 3, 2026 Attachments Estimated Sources and Uses of Funds Estimated Debt Service Schedules Nick Anhut, Senior Municipal Advisor (651) 697-8507 Bruce Kimmel, Senior Municipal Advisor (651) 697-8572 Silvia Johnson, Lead Public Finance Analyst (651) 697-8580 Alicia Gage, Senior Financial Analyst (651) 697-8551 Presale Report July 14, 2026 City of Hutchinson, Minnesota Page 5 City of Hutchinson, Minnesota $5,705,000 General Obligation Bonds, Series 2026A Issue Summary Assumes Current Market BQ AA- Rates plus 50bps Estimated Sources And Uses Dated 09/03/2026 1 Delivered 09/03/2026 Improvement Equipment Wastewater Revenue Issue Summary Sources Of Funds Par Amount of Bonds $2,355,000.00 $875,000.00 $2,475,000.00 $5,705,000.00 Prepaid Assessments 48,552.00 48,552.00 Total Sources $2,403,552.00 $875,000.00 $2,475,000.00 $5,753,552.00 Uses Of Funds Total Underwriter's Discount (1.200%) 28,260.00 10,500.00 29,700.00 68,460.00 Costs of Issuance 42,105.18 15,644.16 44,250.66 102,000.00 Deposit to Project Construction Fund 2,330,060.00 850,000.00 2,400,000.00 5,580,060.00 Rounding Amount 3,126.82 (1,144.16) 1,049.34 3,032.00 Total Uses $2,403,552.00 $875,000.00 $2,475,000.00 $5,753,552.00 2026A GO Bonds - PreSale I Issue Summary 1 7/ 8/2026 1 8:51 AM 15%� EHLERS Page 1 City of Hutchinson, Minnesota $5,705,000 General Obligation Bonds, Series 2026A Issue Summary Assumes Current Market BQ AA- Rates plus 50bps Estimated Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 09/03/2026 - - 08/01/2027 - - 189,294.73 189,294.73 - 02/01/2028 335,000.00 3.100% 103,881.25 438,881.25 628,175.98 08/01/2028 - - 98,688.75 98,688.75 - 02/01/2029 435,000.00 3.200% 98,688.75 533,688.75 632,377.50 08/01/2029 - - 91,728.75 91,728.75 - 02/01/2030 440,000.00 3.250% 91,728.75 531,728.75 623,457.50 08/01/2030 - - 84,578.75 84,578.75 - 02/01/2031 450,000.00 3.350% 84,578.75 534,578.75 619,157.50 08/01/2031 77,041.25 77,041.25 02/01/2032 460,000.00 3.450% 77,041.25 537,041.25 614,082.50 08/01/2032 - - 69,106.25 69,106.25 - 02/01/2033 480,000.00 3.500% 69,106.25 549,106.25 618,212.50 08/01/2033 - - 60,706.25 60,706.25 - 02/01/2034 490,000.00 3.550% 60,706.25 550,706.25 611,412.50 08/01/2034 - - 52,008.75 52,008.75 - 02/01/2035 505,000.00 3.600% 52,008.75 557,008.75 609,017.50 08/01/2035 - - 42,918.75 42,918.75 - 02/01/2036 520,000.00 3.700% 42,918.75 562,918.75 605,837.50 08/01/2036 - - 33,298.75 33,298.75 02/01/2037 535,000.00 3.850% 33,298.75 568,298.75 601,597.50 08/01/2037 - - 23,000.00 23,000.00 - 02/01/2038 195,000.00 4.100% 23,000.00 218,000.00 241,000.00 08/01/2038 - - 19,002.50 19,002.50 - 02/01/2039 200,000.00 4.200% 19,002.50 219,002.50 238,005.00 08/01/2039 - - 14,802.50 14,802.50 - 02/01/2040 210,000.00 4.400% 14,802.50 224,802.50 239,605.00 08/01/2040 - - 10,182.50 10,182.50 - 02/01/2041 220,000.00 4.500% 10,182.50 230,182.50 240,365.00 08/01/2041 - - 5,232.50 5,232.50 - 02/01/2042 230,000.00 4.550% 5,232.50 235,232.50 240,465.00 Total $5,705,000.00 - $1,6579768.48 $7,362,768.48 - Yield Statistics Bond Year Dollars $43,155.39 Average Life 7.564 Years Average Coupon 3.8413939% Net Interest Cost (NIC) 4.0000299% True Interest Cost (TIC) 4.0017136% Bond Yield for Arbitrage Purposes 3.8113693% All Inclusive Cost (AIC) 4.2914896% IRS Form 8038 Net Interest Cost 3.8413939% Weighted Average Maturity 7.564 Years 2026A GO Bonds - PreSale I Issue Summary 1 7/ 8/2026 1 8:51 AM I EHLERS ADVISOFS City of Hutchinson, Minnesota $2,355,000 General Obligation Bonds, Series 2026A Improvements Portion Estimated Debt Service Schedule Date Principal Coupon Interest Total P+I Net New D/S Fiscal Total 09/03/2026 08/01/2027 - - 80,237.00 80,237.00 80,237.00 - 02/01/2028 120,000.00 3.100% 44,032.50 164,032.50 164,032.50 244,269.50 08/01/2028 - - 42,172.50 42,172.50 42,172.50 - 02/01/2029 160,000.00 3.200% 42,172.50 202,172.50 202,172.50 244,345.00 08/01/2029 - - 39,612.50 39,612.50 39,612.50 - 02/01/2030 160,000.00 3.250% 39,612.50 199,612.50 199,612.50 239,225.00 08/01/2030 - - 37,012.50 37,012.50 37,012.50 - 02/01/2031 165,000.00 3.350% 37,012.50 202,012.50 202,012.50 239,025.00 08/01/2031 34,248.75 34,248.75 34,248.75 02/01/2032 165,000.00 3.450% 34,248.75 199,248.75 199,248.75 233,497.50 08/01/2032 - - 31,402.50 31,402.50 31,402.50 - 02/01/2033 170,000.00 3.500% 31,402.50 201,402.50 201,402.50 232,805.00 08/01/2033 - - 28,427.50 28,427.50 28,427.50 - 02/01/2034 170,000.00 3.550% 28,427.50 198,427.50 198,427.50 226,855.00 08/01/2034 - - 25,410.00 25,410.00 25,410.00 - 02/01/2035 175,000.00 3.600% 25,410.00 200,410.00 200,410.00 225,820.00 08/01/2035 - - 22,260.00 22,260.00 22,260.00 - 02/01/2036 180,000.00 3.700% 22,260.00 202,260.00 202,260.00 224,520.00 08/01/2036 - - 18,930.00 18,930.00 18,930.00 - 02/01/2037 185,000.00 3.850% 18,930.00 203,930.00 203,930.00 222,860.00 08/01/2037 - - 15,368.75 15,368.75 15,368.75 - 02/01/2038 130,000.00 4.100% 15,368.75 145,368.75 145,368.75 160,737.50 08/01/2038 - - 12,703.75 12,703.75 12,703.75 - 02/01/2039 135,000.00 4.200% 12,703.75 147,703.75 147,703.75 160,407.50 08/01/2039 - - 9,868.75 9,868.75 9,868.75 - 02/01/2040 140,000.00 4.400% 9,868.75 149,868.75 149,868.75 159,737.50 08/01/2040 - - 6,788.75 6,788.75 6,788.75 - 02/01/2041 145,000.00 4.500% 6,788.75 151,788.75 151,788.75 158,577.50 08/01/2041 - - 3,526.25 3,526.25 3,526.25 - 02/01/2042 155,000.00 4.550% 3,526.25 158,526.25 158,526.25 162,052.50 Total $2,355,000.00 - $7799734.50 $391349734.50 $391349734.50 Yield Statistics Bond Year Dollars $19,678.17 Average Life 8.356 Years Average Coupon 3.9624347% Net Interest Cost (NIC) 4.1060456% True Interest Cost (TIC) 4.1052251% All Inclusive Cost (AIC) 4.3732007% Bond Yield for Arbitrage Purposes 3.8113693% IRS Form 8038 Net Interest Cost 3.9624347% Weighted Average Maturity 8.356 Years Dated 9/03/2026 First Available Call Date 2026A GO Bonds - PreSale I Improvements 1 7/ 8/2026 1 8:51 AM Ig"EHLERS City of Hutchinson, Minnesota $609,569 Remaining Assessments TIC plus 1.00% - Equal Principal Assessments Revenue Date Principal Coupon Interest Total P+I 12/31/2027 60,956.90 5.000% 30,478.45 91,435.35 12/31/2028 60,956.90 5.000% 27,430.60 88,387.50 12/31/2029 60,956.90 5.000% 24,382.76 85,339.66 12/31/2030 60,956.90 5.000% 21,334.92 82,291.82 12/31/2031 60,956.90 5.000% 18,287.08 79,243.98 12/31/2032 60,956.90 5.000% 15,239.22 76,196.12 12/31/2033 60,956.90 5.000% 12,191.38 73,148.28 12/31/2034 60,956.90 5.000% 9,143.54 70,100.44 12/31/2035 60,956.90 5.000% 6,095.70 67,052.60 12/31/2036 60,956.90 5.000% 3,047.84 64,004.74 Total $609,569.00 $167,631.49 $7779200.49 Significant Dates Filing Date First Payment Date 1/01/2027 12/31/2027 Series 2026A GO Bonds - A I SINGLE PURPOSE 1 6/30/2026 1 8:13 AM ►EHLERS �� —" AVV150H5 City of Hutchinson, Minnesota $2,355,000 General Obligation Bonds, Series 2026A Improvements Portion Tax Levy Calculation Tax Tax Bond Levy Collect Pay Year Year Year Principal Coupon Interest Total P+I Net New D/S 105% of Total Assessments Net Levy 2025 2026 2027 - - - - - - - 2026 2027 2028 120,000.00 3.100% 124,269.50 244,269.50 244,269.50 256,482.98 91,435.35 165,047.63 2027 2028 2029 160,000.00 3.200% 84,345.00 244,345.00 244,345.00 256,562.25 88,387.50 168,174.75 2028 2029 2030 160,000.00 3.250% 79,225.00 239,225.00 239,225.00 251,186.25 85,339.66 165,846.59 2029 2030 2031 165 000.00 3.350% 74 025.00 239 025.00 239 025.00 250 976.25 82 291.82 168 684.43 2030 2031 2032 165,000.00 3.450% 68,497.50 233,497.50 233,497.50 245,172.38 79,243.98 165,928.40 2031 2032 2033 170,000.00 3.500% 62,805.00 232,805.00 232,805.00 244,445.25 76,196.12 168,249.13 2032 2033 2034 170,000.00 3.550% 56,855.00 226,855.00 226,855.00 238,197.75 73,148.28 165,049.47 2033 2034 2035 175,000.00 3.600% 50,820.00 225,820.00 225,820.00 237,111.00 70,100.44 167,010.56 2034 2035 2036 180 000.00 3.700% 44 520.00 224 520.00 224 520.00 235 746.00 67 052.60 168 693.40 2035 2036 2037 185,000.00 3.850% 37,860.00 222,860.00 222,860.00 234,003.00 64,004.74 169,998.26 2036 2037 2038 130,000.00 4.100% 30,737.50 160,737.50 160,737.50 168,774.38 - 168,774.38 2037 2038 2039 135,000.00 4.200% 25,407.50 160,407.50 160,407.50 168,427.88 168,427.88 2038 2039 2040 140,000.00 4.400% 19,737.50 159,737.50 159,737.50 167,724.38 167,724.38 2039 2040 2041 145 000.00 4.500% 13 577.50 158 577.50 158 577.50 166 506.38 166 506.38 2040 2041 2042 155,000.00 4.550% 7,052.50 162,052.50 162,052.50 170,155.13 170,155.13 Total - - $2,355,000.00 - $779,734.50 $3,134,734.50 $3,134,734.50 $3,291,471.23 $777,200.49 $2,514,270.74 2026A GO Bonds - PreSale I Improvements 1 7/ 8/2026 1 8:51 AM EHLERS City of Hutchinson, Minnesota $875,000 General Obligation Bonds, Series 2026A Equipment Portion Estimated Debt Service Schedule Date Principal Coupon Interest Total P+I Net New D/S Fiscal Total 09/03/2026 - - - 08/01/2027 - - 30,558.67 30,558.67 30,558.67 - 02/01/2028 35,000.00 3.100% 16,770.00 51,770.00 51,770.00 82,328.67 08/01/2028 - - 16,227.50 16,227.50 16,227.50 - 02/01/2029 50,000.00 3.200% 16,227.50 66,227.50 66,227.50 82,455.00 08/01/2029 - - 15,427.50 15,427.50 15,427.50 - 02/01/2030 50,000.00 3.250% 15,427.50 65,427.50 65,427.50 80,855.00 08/01/2030 - - 14,615.00 14,615.00 14,615.00 - 02/01/2031 50,000.00 3.350% 14,615.00 64,615.00 64,615.00 79,230.00 08/01/2031 13,777.50 13,777.50 13,777.50 02/01/2032 50,000.00 3.450% 13,777.50 63,777.50 63,777.50 77,555.00 08/01/2032 - - 12,915.00 12,915.00 12,915.00 - 02/01/2033 55,000.00 3.500% 12,915.00 67,915.00 67,915.00 80,830.00 08/01/2033 - - 11,952.50 11,952.50 11,952.50 - 02/01/2034 55,000.00 3.550% 11,952.50 66,952.50 66,952.50 78,905.00 08/01/2034 - - 10,976.25 10,976.25 10,976.25 - 02/01/2035 60,000.00 3.600% 10,976.25 70,976.25 70,976.25 81,952.50 08/01/2035 - - 9,896.25 9,896.25 9,896.25 - 02/01/2036 60,000.00 3.700% 9,896.25 69,896.25 69,896.25 79,792.50 08/01/2036 - - 8,786.25 8,786.25 8,786.25 - 02/01/2037 60,000.00 3.850% 8,786.25 68,786.25 68,786.25 77,572.50 08/01/2037 - - 7,631.25 7,631.25 7,631.25 - 02/01/2038 65,000.00 4.100% 7,631.25 72,631.25 72,631.25 80,262.50 08/01/2038 - - 6,298.75 6,298.75 6,298.75 - 02/01/2039 65,000.00 4.200% 6,298.75 71,298.75 