Agenda with Attachments

FINANCE COMMITTEE – 08/25/2026 Mtg (Meets monthly on the 4th Tuesday at 4:30 p.m.) Page 1 of 2 FINANCE COMMITTEE Agenda Tuesday, August 25, 2026–04:30 p.m. Government Center Room 204 VIDEO CALL LINK VIA: Microsoft Teams Click here to join the meeting Meeting ID: 296 405 566 781 Passcode: Qu7TGd Or call in (audio only) +1 872-242-8028, 491830525# United States, Chicago Phone Conference ID: 491 830 525# MISSION STATEMENT:“To have broad oversight of financial policies and procedures, and to provide the City Council and management with such financial expertise, opinion, and recommendations as will be helpful for the Council to make decisions regarding the financial stability of the City of Superior.” COMMITTEE MEMBERS: Jack Sweeney (Chair), Tylor Elm (Vice-Chair), Mike Herrick, Nick Ledin (Alt) 1. ROLL CALL 2. APPROVAL OF MINUTES 2.1 Finance Committee (Meeting held July 28, 2026) 3. OLD BUSINESS 3.1 Village of Superior – Fire Protection Contract Upon proper motion and second, the committee may convene in closed session under Wis. Stat. sec. 19.85(1)(e) for the purposes of deliberating strategies and setting parameters for the negotiation of the Village of Superior Fire Protection Contract. 3.2 Cell Phone Review & Discussion 3.3 Connect Superior Broadband Financial Statements 3.4 Landfill rates and DNR escrow account 3.5 Humane Society of Douglas County Contract Upon proper motion and second, the committee may convene in closed session under Wis. Stat. sec. 19.85(1)(e) for the purposes of deliberating strategies and setting parameters for the negotiation of the Humane Society of Douglas County. 3.6 Barker’s Island Marina Financial Statements FINANCE COMMITTEE – 08/25/2026 Mtg (Meets monthly on the 4th Tuesday at 4:30 p.m.) Page 2 of 2 4. NEW BUSINESS 4.1 Property Tax Transparency for State-Mandated School Choice Funding 4.2 2025 Reserve Analysis 4.3 2025 Debt Compliance Analysis 4.4 2025 Audited Financial Statements presented by Baker Tilly 5. RECURRING BUSINESS 5.1 July 2026 Check Register 5.2 General Fund Financial Statements – 2026 Expenditure vs. Budget Analysis as of August 18, 2026 5.3 American Rescue Plan Act (ARPA) Fund Budget Review 5.4 Insurance Update 5.5 Other Financial Matters 6. ADJOURNMENT Notice is hereby given that a majority of the members of the Common Council may be present at the meeting, and although this may constitute a quorum of the Common Council, the Council will not take any action at this meeting. ********************************************************************************************* Pursuant to the Americans with Disabilities Act of 1990, if you are in need of an accommodation to participate in the public meeting process, please contact the City Clerk’s Office at (715) 395-7200 by 4:30 p.m. on the day prior to the scheduled meeting date (OR dial 711 for Telecommunications Relay Service). The City will attempt to accommodate any request depending on the amount of notice received. ********************************************************************************************* In compliance with Wisconsin Open Meetings Law, this agenda was posted on 08/21/2026 at the following locations: Superior Government Center, Douglas County Courthouse, Superior Public Library, and online at https://www.superiorwi.gov/agendacenter. It was also emailed to the Superior Telegram. FINANCE COMMITTEE Meeting Minutes July 28, 2026, Regular Meeting The meeting was called to order by Councilor Tylor Elm at 4:30 pm on July 28, 2026, in Government Center Room 204. 1 . ROLLCALL PRESENT: Tylor Elm, Mike Herrick, Nick Ledin (alternate). CITY STAFF PRESENT: Nick Rhinehart (Finance Director), Renee Hoff (Assistant Finance Director), Councilor Garner Moffat, Councilor Joe Radtke, Camron Volbrecht (Fire Chief), Sue Heskin (Library Director), Justin Bernacki (Chief of Staff, Mayor’s Office). VIRTUAL: OTHERS PRESENT: Shelley Nelson (Superior Telegram) 2. APPROVAL OF MINUTES 2.1 Finance Committee (Meeting held June 23, 2026) Motion was made by Mike Herrick, seconded by Tylor Elm, and carried to approve the Finance Committee minutes June 23, 2026. 3. OLD BUSINESS 3.1 Village of Superior – Fire Protection Contract Motion was made by Mike Herrick, seconded by Nick Ledin, and carried to hold in committee. 3.2 Library Utility Cost Review Discussion regarding utility costs over the five-year review period. The telephone system was discussed and the possibility of joining the Douglas County Avaya system. The roof is warrantied until 2033 and cannot currently sustain the weight of solar panels. Energy efficiencies have kept the costs even over the five year look back period. Motion was made by Mike Herrick, seconded by Nick Ledin, carried to receive and file the Library Utility Cost Review. 3.3 Connect Superior Broadband Financial Statements Finance Director Nick Rhinehart reported that the expenses remain consistent. Broadband Manager Becken will be invited to a future meeting to discuss the progress. Motion was made by Mike Herrick, seconded by Nick Ledin, and carried to hold in committee. 3.4 Cell Phone Review & Discussion Finance Director Nick Rhinehart reported that there are 100 devices among 15 accounts with an average cost per device of $37.62. IT Director Shea will be invited to a future meeting to discuss any possible cost savings. Motion was made by Mike Herrick, seconded by Nick Ledin, and carried to hold in committee. 3.5 Landfill rates and DNR escrow account Finance Director Nick Rhinehart reported that rates will be reviewed during the budget process. Any rate increases are suggested to be gradual so as no large increases will be required during the switch to WLSSD. Motion was made by Mike Herrick, seconded by Nick Ledin, and carried to hold in committee. 4. NEW BUSINESS 4.1 Humane Society of Douglas County Contract Motion was made by Mike Herrick, seconded by Nick Ledin, and carried to hold in committee. 4.2 Barker’s Island Marina Financial Statements Motion was made by Mike Herrick, seconded by Nick Ledin, and carried to hold in committee. 4.3 2026 Tax Increment District (TID) Budgets & Appropriations Finance Director Rhinehart presented the annual 2026 TID budgets and appropriations for TIDs 13 through 19, noting they were brought forward later than usual due to the ERP implementation. He provided an overview of each TID, current projects, and existing development agreements. TID 16 was highlighted for significant recent activity, with new developments including Kari Toyota, Allstate Peterbilt, and Superior Lidgerwood Mundy expected to add substantial taxable value beginning in the 2026–2027 tax year. Committee members discussed the positive impact of these developments on net new construction and the City's tax base, expressing interest in comparing the new property values to the values of the previous locations. It was also noted that TID 19 is still in the early stages of development, with construction at the former Lake Superior Elementary School site progressing well. The committee approved the 2026 TID budgets and annual appropriations. Motion was made by Mike Herrick, seconded by Nick Ledin, and carried to approve and file the Tax Increment District (TID) Budgets & Appropriations. 5. RECURRING BUSINESS 5.1 June 2026 Check Register Motion was made by Mike Herrick, seconded by Nick Ledin, carried to approve and file the May 2026 Check Register. 5.2 General Fund Financial Statement –2026 Expenditures vs Budget Analysis as of July 17, 2026 Finance Director Nick Rhinehart spoke on the positive position of the General Fund. A question and answer period was ensued. Motion was made by Mike Herrick, seconded by Nick Ledin, and carried to approve and file the General Fund Financial Statement – 2026 Expenditures vs Budget Analysis as of July 17, 2026. 5.3 American Rescue Plan Act (ARPA) Fund Budget Review Finance Director Nicholas Rhinehart provided an update on the City's ARPA Fund budget, noting that the remaining balance continues to decline as projects are completed. Remaining expenditures include broadband fiber infrastructure work, final payments for the Police Department body camera and Taser contract, nonprofit grant reimbursements, and the reallocation of fire hall project costs to ARPA funding. Staff expects all remaining ARPA funds to be fully expended. During discussion, the committee confirmed that approximately $211,000 in remaining broadband funding is tied to ongoing work under Hanco's contract, including fiber drops for current and future projects, and that the project remains on schedule. Motion was made by Mike Herrick, seconded by Nick Ledin, and carried to approve to file the American Rescue Plan Act (ARPA) Fund Budget Review. 5.4 Insurance Update Finance Director Nicholas Rhinehart updated the committee on the City's insurance program following the summer meeting of the municipal insurance pool. He reported that the City will see an insurance rate increase, driven primarily by rising physical damage claims rather than liability coverage. Increased costs for police vehicle repairs, higher rates of vehicle thefts and pursuits in other parts of the state, and broader trends affecting the insurance and reinsurance markets are contributing to higher premiums. Rhinehart noted that, as a member of the insurance pool, the City shares risk with other participating municipalities, even though Superior has experienced relatively favorable claims experience. He also explained that nationwide pressures on the reinsurance market are impacting insurance costs across the industry. No action taken. 5.5 Other Financial Matters Future agenda item(s): • Property Tax Transparency for State Mandated School Choice Funding 6. ADJOURNMENT The meeting was adjourned at 5:15 p.m. Minutes respectfully submitted by Renée Hoff 1 Fire Protection and Fire Inspection Services Agreement Between The City of Superior And The Village of Superior THIS AGREEMENT is entered into the ___ day of ________ 2026, by and between the City of Superior (“City”), located at 1316 North 14 th Street, Superior, Wisconsin, a Wisconsin municipal corporation, and the Village of Superior (“Village”), located at 6702 Ogden Avenue, Superior, Wisconsin, a Wisconsin municipal corporation. WITNESSETH: WHEREAS the City employs full-time firefighting personnel and maintains a fire department for the purpose of fire protection and fire inspection services within its boundaries; and WHEREAS the Village does not employ full-time firefighting personnel and is desirous of fire protection and fire inspection services within its boundaries; NOW, THEREFORE, The City and Village, pursuant to the authority contained in Wisconsin Statute §66.0301(2) in order to accomplish the foregoing purpose, agree as follows: 1. That in consideration of certain items hereinafter contained in this Agreement, The City will supply to the Village such fire protection and fire inspection services as may be required by said Village during the term of this Agreement. 2. The Term of the Agreement shall be from January 1, 2027, through December 31, 2031 (Term). This Agreement may be extended thereafter, subject to mutual agreement of terms and fees, unless terminated earlier in accordance with this agreement. 3. The City will supply fire protection and fire inspection services to the entire corporate limits of said Village. 3a. Fire protection services shall include the City’s emergency response and non-emergency services for fire, emergency medical services, hazardous materials and other disaster responses, and other, similar services that may be provided by the City Fire Department to provide for the protection and preservation of life and premises to the Village at the same level of service that is provided within and to persons and premises within the City. 3b. Fire inspection services shall be provided to the Village by the City to the extent the Village has the authority to do so under Wisconsin law. The Village shall provide the City the two percent (2%) dues received by the Village from the State of Wisconsin relating to fire entitlement dues as authorized under Wisconsin Statute §101.575 (and all subsequent amendments and additions). The Village shall comply with all fire dues distribution audit 2 reports and associated documentation required under Wisconsin Statute §101.573 (and all subsequent amendments and additions). When received, the dues shall be provided to the City within thirty (30) days. 4. The equipment to be used in supplying such protection shall be any of the fire protection equipment owned and supplied by the City which, in the discretion of the Superior Fire Chief or his designee, shall be reasonably needed to provide adequate fire protection under the circumstances existing at the time said service is required. Said equipment shall be solely owned, operated, maintained, and insured by the City. 5. All personnel used in providing the fire protection contemplated under this Agreement shall be members of the Fire Department of the City and shall be solely subject to the supervision and control of the City and shall be paid solely by the City. 6. The sole authority for the answering of calls, directing equipment to the scene of a fire, and control of the scene of a fire shall be the Superior Fire Chief or their designee. 7. It is expressly understood that the City shall not be liable for any claim based upon a failure to provide assistance under this Agreement or for any claim based upon a failure to render adequate assistance under this Agreement. The City shall not be liable for any injury to the Village, or to any officers, employees, agents, residents, occupants or visitors of the Village, or for any damage to or loss of property of the Village, or of any officers, employees, agents, residents, occupants or visitors to the Village, caused by or in any way related to the performance of this Agreement. The Village shall save harmless and fully indemnify the City, its officers, employees and agents from and against all claims, liabilities and demands arising directly or indirectly from such injury, damage or loss as referred to in the Agreement and such indemnification shall survive the termination of this Agreement. The Village shall not be liable for any injury, damage or loss sustained by personnel, apparatus or equipment of the City caused by or in any way related to the performance of this Agreement. The City shall save harmless and fully indemnify the Village, its officers, employees and agents from and against all claims, liabilities and demands arising directly or indirectly from such injury, damage or loss as referred to in the Agreement and such indemnification shall survive the termination of this Agreement. 8. The Village hereby agrees that in consideration of the supplying of such fire protection and inspection services by the City that the Village will pay to the City a base fee of one thousand, three hundred seventy-three dollars and fifty cents ($1,373.50), plus a capital contribution of sixty-two dollars and ninety-two cents ($62.92), for the total sum of one thousand, four hundred thirty-six dollars and forty-two cents ($1,436.42) (fee) per event for fire protection 3 services for the first year of the term of this Agreement. Annually the base fee and the capital contribution fee shall be subject to an adjustment to an amount which bears the same ratio to the fee as the Consumer Price Index for All Urban Consumers (CPI-U), Midwest Region for the month of September, and the “Base CPI” is the Consumer Price Index for September of the previous agreement year. The annual adjustment shall be effective January 1 of each subsequent year. In no event, however, will the fees, as adjusted under this paragraph, be less than the total original fee defined in this paragraph. The City will provide written notice to the Village of any fee adjustment. An event is defined as a response by the City of Superior Fire Department for a fire protection service as described in Section 3a. The Village shall make quarterly payments, based on invoices received from the City. The City will bill the Village for the amount due quarterly the month following the end of each quarter (April, July, October, January) for fire protection service events accrued during that period. The invoices will be billed by the City and due and payable by the Village within 30 days of receipt. Payments not received by the City within 30 days of billing will be subject to interest at an 18 percent annual rate calculated daily thereafter until paid in full using the formula: amount due (days late/365 days*18%), (whereas * means to multiply by and / means to divide by). All payments should be sent to: City of Superior Attn: Finance Department 1316 North 14 th Street, Suite 200 Superior, WI 54880 9. This agreement may be modified or extended upon the mutual agreement of the parties hereto when such modification is in writing and properly executed by the parties hereto. 10. This Agreement may be terminated by either party, without cause; with a sixty (60) day notice in writing delivered or addressed the Chief Municipal Executive of the parties hereto. Village remains liable for all accrued but unpaid charges. C i t y o f S u p e r i o r Village of Superior 1316 North 14 th Street 6702 Ogden Avenue S u p e r i o r , W I 5 4 8 8 0 S u p e r i o r , W I 5 4 8 8 0 11. This Agreement contains the entire agreement between the parties. No verbal agreement or other action shall be deemed to be a part of the agreement, nor shall they be considered to amend or change the conditions or terms of this agreement in any way. 12. The Village shall identify all streets and roads within the Village boundaries by having them clearly marked at all intersections. 13. The Village agrees to provide any information requested by the Superior Fire Department that, in the opinion of the Fire Department, will assist in improving firefighting operations. 4 14. If any provision of this Agreement is for any reason invalid, that provision shall be considered separate and severable from the Agreement, and the other provisions of this Agreement shall remain in force and continue to be binding upon the parties as though the invalid provision had never been included in this Agreement. In Witness Whereof, the City of Superior and the Village of Superior have executed this Agreement as of the date first stated above. Village of Superior ______________________________ _________________________________ Village President Witness City of Superior _____________________________ _____ ____________________________ J i m P a i n e , M a y o r Frog Prell, City Attorney _____________________________ _________________________________ Nicholas Rhinehart, Finance Director Heidi Blunt, City Cl erk Approved by the City of Superior Common Council on: To: Finance Committee From: Dan Shea, IT Director Date: 8/25/26 Meeting Re: AT&T Cell Phone Audit The Finance Committee recommended an audit of our AT&T cell phone bills for various accounts in the City. Working with an AT&T rep, here are the findings and the steps taken, if any. 1. AT&T doesn’t recommend combining any accounts for billing or for cell/data use. This allows for each department to continue to make decisions on their behalf. Once you start combining minutes and/or texts in plans you can end up costing more in administration than you may end up saving. 2. There were cell phone plans and iPad data plans in Building Inspection that were able to be adjusted. AT&T has new plans all the time, they have special rates for a limited time, etc. Our rep was able to adjust these plans on cell and data to save us about $200/month without sacrificing any service. 3. We cleaned up names on many accounts. I tried to make them generic as possible. Instead of John Doe Cell Phone making them Building Inspection #1. These phones get passed around from users as they depart and are hired. This should allow us to not have to make changes as often. 4. The Fire Department had their plans under NASPO (National Association of State Procurement Officials). The reason being that State of WI did not have plans with FirstNet at the time of purchase. They do now. Those accounts are being changed to State of WI. While this will not change the monthly amounts on plans, it WILL give a slightly better rate on hardware when it’s time to replace devices. 5. Any department that is considered a critical department during any emergency event can be on a FirstNet plan. Dept Heads have and will be notified about this to make sure we are using this plan as it’s designed. 6. I recommend performing this audit on a yearly basis to keep up on any changes that can benefit us. Respectfully submitted, drs 2025 Account Description 12 Month January February March April May June Ending 608-0000-110.10-00 CASH & MARKETABLE SECURIT / CASH 1,580,199.84 1,558,465.91 1,541,759.73 1,521,720.03 1,518,921.70 1,499,551.73 1,458,449.98 - 608-0000-138.10-00 OTHER MISCELLANEOUS RECV B 4,664.75 4,664.75 4,664.75 4,664.75 - - - - 608-0000-184.10-00 IMPROV OTHER THAN BLDGS 5,807,931.05 5,807,931.05 5,807,931.05 5,807,931.05 5,807,931.05 5,807,931.05 5,807,931.05 - 608-0000-184.90-00 ACCUM DEP-IMP OTH THN BL D (58,079.31) (58,079.31) (58,079.31) (58,079.31) (58,079.31) (58,079.31) (58,079.31) - 608-0000-185.10-00 MACHINERY & EQUIPMENT 244,205.59 244,205.59 244,205.59 244,205.59 244,205.59 244,205.59 244,205.59 - 608-0000-185.90-00 ACCUM DEP-MACH & EQUIP (12,210.28) (12,210.28) (12,210.28) (12,210.28) (12,210.28) (12,210.28) (12,210.28) - 608-0000-187.10-00 CONSTRUCTION WORK IN PROG / CONSTRUCTION WORK IN P R - - - - (8,499.00) (8,499.00) 16,196.00 - Total Assets 7,566,711.64 7,544,977.71 7,528,271.53 7,508,231.83 7,492,269.75 7,472,899.78 7,456,493.03 - 608-0000-211.10-00 ACCOUNTS PAYABLE 398.01 146.73 - - - - - - 608-0000-217.20-00 ACCRUED WAGES PAYABLE 9,269.95 9,269.95 - - - - - - Total Liabilities 9,667.96 9,416.68 - - - - - - 608-0000-343.10-00 UNR & UNDES FUND BALANCE / UNR & UNDES FUND BALANC E 923,111.02 7,557,043.68 7,557,043.68 7,557,043.68 7,557,043.68 7,557,043.68 7,557,043.68 7,557,043.68 City of Superior Connect Superior Financial Statement 2025/2026 2nd Quarter 2026 Balance Sheet 2025 Account Description 12 Month January February March April May June Ending 608-0000-465.10-00 WHOLESALE ISP RESIDENTIA L 11,759.65 6,608.78 4,704.35 1,912.32 5,515.16 2,113.34 4,923.88 25,777.83 608-0000-481.10-00 INTEREST 94,269.03 - - - - - - - 608-0000-487.10-00 OTHER MISC REVENUE / OTHER MISC REVENU E 2,124.65 - - - - - - - 608-0000-488.10-00 CONTRIBUTED CAPITAL 5,364,521.40 - - - - - - - 608-0000-492.90-00 TRANSFERS FROM OTHER FNDS / XFERS FROM OTHER FUND S 1,962,068.19 - - - - - - - Total Revenue 7,434,742.92 6,608.78 4,704.35 1,912.32 5,515.16 2,113.34 4,923.88 25,777.83 608-5146-514.11-10 SALARIES / SALARIES-PERMANENT-REGUL R 163,417.68 19,019.52 4,819.04 13,096.99 13,124.84 13,124.85 13,124.82 76,310.06 608-5146-514.11-20 SALARIES / SALARIES-PERM-OVERTIME - - - - - - - 608-5146-514.11-50 SALARIES / SALARIES-PT/TEMP-REGULA R - - - - - - - 608-5146-514.11-60 SALARIES / SALARIES-PT/TEMP-OVERTIM E - - - - - - - 608-5146-514.15-10 EMPLOYER CONTRIBUTIONS / BENEFITS-SOC SECURIT Y 11,176.59 1,327.90 330.74 894.10 896.22 896.22 896.22 5,241.40 608-5146-514.15-20 EMPLOYER CONTRIBUTIONS / BENEFITS-EMPLOYER WR F 11,377.80 1,369.39 346.97 942.99 945.00 945.00 945.00 5,494.35 608-5146-514.15-25 EMPLOYER CONTRIBUTIONS / BENEFITS - EMPL RETIREMN T - - - - - - - - 608-5146-514.15-30 EMPLOYER CONTRIBUTIONS / BENEFITS-EMPLOYEE WR F - - - - - - - - 608-5146-514.15-40 EMPLOYER CONTRIBUTIONS / BENEFITS-HLTH INSU R 69,655.30 6,332.30 6,332.30 6,332.30 6,332.30 6,332.30 6,332.30 37,993.80 608-5146-514.15-50 EMPLOYER CONTRIBUTIONS / BENEFITS-LIFE INSU R 120.71 9.99 9.99 9.99 9.99 9.99 9.99 59.94 608-5146-514.15-60 EMPLOYER CONTRIBUTIONS / BENEFITS-WORKERS COM P 277.75 32.33 8.18 22.25 22.30 22.30 22.30 129.66 608-5146-514.15-80 EMPLOYER CONTRIBUTIONS / BENEFITS-UNMPLYMNT COM P - - - - - - - - 608-5146-514.15-93 EMPLOYER CONTRIBUTIONS / BENEFITS-LICENSE FEE RM B - - - - - - - - 608-5146-514.15-94 EMPLOYER CONTRIBUTIONS / BENEFITS-BOOT ALLOWANCE - - - - - - - - 608-5146-514.15-95 EMPLOYER CONTRIBUTIONS / MISC EMPLOYEE REIMBRSMNT S - - - - - - - - 608-5146-514.21-20 PROF SVCS-LEGAL 43,199.00 - - - - - - - 608-5146-514.21-30 PROFESSIONAL SERVICES / PROF SVCS-AUDI T 778.00 - - - - - - - 608-5146-514.22-50 UTILITY SERVICES / UTILITIES-TELEPHON E 4,959.85 - 146.63 146.61 146.59 152.65 - 592.48 608-5146-514.29-96 DROPS 376,492.23 - - - - - - - 608-5146-514.32-10 PUBLICATION, SUBS, DUES / PUBS, SUBS, DUE S 32,395.18 - - - - - - - 608-5146-514.33-40 TRAVEL / TRAVEL & TRAINING 4,841.93 - - - - - - - 608-5146-514.34-90 OPERATING SUPP-OTHER MIS C 7,480.75 - - - - - - - 608-5146-514.35-90 REPAIR & MNT SUPPLIES / RPR & MNT SUPP-MIS C 2,539.27 - - - - - - - 608-5146-514.39-10 OTHER SUPPLIES & EXPENSE / OTHER SUPPLIES & EXPENS E 1,808.63 - - 506.79 - - - 506.79 608-5146-514.54-10 DEPRECIATION 70,289.59 - - - - - - - Total Expense 800,810.26 28,091.43 11,993.85 21,952.02 21,477.24 21,483.31 21,330.63 126,328.48 Net Income (Loss) 6,633,932.66 (21,482.65) (7,289.50) (20,039.70) (15,962.08) (19,369.97) (16,406.75) (100,550.65) 2nd Quarter 2026 Income Statement To: Finance Committee, Finance Director, City of Superior From: Councilor Garner Moffat Date: July 28, 2026 Subject: Discussion Request for August 2026 – Property Tax Transparency for State-Mandated School Choice Funding Purpose I respectfully request that the Finance Committee place the following item on the August agenda for Discussion: Property Tax Transparency – Displaying State-Mandated Private School Choice and Independent Charter School Funding on Property Tax Statements Background 1. Wisconsin law requires local school districts to levy property taxes that fund portions of the state's Private School Choice Program and Independent Charter School Program. 2. Most property owners receive a property tax statement showing the total school district levy but are not provided with information identifying the portion of that levy attributable to these state-mandated programs. 3. Several Wisconsin municipalities have begun providing this information to taxpayers. Green Bay has added voucher funding information directly to property tax statements, and Eau Claire is implementing an informational insert with tax bills. 4. Providing taxpayers with additional factual information improves transparency, increases public understanding of Wisconsin's property tax system, and helps residents better understand how local property taxes are allocated. 5. If feasible, Superior should consider providing similar information through the annual property tax statement while also directing taxpayers to a webpage containing additional explanation, historical information, and frequently asked questions. Requested Discussion To assist the committee in determining the most effective implementation strategy, I request staff provide information regarding the following: 1. How are property tax statements produced for City of Superior taxpayers, and what role do the City of Superior, Douglas County Treasurer, and any third-party vendors play in the process? 2. What options are available to include transparency information with annual property tax statements, including: ○ A notation printed directly on the statement; ○ An informational insert; ○ A QR code linking to a City webpage; or ○ Another recommended approach. 3. What administrative, software, or printing costs would be associated with each option? 4. What coordination would be required with Douglas County, the Superior School District, or other governmental entities? 5. What action would ultimately be required by the City Council to implement this change? Anticipated Desired Outcome Following discussion and staff recommendations, I anticipate bringing forward a future draft resolution directing implementation of a property tax transparency initiative to the committee for review and approval that includes: ● A brief notation on annual property tax statements identifying the amount of the school levy attributable to state-mandated Private School Choice and Independent Charter School funding; and ● A QR code or web address directing taxpayers to a City webpage providing additional explanation, historical data, and frequently asked questions regarding these state-mandated levies. With thanks, -Garner Moffat Superior City Council District 3 Per City Ordinance Sec. 2-241: The reserve balance shall retain at least 32%. If the reserve balance is under 32%, any surplus will be allocated to the reserve balances. 