General Government & Finance Committee — Agenda Packet

MEETING: REGULAR MEETING OF THE GENERAL GOVERNMENT & FINANCE COMMITTEE DATE & TIME: Monday, August 17, 2026 at 5:30 PM LOCATION: Germantown Village Hall Board Room N112 W17001 Mequon Road Any member of the body and/or citizen may attend the meeting virtually through the WebEx platform, Meeting #: 2551 528 1989 Password: 6xNFAgPDm43 which can be accessed by phone at 408-418-9388 or by logging on at https://villageofgermantown.my.webex.com/villageofgermantown.my/j.php?MTID=maaf2ba514fb53da951ec23b2d6232931 Citizens not wishing to attend the meeting personally or virtually may submit any public comments by sending an email to comments@germantownwi.gov by 4 p.m. on the day of the meeting so that it can be provided to the members of the body for their consideration. Previously recorded Village Board Meeting Videos can be viewed at https://www.youtube.com/channel/UCOYp0EgELzTCa9X_iCohyhQ. AGENDA I. CALL TO ORDER: This meeting has been given public notice in accordance with Section 19.83 and 19.84, Wis. Stats, in such form that will apprise the general public and news media of subject matter that is intended for consideration and action. II. ROLL CALL: III. CITIZEN INPUT: (Please be advised per 19.84(2) that information and comment will be received from the public. It is the policy of this municipality that public input be limited to a four (4) minute period per person with a time extension granted at the discretion of the Chairperson. Be advised that there may be limited discussion of the information received but no action will be taken under public comments.) Comments that may be injurious to village personnel or other individuals will not be allowed. IV. CONSENT AGENDA: A. July 16, 2026, Special General Government and Finance Committee Meeting Minutes (ACTION) B. July 20, 2026, General Government & Finance Committee Meeting Minutes (ACTION) V. UNFINISHED BUSINESS: A. Professional Services Agreement with Washington County for IT Services for Police Department (ACTION) B. Lease of Former Recycling Center Site (ACTION) VI. NEW BUSINESS: A. Presentation of the 2025 Annual Comprehensive Financial Report and Audit Results Report by Baker Tilly (PRESENTATION) VII. REPORTS (Discussion Unless Otherwise Noted): A. Finance Director's Report B. Budget to Actual VIII. ADJOURNMENT: Page 1 of 345 GENERAL GOVERNMENT & FINANCE COMMITTEE AGENDA August 17, 2026 Page 2 UPON REASONABLE NOTICE, efforts will be made to accommodate the needs of disabled individuals through appropriate aids and services. For additional information or to request this service, please contact the Village Clerk at (262)250-4745 at least 2 days prior to the meeting. Notice is hereby given that a possible quorum of other boards, committees, and/or commissions may attend this meeting to gather information about an item over which they have decision-making responsibility. This may constitute a meeting of these bodies per State ex rel. Badke v Greendale Village Board, even though these bodies will not take formal action at this meeting. Page 2 of 345 MEETING: SPECIAL MEETING OF THE GENERAL GOVERNMENT & FINANCE COMMITTEE DATE AND TIME: Thursday, Jul y 16, 2026 5:30 PM LOCATION: Germantown Vi llage Hall Board Room N112 W17001 Mequon Road MINUTES I. CALL TO ORDER: This meeting has been given public notice in accordance with Section 19.83 and 19.84, Wis. Stats, in such form that will apprise the general public and news media of subject matter that is intended for consideration and action. Chai rperson Trustee Meg Cutts called the General Government & Finance Committee meeting to order at 5:31 PM. II. ROLL CALL: Present: Trustee Terri Kaminski, Trustee Meg Cutts, Trustee Scott Hefle Excused: Trustee Jolene Pieper Also Present: Village Clerk Donna Ott, Police Chief Pat Merten III. CITIZEN INPUT: (Please be advised per 19.84(2) that information and comment will be received from the public. It is the policy of this municipality that public input be limited to a four (4) minute period per person with a time extension granted at the discretion of the Chairperson. Be advised that there may be limited discussion of the information received but no action will be taken under public comments.) Comments that may be injurious to village personnel or other individuals will not be allowed. Melan ie Smythe (via WebEx) spoke regarding New Business Item A (Approval of Funding for Construction Manager at Risk for New Police Department to Moore Construction Services. IV. NEW BUSINESS: A. Approval of Funding for Construction Manager at Risk for New Police Department to Moore Construction Services (ACTION) Police Chief Merten (in person) and Owners Representative Ric Miller of MC Group (via WebEx) were available to answer questions from committee members. Motion: Approve funding for Construction Manager at Risk (CMAR) for new Police Department to Moore Construction Services as presented Motioned By: Meg Cutts Seconded By: Terri Kaminski DRAFT Page 3 of 345 Page 2 Yes: Terri Kaminski, Meg Cutts, Scott Hefle No: None Abstain: None Motion Carried by Roll Call Vote (Yes 3, No 0, Abstained 0) V. ADJOURNMENT: Trustee Chairperson Cutts adjourned the Special General Government & Finance Committee meeting at 5:58 PM. DRAFT Page 4 of 345 MEETING: REGULAR MEETING OF THE GENERAL GOVERNMENT & FINANCE COMMITTEE DATE AND TIME: Monday, Ju ly 20, 2026 5:30 PM LOCATION: Germantown Vi llage Hall Board Room N112 W17001 Mequon Road MINUTES I. CALL TO ORDER: This meeting has been given public notice in accordance with Section 19.83 and 19.84, Wis. Stats, in such form that will apprise the general public and news media of subject matter that is intended for consideration and action. Chai rperson Trustee Meg Cutts called the General Government & Finance Committee meeting to order at 5:34 PM. II. ROLL CALL: Present: Trustee Terri Kaminski, Trustee Meg Cutts, Trustee Scott Hefle Excused: Trustee Jolene Pieper Also Present: Village Administrator Matt Trebatoski, Village Clerk Donna Ott, Finance Director Lisa Davis, Village Attorney Brian Sajdak III. CITIZEN INPUT: (Please be advised per 19.84(2) that information and comment will be received from the public. It is the policy of this municipality that public input be limited to a four (4) minute period per person with a time extension granted at the discretion of the Chairperson. Be advised that there may be limited discussion of the information received but no action will be taken under public comments.) Comments that may be injurious to village personnel or other individuals will not be allowed. Lynne Schauer Bedanrz (W156N10121 Pawnee Ct) spoke regarding the Village budget. Written comments were not read aloud but are included with these minutes. IV. CONSENT AGENDA: A. June 5, 2026 Meeting Minutes (ACTION) Motion : Approve as presented Motioned By: Terri Kaminski Seconded By: Scott Hefle Yes: Terri Kaminski, Meg Cutts, Scott Hefle No: None DRAFT Page 5 of 345 Page 2 Abstain: None Motion Carried by Voice Vote (Yes 3, No 0, Abstained 0) V. UNFINISHED BUSINESS: VI. NEW BUSINESS: A. Public Grant Program Application by Germantown Historical Society Inc for 2026 Christ Church Restoration and Addition Project (ACTION) Motion: Approve Public Grant Program Application by Germantown Historical Society Inc Motioned By: Terri Kaminski Seconded By: Meg Cutts Yes: None No: Terri Kaminski, Meg Cutts, Scott Hefle Abstain: None Motion Failed by Voice Vote (Yes 0, No 3, Abstained 0) B. Lease of Former Recycling Center Site Motion: Direct the Village Attorney to explore the possibility of leasing the former recycling center site to the Heimat Group Motioned By: Terri Kaminski Seconded By: Scott Hefle Yes: Terri Kaminski, Meg Cutts, Scott Hefle No: None Abstain: None Motion Carried by Voice Vote (Yes 3, No 0, Abstained 0) C. Request to Update Master Signers on the Village’s US Bank account (ACTION) Motion: Approve as presented Motioned By: Terri Kaminski Seconded By: Scott Hefle Yes: Terri Kaminski, Meg Cutts, Scott Hefle No: None Abstain: None Motion Carried by Voice Vote (Yes 3, No 0, Abstained 0) DRAFT Page 6 of 345 Page 3 VII. REPORTS (Discussion Unless Otherwise Noted): Village Administrator Trebatoski and Finance Director Davis provided the below reports and answered questions from the committee: A. Accounts Payable B. Budget to Actual C. Payroll D. Contracts E. Investments VIII. ADJOURNMENT: Chairperson Trustee Cutts adjourned the General Government & Finance Committee meeting at 6:05 PM. DRAFT Page 7 of 345 From: crb crb To: Comments Subject: GGF MEETING 7-20-26 NEW BUSINESS ITEM "B" Date: Monday, July 20, 2026 10:54:35 AM CAUTION: This email originated from outside the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Hello, New business item "B"- lease of the Former Recycling Center Please take into consideration that the Village of Germantown has not award any developers any information yet about the VILLAGE CENTER, OLD FLOWER PORPERTY, GORSENICK PROPERTY AND THE ASCENSION PROPERTY. Due to not having "public meetings" on all the properties for how they would be developing the area for the future with the residents. Nothing has been decided at all yet. Why would the village agree to $1. Lease ? Who came up with the $1.00 amount? Also, how would this affect the residents in BLACKSTONE CREEK SUBDIVISION? Believe, it was said they didn't want a "path" in that way. The Village Board didn't even have any discussions on this yet! This is the first of it being on the agenda. Don't believe the golf carts are locked up now. Park in the front of the building. Why can't they just park and store the equipment's to the west, on the gravel road going toward the retirement home? Why would the Village Board agree to let this developer to be first to be offer to buy the property? Because of "past closed doors" meetings with certain former members? This would be "very unfair" to all developers who might have a plan they would like to submit, when the time comes. It could be a better plan, then what this developer would like to do. Please take everything into consideration. Do it the right way this time around. The Schneider's Page 8 of 345 Page 9 of 345 BUSINESS OF THE GENERAL GOVERNMENT & FINANCE COMMITTEE GERMANTOWN, WI MEETING DATE: August 17, 2026 AGENDA ITEM: Action ITEM TITLE: IT Professional Services Agreement with Washington County for Police Department SUBMITTED BY: Chief Patrick Merten SUMMARY EXPLANATION: The Village has contracted with Capital Data Inc. since October 2021. This transition was initiated in part after the Police Department requested replacing a retiring Communications Supervisor position with an IT Specialist position in February 2021. Previously, the Communications Supervisor was responsible for the research, design, implementation, maintenance, and management of all department technology, in addition to supervising dispatch operations. Currently, the Police Department employs a Systems Specialist who serves as a liaison between vendors and Capital Data. However, the increasing complexity of municipal technology, including records management systems, computer-aided dispatch (CAD), body- worn camera systems, squad technology, cybersecurity requirements, CJIS compliance, and network infrastructure—requires more direct and dedicated oversight than the current staffing structure can provide. Approving IT Services with Washington County would: • Provide consistent onsite technical oversight and faster response times • Reduce operational disruptions and system downtime • Improve cybersecurity readiness and compliance • Allow staff to focus on supervisory and operational responsibilities • Create long-term stability in technology planning, budgeting, and implementation Technology is now central to every aspect of Police Department operations. Transitioning IT Services to Washington County would provide the Village with daily onsite Engineer and/or Administrator support. This adjustment is necessary to ensure the Police Department can operate efficiently, securely, and responsibly. These services would benefit the Police Department by improving coordination, responsiveness, and overall operational efficiency. In 2025, the Village spent approximately $143,950 on support requests and infrastructure monitoring services through Capital Data. This amount does not include the significant staff time spent troubleshooting and addressing daily technology-related issues. Washington County will consider the expansion of IT Services to the Village of Germantown Police Department over the coming months according to the following schedule: Page 10 of 345 • August 20 – Presentation of IT Professional Services concept to WC Public Works Committee for recommendation to the full County Board • September 9 – Presentation of IT Professional Services concept to County Board for action COSTS: The Village’s 50% personnel cost will come from a records clerk position that was not filled when they resigned in Fall of 2025. The projected wage for that records clerk in 2026 was approximately $58,000. An Innovation Grant will be investigated for future support for the position, along with other possible grant opportunities. The attached Professional Services Agreement is a preliminary, conceptual draft that will need to be negotiated and additionally reviewed by the County and Village attorneys prior to final approval. Chief Merten and Trustee Pieper met with Washington County IT Staff on July 23, 2026 to discuss some concerns of the committee. Thank you for your consideration of this request. ATTACHMENT: ORDINANCE___ RESOLUTION_____ OTHER__X__ RECOMMENDATION: Move to recommend the Police Chief and Village Administrator to enter into negotiations with Washington County to develop a Professional Services Agreement for IT services for the Police Department, and bring back to the Village Board for final approval of the Professional Service Agreement. ESTIMATED COSTS Germantown PD Costs County Costs Personnel Costs (Additional 1.0 FTE) $45,000 - $55,000 $45,000 - $55,000 Staff Laptop and Equipment $1,250 $1,250 Application and License Costs $4,000 $4,000 TOTAL ESTIMATED COSTS $50,250 - $60,250 $50,250 - $60,250 Page 11 of 345 PROFESSIONAL SERVICES AGREEMENT This Professional Services Agreement (“Agreement”) is entered into between Washington County (“County”) and Village of Germantown Police Department (“Village”) pursuant to Wis. Stat. §66.0301 for the purpose of allowing the County’s Information Technology Department to provide Information Technology services to the Village as set forth below and shall become effective on the date of the last signature to be affixed hereto. STATEMENT OF WORK County agrees to provide Information Technology Services (“Services”) to the Village in accordance with terms and conditions set forth herein. Services shall include desktop hardware support, squad car technology support, law enforcement application support, and emergency after hours support of law enforcement func tions. The County shall be the exclusive provider of Services under this Agreement. The County agrees to employ industry standards in performing services under this Agreement consistent with the professional skills and care ordinarily provided by firms in the same profession under same and similar conditions. CONSIDERATION The Village recognizes that the services provided by the County are valuable and worthwhile as it is anticipated that the standardization of technology and cost structure will allow for a cost savings for the parties. It is anticipated that the sharing of services will result in price breaks the parties would not receive separately. The Village recognizes that costs incurred by the County for personnel and equipment will be calculated and invoiced to the Village at 50% reimbursement rate, and the 50% non-reimbursed expenses will be funded through the County’s Shared Revenue Program of an equal amount which shall be approved no less than quarterly by the Village Board . The Village also recognizes that any material hardware or software costs beyond those needed to incorporate the Village into County systems shall be invoiced and paid for by the Village. EQUIPMENT All software, hardware, and other materials required for the County to perform its obligations under this agreement shall be purchased and provided by the Village. In the event the County determines that additional software, hardware, or other materials are required to complete or perform services, it shall advise the Village in writing. The Village agrees to reimburse the County for any purchases the County makes or costs the County incurs under this agreement provided that the County shall make no such purchases or incur such costs without the prior written consent of the Village. The Village agrees to maintain service contracts with manufacturers and vendors for all information software and hardware. The Village agrees to purchase hardware and maintain licensing to allow for the County to provide services. WARRANTY The County agrees to follow all manufacturer installation and service recommendations and practices. However, the County shall provide no warranties of any kind under this agreement. Page 12 of 345 2 SERVICE LEVEL AGREEMENT This Service Level Agreement (“SLA”) describes the support obligations, response time commitments, and escalation procedures between the County and the Village for the services covered by the Agreement. The SLA applies to all incidents, requests, and security events (“Tickets”) submitted through the agreed support channels. Definitions Business Hours: Monday–Friday, 8:00 a.m.–4:30 p.m., excluding holidays. Emergency Support: 24/7/365 availability for critical and security-related Tickets. Response Time: The elapsed time from Ticket submission to initial human contact by County acknowledging the issue and beginning triage. Assistance Time (Critical/Security): Time to engage a qualified support engineer and begin remediation efforts. Resolution Time: The elapsed time from initial response to restoration of service to normal operation or implementation of a reasonable workaround. (Resolution targets may vary.) Workaround: A temporary solution that mitigates impact while a permanent fix is pursued. Severity/Priority: Classification of Ticket importance and impact as set forth below. Severity Levels Critical / Security (Priority P1): Total service outage of public safety activities; severe degradation impacting essential public safety operations; confirmed or suspected security incident (e.g., ransomware, unauthorized access, data breach), or threats to safety/compliance. High (Priority P2): Significant functional impact to multiple users, key services impaired, no reasonable workaround available, but not full outage. Medium (Priority P3): Limited functional impact, some users affected, reasonable workaround exists, normal operations largely continue. Low (Priority P4): Minimal impact, informational requests, routine changes, minor defects with negligible operational impact. Response & Assistance Commitments The County shall meet the following initial contact/assistance commitments after Ticket submission through the designated channel(s): P1 – Critical / Security: Emergency Support: Provided 24/7/365. Assistance Time: Within 15 minutes to engage a qualified support engineer and begin remediation. P2 – High: Initial Contact: Within 1 hour during Business Hours; next Business Day if submitted outside Business Hours. Page 13 of 345 3 P3 – Medium: Initial Contact: Within 2 hours during Business Hours; next Business Day if submitted outside Business Hours. P4 – Low: Initial Contact: Within 4 hours during Business Hours; next 2 Business Days if submitted outside Business Hours. Escalation Procedures Immediate Escalation (P1 Critical/Security): If Assistance Time is not met, automatic escalation to the on‑call engineer and the County IT Infrastructure Manager. If not engaged within 30 minutes, escalate to the County Director of Information Technology (or designee). Hierarchical Escalation (P2–P4): If initial contact timelines are at risk, escalate to the County IT Infrastructure Manager if not contacted within twice the committed timeframe, escalate to the County IT Infrastructure Manager, then Director. Contact Directory: The parties will maintain and exchange an up‑to‑date escalation matrix with names, roles, phone numbers, and email addresses. Resolution Targets P1 Critical/Security: Restore service or deploy a risk‑reducing workaround as soon as practicable, with continuous effort until stabilization. P2 High: Target resolution within [e.g., 8 business hours]. P3 Medium: Target resolution within [e.g., 2 business days]. P4 Low: Target resolution within [e.g., 5 business days]. Resolution targets are objectives, not guarantees, and may be paused pending Customer, vendor, or third-party actions. Customer Dependencies SLA timers may be paused if the County is awaiting required information, access approvals, third‑party vendor engagement, or other actions reasonably within the Village’s control. Exclusions SLA commitments do not apply where delays result from: Force majeure events; Widespread third‑party outages (e.g., utility or upstream provider failures) beyond County or Village control; Village’s non‑compliance with security policies, change control, or unsupported configurations; Scheduled maintenance windows with prior notice. Change Management Any modifications to this SLA must be in writing and signed by authorized representatives of both parties. Changes shall take effect on the agreed effective date and be reflected in the support documentation. Page 14 of 345 4 TERMINATION This Agreement shall remain in effect unless a party wishing to terminate provides ninety (90) days written notice of the intent to terminate. Either party may terminate this agreement for any reason by providing ninety (90) days written notice to the other party as follows: Washington County IT Dept. Village of Germantown 432 E. Washington Street N112 W17001 Mequon Road West Bend, WI 53095 Germantown, WI 53022 NATURE OF RELATIONSHIP Nothing in this agreement shall be construed as creating a partnership or joint venture of any kind between the parties. When providing services under this agreement, employees of the County shall not be considered employees of the Village. INDEMNIFICATION AND INSURANCE Each party shall indemnify and hold harmless the other, their officers, agents, elected officials, and employees from any and all liability, obligation, damages, loss, costs, claims, or demands of any nature, including attorney fees, and costs arising directly or indirectly from action taken, direction given, or omission made by the other party under this agreement. The County shall add the Village to its cyber security insurance policy at no cost to the Village. The Village shall add the County to its cyber security insurance policy at no cost to the County. IMMUNITY Nothing in this agreement shall constitute a waiver of either party's sovereign immunity, notice of claim procedures set forth in Chapter 893 of the Wisconsin statutes or any other protection afforded under the law. ENTIRE AGREEMENT The terms of this Agreement constitute the entire agreement of the parties as it relates to the subject matter herein. This Agreement may only be amended by a writing signed and dated by both parties. Any disputes arising that cannot be informally resolved to the satisfaction of the parties shall be heard in the Circuit Court of Washington County, Wisconsin. WASHINGTON COUNTY VILLAGE OF GERMANTOWN ______________________________ ___________________________________ Josh Schoemann Name______________________________ County Executive Title_______________________________ Date___________________________ Date_______________________________ Page 15 of 345 BUSINESS OF THE GENERAL GOVERNMENT & FINANCE COMMITTEE MEETING DATE: August 17, 2026 PLACEMENT: Action Item ITEM TITLE: Lease of Former Recycling Center Site (ACTION) SUBMITTED BY: Brian Sajdak, Attorney SUMMARY EXPLANATION: August Update At the July meeting, the Committee authorized staff to prepare and negotiate a draft agreement for the lease of the former recycling center site. The proposed draft is attached for the Committee's recommendation to the Village Board, subject to further legal and technical changes approved by the Village Attorney. Some comments: 1. The Lease is with the owner of the Golf Course (Heimat Group) who will in turn sublease the recycling center to the operator. This reflects the current arrangement for the Golf Course and ensures that if the operator bows out that the owner can release the golf course to a new party. Note that the lease limits allowed uses to golf course operations. 2. Rent is proposed at $500 per year. This is an increase over the $1 per year proposed, but is still below market rents. This was an intentional decision and reflects that the move, while immediately necessitated by the construction of the new Culvers), is part of an anticipated broader reconfiguration of the golf course to reflect potential development north of the Culvers location which may include earth moving and a new clubhouse/restaurant building. In the interest of maintaining the course as an amenity to residents and the changing economics of golf courses in general, a discounted rent to assist in offsetting the large expense of the reconfiguration was deemed appropriate by staff to allow golf operations to continue in the interim. 3. The requested right of first refusal was rejected and not incorporated into the lease. Original Discussion On July 8, Administrator Trebatoski received the attached request from the Heimat Group (as the owners of the Blackstone Creek golf course) and Blackstone Creek Golf Club LTD (as operators of the golf course). The request indicates that as a result of the construction of the new Culvers at the south-east corner of the property together with the access road, the existing golf course will lose customer parking, golf cart storage and potentially the facility containing the starter. The request is to lease the former recycling center site for these purposes in the interim until longer-term plans can be determined. We understand that without an interim solution, golf course operations will likely terminate. There has been discussion by some members of the Board over the past few months about a preference to maintain the golf course for the community's Page 16 of 345 benefit. The recycling center parcel is part of the Village Center community outreach program. As such, it is unlikely that there will be any activity on the parcel until that process is completed. Therefore, a short-term lease may be attractive to allow the golf course operation to continue in the near term. Based on this, the Committee should consider the following: 1. Does the Village wish to explore a lease for the recycling center property with the golf course operator? 