71,298.75 77,597.50 08/01/2039 - - 4,933.75 4,933.75 4,933.75 - 02/01/2040 70,000.00 4.400% 4,933.75 74,933.75 74,933.75 79,867.50 08/01/2040 - - 3,393.75 3,393.75 3,393.75 - 02/01/2041 75,000.00 4.500% 3,393.75 78,393.75 78,393.75 81,787.50 08/01/2041 - - 1,706.25 1,706.25 1,706.25 - 02/01/2042 75,000.00 4.550% 1,706.25 76,706.25 76,706.25 78,412.50 Total $875,000.00 $3249403.67 $191999403.67 $191999403.67 Yield Statistics Bond Year Dollars $8,009.72 Average Life 9.154 Years Average Coupon 4.0501238% Net Interest Cost (NIC) 4.1812145% True Interest Cost (TIC) 4.1813275% All Inclusive Cost (AIC) 4.4301477% Bond Yield for Arbitrage Purposes 3.8113693% IRS Form 8038 Net Interest Cost 4.0501238% Weighted Average Maturity 9.154 Years Dated 9/03/2026 First Available Call Date 2026A GO Bonds - PreSale I Equipment 1 7/ 8/2026 1 8:51 AM EHLERS IN PUBLIC FINANCE ADY1SOR5 City of Hutchinson, Minnesota $875,000 General Obligation Bonds, Series 2026A Equipment Portion Tax Levy Calculation Tax Tax Bond Levy Collect Pay Year Year Year Principal Coupon Interest Total P+I Net New D/S 105% of Total Net Levy 2025 2026 2027 2026 2027 2028 35,000.00 3.100% 47,328.67 82,328.67 82,328.67 86,445.10 86,445.10 2027 2028 2029 50,000.00 3.200% 32,455.00 82,455.00 82,455.00 86,577.75 86,577.75 2028 2029 2030 50,000.00 3.250% 30,855.00 80,855.00 80,855.00 84,897.75 84,897.75 2029 2030 2031 50,000.00 3.350% 29,230.00 79,230.00 79,230.00 83,191.50 83,191.50 2030 2031 2032 50,000.00 3.450% 27,555.00 77,555.00 77,555.00 81,432.75 81,432.75 2031 2032 2033 55,000.00 3.500% 25,830.00 80,830.00 80,830.00 84,871.50 84,871.50 2032 2033 2034 55,000.00 3.550% 23,905.00 78,905.00 78,905.00 82,850.25 82,850.25 2033 2034 2035 60,000.00 3.600% 21,952.50 81,952.50 81,952.50 86,050.13 86,050.13 2034 2035 2036 60,000.00 3.700% 19,792.50 79,792.50 79,792.50 83,782.13 83,782.13 2035 2036 2037 60,000.00 3.850% 17,572.50 77,572.50 77,572.50 81,451.13 81,451.13 2036 2037 2038 65,000.00 4.100% 15,262.50 80,262.50 80,262.50 84,275.63 84,275.63 2037 2038 2039 65,000.00 4.200% 12,597.50 77,597.50 77,597.50 81,477.38 81,477.38 2038 2039 2040 70,000.00 4.400% 9,867.50 79,867.50 79,867.50 83,860.88 83,860.88 2039 2040 2041 75,000.00 4.500% 6,787.50 81,787.50 81,787.50 85,876.88 85,876.88 2040 2041 2042 75,000.00 4.550% 3,412.50 78,412.50 78,412.50 82,333.13 82,333.13 Total - - $875,000.00 - $3249403.67 $1,199,403.67 $1,199,403.67 $1,259,373.85 $1,259,373.85 2026A GO Bonds - PreSale I Equipment 1 7/ 8/2026 1 8:51 AM h' FREERS City of Hutchinson, Minnesota $2,475,000 General Obligation Bonds, Series 2026A Wastewater Revenue Portion Estimated Debt Service Schedule Date Principal Coupon Interest Total P+I Net New D/S Fiscal Total 09/03/2026 - - - 08/01/2027 - - 78,499.06 78,499.06 78,499.06 - 02/01/2028 180,000.00 3.100% 43,078.75 223,078.75 223,078.75 301,577.81 08/01/2028 - - 40,288.75 40,288.75 40,288.75 - 02/01/2029 225,000.00 3.200% 40,288.75 265,288.75 265,288.75 305,577.50 08/01/2029 - - 36,688.75 36,688.75 36,688.75 - 02/01/2030 230,000.00 3.250% 36,688.75 266,688.75 266,688.75 303,377.50 08/01/2030 - - 32,951.25 32,951.25 32,951.25 - 02/01/2031 235,000.00 3.350% 32,951.25 267,951.25 267,951.25 300,902.50 08/01/2031 29,015.00 29,015.00 29,015.00 02/01/2032 245,000.00 3.450% 29,015.00 274,015.00 274,015.00 303,030.00 08/01/2032 - - 24,788.75 24,788.75 24,788.75 - 02/01/2033 255,000.00 3.500% 24,788.75 279,788.75 279,788.75 304,577.50 08/01/2033 - - 20,326.25 20,326.25 20,326.25 - 02/01/2034 265,000.00 3.550% 20,326.25 285,326.25 285,326.25 305,652.50 08/01/2034 - - 15,622.50 15,622.50 15,622.50 - 02/01/2035 270,000.00 3.600% 15,622.50 285,622.50 285,622.50 301,245.00 08/01/2035 - - 10,762.50 10,762.50 10,762.50 - 02/01/2036 280,000.00 3.700% 10,762.50 290,762.50 290,762.50 301,525.00 08/01/2036 - - 5,582.50 5,582.50 5,582.50 02/01/2037 290,000.00 3.850% 5,582.50 295,582.50 295,582.50 301,165.00 Total $2,475,000.00 - $553,630.31 $3,028,630.31 $39028,630.31 - Yield Statistics Bond Year Dollars $15,467.50 Average Life 6.249 Years Average Coupon 3.5793135% Net Interest Cost (NIC) 3.7713290% True Interest Cost (TIC) 3.7887485% All Inclusive Cost (AIC) 4.1255974% Bond Yield for Arbitrage Purposes 3.8113693% IRS Form 8038 Net Interest Cost 3.5793135% Weighted Average Maturity 6.249 Years Dated 9/03/2026 First Available Call Date 2026A GO Bonds - PreSale I Wastewater Revenue 1 7/ 8/2026 1 8:51 AM 9 �EHLERS I AVv.So Rs City of Hutchinson, Minnesota $2,475,000 General Obligation Bonds, Series 2026A Wastewater Revenue Portion Tax Levy Calculation Tax Tax Bond Levy Collect Pay Year Year Year Principal Coupon Interest Total P+I Net New D/S 105% Revenue Net Levy 2025 2026 2027 2026 2027 2028 180,000.00 3.100% 121,577.81 301,577.81 301,577.81 316,656.70 2027 2028 2029 225,000.00 3.200% 80,577.50 305,577.50 305,577.50 320,856.38 2028 2029 2030 230,000.00 3.250% 73,377.50 303,377.50 303,377.50 318,546.38 2029 2030 2031 235,000.00 3.350% 65,902.50 300,902.50 300,902.50 315,947.63 2030 2031 2032 245,000.00 3.450% 58,030.00 303,030.00 303,030.00 318,181.50 2031 2032 2033 255,000.00 3.500% 49,577.50 304,577.50 304,577.50 319,806.38 2032 2033 2034 265,000.00 3.550% 40,652.50 305,652.50 305,652.50 320,935.13 2033 2034 2035 270,000.00 3.600% 31,245.00 301,245.00 301,245.00 316,307.25 2034 2035 2036 280,000.00 3.700% 21,525.00 301,525.00 301,525.00 316,601.25 2035 2036 2037 290,000.00 3.850% 11,165.00 301,165.00 301,165.00 316,223.25 Total - - $2,475,000.00 - $553,630.31 $390289630.31 $3,028,630.31 $3,180,061.83 2026A GO Bonds - PreSale I Wastewater Revenue 1 7/ 8/2026 1 8:51 AM %EHLERS PUBLIC FINANCE ADVISORS July 14, 2026 PRE -SALE REPORT FOR City of Hutchinson, Minnesota $4,295,000 Public Utility Revenue Bonds, Series 2026B rgREHLERS ■ PUBLIC FINANCE ADVISORS Prepared by: Ehlers 3001 Broadway Street, Suite 320 Minneapolis, MN 55413 Advisors: Nick Anhut, Senior Municipal Advisor Bruce Kimmel, Senior Municipal Advisor BUILDING COMMUNITIES. IT'S WHAT WE DO. BUILDING COMMUNITIES. IT'S WHAT WE DO. ® info@ehlers-inc.com % 1 (800) 552-1171 (a www.ehiers-inc.com Proposed Issue: $4,295,000 Public Utility Revenue Bonds, Series 2026B (the "Bonds") Purposes: The proposed issue includes fixed-rate, tax-exempt financing for various Hutchinson Utilities Commission electric utility system infrastructure improvements underway in 2026. Debt service will be paid exclusively from pledged net revenues of the electric and gas utility system enterprise operated and administered by the Hutchinson Utilities Commission. Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapter 453. Chapter 453 allows cities to issue debt without limitation as long as the bonds are limited obligation of the City payable only from revenues of the public utility system. The City has two outstanding Public Utility Revenue Bond Issues (Series 2012A and 2017B). Because Public Utility Revenue bonds are not general obligations of the City backed by its full faith and credit, it is necessary to give the bondholders a lien on revenues by setting certain covenants in the bond documents and restrict the issuance of future debt unless thresholds are met. Specifically: • Rate Covenant: The City covenants to establish, maintain and collect such charges, fees and rentals as will produce revenues sufficient to pay the reasonable cost of operation and maintenance of the public utility system and to produce, in each year, net revenues not less than 130% of the annual interest and principal requirements of all bonds outstanding. • Additional Bonds Test: In order for the City to issue additional bonds on a parity of lien, the City must demonstrate that the preceding annual net revenues of the public utility system for the prior fiscal year were at least 130% of the maximum amount of annual debt service on all outstanding bonds and the bonds proposed to be issued. Fiscal 2025 net revenues exceeded $7.7 million and 247% coverage on existing debt service. The 2026B Public Utility Bonds will meet the 130% coverage test for issuing additional bonds. • Debt Service Reserve Account: A Debt Service Reserve Account must be maintained in an amount equal to the lesser of (a) 10% of the aggregate original principal amount of bonds outstanding, (b) the maximum annual debt service coming due on all parity bonds, or (c) 125% of the average annual debt service to become due on all parity bonds. The existing balance in the Reserve Account is currently sufficient to meet the estimated requirement necessary for the additional 2026B Public Utility Bonds. Presale Report July 14, 2026 City of Hutchinson, Minnesota Page 1 Term/Call Feature: The Bonds are being issued for a term of 11 years, three months in total. Principal on the Bonds will be due on December 1 in the years 2027 through 2037. Interest will be due every six months beginning June 1, 2027. The Bonds will be offered with a call option allowing prepayment at the discretion of the City without penalty starting December 1, 2034 or any date thereafter. Bank Qualification: Because the City, inclusive of the 2026A and 2026B Bonds, is expecting to issue no more than $10,000,000 in tax exempt obligations during the calendar year, the City will be able to designate both series of bonds as "bank qualified" obligations. Bank qualified status can broaden the market for the Bonds which can result in more favorable interest rates. Credit Rating: A credit rating provides an independent opinion of risk and can help differentiate the Bonds among other offerings in the marketplace. The City and HUC's most recent revenue bond issues were rated by Moody's Investors Service. The current rating on those bonds is "Al." To enhance marketability of the Bonds, we recommend the City request a new evaluation to update and apply the credit rating to the Bonds. The underwriter on the Bonds may elect to purchase bond insurance. In that instance, the credit rating for the issue may be higher in the event the bond rating of the insurer is higher than that of the City and HUC's net revenue pledge. Method of Sale/Placement: We are recommending the Bonds be issued as municipal securities