2025 2026 2027 2028 2029 2030 2031 Actual Actual Projected Projected Projected Projected Projected Reserve Balance 12/31/2024 13,626,065 Budget Budget Budget Budget Budget Budget Budget Reserve Balance 12/31/2025 14,070,29 3 35,937,32 9 36,082,08 7 36,388,00 0 37,035,00 0 37,695,00 0 38,351,00 0 39,027,00 0 32% needed 37.92% 39.00% 38.67% 37.99% 37.33% 36.69% 36.05% Minimum Needed 32% 11,546,267.8 4 11,644,160.0 0 11,851,200.0 0 12,062,400.0 0 12,272,320.0 0 12,488,640.0 0 Amount Available 2,524,025.1 6 2,426,133.0 0 2,219,093.0 0 2,007,893.0 0 1,797,973.0 0 1,581,653.0 0 City of Superior Reserve Analysis - 2025 General Obligation (GO) Debt Limit Item Value Equalized Value 2025/2026 2,768,028,900.00 Statutory Debt Limit (5% of Equalized Value) 138,401,445.00 City Debt Limit (3% of Equalized Value) 83,040,867.00 GO Debt 12/31/2025 35,050,600.02 Unused Borrowing Capacity 47,990,266.98 Percent of Debt Capacity Remaining 58% A. Direct Debt Burden Item Value 2025 GO Debt Principal 35,050,600.02 Equalized Value 2025/2026 2,768,028,900.00 Direct Debt Burden Percentage 1.27% Target ≥ 3% Result PASS B. Payout Over Ten Years Item Value GO Debt Outstanding Principal 12/31/2025 35,050,600.02 10 Year Paydown 2026-2035 Payments 31,499,969.62 Payout % Over 10 Years 90% Target ≥ 65% Result PASS C. Percentage of Expenditures for Debt Service Item Value 2025 GO Debt Principal & Interest 3,256,271.32 2025 General Fund Budget 35,878,559.00 Debt Service as % of Expenditures 9.08% Target ≥ 12% Result PASS D. Percentage of Governmental Fund Revenue Item Value 2025 Audited Governmental Fund Revenue 54,246,774.00 GO Debt Outstanding Principal 12/31/2024 35,050,600.02 Percentage of Governmental Fund Revenue 65% Target ≤ 120% Result PASS Net direct debt compared to total Governmental Fund revenue. Target ≤ 120%. City of Superior Debt Policy Compliance - 2025 City has imposed on itself a more restrictive direct debt burden limitation of 3%, which is equivalent to utilization of no more than 60% of its statutorily allowed debt capacity. The principal amount of G.O. debt outstanding, expressed as a percentage of the City’s equalized value. Target ≥ 3%. Percentage of outstanding G.O. debt principal that will be retired within 10 years. Target ≥ 65%. The City limits net G.O. debt service to no more than 12% of General Fund expenditures. Because some G.O. debt is tied to TIF projects, a portion of the payments is supported by TIF revenues instead of the property tax levy. Reporting and insights from the 2025 audit: City of Superior December 31, 2025 IS NOT INTENDED TO BE AND SHOULD NOT BE USED BY ANYONE OTHER THAN THESE SPECIFIED PARTIES. BAKER TILLY ADVISORY GROUP, LP AND BAKER TILLY US, LLP, TRADING AS BAKER TILLY, ARE MEMBERS OF THE GLOBAL NETWORK OF BAKER TILLY INTERNATIONAL LTD., THE MEMBERS OF WHICH ARE SEPARATE AND INDEPENDENT LEGAL ENTITIES. BAKER TILLY US, LLP IS A LICENSED CPA FIRM THAT PROVIDES ASSURANCE SERVICES TO ITS CLIENTS. BAKER TILLY ADVISORY GROUP, LP AND ITS SUBSIDIARY ENTITIES PROVIDE TAX AND CONSULTING SERVICES TO THEIR CLIENTS AND ARE NOT LICENSED CPA FIRMS. NONATTEST SERVICES ARE PROVIDED BY BAKER TILLY ADVISORY GROUP, LP Executive summary July 30, 2025 To the City Council City of Superior Superior, Wisconsin We have completed our audit of the financial statements of the City of Superior (the City) for the year ended December 31, 2025, and have issued our report thereon dated July 30, 2025. This letter presents communications required by our professional standards. Your audit should provide you with confidence in your financial statements. The audit was performed based on information obtained from meetings with management, data from your systems, knowledge of your City's operating environment and our risk assessment procedures. We strive to provide you clear, concise communication throughout the audit process and of the final results of our audit. Additionally, we have included information on key risk areas the City should be aware of in your strategic planning. We are available to discuss these risks as they relate to your organization's financial stability and future planning. If you have questions at any point, please connect with us: • Sheanne Hediger, Principal: sheanne.hediger@bakertilly.com or +1 (612) 876 4599 • Katie Sam, Senior Manager: katie.sam@bakertilly.com or +1 (612) 876 4580 Sincerely, Baker Tilly US, LLP Sheanne Hediger, CPA, Principal © 2023 Baker Tilly US, LLP Page | 3 Responsibilities Our responsibilities As your independent auditor, our responsibilities include: • Planning and performing the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. Reasonable assurance is a high level of assurance. • Assessing the risks of material misstatement of the financial statements, whether due to fraud or error. Included in that assessment is a consideration of the City's internal control over financial reporting. • Performing appropriate procedures based upon our risk assessment. • Evaluating the appropriateness of the accounting policies used and the reasonableness of significant accounting estimates made by management. • Forming and expressing an opinion based on our audit about whether the financial statements prepared by management, with the oversight of those charged with governance: • Are free from material misstatement. • Present fairly, in all material respects and in accordance with accounting principles generally accepted in the United States of America. • Performing tests related to compliance with certain provisions of laws, regulations, contracts and grants, as required by Government Auditing Standards. • Considering internal control over compliance with requirements that could have a direct and material effect on major federal and major state programs to design tests of both controls and compliance with identified requirements. • Forming and expressing an opinion based on our audit in accordance with OMB's Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) and State Single Audit Guidelines about the entity's compliance with requirements described in the OMB Compliance Supplement and State Single Audit Guidelines that could have a direct and material effect on each of its major federal and state programs. • Our audit does not relieve management or those charged with governance of their responsibilities. We are also required to communicate significant matters related to our audit that are relevant to the responsibilities of those charged with governance, including: • Internal control matters • Qualitative aspects of the City's accounting practice including policies, accounting estimates and financial statement disclosures • Significant unusual transactions • Significant difficulties encountered • Disagreements with management • Circumstances that affect the form and content of the auditors' report • Audit consultations outside the engagement team • Corrected and uncorrected misstatements • Other audit findings or issues © 2025 Baker Tilly US, LLP Page | 4 Audit status Significant changes to the audit plan There were no significant changes made to either our planned audit strategy or to the significant risks and other areas of emphasis identified during the performance of our risk assessment procedures. © 2025 Baker Tilly US, LLP Page | 5 Audit approach and results Planned scope and timing Audit focus Based on our understanding of the City and environment in which you operate, we focused our audit on the following key areas: • Key transaction cycles • Areas with significant estimates Our areas of audit focus were informed by, among other things, our assessment of materiality. Materiality in the context of our audit was determined based on specific qualitative and quantitative factors combined with our expectations about the City's current year results. Key areas of focus and significant findings Significant risks of material misstatement A significant risk is an identified and assessed risk of material misstatement that, in the auditors’ professional judgment, requires special audit consideration. Within our audit, we focused on the following areas below. Significant risk areas Testing approach Conclusion Management override of controls Incorporate unpredictability into audit procedures, emphasize professional skepticism and utilize audit team with industry expertise Procedures identified provided sufficient evidence for our audit opinion Improper revenue recognition due to fraud Confirmation or validation of certain revenues supplemented with detailed predictive analytics based on non-financial data and substantive testing of related receivables Procedures identified provided sufficient evidence for our audit opinion Inadequate segregation of duties Incorporate unpredictability into audit procedures, emphasize professional skepticism, utilize audit team with industry expertise and performance of sufficient substantive procedures Procedures identified provided sufficient evidence for our audit opinion © 2025 Baker Tilly US, LLP Page | 6 Other areas of emphasis We also focused on other areas that did not meet the definition of a significant risk, but were determined to require specific awareness and a unique audit response. Other areas of emphasis Cash and investments Revenues and receivables General disbursements Payroll Pension and OPEB liabilities Long-term debt Capital assets including infrastructure Net position and fund balance calculations Financial reporting and required disclosures Internal control matters We considered the City's internal control over financial reporting as a basis for designing our audit procedures for the purpose of expressing an opinion on the financial statements. We are not expressing an opinion on the effectiveness of the City's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that were not identified. 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 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. We identified the following deficiencies as material weaknesses: • Missing key controls over payroll There are certain controls that are not currently in place related to significant transaction cycles. As a result, there is a risk that erroneous or unauthorized transactions or misstatements could occur without the knowledge of management or the governing body. Our recommendations for strengthening controls are listed below. • Persons preparing the payroll should be independent of other personnel duties or restricted from access to the payroll account. • Year-end payroll accruals should be reviewed and approved by someone other than the preparer. Since the controls listed above or other compensating controls are not currently in place, errors or irregularities could occur as part of the accounting processes that might not be discovered by management or the governing body. Therefore, the absence of these controls is considered to be a material weakness. We recommend that a designated employee review the segregation of duties, risks, and these potential controls and determine whether additional controls should be implemented. This determination should take into consideration a cost / benefit analysis. © 2025 Baker Tilly US, LLP Page | 7 • Financial statement close process Properly designed systems of internal control provide your organization with the ability to process and record accurate monthly and year-end transactions and annual financial reports. Our audit includes a review and evaluation of the internal controls relating to financial reporting. Common attributes of a properly designed system of internal control for financial reporting are as follows: • There is adequate staffing to prepare financial reports throughout the year and at year-end. • Material misstatements are identified and corrected during the normal course of duties. • Complete and accurate financial statements, including footnotes, are prepared. • Complete and accurate schedule of expenditures of federal and state awards is prepared. • Financial reports are independently reviewed for completeness and accuracy. Our evaluation of the internal controls over financial reporting has identified control deficiencies that are considered material weakness surrounding the preparation of financial statements and footnotes including the schedule of expenditures of federal and state awards, adjusting journal entries identified by the auditors, and an independent review of financial reports. Management has not prepared financial statements that are in conformity with generally accepted accounting principles or the schedule of expenditures of federal and state awards that is in conformance with the applicable federal or state requirements. In addition, material misstatements in the general ledger were identified during the financial audit. 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. We identified the following deficiencies as significant deficiencies: • Inadequate segregation of duties A properly designed system of internal control includes adequate staffing as well as policies and procedures to properly segregate duties. This includes systems that are designed to limit the access or control of any one individual to your government's assets or accounting records, and to achieve a higher likelihood that errors or irregularities in your accounting processes would be discovered by your staff in a timely manner. At this time, due to staffing and financial limitations, the proper internal controls are not in place to achieve adequate segregation of duties. As a result, errors, irregularities, or fraud could occur as part of the financial reporting process that may not be discovered by someone in your organization. Therefore, we are reporting a significant deficiency related to the internal control environment. © 2025 Baker Tilly US, LLP Page | 8 • Missing key controls There are certain controls that are not currently in place related to significant transaction cycles. As a result, there is a risk that erroneous or unauthorized transactions or misstatements could occur without the knowledge of management or the governing body. Our recommendations for strengthening controls are listed below. Controls over accounts payable/disbursements • For payments made by ACH or wire transfer, someone independent of the preparation/initiation of the wire should approve/release the wire. Controls over landfill billing • The entry of new customers and changes in billing rates should be reviewed by someone other than the person who enters the information into the billing system. Controls over monthly and year-end accounting • Adjusting journal entries and supporting documentation should be reviewed and approved by an appropriate person who is not the original preparer. Other comments and recommendations Control Recommendations There are certain controls that are not currently in place related to significant transaction cycles. As a result, there is a risk that erroneous or unauthorized transactions or misstatements could occur without the knowledge of management or the governing body. Our recommendation for strengthening controls over monthly and year-end accounting is maintaining documentation of account reconciliation review completed by someone other than the preparer. © 2025 Baker Tilly US, LLP Page | 9 Required communications Qualitative aspect of accounting practices • Accounting policies: Management is responsible for the selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we have advised management about the appropriateness of accounting policies and their application. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing accounting policies was not changed during 2025. We noted no transactions entered into by the City during the year for which accounting policies are controversial or for which there is a lack of authoritative guidance or consensus or diversity in practice. • Accounting estimates: Accounting estimates, including fair value estimates, are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements, the degree of subjectivity involved in their development and because of the possibility that future events affecting them may differ significantly from those expected. The following estimates are of most significance to the financial statements: Estimate Management's process to determine Baker Tilly's conclusions regarding reasonableness Net pension liability and related deferrals Evaluation of information provided by the Wisconsin Retirement System Reasonable in relation to the financial statements as a whole Self-insurance claims Historical claims analysis and report provided by a 3rd party administrator Reasonable in relation to the financial statements as a whole Net/Total OPEB liability and related deferrals Key assumptions set by management with the assistance of a third party actuary Reasonable in relation to the financial statements as a whole Depreciation/Amortization Evaluate estimated useful life of the asset and original acquisition value Reasonable in relation to the financial statements as a whole Landfill closure and post- closure care Evaluation of estimated capacity of the landfill Reasonable in relation to the financial statements as a whole There have been no significant changes made by management to either the processes used to develop the particularly sensitive accounting estimates, or to the significant assumptions used to develop the estimates, noted above. • Financial statement disclosures: The disclosures in the financial statements are neutral, consistent and clear. © 2025 Baker Tilly US, LLP Page | 10 Significant unusual transactions There have been no significant transactions that are outside the normal course of business for the City or that otherwise appear to be unusual due to their timing, size or nature. Significant difficulties encountered during the audit We encountered no significant difficulties in dealing with management and completing our audit. Disagreements with management Professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the basic financial statements or the auditors' report. We are pleased to report that no such disagreements arose during the course of our audit. Audit report There have been no departures from the auditors' standard report. Audit consultations outside the engagement team We encountered no difficult or contentious matters for which we consulted outside of the engagement team. Uncorrected misstatements and corrected misstatements Professional standards require us to accumulate misstatements identified during the audit, other than those that are clearly trivial, and to communicate accumulated misstatements to management. The schedule within the attachments summarizes the uncorrected misstatements, other than those that are clearly trivial, that we presented to management and the corrected misstatements that, in our judgment, may not have been detected except through our auditing procedures. Some of the corrected misstatements are considered material. The internal control matters section of this report describes the effects on the financial reporting process indicated by the uncorrected misstatements and corrected misstatements, other than those that we consider to be of a lesser magnitude than significant deficiencies and material weaknesses. Management has determined that the effects of the uncorrected misstatements are immaterial, both individually and in the aggregate, to the financial statements as a whole. The uncorrected misstatements or the matters underlying them could potentially cause future period financial statements to be materially misstated, even though, in our judgment, such uncorrected misstatements are immaterial to the basic financial statements under audit. Other audit findings or issues We encountered no other audit findings or issues that require communication at this time. We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. © 2025 Baker Tilly US, LLP Page | 11 Management's consultations with other accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing or accounting matters. Written communications between management and Baker Tilly The attachments include copies of other material written communications, including a copy of the management representation letter. Compliance with laws and regulations We did not identify any non-compliance with laws and regulations during our audit. We will issue a separate document which contains the results of our audit procedures to comply with the Uniform Guidance and State Single Audit Guidelines. Fraud We did not identify any known or suspected fraud during our audit. Going concern Pursuant to professional standards, we are required to communicate to you, when applicable, certain matters relating to our evaluation of the City's ability to continue as a going concern for a reasonable period of time but no less than 12 months from the date of the financial statements, including the effects on the financial statements and the adequacy of the related disclosures, and the effects on the auditors’ report. No such matters or conditions have come to our attention during our engagement. Independence We are not aware of any relationships between Baker Tilly and the City that, in our professional judgment, may reasonably be thought to bear on our independence. Related parties We did not have any significant findings or issues arise during the audit in connection with the City's related parties. © 2025 Baker Tilly US, LLP Page | 12 Other matters We applied certain limited procedures to the required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the supplementary information. With respect to the supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. Nonattest services The following nonattest services were provided by Baker Tilly: • Financial statement preparation • Adjusting journal entries • SEFSA preparation • Compiled regulatory reports • Preparation of auditee sections of the Data Collection Form In addition, we prepared GASB No. 34 conversion entries which are summarized in the "Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position" and the "Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities" in the financial statements. None of these nonattest services constitute an audit under generally accepted auditing standards, including Government Auditing Standards. © 2025 Baker Tilly US, LLP Page | 13 City Council resources Our business is to know every aspect of yours and to maintain a constant lookout for what's next. We invite you to learn about some of the trending challenges and opportunities for public sector organizations like yours and how Baker Tilly can help. To explore more trending topics and regulatory updates, visit our resource page at https://www.bakertilly.com/insights/audit-committee-resource-page. Capital project oversight Public sector capital projects face increasing pressure from cost escalation, supply chain disruption, regulatory complexity and heightened scrutiny around transparency and accountability. Strong planning, governance and controls are critical across the full project life cycle, from feasibility and funding strategy through execution and closeout. Independent oversight helps chart a clear course from planning to delivery. Our teams work alongside leadership to strengthen governance, establish financial and contractual controls, align funding with project goals, and monitor performance throughout execution, helping projects stay on schedule, within budget, and aligned with community priorities. Succession planning An aging workforce, rising retirement rates, and competition for specialized talent make succession planning a fiscal and operational a priority for public sector organizations. By identifying critical roles, assessing workforce risk, building internal talent pipelines, and integrating succession planning with broader workforce strategies, Baker Tilly helps organizations preserve institutional knowledge and maintain continuity, today, and into the future. Economic development Successful economic development depends on disciplined planning, sound financial analysis and coordinated execution. Public sector leaders must balance incentives, infrastructure investment, funding opportunities and stakeholder priorities while maintaining fiscal responsibility. Baker Tilly’s supports local governments with strategic and financial planning, incentive structuring and negotiation, tax increment financing administration, project financing, grant strategy, and economic and fiscal impact analysis. This integrated approach helps leaders move from vision to action, strengthening communities and advancing sustainable, long-term growth. © 2025 Baker Tilly US, LLP Page | 14 Management representation letter Baker Tilly US, LLP 3410 Oakwood Mall Drive, Suite 200 Eau Claire, Wisconsin 54701 Dear Baker Tilly US, LLP: We are providing this letter in connection with your audit of the financial statements of the City of Superior as of December 31, 2025 and for the year then ended for the purpose of expressing opinions as to whether the financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Superior and the respective changes in financial position and cash flows, where applicable, in conformity with accounting principles generally accepted in the United States of America (GAAP). We confirm that we are responsible for the fair presentation of the previously mentioned financial statements in conformity with accounting principles generally accepted in the United States of America. We are also responsible for adopting sound accounting policies, establishing and maintaining internal control over financial reporting, and preventing and detecting fraud. Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement. An omission or misstatement that is monetarily small in amount could be considered material as a result of qualitative factors. We confirm, to the best of our knowledge and belief, the following representations made to you during your audit. Financial Statements 1) We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated November 16, 2022, including our responsibility for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America U.S. GAAP. 2) The financial statements referred to above are fairly presented in conformity with accounting principles generally accepted in the United States of America. We have engaged you to advise us in fulfilling that responsibility. The financial statements include all properly classified funds of the primary government required by accounting principles generally accepted in the United States of America to be included in the financial reporting entity. 3) We acknowledge our responsibility for the design, im plementation, 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. Docusign Envelope ID: 1DE259E8-8951-80B3-82A2-47E8DA3B2743 4) We acknowledge our responsibility for the design, impl ementation, and maintenance of internal control to prevent and detect fraud. 5) Significant assumptions we used in making accounting estimates, including those measured at fair value, if any, are reasonable in accordance with accounting principles generally accepted in the United States of America U.S. GAAP. 6) Related party relationships and transactions, including revenues, expenditures/expenses, loans, transfers, leasing arrangements, and guarantees, and amounts receivable from or payable to related parties have been appropriately accounted for and disclosed in accordance with the requirements of accounting principles generally accepted in the United States of America. 7) All events subsequent to the date of the financ ial statements and for which accounting principles generally accepted in the United States of America require adjustment or disclosure have been adjusted or disclosed. No other events, including instances of noncompliance, have occurred subsequent to the financial statement date and through the date of this letter that would require adjustment to or disclosure in the aforementioned financial statements or in the schedule of findings and questioned costs. 8) All material transactions have been recorded in the accounting records and are reflected in the financial statements and the schedule of expenditures of federal and state awards. 9) We believe the effects of the uncorrected financial statement missta tements summarized in the attached schedule are immaterial, both individually and in the aggregate, to the basic financial statements as a whole. 10) We are in agreement with the adjusting journal entries you have proposed, and they have been posted to the appropriate accounts. 