Finance Director Josh Feldman presented the City of Eagan's proposed 2026'27 enterprise and special revenue fund budgets at the Oct. 14 workshop, explaining how each fund will balance operating costs, capital needs and reserves.

"I'm happy to be here tonight to present the 20 26 and 27 Enterprise and Special Revenue Fund budgets," Feldman said as he opened the packet overview. He told council members the packet contains more detail but he was presenting highlights, including projected revenue, cash balances and planned capital spending.

The proposed enterprise funds include street lighting, storm drainage and water quality; the Civic Arena, Cascade Bay water park and the Community Center; and public utilities (water and sewer). Special revenue funds covered in the presentation included sustainability, ETV, tree mitigation, the opioid-prevention fund and Local Affordable Housing Aid (LAHA).

Feldman said the sustainability fund is capital-intensive and that franchise-fee revenue enacted in 2022 began to flow in 2023. He showed a projected fund cash balance of roughly $1.5 million for recent years and a projected year-end 2027 cash balance a little over $2 million ("a little under $2,500,000," he said). The 2026 budget would launch an "Eagan Climate Action Community Fund" and include personnel reclassifications in sustainability: a sustainability coordinator reclassified to manager and a part-time specialist moved toward full time.

On utilities, Feldman said the cash position has slipped from historical levels of about $20 million to a current projected range of $10 million to $15 million and that the city is pursuing a combination of rate increases and bonds to meet capital needs. He flagged an average consumer impact of about a 9.5% increase under the current rate proposal for a 20,000-gallon user; the council will take formal action on a fee schedule in the fall. Feldman also highlighted that Metropolitan Council wastewater charges are set to decrease by 2.8%, which reduces a major line-item cost the city pays to Met Council for sewage treatment.

Recreation enterprise funds drew attention for their capital funding needs. Feldman said the Civic Arena typically runs near break-even on operations but faces capital shortfalls and is projecting an operating loss of about $23,000 in 2026; he asked the council to consider a policy discussion about a potential $500,000 transfer from general fund reserves to shore up arena capital needs. Cascade Bay, now about 20 years old, has performed well operationally and is expected to show a roughly $300,000 operating gain, but staff warned major capital work may be needed within five years.

Smaller special revenue funds also drew questions. ETV's PEG capital balance is sufficient for planned equipment purchases, Feldman said, but franchise-fee revenue that funds recurring operations is declining; franchise agreements are set to be renegotiated in 2028. The tree-mitigation fund had nearly $1 million in 2024 and conservative budgeting in 2026'27 planned roughly $100,000 for tree replacement. The opioid-prevention fund balance was described as "near $600,000 to $700,000," and councilors pressed staff for options to deploy those dollars beyond continued Narcan distribution.

Across the presentation, councilors asked for more detail on assumptions behind revenue growth, contingencies for capital projects and timing for coming back with fee schedules or policy recommendations. Several councilors verbally indicated support for the proposed fund budgets and the staff approach during the workshop. Feldman said formal actions on rates and fee schedules would return to council in subsequent meetings.

Ending: Staff will return with more detailed ordinances and fee schedules for council action in the coming months and with follow-ups on specific items flagged during the workshop, including a proposed transfer for the Civic Arena and franchise-fee negotiations for ETV and utilities.