2. If so, does the Village want the Village Attorney to negotiate and draft a lease agreement for consideration? 3. If so, does the Committee want the draft lease to return to the Committee at its next meeting, or does the Committee want to forward the question to the Village Board for direction? 4. Are there any input on any (or all) of the proposed terms? ATTACHMENT: 1. Blackstone Lease Agreement - Recycling Center 2. Heimat Letter - Proposed Recycling Center Property Lease 7-8-26 STAFF RECOMMENDATION: Move to recommend approval of the proposed lease to the Village Board subject to legal and technical changes approved by the Village Attorney. ACTION BY COMMITTEE: Page 17 of 345 LEASE AGREEMENT (Former Recycling Center Site) This Lease Agreement (the “Lease”) is entered into by and between the Village of Germantown, a Wisconsin municipal corporation (“Landlord”), and Blackstone Creek LLC, a Wisconsin limited liability company (“Tenant”) as of the date that the last party to this Lease executes the same. WHEREAS, Landlord is the owner of certain real property located at N116 W17230 Main Street, Germantown, Wisconsin, also identified as Tax Key No. GTNV 211-999 (the “Property”); and WHEREAS, Tenant operates the Blackstone Creek Golf Club from the property located at N112 W17300 Mequon Road (the “Golf Club”), which is adjacent to the Property; and WHEREAS, as part of overall development plans, a portion of the Golf Club property has been sold by the owner, who has plans for more development on the property in the area Tenant currently uses for a clubhouse, patron parking, and storage of golf carts; and WHEREAS, Tenant desires to lease the Property for the purposes of providing temporary space for a clubhouse, patron parking, and storage of golf carts; and WHEREAS, Landlord is willing to lease the Pr operty to Tenant, subject to the terms, conditions, and obligations set forth in this Lease; WHEREAS, Landlord and Tenant desire to enter into this Lease in order to set forth their respective rights, obligations, and liabilities with respect to the use of the Property; NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, Landlord and Tenant agree as follows: 1. Premises. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the approximately 10.55 acres of land located at N116 W17230 Main Street in the Village of Germantown together with the right to use the existing buildings on the land , as more particularly depicted on Attachment A (the “Premises”). 2. Term. The initial term of this Lease (the “Initial Term”) shall be for a period commencing on October 1, 2026 (the “Commencement Date”) and expiring on December 31, 2027 (the “Expiration Date”), unless earlier terminated or renewed pursuant to the provisions of this Lease. For purposes of this Lease, the “Term” shall mean, collectively, the Initial Term and any Renewal Term validly exercised by Tenant pursuant to this Lease. a. Option to Renew. Tenant shall have two (2) options to renew this Lease for an additional term of one (1) year (January 1 through December 31) (the “Renewal Term”), upon the same terms and conditions contained herein, except as otherwise agreed in writing by the parties. Page 18 of 345 2 b. Conditions to Renewal . Tenant’s right to exercise the Renewal Term are conditioned upon: (1) Tenant providing written notice of renewal to Landlord not less than sixty (60) days prior to the Expiration Date; and (2) Tenant not being in default under this Lease, either at the time of giving notice or at the commencement of the Renewal Term. (3) Formal approval of such renewal by the Village Board of the Village of Germantown, which approval shall not be unreasonably withheld, conditioned, or delayed. 3. Rent. a. Base Rent. Tenant shall pay to Landlord annual base rent in the amount of Five Hundred Dollars ($500.00) (“Base Rent”), in advance, without notice, demand, setoff, or deduction, on or before the Commencement Date and again on or before the first (1st) day of the Renewal Term. b. Place and Method of Payment . All Rent shall be payable to Landlord at such address as Landlord may designate from time to time in writing. Payments shall be made by check, electronic transfer, or such other commercially acceptable method as Landlord may approve. c. Additional Rent. In addition to Base Rent, Tenant shall pay as “Additional Rent” all other sums of money, charges, costs, expenses, taxes, and obligations which Tenant assumes or agrees to pay under this Lease, including without limitation the amounts due under Section 8. All such Additional Rent shall be payable in the same manner and at the same time as Base Rent unless otherwise expressly provided. d. Late Charges and Interest . If any installment of Base Rent or Additional Rent is not received by Landlord within five (5) days after its due date, Tenant shall pay a late charge of five percent (5%) of the delinquent amount, in addition to the unpaid Rent. Any amounts not paid within ten (10) days of their due date shall bear interest from the due date until paid in full at the rate of twelve percent (12%) per annum or the highest rate permitted by applicable law, whichever is less. e. Rent Independent of Landlord Obligations. Tenant’s obligation to pay Rent shall be absolute and unconditional and shall not be subject to abatement, deduction, counterclaim, or setoff, except as expressly provided in this Lease or required by law. 4. Security Deposit. a. Amount and Delivery. Upon execution of this Lease, Tenant shall deposit with Landlord the sum of One Thousand Five Hundred Dollars ($1,500.00) (the “Security Deposit”) as security for the full and faithful performance by Tenant of every provision of this Lease. Page 19 of 345 3 b. Application by Landlord . Landlord may apply all or any portion of the Security Deposit to cure any Event of Default by Tenant, including without limitation unpaid Rent, late charges, interest, costs of repair, cleaning, or replacement, and any damages or expenses incurred by Landl ord as a result of Tenant’s breach. Application of the Security Deposit by Landlord shall not limit or waive Landlord’s right to pursue any other remedies provided herein or at law. c. Replenishment. If Landlord applies any portion of the Security Deposit, Tenant shall, within ten (10) days after written demand, restore the Security Deposit to its original amount. Failure to do so shall constitute an Event of Default under this Lease. d. Non-Assignment. The Security Deposit shall not be assigned or encumbered by Tenant and shall not serve as a limitation on Landlord’s damages or remedies. e. Interest. Unless otherwise required by applicable Wisconsin law, Landlord shall not be required to pay Tenant any interest on the Security Deposit. f. Return of Deposit . Provided Tenant has fully performed all of its obligations under this Lease, Landlord shall return the Security Deposit, or the balance thereof, to Tenant within sixty (60) days after the later of (i) the expiration or termination of this Lease (including any Renewal Term), and (ii) Tenant’s surrender of possession of the Premises in accordance with this Lease. The Security Deposit shall automatically carry over and apply to any Renewal Term of this Lease, without increase, reduction, or the need for a new deposit, unless otherwise agreed in writing by the parties. 5. Condition of Premises. a. Acceptance of Premises . Tenant acknowledges that it has inspected the Premises and accepts the Premises in its present, existing, “AS-IS, WHERE-IS” condition, with all faults and without representation or warranty of any kind, express or implied, by Landlord, including without li mitation any warranty of suitability for Tenant’s intended use, merchantability, or fitness for a particular purpose. b. No Landlord Obligation . Landlord shall have no obligation to repair, remodel, improve, or alter the Premises in connection with Tenant’s occupancy, except as expressly provided in this Lease. Tenant shall be solely responsible for performing any work necessary to prepare the Premises for Tenant’s intended use, at Tenant’s sole cost and expense, and in compliance with Section 7. c. Environmental and Code Compliance . Tenant assumes full responsibility for determining whether the Premises are suitable for Tenant’s intended use, including compliance with zoning, building, health, safety, fire, and other applicable codes and regulations. Landlord makes no representation a s to the compliance of the Premises with such codes, ordinances, or regulations. d. Disclaimer of Reliance. Tenant acknowledges that neither Landlord nor any agent of Landlord has made any statement or promise regarding the condition of the Page 20 of 345 4 Premises or the Property, except as expressly set forth in this Lease, and Tenant has not relied on any representation or warranty not expressly contained herein. 6. Permitted Use. a. Use. Tenant shall use and occupy the Premises solely for lawful commercial purposes consistent with the operation of a golf course and in accordance with, and permitted under, applicable zoning ordinances, building codes, and all other municipal, state, and federal laws, rules, and regulations (collectively, “Applicable Laws”). Tenant shall not commit or permit any waste, nuisance, or use that is dangerous, unlawful, immoral, or inconsistent with the character of the Property or the surrounding area. b. Compliance With Laws. Tenant, at its sole cost and expense, shall obtain and maintain in full force and effect all licenses, permits, and approvals required for its operations, and shall comply with all Applicable Laws now or hereafter in effect, including without limitation health and safety codes, fire codes, and accessibility requirements. c. Hazardous Materials . Tenant shall not use, store, generate, release, or dispose of any hazardous, toxic, or flammable substances, chemicals, or materials (“Hazardous Materials”) in, on, or about the Premises, except in de minimis amounts customarily used in Tenant’s lawful business and in compliance with all Applicable Laws. Tenant shall indemnify, defend, and hold harmless Landlord from any and all liability, loss, cost, claim, or damage arising out of Tenant’s use, storage, or disposal of Hazardous Materials. d. Insurance and Indemnity . Any use of the Premises by Tenant shall be conducted in a manner that does not increase insurance premiums for the Property or cause cancellation of any insurance carried by Landlord. If such increase occurs due to Tenant’s use, Tenant shall pay such additional premiums. Tenant shall indemnify and hold Landlord harmless from any and all claims arising from Tenant’s use of the Premises. e. No Warranty of Suitability . Landlord makes no warranty, express or implied, that the Premises are suitable for Tenant’s intended use, and Tenant shall be solely responsible for confirming such suitability. 7. Alterations. a. Tenant’s Responsibility. All alterations, additions, or improvements to the Premises shall be the sole responsibility of Tenant. b. Approval Required . Tenant shall not make or permit any alterations, additions, or improvements (collectively, “Alterations”) to the Premises without first obtaining Landlord’s prior written approval, which approval may be conditioned on compliance with such requirements as Landlord may reasonably impose, including review of plans and specifications by Landlord’s architect or engineer. Cosmetic, non -structural Alterations under $10,000 in aggregate cost per project may be undertaken without prior approval, provided Tenant gives Landlord at least ten (10) days prior written notice. Page 21 of 345 5 c. Standards. All Alterations shall: (1) be performed at Tenant’s sole cost and expense; (2) be done in a good and workmanlike manner, consistent with the quality of the building and in compliance with all applicable laws, codes, and ordinances; (3) not adversely affect the structural integrity of the building, or any building systems (including HV AC, electrical, plumbing, or life-safety systems); (4) be performed only by licensed contractors approved by Landlord; and (5) be performed free of liens, claims, or encumbrances. d. Restoration. Unless Landlord otherwise agrees in writing at the time of approval of any Alterations , Tenant shall, at its sole cost and expense, remove all Alterations (other than customary, non -structural improvements reasonably suitable for future tenants) and restore the Premises to its prior condition at the expiration or earlier termination of this Lease. e. Ownership. All Alterations made to the Premises (other than Tenant’s removable trade fixtures, equipment, and personal property) shall immediately become the property of Landlord and shall remain upon and be surrendered with the Premises at the expiration or earlier termination of this Lease. f. Indemnity. Tenant shall indemnify, defend, and hold harmless Landlord from and against any claims, damages, or liabilities arising from the performance of Alterations, including mechanic’s or construction liens. If any lien is filed against the Premises or the Property, Tenant shall discharge such lien within thirty (30) days, either by payment, bonding, or otherwise, and failure to do so shall constitute an Event of Default. 8. Triple Net Lease. a. Nature of Lease. This Lease is intended to be a triple net lease, such that, except as expressly provided in this Lease, Landlord shall receive the Base Rent set forth in Section 3 without deduction, offset, or responsibility for any costs, charges, expenses, or obligations of any kind relating to the Premises or the Property. b. Tenant’s Obligations . In addition to Base Rent, Tenant shall pay as Additional Rent all of the following during the Term: (1) Taxes. All real estate taxes, assessments, special assessments, and governmental charges (general or special, ordinary or extraordinary, foreseen or unforeseen) levied or assessed against the Property during the Term, other than income, franchise, or excise taxes imposed on Landlord. Page 22 of 345 6 (2) Utilities. All charges for water, gas, heat, electricity, sewer, stormwater, telephone, internet, and all other utilities or services supplied to or consumed on the Premises, whether separately metered, sub-metered, or otherwise allocated to Tenant. (3) Insurance. All insurance premiums required under Section 10 of this Lease, including but not limited to liability, property, and casualty insurance covering Tenant’s use and occupancy. (4) Repairs and Maintenance . All costs of maintaining, repairing, and replacing the Premises and all systems serving the Premises (including electrical, plumbing, mechanical, and HV AC). (5) Other Charges. Any other expense incurred in connection with the ownership, operation, repair, maintenance, and use of the Premises or Tenant’s use of the Property, except as specifically allocated to Landlord in this Lease. c. Landlord’s Obligations. Landlord shall have no responsibility for the repair, replacement, and maintenance of (i) the structural elements of the building, including foundation, exterior walls, and roof, and (ii) capital components unrelated to Tenant’s use or Alterations. d. Payment and Administration . All Additional Rent shall be payable to Landlord within thirty (30) days after Landlord delivers an invoice or written demand therefor, together with reasonable supporting documentation. Failure to pay Additional Rent shall be treated as a failure to pay Base Rent and shall constitute an Event of Default. e. No Offset . Tenant’s obligations under this Section are absolute and unconditional and shall not be subject to abatement, reduction, counterclaim, or setoff, except as expressly provided in this Lease or required by law. 9. Subletting and Assignment. a. General Restriction. With the exception of a sublease to Blackstone Creek Golf Club Ltd., which Landlord hereby expressly approves, Tenant shall not assign this Lease, sublet all or any portion of the Premises, license the use of the Premises, mortgage its leasehold interest, or otherwise transfer any rights under this Lease (each, a “Transfer”) without the prior written consent of Lan dlord. Any attempted Transfer without such consent shall be void and shall constitute an Event of Default. b. Affiliates and Successors . Notwithstanding subsection (a), Tenant may, without Landlord’s prior consent but upon not less than thirty (30) days’ prior written notice to Landlord, assign this Lease or sublet the Premises to (i) any entity controlling, controlled by, or under common control with Tenant, (ii) any successor entity resulting from merger, consolidation, or reorganization of Tenant, or (iii) any purchaser of substantially all of Tenant’s assets, provided that (A) Tenant remains primarily liable under this Lease, (B) the transferee assumes all of Tenant’s obligations under this Lease pursuant to a written Page 23 of 345 7 assumption agreement reasonably acceptable to Landlord, and (C) such Transfer does not materially increase the occupancy load or alter the use of the Premises. c. Conditions of Landlord’s Consent . As a condition to granting consent to any Transfer (other than those permitted under subsection (b)), Landlord may require: (1) Delivery of a true and complete copy of the proposed assignment, sublease, or other transfer instrument; (2) Reasonable evidence of the proposed transferee’s financial condition, business reputation, and experience; (3) Execution by Tenant and the transferee of an assignment and assumption agreement in form reasonably acceptable to Landlord; and (4) Reimbursement of Landlord’s reasonable attorneys’ fees and costs incurred in connection with reviewing the request, not to exceed $2,500. d. Tenant Liability. No Transfer shall release Tenant from its obligations under this Lease, and Tenant shall remain fully and primarily liable, jointly and severally with any transferee, unless expressly released in writing by Landlord. e. Excess Rent. If Tenant sublets the Premises (other than to an affiliate or successor permitted under subsection (b)) for rent in excess of the rent payable under this Lease, Tenant shall pay to Landlord ninety five percent (95%) of such excess as Additional Rent. 10. Insurance and Indemnification. a. Tenant’s Insurance. At all times during the Term, Tenant shall, at its sole cost and expense, maintain and keep in force: (1) Commercial General Liability Insurance on an occurrence basis, with limits of not less than $1,000,000 per occurrence and $2,000,000 general aggregate, covering bodily injury, death, personal injury, and property damage, including contractual liability covering Tenant’s obligations under this Lease. (2) Property Insurance covering Tenant’s personal property, trade fixtures, equipment, and inventory located in or about the Premises, on a “special form” or “all risk” basis, in an amount not less than full replacement value. (3) Workers’ Compensation Insurance as required by Wisconsin law and Employer’s Liability Insurance with limits of not less than $500,000 each accident, $500,000 disease policy limit, and $500,000 disease each employee. (4) Business Interruption/Extra Expense Insurance sufficient to cover at least six (6) months of Rent and Additional Rent, to the extent reasonably available at commercially reasonable rates. Page 24 of 345 8 b. Policy Requirements. All insurance required under this Section shall: (1) Be issued by insurers authorized to do business in Wisconsin, with an A.M. Best rating of at least A-VII; (2) Name Landlord, its officials, employees, and agents as additional insureds (except workers’ compensation and business interruption); (3) Be primary and non -contributory with any insurance carried by Landlord; and (4) Provide that coverage shall not be canceled, non -renewed, or materially modified except upon at least thirty (30) days’ prior written notice to Landlord. c. Evidence of Coverage . Tenant shall deliver to Landlord certificates of insurance (and, upon request, complete copies of policies and endorsements) evidencing the required coverages prior to occupancy and thereafter not less than annually. Failure to maintain required insurance shall constitute an Event of Default. d. Landlord’s Insurance. Landlord shall maintain property insurance covering the building (excluding Tenant’s personal property and trade fixtures) against loss or damage by fire and other perils commonly included in “all risk” coverage. Premiums for such insurance shall be reimbu rsed by Tenant as Additional Rent under Section 8 (Triple Net Lease). e. Indemnification by Tenant. To the fullest extent permitted by law, Tenant shall indemnify, defend, and hold harmless Landlord, its officials, employees, and agents, from and against any and all claims, liabilities, losses, damages, costs, and expenses (including reasonable attorneys ’ fees) arising out of or relating to (i) Tenant’s use or occupancy of the Premises, (ii) the conduct of Tenant’s business, (iii) any work, Alterations, or improvements made by or on behalf of Tenant, and (iv) any negligent acts, errors, omissions, or willful misconduct of Tenant, its subtenants, employees, agents, contractors, or invitees. This indemnity shall not apply to the extent caused by Landlord’s negligence or willful misconduct. 11. Default and Remedies. a. Events of Default . Each of the following shall constitute an “Event of Default” by Tenant under this Lease: (1) Nonpayment of Rent . Tenant fails to pay any installment of Base Rent or Additional Rent within ten (10) days after written notice from Landlord. (2) Other Covenants . Tenant fails to observe or perform any other covenant, agreement, or obligation of Tenant under this Lease, and such failure continues for more than thirty (30) days after written notice from Landlord; provided, however, if the default is not reasonably curable within thirty (30) days, Page 25 of 345 9 Tenant shall not be in default if Tenant promptly commences cure within such period and diligently prosecutes it to completion. (3) Vacancy or Abandonment. Tenant vacates or abandons the Premises for more than thirty (30) consecutive days without Landlord’s consent. (4) Unauthorized Transfer. Tenant assigns this Lease or sublets the Premises (or any portion thereof) without Landlord’s consent where such consent is required. (5) Insolvency. Tenant (i) makes a general assignment for the benefit of creditors, (ii) files a voluntary petition in bankruptcy or is adjudicated bankrupt or insolvent, (iii) has a petition filed against it under any bankruptcy or insolvency law that is not dismissed within sixty (60) days, (iv) has a receiver or trustee appointed for substantially all of its property, or (v) admits in writing its inability to pay its debts as they mature. (6) Liens. Tenant permits any mechanic’s, materialman’s, or other lien to be filed against the Premises or Property and fails to discharge or bond over such lien within thirty (30) days after filing. b. Landlord’s Remedies . Upon the occurrence of an Event of Default, Landlord may, at its option, exercise one or more of the following remedies, in addition to all other remedies available at law or in equity, without further notice or demand (except as expressly required herein): (1) Termination. Landlord may terminate this Lease by written notice to Tenant, whereupon all rights of Tenant hereunder shall cease. Landlord may recover from Tenant all damages permitted by Wisconsin law, including without limitation: • Unpaid Rent accrued through the date of termination; • The worth at the time of award of the amount by which the unpaid Rent for the balance of the Term exceeds the fair rental value of the Premises; and • Reasonable attorneys’ fees and costs incurred by Landlord. (2) Re-Entry and Reletting . Landlord may re -enter the Premises and remove all persons and property therefrom, in compliance with Wisconsin law. Landlord may relet the Premises on such terms as it deems advisable. Tenant shall remain liable for any deficiency between (i) the Rent reserved in this Lease and (ii) the amounts actually received by Landlord upon such reletting, plus all reletting costs, including brokerage fees, reasonable attorneys’ fees, and costs of renovation or repair. Page 26 of 345 10 (3) Acceleration. Landlord may, at its election, declare the entire Rent for the remainder of the Term immediately due and payable in a lump sum, subject to Landlord’s duty to mitigate damages under Wisconsin law. (4) Self-Help. Landlord may, but shall not be obligated to, cure any Event of Default at Tenant’s expense. All costs and expenses so incurred shall be Additional Rent due from Tenant within ten (10) days after written demand, together with interest at the rate of twelv e percent (12%) per annum (or the maximum rate permitted by law, if less). c. Additional Protections. (1) Attorneys’ Fees. Tenant shall reimburse Landlord for all reasonable attorneys’ fees, court costs, and expenses incurred in enforcing this Lease or in connection with any Event of Default. (2) No Waiver. Landlord’s acceptance of Rent after default shall not be deemed a waiver of such default, nor shall Landlord’s waiver of any default constitute a waiver of any other default. (3) Waiver of Redemption . Tenant waives, to the fullest extent permitted by Wisconsin law, any right of redemption or reinstatement after termination of this Lease. (4) Cumulative Remedies. The rights and remedies of Landlord set forth herein are cumulative and not exclusive of any other rights or remedies available at law or in equity. 12. Entire Agreement. This Lease, together with Attachment A (collectively, the “Lease Documents”), constitutes the entire agreement between Landlord and Tenant with respect to the subject matter hereof, and supersedes all prior and contemporaneous negotiations, letters of intent, proposals, understandings, representations, warranties, promises, and agreements, whether written or oral, relating to the Premises or this Lease. No statement, promise, agreement, or understanding made or entered into by either party, or by any agent, employee, or representative of either party, shall be binding or of any effect unless specifically set forth in the Lease Documents. This Lease may not be amended, modified, or supplemented except by a written instrument executed by both Landlord and Tenant. 13. Notices. All notices, demands, or communications required or permitted under this Lease shall be in writing and delivered personally, by certified mail (return receipt requested), or by nationally recognized overnight courier to the addresses set forth below (or such other addresses as either party may designate in writing). Notices shall be effective upon receipt or refusal. 