11) There are no known or possible litigation, cl aims, and assessments whose effects should be considered when preparing the financial statements. There are no unasserted claims or assessments that our lawyer has advised us are probable of assertion and must be disclosed in accordance with accounting principles generally accepted in the United States of America. 12) Guarantees, whether written or oral, under which th e City is contingently liable, if any, have been properly recorded or disclosed. Information Provided 13) We have provided you with: a) Access to all information, of which we are aw are, that is relevant to the preparation and fair presentation of the financial statements, such as financial records and related data, documentation, and other matters and all audit or relevant monitoring reports, if any, received from funding sources. b) Additional information that you have req uested from us for the purpose of the audit. c) Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence. d) Minutes of the meetings of City Council or summaries of actions of recent meetings for which minutes have not yet been prepared. Docusign Envelope ID: 1DE259E8-8951-80B3-82A2-47E8DA3B2743 14) We have not completed an assessment of the risk that the financial statements may be materially misstated as a result of fraud. 15) We have no knowledge of any fraud or suspec ted fraud that affects the entity and involves: a) Management, b) Employees who have significant roles in internal control, or c) Others where the fraud coul d have a material effect on the financial statements. 16) We have no knowledge of any allegations of frau d or suspected fraud affecting the entity received in communications from employees, former employees, regulators, or others. 17) We have no knowledge of known instances of noncompliance or suspected noncompliance with provisions of laws, regulations, contracts, or grant agreements, or abuse, whose effects should be considered when preparing financial statements. 18) There are no related parties or related party rela tionships and transactions, including side agreements, of which we are aware. Other 19) There have been no communications from regulat ory agencies concerning noncompliance with, or deficiencies in, financial reporting practices. 20) We have a process to track the status of audit findings and recommendations. 21) We have identified to you any previous finan cial audits, attestation engagements, and other studies related to the audit objectives and whether related recommendations have been implemented. 22) We have provided our views on reported findings, conclusions, and recommendations, as well as our planned corrective actions, for our report. 23) The City of Superior has no plans or intentions that may materially affect the carrying value or classification of assets, deferred outflows of resources, liabilities, deferred inflows of resources or fund balance or net position. 24) We are responsible for compliance with federal, state, and local laws, regulations, and provisions of contracts and grant agreements applicable to us, including tax or debt limits, debt contracts, and IRS arbitrage regulations; and we have identified and disclosed to you all federal, state, and local laws, regulations and provisions of contracts and grant agreements that we believe have a direct and material effect on the determination of financial statement amounts or other financial data significant to the audit objectives, including legal and contractual provisions for reporting specific activities in separate funds. 25) There are no: a) Violations or possible violations of budget ordi nances, federal, state, and local laws or regulations (including those pertaining to adopting, approving and amending budgets), provisions of contracts and grant agreements, tax or debt limits, and any related debt covenants whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, or for reporting on noncompliance, except those already disclosed in the financial statement, if any. Docusign Envelope ID: 1DE259E8-8951-80B3-82A2-47E8DA3B2743 b) Other liabilities or gain or lo ss contingencies that are required to be accrued or disclosed by accounting principles generally accepted in the United States of America. c) Nonspendable, restricted, committ ed, or assigned fund balances that were not properly authorized and approved. d) Rates being charged to customer s other than the rates as authorized by the applicable authoritative body. e) Violations of restrictions placed on revenues as a result of bond resolution covenants such as revenue distribution or debt service funding. 26) As part of your audit, you assisted with the prepar ation of the financial statements and related notes and schedule of expenditures of federal and state awards. We acknowledge our responsibility as it relates to those non-audit services, including that we assume all management responsibilities; oversee the services by designating an individual, preferably within senior management, who possesses suitable skill, knowledge, or experience; evaluate the adequacy and results of the services performed; and accept responsibility for the results of the services. We have reviewed, approved, and accepted responsibility for those financial statements and related notes and schedule of expenditures of federal and state awards. 27) We have made all management decisions and perf ormed all management functions in relation to the nonattest services provided by Baker Tilly US, LLP or Baker Tilly Advisory Group, LP, as identified in the engagement letter or an addendum to the engagement letter. We have designated Nick Rhinehart an employee with suitable skill, knowledge, and/or experience to oversee the services received. Furthermore, we have established and maintained internal controls, including monitoring activities related to the nonattest services provided by Baker Tilly US, LLP or Baker Tilly Advisory Group, LP, and we have evaluated and accept responsibility for the adequacy and results of the nonattest services received. The nonattest services provided by Baker Tilly US, LLP or Baker Tilly Advisory Group, LP, are listed below. a) Financial statement preparation b) Adjusting journal entries c) SEFSA preparation d) Compiled regulatory reports e) Preparation of auditee sections of the data collection form None of these nonattest services constitute an audit under generally accepted auditing standards, including Government Auditing Standards. 28) The City of Superior has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset been pledged as collateral. 29) The City of Superior has complied with all aspects of contractual agreements that would have a material effect on the financial statement in the event of noncompliance. 30) The financial statements include all component units as well as joint ventures with an equity interest, and properly disclose all other joint ventures and other related organizations, if any. Component units have been properly presented as either blended or discrete. Docusign Envelope ID: 1DE259E8-8951-80B3-82A2-47E8DA3B2743 31) The financial statements in clude all fiduciary activities required by GASB No. 84. 32) The financial statements properly classify all funds and activities. 33) All funds that meet the quantit ative criteria in GASB Statement No. 34 and No. 37 for presentation as major are identified and presented as such and all other funds that are presented as major are particularly important to financial statement users. 34) Components of net position (net investment in capital assets; restricted; and unrestricted) and components of fund balance (nonspendable, restricted, committed, assigned and unassigned) are properly classified and, if applicable, approved. 35) The City of Superior has no derivative financial inst ruments such as contracts that could be assigned to someone else or net settled, interest rate swaps, collars or caps. 36) Provisions for uncollectible receivables, if any, have been properly identified and recorded. 37) Expenses have been appropriately classified in or al located to functions and programs in the statement of activities, and allocations have been made on a reasonable basis. 38) Revenues are appropriately classifi ed in the statement of activities within program revenues and general revenues. 39) Interfund, internal, and intra-entity activity and balan ces have been appropriately classified and reported. 40) Deposits and investments are properly classified, valued, and disclosed (including risk disclosures, collateralization agreements, valuation methods, and key inputs, as applicable). 41) Provision, when material, has been made to reduce excess or obsolete inventories to their estimated net realizable value. 42) Capital assets, including infrastructure and intangi ble assets, are properly capitalized, reported, and, if applicable, depreciated/amortized. Any known impairments have been recorded and disclosed. 43) We have reviewed our employment agreements and personnel policy related to compensated absences and believe our calculation of compensated absences is in alignment with the requirements of GASB Statement No. 101. 44) Tax-exempt bonds issued have re tained their tax-exempt status. 45) We have appropriately disclosed the City of Superio r's policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position are available and have determined that net position were properly recognized under the policy. We have also disclosed our policy regarding which resources (that is, restricted, committed, assigned or unassigned) are considered to be spent first for expenditures for which more than one resource classification is available. 46) We are following our established accounting policy regarding which resources (that is, restricted, committed, assigned or unassigned) are considered to be spent first for expenditures for which more than one resource classification is available. That policy determines the fund balance classifications for financial reporting purposes. Docusign Envelope ID: 1DE259E8-8951-80B3-82A2-47E8DA3B2743 47) We acknowledge our responsibility for the requir ed supplementary information (RSI). The RSI is measured and presented within prescribed guidelines and the methods of measurement and presentation have not changed from those used in the prior period. We have disclosed to you any significant assumptions and interpretations underlying the measurement and presentation of the RSI. 48) With respect to the supplementary information, (SI): a) We acknowledge our responsibility for presenting t he SI in accordance with accounting principles generally accepted in the United States of America, and we believe the SI, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America. The methods of measurement and presentation of the SI have not changed from those used in the prior period, and we have disclosed to you any significant assumptions or interpretations underlying the measurement and presentation of the supplementary information. b) If the SI is not presented with the audited financia l statements, we will make the audited financial statements readily available to the intended users of the supplementary information no later than the date we issue the supplementary information and the auditor's report thereon. 49) We assume responsibility for, and agree with, the findings of specialists in evaluating the other post-employment benefits liability and have adequately considered the qualifications of the specialists in determining the amounts and disclosures used in the financial statements and underlying accounting records. We did not give or cause any instructions to be given to specialists with respect to the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had impact on the independence or objectivity of the specialists. 50) We assume responsibility for, and agree with, the information provided by the Wisconsin Retirement System as audited by the Legislative Audit Bureau relating to the net pension asset/liability and related deferred outflows and deferred inflows and have adequately considered the reasonableness of the amounts and disclosures used in the financial statements and underlying accounting records. We also assume responsibility for the census data that has been reported to the plan. 51) We have evaluated and considered all potential ta x abatements and believe all material tax abatements have been properly reported and disclosed. 52) We have reviewed our long-term debt agreements and believe that all terms related to significant events of default with finance-related consequences, termination events with finance-related consequences and subjective acceleration clauses have been properly identified and disclosed. 53) We have identified any leases or other contracts that are required to be reported as leases and are in agreement with the key assumptions used in the measurement of any lease related assets, liabilities or deferred inflows of resources. 54) We have reviewed existing contracts and determi ned there are no items requiring accounting or reporting as subscriptions. 55) We have evaluated our ongoing operations and det ermined there are no concentrations or constraints meeting the requirements for disclosure under GASB Statement No. 102. Docusign Envelope ID: 1DE259E8-8951-80B3-82A2-47E8DA3B2743 56) We are responsible for the estimation methods and assumptions used in measuring assets and liabilities reported or disclosed at fair value, including information obtained from brokers, pricing services or third parties. Our valuation methodologies have been consistently applied from period to period. The fair value measurements reported or disclosed represent our best estimate of fair value as the measurement date in accordance with the requirements of GASB 72—Fair Value Measurement . In addition our disclosures related to fair value measurements are consistent with the objectives outlined in GASB 72. We have evaluated the fair value information provided to us by brokers, pricing services or other parties that has been used in the financial statements and believe this information to be reliable and consistent with the requirements. 57) The auditing standards define an annual report as “a document, or combination of documents, typically prepared on an annual basis by management or those charged with governance in accordance with law, regulation, or custom, the purpose of which is to provide owners (or similar stakeholders) with information on the entity’s operations and the financial results and financial position as set out in the financial statements.” Among other items, an annual report contains, accompanies, or incorporates by reference the financial statements and the auditors’ report thereon. We confirm that we do not prepare and have no plans to prepare an annual report. 58) With respect to federal and state award programs: a) We are responsible for understanding and complying with and have complied with the requirements of the Single Audit Act Amendments of 1996, OMB's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), State Single Audit Guidelines, including requirements relating to preparation of the schedule of expenditures of federal and state awards (SEFSA). b) We acknowledge our responsibility for preparing and presenting the SEFSA and related disclosures in accordance with the requirements of the Uniform Guidance and the State Single Audit Guidelines, and we believe the SEFSA, including its form and content, is fairly presented in accordance with the Uniform Guidance and the State Single Audit Guidelines. The methods of measurement and presentation of the SEFSA have not changed from those used in the prior period and we have disclosed to you any significant assumptions and interpretations underlying the measurement and presentation of the SEFSA. c) If the SEFSA is not presented with the audited fi nancial statements, we will make the audited financial statements readily available to the intended users of the SEFSA no later than the date we issue the SEFSA and the auditors’ report thereon. d) We have identified and disclosed to you all of our government programs and related activities subject to the Uniform Guidance and the State Single Audit Guidelines and included in the SEFSA, expenditures made during the audit period for all awards provided by federal agencies in the form of grants, federal cost reimbursement contracts, loans, loan guarantees, property (including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other direct assistance. e) We are responsible for understanding and complying with, and have complied with the requirements of laws, regulations, and the provisions of contracts and grant agreements related to each of our federal and state programs and have identified and disclosed to you the requirements of laws, regulations, and the provisions of contracts and grant agreements that are considered to have a direct and material effect on each major federal and state program. Docusign Envelope ID: 1DE259E8-8951-80B3-82A2-47E8DA3B2743 f) We are responsible for establishing and maintaining, and have established and maintained, effective internal control over compliance for federal and state programs that provide reasonable assurance that we are administering our federal and state awards in compliance with laws, regulations, and the provisions of contracts and grant agreements that could have a material effect on our federal and state programs. We believe the internal control system is adequate and is functioning as intended. Also, no changes have been made in the internal control over compliance or other factors to the date of this letter that might significantly affect internal control, including any corrective action taken with regard to control deficiencies reported in the schedule of findings and questioned costs. g) We have made available to you all contracts and grant agreements (including amendments, if any) and any other correspondence with federal or state agencies or pass-through entities relevant to the programs and related activities. h) We have received no requests from a federal or state agency to audit one or more specific programs as a major program. i) We have complied with the direct and material compliance requirements including when applicable, those set forth in the OMB Compliance Supplement and the State Single Audit Guidelines, relating to federal and state awards. j) We have disclosed any communications from gr antors and pass-through entities concerning possible noncompliance with the direct and material compliance requirements, including communications received from the end of the period covered by the compliance audit to the date of the auditors’ report. k) We have disclosed to you the findings received and related corrective actions taken for previous audits, attestation agreements, and internal or external monitoring that directly relate to the objectives of the compliance audit, if any, including findings received and corrective actions taken from the end of the period covered by the compliance audit to the date of the auditors’ report. l) Amounts claimed or used for matching were determined in accordance with relevant guidelines in the Uniform Guidance. m) We have disclosed to you our interpretation of compliance requirements that may have varying interpretations. n) We have made available to you all documentat ion related to the compliance with the direct and material compliance requirements, including information related to federal and state program financial reports and claims for advances and reimbursements. o) We have disclosed to you the nature of any subseq uent events that provide additional evidence about conditions that existed at the end of the reporting period affecting noncompliance during the reporting period. p) We are not aware of any instances of noncompliance with direct and material compliance requirements that occurred subsequent to the period covered by the auditors’ report. q) No changes have been made in internal control over compliance or other factors that might significantly affect internal control, including any corrective action we have taken regarding significant deficiencies or material weaknesses in internal control over compliance, subsequent to the date as of which compliance was audited. r) Federal and state program financial reports and claims for advances and reimbursements are supported by the books and records from which the financial statements have been prepared. Docusign Envelope ID: 1DE259E8-8951-80B3-82A2-47E8DA3B2743 s) The copies of federal and state program financial reports provided you are true copies of the reports submitted, or electronically transmitted, to the respective federal and state agency or pass-through entity, as applicable. t) We have monitored subrecipients to determine that they have expended pass-through assistance in accordance with applicable laws and regulations and have met the requirements of the Uniform Guidance and the State Single Audit Guidelines. u) We have taken appropriate action, including issu ing management decisions, on a timely basis after receipt of subrecipients’ auditors’ reports that identified noncompliance with laws, regulations, or the provisions of contracts or grant agreements to ensure that subrecipients have taken the appropriate and timely corrective action on findings. v) We have considered the results of subrecipie nt audits and made any necessary adjustments to our books and records. w) We have charged costs to federal and state awards in accordance with applicable cost principles. x) We are responsible for and have accurately prepared the summary schedule of prior audit findings to include all findings required to be included by the Uniform Guidance and the State Single Audit Guidelines and we have provided you with all information on the status of the follow-up on prior audit findings by federal and state awarding agencies and pass-through entities, including all management decisions. y) We are responsible for and have ensured the repo rting package does not contain protected personally identifiable information. z) We are responsible for and have accurately prepared the auditee section of the Data Collection Form as required by the Uniform Guidance. aa) We are responsible for preparing and implementing a corrective action plan for each audit finding. Sincerely, City of Superior Signed: _______________________________ Signed: _______________________________ Dated: _______________________________ Docusign Envelope ID: 1DE259E8-8951-80B3-82A2-47E8DA3B2743 7/29/2026 7/30/2026 Total Total Change in Total Assets/ Total Liabilities/ Net Position/ Total Expenses/ Net Position/ Deferred Outflows Deferred Inflows Fund Balances Revenues Expenditures Fund Balances Governmental Activities 413,725 - - (413,725) - (413,725) Remaining Funds - - (311,911) 28,868 (340,779) (311,911) City of Superior SUMMARY OF UNCORRECTED FINANCIAL STATEMENT MISSTATEMENTS December 31, 2025 Financial Statements Effect - Debit (Credit) to Financial Statement Total Docusign Envelope ID: 1DE259E8-8951-80B3-82A2-47E8DA3B2743 © 2025 Baker Tilly US, LLP Page | 25 Accounting changes relevant to the City of Superior Future accounting standards update GASB Statement Number Description Potentially impacts you Effective date 103 Financial Reporting Model Improvements 12/31/26 104 Disclosure of Certain Capital Assets 12/31/26 105 Subsequent Events 12/31/27 Further information on upcoming GASB pronouncements. Changes to the financial reporting model GASB Statement 103, Financial Reporting Model Improvements, builds on Statement 34 by providing key targeted improvements to the financial reporting model. Its requirements are designed to: • Enhance the effectiveness of governmental financial reports in providing information essential for decision making and assessing a government’s accountability, and • Address certain application issues. The targeted improvements contained in Statement 103 establish or modify existing accounting and financial reporting requirements related to: • Management’s discussion and analysis - While the overall requirements do not substantially change management’s discussion and analysis, the modifications are meant to improve the analysis included in this section and provide details about the items that should be discussed as currently known facts, decisions, or conditions expected to have a significant financial effect in the subsequent period. • Unusual or infrequent items (previously known as extraordinary and special items) - The new Statement simplifies GASB literature by eliminating the separate presentation of extraordinary and special items. Under the requirement of Statement 103, applicable items will either be identified as unusual or infrequent, or both. • Presentation of the proprietary fund statement of revenues, expenses, and changes in fund net position - The changes are designed to improve consistency around the classification of items in these statements by better defining what should be included in operating revenues and expenses and nonoperating revenues and expenses including, for example, the addition of subsidies received or provided as a new category of nonoperating revenues and expenses. • Major component unit information, and Budgetary comparison information - Statement 103 is designed to improve the consistency of the reporting of major component unit information and budgetary comparison information by specifying required placement of that information. © 2025 Baker Tilly US, LLP Page | 26 Revisions to disclosures for certain capital assets Governments are required to provide information on capital assets in the footnotes to the financial statements as outlined in GASB Statement No. 34. Recent standards have impacted the accounting and reporting for capital assets and as a result GASB issued Statement No. 104, Disclosure of Certain Capital Assets to provide enhanced disclosures for certain capital assets, including: (a) Lease assets reported under Statement No. 87, intangible right-to-use assets reported under Statement No. 94 and subscription assets reported under Statement No. 96 should all be disclosed separately, and by major class of underlying asset. In addition, if there are any other intangible assets reported they should also be disclosed separately. (b) Capital assets that are held for sale should have the ending balance with separate disclosure for historical cost and related accumulated depreciation as well as any outstanding debt for which the asset is pledged as collateral disclosed by major class of asset. Assets held for sale are defined as those for which the government has decided to pursue the sale, and it is probable that the sale will be finalized within one year of the financial statement date. While these changes are focused on footnote disclosures it is important to plan ahead to ensure the required information is available for implementation. Updated guidance for the financial reporting of subsequent events GASB Statement No. 105, Subsequent Events, which supersedes GASB Statement No. 56, is intended to enhance consistency in the application of requirements for subsequent events. The Statement defines subsequent events as transactions or other events that occur after year end but before the date the financial statements are available to be issued. The date the financial statements are available to be issued is the date at which (a) the financial statements are complete in a form and format that complies with generally accepted accounting principles (GAAP) and (b) approvals necessary for issuance have been obtained, or typically the opinion date. The definition of subsequent events in this Statement modifies the subsequent events time frame throughout the GASB literature. The Statement also clarifies: • The different types of subsequent events (recognized and nonrecognized events) • When note disclosures are required • The information that should be included in those note disclosures © 2025 Baker Tilly US, LLP Page | 27 Corrected misstatements Number Date Name Account No Debit Credit A01 12/31/2025 Video Provider Fee 101-0000-434.10-10 101 (48,187.00) A01 12/31/2025 FRANCHISE FEES-CHARTER 101-0000-482.30-00 101 48,187.00 To move video provider fee to shared revenue account. A02 12/31/2025 Deferred Rev-Grants 240-0000-263.20-00 240 4,597,297.00 A02 12/31/2025 FEDERAL GRANTS 240-0000-432.10-00 240 (4,597,297.00) To recognize ARPA revenues for amounts spent in 2025. A04 12/31/2025 ACCRUED VACATION PAYABLE 601-0000-217.10-00 601 9,840.00 A04 12/31/2025 LONG TERM ACCRUED COMP AB 601-0000-217.15-00 601 48,046.00 