and offered through a competitive underwriting process. The City will solicit competitive bids, which we will compile on its behalf, for the purchase of the Bonds from underwriters and banks. An allowance for discount bidding will be included in the terms of sale. The discount is treated as an interest item and provides the underwriter with all or a portion of their compensation in the transaction. If the Bonds are purchased at a price greater than the minimum bid amount (maximum discount), unused allowance may be used to reduce the final borrowing amount. Premium Pricing: In some cases, investors in municipal bonds prefer "premium" pricing structures. A premium is achieved when the purchaser pays an amount in excess of the face value of a maturity in return for a higher coupon (the interest rate paid by the issuer) than the prevailing market yield. The sum of the amounts paid in excess of face value is considered "reoffering premium." The amount of the premium varies, but it is not uncommon to see premiums for new issues in the range of 2.00% to 10.00% of the face amount of the issue. This means that an issuer with a $4,000,000 offering may receive bids that result in proceeds of $4,080,000 to $4,400,000. For this issue of Bonds we have been directed to use any net premium to reduce the size of the issue. The resulting adjustments may slightly change the final true interest cost calculation of the issue, either up or down. The amount of premium can be restricted in the bid Presale Report July 14, 2026 City of Hutchinson, Minnesota Page 2 specifications. Restrictions on premium may result in fewer bids, but may also eliminate large adjustments on the day of sale and unintended impacts with respect to debt service payment. Ehlers will identify appropriate premium restrictions for the Bonds intended to achieve the City's objectives for this financing. Review of Existing Debt: We have reviewed all outstanding indebtedness for the City and find that there are no viable refunding opportunities to consider. We will continue to monitor the market and call dates for the City's outstanding debt to alert you to any future refunding opportunities as they arise Continuing Disclosure: The City will be agreeing to provide certain updated Annual Financial Information and its Audited Financial Statement annually, as well as providing notices of the occurrence of certain reportable events to the Municipal Securities Rulemaking Board (the "MSRB"), as required by rules of the Securities and Exchange Commission (SEC). The City is already obligated to provide such reports for its existing General Obligation and Net Revenue bonds and engages Ehlers as its disseminating agent to prepare and file the reports on its behalf. Arbitrage Monitoring: The City must ensure compliance with certain sections of the Internal Revenue Code and Treasury Regulations ("Arbitrage Rules") throughout the life of the issue to maintain the tax- exempt status of the Bonds. These Arbitrage Rules apply to amounts held in construction, reserve and debt service accounts, along with related investment income on each fund/account. IRS audits will verify compliance with rebate, yield restriction and records retention requirements within the Arbitrage Rules. The City's specific arbitrage responsibilities will be detailed in the Signature, No -Litigation, Arbitrage Certificate and Purchase Price Receipt (the "Tax Compliance Document") prepared by your Bond Attorney and provided at closing. The Bonds may qualify for one or more exceptions to the Arbitrage Rules by meeting various spend down, debt service fund, reasonable reserve or investments yield restrictions. The City is currently receiving arbitrage services from Ehlers. An Ehlers arbitrage expert will contact the City within 30 days after the sale date to review the City's specific responsibilities for the Bonds. Investment of Bond Proceeds: Subject to the Arbitrage Rules and Tax Compliance Document mentioned above, the City may maximize the fund opportunity for its projects by temporarily investing the proceeds until the funds are needed to pay for construction expenses. As a Registered Investment Advisor, Ehlers will be standing by and available to assist in developing a strategy to invest your Bond proceeds within the objectives of the City and HUC's financial policies and practices. Risk Factors: Utility Revenue: The City expects to pay the Bonds' debt service with net revenues of the electric and gas utility enterprise funds managed and administered by the Hutchinson Utilities Presale Report July 14, 2026 City of Hutchinson, Minnesota Page 3 Commission. If utility revenue is ever inadequate, the City is not obligated to use its levy authority or any other funds on hand to pay debt service on the Bonds. Any enterprise is subject to variations in annual revenues and expenditures, however recent performance for fiscal year 2025 net revenues show the capacity to meet ongoing debt service obligations. Other Service Providers: This debt issuance will require the engagement of other public finance service providers. This section identifies those other service providers, so Ehlers can coordinate their engagement on your behalf. Where you have previously used a particular firm to provide a service, we have assumed that you will continue that relationship. Fees charged by these service providers will be paid from proceeds of the obligation, unless you notify us that you wish to pay them from other sources. Our pre -sale bond sizing includes a good faith estimate of these fees, but the final fees may vary. Bond Counsel: Dorsey & Whitney LLP Paying Agent: Bond Trust Services Corporation Rating Agency: Moody's Investors Service, Inc. Basis for Recommendation: Based on the City and HUC's stated objectives; financial situation; risk tolerance; liquidity needs; experience with the issuance of Bonds; long-term financial capacity; as well as the tax status considerations, structure, timing and other similar matters related to the Bonds, we are recommending the issuance of Bonds as a suitable option. • The issuance is consistent with the City's practices for financing its large-scale capital projects and the anticipated repayment is consistent with long-term financial plans and the adopted utility revenue covenants. • Tax -exemption and bank qualification can result in lower interest costs than most other financing options available to the City and HUC for like projects. • The expectation is this form of financing will meet the City and HUC's objectives for term and future prepayment flexibility. • The method of sale process identified complies with City policy as well as best practices endorsed by the Government Finance Officers Association (GFOA). Summary: The decisions to be made by the City Council are as follows: • Accept or modify the finance assumptions described in this report, and • Consider the resolution provided by the City's Bond Attorney to establish an August 11, 2026 competitive bond sale date. Subject to City Council approval, the Hutchinson Utilities Commission will be asked at their July 22, 2026 meeting to consider a resolution concurring to the City's determination and agreeing to abide by the bond covenants. Presale Report July 14, 2026 City of Hutchinson, Minnesota Page 4 Pre -Sale Review by City Council: July 14, 2026 Concurring action by Hutchinson Utilities Commission: July 22, 2026 Due Diligence Call to Review Official Statement: Week of July 27, 2026 Conference with Rating Agency: Week of July 27, 2026 Distribute Official Statement: By July 31, 2026 City Council Meeting to Award Sale of the Bonds: August 11, 2026 Estimated Closing Date: September 3, 2026 Attachments Estimated Sources and Uses of Funds Estimated Debt Service Schedule Nick Anhut, Senior Municipal Advisor (651) 697-8507 Bruce Kimmel, Senior Municipal Advisor (651) 697-8572 Silvia Johnson, Lead Public Finance Analyst (651) 697-8580 Alicia Gage, Senior Financial Analyst (651) 697-8551 Presale Report July 14, 2026 City of Hutchinson, Minnesota Page 5 City of Hutchinson, Minnesota $4,295,000 Public Utility Revenue Bonds, Series 2026B Assumes Current Market BQ Al Rates plus 50bps 11 Years Estimated Sources & Uses Dated 0910312026 1 Delivered 0910312026 Sources Of Funds Par Amount of Bonds $4,295,000.00 Total Sources $4,295,000.00 Uses Of Funds Total Underwriter's Discount (1.200°/u) 51,540.00 Costs of Issuance 87,000.00 Deposit to Project Fund 4,156,460.00 Total Uses $4,295,000.00 2026B Public Util Rev Bon I SINGLE PURPOSE 1 7/ 2/2026 1 2:33 PM lg't�'E'H.LERS City of Hutchinson, Minnesota $4,295,000 Public Utility Revenue Bonds, Series 2026B Assumes Current Market BQ Al Rates plus 50bps 11 Years Estimated Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 09/03/2026 - - 06/01/2027 - - 118,251.28 118,251.28 - 12/01/2027 295,000.00 3.250% 79,422.50 374,422.50 492,673.78 06/01/2028 - - 74,628.75 74,628.75 - 12/01/2028 340,000.00 3.350% 74,628.75 414,628.75 489,257.50 06/01/2029 - - 68,933.75 68,933.75 - 12/01/2029 350,000.00 3.400% 68,933.75 418,933.75 487,867.50 06/01/2030 - - 62,983.75 62,983.75 - 12/01/2030 365,000.00 3.500% 62,983.75 427,983.75 490,967.50 06/01/2031 - - 56,596.25 56,596.25 - 12/01/2031 375,000.00 3.600% 56,596.25 431,596.25 488,192.50 06/01/2032 - - 49,846.25 49,846.25 - 12/01/2032 390,000.00 3.650% 49,846.25 439,846.25 489,692.50 06/01/2033 - - 42,728.75 42,728.75 - 12/01/2033 405,000.00 3.700% 42,728.75 447,728.75 490,457.50 06/01/2034 - - 35,236.25 35,236.25 - 12/01/2034 420,000.00 3.750% 35,236.25 455,236.25 490,472.50 06/01/2035 - - 27,361.25 27,361.25 - 12/01/2035 435,000.00 3.850% 27,361.25 462,361.25 489,722.50 06/01/2036 - - 18,987.50 18,987.50 - 12/01/2036 450,000.00 4.000% 18,987.50 468,987.50 487,975.00 06/01/2037 - - 9,987.50 9,987.50 - 12/01/2037 470,000.00 4.250% 9,987.50 479,987.50 489,975.00 Total $4,2959000.00 $190929253.78 $5,387,253.78 Yield Statistics Bond Year Dollars $28,529.89 Average Life 6.643 Years Average Coupon 3.8284544% Net Interest Cost (NIC) 4.0091070% True Interest Cost (TIC) 4.0265217% Bond Yield for Arbitrage Purposes 