14. Quiet Enjoyment . So long as Tenant fully and timely performs all of its obligations under this Lease and is not in default, Tenant shall peaceably and quietly have, hold, Page 27 of 345 11 and enjoy the Premises during the Term, without interference by Landlord or anyone claiming through Landlord, subject at all times to the terms, conditions, reservations, and rights of Landlord set forth in this Lease. Tenant acknowledges and agrees that Landlord’s exercise of its rights under this Lease, including but not limited to access for inspection, maintenance, or repair shall not constitute a breach of Landlord’s covenant of quiet enjoyment. 15. Subordination; Attornment; Non-Disturbance. a. Subordination. This Lease, and all rights of Tenant hereunder, are and shall be subject and subordinate at all times to the lien of any mortgage, deed of trust, or other security instrument now or hereafter encumbering the Property, and to all renewals, modifications, co nsolidations, replacements, or extensions thereof (collectively, “Mortgage”). Tenant shall promptly execute and deliver any instrument reasonably requested by Landlord or any mortgagee confirming such subordination. b. Attornment. In the event of foreclosure, deed in lieu of foreclosure, or sale pursuant to the power of sale under any Mortgage, or if Landlord otherwise transfers its interest in the Property, Tenant shall attorn to and recognize such purchaser, transferee, or successor (including a mortgagee or its designee) as Landlord under this Lease, and this Lease shall continue in full force and effect. c. Non-Disturbance. Provided Tenant is not in default under this Lease beyond any applicable cure period, Tenant’s right to possession of the Premises shall not be disturbed or terminated by reason of any foreclosure, deed in lieu, or other enforcement of a Mortgage. Landlord shall use commercially reasonable efforts to obtain a written non - disturbance agreement from any existing or future mortgagee, but failure to obtain such agreement shall not be deemed a default by Landlord. d. Self-Executing. The provisions of this Section shall be self -executing and no further instrument of subordination shall be required provided, however, that Tenant shall, upon request, execute and deliver confirmatory instruments in recordable form to evidence such subordination or attornment. e. Conflict. In the event of a conflict between the provisions of this Section and any non -disturbance agreement actually entered into with a mortgagee, the terms of the non-disturbance agreement shall control as between Tenant and such mortgagee. 16. Surrender of Premises. a. Condition on Surrender. Upon the expiration or earlier termination of this Lease, Tenant shall surrender and deliver the Premises to Landlord in good order, condition, and repair, ordinary wear and tear excepted, and free of all occupants, debris, and rubbish. Tenant shall repair any damage caused by the removal of its property, trade fixtures, or Alterations. Page 28 of 345 12 b. Removal of Property . Tenant shall, at its sole cost and expense, remove from the Premises all of Tenant’s personal property, trade fixtures, equipment, and any Alterations required to be removed pursuant to Section 7. Any property not removed by Tenant shall, at Landlord’s option: (1) be deemed abandoned by Tenant and may be removed, stored, sold, or otherwise disposed of by Landlord at Tenant’s expense; or (2) become the property of Landlord without compensation or liability. c. Survival of Obligations . Tenant’s obligations under this Section shall survive the expiration or earlier termination of this Lease. d. Hold Harmless. Tenant shall indemnify and hold Landlord harmless from all claims, costs, expenses, damages, and liabilities (including attorneys’ fees) arising from Tenant’s failure to surrender the Premises in the condition required by this Lease. 17. Holding Over. a. Month-to-Month Tenancy. Any holding over by Tenant after the expiration or earlier termination of this Lease without Landlord’s prior written consent shall create only a month-to-month tenancy, subject to termination by either party upon thirty (30) days’ prior written notice. Su ch tenancy shall be on the same terms and conditions set forth in this Lease, except that Base Rent shall be increased to five thousand dollars ($5,000) per month payable in advance, without notice, demand, setoff, or deduction, on or before the first (1st) day of each calendar month plus all Additional Rent. b. No Renewal. No holding over, even with Landlord’s acceptance of Rent, shall be deemed to operate as a renewal or extension of this Lease, or to entitle Tenant to any further rights under this Lease, except as expressly provided herein. c. Indemnification. Tenant shall indemnify, defend, and hold harmless Landlord from and against any and all losses, liabilities, costs, claims, damages, or expenses (including reasonable attorneys’ fees) arising out of or relating to Tenant’s failure to surrender the Premises as required under Section 16, including without limitation any claims made by a succeeding tenant or prospective occupant. 18. Waiver of Jury Trial. To the fullest extent permitted by law, the parties hereby waive trial by jury in any action, proceeding, claim, counterclaim, or cross -claim, whether in contract, tort, or otherwise, arising out of or relating to this Lease, the Premises, or the relationship of Landlord and Tenant. Each party further agrees that (a) this waiver is a material inducement to the execution of this Lease; (b) it has knowingly and voluntarily waived its jury trial rights after consulting (or having had the opportunity to consult) with legal counsel; and (c ) this waiver shall survive the expiration or earlier termination of this Lease. Page 29 of 345 13 19. Governing Law and Venue . This Lease shall be governed by, construed, and enforced in accordance with the laws of the State of Wisconsin, without regard to its conflict -of- laws principles. Venue for any action, proceeding, or dispute arising out of or relating to this Lease shall lie exclusively in the state courts located in Washington County, Wisconsin, and the parties irrevocably submit to the jurisdiction of such courts. Tenant waives any objection to venue or forum non conveniens with respect to actions or proceedings brought in such courts. 20. Severability. If any provision of this Lease, or the application thereof to any person or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, the remainder of this Lease and the application of such provision to other persons or circumstances shall not be affected and shall remain in full force and effect. To the extent permitted by law, the parties further agree that in lieu of any such invalid, illegal, or unenforceable provision, there shall be added automatically a valid, legal, and enforceable provision as similar in terms to such provision as may be possible. 21. No Waiver. No failure, delay, or omission by Landlord in exercising any right, remedy, or power under this Lease shall impair such right, remedy, or power, or be construed as a waiver thereof. No single or partial exercise of any right, remedy, or power shall preclud e any other or further exercise of the same or of any other right, remedy, or power. No waiver shall be valid unless in writing and signed by Landlord, and no waiver on one occasion shall be deemed a waiver of the same or any other right or remedy on any future occasion. The acceptance of Rent or other payment by Landlord during the existence of an Event of Default shall not be deemed a waiver of such Event of Default, nor shall it limit or impair Landlord’s rights and remedies with respect thereto. 22. Counterparts; Electronic Signatures. This Lease may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures delivered by PDF, facsimile, DocuSign, or other reliable electronic transmission shall be deemed original signatures for all purposes and shall be fully binding on the parties. The parties agree that this Lease may be stored and maintained in electronic format (including PDF), and that such electronic copies shall be admissible in evidence and have the same force and effect as an original executed version. 23. Authority. Each party represents and warrants to the other that: a. It has full right, power, and authority to enter into this Lease and to perform its obligations hereunder; Page 30 of 345 14 b. The execution, delivery, and performance of this Lease by such party have been duly authorized by all necessary action; c. This Lease constitutes the legal, valid, and binding obligation of such party, enforceable against it in accordance with its terms; and d. The person executing this Lease on behalf of such party is duly authorized to do so and to bind such party. Tenant further represents and warrants that (i) if Tenant is an entity to be formed, it shall be duly formed, validly existing, and in good standing under the laws of its jurisdiction prior to the Commencement Date, and (ii) it shall be duly qualified to t ransact business in Wisconsin throughout the Term. 24. Municipal Approvals. This Lease and all obligations of Landlord hereunder are expressly conditioned upon and subject to formal approval by the Village Board of the Village of Germantown. No Lease, amendment, modification, extension, or renewal shall be binding upon Landlord unless and until such approval has been duly granted and entered into the official records of the Village. Tenant acknowledges and agrees that: a. Execution of this Lease by any officer, employee, or agent of the Village prior to Village Board approval shall not bind the Village; b. Tenant has no claim or right against the Village unless and until such approval is granted; and c. Landlord shall have no liability to Tenant if Village Board approval is withheld for any reason. IN WITNESS WHEREOF, in consideration of the mutual covenants and agreements set forth herein, and intending to be legally bound, the parties have executed this Lease as of the dates set forth below. LANDLORD: Village of Germantown By: Name: Title: Date: ____________________________________ Page 31 of 345 15 TENANT: Blackstone Creek LLC BY: The Heimat Group Inc., its Managing Member By: Name: Title: Date: ____________________________________ Page 32 of 345 Bec/rl , 7lYl26 wr H E I M AT July 6, 2026 Matt Trebatoski Village Administrator Village of Germantown N112 W17001 Mequon Road Germantown, Wl 53022 RE: Proposed Recycling Center Lease for Blackstone Creek Golf Club Mr. Trebatoski, On behalf of Blackstone Creek LLC, a development affiliate of The Heimat Group lnc., and Blackstone Creek Golf Club, we request that the Village of Germantown consider a proposed lease of the Village-owned former recycling center located at the west end of Main Street (Tax Parcel lD: 21 1999). As you know, Culvers will be starting construction at the corner of Mequon Road and Division Road in July 2O26 with an anticipated opening in December 2026. While we have made temporary arrangements to accommodate construction activities in concert with the golf course through the 2026 golf season, once the Culvers is completed and fully operational, we will need to make alternate accommodations for golf operations and parking lor the 2027 golf season and beyond. Given its proximity to the golf course and the fact that it is not being utilized in any way by the Village, we propose to lease the recycling center property from the Village and move the starting operations, parking facilities and maintenance operations for the golf course to the recycling center in order to facilitate the continued operations of Blackstone Creek Golf Club into the near {uture. Given resident and golf patron desires to retain the golf course as a Village amenity, we believe this lease will enable us to address the infrastructure needs of the golf course in the immediate term while still allowing us to collectively work with the Village on a longer-term plan for tho golf course and possible future development of the recycling center property. lt is our understanding that this "future" may be informed by the results of the community engagement exercise currently underway. This proposal will serve as a bridge to continue the golf course operations while maintaining flexibility for future considerations. Blackstone Creek Golf Club will incur costs and business disruption in the process of relocating its operations to the recycling center so in order to help facilitate the economic viability of this venture, we are proposing the following general lease terms: . One-year lease term, with options to continue into the future. Annual Rent to be $1.00. lf and as the Village determines that it wishes to sell the recycling center for future development, Blackstone Creek LLC would like the lirst opportunity to pursue said purchase. a a -Ihe l.leirnat Group lrrc. I nA75 N. Corl:orate Farl<way $uite 250 lVecluorr, \lVisconsin 53C92 I tlreheirrtatgroLlp.colTi Page 33 of 345 We believe this provides a reasonable pathway for us to retain lhe golf course into the future while still maintaining the flexibility for the Village to consider future sales and development opportunities for the currently unused land at the recycling center. Tlme is sensitive since we will need time to plan and execute the relocation lor 2027 golt season, should the Village approve of the loase. We appreciate your consideration of this request as quickly as is possible given appropriate protocol and meeting schedules. Sincerely, BLACKSTONE CREEK LLC. ByTHE HEIMAT GROUP lNC. Jim Sedgwick Principal BLACKSTONE CREEK GOLF CLUB LTD Troy Schmidt Manager The Heimat Group lnc. I QA75 N. Corporate Parkway Suite 250 Mequon, Wisconsin 53092 | theheimatgroup.conl Page 34 of 345 BUSINESS OF THE GENERAL GOVERNMENT & FINANCE COMMITTEE MEETING DATE: August 17, 2026 PLACEMENT: Presentation ITEM TITLE: Presentation of the 2025 Annual Comprehensive Financial Report and Audit Results Report by Baker Tilly (PRESENTATION) SUBMITTED BY: Lisa Davis, Finance Director SUMMARY EXPLANATION: The accounting firm Baker Tilly, has completed their audit of our 2025 financial statements and have concluded that they are “fairly presented in conformity with accounting principles generally accepted in the United States of America.” While the opinion comes without qualification, Baker Tilly has identified internal controls as an area where improvement is needed. 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. Baker Tilly identified the following deficiencies as material weaknesses: Inadequate Segregation of Duties - At this time, due to staffing and financial limitations, the proper internal controls are not in place to achieve adequate segregation of duties related to account reconciliations prepared throughout the year that should be performed by someone independent of processing transactions in the account and year-end reconciliations that should be reviewed and approved y someone other than the preparer. Financial Statement Close Process - Management has not prepared financial statements that are in conformity with generally accepted accounting principles or the schedule of expenditures of federal awards that is in conformance with the applicable federal requirements. In addition, material misstatements in the general ledger were identified during the financial audit. Other Comments and Recommendations by Baker Tilly were around our decentralized cash collections. The recommendation is that management review its decentralized cash collection procedures and controls on a periodic basis and make changes as necessary to strengthen the internal control environment. We will continue to work with Baker Tilly to address these concerns. Baker Tilly will be in attendance to make their presentation and answer questions. ATTACHMENT: Page 35 of 345 1. Village of Germantown - FY25 - Audit Results Report - Final 2. Village of Germantown AUD 12-31-2025 - ACFR - Final STAFF RECOMMENDATION: Presentation Only ACTION BY COMMITTEE: Page 36 of 345 Reporting and insights from 2025 audit: Village of Germantown December 31, 2025 Page 37 of 345 THIS COMMUNICATION IS INTENDED SOLELY FOR THE INFORMATION AND USE OF THOSE CHARGED WITH GOVERNANCE, AND, IF APPROPRIATE, MANAGEMENT, AND 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. Executive summary July 30, 2026 To the Village Board Village of Germantown We have completed our audit of the financial statements of the Village of Germantown (the Village) for the year ended December 31, 2025, and have issued our report thereon dated July 30, 2026. 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 Village’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 Village of Germantown 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: • Amanda Blomberg, Managing Director: amanda.blomberg@bakertilly.com or +1 (608) 240 2386 • Leah Gaffney, Senior Manager: leah.gaffney@bakertilly.com or +1 (608) 240 2346 Sincerely, Baker Tilly US, LLP Amanda Blomberg, Managing Director Page 38 of 345 © 2025 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 Village'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 the Village Board: • 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. • Our audit does not relieve management or the Village Board of their responsibilities. We are also required to communicate significant matters related to our audit that are relevant to the responsibilities of the Village Board, including: • Internal control matters • Qualitative aspects of the Village'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 Page 39 of 345 © 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. Page 40 of 345 © 2025 Baker Tilly US, LLP Page | 5 Audit approach and results Planned scope and timing Audit focus Based on our understanding of the Village and environment in which you operate, we focused our audit on the following key areas: • Key transaction cycles • Areas with significant estimates • Assessment of new accounting standards • Areas of complexity including Tax Incremental Financing Districts and joint municipal/utility projects 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 Village’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 Segregation of duties Incorporate unpredictability into audit procedures, emphasize professional skepticism and utilize audit team with industry experience Procedures identified provided sufficient evidence for our audit opinion Page 41 of 345 © 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 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 Village'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 Village'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: • 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 related to: • Account reconciliations prepared throughout the year should be performed by someone independent of processing transactions in the account. • Year-end reconciliations (retainages, payroll accruals) should be reviewed and approved by someone other than the preparer. 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 material weakness related to the internal control environment. Page 42 of 345 © 2025 Baker Tilly US, LLP Page | 7 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. • 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 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 to be material weaknesses surrounding the preparation of financial statements and footnotes including the schedule of expenditures of federal 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 awards that is in conformance with the applicable federal requirements. In addition, material misstatements in the general ledger were identified during the financial audit. The following material weaknesses, which were identified in the prior years, were remediated during the current year: • Bank reconciliations for the tax account should be performed by someone independent of the tax collection process. • An independent review and approval of adjustments to accounts receivable and account write-offs. • People involved in the cash receipting process should be independent of other billing duties. • The reconciliation of the detailed listing of receivables in the billing system and the receivable balance in the general ledger should be reviewed by someone independent of the utility billing and cash receipting process. • Adjusting journal entries and supporting documentation should be reviewed and approved by an appropriate person who is not the original preparer. Page 43 of 345 © 2025 Baker Tilly US, LLP Page | 8 Other comments and recommendations Decentralized Cash Collections Many governments collect cash at numerous decentralized locations that are separate from the primary system of accounting procedures and controls. The opportunity for theft is often higher at those locations because one person is frequently involved in most, if not all, aspects of a transaction (i.e., lack of segregation of duties). Management is responsible for designing and implementing controls and procedures to detect and prevent fraud. As a result, we recommend that management review its decentralized cash collection procedures and controls on a periodic basis and make changes as necessary to strengthen the internal control environment. Reviewing the adequacy of the controls is a responsibility of the governing body. Below are example procedures and controls to help mitigate the risk of loss at decentralized cash collection points: • Implement a centralized receipting process with adequate segregation of duties • For cash collections, ensure pre-numbered receipts are being used and all receipts in the sequence are being reviewed by someone other than the person receipting the cash and receipts tie to deposits • Perform surprise procedures at decentralized locations (cash counts, walkthrough of processes, etc.) • Require regular cash deposits to minimize collection on-hand • Limit the number of separate bank accounts • Segregate duties as much as possible – the person receipting cash should be separate from the person preparing deposits and the person reconciling bank accounts should be separate from the cash collection activity • Perform a month-to-month or year-to-year comparison to look for unusual changes in collections • If collecting from a drop box site, consider sending two people to collect the funds, especially during peak times We recommend that the Village review possible procedures and controls available to help mitigate the risk. As always, the cost of controls and staffing must be weighed against the benefits of safeguarding your assets. Page 44 of 345 © 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 Village 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 Village 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 (asset) and related deferrals Evaluation of information provided by the Wisconsin Retirement System Reasonable in relation to the financial statements as a whole Allowance for doubtful accounts Evaluation of historical revenues and loss levels with the analysis on collectability of individual amounts Reasonable in relation to the financial statements as a whole Depreciation Evaluate estimated useful life of the asset and original acquisition value 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. Page 45 of 345 © 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 Village 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 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 material corrected misstatements that, in our judgment, may not have been detected except through our auditing procedures. 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 Village's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Page 46 of 345 © 2025 Baker Tilly US, LLP Page | 11 Other information in documents containing audited basic financial statements Annual report The Village's audited financial statements will be included in the Annual Comprehensive Financial Report. Our responsibility for this information does not extend beyond the financial information identified in the audit report, and we are not required to perform any procedures to corroborate such other information. We have read the Introductory and Statistical sections to determine whether a material inconsistency exists between the other information and the financial statements. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, was materially inconsistent with the information, or manner of its presentation, in the financial statements. Official statements The Village's audited financial statements are "general purpose" financial statements. General purpose financial statements consist of the basic financial statements that can be used by a broad group of people for a broad range of activities. Once we have issued our audit report, we have no further obligation to update our report for events occurring subsequent to the date of our report. The Village can use the audited financial statements in other client prepare documents, such as official statements related to the issuance of debt, without our acknowledgement. Unless we have been engaged to perform services in connection with any subsequent transaction requiring the inclusion of our audit report, as well as to issue an auditors' acknowledgment letter, we have neither read the document nor performed subsequent event procedures in order to determine whether or not our report remains appropriate. 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. 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 Village'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. Page 47 of 345 © 2025 Baker Tilly US, LLP Page | 12 Independence We are not aware of any relationships between Baker Tilly and the Village 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 Village's related parties. 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 which accompanies the financial statements but is not RSI. 