A04 12/31/2025 SALARIES-PERMANENT-REGULR 601-5361-536.11-10 601 (57,886.00) A04 12/31/2025 ACCRUED VACATION PAYABLE 602-0000-217.10-00 602 2,538.00 A04 12/31/2025 LONG TERM ACCRUED COMP AB 602-0000-217.15-00 602 12,390.00 A04 12/31/2025 SALARIES-PERMANENT-REGULR 602-5362-536.11-10 602 (14,928.00) A04 12/31/2025 ACCRUED VACATION PAYABLE 606-0000-217.10-00 606 8,656.00 A04 12/31/2025 LONG TERM ACCRUED COMP AB 606-0000-217.15-00 606 42,261.00 A04 12/31/2025 SALARIES-PERMANENT-REGULR 606-5361-536.11-10 606 (50,917.00) A04 12/31/2025 ACCRUED VACATION PAYABLE 801-0000-217.10-00 801 2,133.00 A04 12/31/2025 LONG TERM ACCRUED COMP AB 801-0000-217.15-00 801 10,414.00 A04 12/31/2025 SALARIES-PERMANENT-REGULR 801-5145-514.11-10 801 (12,547.00) A04 12/31/2025 ACCRUED VACATION PAYABLE 817-0000-217.10-00 817 833.00 A04 12/31/2025 LONG TERM ACCRUED COMP AB 817-0000-217.15-00 817 4,067.00 A04 12/31/2025 SALARIES-PERMANENT-REGULR 817-5151-515.11-10 817 (4,900.00) To adjust compensated absences to actual. A05 12/31/2025 CASH 101-0000-110.10-00 101 (33,535.00) A05 12/31/2025 DUE FROM DOUGLAS COUNTY 101-0000-143.10-00 101 33,535.00 A05 12/31/2025 STATE SHARED REVENUES 101-0000-434.10-00 101 125,316.00 A05 12/31/2025 EXPENDITURE RESTR PMT PRG 101-0000-434.31-00 101 (125,316.00) A05 12/31/2025 OTHER STATE AIDS 101-0000-436.90-00 101 (70,773.00) A05 12/31/2025 TRAVEL & TRAINING 101-5210-521.33-40 101 70,773.00 A05 12/31/2025 OTHER MISCELLANEOUS RECVB 211-0000-138.10-00 211 (2,200.00) A05 12/31/2025 OTHER MISCELLANEOUS RECVB 211-0000-138.10-00 211 6,968.00 A05 12/31/2025 DUE FROM STATE OF WI-MISC 211-0000-142.20-00 211 183,415.00 © 2025 Baker Tilly US, LLP Page | 28 Number Date Name Account No Debit Credit A05 12/31/2025 OTHER STATE AIDS 211-0000-436.90-00 211 (183,415.00) A05 12/31/2025 OTHER STATE AIDS 211-0000-436.90-00 211 2,200.00 A05 12/31/2025 OTHER STATE AIDS 211-0000-436.90-00 211 (6,968.00) A05 12/31/2025 OTHER STATE AIDS 400-0000-436.90-00 400 (28,704.00) A05 12/31/2025 CAPITAL IMPROVEMENTS 400-5520-552.82-10 400 28,704.00 A05 12/31/2025 OTHER 405-0000-435.99-00 405 (145,322.00) A05 12/31/2025 CAPITAL IMPROVEMENTS 405-5630-563.82-10 405 145,322.00 A05 12/31/2025 CASH 430-0000-110.10-00 430 5,475.00 A05 12/31/2025 BT Created - Act 12 Personal Property Aid 430-0000-434.15-00 430 (5,475.00) A05 12/31/2025 CASH 431-0000-110.10-00 431 26,825.00 A05 12/31/2025 BT Created - Act 12 Personal Property Aid 431-0000-434.15-00 431 (26,825.00) A05 12/31/2025 CASH 433-0000-110.10-00 433 1,235.00 A05 12/31/2025 BT Created - Act 12 Personal Property Aid 433-0000-434.15-00 433 (1,235.00) To reclassify reimbursements for the SFRF. A07 12/31/2025 CASH 101-0000-110.10-00 101 (6,845.00) A07 12/31/2025 SPEC DEP-PD EVIDENCE $$$ 101-0000-231.35-00 101 6,845.00 A07 12/31/2025 CASH 802-0000-110.10-00 802 6,845.00 A07 12/31/2025 Deposits 802-0000-400.00-00 802 (21,535.00) A07 12/31/2025 Refunds 802-0000-500.00-00 802 14,690.00 To reclassify police evidence account to custodial fund. A08 12/31/2025 UNAVAILABLE REVENUES 281-0000-263.10-00 281 (500,000.00) A08 12/31/2025 OTHER SUPPLIES & EXPENSE 281-5630-563.39-10 281 500,000.00 To record unavailable revenue related to the fund 281 loan issued in 2025. A09 12/31/2025 LEASES 101-0000-139.10-00 101 (178,673.00) A09 12/31/2025 DEF REVENUE-LEASES 101-0000-263.40-00 101 178,673.00 To adjust lease receivable and unearned revenue to actual A10 12/31/2025 FEDERAL GRANTS / PIDP 440-0000-432.35-00 440 701,222.00 A10 12/31/2025 OTHER MISC REVENUE 440-0000-487.10-00 440 (701,222.00) To adjust PIDP amounts to actual © 2025 Baker Tilly US, LLP Page | 29 Number Date Name Account No Debit Credit A12 12/31/2025 Net Pension Asset 601-0000-189.00-00 601 (9,417.00) A12 12/31/2025 Deferred Pension Outflows 601-0000-189.50-00 601 5,240.00 A12 12/31/2025 Deferred Pension Outflows 601-0000-189.50-00 601 (705,229.00) A12 12/31/2025 TOTAL DEF INFLOWS PENSION 601-0000-296.35-00 601 644,103.00 A12 12/31/2025 BENEFITS-EMPLOYER WRF 601-5361-536.15-20 601 65,303.00 A12 12/31/2025 Net Pension Asset 602-0000-189.00-00 602 5,040.00 A12 12/31/2025 Deferred Pension Outflows 602-0000-189.50-00 602 (256,082.00) A12 12/31/2025 TOTAL DEF INFLOWS PENSION 602-0000-296.35-00 602 232,754.00 A12 12/31/2025 BENEFITS-EMPLOYER WRF 602-5362-536.15-20 602 18,288.00 A12 12/31/2025 Net Pension Asset 606-0000-189.00-00 606 1,185.00 A12 12/31/2025 Deferred Pension Outflows 606-0000-189.50-00 606 2,392.00 A12 12/31/2025 Deferred Pension Outflows 606-0000-189.50-00 606 (227,361.00) A12 12/31/2025 TOTAL DEF INFLOWS PENSION 606-0000-296.35-00 606 207,654.00 A12 12/31/2025 BENEFITS-EMPLOYER WRF 606-5361-536.15-20 606 16,130.00 A12 12/31/2025 Deferred Pension Outflows 608-0000-189.50-00 608 11,090.00 A12 12/31/2025 BENEFITS-EMPLOYER WRF 608-5146-514.15-20 608 (11,090.00) A12 12/31/2025 Net Pension Asset 801-0000-189.00-00 801 (7,392.00) A12 12/31/2025 Deferred Pension Outflows 801-0000-189.50-00 801 (136,648.00) A12 12/31/2025 TOTAL DEF INFLOWS PENSION 801-0000-296.35-00 801 121,720.00 A12 12/31/2025 BENEFITS-EMPLOYER WRF 801-5145-514.15-20 801 22,320.00 A12 12/31/2025 Net Pension Asset 817-0000-189.00-00 817 (348.00) A12 12/31/2025 Deferred Pension Outflows 817-0000-189.50-00 817 409.00 A12 12/31/2025 Deferred Pension Outflows 817-0000-189.50-00 817 (17,048.00) A12 12/31/2025 TOTAL DEF INFLOWS PENSION 817-0000-296.35-00 817 15,571.00 A12 12/31/2025 TOTAL DEF INFLOWS PENSION 817-0000-296.35-00 817 A12 12/31/2025 BENEFITS-EMPLOYER WRF 817-5151-515.15-20 817 1,416.00 A12 12/31/2025 Net Pension Asset 819-0000-189.00-00 819 (1,680.00) A12 12/31/2025 Deferred Pension Outflows 819-0000-189.50-00 819 39.00 A12 12/31/2025 Deferred Pension Outflows 819-0000-189.50-00 819 (10,233.00) A12 12/31/2025 TOTAL DEF INFLOWS PENSION 819-0000-296.35-00 819 9,079.00 A12 12/31/2025 BENEFITS-EMPLOYER WRF 819-5151-515.15-20 819 2,795.00 To record current year changes from the WRS balances. © 2025 Baker Tilly US, LLP Page | 30 Number Date Name Account No Debit Credit A13 12/31/2025 OTHER RECEIVABLES-SHA 101-0000-138.29-00 101 241,208.00 A13 12/31/2025 DUE TO OTHER CITIES, VILL 101-0000-244.10-00 101 (99,773.00) A13 12/31/2025 TAXES FROM OTHER EXMP ENT 101-0000-413.20-00 101 (241,208.00) A13 12/31/2025 TAXES FROM OTHER EXMP ENT 101-0000-413.20-00 101 99,773.00 To set up receivable and revenue for PILOT payments received from the housing authority in January 2026, related to 2023 and 2024. Reverse in 2026! A14 12/31/2025 CASH 101-0000-110.10-00 101 (75,900.00) A14 12/31/2025 INTEREST & DIVIDENDS REC 101-0000-133.10-00 101 A14 12/31/2025 INTEREST & DIVIDENDS REC 101-0000-133.10-00 101 75,900.00 A14 12/31/2025 INTEREST 101-0000-481.10-00 101 To move accrued income from cash to receivable. A15 12/31/2025 Def. Outflow-City OPEB 601-0000-189.70-00 601 (30,868.00) A15 12/31/2025 Net OPEB Liab-City Plan 601-0000-296.38-00 601 2,449.00 A15 12/31/2025 Def.Inflow-City OPEB Plan 601-0000-296.39-00 601 16,183.00 A15 12/31/2025 BENEFITS-HLTH INSUR 601-5361-536.15-40 601 12,236.00 A15 12/31/2025 Def. Outflow-City OPEB 602-0000-189.70-00 602 (830.00) A15 12/31/2025 Net OPEB Liab-City Plan 602-0000-296.38-00 602 (18,776.00) A15 12/31/2025 Def.Inflow-City OPEB Plan 602-0000-296.39-00 602 73.00 A15 12/31/2025 BENEFITS-HLTH INSUR 602-5362-536.15-40 602 19,533.00 A15 12/31/2025 Def. Outflow-City OPEB 606-0000-189.70-00 606 (5,309.00) A15 12/31/2025 Net OPEB Liab-City Plan 606-0000-296.38-00 606 (7,342.00) A15 12/31/2025 Def.Inflow-City OPEB Plan 606-0000-296.39-00 606 2,633.00 A15 12/31/2025 BENEFITS-HLTH INSUR 606-5361-536.15-40 606 10,018.00 A15 12/31/2025 Def. Outflow-City OPEB 801-0000-189.70-00 801 (5,790.00) A15 12/31/2025 Net OPEB Liab-City Plan 801-0000-296.38-00 801 (6,934.00) A15 12/31/2025 Def.Inflow-City OPEB Plan 801-0000-296.39-00 801 2,893.00 A15 12/31/2025 BENEFITS-HLTH INSUR 801-5145-514.15-40 801 9,831.00 A15 12/31/2025 Def. Outflow-City OPEB 817-0000-189.70-00 817 758.00 A15 12/31/2025 Net OPEB Liab-City Plan 817-0000-296.38-00 817 (2,143.00) A15 12/31/2025 Def.Inflow-City OPEB Plan 817-0000-296.39-00 817 (438.00) A15 12/31/2025 BENEFITS-HEALTH INS 817-5151-515.15-40 817 1,823.00 A15 12/31/2025 Def. Outflow-City OPEB 820-0000-189.70-00 820 (431,363.00) A15 12/31/2025 Net OPEB Liab-City Plan 820-0000-296.38-00 820 511,061.00 A15 12/31/2025 Def.Inflow-City OPEB Plan 820-0000-296.39-00 820 235,351.00 A15 12/31/2025 BENEFITS-EMPL RETIREMENTS 820-5151-515.15-25 820 (315,049.00) To record current year OPEB activity. © 2025 Baker Tilly US, LLP Page | 31 Number Date Name Account No Debit Credit A16 12/31/2025 ACCOUNTS PAYABLE 400-0000-211.10-00 400 (2,353,166.00) A16 12/31/2025 CAPITAL IMPROVEMENTS 400-5340-534.82-10 400 2,353,166.00 To record payable related to 2025 Hammond Avenue project run by the state and billed to the City in 2026. REVERSE IN 2026! A17 12/31/2025 LIABILITY FOR CLOSURE/CAR 602-0000-293.60-00 602 (214,956.00) A17 12/31/2025 OTHER SUPPLIES & EXPENSE 602-5363-536.39-10 602 214,956.00 To adjust landfill long term care liability. A18 12/31/2025 Deferred Outflows-LRLIF 601-0000-189.60-00 601 2,467.00 A18 12/31/2025 Deferred Outflows-LRLIF 601-0000-189.60-00 601 (18,089.00) A18 12/31/2025 Net OPEB Liability-LRLIF 601-0000-296.36-00 601 205.00 A18 12/31/2025 Deferred Inflows-LRLIF 601-0000-296.37-00 601 3,288.00 A18 12/31/2025 Deferred Inflows-LRLIF 601-0000-296.37-00 601 (16,987.00) A18 12/31/2025 BENEFITS-LIFE INSUR 601-5361-536.15-50 601 29,116.00 A18 12/31/2025 Deferred Outflows-LRLIF 602-0000-189.60-00 602 1,330.00 A18 12/31/2025 Deferred Outflows-LRLIF 602-0000-189.60-00 602 (10,050.00) A18 12/31/2025 Net OPEB Liability-LRLIF 602-0000-296.36-00 602 38,024.00 A18 12/31/2025 Deferred Inflows-LRLIF 602-0000-296.37-00 602 1,818.00 A18 12/31/2025 Deferred Inflows-LRLIF 602-0000-296.37-00 602 (9,394.00) A18 12/31/2025 BENEFITS-LIFE INSUR 602-5362-536.15-50 602 (21,728.00) A18 12/31/2025 Deferred Outflows-LRLIF 608-0000-189.60-00 608 23.00 A18 12/31/2025 BENEFITS-LIFE INSUR 608-5146-514.15-50 608 (23.00) A18 12/31/2025 Deferred Outflows-LRLIF 801-0000-189.60-00 801 832.00 A18 12/31/2025 Deferred Outflows-LRLIF 801-0000-189.60-00 801 (6,188.00) A18 12/31/2025 Net OPEB Liability-LRLIF 801-0000-296.36-00 801 3,672.00 A18 12/31/2025 Deferred Inflows-LRLIF 801-0000-296.37-00 801 1,125.00 A18 12/31/2025 Deferred Inflows-LRLIF 801-0000-296.37-00 801 (5,810.00) A18 12/31/2025 BENEFITS-LIFE INSUR 801-5145-514.15-50 801 6,369.00 A18 12/31/2025 Deferred Outflows-LRLIF 817-0000-189.60-00 817 40.00 A18 12/31/2025 Deferred Outflows-LRLIF 817-0000-189.60-00 817 (194.00) A18 12/31/2025 Net OPEB Liability-LRLIF 817-0000-296.36-00 817 278.00 A18 12/31/2025 Deferred Inflows-LRLIF 817-0000-296.37-00 817 35.00 A18 12/31/2025 Deferred Inflows-LRLIF 817-0000-296.37-00 817 (183.00) A18 12/31/2025 BENEFITS-LIFE INS 817-5151-515.15-50 817 24.00 To record current year ETF Life Insurance activity. © 2025 Baker Tilly US, LLP Page | 32 Number Date Name Account No Debit Credit A19 12/31/2025 CAPITAL IMPROVEMENTS 240-5220-522.82-10 240 (109,508.00) A19 12/31/2025 CAPITAL IMPROVEMENTS 240-5341-534.82-10 240 (59,514.00) A19 12/31/2025 XFERS TO OTHER FUNDS 240-5920-592.90-10 240 109,508.00 A19 12/31/2025 XFERS TO OTHER FUNDS 240-5920-592.90-10 240 59,514.00 A19 12/31/2025 XFER FROM OTHER FUNDS 400-0000-492.18-00 400 (109,508.00) A19 12/31/2025 XFER FROM OTHER FUNDS 400-0000-492.18-00 400 (59,514.00) A19 12/31/2025 CAPITAL IMPROVEMENTS 400-5220-522.82-10 400 109,508.00 A19 12/31/2025 CAPITAL IMPROVEMENTS 400-5341-534.82-10 400 59,514.00 To move ARPA reimbursement to fund 400 related to 2024 expenses to a transfer account. A21 12/31/2025 OTHER MISCELLANEOUS RECVB 210-0000-138.10-00 210 228,596.00 A21 12/31/2025 BT created - Unavailable Revenue Opioid 210-0000-261.10-00 210 (228,596.00) To record receivable for opioid settlement funds not yet received A22 12/31/2025 OTHER MISC REVENUE 231-0000-487.10-00 231 24,100.00 A22 12/31/2025 TRANSFERS FROM GENL FUND 231-0000-492.10-00 231 (24,100.00) To reclassify sewer payment to urban tree fund as a transfer, rather than revenue A23 12/31/2025 A/P - AJE ENTRIES 817-0000-211.11-00 817 (111,004.00) A23 12/31/2025 CLAIMS PAID-ACTIVE EMPL 817-5151-515.19-10 817 111,004.00 To adjust self insured health liability. A24 12/31/2025 PREPAID EXPENSES 818-0000-162.10-00 818 (592,864.00) A24 12/31/2025 PREMIUMS PAID 818-5151-515.51-10 818 592,864.00 To reduce prepaid expenses to actual © 2025 Baker Tilly US, LLP Page | 33 Two-way audit communications As part of our audit of your financial statements, we are providing communications to you throughout the audit process. Auditing requirements provide for two-way communication and are important in assisting the auditor and you with more information relevant to the audit. As this past audit is concluded, we use what we have learned to begin the planning process for next year's audit. It is important that you understand the following points about the scope and timing of our next audit: a. We address the significant risks of material misstatement, whether due to fraud or error, through our detailed audit procedures. b. We will obtain an understanding of the five components of internal control sufficient to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing and extent of further audit procedures. We will obtain a sufficient understanding by performing risk assessment procedures to evaluate the design of controls relevant to an audit of financial statements and to determine whether they have been implemented. We will use such knowledge to: • Identify types of potential misstatements. • Consider factors that affect the risks of material misstatement. • Design tests of controls, when applicable, and substantive procedures. c. We will not express an opinion on the effectiveness of internal control over financial reporting or compliance with laws, regulations and provisions of contracts or grant programs. For audits performed in accordance with Government Auditing Standards, our report will include a paragraph that states that the purpose of the report is solely to describe the scope of testing of internal control over financial reporting and compliance and the result of that testing and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance and that the report is an integral part of an audit performed in accordance with Government Auditing Standards in considering internal control over financial reporting and compliance. The paragraph will also state that the report is not suitable for any other purpose. d. The concept of materiality recognizes that some matters, either individually or in the aggregate, are important for fair presentation of financial statements in conformity with generally accepted accounting principles while other matters are not important. In performing the audit, we are concerned with matters that, either individually or in the aggregate, could be material to the financial statements. Our responsibility is to plan and perform the audit to obtain reasonable assurance that material misstatements, whether caused by errors or fraud, are detected. Our audit will be performed in accordance with auditing standards generally accepted in the United States of America, Government Auditing Standards, OMB's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and the State Single Audit Guidelines. © 2025 Baker Tilly US, LLP Page | 34 We will not express an opinion on the effectiveness of internal control over financial reporting or compliance with laws, regulations, and provisions of contracts or grant programs. For audits done in accordance with Government Auditing Standards, the Uniform Guidance, and the State Single Audit Guidelines, our report will include a paragraph that states that the purpose of the report is solely to describe (a) the scope of testing of internal control over financial reporting and compliance and the result of that testing and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance, (b) the scope of testing internal control over compliance for major programs and major program compliance and the result of that testing and to provide an opinion on compliance but not to provide an opinion on the effectiveness of internal control over compliance and, (c) that the report is an integral part of an audit performed in accordance with Government Auditing Standards in considering internal control over financial reporting and compliance and the Uniform Guidance, and the State Single Audit Guidelines, in considering internal control over compliance and major program compliance. The paragraph will also state that the report is not suitable for any other purpose. We are very interested in your views regarding certain matters. Those matters are listed here: a. We typically will communicate with your top level of management unless you tell us otherwise. b. We understand that the governing board has the responsibility to oversee the strategic direction of your organization, as well as the overall accountability of the entity. Management has the responsibility for achieving the objectives of the entity. c. We need to know your views about your organization's objectives and strategies, and the related business risks that may result in material misstatements. d. We anticipate that the City will receive an unmodified opinion on its financial statements. e. Which matters do you consider warrant particular attention during the audit, and are there any areas where you request additional procedures to be undertaken? f. Have you had any significant communications with regulators or grantor agencies? g. Are there other matters that you believe are relevant to the audit of the financial statements? Also, is there anything that we need to know about the attitudes, awareness and actions of the governing body concerning: a. The entity's internal control and its importance in the entity, including how those charged with governance oversee the effectiveness of internal control? b. The detection or the possibility of fraud? We also need to know if you have taken actions in response to developments in financial reporting, laws, accounting standards, governance practices, or other related matters, or in response to previous communications with us. With regard to the timing of our audit, here is some general information. If necessary, we may do preliminary financial audit work during the months of October-December, and sometimes early in January. Our final financial fieldwork is scheduled during the spring to best coincide with your readiness and report deadlines. After fieldwork, we wrap up our financial audit procedures at our office and may issue drafts of our report for your review. Final copies of our report and other communications are issued after approval by your staff. This is typically 6-12 weeks after final fieldwork, but may vary depending on a number of factors. © 2025 Baker Tilly US, LLP Page | 35 Keep in mind that while this communication may assist us with planning the scope and timing of the audit, it does not change the auditors’ sole responsibility to determine the overall audit strategy and the audit plan, including the nature, timing and extent of procedures necessary to obtain sufficient appropriate audit evidence. We realize that you may have questions on what this all means, or wish to provide other feedback. We welcome the opportunity to hear from you. City of Superior Financial Statements and Supplementary Information December 31, 2025 City of Superior Table of Contents December 31, 2025 Page Independent Auditors' Report i Required Supplementary Information Management's Discussion and Analysis (Unaudited) iv Basic Financial Statements Government-Wide Financial Statements: Statement of Net Position 1 Statement of Activities 2 Fund Financial Statements: Balance Sheet - Governmental Funds 4 Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activities 5 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 6 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 7 Statement of Net Position - Proprietary Funds 8 Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds 10 Statement of Cash Flows - Proprietary Funds 11 Statement of Fiduciary Net Position - Custodial Funds 12 Statement of Changes in Fiduciary Net Position - Custodial Funds 13 Index to Notes to Financial Statements 14 Notes to Financial Statements 15 City of Superior Table of Contents December 31, 2025 Page Required Supplementary Information Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 62 Schedule of Employer's Proportionate Share of Net Pension Liability (Asset) - Wisconsin Retirement System (WRS) 63 Schedule of Employer Contributions - Wisconsin Retirement System 63 Schedule of Employer's Proportionate Share of the Net OPEB Liability - Local Retiree Life Insurance Fund (LRLIF) 64 Schedule of Employer Contributions - Local Retiree Life Insurance Fund (LRLIF) 64 Schedule of Changes in the Total OPEB Liability and Related Ratios - City OPEB Plan 65 Notes to the Required Supplementary Information 66 Supplementary Information Detailed Schedule of Revenues and Other Financing Sources - Budget and Actual - General Fund 68 Detailed Schedule of Expenditures and Other Financing Uses - Budget and Actual - General Fund 70 Combining Balance Sheet - Nonmajor Governmental Funds 71 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 72 Combining Balance Sheet - Nonmajor Special Revenue Funds 73 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds 78 Combining Balance Sheet - Nonmajor Capital Projects Funds 83 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Capital Projects Funds 85 Other Reports Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance7 With Government Auditing Standards 87 Schedule of Findings and Responses 89 Independent Auditors' Report To the City Council of City of Superior Report on the Audit of the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Superior, Wisconsin (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 accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, 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. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditors' 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. Emphasis of Matter As discussed in Note 3 to the financial statements, changes in the presentation of funds within the financial statements had occurred and adjustments were made to the reporting period's beginning fund balance. Our opinions are not modified with respect to this matter. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the 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 City's 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. i Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms. Auditors' 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 auditors' 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 GAAS 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 GAAS 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 required supplementary information, as listed in the table of contents, 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. ii 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 supplementary information as listed in the table of contents is presented for purposes of additional analysis and is 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 supplementary information is fairly stated in all material respects, in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated July 30, 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. Eau Claire, Wisconsin July 30, 2026 iii City of Superior, Wisconsin Management's Discussion and Analysis December 31, 2025 (Unaudited) iv As management of the City of Superior, Wisconsin (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. All amounts within tables are expressed in thousands of dollars. Financial Highlights The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $166,426,133 (net position). Of this amount, $42,464,483 (unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors.  The government's total net position increased by $11,280,442.  As of the close of the current fiscal year, the City's governmental activities reported combined ending net position of $90,208,262, an increase of $1,330,083 in comparison with the prior year. Approximately 24% of this total amount, $21,827,773 is available for spending at the government's discretion (unrestricted net position).  At the end of the current fiscal year, unassigned fund balance for the general fund was $12,400,942, or 40% of total general fund expenditures.  The City's total debt balance decreased by $573,264, or 2%, during the current fiscal year. 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 supplementary information in addition to the basic financial statements themselves. 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 a 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 between the two 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 government'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 the future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). The 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, protection of persons and property, highway and transportation, library, conservation and development, and parks and recreation. The business-type activities of the City include a wastewater utility, a landfill utility, a stormwater utility, broadband utility and a golf course. The government-wide financial statements can be found on pages 1 - 3 of this report. City of Superior, Wisconsin Management's Discussion and Analysis December 31, 2025 (Unaudited) v 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 uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. 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 requirements. 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 75 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 and capital improvement program fund, which are considered to be major funds. 32 debt service funds are consolidated and presented as one major governmental fund. Data from the other 41 governmental funds are combined into a single, aggregated presentation. The City adopts an annual appropriated budget for funds as required by state statute. Budgetary comparison statements have been provided for the general fund to demonstrate compliance with the adopted budget. The basic governmental fund financial statements can be found on pages 4 - 7 of this 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 Sewerage System, Landfill Utility, Stormwater Utility, Broadband Utility and Golf Course Fund. 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 insurance activities. Because this service predominantly benefits governmental rather than business-type functions, the majority has been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statement, only in more detail. The proprietary fund financial statements provide separate information for the Sewerage System, Landfill Utility, Stormwater Utility, Broadband Utility and Golf Course Fund. The basic proprietary fund financial statements can be found on pages 8 - 11 of this report. Fiduciary Funds - The fiduciary fund is used to account for resources held for the benefit of parties outside the government. The fiduciary fund is not reflected in the government-wide financial statement because the resources of this fund are not available to support the City's own programs. The fiduciary fund maintained by the City is a custodial fund, which records the tax roll and tax collections for other taxing jurisdictions within the City and assets held as police evidence. The accounting used for the fiduciary fund is much like that used for governmental funds. City of Superior, Wisconsin Management's Discussion and Analysis December 31, 2025 (Unaudited) vi The basic fiduciary fund financial statement can be found on pages 12 - 13 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 on pages 15 - 61 of this report. Government-Wide Financial Analysis - As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $166,426,133 at the close of the most recent fiscal year. By far, the largest portion of the City's net position reflects its investment in capital assets (e.g., land, buildings, machinery, equipment, and infrastructure), less any related debt used to acquire those assets that are still outstanding. The City used 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. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its governmental activities. 