3.8140940% All Inclusive Cost (AIC) 4.3933592% IRS Form 8038 Net Interest Cost 3.8284544% Weighted Average Maturity 6.643 Years 2026B Public Util Rev Bon I SINGLE PURPOSE 1 7/ 2/2026 1 2:33 PM Ig E"HLERS City of Hutchinson, Minnesota $4,295,000 Public Utility Revenue Bonds, Series 2026B Assumes Current Market BQ Al Rates plus 50bps 11 Years Estimated Net Debt Service Schedule with Existing Obligations Date Principal Coupon Interest Total P+I Existing D/S Net New D/S Fiscal Total 09/03/2026 12/01/2026 - - 3,132,828.13 3,132,828.13 3,132,828.13 06/01/2027 - - 118,251.28 118,251.28 164,428.13 282,679.41 12/01/2027 295,000.00 3.250% 79,422.50 374,422.50 1,014,428.13 1,388,850.63 1,671,530.04 06/01/2028 - - 74,628.75 74,628.75 147,428.13 222,056.88 12/01/2028 340,000.00 3.350% 74,628.75 414,628.75 1,032,428.13 1,447,056.88 1,669,113.76 06/01/2029 - - 68,933.75 68,933.75 136,365.63 205,299.38 12/01/2029 350,000.00 3.400% 68,933.75 418,933.75 1,046,365.63 1,465,299.38 1,670,598.76 06/01/2030 - - 62,983.75 62,983.75 124,990.63 187,974.38 12/01/2030 365,000.00 3.500% 62,983.75 427,983.75 1,054,990.63 1,482,974.38 1,670,948.76 06/01/2031 - - 56,596.25 56,596.25 111,040.63 167,636.88 12/01/2031 375,000.00 3.600% 56,596.25 431,596.25 1,071,040.63 1,502,636.88 1,670,273.76 06/01/2032 - - 49,846.25 49,846.25 96,640.63 146,486.88 12/01/2032 390,000.00 3.650% 49,846.25 439,846.25 1,086,640.63 1,526,486.88 1,672,973.76 06/01/2033 - - 42,728.75 42,728.75 81,790.63 124,519.38 12/01/2033 405,000.00 3.700% 42,728.75 447,728.75 1,101,790.63 1,549,519.38 1,674,038.76 06/01/2034 - - 35,236.25 35,236.25 66,490.63 101,726.88 12/01/2034 420,000.00 3.750% 35,236.25 455,236.25 1,116,490.63 1,571,726.88 1,673,453.76 06/01/2035 - - 27,361.25 27,361.25 50,740.63 78,101.88 12/01/2035 435,000.00 3.850% 27,361.25 462,361.25 1,130,740.63 1,593,101.88 1,671,203.76 06/01/2036 - - 18,987.50 18,987.50 34,540.63 53,528.13 12/01/2036 450,000.00 4.000% 18,987.50 468,987.50 1,144,540.63 1,613,528.13 1,667,056.26 06/01/2037 - - 9,987.50 9,987.50 17,890.63 27,878.13 12/01/2037 470,000.00 4.250% 9,987.50 479,987.50 1,162,890.63 1,642,878.13 1,670,756.26 Total $4,2959000.00 - $190929253.78 $593879253.78 $1691279521.99 $2195149775.77 - Significant Dates Dated 9/03/2026 First available call date 2026B Public Util Rev Bon I SINGLE PURPOSE 1 7/ 2/2026 1 2:33 PM '*.'4-EHLERS HUTCHINSON CITY COUNCIL HUTC HIN SON Request for Board Action A UTY DN KJAPOSE. 2025 General Fund Financial Results Agenda Item: Department: Finance LICENSE SECTION Meeting Date: 7/14/2026 Application Complete N/A Contact: Andy Reid Agenda Item Type: Presenter: Reviewed by Staff ❑� Governance Time Requested (Minutes): 0 License Contingency N/A Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: In conjunction with the council workshop to review the 2025 audited financial results, I wanted to share additional financial/budgetary information related to the General fund operations. The General fund accounts for the day to day operations of the City, including public safety, streets and highways, culture and recreation and general government operations. It's the City's largest fund and relies on a property tax levy to support its operations. Attached is a detailed financial statement showing actual versus budgeted activity along with a comparison to the prior year results. I've also attached a memo detailing the performance within each revenue/expenditure category in addition to explanations for departmental expenses that exceeded the budget. Feel free to contact me with any questions you may have. BOARD ACTION REQUESTED: Fiscal Impact: Funding Source: FTE Impact: Budget Change: Govern; Included in current budget: No PROJECT SECTION: Total Project Cost: Total City Cost: Funding Source: N/A Remaining Cost: $ 0.00 Funding Source: N/A GENERALFUND Detailed Income Statement Period Ending December 31, 2025 MONTH YTD 2025 AVAILABLE % BDGT YTD 2024 % BDGT 2025-2024 Change ACCT DESCRIPTION 12/31/2025 12/31/2025 BUDGET BALANCE USED 12/31/2024 BUDGET USED Amount % REVENUES 31010 Current Ad Valorem Taxes 3,162,925.56 6,671,797.31 6,729,034.00 57,236.69 99.15 6,282,301.04 6,358,436.00 98.80 389,496.27 6.2% 31020 Delinquent Ad Valorem Taxes 14,207.45 100,311.37 12,000.00 (88,311.37) 835.93 67,639.08 12,000.00 563.66 32,672.29 48.3% TAXES 3,177,133.01 6,772,108.68 6,741,034.00 (31,074.68) 100.46 6,349,940.12 6,370,436.00 99.68 422,168.56 6.61/6 31410 Lodging Tax 16,657.10 129,688.14 130,000.00 311.86 99.76 128,700.07 130,000.00 99.00 988.07 0.8% 31411 Cable TV Franchise Fees 39,973.67 167,834.96 190,000.00 22,165.04 88.33 180,721.43 200,000.00 90.36 (12,886.47) -7.1 % OTHER TAXES 56,630.77 297,523.10 320,000.00 22,476.90 92.98 309,421.50 330,000.00 93.76 (11,898.40) -3.8% 32101 Alcoholic Beverages (34,275.00) 35,850.00 32,700.00 (3,150.00) 109.63 36,400.00 31,000.00 117.42 (550.00) -1.5% 32103 Tobacco - 2,450.00 2,975.00 525.00 82.35 3,150.00 3,000.00 105.00 (700.00) -22.2% 32105 Cannabis - 125.00 - (125.00) - - - - 125.00 0.0% 32110 Building Permits 9,071.39 461,650.63 341,000.00 (120,650.63) 135.38 339,078.66 316,000.00 107.30 122,571.97 36.1 % 32111 Building Permit Surcharges (3,710.17) 673.37 500.00 (173.37) 134.67 1,402.72 500.00 280.54 (729.35) -52.0% 32112 Plumbing Permits 465.00 15,734.00 15,000.00 (734.00) 104.89 15,042.50 15,000.00 100.28 691.50 4.6% 32113 Demolition Permits - 310.00 1,000.00 690.00 31.00 500.00 1,500.00 33.33 (190.00) -38.0% 32117 Planning&Zoning Fees (18.41) 4,461.02 9,000.00 4,538.98 49.57 8,639.29 8,000.00 107.99 (4,178.27) -48.4% 32118 Tree Applications/Permits - 7,800.00 1,200.00 (6,600.00) 650.00 1,200.00 5,000.00 24.00 6,600.00 550.0% 32130 Animal Licenses 30.00 450.00 600.00 150.00 75.00 250.00 600.00 41.67 200.00 80.0% 32190 Other Licenses & Permits 170.00 9,558.33 11,750.00 2,191.67 81.35 13,965.25 11,500.00 121.44 (4,406.92) -31.6% LICENSES & PERMITS (28,267.19) 539,062.35 415,725.00 (123,337.35) 129.67 419,628.42 392,100.00 107.02 119,433.93 28.50/6 33101 Federal Grants - 7,205.18 11,500.00 4,294.82 62.65 827.76 1,500.00 55.18 6,377.42 770.4% 33401 Local Government Aid 0.50 1,551,734.00 1,551,734.00 - 100.00 1,548,963.00 1,548,963.00 100.00 2,771.00 0.2% 33402 Homestead Credit Aid 361.85 675.02 - (675.02) - 887.94 - - (212.92) -24.0% 33416 Police Training Reimbursement - 21,877.45 20,500.00 (1,377.45) 106.72 23,313.77 20,500.00 113.73 (1,436.32) -6.2% 33419 Municipal State Aid - Streets - 53,794.00 81,626.00 27,832.00 65.90 36,660.00 29,280.00 125.20 17,134.00 46.7% 33431 Police Pension Aid - 292,183.68 290,072.00 (2,111.68) 100.73 290,072.07 246,826.00 117.52 2,111.61 0.7% 33434 DARE Aid (100.00) 822.70 - (822.70) - 9,963.87 - - (9,141.17) -91.7% 33440 Fire Relief Assoc Aid - State - 192,033.94 162,393.00 (29,640.94) 118.25 162,392.71 142,925.00 113.62 29,641.23 18.3% 33450 Airport Aid - 23,595.50 26,200.00 2,604.50 90.06 31,294.50 26,200.00 119.44 (7,699.00) -24.6% 33490 State Grants - Other 24,092.50 82,264.41 22,500.00 (59,764.41) 365.62 48,444.95 12,000.00 403.71 33,819.46 69.8 % 33690 Other Local Govt Grants & Aid 9,199.14 (9,199.14) -100.0 % INTERGOVERNMENTAL REVENUE 24,354.85 2,226,185.88 2,166,525.00 (59,660.88) 102.75 2,162,019.71 2,028,194.00 106.60 64,166.17 3.0% 34101 Rentals -City Hall Bldg 450.00 2,136.96 2,200.00 63.04 97.13 2,200.00 2,200.00 100.00 (63.04) -2.9% 34110 Motor Vehicle Fees 24,072.78 261,312.45 250,000.00 (11,312.45) 104.52 266,005.16 230,000.00 115.65 (4,692.71) -1.8% 34111 Drivers License Fees 9,263.78 127,163.28 95,000.00 (32,163.28) 133.86 100,718.28 80,000.00 125.90 26,445.00 26.3% 34116 Passport Photos 64.70 1,194.21 2,500.00 1,305.79 47.77 1,189.80 2,500.00 47.59 4.41 0.4% 34117 DNR Fish &Game (1,888.76) 10,554.64 15,000.00 4,445.36 70.36 13,113.10 17,500.00 74.93 (2,558.46) -19.5% 34120 Assessment Searches 738.13 10,421.41 12,500.00 2,078.59 83.37 9,315.06 12,500.00 74.52 1,106.35 11.9% 34190 Other Revenues 11,041.16 209,648.03 205,150.00 (4,498.03) 102.19 211,577.34 194,340.00 108.87 (1,929.31) -0.9% 34201 School Liaison Program 4,944.15 57,969.90 57,500.00 (469.90) 100.82 55,966.41 57,500.00 97.33 2,003.49 3.6 % 34203 Public Safety Reimbursement - 16,931.09 9,000.00 (7,931.09) 188.12 5,525.00 9,000.00 61.39 11,406.09 206.4 % 34204 Police Accident Reports 21.05 250.13 400.00 149.87 62.53 83.81 400.00 20.95 166.32 198.4 % 34205 Police Paper Service - 700.00 300.00 (400.00) 233.33 210.00 300.00 70.00 490.00 233.3% 34255 Fire Dept Country Acct 15,665.43 15,665.43 16,212.00 546.57 96.63 12,547.62 16,734.00 74.98 3,117.81 24.8% 34270 Rehab Services - 1,000.00 - (1,000.00) - - - - 1,000.00 0.0% 34275 Rental Inspection Fees 125.00 49,350.00 51,000.00 1,650.00 96.76 53,785.00 51,000.00 105.46 (4,435.00) -8.2% 34290 Other Revenues 471.00 6,330.00 8,000.00 1,670.00 79.13 12,184.32 8,000.00 152.30 (5,854.32) -48.0% 34301 Engineering Fees 476,702.00 476,702.00 461,617.00 (15,085.00) 103.27 330,521.00 394,281.00 83.83 146,181.00 44.2% 34302 Project Admin Fees 95,340.50 95,340.50 85,000.00 (10,340.50) 112.17 66,104.50 85,000.00 77.77 29,236.00 44.2% 34309 Other Fees 12,120.24 16,320.80 14,900.00 (1,420.80) 109.54 15,878.47 14,900.00 106.57 442.33 2.8% 34390 Other Revenues - 1,655.53 - (1,655.53) - 791.45 - - 864.08 109.2% GENERALFUND Detailed Income Statement Period Ending December 31, 2025 MONTH YTD 2025 AVAILABLE % BDGT YTD 2024 % BDGT 2025-2024 Change ACCT DESCRIPTION 12/31/2025 12/31/2025 BUDGET BALANCE USED 12/31/2024 BUDGET USED Amount % 34401 Recreation Activity Fees 12,422.50 162,535.13 207,500.00 44,964.87 78.33 161,826.68 207,500.00 77.9 7708.45 0.47 34402 Civic Arena -Fees & Rents 76,475.79 324,519.60 360,000.00 35,480.40 90.14 356,180.65 320,000.00 111.31 (31,661.05) -8.9 % 34405 Park Fees 818.13 36,034.29 30,000.00 (6,034.29) 120.11 31,212.27 30,000.00 104.04 4,822.02 15.4% 34406 Campground Fees (1,266.57) 75,744.79 75,000.00 (744.79) 100.99 74,795.38 75,000.00 99.73 949.41 1.3% 34410 Contract Lease Revenue 550.00 6,600.00 6,600.00 - 100.00 6,600.00 6,600.00 100.00 - 0.0% 34430 Rentals -Building 12,289.57 94,534.53 79,000.00 (15,534.53) 119.66 85,393.02 69,000.00 123.76 9,141.51 