Grand Forks County finance staff told the Board of Commissioners that the draft 2026 budget, as presented, exceeds the property‑tax levy cap by a material amount and that commissioners will need to decide whether to cut expenditures, use reserves, or adjust the levy.

Why it matters: the levy cap governs how much property tax revenue the county can levy without a voter authorization; exceeding the cap requires expenditure reductions or other adjustments before the budget is finalized.

Staff walked commissioners through two cap calculations. Using the first method, staff said the county’s budgeted levy totaled roughly $31,971,561 and the cap calculation returned $29,000,395.63, leaving a gap that would require about $2,600,000 in cuts. Using the second method staff reported a cap figure of $30,542,291 and a smaller but still material gap. Finance staff characterized the two calculations and said they run both methods and then take the more favorable result for that year.

Commissioners pressed staff for new‑growth amounts and valuation changes that affect whether the county needs to seek a mill increase. The chair asked staff to compute the exact new‑growth dollar amount and to rerun cap worksheets after updated valuation figures are available. Commissioners also asked for a spreadsheet showing multiple scenarios (with and without step increases, with and without the 2.4% cost‑of‑living adjustment).

Cash reserves and projected carryforward: commissioners noted the draft shows a projected cash reserve balance declining from a projected $18 million at the end of the current year to about $12.2 million by the end of 2026 in the current budget scenario. Several commissioners argued for using some portion of that carryforward to avoid cutting services or raising taxes; others cautioned that using reserves for ongoing operating costs could be imprudent and that reserves are earmarked or may be needed for capital obligations.

Correctional facility revenue and uncertainty: the budget narrative also depends on projected revenue tied to housing inmates under contracts. Commissioners and staff discussed a projected state lease revenue line that staff had modeled at about $2.62 million; later in the meeting commissioners were told that negotiations with the state were not finalized and the state’s current proposal appeared closer to $2.19 million if the state reduced the contracted beds from 72 to 60. Staff and the sheriff’s office cautioned that until bed counts and contract terms are finalized the exact revenue cannot be booked.

Next steps: the board directed staff to rerun the budget worksheets early the following week, provide updated cap calculations using the updated valuation/new‑growth numbers, and circulate a working spreadsheet in advance of the budget adoption vote. No formal vote was taken at the session.

Quotation in context: Chair Schneider emphasized timing and the need to see updated numbers early: “The earlier in the week the better because she’s then after that meeting, you have to rerun all the numbers again to send out on Friday so we have all weekend to look at it before we vote it go on the budget on Tuesday.” Commissioner Bjerke (spelled in the transcript several ways) said the board should not immediately assume a tax increase and suggested using carryforward if appropriate.