2025 2024 2025 2024 2025 2024 Current and other assets 55,772 $ 61,348 $ 37,057 $ 31,351 $ 92,829 $ 92,699 $ Capital assets 87,981 84,959 64,946 58,370 152,927 143,329 Total assets 143,753 146,307 102,003 89,721 245,756 236,028 Deferred outflows of resources 14,926 20,266 2,619 3,328 17,545 23,594 Other Liabilities 8,089 10,172 1,577 1,558 9,666 11,730 Long-term liabilities outstanding 35,329 38,517 25,272 23,109 60,601 61,626 Total liabilities 43,418 48,689 26,849 24,667 70,267 73,356 Deferred inflows of resources 25,053 29,006 1,555 2,115 26,608 31,121 Net position: Net investment in capital assets 61,569 56,901 54,070 49,449 115,639 106,350 Restricted 6,811 10,968 1,511 1,511 8,322 12,479 Unrestricted 21,828 21,009 20,637 15,307 42,465 36,316 Total net position 90,208$ 88,878 $ 76,218 $ 66,267 $ 166,426 $ 155,145 $ Total City of Superior Net Position (Amounts expressed in $000s) Governmental Activities Business-Type Activities City of Superior, Wisconsin Management's Discussion and Analysis December 31, 2025 (Unaudited) vii Governmental and Business-Type Activities - Governmental Activities increased the City's net position by $1,330,083. Business-type activities increased the City's net position by $9,950,359. 2025 2024 2025 2024 2025 2024 Revenues: Program Revenues: Charges for serv ices 3,589$ 2,869 $ 20,436 $ 20,042 $ 24,025 $ 22,911 $ Operating grants and contributions 975 4,173 471 194 1,446 4,367 Capital grants and contributions - - 1,241 496 1,241 496 General Revenues: Property taxes 14,111 13,877 14,111 13,877 Other taxes 1,921 1,702 1,921 1,702 Intergovernmental revenues not restricted to specific programs 32,055 35,505 32,055 35,505 Inv estment income/(loss) 1,413 2,143 1,445 1,155 2,858 3,298 Miscellaneous 1,421 7,782 26 839 1,447 8,621 Total Revenues 55,485$ 68,051 $ 23,619 $ 22,726 $ 79,104 $ 90,777 $ Expenses General Government 3,052 4,160 - - 3,052 4,160 Public Safety 19,907 16,760 - - 19,907 16,760 Public Works 13,965 13,536 - - 13,965 13,536 Health and Human Services 95 205 - - 95 205 Culture, Recreation, and Education 5,894 5,097 - - 5,894 5,097 Economic Development 5,087 17,905 - - 5,087 17,905 Interest and fiscal charges 825 874 - - 825 874 Sewerage System - - 8,082 7,032 8,082 7,032 Landfill Utility - - 5,393 5,558 5,393 5,558 Stormwater Utility - - 1,987 1,631 1,987 1,631 Broadband Utility - - 790 2 790 2 Golf Course - - 2,746 2,718 2,746 2,718 Total Expenses 48,825$ 58,537 $ 18,998 $ 16,941 $ 67,823 $ 75,478 $ Increase (decrease) in net position 6,660 9,514 4,621 5,785 11,281 15,299 before transfers Transfers (5,330) (1,615) 5,330 1,615 - - Increase (decrease) in net position 1,330 7,899 9,951 7,400 11,281 15,299 Net position - January 1 88,878 80,979 66,267 58,867 155,145 139,846 Net position - December 31 90,208$ 88,878 $ 76,218 $ 66,267 $ 166,426 $ 155,145 $ Governmental Activities Business-type Activities Total Activities City of Superior Changes in Net Position (Amounts expressed in $000s) City of Superior, Wisconsin Management's Discussion and Analysis December 31, 2025 (Unaudited) viii Public charges for services 6.5% Operating grants and contributions 1.8% Capital grants and contributions 0.0% Taxes 28.9% Intergovernmental revenues not restricted to specific programs 57.7% Investment income/(loss) 2.5%Miscellaneous 2.6% 2025 Revenues by Source Governmental Activities City of Superior, Wisconsin Management's Discussion and Analysis December 31, 2025 (Unaudited) ix 2025 2024 2025 2024 2025 2024 Expenses General Government 3,052$ 4,160 $ - $ - $ 3,052$ 4,160 $ Public Safety 19,907 16,760 - - 19,907 16,760 Public Works 13,965 13,536 - - 13,965 13,536 Health and Human Services 95 205 - - 95 205 Culture, Recreation, and Education 5,894 5,097 - - 5,894 5,097 Economic Development 5,087 17,905 - - 5,087 17,905 Interest and fiscal charges 825 874 - - 825 874 Sewerage System - - 8,082 7,032 8,082 7,032 Landfill Utility - - 5,393 5,558 5,393 5,558 Stormwater Utility - - 1,987 1,631 1,987 1,631 Broadband Utility - - 790 2 790 2 Golf Course - - 2,746 2,718 2,746 2,718 Total Expenses 48,825$ 58,537 $ 18,998 $ 16,941 $ 67,823 $ 75,478 $ Program Revenues: General Government 1,827 $ 1,860 $ - $ - $ 1,827 $ 1,860 $ Public Safety 1,048 1,239 - - 1,048 1,239 Public Works 383 307 - - 383 307 Culture, Recreation, and Education 526 406 - 526 406 Economic Development 780 3,230 - 780 3,230 Sewerage System - - 8,996 8,068 8,996 8,068 Landfill Utility - - 6,877 7,240 6,877 7,240 Stormwater Utility - - 3,526 2,665 3,526 2,665 Broadband Utility - - 14 - 14 - Golf Course - - 2,735 2,759 2,735 2,759 Total Program Revenues 4,564$ 7,042 $ 22,148 $ 20,732 $ 26,712 $ 27,774 $ Net Cost of Service General Government 1,225 $ 2,300 $ - $ - $ 1,225$ 2,300 $ Public Safety 18,859 15,521 - - 18,859 15,521 Public Works 13,582 13,229 - - 13,582 13,229 Health and Human Services 95 205 - - 95 205 Culture, Recreation, and Education 5,368 4,691 - - 5,368 4,691 Economic Development 4,307 14,675 - - 4,307 14,675 Interest and fiscal charges 825 874 - - 825 874 Sewerage System - - (914) (1,036) (914) (1,036) Landfill Utility - - (1,484) (1,682) (1,484) (1,682) Stormwater Utility - - (1,539) (1,034) (1,539) (1,034) Broadband Utility - - 776 2 776 2 Golf Course - - 11 (41) 11 (41) Total Net Cost of Service 44,261$ 51,495 $ (3,150) $ (3,791) $ 41,111 $ 47,704 $ City of Superior Expenses and Program Revenues Governmental Activities Business-type Activities Total Activities (Amounts expressed in $000s) City of Superior, Wisconsin Management's Discussion and Analysis December 31, 2025 (Unaudited) x Financial Analysis of the Government'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, an 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 general fund is the chief operation fund of the City. At the end of the current fiscal year, unassigned fund balance of the general fund was $12,400,942, while total fund balance reached $14,070,293. As a measure of the general fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Total unassigned fund balance represents 40% of total general fund expenditures, while total fund balance represents 45% of that same amount. The fund balance of the City's general fund increased by $444,228. Expenditures in the general fund were $1,782,931 less than budgeted due primarily to debt service being under budget although all other functions were over and under budget as well. The City amended the original budget. Proprietary Funds - The City's proprietary funds provide the same type of information found in the government- wide financial statements, but in more detail. Unrestricted net position of the Sewerage System Fund at the end of the year amounted to $8,105,355, for the Landfill Utility Fund $2,188,224, the Stormwater Utility Fund $6,857,117, the Golf Course Fund $1,757,153, and the Broadband Utility $1,586,310. The total increase (decrease) in net position for the funds was $(8,891), $1,995,675, $1,006,485, $368,560, and $6,645,046, respectively. 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, amounts to $152,926,627 (net of accumulated depreciation/amortization). This investment in capital assets includes land, land improvements, buildings, machinery and equipment, park facilities, roads, highways, and sidewalks. Additional information on the City's capital assets can be found in Note 3 on pages 31 - 35 of this report. 2025 2024 2025 2024 2025 2024 Land and land improvements 26,624 $ 24,258 $ 24,187 $ 18,363 $ 50,812 $ 42,621 $ Buildings and improvements 16,820 17,375 3,752 4,115 20,572 21,490 Machinery and equipment 6,141 6,682 5,103 5,332 11,243 12,013 Leased assets 167 243 202 228 369 472 Infrastructure - - 27,655 23,323 27,655 23,323 Construction in progress 11,848 7,485 4,047 7,009 15,895 14,495 Roads 20,506 22,903 - - 20,506 22,903 Sidewalks/Bikepaths 5,875 6,013 - - 5,875 6,013 Total 87,981 $ 84,959 $ 64,946 $ 58,370 $ 152,927 $ 143,330 $ City of Superior Bay Capital Assets (net of accumulated depreciation) Total ActivitiesGovernmental Activities Business-type Activities (Amounts expressed in $000s) City of Superior, Wisconsin Management's Discussion and Analysis December 31, 2025 (Unaudited) xi Long-Term Debt. At the end of the current fiscal year, the City had total bonds and notes outstanding of $25,510,600. The debt is backed by the full faith and credit of the government. The remainder, $10,694,853, represents the City's bonds secured solely by specified revenue sources (i.e., revenue bonds). The City's total bond and note payable debt decreased by $573,264 or 2% during the current fiscal year. The City's bond rating has been maintained at AA from Standard & Poor's for its general obligation debt. State statutes limit the amount of general obligation debt a governmental entity may issue to 5% of its total equalized valuation. The current debt limitation for the City is $138,401,445, which is significantly in excess of the City's actual outstanding general obligation debt. Additional information on the City's long-term debt can be found on pages 38 - 43 of this report. Economic Factors  The unemployment rate for Douglas County is current ly 4.2%. This compares to the state's average unemployment rate of 3.2% and the national average rate of 4.4%.  The equalized value has increased an average of 8. 29% per year over the last five years. Equalized value decreased 3.23% between 2024 and 2025. 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 Office of the Finance Director. Business- Governmental Type Activities Activities Total Assets Cash and investments 35,327,562 $ 18,959,114 $ 54,286,676 $ Taxes receivable, net 15,415,206 - 15,415,206 Accounts receivable, net - 3,622,030 3,622,030 Special assessments receivable 508,699 171,770 680,469 Loans receivable, net 1,460,781 - 1,460,781 Leases receivable 2,222,471 - 2,222,471 Other receivables 898,483 6,299 904,782 Due from other governments 251,267 - 251,267 Internal balances (956,327) 956,327 - Inventories and prepaid items 71,555 203,376 274,931 Restricted assets: Cash and investments 90,069 13,138,330 13,228,399 Property held for resale 482,138 - 482,138 Capital assets: Construction in progress 11,847,727 4,047,114 15,894,841 Land 14,875,995 1,630,722 16,506,717 Other capital assets, net of depreciation/amortization 61,257,207 59,267,86 2 120,525,06 9 Total assets 143,752,833 102,002,944 245,755,777 Deferred Outflows of Resources OPEB related amounts, City plan 2,296,833 365,583 2,662,416 OPEB related amounts, LRLIF 264,712 64,819 329,531 Pension related amounts 12,364,433 2,188,27 6 14,552,70 9 Total deferred outflows of resources 14,925,978 2,618,678 17,544,656 Liabilities Accounts payable 5,172,906 1,166,138 6,339,044 Accrued and other current liabilities 1,960,885 328,927 2,289,812 Due to other governments 119,707 - 119,707 Unearned revenues 835,732 81,723 917,455 Noncurrent liabilities: OPEB liability, City plan 5,231,923 832,758 6,064,681 OPEB liability, LRLIF 845,493 240,804 1,086,297 Net pension liability 2,186,090 298,767 2,484,857 Due within one year 2,229,217 1,060,802 3,290,019 Due in more than one year 24,835,811 22,839,27 6 47,675,08 7 Total liabilities 43,417,764 26,849,195 70,266,959 Deferred Inflows of Resources Property taxes levied for subsequent year 14,812,494 - 14,812,494 Unearned lease revenue 2,222,471 - 2,222,471 OPEB related amounts, City plan 1,301,640 207,180 1,508,820 OPEB related amounts, LRLIF 621,239 170,553 791,792 Pension related amounts 6,094,941 1,176,82 3 7,271,76 4 Total deferred inflows of resources 25,052,785 1,554,556 26,607,341 Net Position Net investment in capital assets 61,569,055 54,070,194 115,639,249 Restricted for: Capital projects 841,668 - 841,668 Debt service 802,849 1,510,967 2,313,816 Library 176,663 - 176,663 Narcotics task force 29,510 - 29,510 Community improvement, development and tourism 1,657,115 - 1,657,115 Affordable housing 1,469,023 - 1,469,023 Hazardous materials grant 48,752 - 48,752 Housing loans 1,426,745 - 1,426,745 Opioid remediation 359,109 - 359,109 Unrestricted 21,827,773 20,636,71 0 42,464,48 3 Total net position 90,208,26 2$ 76,217,871 $ 166,426,13 3$ City of Superior Statement of Net Position December 31, 2025 See notes to financial statements 1 City of Superior Statement of Activities Year Ended December 31, 2025 Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Governmental Activities General government 3,051,802 $ 994,601 $ 832,640 $ - $ Public safety 19,906,643 919,999 127,758 - Public works 13,965,272 382,942 - - Health and human services 94,936 - - - Culture and recreation 5,894,054 526,520 - - Conservation and development 5,087,054 765,080 14,916 - Interest and fiscal charges 825,234 - - - Total governmental activities 48,824,995 3,589,142 975,314 - Business-Type Activities Sewerage System 8,081,629 8,296,715 - 699,857 Landfill Utility 5,392,572 6,776,591 100,407 - Stormwater Utility 1,987,116 2,614,366 370,667 540,849 Broadband Utility 790,238 13,885 - - Golf Course 2,746,42 5 2,734,670 - - Total business-type activities 18,997,980 20,436,227 471,074 1,240,706 Total primary government 67,822,975 $ 24,025,369 $ 1,446,388 $ 1,240,706 $ General Revenues Taxes: Property taxes, levied for general purposes Property taxes, levied for debt service Room taxes Other taxes Intergovernmental revenues not restricted to specific programs Investment income Miscellaneous Total general revenues Transfers Change in net position Net Position, Beginning Net Position, Ending Program Revenue s See notes to financial statements 2 Governmental Business-Type Activities Activities Total (1,224,561)$ - $ (1,224,561)$ (18,858,886) - (18,858,886) (13,582,330) - (13,582,330) (94,936) - (94,936) (5,367,534) - (5,367,534) (4,307,058) - (4,307,058) (825,234) - (825,234) (44,260,539) - (44,260,539) - 914,943 914,943 - 1,484,426 1,484,426 - 1,538,766 1,538,766 - (776,353) (776,353) - (11,755) (11,755) - 3,150,027 3,150,027 (44,260,539) 3,150,027 (41,110,512) 10,278,369 - 10,278,369 3,832,674 - 3,832,674 1,452,942 - 1,452,942 468,311 - 468,311 32,055,198 - 32,055,198 1,412,747 1,444,907 2,857,654 1,420,391 25,415 1,445,806 50,920,632 1,470,322 52,390,954 (5,330,010) 5,330,010 - 1,330,083 9,950,359 11,280,442 88,878,179 66,267,512 155,145,691 90,208,262$ 76,217,871 $ 166,426,13 3$ Net (Expenses) Revenues and Changes in Net Position Primary Government See notes to financial statements 3 Balance Sheet - Governmental Funds December 31, 2025 Capital Nonmajor Total General Improvement Debt Governmental Governmental Fund Program Service Funds Funds Assets Cash and investments 13,709,662$ - $ 1,038,062$ 9,834,410 $ 24,582,134 $ Restricted cash and investments - - - 90,069 90,069 Receivables, net: Taxes 11,369,795 - 4,000,268 - 15,370,063 Delinquent personal property taxes 45,143 - - - 45,143 Special assessments 44,071 - - 464,628 508,699 Loans - - - 1,460,781 1,460,781 Leases 2,222,471 - - - 2,222,471 Other 434,318 750 - 429,274 864,342 Due from other governments 11,441 - - 227,929 239,370 Due from other funds 100,730 - - - 100,730 Inventories and prepaid items 65,157 - - - 65,157 Property held for resale - - - 482,138 482,138 Advances to other funds 1,473,681 - - 864,348 2,338,029 Total assets 29,476,469 $ 750 $ 5,038,330$ 13,853,577 $ 48,369,126 $ Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities Accounts payable 447,958 $ 3,831,278 $ - $ 470,051$ 4,749,287 $ Accrued liabilities 1,166,785 - - 99,141 1,265,926 Due to other funds 813,776 - - 100,730 914,506 Due to other governments 119,707 - - - 119,707 Deposits 35,624 - - 393,103 428,727 Unearned revenues - - - 835,732 835,732 Advances from other funds - 269,344 - 2,068,685 2,338,029 Total liabilities 2,583,850 4,100,622 - 3,967,442 10,651,914 Deferred Inflows of Resources Property taxes levied for subsequent year 10,556,019 - 4,000,268 256,207 14,812,494 Unearned lease revenue 2,222,471 - - - 2,222,471 Unavailable revenues 43,836 - - 1,455,647 1,499,483 Total deferred inflows of resources 12,822,326 - 4,000,268 1,711,854 18,534,448 Fund Balances Nonspendable 1,538,838 - - 100,000 1,638,838 Restricted 130,513 - 1,038,062 5,708,254 6,876,829 Committed - - - 30,718 30,718 Assigned - - - 3,597,477 3,597,477 Unassigned (deficit) 12,400,942 (4,099,872) - (1,262,168) 7,038,902 Total fund balances (deficit) 14,070,293 (4,099,872) 1,038,062 8,174,281 19,182,764 Total liabilities, deferred inflows of resources and fund balances 29,476,469 $ 750 $ 5,038,330$ 13,853,577 $ 48,369,126 $ City of Superior See notes to financial statements 4 Total Fund Balance, Governmental Funds 19,182,764$ Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in government activities are not financial resources and therefore are not reported in the fund statements. See Note 3. 87,980,929 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. These amounts are the net effect of these differences: Premium on debt (770,995) Special assessments, loans receivable, and various other receivables are reported as unavailable revenue in the fund financial statements and are recognized as revenue when earned in the government-wide financial statements. See Note 3. 1,499,483 Some deferred outflows of resources do not relate to current financial resources and are not reported in the governmental funds. Deferred outflows, OPEB related amounts, City plan 898,419 Deferred outflows, OPEB related amounts, LRLIF 263,459 Deferred outflows, pension related amounts 12,199,950 Some deferred inflows of resources do not relate to current financial resources and are not reported in the governmental funds. Deferred inflows, OPEB related amounts, City plan (509,143) Deferred inflows, OPEB related amounts, LRLIF (595,906) Deferred inflows, pension related amounts (6,030,623) Internal service funds are used by management to charge the cost of self- insurance to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the Statement of Net Position. 7,602,188 Long-term liabilities, including bonds and notes payable, are not due in the current period and therefore are not reported in the fund statements. Long-term liabilities at year-end consist of: General obligation debt (25,510,600) $ Financed purchases (540,597) Lease liabilities (167,090) Compensated absences (75,712) Net pension liability (2,145,767) OPEB liabilities, City plan (2,046,494) OPEB liabilities, LRLIF (790,790) Accrued interest (235,213) (31,512,263 ) Total Net Position, Governmental Activities 90,208,262$ City of Superior Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activities December 31, 2025 See notes to financial statements 5 (Previous Year (Previous Year Major Fund) Major Fund) Capital Nonmajor Total General ARPA PIDP Improvement Debt Governmental Governmental Fund Grant Grant Program Service Funds Funds Revenues Taxes 10,658,881$ -$ - $ - $ 3,832,674$ 1,457,206 $ 15,948,761 $ Special assessments 5,074 - - - - 318,385 323,459 Intergovernmental 19,595,047 - - 5,148,242 - 8,038,437 32,781,726 Licenses and permits 692,118 - - 90,850 - - 782,968 Fines, forfeitures and penalties 155,542 - - - - 14,256 169,798 Public charges for services 122,363 - - 27,707 - 1,006,542 1,156,612 Intergovernmental charges for services 104,032 - - 23,745 - - 127,777 Investment income (loss) 547,631 - - - 54,583 306,783 908,997 Miscellaneous 624,712 - - 126,626 93,038 1,202,300 2,046,676 Total revenues 32,505,400 - - 5,417,170 3,980,295 12,343,909 54,246,774 Expenditures Current: General government 4,060,705 - - - - 106,716 4,167,421 Public safety 16,656,858 - - 3,559 - 788,788 17,449,205 Public works 7,708,155 - - - - - 7,708,155 Health and human services 94,936 - - - - - 94,936 Culture and recreation 2,279,495 - - 912 - 2,079,018 4,359,425 Conservation and development 255,786 - - 23,302 - 5,712,065 5,991,153 Capital outlay - - - 11,311,219 - 4,362,272 15,673,491 Debt service: Principal retirement - - - 249,712 2,421,851 150,619 2,822,182 Interest and fiscal charges - - - 38,825 839,621 51,199 929,645 Total expenditures 31,055,935 - - 11,627,529 3,261,472 13,250,677 59,195,613 Excess (deficiency) of revenues over expenditures 1,449,465 - - (6,210,359) 718,823 (906,768) (4,948,839) Other Financing Sources (Uses) Proceeds from sale of capital assets 60,100 - - 65,863 - 5,200 131,163 Transfers in 538,332 - - 2,304,716 170,000 4,192,975 7,206,023 Transfers out (1,603,669) - - (2,845,000) (2,387,974) (1,109,868) (7,946,511) Total other financing sources (uses) (1,005,237) - - (474,421) (2,217,974) 3,088,307 (609,325) Net change in fund balances 444,228 - - (6,684,780) (1,499,151) 2,181,539 (5,558,164) Fund Balances (Deficit), Beginning, as Previously Reported 13,626,065 487,657 (1,165,433) 2,584,908 2,537,213 6,670,518 24,740,928 Accounting changes (see note disclosure) - (487,657) 1,165,433 - - (677,776) - Fund Balances, Beginning, as Adjusted 13,626,065 - - 2,584,908 2,537,213 5,992,742 24,740,928 Fund Balances (Deficit), Ending 14,070,293$ - $ - $ (4,099,872)$ 1,038,062 $ 8,174,281 $ 19,182,764 $ City of Superior Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Year Ended December 31, 2025 See notes to financial statements 6 Net Change in Fund Balances, Total Governmental Funds (5,558,164)$ Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Capital outlay is capitalized in the government-wide statements 15,673,491 Some capital outlay is not capitalized in the government-wide statements (1,861,025) Some functional expenditures are capitalized 957,327 Depreciation/amortization is reported in the government-wide statements (6,277,100) Capital assets transferred to business-type activities (5,364,522) In the Statement of Activities, the gain or loss on the disposal of capital assets is reported. In the fund financial statements, proceeds from the sale of capital assets are reported because the proceeds increase financial resources. This is the amount of net book value of capital asset disposals. (106,083) Receivables not currently available are reported as unavailable revenue in the fund financial statements but are recognized as revenue when earned in the government-wide financial statements. This amount is the change in the following unavailable revenue categories: Accounts receivable (702,044) Special assessments receivable 75,232 Loans receivable 442,686 Grants receivable (613,390) Miscellaneous receivable 228,596 Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. This is the amount of principal payments paid in the following categories: Principal repaid 2,572,470 Financed purchases paid 249,712 Leases paid 75,131 Some expenses in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. This amount is the change in the following assets and liabilities: Compensated absences (8,587) OPEB liability and related deferred outflows/inflows of resources - City plan (192,436) OPEB liability and related deferred outflows/inflows of resources - LRLIF (26,894) Net pension liability and related deferred outflows/inflows of resources (892,309) Interest on long-term debt in the Statement of Activities differs from the amount reported in the fund financial statements because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the Statement of Activities interest expense is recognized as the interest accrues regardless of when it is due. 11,033 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. These amounts are the net effect of these differences: Amortization of premium and deferred charge on refunding 93,378 Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue (expense) of certain activities of internal service funds is reported with governmental activities. 2,553,581 Change in Net Position of Governmental Activities 1,330,083$ City of Superior Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended December 31, 2025 See notes to financial statements 7 Sewerage Landfill Stormwater Gol f Broadband Internal System Utility Utility Course Utility Total Service Funds Assets and Deferred Outflows of Resources Current Assets Cash and investments 6,400,989$ 3,150,286 $ 6,110,381 $ 1,717,258 $ 1,580,200 $ 18,959,114 $ 10,745,428$ Receivables: Customer accounts 2,163,286 754,192 704,552 - - 3,622,030 - Special assessments 104,823 37,455 29,492 - - 171,770 - Other 1,634 - - - 4,665 6,299 34,141 Due from other funds 540,468 170,634 102,674 - - 813,776 - Due from other governments - - - - - - 11,897 Inventories and prepaid items 3,700 - - 199,676 - 203,376 6,398 Total current assets 9,214,900 4,112,567 6,947,099 1,916,934 1,584,865 23,776,365 10,797,864 Noncurrent Assets Restricted assets: Cash and investments 1,510,967 11,627,363 - - - 13,138,330 - Capital assets: Construction in progress 3,830,021 - 41,293 175,800 - 4,047,114 - Land 28,860 61,240 246,622 1,294,000 - 1,630,722 - Capital assets 65,936,442 23,759,000 18,632,674 4,199,306 6,052,137 118,579,559 - Less accumulated depreciation/amortization (33,407,366) (17,639,204) (5,024,682) (3,170,155) (70,290) (59,311,697) - Total capital assets (net of accumulated depreciation/amortization) 36,387,957 6,181,036 13,895,907 2,498,951 5,981,847 64,945,698 - Total noncurrent assets 37,898,924 17,808,399 13,895,907 2,498,951 5,981,847 78,084,028 - Total assets 47,113,824 21,920,966 20,843,006 4,415,885 7,566,712 101,860,393 10,797,864 Deferred Outflows of Resources OPEB related amounts, City plan 222,190 76,236 67,157 - - 365,583 1,398,414 OPEB related amounts, LRLIF 33,308 31,488 - - 23 64,819 1,253 Pension related amounts 1,266,065 513,512 397,609 - 11,090 2,188,276 164,483 Total deferred outflows of resources 1,521,563 621,236 464,766 - 11,113 2,618,678 1,564,150 City of Superior Statement of Net Position - Proprietary Funds December 31, 2025 Business-Type Activities - Enterprise Funds See notes to financial statements 8 City of Superior Statement of Net Position - Proprietary Funds December 31, 2025 Sewerage Landfill Stormwater Gol f Broadband Internal System Utility Utility Course Utility Total Service Funds Liabilities, Deferred Inflows of Resources and Net Position Current Liabilities Accounts payable 706,144 $ 365,663 $ 21,861 $ 72,072 $ 398 $ 1,166,138$ 423,619 $ Accrued liabilities 187,498 62,438 63,735 5,986 9,270 328,927 31,019 Unearned revenue - - - 81,723 - 81,723 - Current portion of compensated absences 585 335 346 - - 1,266 6 Current portion of revenue bonds 737,631 - 273,256 - - 1,010,887 - Current portion of leases - - - 48,649 - 48,649 - Total current liabilities 1,631,858 428,436 359,198 208,430 9,668 2,637,590 454,644 Noncurrent Liabilities Compensated absences 2,854 1,635 1,691 - - 6,180 28 Revenue bonds 7,776,691 - 1,907,275 - - 9,683,966 - Leases - - - 132,002 - 132,002 - OPEB liability, City plan 506,123 173,658 152,977 - - 832,758 3,185,429 OPEB liability, LRLIF 155,053 85,751 - - - 240,804 54,703 Net pension liability 177,441 64,120 57,206 - - 298,767 40,323 Landfill closure and postclosure liability - 13,017,128 - - - 13,017,128 - Total noncurrent liabilities 8,618,162 13,342,292 2,119,149 132,002 - 24,211,605 3,280,483 Total liabilities 10,250,020 13,770,728 2,478,347 340,432 9,668 26,849,195 3,735,127 Deferred Inflows of Resources OPEB related amounts, City plan 125,917 43,204 38,059 - - 207,180 792,497 OPEB related amounts, LRLIF 95,333 75,220 - - - 170,553 25,333 Pension related amounts 674,160 283,790 218,873 - - 1,176,823 64,318 Total deferred inflows of resources 895,410 402,214 256,932 - - 1,554,556 882,148 Net Position Net investment in capital assets 27,873,635 6,181,036 11,715,376 2,318,300 5,981,847 54,070,194 - Restricted for: Debt service 1,510,967 - - - - 1,510,967 - Unrestricted 8,105,355 2,188,224 6,857,117 1,757,153 1,586,310 20,494,159 7,744,739 Total net position 37,489,957$ 8,369,260 $ 18,572,493 $ 4,075,453 $ 7,568,157 $ 76,075,320 7,744,739$ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 142,551 Net position of business-type activities 76,217,871$ Business-Type Activities - Enterprise Funds See notes to financial statements 9 Sewerage Landfill Stormwater Gol f Broadband Internal System Utility Utility Course Utility Total Service Funds Operating Revenues Charges for services 8,189,761 $ 6,731,566 $ 2,614,366 $ 2,733,700 $ 11,760 $ 20,281,153$ 9,166,578 $ Other 106,954 45,025 - 970 2,125 155,074 1,594,521 Total operating revenues 8,296,715 6,776,591 2,614,366 2,734,670 13,885 20,436,227 10,761,099 Operating Expenses Operation and maintenance 6,380,148 4,736,420 1,506,788 2,455,323 719,408 15,798,087 3,673,300 Depreciation and amortization 1,498,586 632,853 423,291 272,634 70,290 2,897,654 - Insurance claims and premiums - - - - - - 5,918,412 Total operating expenses 7,878,734 5,369,273 1,930,079 2,727,957 789,698 18,695,741 9,591,712 Operating income (loss) 417,981 1,407,318 684,287 6,713 (775,813) 1,740,486 1,169,387 Nonoperating Revenues (Expenses) Noncapital grants - 100,407 370,667 - - 471,074 - Investment income 366,054 694,561 259,727 30,296 94,269 1,444,907 503,749 