08.a Resolution No. 09-16-25-01 - Preliminary Levy Staff Report
Date of Meeting: September 16, 2025
For: Honorable Mayor and Council
From: Kyle Morell, City Administrator
Subject: 2026 Draft Preliminary Budget Approval
Background:
August
Staff is presenting the preliminary 2026 budget for the Council to review. The Capital Investment
Committee met three times to review the CIP funds and discuss future projects. Their recommendations
have been included in the CIP fund budgets. The General Fund budget was prepared using past revenue
and expense practices, along with a six-month review of 2025 spending, as guides for future revenue and
expense projections.
The 2026 Preliminary Budget presentation includes the recommendations of the CIP Committee, which
include the creation of two new CIP Funds. The Fire Department (Fund 410) and the Public Safety
Building (Fund 412) have each been allocated their own CIP fund. The 406 Fund, previously dedicated to
equipment replacement, will now be redirected to support the Public Works department. This separation
of Public Works, the Fire Department, and the Public Safety Building enables us to better understand the
cost of funding each department and the operating costs of the building.
The most significant change to the General Fund is the inclusion of a new full-time public works
employee. This employee is budgeted for 6 months in 2026, with a starting date of July 1, 2026 (total
annual cost is $44,778.00). To accommodate this new employee, we have removed both seasonal public
works hires from the budget, as well as the winter rink maintenance worker. This has reallocated $29,400
to the new full-time employee. All insurance line items have been increased by 10% in expectation of
annual increases.
The overall projected levy increase is $197,249, representing a 6.59% increase over 2025, with the net levy
increasing from $2,994,515 to $3,191,764. This increase is due in large part to the additional $111,270 in
debt service levy the City has added in 2025 and a $62,480 increase in the City’s general fund operating
levy. I have also reinstated the EDA levy of $6,000 and added a levy of $4,000 for the Tourism
Committee to the budget.
September 03
Staff worked to revise the draft preliminary budget to limit the levy increase to the 3.3% that the Council
requested at the August presentation. Minor cuts were made to the Fire Department and Public Works
budgets. The General Fund Operating Levy was reduced by $43,541 in response to these cuts and to
reduce the budget's cushion. The CIP funds were reviewed, with levy amounts reduced by $15,000 within
the 401 General CIP Fund and $5,000 within the 404 Parks CIP Fund. Staff also performed a thorough
review of the 2024 Street Project Bond fund to determine the amount of project savings remaining that
can only be used to repay the debt. The fund review revealed that there are sufficient savings in the fund
to use $200,000 to offset the 2026 debt service levy, rather than the $175,000 proposed in August, thereby
reducing the debt service levy by $25,000. Small reductions were also made to the EDA and Tourism
levies. These changes reduced the preliminary levy by $90,541, to $3,223,111, resulting in a total levy
increase over 2025 of 3.36%
I have added a column to the budget spreadsheets, which shows the budget presented in September,
compared to the numbers presented in August. A majority of the line items remain unchanged, but some
have been modified to meet the Council's requests.
September 16
Staff has prepared Resolution 09-16-25-01, a Resolution adopting the Preliminary 2026 Tax Levy. The
preliminary levy amount is $3,223,111, which is the same amount presented to Council at the September 3
Work Session.
Discussion:
The attached Resolution certified the City’s preliminary levy for 2026 as the levy amount presented at the
September 3 Work Session. This amount cannot be exceeded by the City’s final levy, due in December.
Options:
1) Approve Resolution 09-16-25-01-2026 Preliminary Levy
2) Table for further discussion
Recommendation:
Option 1
Attachments:
Resolution 09-16-25-01
WHEREAS, The City Council of the City of Scandia is required to determine a preliminary levy by the end
of September for inclusion on property tax statements distributed in November
WHEREAS, the property tax levy to be certified only represents the maximum property tax levy that the
City may consider, and the City Council may consider the adoption of a lower levy by the County's December
submission deadline.
THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCANDIA,
WASHINGTON COUNTY, STATE OF MINNESOTA, HEREBY ORDAINS AS FOLLOWS:
The City Council of the City of Scandia certifies that it will host its Truth-in-Taxation Public Hearing on its 2026 budget
and levy on Wednesday, December 3, 2025, at 6:30 p.m. at the Scandia Community Center, at 14727 209th St. N.
And, that the following maximum property tax levy certified in 2025, payable in 2026, be levied upon the taxable
property in the City of Scandia of $3,223,111 for the following tentative purposes
Total
The City Administrator is hereby instructed to transmit a certified copy of this resolution to the County Auditor of
Washington County, Minnesota.
Adopted by the City Council of the City of Scandia this 16th day of September, 2025
Steve Kronmiller, Mayor
Kyle Morell, City Administrator
Park Improvement Fund
Equipment Improvement Fund
Local Road Improvement Fund
Economic Development Authority Fund
$3,223,111
$20,000
$50,000
$451,708
$5,000
Tourism Committee Fund
Fire Department Fund
Public Safety Building Fund
$50,000
$25,000
$3,000
$125,000
RESOLUTION 09-16-25-01
A RESOLUTION ADOPTING THE PRELIMINARY 2026 LEVY
PURPOSE
General Fund
AMOUNT
$1,912,846
$580,557Debt Service Fund
General Capital Improvement Fund