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. We were not engaged to report on the other information, which accompanies the financial statements but are not RSI. We did not audit or perform other procedures on this other information, and we do not express an opinion or provide any assurance on it. Nonattest services The following nonattest services were provided by Baker Tilly: • Adjusting journal entries and financial statement preparation • Preparation of regulatory reports (Public Service Commission, State Report) • Accounting assistance 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. Page 48 of 345 © 2025 Baker Tilly US, LLP Page | 13 Village Board 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. Page 49 of 345 © 2025 Baker Tilly US, LLP Page | 14 Management representation letter Page 50 of 345 Page 51 of 345 Page 52 of 345 Page 53 of 345 Page 54 of 345 Page 55 of 345 Page 56 of 345 Page 57 of 345 Page 58 of 345 Page 59 of 345 Page 60 of 345 © 2025 Baker Tilly US, LLP Page | 25 Client service team Amanda Blomberg, CPA Managing Director 4807 Innovate Lane Madison, Wisconsin 53718 United States T +1 (608) 240 2386 | Madison amanda.blomberg@bakertilly.com Leah Gaffney, CPA Senior Manager 4807 Innovate Lane Madison, Wisconsin 53718 United States T +1 (608) 240 2346 | Madison leah.gaffney@bakertilly.com Kyle Reilly, CPA Senior Associate 4807 Innovate Lane Madison, Wisconsin 53718 United States T +1 (608) 240 2559 | Madison kyle.reilly@bakertilly.com Page 61 of 345 © 2025 Baker Tilly US, LLP Page | 26 Accounting changes relevant to the Village of Germantown 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. Page 62 of 345 © 2025 Baker Tilly US, LLP Page | 27 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 Page 63 of 345 © 2025 Baker Tilly US, LLP Page | 28 Uncorrected misstatements • Costs previously reported as Governmental activities construction work in progress were determined to be unrelated to capital additions and were written off in the current year. As a result, beginning net position and current year expenses are overstated by $714,711. Material corrected misstatements Description Opinion unit Amount To record utility depreciation Water Utility, Sewer Utility $2,449,748 To record capital activity Water Utility $1,604,458 To record building lease Debt Service Fund $1,392,245 To adjust receivables Water Utility $250,000 The remaining misstatements that were identified and corrected by management were not material individually or in the aggregate to the financial statements taken as a whole. Page 64 of 345 © 2025 Baker Tilly US, LLP Page | 29 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 and Government Auditing Standards, OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Page 65 of 345 © 2025 Baker Tilly US, LLP Page | 30 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, 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, 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 Village 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. We perform preliminary financial audit work during the months of October-December, and sometimes early 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 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. 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. Page 66 of 345 Annual Comprehensive Financial Report of the Village of Germantown December 31, 2025 Department Issuing Report Prepared by Village Administrator and Clerk-Treasurer Department Member of the Government Finance Officers Association of the United States and Canada Page 67 of 345 Village of Germantown Table of Contents December 31, 2025 Page Introductory Section Letter of Transmittal i List of Principal Officers vi Organizational Chart vii Location Map viii History ix Financial Section Independent Auditors' Report x Required Supplementary Information Management's Discussion and Analysis xiii Basic Financial Statements Government-Wide Financial Statements Statement of Net Position 1 Statement of Activities 2 Fund Financial Statements Balance Sheet - Governmental Funds 3 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 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 8 Statement of Net Position - Proprietary Funds 9 Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds 11 Statement of Cash Flows - Proprietary Funds 12 Statement of Fiduciary Net Position 14 Statement of Changes in Fiduciary Net Position 15 Index to Notes to Financial Statements 16 Notes to Financial Statements 17 Page 68 of 345 Village of Germantown Table of Contents December 31, 2025 Page Required Supplementary Information General Fund Detailed Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 51 Schedule of Proportionate Share of the Net Pension Liability (Asset) - Wisconsin Retirement System 53 Schedule of Employer Contributions - Wisconsin Retirement System 53 Notes to Required Supplementary Information 54 Supplementary Information Debt Service Fund Detailed Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Debt Service Fund 55 Major Capital Projects Fund Detailed Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Capital Projects 56 Detailed Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - TID No. 8 Capital Projects Fund 57 Nonmajor Governmental Funds Combining Balance Sheet - Nonmajor Governmental Funds 58 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 62 Detailed Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Police Impact Fee Fund 66 Fire Impact Fee Fund 67 Library Impact Fee Fund 68 Park and Recreation Impact Fee Fund 69 Senior Van Replacement Fund 70 Police Asset Forfeiture Fund 71 Police Canine Fund 72 Police Honor Guard Fund 73 Historic Preservation Fund 74 Library Fund 75 Recreation Facilities Fund 76 Page 69 of 345 Village of Germantown Table of Contents December 31, 2025 Page Fire Explorer Fund 77 Property Maintenance Fund 78 ARPA Fund 79 TID No. 6 Capital Projects Fund 80 TID No. 7 Capital Projects Fund 81 TID No. 9 Capital Projects Fund 82 Library Capital Fund 83 Internal Service Funds Combining Statement of Net Position - Internal Service Funds 84 Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Internal Service Funds 85 Combining Statement of Cash Flows - Internal Service Funds 86 Statistical Section Table 1 - Statement of Net Position by Component - Last Ten Fiscal Years 87 Table 2 - Changes in Net Position - Last Ten Fiscal Years 88 Table 3 - Fund Balances, Governmental Funds - Last Ten Fiscal Years 89 Table 4 - Changes in Fund Balances, Total Governmental Funds - Last Ten Fiscal Years 90 Table 5 - Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years 91 Table 6a - Direct and Overlapping Property Tax Rates 92 Table 6b - Full Value Rates for Property Taxes 92 Table 7 - Principal Property Tax Payers - Current Year and Nine Years Ago 93 Table 8 - Property Tax Levies and Collections - Last Ten Fiscal Years 94 Table 9 - Water & Sewer Utility - Customer Count - Last Ten Fiscal Years 95 Table 10 - Water Utility Customer Summary - Last Ten Fiscal Years 96 Table 11 - Water Utility Customer Rates - Last Ten Fiscal Years 97 Table 12 - Sewer Utility Customer Summary - Last Ten Fiscal Years 98 Table 13 - Sewer Utility Customer Rates - Last Ten Fiscal Years 99 Table 14 - Ratio of Outstanding Debt - Last Ten Fiscal Years 100 Table 15 - Ratio of General Bonded Debt Outstanding - Governmental Activities - Last Ten Fiscal Years 101 Table 16 - Direct and Overlapping Governmental Activities Debt - As of December 31, 2025 102 Page 70 of 345 Village of Germantown Table of Contents December 31, 2025 Page Table 17 - Legal Debt Margin Information - Last Ten Fiscal Years 103 Table 18 - Pledged - Revenue Coverage - Utility - Last Ten Fiscal Years 104 Table 19 - Demographic and Economic Indicators - Last Ten Fiscal Years 105 Table 20 - Principal Employers - Current Year and Nine Years Ago 106 Table 21 - Full-time Equivalent Village Government Employees by Function/Program - Last Ten Fiscal Years 107 Table 22 - Operating Indicators by Function/Program - Last Ten Fiscal Years 108 Table 23 - Capital Asset Statistics by Function/Program - Last Ten Fiscal Years 109 Table 24 - Building Permits - Last Ten Fiscal Years 110 Page 71 of 345 INTRODUCTORY SECTON Page 72 of 345 i Clerk/Treasurer Department PO Box 337 Germantown WI 53022 July 30, 2026 To: Citizens of the Village of Germantown Members of the Board of Trustees The Annual Comprehensive Financial Report for the Village of Germantown, Wisconsin for fiscal year ending December 31, 2025, is prepared to provide the Board, our citizens, our bondholders, and other interested persons, detailed information concerning the financial condition of the Village government. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the village government. The report was prepared by the Village's Administration and Finance departments and contains represen tations concerning the finances of the Village. We believe the data, as presented is accurate in all material aspects; that it is presented in a manner designed to fairly set forth the financial position and results of operations of the Village as measured by financial acti vity of its various funds; and t hat all disclosures necessary to enable the reader to gain reasonable understanding of its financial affairs have been included. The Village retained the services of Baker Tilly US, LLP to perform its audit. Based upon standard audit procedures, Baker Tilly US, LLP has issued an unmodified opinion on the Village's financial statements for the year ended December 31, 2025. The auditor's opinion is located at the front of the financial section of this report. Report Format The Annual Comprehensive Financial Report is presented in three main sections: introductory, financial and statistical. The intr oductory section contains this transmittal letter, the Village's organizational chart, a list of principal officials, an d other information. The financial section contains the independent auditors report, management's discu ssion and analysis (MD&A), government-wide financial statements, notes to the financial statements and more detailed fund financial statements. A third section provides selected statistical and general information pr esented on a multi-year comparative basis. Reporting Entity This report includes all funds of the Village of Germant own. The criteria used in determining the reporting entity are consis tent with criteria es tablished by the Governmental Accounting Standards Board (GASB) as outlined in the Codification of Governmental Account ing and Financial Reporting Standards. This report includes the General Fund, which accounts fo r the general administration of the Village, Special Revenue funds relating to Economic Development, and long-term Capital Projects funds and Internal Service Funds. The report also includes the Village's Enterprise funds that account for the Water and Wastewater Utilities. Internal se rvice funds provide info rmation on the health and dental protection plans of the Village's employees. Village Profile Located 25 miles northwest of Milwaukee, Germantown encompa sses 34 square miles in the southeast corner of Washington County. Germant own is one of the larges t villages in geographical Page 73 of 345 ii area in the State of Wisconsin. The Village's current population, as of the 2020 census, is 20,917, a 5.8% increase over the prior ten year's period. The 2025 estimated population is 21,053. The Village operates under a council-manager form of government. There are nine members on the Germantown Village Board. Eight of the members are elected from four trustee districts and the Village President is elected at large. Board members are elected to three-year terms. The appointed Village Administrator is responsible for the day-to-day operations of the Vill age, the appointment of administrative staff members, and the supervision of all employees. The area offers a pleasing, small-town character enhanced by all the modern amenities of a first-class suburb. Germantown residents take advantage of exceptional schools, modern healthcare providers, attractive real estate, well- maintained parks and facilities as well as unique shops and local restaurants. While the village has worked hard to provide its resident s with the finest in big-city conveniences, it has wo rked equally hard to maintain it s rich German heritage and beautiful architecture. The Village provides typical municipal services including polic e, fire, emergency dispatch and ambulance services; public works activities such as highway and st reet maintenance, and recycling; recreational activities such as parks, recreation pr ograms, public library and s enior activity center; community development activities includi ng planning and zoning enforcement, economic development, and general administrat ive and financial services. T he Village operates a Water and Wastewater Utility as enterprise funds. Accounting Systems and Budgetary Control The Village's accounting records for governmental and custodial funds ar e based upon the modified accrual basis, with revenues recorded when av ailable and measurable and expenditures recorded when the services and goods are received, and the liabilities incurred. Accounting records for the Village's utilities are maintained on an accrual basis. In developing the Village's overall accounting system, consideration was given to the adequacy of the internal accounting control struct ure. Internal controls are des igned to provide reasonable but not absolute assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition and (2) the reliability of financial resources for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognized that: (1) the cost of a control should not exceed the benefits likely to be derived and (2 ) the evaluation of costs and ben efits requires estimates and judgements by management. We believe that th e Village's internal acc ounting controls adequately safeguard assets and provides reasonable assurance of proper recording of financial transactions. Village Board policy provides for adoption of an annual budget prepared by management. The budget, as adopted by the Board, is intended to appropriate expenditures on a program or functional basis. The Village Administrator is granted authority to make mid-year adjustments within budgeted accounts of a department. Budget amendment s which change a departmental budget appropriation or are transfers between departments or funds must be approved by a 2/3 majority of the Village Board. The Village Board's upda ted Fund Balance Policy establishes a minimum unassigned Fund Balance. It states that the Village will maintain a minimum unassigned fund balance in its General Fund ranging from 16% to 25% of the subseque nt year's budgeted expenditures. This minimum fund balance is to protect against cash flow shortfalls related to timing of projected revenue receipts and to maintain a budget stabilization commitment. The 2026 unassi gned fund balance is 20. 73% of the subsequent year's expenditure budget, changing from $5.11 million in 2024 compared to $4.72 million in 2025. When an unassigned fund balance of the General Fund exceeds 20%, the Village may consider such fund balance surpluses for one-time expenditures that are nonrecurring in nature, and which will not require additional staffing or recurring expenditures. Page 74 of 345 iii Economic Conditions and Outlook The Village's $4,424,654,900 property tax base of equalized value is primarily residential (66%) but has a sizeable commercial (25%) and manufacturing (8%) presence as well. The Village's overall equalized value increased by 5%, following an increase of 7% the previous year. The average unemployment rate for Washington county in 2025 was 2.8%, which is lower than the Wisconsin state average of 3.2%. With the use of a variety of financing tools such as impact fees, tax incremental financing incentives, and close partnerships with local business, the Village will be able to maintain current services to our constituents. We have been able to balance the community with a mixture of agricultural, residential, commercial and industrial/office development. Germantown's fine school system and parks and recreational activities are also helpful in acquiring and keeping our residential base. Tax Incremental District No. 6 (Willow Creek Busine ss Park) is a Mixed-Use District, that is bounded by Appleton Avenue, Lannon Road, and Maple Road. Current construction includes Discount Ramps, Metro Cigars and Ryan Companies. The base valu e was $2,796,000 and has grown to $64,308,800 in 2025. The TID is projected to close in 2033. Tax Incremental District No. 7 is designated as an Industrial TID. The TID was amended in 2021 in order to add territory. This district was created to capture economic growth related to JW Speaker and so far the development has not created sufficient increment to cover the District's expenses. In 2021, the TID was amended to add territo ry and account for the Planned C apstone Quadrangle industrial park development. The area included in the Dist rict encompasses 144.2 ac res owned by the J.W. Speaker Corporation, locat ed on Freistadt Road and by Nort h Goldendale Rd and Capstone Quadrangle property along Goldendale Road. The project allowed for ext ension of 16” public watermain and the 18” public sanitary sewer interc eptor from their current terminus approximately 2,400 feet north along Go ldendale Road. The extens ion facilitated growth within the district and allowed for utility connection through to Tax Increment District No. 8. The amendment includes properties on Goldendale Road. The base va lue was $9,642,400 and has grown to $65,992,600 in 2025. The TID projected closure of 2031. In July 2018 the Village created Tax Increment Distri ct No. 8. The district is an industrial TID, encompassing 224.8 acres which is broken into two development areas, the property controlled by Zilber Property Group (approximately 151.3 acres) and the remaining 73.5 acres to be developed in later phases. The Village anticipates making total project expenditures of approximately $14.2 million, with completion in phases as development requires. Construction in 2019 included a 706,800 square foot Briggs & Stratton warehouse fa cility, with two other multi-tenant industrial buildings constructed by Zilber Property Group, plus a 100,000 square foot manufacturing facility for Dielectric. The Village had three TID No. 8 related bond issues in 2019, $6,725,000 G.O. Community Development Bonds, $1,755,000 Taxable G.O. Community Development Bonds, and $7,850,000 G.O. Corporate Purpose bonds. The taxable issue will reimburse Zilber Pr operty Group to cover their costs for internal infrastructure improvements; the other two issues have funded the expansion of water and sewer main to the development as well as r oad reconstruction costs. The issues also provided the initial funding to construct Well #12 and Water Tower #4, in conj unction with the Water Utility. The base value was $640,700 and has grown to $240,334,300 in 2025. The TID is projected to close in 2031. The Water Utility currently operates six wells; three deep and three shallow; with a capacity of 4,415,000 gallons per day plus four elevated tank water towers, tw o at 125 feet and two at 190 feet. The 2025 average daily water pumped for customer consumption was 1,716,923 gallons. The village is moving forward with a seventh well completed construction by the end of 2026. The Public Service Commission approved a significant rate increase for the utility during 2021 that took effect at the beginning of 2022. The second phase of the PSC rate increase took effect first quarter of 2025. The Sewer Utility maintains 110.40 miles of sewer main, seven lift stations and one metering station. The Village contracts with Milwaukee Metropolit an Sewerage District (MMSD) for its sewage Page 75 of 345 iv treatment, the charges from MMSD for treatment and its annual capital charge remain the utility's largest expenditure. Wrenwood subdivision, a major housing development proposed for the Northeast side of the Village has required an extension of interceptor sewer main, with an abandonment and construction of a new lift station completed in 2020. The Village continues to follow basic short-term and long-term planning policies. The Village's philosophy strives for manageable conservative budgets that allow for stable financial futures, keeping taxes and utility user rates as low as possible while guaranteeing that funds will be available to protect village infrastructure and services. The Village board is committed to maintaining a positive General Fund balance. This positive bal ance provides the Village with a cushion for unanticipated emergencies. The COVID-19 pandemic is a perfect example of this. By necessity, long range planning in cludes assessment of future debt issuance in conjunction with current debt service requirements. Village debt policies are designed to comply with requirements of Wisconsin State Statutes and bond covenants, while maintain ing the highest bond rating possible. Management reviews capital planning and resultant bond issuance in conjunction with its resources on hand and monitors the effects on future cash fl ows. The Village maintains a solid Aa3 general obligation bond rating from Moody's Investors Service, based upon its healthy fund balance, conservative financial management and aggressive debt repayment schedules. As required by State Law, compr ehensive “smart growth” plans are intended to be the community's guide for future growth and development. These plans must address nine specific elements: land use; housing; transportation; utilities and co mmunity facilities; agricultural, natural and cultural resources; economic development; intergov ernmental cooperation; iss ues and opportunities; and implementation. The Village began the process of updating the current 2020 Comprehensive Plan in 2019 with assistance from GRAEF c onsulting. Public workshops, meetings and hearings concerning the required components of the new 2050 Compre hensive Plan were conduct ed in 2020-2022. The 2050 Comprehensive Plan will include all required elem ents but will reflect current trends and policy decisions made over the last dec ade. The 2050 Comprehensive Plan overall planning process is expected took over 24 months to complete and included an ex tensive “public participation program” that will provide many different opportunities for property owners, residents and other stakeholders to be part of the process. The 2050 Comprehensive Plan was adopted in 2022. As in the past several years, development in the Village, be it residential, commercial, or industrial in nature, has been of the high quality necessary to provide the dive rsified tax base and tax rate necessary to provide services expected by the residents of Germantown. The Village of Germantown intends to maintain an adequate financial reserve in addition to a low tax rate to provide the citizens excellent municipal services. Vision Statement: Germantown's ethnic heritage, high quality of life based on its rural and suburban character, and desirable location in the greater metropolitan area create our competitive advantage. Our people will work together, with respect for each other, to ensure that dev elopment is consistent with Germantown's future as a neighborly and safe place to live, work and play. Mission Statement: The Village of Germantown is responsive to our citizens and businesses, embracing our heritage while working together to provide quality services in a fiscally responsible manner that will enhance the quality of life in our community. Page 76 of 345 v Independent Audit Included in the financial section is the independent auditor's report which is a significant part of the Annual Comprehensive Financial Report (ACFR). In th is report, Baker Tilly US, LLP, Certified Public Accountants, express their opinion that the financial statements are presented fairly in conformity with generally accepted accounting principles and comment on the scope of the examination. The opinion is unmodified and signifies a substantial level of achievement. Management's Discussion and Analysis Immediately following the independent auditor's report is Management's Discussion and Analysis which provides a narrative introduction, overview, and analysis of the basic financial statements. Acknowledgments The preparation of this report was made possible by the dedicated services of the entire staff of the Village of Germantown Finance Depa rtment and Administration D epartment, and the advice of the Village's independent auditors, Baker Tilly US, LLP. Appreciation is expressed to Village employees throughout the organization, especially those employees who were in strumental in the successful completion of this report. Additional appreciation is expressed to Alex Claerbaut for the significant time, energy, and work he dedicated towards the completion of this report. Respectfully submitted, Lisa Davis M a t t T r e b a t o s k i Lisa Davis, Finance Director Matt Trebatoski , Administrator Page 77 of 345 LIST OF PRINCIPAL OFFICIALS as of December 31, 202 ELECTED OFFICIALS TITLE NAME Village President Žď^ŽĚĞƌďĞƌŐ Village Trustee - District 1 David Baum Village Trustee - District 1 Terri Kaminski Village Trustee - District 2 Meg Cutts Village Trustee - District 2 Rick Miller Village Trustee - District 3 Jolene Pieper Village Trustee - District 3 Robert Warren Village Trustee - District 4 Jan Miller Village Trustee - District 4 <ƌŝƐƚĞŶŽƌƐƚ APPOINTED OFFICALS Village Administrator Steven R. Kreklow Village Attorney Brian Sajdak; Wesolowski, Reidenbach & Sajdak SC Village Assessor - Contract Service Associated Appraisal Consultants, Inc Village Clerk Donna Ott &ŝŶĂŶĐĞŝƌĞĐƚŽƌ Matthew Uselding Community Development/Planning & Inspection Jeffrey W. Retzlaff Director of Public Works Matthew Mortwedt Village Engineer Kevin Driscoll Police Chief WĂƚƌŝĐŬ:͘DĞƌƚĞŶ Fire Chief John Delain Library Director Patricia Smith Recreation Director Guilford Standridge Police & Fire Commission Chairperson Scott Scheife Park & Recreation Commission Chair ƌŝĂŶĞƉŝĞƐ Library Board President Joyce Nelson vi Page 78 of 345 GERMANTOWN CITIZENS VILLAGE PRESIDENT VILLAGE TRUSTEES ADMINISTRATOR Municipal Development VILLAGE ATTORNEY POLICE DEPARTMENT Law Enforcement FINANCE DEPARTMENT Public Safety Finance & Accounting Crime Prevention Tax Preparation & Collection Emergency Government Budget Preparation Telecommunication Cash Management 911 Payroll Accounts Payable & Recievable FIRE DEPARTMENT Employee Benefits Fire Prevention Fire Suppression E.M. S. VILLAGE CLERK Hazmat Elections Licenses Records Management PARKS & RECREATION DEPT. of PUBLIC WORKS Recreation Programs Highway Park Development Parks Senior Activity Center Building & Grounds Engineering Water Utility COMMUNITY DEVELOPMENT Wastewater Utility Planning & Zoning Recycling Inspection Services Property Maintenance GENERAL GOVT Data Processing Assessor - Contracted Germantown Community LIBRARY BOARD Library VILLAGE OF GERMANTOWN ORGANIZATIONAL CHART VII Page 79 of 345      
 
    

  