Insurance recoveries - - - - - - 48,929 Net gain on disposal of capital assets 2,034 - - - - 2,034 - Interest and fiscal charges (172,836) - (54,438) (18,449) - (245,723) - Other miscellaneous revenue - - 23,381 - - 23,381 - Total nonoperating revenues (expenses) 195,252 794,968 599,337 11,847 94,269 1,695,673 552,678 Income (loss) before contributions and transfers 613,233 2,202,286 1,283,624 18,560 (681,544) 3,436,159 1,722,065 Capital Contributions 699,857 - 540,849 - 5,364,522 6,605,228 - Transfers In - - - 350,000 1,962,068 2,312,068 775,000 Transfers Out (1,321,981) (206,611) (817,988) - - (2,346,580) - Change in net position (8,891) 1,995,675 1,006,485 368,560 6,645,046 10,006,875 2,497,065 Net Position, Beginning 37,498,848 6,373,585 17,566,008 3,706,893 923,111 5,247,674 Net Position, Ending 37,489,957$ 8,369,260 $ 18,572,493 $ 4,075,453 $ 7,568,157 $ 7,744,739 $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (56,516) Change in net position of business-type activities 9,950,359$ Business-Type Activities - Enterprise Funds City of Superior Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds Year Ended December 31, 2025 See notes to financial statements 10 Sewerage Landfill Stormwater Golf Broadband Internal System Utility Utility Course Utility Total Service Funds Cash Flows From Operating Activities Cash received from services provided 8,128,905$ 6,915,095 $ 2,999,709 $ 2,750,521 $ 9,220 $ 20,803,450$ 10,805,952 $ Cash paid to suppliers for goods and services (4,126,851) (3,599,380) (680,343) (1,438,543) (557,435) (10,402,552) (8,853,171) Cash paid to employees for services (2,446,661) (888,529 ) (800,150 ) (1,008,034 ) (163,418 ) (5,306,792 ) (479,997 ) Net cash flows from operating activities 1,555,393 2,427,186 1,519,216 303,944 (711,633) 5,094,106 1,472,784 Cash Flows From Noncapital Financing Activities Transfers from other funds - - - 350,000 462,068 812,068 775,000 Transfers to other funds (1,321,981) (206,611 ) (817,988 ) - - (2,346,580 ) - Net cash flows from noncapital financing activities (1,321,981 ) (206,611 ) (817,988 ) 350,00 0 462,06 8 (1,534,512 ) 775,00 0 Cash Flows From Investing Activities Investment income 366,054 694,561 259,72 7 30,29 6 94,26 9 1,444,90 7 503,74 9 Net cash flows from investing activities 366,054 694,561 259,727 30,296 94,269 1,444,907 503,749 Cash Flows From Capital and Related Financing Activities Debt issued 1,629,469 - 1,262,091 - - 2,891,560 - Debt retired (680,019) - (212,335) (44,479) - (936,833) - Special assessments received (18,221) (3,195) 13,400 - - (8,016) - Interest and fiscal charges paid (172,836) - (54,438) (18,449) - (245,723) - Acquisition and construction of capital assets (2,686,378) (50,164) (126,142) (286,920) (3,123,461) (6,273,065) - Capital contributions received 699,857 - 540,84 9 - 2,435,84 6 3,676,55 2 - Capital transfers in - - - - 1,500,00 0 1,500,00 0 - Net cash flows from capital and related financing activities (1,228,128) (53,359) 1,423,425 (349,848) 812,385 604,475 - Net change in cash and cash equivalents (628,662) 2,861,777 2,384,380 334,392 657,089 5,608,976 2,751,533 Cash and Cash Equivalents, Beginning 8,540,618 11,915,872 3,726,001 1,382,866 923,111 26,488,468 7,993,895 Cash and Cash Equivalents, Ending 7,911,956$ 14,777,64 9$ 6,110,381 $ 1,717,25 8$ 1,580,20 0$ 32,097,44 4$ 10,745,42 8$ Reconciliation of Cash and Cash Equivalents Cash and investments per Statement of Net Position 6,400,989 $ 3,150,286 $ 6,110,381 $ 1,717,258 $ 1,580,200 $ 18,959,114 $ 10,745,428 $ Restricted cash and investments 1,510,967 11,627,363 - - - 13,138,330 - Cash and Cash Equivalents per Statement of Cash Flows 7,911,956$ 14,777,64 9$ 6,110,381 $ 1,717,25 8$ 1,580,20 0$ 32,097,44 4$ 10,745,42 8$ Reconciliation of Operating Income (Loss) to Net Cash Flows From Operating Activities Operating income (loss) 417,981 $ 1,407,318$ 684,287 $ 6,713 $ (775,813)$ 1,740,486 $ 1,169,387 $ Adjustments to reconcile operating income to net cash flows from operating activities: Nonoperating Income - 100,407 394,048 - - 494,455 48,929 Noncash items included in income: Depreciation and amortization 1,498,586 632,853 423,291 272,634 70,290 2,897,654 - Change in assets, deferred outflows, liabilities and deferred inflows: Accounts receivable (125,750) 34,374 (14,057) 9,958 (4,665) (100,140) (4,076) Due from other funds (42,060) 3,723 5,352 - - (32,985) - Inventories and prepaid items - - - (12,562) - (12,562) 380,504 Accounts payable (309,146) 15,701 (6,347) 58,038 398 (241,356) 211,542 Due to other funds - - - - - - (46,040) Other current liabilities 7,207 215,463 4,698 (36,730) 9,270 199,908 (16,915) Compensated absences 1,920 1,254 1,796 - - 4,970 (76) OPEB related deferrals and liability 41,352 (2,195) 10,018 5,893 (23) 55,045 (297,002) Pension related deferrals and asset/liability 65,30 3 18,28 8 16,13 0 - (11,090 ) 88,631 26,531 Net cash flows from operating activities 1,555,39 3$ 2,427,18 6$ 1,519,21 6$ 303,94 4$ (711,633 )$ 5,094,10 6$ 1,472,78 4$ Noncash Capital, Investing and Financing Activities Capital related accounts payable 458,568$ - $ 6,763$ - $ - $ - $ Capital assets contributed by municipality -$ - $ - $ - $ 2,928,676$ - $ City of Superior Statement of Cash Flows - Proprietary Funds Year Ended December 31, 2025 Business-Type Activities - Enterprise Fund s See notes to financial statements 11 Custodial Funds Assets Cash and investments 1,422,722$ Taxes receivable 28,224,787 Total assets 29,647,509 Liabilities Due to other governments 29,107,319 Total liabilities 29,107,319 Net Position Total net position restricted for police evidence 540,190 $ City of Superior Statement of Fiduciary Net Position - Custodial Funds December 31, 2025 See notes to financial statements 12 Custodial Funds Additions Taxes collected for other governments 17,044,996 $ Deposits received 21,535 Total additions 17,066,531 Deductions Taxes distributed to other governments 17,044,996 Refund of deposits 14,690 Total deductions 17,059,686 Change in fiduciary net position 6,845 Net Position, Beginning 533,345 Net Position, Ending 540,190$ City of Superior Statement of Changes in Fiduciary Net Position - Custodial Funds Year Ended December 31, 2025 See notes to financial statements 13 City of Superior Index to Notes to Financial Statements December 31, 2025 Page 1. Summary of Significant Accounting Policies 15 Reporting Entity 15 Government-Wide and Fund Financial Statements 16 Measurement Focus, Basis of Accounting and Financial Statement Presentation 18 Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position or Equity 20 Deposits and Investments 20 Receivables 21 Inventories and Prepaid Items 21 Restricted Assets 22 Capital Assets 22 Other Assets 22 Deferred Outflows of Resources 23 Compensated Absences 23 Long-Term Obligations 23 Leases 23 Deferred Inflows of Resources 23 Equity Classifications 24 Pension 25 Postemployment Benefits Other Than Pensions (OPEB) 25 2. Stewardship, Compliance and Accountability 25 Budgetary Information 25 Deficit Balances 26 Limitations on the City's Tax Levy 26 3. Detailed Notes on All Funds 27 Deposits and Investments 27 Receivables 29 Restricted Assets 30 Capital Assets 31 Interfund Receivables/Payables, Advances and Transfers 36 Long-Term Obligations 39 Lease Disclosures 44 Closure and Postclosure Care Cost 45 Net Position/Fund Balances 45 Accounting Changes 47 4. Other Information 47 Employees' Retirement System 47 Risk Management 52 Commitments and Contingencies 53 Other Postemployment Benefits 54 Subsequent Event 61 Tax Abatement 61 Effect of New Accounting Standards on Current-Period Financial Statements 61 14 City of Superior Notes to Financial Statements December 31, 2025 1. Summary of Significant Accounting Policies The accounting policies of the City of Superior, Wisconsin (the City) conform to accounting principles generally accepted in the United States of America as applicable to governmental units. The accepted standard-setting body for establishing governmental accounting and financial reporting principles is the Governmental Accounting Standards Board (GASB). Reporting Entity This report includes all of the funds of the City. The reporting entity for the City consists of the primary government and its component units. Component units are legally separate organizations for which the primary government is financially accountable or other organizations for which the nature and significance of their relationship with the primary government are such that their exclusion would cause the reporting entity's financial statements to be misleading. The primary government is financially accountable if (1) it appoints a voting majority of the organization's governing body and it is able to impose its will on that organization, (2) it appoints a voting majority of the organization's governing body and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government, (3) the organization is fiscally dependent on and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. Certain legally separate, tax exempt organizations should also be reported as a component unit if all of the following criteria are met: (1) the economic resources received or held by the separate organization are entirely or almost entirely for the direct benefit of the primary government, its component units or its constituents; (2) the primary government or its component units, is entitled to, or has the ability to access, a majority of the economic resources received or held by the separate organization; and (3) the economic resources received or held by an individual organization that the primary government, or its component units, is entitled to, or has the ability to otherwise access, are significant to the primary government. Component units are reported using one of three methods, discrete presentation, blended or fiduciary. Generally, component units should be discretely presented in a separate column in the financial statements. A component unit should be reported as part of the primary government using the blending method if it meets any one of the following criteria: (1) the primary government and the component unit have substantively the same governing body and a financial benefit or burden relationship exists, (2) the primary government and the component unit have substantively the same governing body and management of the primary government has operational responsibility for the component unit, (3) the component unit serves or benefits, exclusively or almost exclusively, the primary government rather than its citizens or (4) the total debt of the component unit will be paid entirely or almost entirely from resources of the primary government. Blended Component Unit The Redevelopment Authority (the Authority) of the City of Superior is an authority organized by the City under the laws of the state of Wisconsin. The Authority promotes urban renewal projects and the alleviation of the conditions of urban blight. It is governed by a seven-member Board appointed by the City. Because the funds of the Authority are spent on urban development for the benefit of the City, the Authority is reported as if it were a part of the primary government. The Authority does not prepare separate financial statements. 15 City of Superior Notes to Financial Statements December 31, 2025 Government-Wide and Fund Financial Statements Government-Wide Financial Statements The statement of net position and statement of activities display information about the reporting government as a whole. They include all funds of the reporting entity except for fiduciary funds. The statements distinguish between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues and other nonexchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. 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. The City does not allocate indirect expenses to functions in the statement of activities. 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 included among program revenues are reported as general revenues. Internally dedicated resources are reported as general revenues rather than as program revenues. Fund Financial Statements Financial statements of the City are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts, which constitute its assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position/fund balance, revenues and expenditures/expenses. Funds are organized as major funds or nonmajor funds within the governmental and proprietary statements. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the City or meets the following criteria: a. Total assets/deferred outflows of resources, liabilities/deferred inflows of resources, revenues or expenditures/expenses of that individual governmental or enterprise fund are at least 10% of the corresponding total for all funds of that category or type, and b. The same element of the individual governmental or enterprise fund that met the 10% test is at least 5% of the corresponding total for all governmental and enterprise funds combined. c. In addition, any other governmental or enterprise fund that the City believes is particularly important to financial statement users may be reported as a major fund. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. The City reports the following major governmental funds: General Fund General Fund accounts for the City's primary operating activities. It is used to account for and report all financial resources except those accounted for and reported in another fund. 16 City of Superior Notes to Financial Statements December 31, 2025 Debt Service Fund Debt Service Fund is used to account for and report financial resources that are restricted, committed or assigned to expenditure for the payment of general long-term debt principal, interest and related costs, other than enterprise debt. Capital Projects Fund Capital Improvement Program Fund is used to account for and report financial resources that are restricted, committed or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets for the City's Capital Improvement Program. Enterprise Funds The City reports the following major enterprise funds: Sewerage System accounts for operations of the sewer system. Landfill utility accounts for operations of the waste collection operations. Stormwater utility accounts for operations of the stormwater system. Golf Course Fund accounts for operations of the golf course. Broadband utility accounts for operations of the broadband system. The City reports the following nonmajor governmental funds: Special Revenue Funds Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes (other than debt service or capital projects). Crime Prevention Police Grant & Liaison Fire Department Grant Loan Urban Tree Parks and Recreation Boat Ramp Fees ARPA Grant Haz Mat Grant Library HUD CDBG Home SF Grant 2006-2008 Neighborhood Improvement Affordable Housing Fire Department PPP Public Museum Special Events Economic Development CDBG Revolving Loan Superior Business Center Municipal Forest Special Assessment Illegal Tax Business Improvement District Narcotics Hotel/Motel Tax Tourism Commission Revolving Grant 2020 17 City of Superior Notes to Financial Statements December 31, 2025 Capital Projects Funds Capital Projects Funds are used to account for and report financial resources that are restricted, committed or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. Hallet Dock Rehabilitation Project July 2016 Rain Event Project HAP Grant Project PIDP Grant Project Tax Increment District No. 9 Tax Increment District No. 12 Tax Increment District No. 13 Tax Increment District No. 14 Tax Increment District No. 15 Tax Increment District No. 16 Tax Increment District No. 17 Tax Increment District No. 18 Tax Increment District No. 19 Redevelopment Authority In addition, the City reports the following fund types: Internal Service Funds Internal Service Funds are used to account for and report the financing of goods or services provided by one department or agency to other departments or agencies of the City, or to other governmental units, on a cost-reimbursement basis. Custodial Funds Custodial Funds are used to account for and report assets controlled by the City and the assets are for the benefit of individuals, private organizations and/or other governmental units. Measurement Focus, Basis of Accounting and Financial Statement Presentation Government-Wide Financial Statements The government-wide statement of net position and statement of activities are reported using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Property taxes are recognized as revenues in the year for which they are levied. Taxes receivable for the following year are recorded as receivables and deferred inflows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider are met. Special assessments are recorded as revenue when earned. Unbilled receivables are recorded as revenues when services are provided. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the City's sewer and stormwater utilities and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. 18 City of Superior Notes to Financial Statements December 31, 2025 Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recorded when they are both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. 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 are recorded when the related fund liability is incurred, except for unmatured interest on long-term debt, claims, judgments, compensated absences and pension expenditures, which are recorded as a fund liability when expected to be paid with expendable available financial resources. Property taxes are recorded in the year levied as receivables and deferred inflows. They are recognized as revenues in the succeeding year when services financed by the levy are being provided. Intergovernmental aids and grants are recognized as revenues in the period the City is entitled to the resources and the amounts are available. Amounts owed to the City which are not available are recorded as receivables and unavailable revenues. Amounts received before eligibility requirements (excluding time requirements) are met are recorded as liabilities. Amounts received in advance of meeting time requirements are recorded as deferred inflows. Special assessments are recorded as revenues when they become measurable and available as current assets. Annual installments due in future years are reflected as receivables and unavailable revenues. Revenues susceptible to accrual include property taxes, miscellaneous taxes, public charges for services, special assessments and interest. Other general revenues such as fines and forfeitures, inspection fees, recreation fees and miscellaneous revenues are recognized when received in cash or when measurable and available under the criteria described above. Proprietary and Fiduciary Funds Proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as described previously in this note. The 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 Sewerage System, Landfill Utility, Stormwater Utility, Golf Course and Broadband Utility funds are charges to customers for sales and services. Special assessments are recorded as receivables and contribution revenue when levied. Operating expenses for proprietary 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. All Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. 19 City of Superior Notes to Financial Statements December 31, 2025 Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position or Equity Deposits and Investments For purposes of the statement of cash flows, the City considers all highly liquid investments with an initial maturity of three months or less when acquired to be cash equivalents. Investment of City funds is restricted by Wisconsin state statutes. Available investments are limited to: a. Time deposits in any credit union, bank, savings bank or trust company. b. Bonds or securities of any county, city, drainage district, technical college district, village, town or school district of the state. Also, bonds issued by a local exposition district, a local professional baseball park district, a local professional football stadium district, a local cultural arts district, the University of Wisconsin Hospitals and Clinics Authority or the Wisconsin Aerospace Authority. c. Bonds or securities issued or guaranteed by the federal government. d. The local government investment pool. e. Any security maturing in seven years or less and having the highest or second highest rating category of a nationally recognized rating agency. f. Securities of an open-end management investment company or investment trust, subject to various conditions and investment options. g. Repurchase agreements with public depositories, with certain conditions. Investment of most trust funds including cemetery perpetual care funds, is regulated by Chapter 881 of the Wisconsin Statutes. Investment of library trust funds is regulated by Chapter 112. Those sections give broad authority to use such funds to acquire various kinds of investments including stocks, bonds and debentures. The City has adopted an investment policy. That policy follows the state statute for allowable investments. Investments are stated at fair value, which is the amount at which an investment could be exchanged in a current transaction between willing parties. Fair values are based on methods and inputs as outlined in Note 3. No investments are reported at amortized cost. Adjustments necessary to record investments at fair value are recorded in the operating statement as increases or decreases in investment income. Investment income on commingled investments of municipal accounting funds is allocated based on average balances. The difference between the bank statement balance and carrying value is due to outstanding checks and/or deposits in transit. The Wisconsin Local Government Investment Pool (LGIP) is part of the State Investment Fund (SIF) and is managed by the State of Wisconsin Investment Board. The SIF is not registered with the Securities and Exchange Commission, but operates under the statutory authority of Wisconsin Chapter 25. The SIF reports the fair value of its underlying assets annually. Participants in the LGIP have the right to withdraw their funds in total on one day's notice. At December 31, 2025, the fair value of the City's share of the LGIP's assets was substantially equal to the amount as reported in these statements. See Note 3 for further information. 20 City of Superior Notes to Financial Statements December 31, 2025 Receivables Property taxes are levied in December on the assessed value as of the prior January 1. In addition to property taxes for the City, taxes are collected for and remitted to the county government as well as the local school district and technical college district. Taxes for all state and local governmental units billed in the current year for the succeeding year are reflected as receivables and due to other taxing units on the accompanying statement of fiduciary net position. Property tax calendar - 2025 tax roll: Lien date and levy date December 2025 Tax bills mailed December 2025 Payment in full, or January 31, 2026 First installment due January 31, 2026 Second installment due July 31, 2026 Tax sale - 2025 delinquent real estate taxes October 2028 Accounts receivable have been shown net of an allowance for uncollectible accounts. Delinquent real estate taxes as of July 31 are paid in full by the County, which assumes the collection thereof. No provision for uncollectible accounts receivable has been made for the sewerage system because they have the right by law to place substantially all delinquent bills on the tax roll and other delinquent bills are generally not significant. During the course of operations, transactions occur between individual funds that may result in amounts owed between funds. Short-term interfund loans are reported as "due to and from other funds." Long-term interfund loans (noncurrent portion) are reported as "advances from and to other funds." Interfund receivables and payables between funds within governmental activities are eliminated in the statement of net position. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as internal balances. In the governmental fund financial statements, advances to other funds are offset equally by a nonspendable fund balance account which indicates that they do not constitute expendable available financial resources and, therefore, are not available for appropriation or by a restricted fund balance account, if the funds will ultimately be restricted when the advance is repaid. The City has received federal and state grant funds for economic development and housing rehabilitation loan programs to various businesses and individuals. The City records a loan receivable when the loan has been made and funds have been disbursed. The amount recorded as economic development and housing rehabilitation loans receivable has been reduced by an allowance for uncollectible accounts of $574,500. It is the City's policy to record unavailable revenue for the net amount of the receivable balance. As loans are repaid, revenue is recognized. When new loans are made from the repayments, expenditures are recorded. Interest received from loan repayments is recognized as revenue when received in cash. Any unspent loan repayments at year end are presented as restricted fund balance in the fund financial statements. Inventories and Prepaid Items Governmental fund inventory items are charged to expenditure accounts when purchased. Year- end inventory was not significant. Proprietary fund inventories are generally used for construction and/or for operation and maintenance work. They are not for resale. They are valued at cost based on weighted average and charged to construction and/or operation and maintenance expense when used. 21 City of Superior Notes to Financial Statements December 31, 2025 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. Restricted Assets Mandatory segregations of assets are presented as restricted assets. Such segregations are required by bond agreements and other external parties. Current liabilities payable from these restricted assets are so classified. The excess of restricted assets over current liabilities payable from restricted assets will be used first for retirement of related long-term debt. The remainder, if generated from earnings, is shown as restricted net position. Capital Assets Government-Wide Financial Statements Capital assets, which include property, plant and equipment (including right-to-use lease assets), are reported in the government-wide financial statements. Capital assets are defined by the government as assets with an initial cost of more than $5,000 for general and infrastructure assets and an estimated useful life in excess of one year. All capital assets are valued at historical cost or estimated historical cost if actual amounts are unavailable. Donated capital assets are recorded at their estimated acquisition value at the date of donation. Additions to and replacements of capital assets of business-type activities are recorded at original cost, which includes material, labor and overhead. The cost of renewals and betterments relating to retirement units is added to plant accounts. The cost of property replaced, retired or otherwise disposed of, is deducted from plant accounts and, generally, together with removal costs less salvage, is charged to accumulated depreciation. Depreciation and amortization of all exhaustible capital assets is recorded as an allocated expense in the statement of activities, with accumulated depreciation and amortization reflected in the statement of net position. Depreciation and amortization is provided over the assets' estimated useful lives using the straight-line method. The range of estimated useful lives by type of asset is as follows: Buildings 20-50 Years Land improvements 20-50 Years Machinery and equipment 5-15 Years Infrastructure 20-50 Years Lease assets are typically amortized over the lease term. Fund Financial Statements In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for the same way as in the government-wide statements. Other Assets Property held for resale consists of buildings and improvements and is valued at cost of acquisition and improvements. 22 City of Superior Notes to Financial Statements December 31, 2025 Deferred Outflows of Resources A deferred outflow of resources represents a consumption of net assets that applies to a future period and will not be recognized as an outflow of resources (expense/expenditure) until that future time. Compensated Absences Under terms of employment, employees are granted sick leave and vacation in varying amounts. Vacation and sick leave pay is accrued in the government-wide and proprietary fund financial statements. 