City administration recommends 5.9% levy increase in 2026 budget; council to set preliminary levy Sept. 22

Administrator Zelms, City Administrator, told the council this was the first of three budget study sessions and walked members through a recommended two‑year budget and the schedule for levy adoption.

The administration recommended a tax levy of $118,200,000 for 2026 and a total recommended budget including Rochester Public Utilities of $663,850,000, and described a proposed 5.9% year‑over‑year increase in the levy for 2026. Zelms said the recommended levy reflected work by departments to reduce an earlier, larger levy projection and to align decision packages with the council’s recently adopted strategic priorities.

Why this matters: the council must set a preliminary levy at or before the statutory deadline that Zelms identified as Sept. 22; after that date the council may lower the levy but “cannot go higher than” the preliminary amount, she said. The levy level sets the maximum property tax the council may adopt later in the year and is the primary local revenue source for the general fund and many city services.

Key cost drivers and decisions - Employee costs and labor negotiations: Zelms said personnel costs are the largest long‑term driver and that multiple labor units and contracts are under review. She described projections in the personnel line that reflect cost‑of‑service and bargaining assumptions. City finance staff (Rachel…