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i[ Page 81 of 345 FINANCIAL SECTON Page 82 of 345 /0 /1 /2 /3 /4 /i255 /6 /7 /8 /8 /9 /i255 /10 /11 /12 /7 /13 /14 /4 /9 /i255/15/4/14 /16 /17 /18 /i255 /19 /20 /i255 /1 /21 /11 /i255 /0 /1 /2 /3 /4 /i255 /6 /7 /8 /8 /9 /i255 /22 /23 /18 /i255 /19 /19 /20 /18 /i255 /24 /4 /1 /11 /7 /21 /25 /i255 /1 /13 /i255 /0 /1 /2 /3 /4 /i255 /6 /7 /8 /8 /9 /18 /i255 /1 /4 /3 /i255/26/3 /26/27/3 /4 /13 /i255 /14 /28 /i255 /24 /29 /3 /i255 /25 /8 /14 /27 /1 /8 /i255 /21 /3 /24 /30 /14 /4 /2 /i255 /14 /28 /i255 /0 /1 /2 /3 /4 /i255 /6 /7 /8 /8 /9 /i255 /31 /32 /33 /34 /35 /32 /36 /33 /37 /38 /32 /36 /39 /i255 /41 /33 /42 /43 /44 /i255 /33 /45 /34 /i255/46/34 /46/47/34 /35 /48 /i255 /38 /49 /i255 /50 /45 /37 /51 /45 /i255 /36 /35 /34 /i255 /48 /34 /52 /36 /35 /36 /33 /34 /i255 /36 /32 /42 /i255 /37 /32 /42 /34 /52 /34 /32 /42 /34 /32 /33 /i255 /39 /34 /53 /36 /39 /i255 /34 /32/33 /37 /33 /37 /34 /48 /43 /i255 /54 /36 /55 /34 /35 /i255 /56 /37 /39 /39 /57 /i255 /58 /59 /44 /i255 /41 /41 /60 /i255 /37 /48 /i255 /36 /i255 /39 /37 /51 /34 /32 /48 /34 /42 /i255 /61 /60 /62 /i255 /63 /35/46/i255/33 /45 /36 /33 /i255 /17 /4 /14 /12 /7 /11 /3 /13 /i255 /1 /13 /13 /16 /4 /1 /21 /64 /3 /i255 /13 /3 /4 /12 /7 /64 /3 /13 /i255 /24 /14 /i255 /7 /24 /13 /i255 /64 /8 /7 /3 /21 /24 /13 /65 /i255 /0 /1 /2 /3 /4 /i255 /6 /7 /8 /8 /9 /i255 /10 /11 /12 /7 /13 /14 /4 /9 /i255/15/4/14 /16 /17 /18 /i255 /19 /20 /i255 /1 /21 /11 /i255 /7 /24 /13 /i255 /13 /16 /27 /13 /7 /11 /7 /1 /4 /9 /i255 /3 /21 /24 /7 /24 /7 /3 /13 /i255 /17 /4 /14 /12 /7 /11 /3 /i255 /24 /1 /66 /i255 /1 /21 /11 /i255 /64 /14 /21 /13 /16 /8 /24 /7 /21 /25 /i255 /13 /3 /4 /12 /7 /64 /3 /13 /i255 /33 /38 /i255 /33 /45 /34 /37 /35 /i255 /51/39 /37 /34 /32 /33 /48 /i255 /36 /32 /42 /i255 /36 /35 /34 /i255 /32 /38 /33 /i255 /39 /37 /51 /34 /32 /48 /34 /42 /i255 /61 /60 /62 /i255 /63 /35/46/48/43 Independent Auditors' Report To the Village Board of Village of Germantown 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 Village of Germantown, Wisconsin (the Village), as of and for the year ended December 31, 2025, and the related notes to the financial statements, which collectively comprise the Village'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 Village 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 Standard s 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 Villa ge and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accountin g 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 Villa ge'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. x Page 83 of 345 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 Standard s 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 Village'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 Village'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 Accountin g 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 auditin g 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. xi Page 84 of 345 Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Village'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 Information Management is responsible for the other information included in the annual comprehensive financial report. The other information comprises the introductor y and statistical sections but does not include the basic financial statements and our auditors' report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated Jul y 30, 2026 on our consideration of the Village'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 Villa ge'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 Villa ge's internal control over financial reporting and compliance. Madison, Wisconsin July 30, 2026 xii Page 85 of 345 Village of Germantown Management's Discussion and Analysis December 31, 2025 (Unaudited) xiii Management's Discussion and Analysis provides management's overview and analysis of the Village of Germantown's (Village) basic financial statements for the year ended December 31, 2025. This discussion is designed to assist the reader in focusing on significant financial issues, provide an overview of the Village's financial activity and identify changes in the Village's financial position. Using This Report This report consists of a series of financial statements. The Statement of Net Position and the Statement of Activities provide information about the activities of the Village as a whole and presents a longer-term view of the Village's finances. As for governmental activities, these statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the Village's operations in more detail than the government-wide statement by providing information about the most significant funds. These statements also include information about activities for which the Village acts solely as a trustee or agent for the benefit of those outside the government. Reporting the Village of as Whole - Government-wide Financial Statements One of the most important questions asked about the Village's finances is, is the Village as a whole better off or worse than the year before? The statement of Net Position and the Statement of Activities report information that helps answer that question. The statements include assets, deferred outflows of resources, liabilities and deferred inflows of resources. The Village uses an accrual basis of accounting. The current year's revenues and expenses are taken into account regardless of when cash is received or paid. Net Position is the difference between what the citizens own and what the citizens owe in liabilities at one moment in time. Over time, increases or decreases in the Village's Net Position are one indicator of whether its financial health is improving or not. Other nonfinancial factors play a significant role in determining the Village's overall position, such as changes in the property tax base and the conditions of the Village's capital assets (roads, buildings, water and sewer lines, etc.). Two types of activities are reported in the Statement of Net Position and the Statement of Activities: Governmental activities - Incudes most of the Village's basic services, such as police, fire, street maintenance, parks, library and general administration. These services are supported primarily by property taxes, state revenues and other miscellaneous revenues (inspection fees, fines, permits). Business-type activities - Water and Wastewater services. The Village charges a fee to customers to cover most of the cost of water and sanitary sewer utility services. Reporting the Village's Most Significant Funds - Fund Financial Statements The analysis of the Village's major funds provides detailed information about the most significant funds. Some funds are required to be established by state law and bond covenants. However, the Village establishes other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants and other money (like donations). The Village's three kinds of funds, governmental funds, proprietary funds and fiduciary funds use different accounting approaches. Page 86 of 345 Village of Germantown Management's Discussion and Analysis December 31, 2025 (Unaudited) xiv Governmental Funds - Most of the Village's basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the Village's general operations and the basic services it provides. Governmental fund information helps the user determine whether there are more or fewer financial resources available to finance the Village's programs in the future. Reconciliations between the government-wide statements and the governmental fund statements are provided with the fund financial statements. The Village maintains twenty-two 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, Debt Service Fund, General Capital Projects, and TID No. 8 Capital Projects Fund, which are considered major funds. Data from the remaining funds are combined into a single aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements later in this report. The basic governmental fund financial statements can be found on pages 3 - 8 of this report. Proprietary Funds - Proprietary funds are financed and reported in a manner similar to normal business- type entities and are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. The Village's enterprise funds (a component of proprietary funds) are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information such as cash flows for proprietary funds. The Village's Water and Sewer Utilities are a part of this. The Village also has an internal service fund (the other component of proprietary funds) to report employee self-insurance activities. The basic proprietary fund financial statements can be found on pages 9 - 13 of this report. Fiduciary Funds - Fiduciary Funds are used to account for resources held for the benefit of parties other than the Village. These funds are not available to fund Village activities and are not reflected in the government-wide financial statements. The Village maintains one fiduciary fund, the Tax Collection Fund which records the tax roll and tax collections for the taxing jurisdictions within the Village. It records the assets collected on behalf of other taxing units. Notes to the Financial Statements - The notes to the financial statements provide additional detail 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 begin on page 17 of this report. Supplementary Information - Following the basic government-wide and fund financial statements and accompanying notes, combining statements are included for the nonmajor governmental, enterprise and internal service funds. The last section of The Village of Germantown Annual Comprehensive Financial Report presents statistical and historical reference data. Page 87 of 345 Village of Germantown Management's Discussion and Analysis December 31, 2025 (Unaudited) xv Government-Wide Financial Analysis Net Position Net Position may serve over time as a useful indicator of a government's financial position. In the case of the Village of Germantown, total net position was approximately $159.1 million as of December 31, 2025. The largest portion of the Village's net position (90.5%) reflects its investment in capital assets (e.g. land, building, equipment, improvements, construction in progress and infrastructure) less any outstanding debt used to acquire those assets. The Village uses these assets to provide service to citizens; consequently, these assets are not available for future spending. It should be noted that the resources needed to pay debt related to capital assets must be provided from other sources, since the capital assets themselves will not be used to liquidate these liabilities. Another portion of the Village's net position (3.9%) represents resources that are subject to external restrictions on how they may be used. The remaining unrestricted net position will be discussed in later sections of this analysis. Net position of the Village as a whole decreased $0.33 million from 2024. Village of Germantown Condensed Statement of Net Position (in millions of dollars) ∗ Net investment in capital assets and unrestricted net position for the primary government includes an adjus tment. See Note 1 for more information. 2025 2024 2025 2024 2025 2024 Assets Capital Assets 128.39$ 125.42$ 108.71$ 109.05$ 237.10$ 234.47$ Other Assets 44.00 35.26 9.90 10.96 53.90 46.22 Total assets 172.39 160.68 118.60 120.01 291.00 280.69 Deferred Outflows of Resources 6.89 8.47 0.66 0.76 7.54 9.23 Liabilities Noncurrent liabilities 86.40 77.82 16.74 16.67 103.14 94.49 Other liabilities 5.23 5.52 1.07 1.25 6.30 6.77 Total liabilites 91.63 83.34 17.81 17.92 109.44 101.26 Deferred inflows of resources 29.35 28.50 0.61 0.70 29.97 29.20 Net Position Net Inv estment in capital assets* 52.78 57.30 92.21 94.29 131.34 137.33 Restricted 2.30 1.66 1.59 1.63 3.89 3.29 Unrestricted* 3.22 (1.66) 7.04 6.24 23.90 18.84 Total net positon 58.30$ 57.31$ 100.84$ 102.16$ 159.13$ 159.47$ Governmental Business-Type Total Primary Activities Activities Government Page 88 of 345 Village of Germantown Management's Discussion and Analysis December 31, 2025 (Unaudited) xvi Changes in Net Position During 2025, the net position of governmental activities increased by $0.99 million to $58.30 million, mainly due to an increase in property tax revenue, offset by an increase in expenses. Net position of business-type activities totaled $100.84 million as of December 31, 2025, $1.32 million lower than 2024. Net investment in capital assets decreased by $2.08 million. Also shown are other restricted uses for impact fees, debt service and equipment replacement. Revenues The Statement of Activities on page 2 will show that Program Revenues in the Governmental Activities were $9.55 million and Business-type Activities were $11.50 million in 2025. The increase of $1.39 million in Governmental Activities and decrease of $1.29 million for Business-type activities from 2024 was mainly due to more capital contributions received in the current year for projects covered by the governmental funds, and less developer-added utility infrastructure than prior year. All general revenues other than program revenues, investment income and small miscellaneous amounts are reported as general revenues. Tax revenue, the largest portion of general revenues, increased by $2.93 million from the prior year to $23.08 million. Transfers shown between Governmental Activities and Business-type Activities is $0.10 million. Expenses Total expenses of $48.03 million are an increase of $4.63 million from 2024. Governmental Activities increased $4.62 million, mainly due to increases in general government and public works expenses. The increase to expenses in the Business-type Activities was $0.01 million, mainly due to increases in operating expenses for both water and sewer utility. Page 89 of 345 Village of Germantown Management's Discussion and Analysis December 31, 2025 (Unaudited) xvii Village of Germantown 2025 2024 2025 2024 2025 2024 Revenues Program revenues: Charges for Services 4.39$ 4.00$ 10.83$ 11.10$ 15.21$ 15.11$ Operating grants and contributions 2.63 2.33 - 0.46 2.63 2.79 Capital grants and constributions 2.53 1.82 0.67 1.23 3.21 3.04 General revenues: Property taxes 23.08 20.14 - - 23.08 20.14 Intergovernmental revenues 1.97 1.96 - - 1.97 1.96 Inv estment income 0.61 0.98 0.30 0.47 0.91 1.45 Other 0.67 0.57 0.02 0.02 0.69 0.59 Total revenues 35.87 31.80 11.83 13.28 47.69 45.08 Expenses General government 3.64 3.16 - - 3.64 3.16 Public Safety 13.49 10.98 - - 13.49 10.98 Public Works 8.79 9.07 - - 8.79 9.07 Culture and recreation 4.38 3.90 - - 4.38 3.90 Conservation and development 1.79 0.70 - - 1.79 0.70 Interest and fiscal charges 2.90 2.55 - - 2.90 2.55 Water Utility - - 4.75 4.03 4.75 4.03 Sewer Utility - - 8.30 9.00 8.30 9.00 Total expenses 34.98 30.36 13.046 13.033 48.03 43.40 Transfers 0.10 (3.43) (0.10) 3.43 - - Change in net position 0.99 (1.99) (1.32) 3.68 (0.33) 1.69 Net Position, Beginning 57.31 59.30 102.17 98.49 159.46 157.77 Net Position, Ending 58.29$ 57.31 $ 100.85 $ 102.17 $ 159.13 $ 159.46 $ Changes in Net Position (in millions of dollars) Governmental Business-Type Total Primary Activities Activities Government Page 90 of 345 Village of Germantown Management's Discussion and Analysis December 31, 2025 (Unaudited) xviii Governmental Funds Program and General Revenues by source Page 91 of 345 Village of Germantown Management's Discussion and Analysis December 31, 2025 (Unaudited) xix Business-Type Activities - Enterprise Funds Program Revenues by source Page 92 of 345 Village of Germantown Management's Discussion and Analysis December 31, 2025 (Unaudited) xx Fund Financial Analysis Water Utility The Water Utility reported a loss before contributions and transfers of $1.05 million. Operating revenues Increase from prior year to $3.53 million. Operating expenses increased $0.68 million, mainly due to increase in maintenance and supply costs. Capital contributions vary widely from year-to-year since they are dependent on the completion of developer and Village projects. There were developer contributions of $0.27 million and village contributions of $0.40 million. The ending net position of the Water Utility is $39.10 million. The Village maintains six wells and four water towers within its corporate boundaries. The Village has plans to begin construction of a new well in the northern part of the Village. The Village has a Water Impact Fee of $832 per residential equivalency, charged for new construction. $83,770 was collected in 2025 from single and multi-family homes and new business construction. These fees help cover ongoing maintenance and other improvements to the system. Sewer Utility The Sewer Utility reported a loss before contributions and transfers of $0.77 million for 2025. Its overall net position decreased by $0.17 million to end the year to $61.58 million which included capital contributions of $0.67 million. Total operating income remained stable, with a $0.23 million decrease. Capital contributions of $0.67 million of which $0.27 million were village contributions and $0.40 million in sewer connection fees. The sewer connection fee is a charge for new connections to the system. These fees help cover ongoing maintenance and other improvements to the system. 2025 2024 Change Operating revenues 3.53$ 3 .32$ 0.22$ Operating expenses 4.40 3.72 0.68 Operating income (loss) (0.87) (0.40) (0.46) Nonoperating revenues (expenses) (0.18) (0.04) (0.14) Capital contributions 0.68 3.84 (3.16) Transfers out, tax equivalent (0.77) (0.65) (0.12) Change in net position (1.15) 2.75 (3.42) Net Position, Beginning 40.25 37.50 2.75 Net Position, Ending 39.10$ 4 0.25$ (1.15)$ Water Utility Activity Summary (in millions of dollars) Page 93 of 345 Village of Germantown Management's Discussion and Analysis December 31, 2025 (Unaudited) xxi The Village contracts with Milwaukee Metropolitan Sewerage District for its sewage treatment. Charges from MMSD for treatment and their annual capital charge remain the utility's largest expense accounting for 67.8% of the operating expenses, or $5.47 million. The capital charge is based on the equalized value of properties within the sewer service area. Governmental Funds As of December 31, 2025, Village governmental funds reported a combined fund balance of $12.62 million. The nonspendable, restricted, committed or assigned portion is $11.91 million. A majority of that is restricted to ongoing capital expenditures and debt service, impact fees or other special revenue funds, used as fund purposes allow. The remaining balance, an unassigned balance of $0.71 million, is comprised of the General Fund unassigned fund balance and deficit fund balances within a few funds, largest of which includes TID No. 7, TID No. 8, and TID. No. Capital Projects Funds. Most of the total fund balance in the Governmental Funds is in the General Fund, $6.05 million, General Capital Projects Fund, $7.18 million, or in Nonmajor Governmental Funds, $1.13 million. General Fund The General Fund's net change in fund balance is an increase of $0.03 million, with an ending fund balance of $6.05 million. After adjusting for nonspendable and assigned portions for the general fund, the unassigned fund balance at year end was $4.72 million, 20.7% of the Village's subsequent year general fund expenditure budget. The Village's fund balance policy endeavors to maintain a working capital balance of 16-25% of the subsequent years expense budget. The excess unassigned amount over the 25% policy percentage may be used to offset future borrowing costs of major infrastructure renovations planned in future years. 2025 2024 Change Operating revenue 7.30$ 7 .78$ (0.49)$ Operating expenses 8.07 8.33 (0.26) Operating income (loss) (0.77) (0.54) (0.23) Nonoperating revenues (expenses) (0.06) (0.05) (0.01) Capital contributions 0.67 1.47 (0.81) Change in net position (0.17) 0.88 (1.06) Net Position, Beginning 61.76 60.87 0.88 Net Position, Ending 61.58$ 6 1.76$ (0.17)$ (in millions of dollars) Sewer Utility Activity Summary Page 94 of 345 Village of Germantown Management's Discussion and Analysis December 31, 2025 (Unaudited) xxii The General Fund is the primary operating fund used to account for the governmental operations of the Village of Germantown. Total revenues ended the year at $22.52 million, a $1.77 million increase from 2024. The largest revenue sources for the General fund are general property and other taxes accounting for $13.39 million or 0.59% of total revenues. The Village had higher investment income in 2025 than budgeted. This was mostly due to improved markets in 2025. General Fund expenditures for 2025 of $23.26 million increased approximately $2.43 million from 2024. Actual expenditures were $0.56 million more than budgeted. Debt Service Fund Debt Service Fund has a total fund balance of $1.02 million, all of which is restricted for the payment of debt service. Annual debt service requirements were met primarily by property taxes levied of $4.82 million. Expenditures for principal and interest and fiscal charges totaled $5.22 million. General Capital Projects The General Capital Projects Fund has a total fund balance of $7.18 million, an increase of $8.99 million from 2024. The change in fund balance is mainly due to debt proceeds in the current year of $12.22 million. TID No. 8 Capital Projects Tax Increment District No. 8 was created in July 2018. This industrial TID encompasses 224.8 acres which is broken into two development areas, the property controlled by the Zilber Property Group is approximately 151.3 acres and remaining 73.5 acres will be developed by the Village. The Tax Increment District is located in the northern section of the Village bounded by Holy Hill Road, Goldendale Road, Rockfield Road and US Hwy 41/45. The project plan consists of watermain and sewer main extension, site grading, storm water management, road construction, new municipal well, water tower and booster station. It has a fund balance deficit of $2.76 million. The capital expenditures related to project plan projects were more than current year revenue by $2.93 million. Nonmajor Governmental Funds Tax Incremental District No. 6, Willow Creek Business Park, was created in 2014 as a mixed-use business park suitable for industrial and commercial purposes. The estimated saleable property consisted of fifty-two acres. The Project Plan included site grading, sanitary sewer and water systems, stormwater management, street improvements, landscaping and other site improvement infrastructure and related costs. All internal infrastructure has been completed other than a final lift of asphalt. The park currently has three buildings, Discount Ramps, Ryan Companies multi-tenant building and Metro Cigars. The total fund balance is $0.38 million, an increase of $0.25 million from 2024. In December 2017, the Village created Tax Incremental District No. 7, an industrial TID that encompasses 144.2 acres of land which is owned by the J.W. Speaker Corporation. One section of the district includes the original J.W. Speaker facility and the other area of vacant land to be developed by J.W. Speaker. The project plan also includes the extension of municipal water and sewer main from Freistadt Road North along Goldendale Road approximately 2,400 feet where it meets the Wisconsin & Southern Rail line. Speaker constructed internal roadway, water and sewer main and landscaping for their future building projects, the District will reimburse a portion of that cost up to $708,000 with future tax increment. The total fund deficit is $0.68 million, a decrease of $0.09 million in fund balance from 2024. Page 95 of 345 Village of Germantown Management's Discussion and Analysis December 31, 2025 (Unaudited) xxiii In June 2022, the Village created Tax Incremental District No. 9, an industrial TID that comprises of approximately 38.15 acres located at the intersection of Donges Bay Road and Wasaukee Road. The district was created to pay the costs of land acquisition and public infrastructure needed to be developed by a potential future developer. In addition, the Village expects the project will result in public infrastructure that will be needed for future construction of the planned Department of Public Works facility. In November 2022, the Village approved an amendment that added territory and amend project costs. The fund deficit at the end of the year was $0.57 million, a decrease of 0.15 million in fund balance from 2024. The Village has fourteen Special Revenue funds and two other Capital Project fund in the Nonmajor Governmental Fund section which are specifically earmarked for a single purpose and are either restricted or committed. Four of these are Impact Fee funds; Police, Fire, Parks & Recreation and Library Impact fees are imposed on new construction to fund all or a portion of the costs of providing public services to the new development. The Impact Fee Funds had little fund balance growth due to the residential and commercial activity in 2025 being offset by related expenditures, increasing to $0.79 million from 2024. The other Special Revenue Funds are the Senior Van Replacement, Police Asset Forfeiture, Police Canine, Police Honor Guard, Historic Preservation, Recreation Department Facility Fees, Library, Fire Explorer Fund, ARPA, and the Property Maintenance fund. The nonmajor capital project funds include the Library capital projects fund, which was created in 2024, and the Capital Reserve fund, which was created in 2025 to track capital projects funded by reserves. Details can be found in the supplemental section of this report within the Combining Balance Sheet - Nonmajor Governmental Funds, and the Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds. The combined total fund balance of these funds at year-end is $0.34 million. Excess Expenditures and Other Financing Uses Over Appropriations Several funds have been identified as having excess expenditures and other financing uses over budget. See Note 2 for a list of funds exceeding budgeted expenditures during 2025. Proprietary Funds The Water and Sewer Utilities were discussed on previous pages. The Health and Dental Protection Funds are Self-Funded employee insurance plans with Third- Party Administrators. The funds maintained positive cash flow ending the year at $1.39 million. Health and dental coverage costs are monitored closely and changes to the design and scope of the plan are adjusted accordingly. Custodial Fund The Village acts as a custodian for property taxes collected on behalf of the other taxing units; The State of Wisconsin, Washington County, Germantown School District and Milwaukee Area Technical College. All of the Village's fiduciary activities are reported in the Statement of Fiduciary Net Position on page 14 and Statement of Changes in Fiduciary Net Position on page 15. Page 96 of 345 Village of Germantown Management's Discussion and Analysis December 31, 2025 (Unaudited) xxiv Capital Assets and Debt Capital Assets As of December 31, 2025, the Village had $245.45 million (net of accumulated depreciation) invested in a broad range of capital assets including buildings, equipment, and infrastructure. (See table below) Significant Additions to Capital Assets in 2025 • Infrastructu re $2,434,585 • Construction work in progress related to High Point Pass $1,949,304 • Construction work in progress relate to Well #12 $1,874,226 Capital Assets (Net of Accumulated Depreciation) (in millions of dollars) Governmental Activities Business-Type Activities 2025 2024 2025 2024 Cons truction in progress $ 7.47 $ 3.90 $ 0.69 $ 0.30 Land 15.63 15.63 0.18 0.18 Buildings and improvements 36.02 36.70 12.90 13.16 Machinery and equipment 6.82 6.81 2.89 3.07 Infrastructure 62.45 62.38 92.05 92.34 Total $ 128.39 $ 125.42 $ 108.71 $ 109.05 Additional Informatio n about the Village's capital assets can be found in Note 3 of this report. Long-Term Debt As of December 31, 2025, the outstanding debt for long-term general obligations, revenue bonds and safe drinking water loans totaled $96.92 million. Principal paid on outstanding debt totaled $5.68 million. Village of Germantown's Outstanding Debt Governmental Activities Business-Type Activities 2025 2024 2025 2024 Gene ral obligation debt $ 81,020,000 $ 73,105,000 $ 11,340,000 $ 11,875,000 Revenue bonds - - 4,555,978 3,948,160 Total $ 81,020,000 $ 73,105,000 $ 15,895,978 $ 15,823,160 In accord ance with Wisconsin Statutes, total general obligation indebtedness of the Village may not exceed 5% of the equalized value of all taxable property within the Village's jurisdiction. The debt limit as of December 31, 2025, was $221,232,745. Total General Obligation debt outstanding was $92,360,000. Additional information about the Village's long-term obligations can be found in Note 3 of this report. Page 97 of 345 Village of Germantown Management's Discussion and Analysis December 31, 2025 (Unaudited) xxv Economic Factors and Next Year's Budgets and Rates On May 21, 2026, the Village issued general obligation promissory notes in the amount of $17,170,000 with an interest rate of 5.00%. This amount will be used to finance capital improvements. All other currently known facts have been considered in the preparation of the subsequent year's budget. Requests for Information This financial report is designed to provide our citizens, taxpayers, customers and creditors with a general overview of the Village's finances and to show the Village's accountability for the money it receives. The Village of Germantown provides its Annual Comprehensive Financial Report on our web page (www.germantownwi.gov) under the Finance Department's Financial Reports Section. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Village Administrator, N112 W17001 Mequon Road, P.O. Box 337, Germantown, WI 53022. Finance Department staff can also be reached at 262-250-4700 or email: muselding@germantownwi.gov . Page 98 of 345 %$6,&),1$1&,$/67$7(0(176 Page 99 of 345 Village of Germantown Statement of Net Position December 31, 2025 Governmental Activities Business-Type Activities Total Assets and Deferred Outflows of Resources Assets Cash and investments $ 7,883,972 $ 4,414,104 $ 12,298,076 Receivables (net): Taxes 23,831,526 - 23,831,526 Accounts 1,069,950 3,073,673 4,143,623 Delinquent taxes 85,530 - 85,530 Accrued interest 644 - 644 Leases 2,060,537 - 2,060,537 Internal balances (782,707) 782,707 - Prepaid items 862 13,878 14,740 Restricted assets: Cash and investments 788,029 1,611,674 2,399,703 Accrued interest - 1,066 1,066 Land held for resale 9,062,646 - 9,062,646 Capital assets: Land 15,629,920 175,599 15,805,519 Construction in progress 7,470,858 688,060 8,158,918 Capital assets, net of depreciation 105,291,409 107,841,469 213,132,878 Total assets 172,393,176 118,602,230 290,995,406 Deferred Outflows of Resources Pension related amounts 6,887,472 656,047 7,543,519 Total deferred outflows of resources 6,887,472 656,047 7,543,519 Liabilities, Deferred Inflows of Resources and Net Position Liabilities Accounts payable and accrued expenses 3,385,414 886,338 4,271,752 Accrued interest 1,202,068 180,315 1,382,383 Unearned revenues 306,922 - 306,922 Deposits 338,933 - 338,933 Noncurrent liabilities: Due within one year 5,213,914 964,393 6,178,307 Due in more than one year 80,045,087 15,689,948 95,735,035 Net pension liability 1,137,803 90,470 1,228,273 Total liabilities 91,630,141 17,811,464 109,441,605 Deferred Inflows of Resources Property taxes levied for subsequent year 23,830,057 - 23,830,057 Pension related amounts 3,464,093 611,440 4,075,533 Lease related amounts 2,060,537 - 2,060,537 Total deferred inflows of resources 29,354,687 611,440 29,966,127 Net Position Net investment in capital assets 52,779,442 92,208,228 131,343,299 Restricted for: Debt service - 761,707 761,707 Impact fees 788,029 484,535 1,272,564 Librar y 1,030,514 - 1,030,514 Capital projects 101,256 - 101,256 Equipment replacement - 345,296 345,296 TIF purposes 376,779 - 376,779 Unrestricted 3,219,800 7,035,607 23,899,778 Total net position $ 58,295,820 $ 100,835,373 $ 159,131,193 See notes to financial statements 1 Page 100 of 345 Village of Germantown Statement of Activities Year Ended December 31, 2025 Program Revenues Net (Expenses) Revenues and Changes in Net Position Functions/Programs Expenses Charges for Services Operating Grants and Contributions Capital Grants and Contributions Governmental Activities Business-Type Activities Total Governmental activities: General government $ 3,637,663 $ 564,669 $ 153,182 $ - $ (2,919,812) $- $ (2,919,812) Public safety 13,489,649 1,936,827 472,985 - (11,079,837) - (11,079,837) Public works 8,789,098 300,832 1,614,583 2,018,032 (4,855,651) - (4,855,651) Culture, education and recreation 4,383,223 1,583,011 388,898 513,875 (1,897,439) - (1,897,439) Conservation and development 1,789,217 - - - (1,789,217) - (1,789,217) Interest and fiscal charges 2,895,989 - - - (2,895,989) - (2,895,989) Total governmental activities 34,984,839 4,385,339 2,629,648 2,531,907 (25,437,945) - (25,437,945) Business-type activities: Water Utility 4,745,065 3,533,618 - 274,142 - (937,305) (937,305) Sewer Utility 8,300,477 7,295,764 - 399,397 - (605,316) (605,316) Total business-type activities 13,045,542 10,829,382 - 673,539 - (1,542,621) (1,542,621) Total $ 48,030,381 $ 15,214,721 $ 2,629,648 $ 3,205,446 (25,437,945) (1,542,621) (26,980,566) General Revenues Taxes: Property taxes, levied for general purposes 12,826,555 - 12,826,555 Property taxes, levied for debt service 4,823,265 - 4,823,265 Property taxes, levied for TIF districts 4,828,718 - 4,828,718 Other taxes 599,160 - 599,160 Intergovernmental revenues not restricted to specific programs 1,966,049 - 1,966,049 Investment income 606,232 304,549 910,781 Miscellaneous 672,482 18,632 691,114 Total general revenues 26,322,461 323,181 26,645,642 Transfers 102,879 (102,879) - Change in net position 987,395 (1,322,319) (334,924) Net Position, Beginning 57,308,425 102,157,692 159,466,117 Net Position, Ending $ 58,295,820 $ 100,835,373 $ 159,131,193 See notes to financial statements 2 Page 101 of 345 Village of Germantown Balance Sheet - Governmental Funds December 31, 2025 General Fund Debt Service Fund General Capital Projects TID No. 8 Capital Projects Fund Assets Cash and investments $ 3,633,356 $ 1,024,180 $ - $ - Receivables (net): Taxes 13,103,793 4,908,320 - 3,543,725 Accounts 978,876 - 10,923 - Leases 1,031,396 1,029,141 - - Delinquent taxes 85,530 - - - Accrued interest --- - Due from other funds 2,767,793 - - - Advances to other funds 363,817 - - - Prepaid items 862 - - - Restricted assets: Cash and investments - - - - Land held for resale - - 9,062,646 - Total assets $ 21,965,423 $ 6,961,641 $ 9,073,569 $ 3,543,725 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities Accounts payable $ 356,756 $ - $ 1,571,379 $ 347,701 Accrued liabilities 726,412 - - 3,212 Unearned revenues 70,771 - - - Deposits 338,933 - - - Due to other funds - - 311,094 2,409,375 Advances from other funds - - - - Total liabilities 1,492,872 - 1,882,473 2,760,288 Deferred Inflows of Resources Property taxes levied for subsequent year 13,102,324 4,908,320 - 3,543,725 Lease related amounts 1,031,396 1,029,141 - - Unavailable revenues 289,544 - 10,923 - Total deferred inflows of resources 14,423,264 5,937,461 10,923 3,543,725 Fund Balances (Deficit) Nonspendable 450,209 - - - Restricted - 1,024,180 3,233,998 - Committed - - - - Assigned 875,639 - 3,946,175 - Unassigned (deficit) 4,723,439 - - (2,760,288) Total fund balances (deficit) 6,049,287 1,024,180 7,180,173 (2,760,288) Total liabilities and fund balances $ 21,965,423 $ 6,961,641 $ 9,073,569 $ 3,543,725 See notes to financial statements 3 Page 102 of 345 Nonmajor Governmental Funds Total $ 1,833,632 $ 6,491,168 2,275,688 23,831,526 1,077 990,876 - 2,060,537 - 85,530 644 644 - 2,767,793 - 363,817 - 862 788,029 788,029 - 9,062,646 $ 4,899,070 $ 46,443,428 $ 204,130 $ 2,479,966 5,465 735,089 236,151 306,922 - 338,933 47,324 2,767,793 998,817 998,817 1,491,887 7,627,520 2,275,688 23,830,057 - 2,060,537 - 300,467 2,275,688 26,191,061 - 450,209 2,296,578 6,554,756 89,162 89,162 - 4,821,814 (1,254,245) 708,906 1,131,495 12,624,847 $ 4,899,070 $ 46,443,428 See notes to financial statements 4 Page 103 of 345 Village of Germantown Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position December 31, 2025 Total Fund Balances, Governmental Funds $ 12,624,847 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental funds are not financial resources and therefore are not reported in the funds. Land 15,629,920 Construction in progress 7,470,858 Other capital assets 174,018,845 Less accumulated depreciation (68,727,436) Some receivables that are not currently available are reported as unavailable revenues in the fund financial statements but are recognized as revenue when earned in the government-wide statements. 300,467 The net pension liability does not relate to current financial resources and is not reported in the governmental funds. (1,137,803) Deferred outflows of resources related to pensions do not relate to current financial resources and are not reported in the governmental funds. 6,887,472 Deferred inflows of resources related to pensions do not relate to current financial resources and are not reported in the governmental funds. (3,464,093) Internal service funds are reported in the Statement of Net Position as governmental activities. 1,301,519 Internal service fund internal payable between governmental and business-type activities. (147,707) Some liabilities, including long-term debt, are not due and payable in the current period and, therefore, are not reported in the funds. Bonds and notes payable (81,020,000) Compensated absences (1,573,177) Accrued interest (1,202,068) Unamortized debt premium (2,665,824) Net Position of Governmental Activities $ 58,295,820 See notes to financial statements 5 Page 104 of 345 Village of Germantown Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Year Ended December 31, 2025 General Fund Debt Service Fund General Capital Projects TID No. 8 Capital Projects Fund Revenues Taxes $ 13,388,151 $ 4,823,265 $ - $ 3,022,033 Intergovernmental 4,338,403 - 1,506,459 19,945 Regulation and compliance 1,192,373 - - - Public charges for services 2,619,562 - - - Intergovernmental charges for services 173,635 - - - Investment income 270,553 65,170 132,525 5,281 Miscellaneous 536,716 152,023 41,906 206,700 Total revenues 22,519,393 5,040,458 1,680,890 3,253,959 Expenditures Current: General government 2,870,293 - - - Public safety 12,259,301 - - - Public works 3,965,483 - - - Culture and recreation 3,545,729 - - - Conservation and developmen t 420,866 - - 224,873 Capital outlay 194,191 - 4,749,210 4,782,294 Debt service: Principal - 3,530,000 - 680,000 Interest and fiscal charges - 1,690,469 - 499,533 Debt issuance costs - 801 225,205 - Total expenditures 23,255,863 5,221,270 4,974,415 6,186,700 Excess (deficiency) of revenues over expenditures (736,470) (180,812) (3,293,525) (2,932,741) Other Financing Uses General obligation debt issued - 485,136 12,224,864 - Premium on debt issued - 278,206 33,835 - Transfers in 770,758 - 29,271 - Transfers out - - - - Total other financing uses 770,758 763,342 12,287,970 - Net change in fund balances 34,288 582,530 8,994,445 (2,932,741) Fund Balances (Deficit), Beginning 6,014,999 441,650 (1,814,272) 172,453 Fund Balances (Deficit), Ending $ 6,049,287 $ 1,024,180 $ 7,180,173 $ (2,760,288) See notes to financial statements 6 Page 105 of 345 Nonmajor Governmental Funds Total $ 1,806,685 $ 23,040,134 561,197 6,426,004 - 1,192,373 167,338 2,786,900 - 173,635 132,641 606,170 26,272 963,617 2,694,133 35,188,833 29,626 2,899,919 5,993 12,265,294 2,621 3,968,104 63,057 3,608,786 227,507 873,246 963,438 10,689,133 585,000 4,795,000 503,815 2,693,817 - 226,006 2,381,057 42,019,305 313,076 (6,830,472) - 12,710,000 - 312,041 - 800,029 (29,271) (29,271) (29,271) 13,792,799 283,805 6,962,327 847,690 5,662,520 $ 1,131,495 $ 12,624,847 See notes to financial statements 7 Page 106 of 345 Village of Germantown 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 Net Change in Fund Balances, Total Governmental Funds $ 6,962,327 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 net position the cost of these assets is capitalized and they are depreciated over their estimated useful lives and reported as depreciation expense in the Statement of Activities. Capital outlay is reported as an expenditure in the fund financial statements but is capitalized in the government-wide financial statements 10,689,133 Some items reported as capital outlay were not capitalized (3,420,739) Adjustment for assets transferred to utility funds (667,879) Contributed capital assets are reported as revenues in the government-wide financial statements 959,928 Depreciation is reported in the government-wide financial statements (4,584,731) Receivables not currently available are reported as revenue when collected or currently available in the fund financial statements but are recognized as revenue when earned in the government-wide financial statements. 31,854 Debt issued provides current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. Debt issued (12,710,000) Principal repaid 4,795,000 Governmental funds report debt premiums and discounts as other financing sources (uses) or financing sources or uses. However, in the Statement of Net Position, these are reported as additions to or deductions from long-term debt. These are allocated over the period the debt is outstanding in the Statement of Activities and are reported as interest expense. Premium on debt issued (312,041) Amortization of debt premium 270,149 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. Compensated absences (455,412) Accrued interest on debt (246,315) Net pension asset/liability (168,632) Deferred outflows of resources related to pensions (1,586,128) Deferred inflows of resources related to pensions 1,432,196 Internal service fund are reported in the Statement of Net Position as governmental activities. (1,497) Internal service fund internal payable between governmental and business-type activities. 182 Change in Net Position of Governmental Activities $ 987,395 See notes to financial statements 8 Page 107 of 345 Village of Germantown Statement of Net Position - Proprietary Funds December 31, 2025 Business-Type Activities - Enterprise Funds Water Utility Sewer Utility Total Governmental Activities - Internal Service Funds Assets Current assets: Cash and investments $ 181,194 $ 4,232,910 $ 4,414,104 $ 1,392,804 Accounts receivable 1,039,109 2,034,564 3,073,673 79,074 Prepaid items 13,878 - 13,878 - Current portion of advances 55,000 - 55,000 - Restricted assets: Redemption account 317,253 - 317,253 - Total current assets 1,606,434 6,267,474 7,873,908 1,471,878 Noncurrent assets: Restricted assets: Reserve account 414,000 - 414,000 - Depreciation account 50,590 - 50,590 - Equipment replacement account - 345,296 345,296 - Impact fees 484,535 - 484,535 - Accrued interest receivable 1,066 - 1,066 - Capital assets: Land 140,450 35,149 175,599 - Construction in progress 609,543 78,517 688,060 - Plant in service 65,108,808 83,927,346 149,036,154 - Less accumulated depreciation (19,808,632) (21,386,053) (41,194,685) - Other assets: Advances to other funds 580,000 - 580,000 - Total noncurrent assets 47,580,360 63,000,255 110,580,615 - Total assets 49,186,794 69,267,729 118,454,523 1,471,878 Deferred Outflows of Resources Pension related amounts 300,033 356,014 656,047 - Total deferred outflows of resources 300,033 356,014 656,047 - See notes to financial statements 9 Page 108 of 345 Village of Germantown Statement of Net Position - Proprietary Funds December 31, 2025 Business-Type Activities - Enterprise Funds Water Utility Sewer Utility Total Governmental Activities - Internal Service Funds Liabilities Current liabilities: Accounts payable $ 115,409 $ 721,794 $ 837,203 $ 170,359 Accrued wages 27,895 21,240 49,135 - Accrued interest 77,127 81,986 159,113 - Current portion of general obligation debt 255,000 295,000 550,000 - Current portion of compensated absences 16,453 12,119 28,572 - Liabilities payable from restricted assets: Current portion of revenue bonds payable 385,821 - 385,821 - Accrued interest payable 21,202 - 21,202 - Total current liabilities 898,907 1,132,139 2,031,046 170,359 Noncurrent liabilities: Long-term debt: Revenue bonds payable 4,170,157 - 4,170,157 - General obligation debt payable 4,700,000 6,090,000 10,790,000 - Unamortized premium 332,625 268,297 600,922 - Other liabilities: Compensated absences 56,375 72,494 128,869 - Net pension liability 50,025 40,445 90,470 - Total noncurrent liabilities 9,309,182 6,471,236 15,780,418 - Total liabilities 10,208,089 7,603,375 17,811,464 170,359 Deferred Inflows of Resources Pension related amounts 175,923 435,517 611,440 - Total deferred inflows of resources 175,923 435,517 611,440 - Net Position Net investment in capital assets 36,206,566 56,001,662 92,208,228 - Restricted for: Debt service 761,707 - 761,707 - Impact fees 484,535 - 484,535 - Equipment replacement - 345,296 345,296 - Unrestricted 1,650,007 5,237,893 6,887,900 1,301,519 Total net position $ 39,102,815 $ 61,584,851 100,687,666 $ 1,301,519 Adjustments to reflect the consolidation of internal service funds activities related to enterprise funds 147,707 Net position business-type activities $100,835,373 See notes to financial statements 10 Page 109 of 345 Village of Germantown Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds Year Ended December 31, 2025 Business-Type Activities - Enterprise Funds Water Utility Sewer Utility Total Governmental Activities - Internal Service Funds Operating Revenues Charges for services $ - $ 7,295,764 $ 7,295,764 $ - Sale of water 3,496,596 - 3,496,596 - Other 37,022 - 37,022 2,766,309 Total operating revenues 3,533,618 7,295,764 10,829,382 2,766,309 Operating Expenses Operation and maintenance 3,141,823 6,944,331 10,086,154 2,767,868 Depreciation 1,262,574 1,125,450 2,388,024 - Total operating expenses 4,404,397 8,069,781 12,474,178 2,767,868 Operating income (loss) (870,779) (774,017) (1,644,796) (1,559) Nonoperating Revenues (Expenses) Investment income 139,360 165,189 304,549 62 Miscellaneous nonoperating income 17,601 1,031 18,632 - Interest and fiscal charges (340,570) (230,612) (571,182) - Total nonoperating revenues (expenses) (183,609) (64,392) (248,001) 62 Income (loss) before contributions and transfers (1,054,388) (838,409) (1,892,797) (1,497) Contributions and Transfers Capital contributions 274,142 399,397 673,539 - Capital contributions from municipality 402,074 265,805 667,879 - Transfers out, tax equivalent (770,758) - (770,758) - Total contributions and transfers (94,542) 665,202 570,660 - Change in net position (1,148,930) (173,207) (1,322,137) (1,497) Net Position, Beginning 40,251,745 61,758,058 102,009,803 1,303,016 Net Position, Ending $ 39,102,815 $ 61,584,851 100,687,666 $ 1,301,519 Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds (182) Change in net position of business-type activities $ (1,322,319) See notes to financial statements 11 Page 110 of 345 Village of Germantown Statement of Cash Flows - Proprietary Funds Year Ended December 31, 2025 Business-T ype Activities - Enterprise Funds Water Utility Sewer Utility Total Governmental Activities - Internal Service Funds Cash Flows From Operating Activities Received from customers $ 2,747,499 $ 8,262,846 $ 11,010,345 $ - Received from other funds for services 661,136 - 661,136 2,770,181 Paid to suppliers for goods and services (2,449,166) (6,390,396) (8,839,562) (2,644,136) Paid to employees for services (736,147) (630,252) (1,366,399) - Net cash flows from operating activities 223,322 1,242,198 1,465,520 126,045 Cash Flows From Investing Activities Investments sold and matured 99,876 1,295,397 1,395,273 - Investment income 144,311 179,998 324,309 3,974 Investments purchased (78,865) (1,884,316) (1,963,181) - Net cash flows from investing activities 165,322 (408,921) (243,599) 3,974 Cash Flows From Noncapital Financing Activities Paid to municipality for tax equivalent (770,758) - (770,758) - Net cash flows from noncapital financing activities (770,758) - (770,758) - Cash Flows From Capital and Related Financing Activities Acquisition and construction of capital assets (968,895) 1,707,311 738,416 - Capital contributions received 83,770 399,397 483,167 - Debt retired (601,107) (280,000) (881,107) - Interest paid (360,848) (251,657) (612,505) - Proceeds from debt issue 953,925 - 953,925 - Received on long-term advances 530,000 - 530,000 - Net cash flows from capital and related financing activities (363,155) 1,575,051 1,211,896 - Net change in cash and cash equivalents (745,269) 2,408,328 1,663,059 130,019 Cash and Cash Equivalents, Beginning 2,153,654 1,254,417 3,408,071 1,262,785 Cash and Cash Equivalents, Ending $ 1,408,385 $ 3,662,745 $ 5,071,130 $ 1,392,804 See notes to financial statements 12 Page 111 of 345 Village of Germantown Statement of Cash Flows - Proprietary Funds Year Ended December 31, 2025 Business-Type Activities - Enterprise Funds Water Utility Sewer Utility Total Governmental Activities - Internal Service Funds Reconciliation of Operating Income (Loss) to Net Cash Flows From Operating Activities Operating income (loss) $ (870,779) $ (774,017) $ (1,644,796) $ (1,559) Nonoperating revenue 17,601 1,031 18,632 - Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation 1,262,574 1,125,450 2,388,024 - Depreciation charged to other funds 61,724 - 61,724 - Changes in assets, deferred outflows, liabilities, and deferred inflows: Accounts receivable - 1,084,228 1,084,228 3,872 Due to other funds (204,308) (118,177) (322,485) - Accounts payable (67,798) (127,775) (195,573) 123,732 Other current liabilities 9,172 5,112 14,284 - Accrued sick leave (2,384) 24,669 22,285 - Pension related deferrals and liabilities 17,520 21,677 39,197 - Net cash flows from operating activities $ 223,322 $ 1,242,198 $ 1,465,520 $ 126,045 Reconciliation of Cash and Cash Equivalents to the Statement of Net Position, Proprietary Funds Unrestricted cash and investments $ 181,194 $ 4,232,910 $ 4,414,104 $ 1,392,804 Restricted cash and investments 1,266,378 345,296 1,611,674 - Total cash and investments 1,447,572 4,578,206 6,025,778 1,392,804 Less noncash equivalents (39,187) (915,461) (954,648) - Cash and cash equivalents $ 1,408,385 $ 3,662,745 $ 5,071,130 $ 1,392,804 Noncash Capital and Related Financing Activities Developer capital contributions $ 190,372 $ - Municipal additions to utility plant $ 402,074 $ 265,805 Amortization of debt premium $ 27,061 $ 17,021 See notes to financial statements 13 Page 112 of 345 Village of Germantown Statement of Fiduciary Net Position - Fiduciary Fund December 31, 2025 Custodial Fund Tax Collection Fund Assets Cash and investments $ 33,683,553 Tax roll receivable 7,973,807 Total assets 41,657,360 Liabilities Accounts payable 68,854 Due to other governments 41,588,506 Total liabilities 41,657,360 Net Position Total net position $- See notes to financial statements 14 Page 113 of 345 Village of Germantown Statement of Changes in Fiduciary Net Position - Fiduciary Fund Year Ended December 31, 2025 Custodial Fund Tax Collection Fund Additions Tax collections $ 28,911,655 Total additions 28,911,655 Deductions Tax distributions 28,911,655 Total deductions 28,911,655 Change in fiduciary net position - Net Position, Beginning - Net Position, Ending $- See notes to financial statements 15 Page 114 of 345 Village of Germantown Index to Notes to Financial Statements December 31, 2025 Page 1. Summary of Significant Accounting Policies 17 Reporting Entity 17 Government-Wide and Fund Financial Statements 17 Measurement Focus, Basis of Accounting and Financial Statement Presentation 19 Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position or Equity 21 Deposits and Investments 21 Receivables 22 Prepaid Items 22 Restricted Assets 23 Capital Assets 23 Other Assets 23 Deferred Outflows of Resources 24 Compensated Absences 24 Lon g-Term Obligations/Conduit Debt 24 Leases 24 Deferred Inflows of Resources 25 Equity Classifications 25 Pension 26 Basis for Existing Rates 27 2. Stewardship, Compliance and Accountability 27 Budgetary Information 27 Excess Expenditures and Other Financing Uses Over Budget 27 Deficit Balances 27 Limitations on the Village's Tax Levy 28 3. Detailed Notes on All Funds 28 Deposits and Investments 28 Receivables 30 Restricted Assets 31 Capital Assets 32 Interfund Receivables/Pa yables, Advances and Transfers 34 Long-Term Obligations 35 Lease Disclosures 39 Net Position/Fund Balances 40 4. Other Information 42 Employees' Retirement System 42 Risk Management 47 Commitments and Contingencies 49 Subsequent Event 49 Tax Abatement 49 Effect of New Accounting Standards on Current-Period Financial Statements 50 16 Page 115 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 1. Summary of Significant Accounting Policies The accounting policies of the Village of Germantown, Wisconsin (the Village) 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 Villa ge. The reporting entity for the Village 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 Villa ge has not identified any organizations that meet this criteria. 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 fiduciar y funds. The statements distinguish between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues and other nonexchange revenues. Business-t ype activities are financed in whole or in part by fees charged to external parties for goods or services. 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 Villa ge 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 Villa ge 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 Village 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. 17 Page 116 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 c. In addition, any other governmental or enterprise fund that the Village 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 Village reports the following major governmental funds: General Fund General Fund accounts for the Villa ge's primary operating activities. It is used to account for and report all financial resources except those accounted for and reported in another fund. 