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, and are payable with expendable resources. Payments for vacation and sick leave will be made at rates in effect when the benefits are used. Accumulated vacation and sick leave liabilities at December 31, 2025, are determined on the basis of current salary rates and include salary related payments. Long-Term Obligations All long-term obligations to be repaid from governmental and business-type resources are reported as liabilities in the government-wide statements. The long-term obligations consist primarily of notes and bonds payable, financed purchases and accrued compensated absences. Long-term obligations for governmental funds are not reported as liabilities in the fund financial statements. The face value of debts (plus any premiums) are reported as other financing sources and payments of principal and interest are reported as expenditures. The accounting in proprietary funds is the same as it is in the government-wide statements. For the government-wide statements and proprietary fund statements, bond premiums and discounts are amortized over the life of the issue using the straight-line method. The balance at year end is shown as an increase or decrease in the liability section of the statement of net position. Leases The City is a lessor because it leases capital assets to other entities. As a lessor, the City reports a lease receivable and corresponding deferred inflow of resources in both the fund financial statements and government-wide financial statements. The City continues to report and depreciate the capital assets being leased as capital assets of the primary government. The City is a lessee because it leases capital assets from other entities. As a lessee, the City reports a lease liability and an intangible right-to-use capital asset (known as the lease asset) on the government-wide financial statements and proprietary fund statements. In the governmental fund financial statements, the City recognizes lease proceeds and capital outlay at initiation of the lease, and the outflow of resources for the lease liability as a debt service payment. Deferred Inflows of Resources A deferred inflow of resources represents an acquisition of net assets that applies to a future period and therefore will not be recognized as an inflow of resources (revenue) until that future time. 23 City of Superior Notes to Financial Statements December 31, 2025 Equity Classifications Government-Wide Statements Equity is classified as net position and displayed in three components: a. Net Investment in Capital Assets - Consists of capital assets including restricted capital assets, net of accumulated depreciation/amortization and reduced by the outstanding balances (excluding unspent debt proceeds) of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction or improvement of those assets. b. Restricted Net Position - Consists of net position with constraints placed on their use either by 1) external groups such as creditors, grantors, contributors or laws or regulations of other governments or, 2) law through constitutional provisions or enabling legislation. c. Unrestricted Net Position - All other net positions that do not meet the definitions 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 use restricted resources first, then unrestricted resources as they are needed. Fund Statements Governmental fund balances are displayed as follows: a. Nonspendable - Includes fund balance amounts that cannot be spent either because they are not in spendable form or because legal or contractual requirements require them to be maintained intact. b. Restricted - Consists of fund balances with constraints placed on their use either by 1) external groups such as creditors, grantors, contributors or laws or regulations of other governments or 2) law through constitutional provisions or enabling legislation. c. Committed - Includes fund balance amounts that are constrained for specific purposes that are internally imposed by the government through formal action of the highest level of decision making authority. Fund balance amounts are committed through a formal action (resolution) of the City Council. This formal action must occur prior to the end of the reporting period, but the amount of the commitment, which will be subject to the constraints, may be determined in the subsequent period. Any changes to the constraints imposed require the same formal action of the City Council that originally created the commitment. d. Assigned - Includes spendable fund balance amounts that are intended to be used for specific purposes that do not meet the criteria to be classified as restricted or committed. The Council may take official action to assign amounts. Assignments may take place after the end of the reporting period. e. Unassigned - Includes residual positive fund balance within the general fund which has not been classified within the other above mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed or assigned for those purposes. Proprietary fund equity is classified the same as in the government-wide statements. 24 City of Superior Notes to Financial Statements December 31, 2025 The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available unless there are legal documents / contracts that prohibit doing this, such as in grant agreements requiring dollar for dollar spending. Additionally, the City would first use committed, then assigned and lastly unassigned amounts of unrestricted fund balance when expenditures are made. See Note 3 for further information. Pension The fiduciary net position of the Wisconsin Retirement System (WRS) has been determined using the flow of economic resources measurement focus and accrual basis of accounting. This includes for purposes of measuring the following:  Net Pension Liability (Asset);  Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions; and  Pension Expense (Revenue). Information about the fiduciary net position of the WRS and additions to/deductions from WRS' fiduciary net position have been determined on the same basis as they are reported by the WRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Postemployment Benefits Other Than Pensions (OPEB) The fiduciary net position of the Local Retiree Life Insurance Fund (LRLIF) has been determined using the flow of economic resources measurement focus and the accrual basis of accounting. This includes for purposes of measuring following:  Net OPEB Liability (Asset);  Deferred Outflows of Resources and Deferred Inflows of Resources Related to Other Postemployment Benefits; and  OPEB Expense (Revenue). Information about the fiduciary net position of the LRLIF and additions to/deductions from LRLIF's fiduciary net position have been determined on the same basis as they are reported by LRLIF. For this purpose, benefit payments (including refunds of member contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. For purposes of measuring the total OPEB liability and OPEB expense, the City's single-employer defined benefit retiree healthcare plan recognizes benefit payments when due and payable in accordance with the benefit terms. 2. Stewardship, Compliance and Accountability Budgetary Information A budget has been adopted for the all funds except the ARPA grant fund. A budget has not been formally adopted for the ARPA grant fund. Wisconsin Statute 65.90 requires that an annual budget be adopted for all funds. 25 City of Superior Notes to Financial Statements December 31, 2025 Deficit Balances Generally accepted accounting principles require disclosure of individual funds that have deficit balances at year end. As of December 31, 2025, the following individual funds held a deficit balance: Fund Amount Reason Capital Improvement Program $ 4,099,872 Insufficient revenues to cover expenditures Tax Increment District No. 13 4,525 Insufficient tax increment generated Tax Increment District No. 16 115,698 Insufficient tax increment generated Tax Increment District No. 17 864,348 Insufficient tax increment generated Tax Increment District No. 18 69,362 Insufficient tax increment generated Tax Increment District No. 19 18,686 Insufficient tax increment generated Crime Prevention 94,565 Insufficient revenues to cover expenditures Fire Department PPP 14,494 Insufficient revenues to cover expenditures Public Museum 26,789 Insufficient revenues to cover expenditures Special Events 31,954 Insufficient revenues to cover expenditures Illegal Tax 21,747 Insufficient revenues to cover expenditures TIF district deficits are anticipated to be funded with future incremental taxes levied over the life of the districts, which is 27 years for the districts created before October 1, 1995, and 23 years for districts created thereafter through September 30, 2004. Beginning October 1, 2004, the life of new districts varies by type of district (20-27 years) and may be extended in some cases. Other deficits will be funded with future contributions, general tax revenues or long-term borrowing. Limitations on the City's Tax Levy Wisconsin law limits the City's future tax levies. Generally the City is limited to its prior tax levy dollar amount (excluding TIF Districts), increased by the greater of the percentage change in the City's equalized value due to net new construction or zero percent. Changes in debt service from one year to the next are generally exempt from this limit with certain exceptions. The City is required to reduce its allowable levy by the estimated amount of fee revenue it collects for certain services, if those services were funded in 2013 by the property tax levy. Levies can be increased above the allowable limits if the amount is approved by referendum. 26 City of Superior Notes to Financial Statements December 31, 2025 3. Detailed Notes on All Funds Deposits and Investments The City's deposits and investments at year end were comprised of the following: Carrying Value Statement Balances Associated Risks Deposits $ 7,522,251 $ 8,108,567 Custodial credit U.S. agencies, implicitly guaranteed 8,440,031 8,440,031 Custodial credit, credit, concentration of credit, interest rate U.S. treasuries 11,448,139 11,448,139 Custodial credit, interest rate Negotiable CDs 30,411,364 30,411,364 Custodial credit, credit, concentration of credit, interest rate LGIP 11,072,060 11,072,060 Credit Petty cash 43,952 - N/A Total deposits and investments $ 68,937,797 $ 69,480,161 Reconciliation to financial statements Per statement of net position: Unrestricted cash and investments $ 54,286,676 Restricted cash and investments 13,228,399 Per statement of net position, fiduciary funds: Custodial fund 1,422,722 Total deposits and investments $ 68,937,797 Deposits in each local and area bank are insured by the FDIC in the amount of $250,000 for time and savings accounts (including NOW accounts) and $250,000 for demand deposit accounts (interest-bearing and non-interest-bearing). In addition, if deposits are held in an institution outside of the state in which the government is located, insured amounts are further limited to a total of $250,000 for the combined amount of all deposit accounts. Bank accounts are also insured by the State Deposit Guarantee Fund in the amount of $1,000,000. However, due to the nature of this fund, recovery of material principal losses may not be significant to individual municipalities. This coverage has been considered in computing custodial credit risk. The Securities Investor Protection Corporation (SIPC), created by the Securities Investor Protection Act of 1970, is an independent government-sponsored corporation (not an agency of the U.S. government). SIPC membership provides account protection up to a maximum of $500,000 per customer, of which $250,000 may be in cash. $41,599,232 of the City's investments are covered by SIPC. Additionally, through RBC Capital Markets, LLC, accounts have additional securities coverage of $99.5 million per customer, subject to a $400 million aggregate firm limit. The City maintains collateral agreements with its banks. At December 31, 2025, the banks had pledged various government securities in the amount of $22,922,313 to secure the City's deposits. 27 City of Superior Notes to Financial Statements December 31, 2025 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. The valuation methods for recurring fair value measurements are as follows:  Matrix pricing model December 31, 2025 Investment Type Level 1 Level 2 Level 3 Total U.S. agencies, implicitly guaranteed $ - $ 8,440,031 $ - $ 8,440,031 U.S. treasuries - 11,448,139 - 11,448,139 Negotiable CDs - 30,411,364 - 30,411,364 Total $ - $ 50,299,534 $ - $ 50,299,534 Custodial Credit Risk Deposits Custodial credit risk is the risk that in the event of a financial institution failure, the City's deposits may not be returned to the City. The City does not have any deposits exposed to custodial credit risk. Investments For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City does not have any investments exposed to custodial credit risk. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. As of December 31, 2025, the City's investments were rated as follows: Investment Type Standard & Poors Moody's Investors Services U.S. agencies, implicitly guaranteed AA+ AA1 The City's negotiable CDs are not rated. The City also held investments in the following external pool which is not rated: LGIP 28 City of Superior Notes to Financial Statements December 31, 2025 Concentration of Credit Risk 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, the City's investment portfolio was concentrated as follows: Issuer Investment Type Percentage of Net Position Federal Home Loan Bank U.S. agencies, implicitly guaranteed %6.80 Federal Farm Credit Bank U.S. agencies, implicitly guaranteed 6.20 Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the value of an investment. As of December 31, 2025, the City's investments were as follows: Maturity (in Months) Investment Type Fair Value Less Than 1 Year 1-5 Years 6-10 Years U.S. agencies, implicitly guaranteed $ 8,440,031 $ 1,820,490 $ 4,776,783 $ 1,842,758 U.S. treasuries 11,448,139 290,093 10,897,821 260,225 Certificates of deposit, negotiable 30,411,364 8,258,231 21,908,696 244,437 Total $ 50,299,534 $ 10,368,814 $ 37,583,300 $ 2,347,420 See Note 1 for further information on deposit and investment policies. Receivables All of the receivables on the balance sheet are expected to be collected within one year except delinquent personal property taxes of $45,143 and leases receivable of $2,043,789 in the general fund and loans of $1,439,534 and opioid settlement funds of $204,778 in the nonmajor governmental funds. 29 City of Superior Notes to Financial Statements December 31, 2025 Governmental funds report unavailable or unearned revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Property taxes levied for the subsequent year are not earned and cannot be used to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of unavailable revenue and unearned revenue reported in the governmental funds were as follows: Unearned Unavailable Property taxes receivable for subsequent year $ 14,556,287 $ - Special assessments not yet due 256,207 252,257 Loans receivable - 1,018,630 Grants received in advance of incurring allowable expenditures 835,732 - Grants receivable - 228,596 Leases receivable 2,222,471 - Total unearned/unavailable revenue for governmental funds $ 17,870,697 $ 1,499,483 Unearned revenue included in liabilities $ 835,732 Unearned revenue included in deferred inflows 17,034,965 Total unearned revenue for governmental funds $ 17,870,697 Restricted Assets The following represent the balances of the restricted assets: Long-Term Debt Accounts Redemption - Used to segregate resources accumulated for debt service payments over the next twelve months. Depreciation - Used to report resources set aside to fund plant renewals and replacement or make up potential future deficiencies in the redemption account. The City also makes annual contributions to a trust to finance closure and post-closure care of the City landfill. See Note 3. Following is a list of restricted assets at December 31, 2025: Restricted Assets Bond redemption and depreciation account $ 1,510,967 Closure and postclosure care 11,627,363 Library endowments 90,069 Total $ 13,228,399 30 City of Superior Notes to Financial Statements December 31, 2025 Capital Assets Capital asset activity for the year ended December 31, 2025, was as follows: Beginning Balance Adjustments* Additions Deletions Ending Balance Governmental Activities Capital assets not being depreciated / amortized: Land $ 14,875,995 $ - $ - $ - $ 14,875,995 Construction in progress 7,485,350 (2,551,940) 10,203,498 3,289,181 11,847,727 Total capital assets not being depreciated / amortized 22,361,345 (2,551,940) 10,203,498 3,289,181 26,723,722 Capital assets being depreciated / amortized: Land improvements 17,724,045 - 3,246,062 50,680 20,919,427 Buildings and improvements 29,936,817 - 509,323 - 30,446,140 Machinery and equipment 24,905,737 - 1,083,276 775,213 25,213,800 Roads 58,292,326 (376,736) 267,185 - 58,182,775 Sidewalks/bikepaths 15,902,537 - 313,784 126,983 16,089,338 Leased assets, buildings 375,654 - - - 375,654 Total capital assets being depreciated / amortized 147,137,116 (376,736) 5,419,630 952,876 151,227,134 Total capital assets 169,498,461 (2,928,676) 15,623,128 4,242,057 177,950,856 Less accumulated depreciation / amortization for: Land improvements $ (8,341,587) $ - $ (876,775) $ 47,436 $ (9,170,926) Buildings and improvements (12,562,198) - (1,064,037) - (13,626,235) Machinery and equipment (18,224,133) - (1,521,449) 672,374 (19,073,208) Roads (35,389,058) - (2,287,262) - (37,676,320) Sidewalks/bikepaths (9,889,211) - (452,446) 126,983 (10,214,674) Leased assets, buildings (133,433) - (75,131) - (208,564) Total accumulated depreciation / amortization (84,539,620) - (6,277,100) 846,793 (89,969,927) Net capital assets being depreciated / amortized 62,597,496 (376,736) (857,470) 106,083 61,257,207 Total governmental activities capital assets $ 84,958,841 $ (2,928,676) $ 9,346,028 $ 3,395,264 $ 87,980,929 * Assets contributed to Broadband Utility. 31 City of Superior Notes to Financial Statements December 31, 2025 Depreciation / amortization expense was charged to functions as follows: Governmental Activities General government $ 162,220 Public safety 1,180,226 Public works 3,616,044 Culture, recreation and education 1,318,610 Total governmental activities depreciation / amortization expense $ 6,277,100 Business-Type Activities Beginning Balance Additions Deletions Ending Balance Sewerage System Capital assets not being depreciated: Land $ 28,860 $ - $ - $ 28,860 Construction in progress 6,390,148 2,491,748 5,051,875 3,830,021 Total capital assets not being depreciated 6,419,008 2,491,748 5,051,875 3,858,881 Capital assets being depreciated: Buildings and improvements 18,271,952 - - 18,271,952 Machinery and equipment 7,118,020 276,224 - 7,394,244 Infrastructure 35,021,061 5,249,185 - 40,270,246 Total capital assets being depreciated 60,411,033 5,525,409 - 65,936,442 Total capital assets 66,830,041 8,017,157 5,051,875 69,795,323 Less accumulated depreciation for: Buildings and improvements (14,349,501) (385,790) - (14,735,291) Machinery and equipment (5,861,050) (195,480) - (6,056,530) Infrastructure (11,698,229) (917,316) - (12,615,545) Total accumulated depreciation (31,908,780) (1,498,586) - (33,407,366) Net capital assets being depreciated 28,502,253 4,026,823 - 32,529,076 Net sewerage system capital assets $ 34,921,261 $ 6,518,571 $ 5,051,875 $ 36,387,957 32 City of Superior Notes to Financial Statements December 31, 2025 Beginning Balance Additions Deletions Ending Balance Landfill Utility Capital assets not being depreciated: Land $ 61,240 $ - $ - $ 61,240 Total capital assets not being depreciated 61,240 - - 61,240 Capital assets being : Land improvements 18,132,369 50,164 - 18,182,533 Buildings and improvements 178,714 - - 178,714 Machinery and equipment 5,397,753 - - 5,397,753 Total capital assets being depreciated 23,708,836 50,164 - 23,759,000 Total capital assets 23,770,076 50,164 - 23,820,240 Less accumulated depreciation for: Land improvements (14,614,462) (152,520) - (14,766,982) Buildings and improvements (178,715) - - (178,715) Machinery and equipment (2,213,174) (480,333) - (2,693,507) Total accumulated depreciation (17,006,351) (632,853) - (17,639,204) Net capital assets being depreciated 6,702,485 (582,689) - 6,119,796 Net landfill utility capital assets $ 6,763,725 $ (582,689) $ - $ 6,181,036 Beginning Balance Additions Deletions Ending Balance Stormwater Utility Capital assets not being depreciated: Land $ 246,622 $ - $ - $ 246,622 Construction in progress 571,852 33,020 563,579 41,293 Total capital assets not being depreciated 818,474 33,020 563,579 287,915 Capital assets being depreciated: Land Improvements 17,132,028 563,579 - 17,695,607 Machinery and equipment 851,305 85,762 - 937,067 Total capital assets being depreciated 17,983,333 649,341 - 18,632,674 Total capital assets 18,801,807 682,361 563,579 18,920,589 Less accumulated depreciation for: Land Improvements (3,998,390) (357,927) - (4,356,317) Machinery and equipment (603,001) (65,364) - (668,365) Total accumulated depreciation (4,601,391) (423,291) - (5,024,682) Net capital assets being depreciated 13,381,942 226,050 - 13,607,992 Net stormwater utility capital assets $ 14,200,416 $ 259,070 $ 563,579 $ 13,895,907 33 City of Superior Notes to Financial Statements December 31, 2025 Beginning Balance Additions Deletions Ending Balance Golf Course Capital assets not being depreciated / amortized: Land $ 1,294,000 $ - $ - $ 1,294,000 Construction in progress 47,166 128,634 - 175,800 Total capital assets not being depreciated 1,341,166 128,634 - 1,469,800 Capital assets being depreciated / amortized: Land improvements 1,736,816 - - 1,736,816 Buildings and improvements 774,348 39,500 - 813,848 Machinery and equipment 1,300,682 118,786 23,469 1,395,999 Leased assets, equipment 252,643 - - 252,643 Total capital assets being depreciated / amortized 4,064,489 158,286 23,469 4,199,306 Total capital assets 5,405,655 286,920 23,469 5,669,106 Less accumulated depreciation / amortization for: Land improvements (1,657,042) (27,703) - (1,684,745) Buildings and improvements (580,904) (17,954) - (598,858) Machinery and equipment (657,781) (201,712) 23,469 (836,024) Leased assets, equipment (25,263) (25,265) - (50,528) Total accumulated depreciation / amortization (2,920,990) (272,634) 23,469 (3,170,155) Net capital assets being depreciated / amortized 1,143,499 (114,348) - 1,029,151 Net golf course capital assets $ 2,484,665 $ 14,286 $ - $ 2,498,951 34 City of Superior Notes to Financial Statements December 31, 2025 Beginning Balance Adjustments * Additions Deletions Ending Balance Broadband Utility Capital assets not being depreciated: Construction in progress $ - $ 2,551,940 $ 3,500,197 $ 6,052,137 $ - Total capital assets not being depreciated - 2,551,940 3,500,197 6,052,137 - Capital assets being depreciated: Land improvements $ - $ 376,736 $ 5,431,195 $ - $ 5,807,931 Machinery and equipment - - 244,206 - 244,206 Total capital assets being depreciated - 376,736 5,675,401 - 6,052,137 Total capital assets - 2,928,676 9,175,598 6,052,137 6,052,137 Less accumulated depreciation for: Land improvements - - (58,080) - (58,080) Machinery and equipment - - (12,210) - (12,210) Total accumulated depreciation - - (70,290) - (70,290) Net capital assets being depreciated - 376,736 5,605,111 - 5,981,847 Net broadband utility capital assets $ - $ 2,928,676 $ 9,105,308 $ 6,052,137 $ 5,981,847 * Assets contributed from governmental activities. Business-type activities capital assets, net as reported in the statement of net position $ 58,370,067 $ 15,314,546 $ 11,667,591 $ 64,945,698 Depreciation / amortization expense was charged to functions as follows: Business-Type Activities Sewerage $ 1,498,586 Landfill 632,853 Stormwater 423,291 Golf course 272,634 Broadband 70,290 Total business-type activities, net as reported in the statement of net position expense $ 2,897,654 35 City of Superior Notes to Financial Statements December 31, 2025 Interfund Receivables/Payables, Advances and Transfers Interfund Receivables/Payables The following is a schedule of interfund receivables and payables including any overdrafts on pooled cash and investment accounts: Receivable Fund Payable Fund Amount General fund Nonmajor governmental funds $ 100,730 Sewerage system General fund 540,468 Landfill utility General fund 170,634 Stormwater utility General fund 102,674 Total, fund financial statements 914,506 Less fund eliminations (100,730) Add interfund receivables created with internal service fund eliminations 142,551 Total internal balances, government-wide statement of net position $ 956,327 All amounts are due within one year. These interfunds resulted from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system and (3) payments between funds are made. Advances The general fund, economic development and redevelopment authority are advancing funds to Tax Increment District Nos. 14, 16, 17, 18 and 19. The amount advanced is determined by the deficiency of revenues over expenditures and other financing sources since the district's inception. Repayment schedules have been established for the advances payable from the tax increment districts which includes annual interest of 4%. The general fund is advancing funds to the Crime Prevention and Capital Improvement Program funds. The amount advanced is determined by the deficiency of revenues over expenditures and other financing sources. No repayment schedule has been established. 36 City of Superior Notes to Financial Statements December 31, 2025 The following is a schedule of interfund advances: Receivable Fund Payable Fund Amount Amount Not Due Within One Year General fund Crime Prevention $ 95,295 $ 95,295 General fund Capital Improvement Program 269,344 269,344 General fund Tax Increment District No. 14 66,882 66,882 General fund Tax Increment District No. 16 79,569 79,569 Economic Development Tax Increment District No. 17 486,196 486,196 Redevelopment Authority Tax Increment District No. 17 378,152 378,152 General fund Tax Increment District No. 17 875,283 875,283 General fund Tax Increment District No. 18 69,362 69,362 General fund Tax Increment District No. 19 17,946 17,946 Total, fund financial statements 2,338,029 Less fund eliminations (2,338,029) Total, interfund advances, government-wide statement of net position $ - 37 City of Superior Notes to Financial Statements December 31, 2025 Transfers The following is a schedule of interfund transfers: Fund Transferred To Fund Transferred From Amount Principal Purpose General fund Sewerage system $ 85,175 Reimbursement for services General fund Landfill utility 206,611 Reimbursement for services General fund Nonmajor governmental funds 246,546 Room tax and expenditure reimbursement Capital improvement program Nonmajor governmental funds 374,022 Reimbursement of previous library project costs, sidewalk special assessments collected Capital improvement program Sewerage system 1,212,706 Capital purchases Capital improvement program Stormwater utility 717,988 Capital purchases Debt service Capital improvement program 170,000 Fire truck debt services Golf course Capital improvement program 350,000 Capital purchases Internal service funds Capital improvement program 775,000 Technology purchases Broadband utility Capital improvement program 1,500,000 Annual transfers Broadband utility Nonmajor governmental funds 462,068 Operating expenses Nonmajor governmental funds Capital improvement program 50,000 Neighborhood improvement transfer Nonmajor governmental funds Debt service 2,387,974 TID projects Nonmajor governmental funds Nonmajor governmental funds 27,232 Room tax and TID 12 closeout Nonmajor governmental funds Sewerage system 24,100 Contribution for replanting trees Nonmajor governmental funds General fund 1,603,669 Library funding budget transfer, police department grant match, City portion of liaison officers, and tree fund transfer Nonmajor governmental funds Stormwater utility 100,000 Capital purchases Total, fund financial statements 10,293,091 Less fund eliminations (4,859,443) Less government-wide eliminations (5,399,136) Less capital assets contributed to the broadband utility (5,364,522) Total transfers, government-wide statement of activities $ (5,330,010) Generally, transfers are used to (1) move revenues from the fund that collects them to the fund that the budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund and (3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. 