10.7% 34431 Rentals-Bikes/Boats 144.24 74.51 500.00 425.49 14.90 610.01 500.00 122.00 (535.50) -87.8% 34435 Rentals -Other - - - - - 100.00 - - (100.00) -100.0% 34440 Parks & Recreation Concessions 280.28 25,217.39 30,000.00 4,782.61 84.06 16,197.90 30,000.00 53.99 9,019.49 55.7 % 34470 Sr Center -Trip Revenue 4,314.00 38,747.00 35,000.00 (3,747.00) 110.71 35,771.00 38,000.00 94.13 2,976.00 8.3% 34471 Sr Center -Activities 19.20 940.69 2,500.00 1,559.31 37.63 1,099.89 2,500.00 44.00 (159.20) -14.5% 34472 Sr Center-Instructions/Adapt Rec 318.00 7,425.00 5,000.00 (2,425.00) 148.50 4,726.00 5,000.00 94.52 2,699.00 57.1% 34480 Community Education Reimburse - 72,408.52 74,888.00 2,479.48 96.69 71,839.03 69,987.00 102.65 569.49 0.8 % 34490 Other Revenues - 2,435.08 1,000.00 (1,435.08) 243.51 761.71 750.00 101.56 1,673.37 219.7% 34500 Admission Fees - Waterpark - 127,308.03 140,000.00 12,691.97 90.93 124,061.29 140,000.00 88.62 3,246.74 2.6% 34505 Season Passes - Waterpark - 77,784.34 95,000.00 17,215.66 81.88 83,646.16 95,000.00 88.05 (5,861.82) -7.0 % 34510 Special Events/Rentals - Waterpark - 16,722.73 13,000.00 (3,722.73) 128.64 20,881.18 13,000.00 160.62 (4,158.45) -19.9% 34515 Concessions-Waterpark - 70,639.28 65,000.00 (5,639.28) 108.68 64,692.89 65,000.00 99.53 5,946.39 9.2% 34595 Cash Over/(Short) - 612.87 - (612.87) - 101.61 - - 511.26 503.2% 34901 Rentals -Hangars & Shop (4,006.50) 65,240.00 75,000.00 9,760.00 86.99 72,604.75 75,000.00 96.81 (7,364.75) -10.1 % 34902 Leased Airport Hangar Lot 2,400.00 8,216.44 - (8,216.44) - 2,662.07 - - 5,554.37 208.6% 34905 Rentals -Other 1,350.00 28,338.00 22,000.00 (6,338.00) 128.81 22,305.00 22,000.00 101.39 6,033.00 27.0% 34910 Fuel Sales -Airport 7,042.39 89,205.59 110,000.00 20,794.41 81.10 108,257.05 3,000.00 3,608.57 (19,051.46) -17.6% 34940 Cemetery Fees 2,500.00 103,925.00 105,000.00 1,075.00 98.98 96,865.00 105,000.00 92.25 7,060.00 7.3% 34942 Burial Plot Buybacks - - (2,100.00) (2,100.00) - - (2,100.00) - - 0.0% 34990 Other Revenues - - 250.00 250.00 - 250.00 250.00 100.00 (250.00) -100.0% CHARGES FOR SERVICES 764,782.19 2,795,855.17 2,816,417.00 20,561.83 99.27 2,601,156.86 2,547,142.00 102.12 194,698.31 7.5% 35101 Court Fines 5,435.17 43,584.51 55,000.00 11,415.49 79.24 50,808.79 55,000.00 92.38 (7,224.28) -14.2% FINES & FORFEITURES 5,435.17 43,584.51 55,000.00 11,415.49 79.24 50,808.79 55,000.00 92.38 (7,224.28) -14.2% 36210 Interest Earnings 91,797.67 284,910.36 140,000.00 (144,910.36) 203.51 291,449.33 140,000.00 208.18 (6,538.97) -2.2% 36215 Net Incr/Decrin FV of Invest 114,228.53 114,228.53 - (114,228.53) - 23,921.42 - - 90,307.11 377.5% 36225 Refunds & Reimbursements 131,225.85 255,128.60 203,800.00 (51,328.60) 125.19 245,069.41 188,800.00 129.80 10,059.19 4.1 % 36230 Donations 1,400.00 21,575.00 4,000.00 (17,575.00) 539.38 17,792.00 4,000.00 444.80 3,783.00 21.3% 36235 Sponsorships & Contributions 14,481.65 64,283.92 34,600.00 (29,683.92) 185.79 54,430.79 21,100.00 257.97 9,853.13 18.1 % 36285 Vending Machine 284.66 47.51 (47.51) 47.51 0.0% MISCELLANEOUS REVENUES 353,418.36 740,173.92 382,400.00 (357,773.92) 193.56 632,662.95 353,900.00 178.77 107,510.97 17.0% 39202 Transfer from Liquor Fund 550,000.00 550,000.00 550,000.00 - 100.00 550,000.00 550,000.00 100.00 - 0.0% 39203 Transfer from Water/Sewer Fund 200,000.00 200,000.00 200,000.00 - 100.00 200,000.00 200,000.00 100.00 - 0.0% 39204 Transfer from Compost Fund 120,000.00 120,000.00 120,000.00 - 100.00 120,000.00 120,000.00 100.00 - 0.0% 39205 Transfer from HUC 1,942,628.00 1,942,628.00 100.00 1,942,628.00 1,942,628.00 100.00 0.0% TRANSFERS -IN 870,000.00 2,812,628.00 2,812,628.00 - 100.00 2,812,628.00 2,812,628.00 100.00 - 0.0% 39400 Lease Receivable Amortization (636.00) (636.00) - 636.00 - (868.00) - - 232.00 -26.7% 39410 Lease Interest 1,032.00 1,032.00 - (1,032.00) - 1,096.00 - - (64.00) -5.8% 33432 PERA Reimbursement 85,628.00 (85,628.00) -100.0% OTHER REVENUES 396.00 396.00 - (396.00) - 85,856.00 - - (85,460.00) -99.5% TAL REVENUE 5,223,883.16 16 103.59 803,395.26 GENERALFUND Detailed Income Statement Period Ending December 31, 2025 MONTH YTD 2025 AVAILABLE % BDGT YTD 2024 % BDGT 2025-2024 Change ACCT DESCRIPTION 12/31/2025 12/31/2025 BUDGET BALANCE USED 12/31/2024 BUDGET USED Amount % EXPENDITURES 50101 Full-time Employees -Regular 491,900.80 5,360,510.09 6,366,892.00 1,006,381.91 84.19 4,882,447.29 5,935,067.00 82.26 478,062.80 9.8% 50102 Part-time Employees -Regular 28,769.08 294,711.79 399,248.00 104,536.21 73.82 367,256.36 425,754.00 86.26 (72,544.57) -19.8% 50103 Temporary Employees -Regular 22,556.01 690,225.80 726,909.00 36,683.20 94.95 715,228.46 701,223.00 102.00 (25,002.66) -3.5% 50105 Vacation Pay 84,551.92 541,331.26 - (541,331.26) - 500,162.35 - - 41,168.91 8.2% 50106 Holiday Pay 169,306.48 379,859.22 82,419.00 (297,440.22) 460.89 353,062.32 76,670.00 460.50 26,796.90 7.6% 50107 Sick Pay 28,232.70 282,879.20 22,015.00 (260,864.20) 1,284.94 237,136.92 17,091.00 1,387.50 45,742.28 19.3% 50108 Jury Duty - 1,003.16 - (1,003.16) - 685.43 - - 317.73 46.4% 50109 Bereavement Leave 724.16 12,249.96 - (12,249.96) - 17,267.45 - - (5,017.49) -29.1 % 50121 Full-time Employees -Overtime 1,167.87 91,436.75 71,000.00 (20,436.75) 128.78 77,396.13 61,500.00 125.85 14,040.62 18.1 % 50122 Part-time Employees -Overtime - 18.84 - (18.84) - 63.89 - - (45.05) -70.5% 50123 Temporary Employees -Overtime 5,383.03 18,702.76 5,000.00 (13,702.76) 374.06 11,145.36 5,000.00 222.91 7,557.40 67.8% 50125 Premium Pay 6,313.26 13,476.27 - (13,476.27) - 3,982.39 - - 9,493.88 238.4% 50126 Comp Time Paid 8,656.97 81,129.93 - (81,129.93) - 79,815.78 - - 1,314.15 1.6% 50130 PERA- Coordinated 37,329.06 337,170.04 330,332.00 (6,838.04) 102.07 314,374.56 315,478.00 99.65 22,795.48 7.3% 50131 PERA-D.C.P. 117.43 1,094.63 1,090.00 (4.63) 100.42 1,098.83 1,090.00 100.81 (4.20) -0.4% 50132 PERA - Police 57,461.59 444,040.15 446,968.00 2,927.85 99.34 404,039.22 406,950.00 99.28 40,000.93 9.9 % 50138 Fire Pension Contrib-Local - 65,000.00 65,000.00 - 100.00 65,000.00 65,000.00 100.00 - 0.0% 50139 Fire Pension Contrib-State - 192,033.94 162,393.00 (29,640.94) 118.25 162,392.71 142,925.00 113.62 29,641.23 18.3% 50140 Social Security 29,713.25 300,842.38 305,266.00 4,423.62 98.55 284,027.25 292,133.00 97.23 16,815.13 5.9% 50141 Medicare 11,368.21 104,659.94 106,911.00 2,251.06 97.89 97,571.14 100,849.00 96.75 7,088.80 7.3% 50142 Worker's Comp Insur Premiums 22,723.90 221,470.29 221,432.00 (38.29) 100.02 282,980.51 290,341.00 97.46 (61,510.22) -21.7% 50145 Unemployment Benefit Payments 306.16 519.48 - (519.48) - 6,954.70 - - (6,435.22) -92.5 % 50150 Health 90,233.65 1,071,626.81 1,103,629.00 32,002.19 97.10 1,061,324.90 1,089,188.00 97.44 10,301.91 1.0% 50152 HSA Contribution 9,060.08 112,852.14 114,700.00 1,847.86 98.39 108,755.66 112,800.00 96.41 4,096.48 3.8% 50170 Clothing Allowance - 8,774.24 6,421.00 (2,353.24) 136.65 7,328.68 6,325.00 115.87 1,445.56 19.7% 50180 Admin Fees -HSA/Flex 222.70 3,166.37 4,975.00 1,808.63 63.65 3,092.04 5,030.00 61.47 74.33 2.4% 50195 Pension Expense - Coordinated 85,628.00 (85,628.00) -100.0 % WAGES & BENEFITS 1,106,098.31 10,630,785.44 10,542,600.00 (88,185.44) 100.84 10,130,218.33 10,050,414.00 100.79 500,567.11 4.9% 52201 Office Supplies 1,439.60 16,619.74 23,350.00 6,730.26 71.18 13,990.94 22,050.00 63.45 2,628.80 18.8% 52211 Operating Supplies 21,570.03 202,687.59 210,100.00 7,412.41 96.47 218,759.02 208,000.00 105.17 (16,071.43) -7.3% 52212 Cleaning Supplies 2,026.03 17,549.17 24,975.00 7,425.83 70.27 11,693.26 21,325.00 54.83 5,855.91 50.1% 52213 Motor Fuels & Lubricants 17,153.35 115,639.79 164,900.00 49,260.21 70.13 112,012.98 173,400.00 64.60 3,626.81 3.2 % 52214 Shop Supplies 1,180.11 3,612.51 5,500.00 1,887.49 65.68 2,414.84 8,500.00 28.41 1,197.67 49.6% 52215 Chemicals & Chemical Products 6,483.86 41,070.21 51,600.00 10,529.79 79.59 39,184.01 53,100.00 73.79 1,886.20 4.8% 52217 Concession Supplies - 49,407.64 45,000.00 (4,407.64) 109.79 47,445.62 45,000.00 105.43 1,962.02 4.1 % 52218 Uniforms & Personal Equip 448.22 28,883.90 26,150.00 (2,733.90) 110.45 25,002.86 25,900.00 96.54 3,881.04 15.5 % 52219 Safety Supplies 1,988.06 61,898.53 56,325.00 (5,573.53) 109.90 36,576.37 30,800.00 118.75 25,322.16 69.2% 52220 Small Tools & Minor Equipment (2,809.48) 124,432.76 159,000.00 34,567.24 78.26 150,391.21 150,208.00 100.12 (25,958.45) -17.3 % 52231 Repair& Maintenance Supplies 11,695.06 80,252.31 95,000.00 14,747.69 84.48 62,399.84 90,000.00 69.33 17,852.47 28.6% 52232 Equipment Parts 3,685.84 60,829.47 62,850.00 2,020.53 96.79 74,407.69 60,250.00 123.50 (13,578.22) -18.2% 52234 Building Repair Supplies 2,892.37 18,515.33 22,500.00 3,984.67 82.29 13,678.36 19,000.00 71.99 4,836.97 35.4 % 52235 Street Maintenance Materials 20.00 70,993.13 80,000.00 9,006.87 88.74 70,847.70 80,000.00 88.56 145.43 0.2 % 52236 Sign Repair Materials - 22,261.51 34,500.00 12,238.49 64.53 33,319.27 34,500.00 96.58 (11,057.76) -33.2% 52238 Tree & Landscaping Materials (4,320.00) 52,963.85 54,100.00 1,136.15 97.90 36,443.30 49,800.00 73.18 16,520.55 45.3% 52240 Vandalism Supplies - 1,389.17 3,000.00 1,610.83 46.31 13,602.50 1,000.00 1,360.25 (12,213.33) -89.8% 52250 Fuel for Resale (25,979.75) 71,623.92 100,000.00 28,376.08 71.62 92,126.32 (20,502.40) -22.3% SUPPLIES 37,473.30 1,040,630.53 1,218,850.00 178,219.47 85.38 1,054,296.09 1,072,833.00 98.27 (13,665.56) -1.3% 54301 Professional Services - Auditing - 51,296.00 52,000.00 704.00 98.65 54,496.00 49,000.00 111.22 (3,200.00) -5.9% 54309 Professional Services - Other 29,144.37 514,231.11 520,533.00 6,301.89 98.79 634,738.88 583,264.00 108.83 (120,507.77) -19.0 % 54311 Phone Services 13,161.17 83,942.40 93,100.00 9,157.60 90.16 81,956.76 92,190.00 88.90 1,985.64 2.4% 54312 Postage 904.13 13,674.63 12,875.00 (799.63) 106.21 12,912.06 12,125.00 106.49 762.57 5.9% GENERALFUND Detailed Income Statement Period Ending December 31, 2025 MONTH YTD 2025 AVAILABLE % BDGT YTD 2024 % BDGT 2025-2024 Change ACCT DESCRIPTION 12/31/2025 12/31/2025 BUDGET BALANCE USED 12/31/2024 BUDGET USED Amount % 54314 Credit Card Processing 