Oak Grove advances preliminary 2026 budget framework: 4.95% levy, 3.5% COLA included

Oak Grove city staff and its finance consultant presented a draft preliminary 2026 budget Sept. 8 that would hold the citywide levy increase to 4.95% while including a 3.5% cost-of-living adjustment (COLA) for all staff.

The budget summary presented by Carrie, a consultant from ABDO, lists a total levy increase of $221,008 and shows the city—s tax rate moving from 25.88 last year to about 25.441 under the proposed levy. "With the proposed 4.95% budget, that does include a 3.5% COLA increase for all staff," Carrie said. She also reported the total increase as "$221,008."

Why it matters: the council aimed to keep the levy increase below 5% while addressing wages and a multi-year capital-improvement plan (CIP). Council members pressed staff on whether near-term cuts rely on one-time grants or transfers and asked for clearer CIP balances so future years are not left with steep catch-up increases.

Key elements and council direction

- COLA and levy: Council members signaled informal consensus to include a 3.5% COLA in the proposed budget that produces the 4.95% levy scenario. Staff said other COLA scenarios (3%, 4% and 4.5%) were modeled but the 3.5% scenario is included in the current draft.

- CIP and fund shifts: Staff described multiple adjustments to CIP and operating accounts to reach the levy goal. The fire acquisition CIP line was reduced to $100,000, but staff said that transfers — $25,000 from the charitable gambling fund and $50,000 from public-safety aid — effectively increase available resources for fire-related capital to roughly $175,000 in the year discussed. Council members requested clearer documentation of those transfers and the actual usable balance of CIP funds before the preliminary budget vote.

- Grants and assumptions: Council members asked whether some assumed reductions depend on grant awards. Carrie said Oak Grove is eligible to apply for a Met Council comprehensive-plan grant and an Anoka County recycling grant; the Met Council grants will not be awarded until October and the recycling amount is a conservative estimate. Council members asked staff to show grant-dependent amounts as conditional entries.

- Specific line-item changes mentioned by staff: removal of a warming-house attendant from costs; reduction of the fire acquisition capital line (see transfers above); transfer of $25,000 from the charitable gambling fund; reduction of the trail maintenance allocation to $51,000; moving part of the comprehensive-plan expense into a multi-year line; shifting newsletter costs from the mayor and council department to administration; and raising watershed professional services to $15,000.

- Vehicles and equipment: The council discussed delaying purchase of a replacement pickup (an older 2008 pickup/plow) and replacement battery-powered rescue tools for Rescue 11. Rob (fire chief) said the existing rescue tools are second-generation and batteries are still available but may cease production; several council members recommended deferring both purchases for a year unless equipment failures require earlier replacement. The city will keep the CIP allocation available even if the purchases are deferred.

- Radios and encryption: The council discussed encrypted radio upgrades for public-safety radios; staff said only a few mobiles and handhelds will require replacement immediately but encryption compliance may force additional replacements.

- Commissions stipend: Council members proposed and gave informal agreement to add a small stipend for planning and parks commission members in the preliminary budget (discussion centered on $25 to $100 options). The council agreed to include a modest stipend placeholder for the preliminary budget and to discuss and refine the approach before the final budget.

- Finance and audit costs: Staff identified finance and audit line-item increases that drive part of the proposed change, including accounting services and audit preparation. The council discussed the level of contracted finance support (about $90,000 in the contract) and asked staff to provide clearer hour/effort breakdowns and to assess whether in-house options would be more cost-effective over time.

Context and next steps

City staff emphasized the difficulty of tracking CIP balances because prior-year purchases, transfers and placeholders can make on-paper balances hard to interpret. Council members asked staff to provide a clearer "funded-to-date" or "available balance" line for each CIP account so the council can see what is actually available versus what is encumbered or already allocated.

Council members said they expect a preliminary budget vote during the regular meeting later the same evening; staff will return with updated CIP balances, a clearer grant contingency notation, and options for a possible stipend or project manager stipend for the fire chief related to the planned building project. No formal budget vote was recorded in the work session transcript; the council gave informal consensus on the items above and directed staff to update the materials before the preliminary vote.

Ending

Staff will update the draft with clarified CIP balances, grant contingencies and options for commission stipends and chief compensation and present the revised draft at the regular council meeting for the formal preliminary budget action.