38 City of Superior Notes to Financial Statements December 31, 2025 Long-Term Obligations Long-term obligations activity for the year ended December 31, 2025, was as follows: Beginning Balance Increases Decreases Ending Balance Amounts Due Within One Year Governmental Activities Bonds and notes payable: General obligation debt $ 27,865,000 $ - $ 2,370,000 $ 25,495,000 $ 2,120,000 General obligation notes from direct borrowings and direct placements 218,070 - 202,470 15,600 15,600 (Discounts)/Premiums: Bond premium 864,373 - 93,378 770,995 - Total bonds and notes payable 28,947,443 - 2,665,848 26,281,595 2,135,600 Other liabilities: Compensated absences* 67,235 8,511 - 75,746 12,877 Financed purchases 790,309 - 249,712 540,597 - Total other liabilities 857,544 8,511 249,712 616,343 12,877 Total governmental activities long-term liabilities, excluding lease liabilities $ 29,804,987 $ 8,511 $ 2,915,560 $ 26,897,938 $ 2,148,477 Lease liabilities (Note 3) $ 167,090 $ 80,740 Total governmental activities long- term liabilities $ 27,065,028 $ 2,229,217 Business-Type Activities Bonds and notes payable: Revenue bonds from direct borrowings and direct placements $ 8,695,647 $ 2,891,560 $ 892,354 $ 10,694,853 $ 1,010,887 Total bonds and notes payable 8,695,647 2,891,560 892,354 10,694,853 1,010,887 Other liabilities: Compensated absences* 2,476 4,970 - 7,446 1,266 Landfill closure and postclosure liability 12,802,172 214,956 - 13,017,128 - Total other liabilities 12,804,648 219,926 - 13,024,574 1,266 Total business-type activities long-term liabilities, excluding lease liabilities $ 21,500,295 $ 3,111,486 $ 892,354 $ 23,719,427 $ 1,012,153 Lease liabilities (Note 3) $ 180,651 $ 48,649 Total business-type activities long- term liabilities $ 23,900,078 $ 1,060,802 *The change in the compensated absences liability is presented as a net change. In accordance with Wisconsin Statutes, total general obligation indebtedness of the City may not exceed 5% of the equalized value of taxable property within the City's jurisdiction. The debt limit as of December 31, 2025, was $138,401,445. Total general obligation debt outstanding at year end was $25,510,600. 39 City of Superior Notes to Financial Statements December 31, 2025 General Obligation Debt All general obligation debt payable is backed by the full faith and credit of the City. Debt in the governmental funds will be retired by future property tax levies or tax increments accumulated by the debt service fund. Governmental Activities General Obligation Debt Date of Issue Final Maturity Interest Rates Original Indebtedness Balance December 31, 2025 2006B State Trust Fund Loan * 07/2006 03/2026 4.5% $ 214,991 $ 15,600 2014A Corporate Purpose Bonds 08/2014 06/2034 2.0-4.0 6,375,000 1,525,000 2015A Street Improvement Bonds 02/2015 02/2031 2.75-3.0 3,870,000 2,230,000 2016A Corporate Purpose Bonds 06/2016 12/2036 2.0-3.0 2,065,000 1,290,000 2016B Promissory Note 06/2016 12/2026 1.5-2.5 770,000 85,000 2017B Street Improvement Bonds 04/2017 12/2037 3.0-4.0 5,380,000 3,990,000 2018A Corporate Purpose Bonds 04/2018 04/2038 3.0-3.5 5,400,000 4,280,000 2018C Community Development Bonds 08/2018 12/2035 3.0-3.7 1,415,000 1,020,000 2019A Community Development Bonds 12/2019 03/2031 2.0-2.5 1,345,000 845,000 2020B Corporate Purpose Bonds 04/2020 12/2040 2.0-4.0 3,750,000 3,475,000 2021A Corporate Purpose Bonds 04/2021 10/2041 1.1-3.0 3,090,000 2,855,000 2021B Refunding Bonds 08/2021 10/2031 1.0-2.0 3,595,000 2,145,000 2024B GO Note 05/2024 11/2039 4.0-5.0 1,925,000 1,755,000 Total governmental activities, general obligation debt $ 25,510,600 * considered direct placement or direct borrowing Debt service requirements to maturity are as follows: Governmental Activities General Obligation Debt Years Principal Interest 2026 $ 2,120,000 $ 724,837 2027 2,090,000 662,258 2028 2,160,000 600,182 2029 2,220,000 539,620 2030 2,270,000 481,396 2031-2035 9,510,000 1,558,757 2036-2040 4,925,000 347,668 2041 200,000 2,000 Total $ 25,495,000 $ 4,916,718 40 City of Superior Notes to Financial Statements December 31, 2025 Governmental Activities General Obligation Notes From Direct Borrowings and Direct Placements Year Principal Interest 2026 $ 15,600 $ 702 Revenue Debt Business-type activities revenue bonds are payable only from revenues derived from the operation of the sewerage system and stormwater utility. The City has pledged future sewerage system revenues, net of specified operating expenses, to repay revenue bonds issued in 2012, 2017, 2018, 2020, 2022, 2024, and 2025. Proceeds from the bonds provided financing for the sewerage system improvements. The bonds are payable solely from the sewerage system revenues and are payable through 2044. Annual principal and interest payments on the bonds are expected to require 53.30% of net revenues. The total principal and interest remaining to be paid on the bonds is $9,745,743. Principal and interest paid for the current year and total customer net revenues were $842,855 and $962,674, respectively. The City has pledged future stormwater utility revenues, net of specified operating expenses, to repay revenue bonds issued in 2010 and 2025. Proceeds from the bonds provided financing for the stormwater utility capital projects. The bonds are payable solely from the stormwater system revenues and are payable through 2044. Annual principal and interest payments on the bonds are expected to require 14.10% of net revenues. The total principal and interest remaining to be paid on the bonds is $2,521,504. Principal and interest paid for the current year and total customer net revenues were $256,774 and $943,365, respectively. 41 City of Superior Notes to Financial Statements December 31, 2025 Revenue debt payable at December 31, 2025, consists of the following: Business-Type Activities Revenue Debt Date of Issue Final Maturity Interest Rates Original Indebtedness Balance December 31, 2025 Sewerage System 2012B Clean Water Fund Revenue Bonds * 02/2012 05/2031 2.4% $ 3,348,738 $ 1,240,462 2017A Clean Water Fund Revenue Bonds * 02/2017 05/2036 2.4 1,640,000 1,039,411 2018B Sewer System Revenue Bonds * 07/2018 05/2028 1.9 1,439,290 462,443 2020B Clean Water Fund Revenue Bonds * 02/2020 05/2039 1.7 2,823,890 2,280,676 (1) 2022B Clean Water Fund Revenue Bonds * 06/2022 05/2042 2.0 738,215 888,546 (2) 2024A Clean Water Fund Revenue Bonds * 01/2024 05/2043 2.145 1,868,364 1,791,083 (3) 2024A Clean Water Fund Revenue Bonds * 04/2025 05/2044 2.2 811,701 811,701 Total sewerage system 8,514,322 (1) - During 2020, the utility was authorized to issue $3,217,370 of sewerage system Clean Water Fund revenue bonds. The original amount reported above has been issued as of December 31, 2025. The repayment schedule is for the amount issued. (2) - During 2022, the utility was authorized to issue $1,059,522 of sewerage system Clean Water Fund revenue bonds. The original amount reported above has been issued as of December 31, 2025. The repayment schedule is for the amount issued. (3) - During 2024, the utility was authorized to issue $1,880,617 of sewerage system Clean Water Fund revenue bonds. The original amount reported above has been issued as of December 31, 2025. The repayment schedule is for the amount issued. Stormwater Utility 2010 Storm Water Revenue Bonds * 01/2010 05/2029 3.2% 3,398,121 918,440 2025B Storm Water Revenue Bonds * 04/2025 05/2044 2.2 1,262,091 1,262,091 Total landfill utility 2,180,531 * Considered direct placement or direct borrowing. Total business-type activities, revenue debt $ 10,694,853 42 City of Superior Notes to Financial Statements December 31, 2025 Debt service requirements to maturity are as follows: Business-Type Activities Revenue Debt Years Principal Interest 2026 $ 1,010,887 $ 220,555 2027 1,034,332 196,418 2028 1,058,348 172,110 2029 923,000 148,708 2030 697,215 130,132 2031-2035 2,786,242 461,328 2036-2040 2,205,365 206,599 2041-2044 979,464 36,544 Total $ 10,694,853 $ 1,572,394 Financed Purchases Financed purchases are payable from the Capital Improvement Program fund. Financed purchases at December 31, 2025 consist of the following: Governmental Activities Financed Purchases Date of Issue Final Maturity Interest Rates Original Indebtedness Balance December 31, 2025 Platform Truck 09/10/2020 01/15/2030 2.66% $ 1,273,400 $ 540,597 Total governmental activities financed purchases $ 540,597 Debt service requirements to maturity are as follows: Governmental Activities Financed Purchases Years Principal Interest 2027 $ 129,867 $ 14,402 2028 133,327 10,942 2029 136,878 7,390 2030 140,525 3,744 Total $ 540,597 $ 36,478 Other Debt Information The City's outstanding State Trust Fund Loans from direct borrowing related to governmental activities of $15,600 contain clauses that any delinquent payments are subject to a penalty of one percent per month and shall be deducted from any state payments that are due to the City. 43 City of Superior Notes to Financial Statements December 31, 2025 The City's outstanding debt from direct borrowings or direct placements related to the sewerage system and stormwater utility of $10,694,853 contain provisions that (1) any delinquent payments can be deducted from any state payments that are due to the City or a special charge may be added to the taxes apportioned to and levied upon the County in which the City is located and (2) in an event of default, outstanding amounts become immediately due and payable or the interest rate may be increased to the market interest rate and (3) any delinquent payments may be intercepted from the revenue of the sewerage system and stormwater utility. Lease Disclosures Lessee - Lease Liabilities Governmental Activities Lease Liabilities Beginning Balance Additions Deductions Ending Balance Amounts Due Within One Year Office space $ 242,221 $ - $ 75,131 $ 167,090 $ 80,740 Future minimum lease payments are as follows: Years Principal Interest 2026 $ 80,740 $ 11,219 2027 86,350 5,609 Total $ 167,090 $ 16,828 Business-Type Activities Lease Liabilities Beginning Balance Additions Deductions Ending Balance Amounts Due Within One Year Golf carts $ 225,130 $ - $ 44,479 $ 180,651 $ 48,649 Future minimum lease payments are as follows: Years Principal Interest 2026 $ 48,649 $ 14,279 2027 53,211 9,717 2028 58,201 4,727 2029 20,590 387 Total $ 180,651 $ 29,110 44 City of Superior Notes to Financial Statements December 31, 2025 Lessor - Lease Receivables Governmental Activities Lease Receivables Description Date of Inception Final Maturity Interest Rates Receivable Balance December 31, 2025 Building lease 01/01/2012 12/31/2041 3% $ 27,479 Montreal Pier 01/01/2021 12/31/2030 3 54,930 Marina land lease 05/01/2005 04/30/2036 3 2,087,500 Land lease 08/29/1997 08/28/2047 3 52,562 Total governmental activities $ 2,222,471 The City recognized $178,673 of lease revenue during the fiscal year. The City recognized $86,979 of interest revenue during the fiscal year. Closure and Postclosure Care Cost State and federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for years after closure. Although closure and postclosure care costs will be paid only near or after the date that the landfill stops accepting waste, the City reports a portion of these closure and postclosure care costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. The $12,802,172 reported as landfill closure and postclosure care liability at December 31, 2025, represents the cumulative amount. Actual cost may be higher due to inflation, changes in technology or changes in regulations. The City is required by state and federal laws and regulations to make annual contributions to a trust to finance closure and postclosure care. The City is in compliance with these requirements, and, at December 31, 2025, investments of $11,627,363 are held for these purposes. These are reported as restricted assets on the statement of net position. The City expects that future inflation costs will be paid from interest earnings on these annual contributions. However, if interest earnings are inadequate or additional postclosure care requirements are determined (due to changes in technology or applicable laws or regulations, for example) these costs may need to be covered by charges to future landfill users or from future tax revenue. Net Position/Fund Balances Net position reported on the government-wide statement of net position at December 31, 2025, includes the following: Governmental Activities Invested in capital assets: Land $ 14,875,995 Construction in progress 11,847,727 Other capital assets, net of accumulated depreciation/amortization 61,257,207 Less long-term capital debt outstanding (excluding unspent capital related debt proceeds) (24,933,192) Less lease liabilities and financed purchase (707,687) Less unamortized debt premium (770,995) Total invested in capital assets $ 61,569,055 45 City of Superior Notes to Financial Statements December 31, 2025 Governmental Funds Governmental fund balances reported on the fund financial statements at December 31, 2025, include the following: General Fund Capital Improvement Program Debt Service Nonmajor Funds Total Fund Balances Nonspendable: Inventories and prepaid items $ 65,157 $ - $ - $ - $ 65,157 Long-term loans - - - 100,000 100,000 Advances 1,473,681 - - - 1,473,681 Subtotal 1,538,838 - - 100,000 1,638,838 Restricted for: Capital projects - - - 1,334,088 1,334,088 Debt service - - 1,038,062 - 1,038,062 Library expenditures - - - 176,663 176,663 Narcotics task force - - - 29,510 29,510 Community improvement and development projects - - - 127,226 127,226 Hazardous materials grant - - - 48,752 48,752 Superior business center - - - 154,070 154,070 Tourism - - - 1,375,819 1,375,819 Housing loans - - - 993,103 993,103 Affordable housing - - - 1,469,023 1,469,023 Opioid remediation 130,513 - - - 130,513 Subtotal 130,513 - 1,038,062 5,708,254 6,876,829 Committed to: Maintenance and development of boat launching facilities - - - 30,718 30,718 Assigned to: Future projects - - - 487,657 487,657 Municipal forest fund - - - 64,543 64,543 Special assessment fund - - - 35,214 35,214 Urban Tree - - - 28,573 28,573 Economic development fund - - - 1,770,294 1,770,294 Business improvement fund - - - 285,451 285,451 Neighborhood improvement fund - - - 132,012 132,012 State and federal grant allocation and allotment fund - - - 49,611 49,611 Fire department - - - 172,113 172,113 Revolving grant fund - - - 572,009 572,009 Subtotal - - - 3,597,477 3,597,477 Unassigned (Deficit) 12,400,942 (4,099,872) - (1,262,168) 7,038,902 Total fund balances (deficit) $ 14,070,293 $ (4,099,872) $ 1,038,062 $ 8,174,281 $ 19,182,764 46 City of Superior Notes to Financial Statements December 31, 2025 Business-Type Activities Net investment in capital assets: Land $ 1,630,722 Construction in progress 4,047,114 Other capital assets, net of accumulated depreciation/amortization 59,267,862 Less long-term capital debt outstanding (excluding unspent capital related debt proceeds) (10,694,853) Less lease liabilities (180,651) Total net investment in capital assets $ 54,070,194 Accounting Changes Changes to or Within the Financial Reporting Entity (See Adjustments Below) The ARPA Grant special revenue fund and PIDP Grant Project capital projects fund, previously reported as major funds, are reported as nonmajor funds for 2025. Adjustments to Beginning Balances During fiscal year 2025, changes to or within the financial reporting entity resulted in adjustments to beginning fund balance, as follows: December 31, 2024 As Previously Reported Change to or Within the Financial Reporting Entity December 31, 2024 As Adjusted Governmental Funds Major funds: ARPA Grant $ 487,657 $ (487,657) $ - PIDP Grant Project (1,165,433) 1,165,433 - Nonmajor funds 6,670,518 (677,776) 5,992,742 4. Other Information Employees' Retirement System Plan Description The WRS is a cost-sharing multiple-employer defined benefit pension plan. WRS benefits and other plan provisions are established by Chapter 40 of the Wisconsin Statutes. Benefit terms may only be modified by the legislature. The retirement system is administered by the Wisconsin Department of Employee Trust Funds (ETF). The system provides coverage to all eligible State of Wisconsin, local government and other public employees. All employees, initially employed by a participating WRS employer on or after July 1, 2011, expected to work at least 1,200 hours a year (880 hours for teachers and school district educational support employees) and expected to be employed for at least one year from employee's date of hire are eligible to participate in the WRS. ETF issues a standalone Annual Comprehensive Financial Report (ACFR), which can be found at https://etf.wi.gov/about-etf/reports-and-studies/financial-reports-and-statements. Additionally, ETF issued a standalone Wisconsin Retirement System Financial Report, which can also be found using the link above. 47 City of Superior Notes to Financial Statements December 31, 2025 Vesting For employees beginning participation on or after January 1, 1990, and no longer actively employed on or after April 24, 1998, creditable service in each of five years is required for eligibility for a retirement annuity. Participants employed prior to 1990 and on or after April 24, 1998, and prior to July 1, 2011, are immediately vested. Participants who initially became WRS eligible on or after July 1, 2011, must have five years of creditable service to be vested. Benefits Provided Employees who retire at or after age 65 (54 for protective occupation employees, 62 for elected officials and executive service retirement participants, if hired on or before 12/31/2016) are entitled to a retirement benefit based on a formula factor, their final average earnings, and creditable service. Final average earnings is the average of the participant's three highest annual earnings period. Creditable service includes current service and prior service for which a participant received earnings and made contributions as required. Creditable service also includes creditable military service. The retirement benefit will be calculated as a money purchase benefit based on the employee's contributions plus matching employer's contributions, with interest, if that benefit is higher than the formula benefit. Vested participants may retire at age 55 (50 for protective occupations) and receive an actuarially-reduced benefit. Participants terminating covered employment prior to eligibility for an annuity may either receive employee-required contributions plus interest as a separation benefit or leave contributions on deposit and defer application until eligible to receive a retirement benefit. The WRS also provides death and disability benefits for employees. Postretirement Adjustments The Employee Trust Funds Board may periodically adjust annuity payments from the retirement system based on annual investment performance in accordance with s. 40.27, Wis. Stat. An increase (or decrease) in annuity payments may result when investment gains (losses), together with other actuarial experience factors, create a surplus (shortfall) in the reserves, as determined by the system's consulting actuary. Annuity increases are not based on cost of living or other similar factors. For Core annuities, decreases may be applied only to previously granted increases. By law, Core annuities cannot be reduced to an amount below the original, guaranteed amount (the floor) set at retirement. The Core and Variable annuity adjustments granted during recent years are as follows: Year Core Fund Adjustment % Variable Fund Adjustment % 2015 2.9 2.0 2016 0.5 (5.0) 2017 2.0 4.0 2018 2.4 17.0 2019 0.0 (10.0) 2020 1.7 21.0 2021 5.1 13.0 2022 7.4 15.0 2023 1.6 (21.0) 2024 3.6 15.0 48 City of Superior Notes to Financial Statements December 31, 2025 Contributions Required contributions are determined by an annual actuarial valuation in accordance with Chapter 40 of the Wisconsin Statutes. The employee required contribution is one-half of the actuarially determined contribution rate for General category employees, including Teachers, Executives and Elected Officials. Starting on January 1, 2016, the Executives and Elected Officials category was merged into the General Employee category. Required contributions for protective employees are the same rate as general employees. Employers are required to contribute the remainder of the actuarially determined contribution rate. The employer may not pay the employee required contribution unless provided for by an existing collective bargaining agreement. During the reporting period, the WRS recognized $2,225,104 in contributions from the City. Contribution rates for the plan year reported as of December 31, 2025 are: Employee Category Employee Employer General (Executives & Elected Officials) 6.90 % 6.90 % Protective with Social Security 6.90 14.30 Protective without Social Security 6.90 19.10 Pension Liability, Pension Expense (Revenue), Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At December 31, 2025, the City reported a liability of $2,484,857 for its proportionate share of the net pension liability. The net pension liability was measured as of December 31, 2024, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2023 rolled forward to December 31, 2024. No material changes in assumptions or benefit terms occurred between the actuarial valuation date and the measurement date. The City's proportion of the net pension liability was based on the City's share of contributions to the pension plan relative to the contributions of all participating employers. At December 31, 2024, the City's proportion was 0.15122382%, which was an increase of 0.00104302% from its proportion measured as of December 31, 2023. For the year ended December 31, 2025, the City recognized pension expense (revenue) of $3,223,285. At December 31, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Differences between projected and actual experience $ 7,716,842 $ 7,251,411 Changes in assumptions 737,305 - Net differences between projected and actual earnings on pension plan investments 3,775,872 - Changes in proportion and differences between employer contributions and proportionate share of contributions 6,378 20,353 Employer contributions subsequent to the measurement date 2,316,312 - Total $ 14,552,709 $ 7,271,764 49 City of Superior Notes to Financial Statements December 31, 2025 $2,316,312 reported as deferred outflows of resources related to pension resulting from the WRS Employer's contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) in the year ended December 31, 2026. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pension will be recognized in pension expense as follows: Years Ending December 31: Deferred Outflows of Resources and Deferred Inflows of Resources (Net) 2026 $ 1,494,353 2027 5,146,227 2028 (1,278,788) 2029 (397,159) Actuarial Assumptions The total pension liability in the actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Actuarial Valuation Date: December 31, 2023 Measurement Date of Net Pension Liability (Asset): December 31, 2024 Experience Study: January 1, 2021 - December 31, 2023 Published November 19, 2024 Actuarial Cost Method: Entry Age Normal Asset Valuation Method: Fair Value Long-Term Expected Rate of Return: 6.8% Discount Rate: 6.8% Salary Increases: Wage Inflation Seniority/Merit 3.0% 0.1%-5.7% Mortality: 2020 WRS Experience Mortality Table Postretirement Adjustments*: 1.7% * No postretirement adjustment is guaranteed. Actual adjustments are based on recognized investment return, actuarial experience and other factors. 1.7% is the assumed annual adjustment based on the investment return assumption and the postretirement discount rate. Includes the impact of known Market Recognition Account deferred gains/losses on the liability for dividend payments. 50 City of Superior Notes to Financial Statements December 31, 2025 Actuarial assumptions are based upon an experience study conducted in 2024 that covered a three-year period from January 1, 2021 to December 31, 2023. Based on this experience study, actuarial assumptions used to measure the Total Pension Liability changed from prior year, including seniority (merit) and separation rates. The Total Pension Liability for December 31, 2024 is based upon a roll-forward of the liability calculated from the December 31, 2023 actuarial valuation. Long-Term Expected Return on Plan Assets The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: Asset Allocation Targets and Expected Returns* as of December 31, 2024 Core Fund Asset Class Asset Allocation % Long-Term Expected Nominal Rate of Return % Long-Term Expected Real Rate of Return %** Public Equity 38 7.0 4.3 Public Fixed Income 27 6.1 3.4 Inflation Sensitive 19 4.8 2.1 Real Estate 8 6.5 3.8 Private Equity/Debt 20 9.5 6.7 Leverage*** (12) 3.7 1.1 Total Core Fund 100 7.5 4.8 Variable Fund Asset U.S. Equities 70 6.5 3.8 International Equities 30 7.4 4.7 Total Variable Fund 100 6.9 4.2 * Asset Allocations are managed within established ranges; target percentages may differ from actual monthly allocations ** New England Pension Consultants' Long-Term U.S. CPI (Inflation) Forecast: 2.6% *** The investment policy used for the Core Fund involves reducing equity exposure by leveraging lower-volatility assets, such as fixed income securities. Currently, an asset allocation target of 12% policy leverage is used subject to an allowable range of up to 20%. 51 City of Superior Notes to Financial Statements December 31, 2025 Single Discount Rate A single discount rate of 6.8% was used to measure the total pension liability for the current and prior year. This discount rate is based on the expected rate of return on pension plan investments of 6.8% and a municipal bond rate of 4.08% (Source: "20-Bond GO Index" is the Bond Buyer Index, general obligation, 20 years to maturity, mixed quality as of December 31, 2024. In describing this index, the Bond Buyer notes that the bonds' average quality is roughly equivalent to Moody's Investors Service's Aa2 rating and Standard and Poor's Corp.'s AA rating.). Because of the unique structure of WRS, the 6.8% expected rate of return implies that a dividend of approximately 1.7% will always be paid. For purposes of the single discount rate, it was assumed that the dividend would always be paid. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments (including expected dividends) of current plan members. Therefore, the investment rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the City's Proportionate Share of the Net Pension Liability (Asset) to Changes in the Discount Rate The following presents the City's proportionate share of the net pension liability (asset) calculated using the discount rate of 6.80%, as well as what the City's proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (5.80%) or 1-percentage-point higher (7.80%) than the current rate: 1% Decrease to Discount Rate (5.8%) Current Discount Rate (6.8%) 1% Increase to Discount Rate (7.8%) City's proportionate share of the net pension liability (asset) $ 23,311,209 $ 2,484,857 $ (12,311,667) Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in separately issued financial statements available at https://etf.wi.gov/about-etf/reports-and-studies/financial-reports- and-statements. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to or destruction of assets; errors and omissions; workers compensation; and health care of its employees. The City purchases commercial insurance to provide coverage for losses from (torts; theft of, damage to or destruction of assets; errors and omission; workers compensation; and health care of its employees). However, other risks, such as (torts; theft of, damage to or destruction of assets; errors and omission; workers compensation; and health care of its employees) are accounted for and financed by the City in the general fund and internal service fund. Self Insurance For health and dental claims, the uninsured risk of loss is $150,000 per incident and $6,485,637 in the aggregate for a policy year. The City has purchased commercial insurance for claims in excess of those amounts. Settled claims have not exceeded the commercial coverage in any of the past three years. 52 City of Superior Not