1,728.35 25,441.43 19,775.00 (5,666.43) 128.65 17,412.32 19,025.00 91.52 8,029.11 46.1 54315 Software & Licensing 40,379.57 334,135.78 357,464.00 23,328.22 93.47 320,799.14 249,343.00 128.66 13,336.64 4.2% 54316 Communication Maintenance - - 1,500.00 1,500.00 - 1,680.00 1,500.00 112.00 (1,680.00) -100.0% 54318 Police Body Cameras - 67,865.27 68,000.00 134.73 99.80 67,750.47 68,000.00 99.63 114.80 0.2 % 54320 Travel/Conference Expense 3,288.47 69,971.04 81,180.00 11,208.96 86.19 55,421.66 76,470.00 72.48 14,549.38 26.3% 54321 Meetings In House - 511.34 500.00 (11.34) 102.27 275.83 500.00 55.17 235.51 85.4% 54322 Training Expenses 300.00 23,714.45 22,000.00 (1,714.45) 107.79 18,032.00 20,000.00 90.16 5,682.45 31.5% 54330 Advertising - 1,215.00 2,900.00 1,685.00 41.90 540.00 2,900.00 18.62 675.00 125.0% 54331 Printing & Publishing 4,842.18 22,904.75 24,100.00 1,195.25 95.04 26,421.53 23,600.00 111.96 (3,516.78) -13.3% 54333 Training Site Expenses 1,500.00 7,410.35 14,000.00 6,589.65 52.93 6,321.55 14,000.00 45.15 1,088.80 17.2% 54340 General Liability l nsur - 220,649.00 219,700.00 (949.00) 100.43 236,884.97 226,100.00 104.77 (16,235.97) -6.9% 54341 Property Insurance - 11,641.00 8,750.00 (2,891.00) 133.04 8,532.00 8,400.00 101.57 3,109.00 36.4% 54349 Insurance Deductible 3,500.00 6,787.22 - (6,787.22) - - - - 6,787.22 0.0% 54350 Utilities 83,458.78 453,578.61 456,100.00 2,521.39 99.45 447,519.75 428,900.00 104.34 6,058.86 1.4% 54351 Street Lighting Utilities 30,263.50 121,054.00 124,000.00 2,946.00 97.62 124,108.00 130,000.00 95.47 (3,054.00) -2.5% 54354 Refuse -Recycling 4,283.37 34,693.27 32,950.00 (1,743.27) 105.29 33,835.97 31,950.00 105.90 857.30 2.5% 54360 Contractual R&M 39,264.77 660,462.95 531,025.00 (129,437.95) 124.38 566,832.42 518,925.00 109.23 93,630.53 16.5% 54361 Contracted Snow Removal 24,718.75 36,818.75 47,020.00 10,201.25 78.30 28,918.75 46,720.00 61.90 7,900.00 27.3 % 54362 Tree Maintenance (84,920.00) - - - - - - - - 0.0% 54363 Automotive R&M 17,036.67 101,031.17 101,600.00 568.83 99.44 124,225.15 99,100.00 125.35 (23,193.98) -18.7% 54365 Contracted Janitorial 7,312.20 83,794.20 73,600.00 (10,194.20) 113.85 66,432.14 65,500.00 101.42 17,362.06 26.1% 54366 Contracted Services - Printing 2,394.28 24,212.75 23,410.00 (802.75) 103.43 24,863.62 22,460.00 110.70 (650.87) -2.6% 54368 Contracted Mosquito Control - 69,167.00 57,000.00 (12,167.00) 121.35 - - - 69,167.00 0.0% 54369 Common Area Maintenance 1,500.00 18,000.00 18,000.00 - 100.00 18,000.00 18,000.00 100.00 - 0.0% 54370 Equipment Rental 10,379.63 37,714.37 23,250.00 (14,464.37) 162.21 24,915.46 23,250.00 107.16 12,798.91 51.4% 54380 Sr Center Trip Expenses 3,672.16 35,914.61 30,000.00 (5,914.61) 119.72 31,539.66 30,000.00 105.13 4,374.95 13.9% 54381 Sr Center Activities Expense 111.36 892.68 1,500.00 607.32 59.51 2,919.80 1,500.00 194.65 (2,027.12) -69.4% 54382 Sr Center Instructional Expense 300.00 6,725.87 5,000.00 (1,725.87) 134.52 4,144.60 5,000.00 82.89 2,581.27 62.3% SERVICES & CHARGES 238,523.71 3,139,451.00 3,022,832.00 (116,619.00) 103.86 3,042,430A9 2,867,722.00 106.09 97,020.51 3.2% 56401 Dues & Subscriptions 661.50 72,953.90 75,855.00 2,901.10 96.18 60,697.01 74,100.00 81.91 12,256.89 20.2 % 56402 Refunds & Reimbursements - - - - - 28.70 - - (28.70) -100.0 % 56405 Licenses & Permits - 3,292.20 3,850.00 557.80 85.51 2,978.60 3,850.00 77.37 313.60 10.5 % 56410 Property Taxes - 18,692.00 24,100.00 5,408.00 77.56 22,434.00 22,100.00 101.51 (3,742.00) -16.7% 56412 Drug Testing 112.64 3,380.99 3,500.00 119.01 96.60 3,113.66 2,750.00 113.22 267.33 8.6% 56420 Lodging Tax Reimb 15,824.24 123,201.82 123,500.00 298.18 99.76 122,404.70 123,500.00 99.11 797.12 0.7 % 56421 Cable Franchise Expenses 19,986.84 83,917.50 95,000.00 11,082.50 88.33 90,360.73 100,000.00 90.36 (6,443.23) -7.1 % 56425 Donations to Civic Org. - 2,000.00 2,000.00 - 100.00 - 2,000.00 - 2,000.00 0.0% 56438 Business Subsidy - Tax Abatement 11,236.50 22,473.00 25,000.00 2,527.00 89.89 21,596.84 25,000.00 86.39 876.16 4.1% 56440 Miscellaneous Expense 1,717.30 23,566.12 27,100.00 3,533.88 86.96 32,699.94 28,100.00 116.37 (9,133.82) -27.9% 56445 Bad Debt Expense 6,045.66 (6,045.66) -100.0 % MISCELLANEOUS EXPENSES 49,539.02 353,477.53 379,905.00 26,427.47 93.04 362,359.84 381,400.00 95.01 (8,882.31) -2.51/6 90530 Improv other than Buildings 15,500.00 15,500.00 - (15,500.00) - - - - 15,500.00 0.0% 90540 Machinery & Equipment 33,871.54 63,262.43 (63,262.43) 4,000.00 59,262.43 1481.6% CAPITAL OUTLAY 49,371.54 78,762.43 - (78,762.43) - 4,000.00 - - 74,762.43 1869.1% 80700 I nterfund Transfers 425,000.00 545,542.00 545,542.00 100.00 517,031.00 517,031.00 100.00 28,511.00 5.5% TRANSFERS -OUT 425,000.00 545,542.00 545,542.00 - 100.00 517,031.00 517,031.00 100.00 28,511.00 5.5% TOTAL EXPENDITURES 1,906,005.88 15,788,648.93 15,709,729.00 (78,919.93) 100.50 15,110,335.75 14,889,400.00 101.48 678,313.18 4.5% NET REVENUE 3,317,877.28 438,868.68 - (438,868.68) 313,786.60 - 125,082.08 GENERAL FUND 2025 Financial Results STTM MARY The 2025 financial audit is complete, and this memo provides a summary of the results. The General fund reflects a net surplus of $438,869, based on revenues exceeding expenses. Total Revenues Total Expenses Net Revenue Budgetary Actual Budge Variance % Variance $16,227,518 $15,709,729 $517,789 3.3% 15,788,649 15,709,729-78,920 -0.5% $438,869 $0 $438,869 Total revenues were higher than budgeted expectations by $517,789 while total expenses were higher than budget by $78,920, leading to a positive net revenue (surplus) of $438,869. The surplus is the result of several revenue line items being higher than expected, including Building Permits, State Pension Aid for Police and Fire, and Interest Earnings. FUND BALANCE The 2025 fund balance of $9,077,885 represents 54.9% of the 2026 budgeted expenditures and is down from 55.0% last year. The slight decrease in the fund balance percentage is simply a function of the budgeted expenses growing at a faster rate (5.3%) than our annual net revenue/surplus (2.8%). This trend will continue as long as our budgeted expenses continue to grow at a faster rate than our annual surpluses. We continue to maintain a healthy fund balance in comparison to the State Auditor's recommendation of at least 35% to 50%, affording flexibility for the city to address emergency issues or to fund other one-time needs. Use of fund balance, however, needs to be done strategically and in a manner that doesn't negatively affect the City's AA- bond rating. PY Fund Balance $8,639,016 55.0% CY Net Revenue $438,869 CY Fund Balance $9,077,8 55 2026 Budgeted Expenses $16,548,658 Fund Balance % 54.9% Fund Balances 40% Working Capital 10% for Emergencies Restricted $6,619,463 40.0% $1,654,866 10.0% $39,045 0.2% Unassigned $764,511 4.6% $9,077,885 55.1% 2026 Budgeted Expense Increase 5.3% 2025 Surplus % of Budget 2.8% REVENUES Total revenues were $517,789 higher than budgeted expectations. The following is a summary of the key activity within each revenue category. Taxes ($31, 075 greater than budget) Collection of property tax revenues historically has had a delinquency rate of approximately 0.3%. The delinquency rate for 2025 is 0.9%, producing the minor budgetary deficit in current year tax revenue. Collection of delinquent taxes was higher in 2025 with $100,311 collected and is the reason for this category exceeding the budget. For comparison purposes, we collected $67,639 of delinquent taxes in 2024. Other Taxes ($22,477less than budget) This category includes the collection of Lodging Taxes ($312 below budget) and Cable TV Franchise Fees ($22,165 below budget). We've seen a steady decrease in Cable TV Franchise Fees, likely related to customers moving away from cable and to streaming services. This trend is expected to continue. Lodging revenues saw a slight increase from the prior year. For lodging taxes collected, 95% is remitted to the Hutchinson Convention & Visitors Bureau to fund its operations. For the cable TV franchise fees, 50% is remitted to HCVN to help fund the public television cable network. Payments to HCVB and HCVN are reflected as a Miscellaneous Expense within the general fund. Licenses & Permits ($123,337greater than budget) The largest driver in this category was Building Permits, which exceeded the budget by $120,651. Permits from The Landing apartment project contributed to the higher revenue with approximately $14,500,000 of new valuation. Intergovernmental Revenue ($59,661 greater than budget) Pension aid received from the State for Fire pension aid was $29,641 higher than expected. State grants received were $59,764 higher than the budget, including unbudgeted grants of $13,676 for a new snowplow blade on a Street department 1-ton truck, $18,843 for prairie grass maintenance within the Parks department and $19,007 for clearing trees near the Airport runway. The State grant revenue offset or partially offset unbudgeted expenditures in the identified departments. Charges for Services ($20,562 less than budget) This revenue category underperformed mainly due to recreational activities falling below budgeted expectations, including: Recreation Activity Fees ($44,965), Civic Arena Fees ($35,480), Waterpark Admissions ($29,908) and Airport Fuel ($20,794). Civic Arena fees were lower due to critical repairs being made, limiting the duration of summer ice for practices. The Waterpark revenues continue to underperform, which can be due to weather and perhaps slightly unrealistic budgetary assumptions. The Airport fuel revenue is based on demand and offsets the expense with a moderate markup. Our fuel prices are very competitive and we have airplanes flying in from other areas to take advantage of our pricing. Operations that outperformed compared to the budget and helped to mitigate the budgetary loss in this category include: Motor Vehicle Fees ($43,476), Engineering Fees ($25,426), and the Building Rentals at the Recreation Center ($12,706). Miscellaneous Revenues ($357, 774 greater than budget) A portion of this surplus is due to increased revenues while some is essentially