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 TID or enterprise debt. Capital Projects Funds General Capital Projects 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 capital projects program. Tax Incremental District (TID) No. 8 Capital Projects Fund is used to account for and report financial resources that are restricted, committed or assigned to expenditures outlined in the TID project plan. Enterprise Funds The Village reports the following major enterprise funds: Wate r Utility accounts for operations of the water system Sewer Utility accounts for operations of the sewer system The Village 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). Police Impact Fee Fund Fire Impact Fee Fund Librar y Impact Fee Fund Park and Recreation Impact Fee Fund Senior Van Replacement Fund Police Asset Forfeiture Fund Police Canine Fund Historic Preservation Fund Library Fund Recreation Facilities Fund Police Honor Guard Fund Fire Explorer Fund American Rescue Plan Act (ARPA) Fund Propert y Maintenance Fund 18 Page 117 of 345 Village of Germantown 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. Tax Incremental District (TID) No. 6 Tax Incremental District (TID) No. 9 Tax Incremental District (TID) No. 7 Library Capital Fund Capital Reserve Fund In addition, the Village 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 Village, or to other governmental units, on a cost-reimbursement basis. Health Insurance Fund Dental Insurance Fund Custodial Fund Custodial Fund is used to account for and report assets controlled by the Villa ge and the assets are for the benefit of individuals, private organizations and/or other governmental units. Tax Collection Fund 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 Village's water and sewer 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. 19 Page 118 of 345 Village of Germantown 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 Villa ge 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 Villa ge is entitled to the resources and the amounts are available. Amounts owed to the Village 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 the y 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 propert y 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 Proprietar y 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 water and sewer 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. 20 Page 119 of 345 Village of Germantown 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 Village considers all highly liquid investments with an initial maturity of three months or less when acquired to be cash equivalents. Investment of Village 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. The Village has adopted an investment policy. That policy follows the state statute for allowable investments. The Village's investment policy allows for demand deposits and certificates of deposit at several designated depositories without restriction as to amount of deposit or collateralization. For other financial institutions, the policy limits certificates of deposit to $500,000 unless collateralized with certain investments. All governmental bonds and securities purchased as collateral must be placed in a segregated account in the Village's name. The investment polic y addresses credit risk and concentration of credit risk by limiting investments to the types of securities listed in the policy, which follows state statutes. The Village will pre- qualify financial institutions, brokers/dealers, intermediaries and advisors before doing business with them. In addition, the Village's investment portfolio will be diversified so that the impact of potential losses from any one type of security or from any one individual issuer will be minimized. The Villa ge's investment policy also addresses interest rate risk by requiring investment in securities that mature to meet cash flow requirements, funds that are primarily made up of shorter-term securities, money market mutual funds or similar investment pools and limiting weighted average maturity of portfolios to three years. 21 Page 120 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 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 avera ge 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 Villa ge's share of the LGIP's assets was substantially equal to the amount as reported in these statements. See Note 3 for further information. Receivables Property taxes are levied in December on the assessed value as of the prior January 1. In addition to property taxes for the Village, taxes are collected for and remitted to the state and county governments 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 Januar y 31, 2026 First installment due Januar y 31, 2026 Second installment due Jul y 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 water and sewer utilities because the y 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. Prepaid Items Governmental fund inventory items are charged to expenditure accounts when purchased. Year-end inventory was not significant. 22 Page 121 of 345 Village of Germantown 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, 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 general capital assets and $25,000 for 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 of all exhaustible capital assets is recorded as an allocated expense in the statement of activities, with accumulated depreciation reflected in the statement of net position. Depreciation 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: Buildin gs 40-50 Years Land improvements 25 Years Machinery and equipment 5-20 Years Utility system 20-100 Years Infrastructure 20-50 Years 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 proprietar y fund operations are accounted for the same way as in the government-wide statements. Other Assets Land held for resale consists of land and improvements and is valued at the lower of market value or cost of acquisition, demolition and site improvements. 23 Page 122 of 345 Village of Germantown 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 vacations in varying amounts. Vacation and sick leave pay is accrued in the government-wide and proprietar y 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. Emplo yees who retire and are eligible to draw a Wisconsin Retirement Annuity will have 50%, or other collectively bargained percentage, of their unused accumulated sick leave converted into dollars at the time of their retirement and forwarded to ICMA Retirement Corporation to open a VantageCare Retirement Health Savings Plan (RHS). The RHS is a tax-advantaged investment plan dedicated to funding health care costs. The employee has ownership of the funds and may use the dollars to remain on the Village health care plan until age 65. Funding for the RHS contribution are provided out of the current operating budget of the Village. The contributions are financed on a pay-as-you-go basis. The total expenditure for the year was $115,373. 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/Conduit Debt All long-term obligations to be repaid from governmental and business-t ype resources are reported as liabilities in the government-wide statements. The long-term obligations consist primarily of notes and bonds payable 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 effective interest method. The balance at year end is shown as an increase or decrease in the liability section of the statement of net position. The Villa ge has approved the issuance of industrial revenue bonds (IRB) for the benefit of private business enterprises. IRB's are secured by mortgages or revenue agreements on the associated projects, and do not constitute indebtedness of the Village. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. The total amount of IRB's outstanding at the end of the year is approximately $25,539,265, made up of 9 issues. Leases The Villa ge is a lessor because it leases capital assets to other entities. As a lessor, the Village reports a lease receivable and corresponding deferred inflow of resources in both the fund financial statements and government-wide financial statements. The Village continues to report and depreciate the capital assets being leased as capital assets of the primary government. 24 Page 123 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 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. 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 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." The net position section includes an adjustment for capital assets owned by the business-type activities column, but financed by the debt of the governmental activities column. The amount is a reduction of "net investment in capital assets" and an increase in "unrestricted" net position, shown only in the total column. A reconciliation of this adjustment is as follows: Governmental Activities Business-Type Activities Adjustment Total Net investment in capital assets $ 52,779,442 $ 92,208,228 $ (13,644,371) $ 131,343,299 Unrestricted 3,219,800 7,035,607 13,644,371 23,899,778 When both restricted and unrestricted resources are available for use, it is the Village'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. 25 Page 124 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 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 Village Board. 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 Villa ge Board 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 Village Board has, by resolution, adopted a financial policy authorizing the Director of Finance to assign amounts for a specific purpose. 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. The Villa ge 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 Village would first use committed, then assigned and lastly unassigned amounts of unrestricted fund balance when expenditures are made. The Villa ge has a formal minimum fund balance policy. That policy is to maintain a working capital fund of 16-25% of the Village's subsequent year general fund expenditure budget. The balance at year-end was $4,723,439, or 20.7%, and is included in unassigned general fund balance. 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. 26 Page 125 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 Basis for Existing Rates Water Utility Current water rates were approved by the Public Service Commission of Wisconsin, effective December 16, 2024, or the first quarter bills in 2025. Sewer Utility Current sewer rates were approved by the Village Board with an effective date of December 16, 2024, or the first quarter bills in 2025. 2. Stewardship, Compliance and Accountability Budgetary Information A budget has been adopted for the all funds except the Capital Reserve Fund, as it was established during 2025. Wisconsin Statute 65.90 requires that an annual budget be adopted for all funds. Excess Expenditures and Other Financing Uses Over Budget The following funds had significant expenditures and other financing uses over budget: Funds Budgeted Expenditures and Other Financing Uses Actual Expenditures and Other Financing Uses Excess Expenditures and Other Financing Uses Over Budget General Fund $ 22,699,972 $ 23,255,863 $ 555,891 Police Canine Fund 1,000 1,728 728 Library Fund - 56,695 56,695 Fire Explorer Fund 2,000 3,215 1,215 Property Maintenance Fund 2,500 2,621 121 ARPA 57,800 500,581 442,781 TID No. 6 Capital Projects Fund 531,542 548,289 16,747 TID No. 9 Capital Projects Fund 231,270 507,233 275,963 The Village controls expenditures at the department level. Some individual departments experienced expenditures which exceeded appropriations. The detail of those items can be found in the Village's year-end budget to actual report. 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 Historic Preservation $ 361 Expenditures exceeded revenues TID No. 7 Capital Projects 682,826 Expenditures exceeded revenues TID No. 8 Capital Projects 2,760,288 Expenditures exceeded revenues TID No. 9 Capital Projects 570,473 Expenditures exceeded revenues Property Maintenance 585 Expenditures exceeded revenues 27 Page 126 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 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. The propert y maintenance fund and historic preservation fund deficits are anticipated to be funded with future charges for services and donations. Limitations on the Village's Tax Levy Wisconsin law limits the Villa ge's future tax levies. Generally the Village is limited to its prior tax levy dollar amount (excluding TIF Districts), increased by the greater of the percentage change in the Villa ge'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 Village 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. 3. Detailed Notes on All Funds Deposits and Investments The Village's deposits and investments at year end were comprised of the following: Carrying Value Statement Balances Associated Risks Deposits $ 20,582,540 $ 19,512,339 Custodial credit U.S. agencies, implicitly guaranteed 1,955,711 1,955,711 Custodial credit, interest rate, credit, concentration of credit U.S. treasuries 4,871,129 4,871,129 Custodial credit, interest rate State and local bonds 2,563,396 2,563,396 Credit, custodial credit, concentration of credit, interest rate LGIP 17,334,597 17,334,597 Credit Certificates of deposit (negotiable) 1,073,302 1,073,302 Custodial credit risk, credit, concentration of credit, interest rate Petty cash 657 - N/A Total deposits and investments $ 48,381,332 $ 47,310,474 Reconciliation to financial statements Per statement of net position: Unrestricted cash and investments $ 12,298,076 Restricted cash and investments 2,399,703 Per statement of net position, fiduciary fund: Cash and investments 33,683,553 Total deposits and investments $ 48,381,332 28 Page 127 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 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 not 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 $100,000 may be in cash. $500,000 of the Village's investments are covered by SIPC. The Villa ge maintains collateral agreements with its banks. At December 31, 2025, the banks had pledged various government securities in the amount of $40,000,000 to secure the Village's deposits. The Villa ge 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: • Quoted market prices December 31, 2025 Investment Type Level 1 Level 2 Level 3 Total Certificates of deposit (negotiable) $ - $ 1,073,302 $ - $ 1,073,302 U.S. agencies, implicitly guaranteed - 1,955,711 - 1,955,711 State and local bonds - 2,563,396 - 2,563,396 U.S. treasuries - 4,871,129 - 4,871,129 Total $ - $ 10,463,538 $- $ 10,463,538 Custodial Credit Risk Deposits Custodial credit risk is the risk that in the event of a financial institution failure, the Village's deposits may not be returned to the Village. The Village 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 Villa ge will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. All investments that are subject to custodial credit risk have collateral held by the pledging financial institution. 29 Page 128 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 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 Village's investments were rated as follows: Investment Type Standard & Poors Moody's Investors Services Certificates of deposit (negotiable) N/A N/A U.S. agencies, implicitly guaranteed AA+ Aa1 State and local bonds AAA Aa1, Aa2, Aaa The Village also held investments in the following external pool which is not rated: Local Government Investment Pool 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 Village's investment portfolio was concentrated as follows: Issuer Investment Type Percentage of Portfolio Federal Home Loan Banks U.S. agencies, implicitly guaranteed % 7.04 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 Village's investments were as follows: Maturity (in Years) Investment Type Fair Value Less Than 1 Year 1-5 Years Certificates of deposit (negotiable) $ 1,073,302 $ 495,242 $ 578,060 U.S. agencies, implicitly guaranteed 1,955,711 1,656,545 299,166 State and local bonds 2,563,396 - 2,563,396 U.S. treasuries 4,871,129 4,871,129 - Total $ 10,463,538 $ 7,022,916 $ 3,440,622 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 for leases and delinquent taxes. 30 Page 129 of 345 Village of Germantown 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 $ 23,830,057 $ - Payment in lieu of taxes receivable - 234,873 Developer receivable not yet due - 49,986 Accounts receivable due from developer - 15,608 Grants received not yet earned 306,922 - Total unearned/unavailable revenue for governmental funds $ 24,136,979 $ 300,467 Unearned revenue included in liabilities $ 306,922 Unearned revenue included in deferred inflows 23,830,057 Total unearned revenue for governmental funds $ 24,136,979 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. Reserve - Used to report resources set aside to make up potential future deficiencies in the redemption account. Depreciation - Used to report resources set aside to fund plant renewals and replacement or make up potential future deficiencies in the redemption account. Equipment Replacement Account The sewe r utility established an equipment replacement account to be used for significant mechanical equipment replacement as required by the Wisconsin Department of Natural Resources. Impact Fee Account The Village has received impact fees which must be spent in accordance with the local ordinance and state statutes. Any unspent funds must be refunded to the current property owner. 31 Page 130 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 Following is a list of restricted assets at December 31, 2025: Restricted Assets Impact fee accounts $ 1,272,564 Accrued interest 1,066 Sewer equipment replacement account 345,296 Water redemption account 317,253 Water reserve account 414,000 Water depreciation account 50,590 Total $ 2,400,769 Capital Assets Capital asset activity for the year ended December 31, 2025, was as follows: Beginning Balance Additions Deletions Ending Balance Governmental Activities Capital assets not being depreciated: Land $ 15,629,920 $ - $ - $ 15,629,920 Construction in progress 3,903,844 4,281,724 714,710 7,470,858 Total capital assets not being depreciated 19,533,764 4,281,724 714,710 23,100,778 Capital assets being depreciated: Buildings and improvements 48,443,712 570,779 330,903 48,683,588 Machinery and equipment 16,220,462 988,065 273,987 16,934,540 Roads 69,747,776 1,914,984 559,960 71,102,800 Storm sewers 24,058,791 519,601 59,396 24,518,996 Street li ghting 4,689,296 - - 4,689,296 Bridges 8,089,625 - - 8,089,625 Total capital assets being depreciated 171,249,662 3,993,429 1,224,246 174,018,845 Total capital assets 190,783,426 8,275,153 1,938,956 197,119,623 Less accumulated depreciation for: Buildings and improvements (11,744,940) (1,250,412) 330,903 (12,664,449) Machinery and equipment (9,412,884) (978,433) 273,987 (10,117,330) Roads (22,986,116) (1,469,248) 559,960 (23,895,404) Storm sewers (14,331,485) (490,380) 59,396 (14,762,469) Street lighting (2,880,633) (234,465) - (3,115,098) Bridges (4,010,893) (161,793) - (4,172,686) Total accumulated depreciation (65,366,951) (4,584,731) 1,224,246 (68,727,436) Net capital assets being depreciated 105,882,711 (591,302) - 105,291,409 Total governmental activities capital assets, net as reported in the statement of net position $ 125,416,475 $ 3,690,422 $ 714,710 $ 128,392,187 32 Page 131 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 Depreciation expense was charged to functions as follows: Governmental Activities General government $ 127,120 Public safety 571,861 Public works, including infrastructure 3,570,206 Culture and recreation 315,544 Total governmental activities depreciation expense $ 4,584,731 Beginning Balance Additions Deletions Ending Balance Business-Type Activities Capital assets not being depreciated: Land $ 175,599 $ - $ - $ 175,599 Construction in progress 299,433 388,627 - 688,060 Total capital assets not being depreciated 475,032 388,627 - 863,659 Capital assets being depreciated: Buildings and improvements 15,449,400 190,582 - 15,639,982 Machinery and equipment 8,178,386 142,931 59,502 8,261,815 Water system 52,357,679 999,224 21,913 53,334,990 Sewer system 71,400,962 433,493 35,088 71,799,367 Total capital assets being depreciated 147,386,427 1,766,230 116,503 149,036,154 Total capital assets 147,861,459 2,154,857 116,503 149,899,813 Less accumulated depreciation for: Buildings and improvements (2,292,745) (444,943) - (2,737,688) Machinery and equipment (5,104,561) (328,827) 59,502 (5,373,886) Water system (14,165,311) (977,930) 21,913 (15,121,328) Sewer system (17,249,979) (746,892) 35,088 (17,961,783) Total accumulated depreciation (38,812,596) (2,498,592) 116,503 (41,194,685) Net capital assets being depreciated 108,573,831 (732,362) - 107,841,469 Business-type activities capital assets, net as reported in the statement of net position $ 109,048,863 $ (343,735) $- $ 108,705,128 Depreciation expense was charged to functions as follows: Business-Type Activities Water $ 1,262,574 Sewer 1,125,450 Total business-type activities depreciation expense $ 2,388,024 Additions to accumulated depreciation include depreciation expense as well as salvage on retired assets and joint metering and may not equal depreciation expense. 33 Page 132 of 345 Village of Germantown 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 General capital projects $ 311,094 General TID No. 7 capital projects fund 46,021 General Property maintenance fund 942 General Historic Preservation fund 361 General TID No. 8 capital projects 2,409,375 Total, fund financial statements 2,767,793 Less fund eliminations (2,767,793) Less interfund receivables created with internal service fund eliminations (147,707) Less interfund advances (635,000) Total internal balances, government-wide statement of net position $ (782,707) All amounts are due within one year. Interfund balances 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 Water utility fund is advancing funds to TID No. 7 capital projects fund. The amount advanced is equal to the TID No. 7 related debt issued during 2022. The repayment schedule of the advances is included in the repayment schedule of the 2022 Water Revenue Bonds. The General fund is advancin g funds to the TID No. 9 capital projects fund. The amount advanced is equal to the TID fund deficit. No repayment schedule has been established. The following is a schedule of interfund advances: Receivable Fund Payable Fund Amount Amount Not Due Within One Year General fund TID No. 9 capital projects $ 363,817 $ 363,817 Water utility TID No. 7 capital projects 635,000 580,000 Less fund eliminations (363,817) Total - Interfund Advances $ 635,000 34 Page 133 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 The principal purpose of this advance is to prepay principal on debt. TID No. 7 Years Principal Interest 2026 $ 55,000 $ 21,769 2027 60,000 19,469 2028 60,000 17,069 2029 60,000 14,669 2030 60,000 12,269 2031-2035 340,000 29,003 Total $ 635,000 $ 114,248 Transfers The following is a schedule of interfund transfers: Fund Transferred To Fund Transferred From Amount Principal Purpose General Water utility $ 770,758 Pa yment in lieu of taxes General capital projects ARPA 29,271 Expense reimbursement Total, fund financial statements 800,029 Less fund eliminations (29,271) Less transfer of capital assets to utility funds (667,879) Total transfers, government-wide statement of activities $ 102,879 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. 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 $ 73,105,000 $ 12,710,000 $ 4,795,000 $ 81,020,000 $ 5,025,000 Premiums 2,623,932 312,041 270,149 2,665,824 - Total bonds and notes payable 75,728,932 13,022,041 5,065,149 83,685,824 5,025,000 Other liabilities: Compensated absences* 1,117,765 455,412 - 1,573,177 188,914 Total other liabilities 1,117,765 455,412 - 1,573,177 188,914 Total governmental activities long- term liabilities $ 76,846,697 $ 13,477,453 $ 5,065,149 $ 85,259,001 $ 5,213,914 35 Page 134 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 Business-Type Activities Bonds and notes payable: General obligation debt $ 11,875,000 $ - $ 535,000 $ 11,340,000 $ 550,000 Revenue debt from direct borrowings and direct placements 243,160 953,925 46,107 1,150,978 85,821 Revenue bonds 3,705,000 - 300,000 3,405,000 300,000 (Discounts)/Premiums 645,004 - 44,082 600,922 - Total bonds and notes payable 16,468,164 953,925 925,189 16,496,900 935,821 Other liabilities: Compensated absences* 135,156 22,285 - 157,441 28,572 Total other liabilities 135,156 22,285 - 157,441 28,572 Total business-type activities long- term liabilities $ 16,603,320 $ 976,210 $ 925,189 $ 16,654,341 $ 964,393 *The change in the compensated absences liability is presented as a net change. In accordance with Wisconsin Statutes, total general obligation indebtedness of the Village may not exceed 5% of the equalized value of taxable property within the Village's jurisdiction. The debt limit as of December 31, 2025, was $221,232,745. Total general obligation debt outstanding at year end was $92,360,000. 36 Page 135 of 345 Village of Germantown 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 Village. Debt in the governmental funds will be retired by future property tax levies or tax increments accumulated by the debt service fund. Business-type activities debt is payable by revenues from user fees of those funds or if the revenues are not sufficient, by future tax levies. Governmental Activities General Obligation Debt Date of Issue Final Maturity Interest Rates Original Indebtedness Balance December 31, 2025 GO Community Development Bonds, TID No. 6 10/01/2014 2034 3.00-4.00% $ 5,405,000 $ 3,835,000 GO Promissor y Note 05/11/2016 2026 2.00 2,670,000 265,000 GO Promissory Note 03/29/2017 2027 2.00-2.55 2,805,000 560,000 GO Promissory Note 04/05/2018 2028 2.4855 2,795,000 840,000 GO Community Development Bonds, TID No. 7 06/06/2018 2033 3.0764 2,480,000 1,870,000 GO Communit y Development Bonds, TID No. 8 02/05/2019 2038 3.00-5.00 6,725,000 6,200,000 Taxable GO Communit y Development Bonds, TID No. 8 02/05/2019 2029 3.00-3.30 1,710,000 1,020,000 GO Promissor y Note 05/02/2019 2029 3.00-4.00 3,040,000 1,385,000 GO Corporate Purpose Bond, TID No. 8 12/11/2019 2039 2.25-4.00 7,850,000 6,925,000 GO Promissory Note 04/23/2020 2030 2.00-4.00 3,875,000 2,090,000 GO Promissory Note 06/30/2021 2031 1.00-3.00 3,165,000 1,930,000 GO Promissory Note 05/18/2022 2032 3.00-4.00 4,320,000 3,355,000 Taxable GO Promissory Notes 05/18/2022 2032 3.25-3.35 2,550,000 2,550,000 GO Corporate Purpose Bond 12/01/2022 2042 4.00-5.00 33,050,000 30,930,000 GO Promissory Note 06/05/2024 2034 4.00-5.00 3,175,000 3,125,000 GO Promissory Note 11/07/2024 2034 3.00-5.00 1,520,000 1,430,000 GO Promissory Note 06/26/2025 2035 4.00-5.00 4,110,000 4,110,000 GO Promissory Note 06/26/2025 2045 5.00-5.60 8,600,000 8,600,000 Total governmental activities, general obligation debt $ 81,020,000 Business-Type Activities General Obligation Debt Date of Issue Final Maturity Interest Rates Original Indebtedness Balance December 31, 2025 GO Corporate Purpose Bond 12/11/2019 2039 2.25-4.00% $ 3,005,000 $ 2,225,000 GO Corporate Purpose Bond 12/01/2022 2042 4.00-5.00 9,330,000 8,005,000 GO Promissory Note 11/07/2024 2034 3.00-5.00 1,220,000 1,110,000 Total business-type activities, general obligation debt $ 11,340,000 37 Page 136 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 Debt service requirements to maturity are as follows: Governmental Activities Business-Type Activities General Obligation Debt General Obligation Debt Years Principal Interest Principal Interest 2026 $ 5,025,000 $ 3,212,981 $ 550,000 $ 452,519 2027 5,080,000 2,915,403 565,000 425,969 2028 5,160,000 2,731,617 590,000 399,169 2029 5,710,000 2,532,332 630,000 371,519 2030 5,975,000 2,315,622 660,000 342,781 2031-2035 26,310,000 8,188,734 3,595,000 1,359,247 2036-2040 18,565,000 3,910,108 3,480,000 577,494 2041-2045 9,195,000 717,485 1,270,000 51,199 Total $ 81,020,000 $ 26,524,282 $ 11,340,000 $ 3,979,897 Revenue Debt Business-type activities revenue bonds are payable only from revenues derived from the operation of the water utility system. The Village has pledged future water revenues to repay revenue bonds issued in 2009, 2022 and 2025. Proceeds from the bonds provided financing for the construction of water plant. The bonds are payable solely from water revenues and are payable through 2045. Annual principal and interest payments on the bonds are expected to require 7.64% of gross revenues. The total principal and interest remaining to be paid on the bonds is $5,475,798. Principal and interest paid for the current year and total customer gross revenues were $490,376 and $3,774,349, respectively. 