City council adopts preliminary 2026 budget and tax levy for publication

The Inver Grove Heights City Council adopted four preliminary resolutions setting the city’s proposed 2026 tax levies and preliminary general fund budget and set the statutorily required public meeting date for Dec. 8.

Finance Director Amy Holf summarized the budget framework the council had reviewed in prior work sessions. Holf said the revised preliminary proposed levy is $36,178,590 — a 5.74% increase from the prior year on the number presented — and that the council directed staff to reduce earlier figures to reach the current total. She explained the preliminary levy must be adopted by Sept. 30 and that the final levy adopted in December may be lower but not higher.

Holf reviewed drivers for the levy increase, including wages and benefits (cost-of-living adjustments under existing labor agreements), the new Minnesota family and medical leave tax, health insurance increases, and the phase-in of previously approved public-safety hires (a multi-year “safer” savings plan for firefighters and a smaller phase-in for police hires, the latter partially offset by grant funding). Holf also described one-time uses of prior-year savings: phase-two safer-savings spending, a requested emergency warning siren in the northwest area, and an incident command vehicle. She said police vehicle outfitting will use prior savings and forfeiture funds.

The preliminary levy packet also included the pavement management levy (presented as a 3% increase) and the debt service levy. Holf provided an estimate for a median-valued residential property (median value cited as $362,200) and said the estimated annual change in city taxes would be $80.59 under the preliminary levy figure, subject to Dakota County valuation calculations.

Council members asked questions about the police forfeiture fund balance and the reliance on building-permit revenues. Councilor DeGott asked for the forfeiture balance; Holf said she would provide that figure. Councilor Scales and others praised the clarity of the presentation and asked staff to continue monitoring revenue estimates. After discussion a councilor moved and the council passed the four preliminary resolutions: citywide preliminary levy, three special taxing-district levies (approximately $79,394 total across the three districts), and confirmation of the Dec. 8 truth-in-taxation meeting date.

Staff will continue refining revenue estimates and bring the final levy and budget to the council in December.