a reimbursement of expenses incurred. Our investment earnings exceeded the budget by $144,910. We took advantage of the higher investment rates over the past three years to set us up with higher -than -normal interest earnings over the next 5 to 6 years. We budget conservatively for interest revenue to avoid future budgetary reductions when interest rates fall. This revenue will contribute to future budgetary surpluses to help maintain a healthy fund balance. We also recognized a $114,229 gain on our investment portfolio. This is a required year-end entry to essentially reflect our investments at their fair market value as opposed to the face value. This is simply a paper gain that represents the value we could potentially receive if we sold our entire portfolio on 12/31/2025. Since we hold our investments to maturity, the gain is somewhat meaningless as we'll receive the face value upon maturity. Sponsorships and Contributions towards the various recreational programs and facilities totaled $64,284 compared to the budgeted assumption of $34,600. Refunds & Reimbursement revenue was $51,329 higher than budget due to a combination of insurance claim reimbursement proceeds and fees received from two housing developments that commenced in 2025. Transfers In (Actual equals budget) All transfers were received as expected. Fines & Forfeitures ($11,415 less than budget) This category consists of the City's portion of court fines received from the State and fluctuates annually based on the number of court cases. EXPENDITURES Total expenditures were higher than the budget by $78,920. The following is a summary of the key activity within each expenditure category. Wages & Benefits ($88,185 greater than budget) The unbudgeted Aquatics & Recreation Programmer position contributed to this category being over budget for the year. This caused the Recreation and Waterpark wages to be over budget by $35,228 and $27,792, respectively. Some of the Waterpark overage was offset by $34,485 of savings related to Temporary Employee labor. Departments that came in over budget include Motor Vehicle ($29,690), Police ($89,214), Recreation ($30,146), Cemetery ($29,617) and Unallocated ($28,641). The Motor Vehicle overage is due to increased vacation and sick hours provided to the part-time employees. The result is essentially incurring twice the expense as employees on leave need their presence in the office backfilled to effectively serve customers. This is a trend that will continue with other departments as well and will likely put upward pressure on our labor cost. The Police overage was the result of a retirement and overtime pay exceeding the budget by $43,000. The Cemetery's seasonal mowing labor exceeded the budget by over $10,200 due to a longer than usual mowing season. Supplies ($178,219 less than budget) Several line items within this expense category contributed to the positive results, including the following expenses which all came in below budgeted expectations: Fuel for City Vehicles was $49,260 lower than expected due to a combination of lower fuel prices and mild winter weather resulting in less fuel used for snow removal operations. Small Tools & Equipment was $34,567 less than budget, however, some of the budget was used to address Capital Equipment purchases within the Streets and Parks budgets. Capital equipment is accounted for within the Capital Outlay category and not in Supplies, however departments don't always identify their smaller capital needs during the budget process. Other line items that came in under budget include Chemicals ($10,530), Repair & Maintenance supplies ($14,748), Sign Repair Materials ($12,238) and Airport Fuel ($28,376). Services & Charges ($116,619 greater than budget) Several line items exceeded the budget, contributing to this category being over budget for the year. Contracted Repair & Maintenance exceeded the budget by $129,438, with the following departments contributing to that overage: Civic Arena ($64,673), Recreation Building ($21,951), Parks ($12,354) and Streets ($28,267). The two recreational facilities have seen significant repair needs over the past few years as new maintenance practices have been developed to address prior maintenance deficiencies. Parks completed an unbudgeted paver project at the Harrington Merrill property ($7,500) in addition to repairs at the VMF baseball complex in advance of the 2026 State Amateur Baseball Tournament ($6,187). Streets department was partially over budget due to additional expenses incurred to detour the Luce Line Trail around HUC's substation upgrade project. Those costs, which included a new trail through Kimberly Park to the trail, were reimbursed by HUC as a revenue line item and not a reduction to the expense. Line items that came in under budget include Software & Licensing ($23,328), Travel/Conference Expense ($11,209) and Contracted Snow Removal ($10,201). Miscellaneous Expenses ($26,427less than budget) All line items within this category came in under budget, but the most notable was the Cable TV Franchise expense reimbursement to HCVN. As discussed in the revenue section above, a decrease in the Cable TV franchise fee revenue resulted in the expenditure being less than budget by $11,083. Capital Outlay ($78,762 greater than budget) This expense category did not have any activity budgeted but had the following expenditures during the year: Information Technology incurred costs to redesign the City's webpage ($15,500). The cost was budgeted within Other Professional Services but is appropriately classified as a capital expenditure. Streets purchased a salt/sand spreader and a box plow totaling $40,189. The salt/sand spreader was budgeted under Small Tools & Equipment. City staff received a state grant in the amount of $13,676 to help offset the cost of the box plow. Parks purchased a new mower and snow blade ($23,073). The mower was budgeted under Small Tools & Equipment and the snow blade was partially funded by a grant. Transfers -Out (Actual equals budget) All transfers were made as expected, including the City's funding for shared operations of the HATS Facility ($120,542) and funding of the General fund's fleet replacement ($425,000). O _D. r m m �7 n (n c'n m (A m n S r D T! m n fD m o c°i c°i n co. (D m mc°i O C ° v -o '� �' m D° v m (D (D I m ° o Q m _� cQ tj CD W- v y j (D ran p (D R. pn E.1 N tll �p •-• (p .-. (D C R N f) �j. R fft x �W W A O CNO EA W O v A Cl W O V A W EA Cl A O N W A A m W A N O N CD 0)CD W W N 0)N W Cl O W A D fD fJ3 O y N W A W W N O O CD W Cl Cl W CD W Cl O A O W W N O A N A O N W W CD W A O CD CD O N W W N �I O CD (A (A (A C ff3 M fD 00 o N A CD Cl O O �I O Cl CD N �I W CD W �I O A Cl 0 0 0 0 0 o o o 0� y am. 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CO N W Ul W , C O O bCD NO NOWOCD O (D O CD C°W N°(0 CO W WO W W CW COEA O W W O ClO (D WUl W VO OV(D OV fY m VON �py� Zo in CD O f% N N N N ( A � Z O r} fD CD A W Clmi (D W 60 60 (n (D (n (nN Cl H3 A (D °,l �I W N �I °1 °1 N �I W W W (D Go W �I O O �I (D N W m CD 00 j D N N W W O W �I (,) A N A O Cl W Ul W p) - W A O (D W _ CD C, 7 m Q+ CD 00 0A W A W W W O W W W W Cl W W Cl O W (D W CD A Cl O W W �I v v W W Cl (D (D O O (D W Ul Ul A (D W W O W Go W O Go (D W (D M W O A W V V VD A V V O V� O VW .0V v O .0 V VW V O 9.0 O V VD O V W Planning ($2,589) This department exceeded the expense budget due to an unbudgeted intern being utilized. The IT department budgeted $10,000 for an intern that ended up not being needed, so the Planning department utilized some of that budget. Police ($56,813) This department exceeded the expense budget due to Wages & Benefits being $89,214 greater than budget. Overtime was $43,000 higher than expected and is the main factor in this category's overage. Police union increases and the retirement of a sergeant also contributed to the overage. Our budgeting practice has included a vacancy allowance to account for officer turnover, essentially reducing the wages and benefits budget. With very low turnover since the pandemic, this practice has contributed to the operations being over budget. We've removed this budgetary assumption for 2026. Protective Inspections ($27,916) This department exceeded the expense budget due to software costs being $23,076 higher than budgeted. The increased cost was related to the continued issues with the new software system. The system has proven ineffective and a switch to a new system was budgeted for 2026. Credit card fees were $7,280 higher than expected due to increased building permit activity. The higher expenses were offset by building permit revenue coming in $126,001 higher than budgeted. Engineering ($68,073) Engineering overspent in each of the four expense categories. Wages & Benefits was over budget due to exceeding the budgeted allowance for Temporary employees ($12,800). Supplies were over budget by $1,412 in the Small Tools & Equipment and Equipment Parts. Services & Charges were over budget by $62,640 due to the following line items exceeding expectations: Other Professional Services ($38,843) due to higher use of the contracted engineering firm after hiring the new City Engineer; Software & Licensing ($23,836) due to unbudgeted increases for the special assessment system and autocad; and Travel/Conferences ($2,235), which included training costs for a Temporary employee that Public Works was looking to bring on full-time. The higher expenses were nearly offset by higher revenues from Engineering Fees and fees from two new developments that commenced in 2025. Civic Arena ($59,166) This department exceeded the expense budget due to Contractual Repair & Maintenance being $64,673 higher than expected due to continual issues with critical repairs to the refrigeration system and other components within the facility. We are still trying to get ahead of issues resulting from poor maintenance practices of prior employees. Parks ($16,107) This department exceeded the expense budget due to several line items within the Services & Charges category. The department signed a contract to lease a "Turf Tank", which is