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 Water Utility Direct borrowing/direct placement, Safe Drinking Water Loan 11/12/2009 05/01/2029 2.67% $ 773,293 $ 197,053 Water system revenue bonds 05/18/2022 05/01/2035 3.00-4.00 4,140,000 3,405,000 Direct borrowing/direct placement, Safe Drinking Water Loan 05/14/2025 05/01/2045 2.20 953,925 953,925 Total business-type activities, revenue debt $ 4,555,978 38 Page 137 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 Debt service requirements to maturity are as follows: Business-Type Activities Revenue Debt Years Principal Interest 2026 $ 300,000 $ 116,663 2027 310,000 104,463 2028 320,000 91,863 2029 325,000 78,963 2030 330,000 65,863 2031-2035 1,820,000 226,316 Total $ 3,405,000 $ 684,131 Business-Type Activities Revenue Debt from Direct Borrowings and Direct Placements Years Principal Interest 2026 $ 85,821 $ 25,189 2027 87,930 23,053 2028 90,092 20,865 2029 92,307 18,622 2030 41,985 17,024 2031-2035 224,191 70,697 2036-2040 249,962 44,644 2041-2045 278,690 15,595 Total $ 1,150,978 $ 235,689 Lease Disclosures Lessor - Lease Receivables Governmental Activities Lease Receivables Description Date of Inception Final Maturity Interest Rates Receivable Balance December 31, 2025 General fund, ground and structure leases 2002-2012 2027-2037 3.37% $ 1,031,396 Debt service fund, building lease 2025 2028 5.00 1,029,141 Total governmental activities $ 2,060,537 The Village recognized $246,769 of lease revenue during the fiscal year. The Village recognized $97,013 of interest revenue during the fiscal year. 39 Page 138 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 Net Position/Fund Balances Net position reported on the government-wide statement of net position at December 31, 2025, includes the following: Governmental Activities Net investment in capital assets: Land $ 15,629,920 Construction in progress 7,470,858 Other capital assets, net of accumulated depreciation 105,291,409 Less long-term debt outstanding (81,020,000) Plus unspent capital related debt proceeds 3,913,079 Plus noncapital debt proceeds 4,160,000 Less unamortized debt premium (2,665,824) Total net investment in capital assets $ 52,779,442 40 Page 139 of 345 Village of Germantown 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 Debt Service Capital Projects Fund TIF No. 8 Capital Projects Fund Nonmajor Funds Total Fund Balances Nonspendable: Prepaid items $ 862 $ - $ - $ - $ - $ 862 Noncurrent receivables 85,530 ---- 85,530 Advances 363,817 - - - - 363,817 Subtotal 450,209 - - - - 450,209 Restricted for: Debt service - 1,024,180 - - - 1,024,180 Capital pro jects - - 3,233,998 - 101,256 3,335,254 TID projects ---- 376,779 376,779 Police projects ---- 183,958 183,958 Fire projects ---- 215,274 215,274 Parks ---- 275,834 275,834 Library - - - - 1,143,477 1,143,477 Subtotal - 1,024,180 3,233,998 - 2,296,578 6,554,756 Committed to: Senior van replacement ---- 45,329 45,329 Police ---- 20,174 20,174 Fire explorer program ---- 3 63 3 63 Recreation - - - - 23,296 23,296 Subtotal - - - - 89,162 89,162 Assigned to: Capital projects - - 3,946,175 - - 3,946,175 Payment in lieu of tax 770,758 ---- 770,758 Tourism 69,981 ---- 69,981 Budget carryovers 34,900 - - - - 34,900 Subtotal 875,639 - 3,946,175 - - 4,821,814 Unassigned (Deficit) 4,723,439 - - (2,760,288) (1,254,245) 708,906 Total fund balances $ 6,049,287 $ 1,024,180 $ 7,180,173 $ (2,760,288) $ 1,131,495 $ 12,624,847 Business-Type Activities Net investment in capital assets: Land $ 175,599 Construction in progress 688,060 Other capital assets, net of accumulated depreciation 107,841,469 Less long-term debt outstanding (15,895,978) Less unamortized debt premium (600,922) Total net investment in capital assets $ 92,208,228 41 Page 140 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 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. 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. 42 Page 141 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 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 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 $1,170,412 in contributions from the Village. 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 43 Page 142 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 Pension Liability, Pension Expense (Revenue), Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At December 31, 2025, the Village reported a liability of $1,228,273 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 Villa ge's proportion of the net pension liability was based on the Village's share of contributions to the pension plan relative to the contributions of all participating employers. At December 31, 2024, the Villa ge's proportion was 0.07475047%, which was an increase of 0.00484554% from its proportion measured as of December 31, 2023. For the year ended December 31, 2025, the Village recognized pension expense (revenue) of $1,327,385. At December 31, 2025, the Villa ge 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 $ 4,251,064 $ 4,021,000 Changes in assumptions 364,452 - Net differences between projected and actual earnings on pension plan investments 1,866,427 - Changes in proportion and differences between employer contributions and proportionate share of contributions - 54,533 Employer contributions subsequent to the measurement date 1,061,576 - Total $ 7,543,519 $ 4,075,533 $1,061,576 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 $ 716,065 2027 2,530,184 2028 (639,976) 2029 (199,863) 44 Page 143 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 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. 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. 45 Page 144 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 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%. 46 Page 145 of 345 Village of Germantown 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.). 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 Village's Proportionate Share of the Net Pension Liability (Asset) to Changes in the Discount Rate The following presents the Village's proportionate share of the net pension liability (asset) calculated using the discount rate of 6.80%, as well as what the Village'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%) Village's proportionate share of the net pension liability (asset) $ 11,522,813 $ 1,228,273 $ (6,085,701) 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. At December 31, 2025, the Village reported a payable to the pension plan which represents contractually required contributions outstanding as of the end of the year. Risk Management The Village 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 Village participates in a public entity risk pool called to provide coverage for losses from torts; theft of, damage to or destruction of assets; errors and omission; and workers compensation. However, other risks, such as health and dental care of its employees are accounted for and financed by the Village in the health insurance and dental insurance internal service funds. 47 Page 146 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 Self Insurance For health claims, the uninsured risk of loss is $45,000 per incident and $2,000,000 in the aggregate for a policy year. The Village 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. All funds of the Village participate in the risk management program. Accounts payable in the internal service funds are based on estimates of the amounts necessary to pay prior and current year claims. That reserve was $1,301,519 at year-end and is reported in unrestricted net position of the internal service funds. A liability for a claim is established if information indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss is reasonably estimable. Liabilities include an amount for claims that have been incurred but not reported. The Village does not allocate overhead costs or other nonincremental costs to the claims liability. Claims Liability Prior Year Current Year Unpaid Claims, Beginning $ 44,415 $ 46,627 Current year claims and changes in estimates 1,379,990 1,899,420 Claim payments (1,377,778) (1,843,577) Unpaid Claims, Ending $ 46,627 $ 102,470 Public Entity Risk Pool Wisconsin Municipal Insurance Commission (WMIC) Cities and Villages Mutual Insurance Company (CVMIC) The WMIC is an intergovernmental cooperation commission created by contract under Section 66.30 of the Wisconsin Statutes. It was created in August, 1987 for the purpose of facilitating the organization, establishment and capitalization of the CVMIC, and has numerous cities and villages as members. The CVMIC is a municipal mutual insurance company established on September 14, 1987 under Section 611.23 of the Wisconsin Statutes. The CVMIC provides liability insurance coverage to the cities and villages which make up the membership of the WMIC. The CVMIC is self-insured up to a maximum of $2,000,000 of each insurance risk. Losses paid by CVMIC plus administrative expenses will be recovered through premiums to the participating pool of municipalities. The Village's share of such losses is approximately 1.7%. Management of each organization consists of a board of directors or officers comprised of representatives elected by each of three classes of participants based on population. The Village does not exercise any control over the activities of the agencies beyond the election of the officers and board. Financial statements of WMIC and CVMIC can be obtained directly from CVMIC's offices. 48 Page 147 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 The Village pays an annual premium to CVMIC for its general liability insurance, which provides coverage up to $5,000,000 per occurrence, less the Village's retained liability. The Village's retained liability is limited to $25,000 per occurrence and an annual aggregate limit of $100,000. An actuarially determined estimate has been recorded for this liability, as well as for claims incurred but not reported at December 31, 2025. A total liability of approximately $67,889 at December 31, 2025, was recorded as claims payable in the insurance internal service fund. Changes in the fund's claims loss liability follow: Year Beginning Balance Incurred Claims Claims Paid/ Settled Ending Balance 2025 $ - $ 88,000 $ 20,111 $ 67,889 Commitments and Contingencies Claims and judgments are recorded as liabilities if all the conditions of Governmental Accounting Standards Board pronouncements are met. The liability and expenditure for claims and judgments are only reported in governmental funds if it has matured. Claims and judgments are recorded in the government-wide statements and proprietary funds as expenses when the related liabilities are incurred. The Villa ge has received federal and state grants for specific purposes that are subject to review and audit by the grantor agencies. Such audits could lead to requests for reimbursements to the grantor agency for expenditures disallowed under terms of the grants. Management believes such disallowances, if any, would be immaterial. The Villa ge has active construction projects as of December 31, 2025. Work that has been completed on these projects but not yet paid for (including contract retainages) is reflected as accounts payable and expenditures. Developer Agreements In 2018, the Village issued a municipal revenue obligation as part of a development agreement. The amount of the obligation was $1,000,000, and is payable to the developer solely from tax increments collected from a specific portion of the development in TIF No. 8. Payments are scheduled through the year 2033, and carry an interest rate of 3.75%. The obligation does not constitute a charge upon any funds of the Village. In the event that future tax increments are not sufficient to pay off the obligation, the obligation terminates with no further liability to the Villa ge. Since the amount of future payments is contingent on the collection of future TIF increments, the obligation is not reported as a liability in the accompanying financial statements. The balance of the commitment outstanding at year end was $720,997. Subsequent Event On Ma y 21, 2026 the Village issued general obligation promissory notes in the amount of $17,170,000 with an interest rate of 5.00%. This amount will be used to finance capital improvements. Tax Abatement Tax abatements are a reduction in tax revenues that results from an agreement between one or more governments and an individual or entity in which (a) one or more governments promise to forgo tax revenues to which they are otherwise entitled and (b) the individual or entity promises to take a specific action after the agreement has been entered into that contributes to economic development or otherwise benefits the governments or the citizens of those governments. The Village is disclosing all abatement agreements individually. 49 Page 148 of 345 Village of Germantown Notes to Financial Statements December 31, 2025 The Village through its Tax Incremental Financing District (TIF) No. 8 has entered into tax abatement agreements with a developers in the form of tax incremental financing incentive payments to stimulate economic development. The abatements are authorized through the TID pro ject plan. The developers pay property taxes as they become due, and after meeting the criteria established in the development agreements, are entitled to future incentive payments that directly correlate to the taxes paid. Agreement Description Calculation Method Developer Commitment 2025 Payments TIF No. 8 Incentive payments of $105,277 through 2033 Construct various improvements within District $ 105,277 Effect of New Accounting Standards on Current-Period Financial Statements The Governmental Accounting Standards Board (GASB) has approved the following: • Statement No. 103, Financial Reporting Model Improvements • Statement No. 104, Disclosure of Certain Capital Assets • Statement No. 105, Subsequent Events When they become effective, application of these standards may restate portions of these financial statements. 50 Page 149 of 345 REQUIRED SUPPLEMENTARY INFORMATION Page 150 of 345 GENERAL FUND The general fund is used to account for resources traditionally associated with government which are not required legally or by sound financial management to be accounted for in another fund. Page 151 of 345 Village of Germantown Detailed Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund Year Ended December 31, 2025 Budgeted Amounts Original Final Actual Variance With Final Budget Revenues General property taxes $ 12,826,555 $ 12,826,555 $ 12,826,555 $ - Other taxes 678,783 678,783 561,596 (117,187) Intergovernmental 4,015,091 4,293,088 4,338,403 45,315 Regulation and compliance 1,079,180 1,079,180 1,192,373 113,193 Public charges for services 2,406,388 2,499,595 2,619,562 119,967 Intergovernmental charges for services 139,961 139,961 173,635 33,674 Investment income 109,827 109,827 270,553 160,726 Miscellaneous 94,305 372,734 536,716 163,982 Total revenues 21,350,090 21,999,723 22,519,393 519,670 Expenditures General Government Village board 136,853 136,853 284,356 (147,503) General administrator 177,343 181,436 183,118 (1,682) Village clerk 295,315 302,238 288,747 13,491 Treasurer/accounting 250,704 256,032 271,099 (15,067) Assessor 105,296 105,296 109,296 (4,000) Data processing 242,264 261,564 260,646 918 General government (32,912) (398,984) 413,637 (812,621) Buildings and ground maintenance 1,059,466 1,088,813 1,059,394 29,419 Total general government 2,234,329 1,933,248 2,870,293 (937,045) Public Safety Police protection 6,921,074 7,259,444 7,179,888 79,556 Fire protection 4,548,971 4,817,356 4,485,989 331,367 Emergency government 19,563 19,799 96,042 (76,243) Protective inspections 358,168 359,251 497,382 (138,131) Total public safety 11,847,776 12,455,850 12,259,301 196,549 Public Works Engineer/director 224,685 226,653 246,853 (20,200) Highway and street maintenance and construction 3,246,116 3,276,081 3,223,581 52,500 Solid waste recycling 459,316 461,271 495,049 (33,778) Total public works 3,930,117 3,964,005 3,965,483 (1,478) See notes to required supplementary information 51 Page 152 of 345 Village of Germantown Detailed Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund Year Ended December 31, 2025 Original Final Actual Variance With Final Budget Culture and Recreation Library $ 1,039,379 $ 1,153,332 $ 1,179,727 $ (26,395) Recreation 1,323,151 1,402,058 1,406,419 (4,361) Senior center 124,426 126,380 120,580 5,800 Parks 978,288 994,788 839,003 155,785 Total culture and recreation 3,465,244 3,676,558 3,545,729 130,829 Conservation and Development Planning and zoning 311,724 317,562 265,850 51,712 Municipal development 81,900 81,900 155,016 (73,116) Total conservation and development 393,624 399,462 420,866 (21,404) Capital Outlay 119,000 270,849 194,191 76,658 Total expenditures 21,990,090 22,699,972 23,255,863 (555,891) Excess (deficiency) of revenues over (under) expenditures (640,000) (700,249) (736,470) (36,221) Other Financing Sources Transfers in 640,000 640,000 770,758 130,758 Total other financing sources 640,000 640,000 770,758 130,758 Net change in fund balance - (60,249) 34,288 94,537 Fund Balance, Beginning 6,014,999 6,014,999 6,014,999 - Fund Balance, Ending $ 6,014,999 $ 5,954,750 $ 6,049,287 $ 94,537 See notes to required supplementary information 52 Page 153 of 345 Proportionate Share of the Net Plan Fiduciary Proportion Proportionate Pension Liability (Asset) Net Position WRS of the Net Share of the as a Percentage as a Percentage Fiscal Year Pension Net Pension Covered of Covered of the Total Ending Liability (Asset) Liability (Asset) Payroll Payroll Pension Liability 12/31/25 0.07475047 % 1,228,273 $ 11,001,182 $ 11.16 % 98.79 % 12/31/24 0.06990493 % 1,039,350 9,482,293 10.96 % 98.85 % 12/31/23 0.06778334 % 3,590,960 9,141,620 39.28 % 95.72 % 12/31/22 0.06355283 % (5,281,697) 8,410,935 62.80 % 106.02 % 12/31/21 0.06375385 % (3,980,241) 8,273,949 48.11 % 105.26 % 12/31/20 0.06104707 % (1,968,436) 8,083,395 24.35 % 102.96 % 12/31/19 0.05861313 % 2,085,271 7,386,989 28.23 % 96.45 % 12/31/18 0.05745337 % (1,705,858) 6,970,047 24.47 % 102.93 % 12/31/17 0.05815135 % 479,306 6,998,756 6.85 % 99.12 % 12/31/16 0.05959839 % 968,226 6,919,994 13.99 % 98.20 % Contributions in Relation to the Contributions Village Contractually Contractually Contribution as a Percentage Fiscal Required Required Deficiency Covered of Covered Year Ending Contributions Contributions (Excess) Payroll Payroll 12/31/25 1,061,576$ (1,061,576) $ - $ 11,922,569$ 8.90 % 12/31/24 965,624 (965,624) - 11,259,486 8.58 % 12/31/23 800,182 (800,182) - 9,485,148 8.44 % 12/31/22 718,838 (718,838) - 9,157,347 7.85 % 12/31/21 669,795 (669,795) - 8,411,759 7.96 % 12/31/20 653,360 (653,360) - 8,277,783 7.89 % 12/31/19 670,516 (670,516) - 8,083,395 8.29 % 12/31/18 609,915 (609,915) - 7,386,990 8.26 % 12/31/17 577,241 (577,241) - 6,970,048 8.28 % 12/31/16 550,442 (550,442) - 6,992,283 7.87 % Year Ended December 31, 2025 Schedule of Proportionate Share of the Net Pension Liability (Asset) - Schedule of Employer Contributions - Wisconsin Retirement System Village of Germantown Wisconsin Retirement System Year Ended December 31, 2025 See notes to required supplementary information 53 Page 154 of 345 Village of Germantown Notes to Required Supplementary Information Year Ended December 31, 2025 Budgetary Information Budgetary information is derived from the annual operating budget and is presented using the same basis of accounting for each fund as described in Note 1. The budgeted amounts presented include any amendments made. The Village may authorize transfers of budgeted amounts within departments. Transfers between departments and changes to the overall budget must be approved by a two-thirds Village Board action. Appropriations lapse at year end unless specifically carried over. Carryovers to the following year were $34,900. Budgets are adopted at the department level of expenditure. Wisconsin Retirement System The amounts determined for each fiscal year were determined as of the calendar year-end and occurred within the fiscal year. Changes in benefit terms. There were no changes of benefit terms for any participating employer in the Wisconsin Retirement System. Changes in assumptions. Based on a three-year experience study conducted in 2021 covering January 1, 2018 through December 31, 2020, the ETF Board adopted assumption changes that were used to measure the total pension liability beginning with the year-end December 31, 2021, including the following: • Lowering the long-term expected rate of return from 7.0% to 6.8% • Lowering the discount rate from 7.0% to 6.8% • Lowering the price inflation rate from 2.5% to 2.4% • Lowering the postretirement adjustments from 1.9% to 1.7% • Mortality assumptions were changed to reflect updated trends by transitioning from the Wisconsin 2018 Mortality Table to the 2020 WRS Experience Mortality Table Based on a three-year experience study conducted in 2018 covering January 1, 2015 through December 31, 2017, the ETF Board adopted assumption changes that were used to measure the total pension liability beginning with the year-ended December 31, 2018, including the following: • Lowering the long-term expected rate of return from 7.2% to 7.0% • Lowering the discount rate from 7.2% to 7.0% • Lowering the wage inflation rate from 3.2% to 3.0% • Lowering the price inflation rate from 2.7% to 2.5% • Lowering the postretirement adjustments from 2.1% to 1.9% • Mortality assumptions were changed to reflect updated trends by transitioning from the Wisconsin 2012 Mortality Table to the Wisconsin 2018 Mortality Table 54 Page 155 of 345 SUPPLEMENTARY INFORMATION Page 156 of 345 DEBT SERVICE FUND The Debt Service Fund is used to account for the accumulation of resources and payment of general obligation bond principal and interest from governmental resources. Page 157 of 345 Village of Germantown Detailed Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Debt Service Fund Year Ended December 31, 2025 Budgeted Amounts Original Final Actual Variance With Final Budget Revenues Taxes $ 4,823,265 $ 4,823,265 $ 4,823,265 $ - Investment income - 3,800 65,170 61,370 Rental income - - 152,023 152,023 Total revenues 4,823,265 4,827,065 5,040,458 213,393 Expenditures Debt service: Principal 3,530,000 3,530,000 3,530,000 - Interest and fiscal charges 1,690,950 1,690,950 1,690,469 481 Debt issuance costs - 3,800 801 2,999 Total expenditures 5,220,950 5,224,750 5,221,270 3,480 Excess (deficiency) of revenues over (under) expenditures (397,685) (397,685) (180,812) 216,873 Other Financing Sources General obligation debt issued - 397,685 485,136 87,451 Premium on debt issued - - 278,206 278,206 Total other financing sources - 397,685 763,342 365,657 Net change in fund balance (397,685) - 582,530 582,530 Fund Balance, Beginning 441,650 441,650 441,650 - Fund Balance, Ending $ 43,965 $ 441,650 $ 1,024,180 $ 582,530 55 Page 158 of 345 MAJOR CAPITAL PROJECTS FUNDS General Capital Projects Fund - This fund accounts for the acquisition and construction of major capital facilities and equipment used in general Village operations. This fund does not include capital facilities and equipment used in the Village's enterprise funds. Tax Increment District No. 8 - This fund accounts for the costs of land acquisition and infrastructure improvements related to development of a new industrial park. Financing will be provided primarily from general obligation note proceeds. It is anticipated that costs will be recovered by future incremental property taxes. Page 159 of 345 Village of Germantown Detailed Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Capital Projects Year Ended December 31, 2025 Budgeted Amounts Original Final Actual Variance With Final Budget Revenues Intergovernmental $ - $ 2,301,300 $ 1,506,459 $ (794,841) Investment income - 15,000 132,525 117,525 Miscellaneous - - 41,906 41,906 Total revenues - 2,316,300 1,680,890 (635,410) Expenditures Capital outlay 6,582,000 8,900,174 4,749,210 4,150,964 Debt service: Debt issuance costs 82,000 82,000 225,205 (143,205) Total expenditures 6,664,000 8,982,174 4,974,415 4,007,759 Excess (deficiency) of revenues over (under) expenditures (6,664,000) (6,665,874) (3,293,525) 3,372,349 Other Financing Sources Premium on long-term debt - - 33,835 33,835 Issuance of general obligation notes 6,664,000 7,164,000 12,224,864 5,060,864 Transfers in - - 29,271 29,271 Total other financing sources 6,664,000 7,164,000 12,287,970 5,123,970 Net change in fund balance - 498,126 8,994,445 8,496,319 Fund Balance (Deficit), Beginning (1,814,272) (1,814,272) (1,814,272) - Fund Balance (Deficit), Ending $ (1,814,272) $ (1,316,146) $ 7,180,173 $ 8,496,319 56 Page 160 of 345 Village of Germantown Detailed Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - TID No. 8 Capital Projects Fund Year Ended December 31, 2025 Budgeted Amounts Original Final Actual Variance With Final Budget Revenues Taxes $ 3,048,193 $ 3,048,193 $ 3,022,033 $ (26,160) Intergovernmental -