essentially a robotic piece of equipment the department is using to spray lines on various athletic fields. The machine is more efficient and accurate than having city employees do the work as one employee is needed to operate the machine versus two employees to perform the same task. Less paint will also be used by the machine which will present some budgetary savings in Supplies. The annual cost of $12,700 was not budgeted for 2025 operations. Prairie grass maintenance efforts that began in 2024 with Goats on the Go, continued in 2025 with prescribed burns. The cost of $18,843 was covered by a State DNR grant that is reflected in the department's revenues. Senior Citizen Center ($1,809) This department exceeded the expense budget due to the cost of senior trips being higher than expected. Increased reimbursement revenue from the seniors offset the higher expense and the net revenue outperformed the budget for the year. Cemetery ($19,308) This department exceeded the expense budget due to Wages & Benefits being higher than expected by $29,617. Two things contributed to this overage. First, our full-time employee retired in the year, and we incurred additional cost of $10,200 to pay his accrued vacation and sick pay. We had some overlap in expense with the replacement employee working at the cemetery for the final two months of the year, learning the ropes from the employee who retired at the end of the year. Temporary labor was $11,000 higher than budget, mainly due to weather creating a longer mowing season. MINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, May 27, 2026 Call to order — 3:00 p.m. President Don Martinez called the meeting to order. Members present: President Don Martinez; Secretary Matt Cheney; Vice President Tom Lambert; Commissioner Kathy Silvernale; GM Jeremy Carter; Attorney Marc Sebora Others Present: Mayer Gary Forcier, City Council Member Pat May 1. Conflict of Interest 2. Approve Consent Agenda a. Approve Minutes b. Ratify Payment of Bills Motion by Commissioner Lambert, second by Commissioner C heney to Approve the Consent Agenda. Motion carried unanimously. 3. Approve Financial Statements Mr. Martig presented the Financial Statements. Electric Division Net Profit decreased by $198K over April 2025. Customer revenue and usage increased but total revenues were still down due to less generation sales. Transmission costs are higher and will continue to be all year, Natural Gas Division Net Income increased by $18k. Usage and revenues increased compared to April 2025. Increased revenue was offset by higher purchased gas and employee costs. Operating expenses were also higher due to backhoe repairs and sandblasting and painting stations. GM Carter highlighted the electric usage which is trending above relative to last year. GM Carter touched on the impact of the cold winter snap earlier in the year. Cost of Service Study update was provided. Balance sheet was also reviewed. Motion by Commissioner Cheney, second by Commissioner Silvernale to Approve the Financial Statements. Motion carried unanimously. 4. Open Forum Jeremy Lee, spoke of quality of life, cooling system and noise concerns. Jeremy stated it is important to ask questions, listen carefully and think long term. Brittany Eckstein, raised concerns of water health and the expansion of data centers in the community. Jeremy Lee asked if he could provide his questions in email form and get responses. GM Carter welcomed the questions and has also been responding to other residents' emails as he receives them. GM Carter stated that HUC has a vested interest in this community as well, GM Carter provided an update on the Data Center being an air-cooled system and not a glycol system. General discussion was also held about communication to the public President Martinez stated that once a construction plan has been put in place there are approvals that have to be made, followed and monitored, which also includes relying on the State and EPA to do their process as well. President Martinez and GM Carter also addressed the question of future scale and growth to what has been approved now. GM Carter discussed the infrastructure requirements and capacity for the community, and the local region and that proper review, coordination and planning has been done to ensure no capacity or transmission concerns would exist. In addition, this region has limited transmission capacity thatwould limit the size of data center growth. in addition, GM Carter discussed the characteristics of the new rate class. General discussion was held on other data centers and how it compares to the Data Center coming to Hutchinson. President Martinez thanked the people at the open forum for coming and discussing their concerns and asking questions. General discussion was also held on the use of fans and now possibly noise and air pollution. It was noted that all individuals'can contact GM Carter with additional questions. 5. Communication a. City Administrator— Matthew Jaunich i. Construction season - Edmonton project could be completed by middle of June. ii. Provided update on demolition of Jurgenson Hotel b. Divisions i. Dan Lang, Engineering Services Manager — 1. Working on Plant 1 Transformer Agreement ii. Dave Hunstad, Electric Transmission/Distribution Manager - Absent iii. Mike Gabrielson, Production Manager 1. GE was on site 2 weeks ago to remove Unit 1 iv. Byron Bettenhausen, Natural Gas Manager - 1. Construction season 2. Interviews this week for open Welder/Service position 3. Just completed MNOPS 2025 Audit which went well. Thanked the Commission for supporting Staff on tasks that needed to be completed throughout the year. 2 4. CIS Survey on the next 20 miles of the transmission pipeline is starting today in St James v. Jared Martig, Financial Manager — Nothing to Report c. Human Resources — Angie Radke - i. Continuing to work on the Welder/Service Person open position ii. Continuing to work on Compensation Study d. Legal — Marc Sebora — i. Nothing to report e. General Manager —Jeremy Carter i. Finishing up contracts in the Natural Gas department. ii. MRES will be out next week for annual survey iii. Webinars coming up regarding Prepay 6. Policies a. Review Policies i. Section 5 of Exempt Handbook ii_ Section 5 of Non -Exempt Handbook No changes recommended at this time. 7. Unfinished Business 8. New Business a_ Approve Natural Gas Custody Transfer Agreement with 3M Mr. Bettenhausen presented Approval of Natural Gas Custody Transfer Agreement with 3M. HUC needs to put in place a Custody Transfer Agreement with 3M to delineate the custody transfer point of infrastructure by each party located at each meter set. The agreement ensures both parties acknowledge the responsibilities set forth for the ownership, maintenance, measuring and monitoring of the natural gas facilities. Motion by Commissioner Silvernale, second by Commissioner Cheney to Approve Natural Gas Custody Transfer Agreement with 3M. Motion carried unanimously. b. Approve Natural Gas Maintenance Agreement with City of Fairfax Mr. Bettenhausen presented Approval of Natural Gas Maintenance Agreement with the City of Fairfax_ The maintenance agreement with the City of Fairfax has been updated to reflect the new contract terms as well as provide revisions to the routine work performed by HUC. 3 Motion by Commissioner Cheney, second by Commissioner Lambert to Approve Natural Gas Maintenance Agreement with City of Fairfax. Motion carried unanimously_ c. Approve Amendment #2 to the Heartland Corn Reservation Agreement GM Carter presented Approval of Amendment #2 to the Heartland Corn Reservation Agreement. GM Carter reviewed the Firm Capacity Reservation Agreement that was entered into on December 20, 2023, along with the first amendment. At this time, Heartland Corn is requesting to convert an additional 1000 Dth's/day from the reservation agreement to the firm transportation agreement. Motion by Commissioner Silvernale, second by Commissioner Cheney to Approve Amendment #2 to the Heartland Corn Reservation Agreement. Motion carried unanimously, d. Approve Amendment #2 to the Heartland Corn Firm Transportation Agreement President Martinez stated this is the 2"d part of the Heartland Corn Agreements which is converting an additional 1000 Dth's/day from the Reservation Agreement to the Firm Transportation Agreement. Motion by Commissioner Cheney, second by Commissioner Lambert to Approve Amendment #2 to the Heartland Corn Firm Transportation Agreement. Motion carried unanimously. 9. Adjourn There being no further business, a motion by Commissioner Lambert, second by Commissioner Cheney to adjourn the meeting at 3:37p.m_ Motion carried unanimously. 'J Matt Cheney, Secretary ATTEST:. , e Don Martinez, Presider t 4 To: Mayor and Council From: Candice Woods, Liquor Hutch Director Date: 07-01-26 Re: Liquor Hutch Sales January —June 2026 2025Actual 2026Actual Change Year To Date Sales: $3,510,244 $3,544,032 1.0% Liquor $1,360,550 $1,415,232 4.0% Beer $1,538,752 $1,527,223 -0.7% Wine $419, 035 $404, 023 -3.6% THC $97,125 $94,258 -3.0% YTD Gross Profit Dollars: $929,694 $961,167 3.4% YTD Customer Count: 114,302 113,154 -1.0% Average Sale per Customer: $30.71 $31.32 2.0% YTD Product Count: 266,655 270,406 1.4% Gross Profit Percentage: 26.49 27.12 2.4% 2026 Budget Change $3,547,300 -0.1% $1,374,200 3.0% $1,554,100 -1.7% $421,200 -4.1 $102,000 -7.6% $924,300 4.0% na na na na na na 24.9 8.9% "Although sales are trending flat, it's important to note Gross Profits are up 3.4% over 2025 and 4.0% over budget. Store Activity Highlights — First Tuesday Staff Product Training — 451" Parallel products Agave Spirits Tasting Event held at Crow River Golf Club New Part Time employee hired and training in progress Full Time Employees attended the MMBA Annual Conference "Ready to Drink" products In Store Tasting Event held Discussions begun with River House to host our events Computer software update completed with our POS provider Development of our "Liquor Hutch" label THC products began Bloody Mary Contest began Memorial Day, Water Carnival, Winstock, Father's Day H