Eagan staff present proposed 2026–27 general fund budget; council signals support ahead of Sept. 2 levy vote

Eagan City Council reviewed a proposed 2026–27 general fund budget Aug. 11, 2025, in a workshop presentation by Finance Director Josh Feldman and city staff. The presentation outlined a proposed 7.9% increase in the general fund budget for 2026 and a proposed 8.9% increase in the 2026 property tax levy; formal action on the preliminary levy is scheduled for the council’s Sept. 2 meeting.

Why it matters: the proposal affects the city’s tax rate and household bills, supports staffing and operations across public safety, public works and other departments, and reflects debt service from a 2025 bond issue to renovate the Eagan Community Center.

Key figures and drivers

- Proposed changes: Feldman said the general fund budget is proposed to increase 7.9% in 2026 and that the proposed tax levy increase for 2026 is 8.9 percent. He said the city expects to present the preliminary levy for council consideration Sept. 2, 2025.

- One-time funds and public safety aid: the city received $3,020,000 in public safety aid in February 2023; Feldman and staff proposed using $1,050,000 of those funds in 2026 and additional one-time fund-balance dollars (about $1.3 million total one-time resources) to lower the levy impact in 2026 and phase levy support into 2027.

- Debt service: annual debt service tied to 2025A bonds for the Eagan Community Center remodel is about $992,000 annually and is included in levy projections; Feldman said that item accounts for roughly 7 percentage points of the levy change he presented.

- Revenue and household impact: the county’s assessments show the average Eagan home value at about $426,000 (a 3.3% increase); Feldman estimated the average city tax on that home could increase about 9.6%, or roughly $140 annually at the proposed 2026 levy level.

- Personnel and costs: personnel account for about 78% of the general fund; notable cost pressures include a projected 10% health insurance increase and state-mandated paid family and medical leave (about $150,000 in 2026). Feldman said the city expects to add two positions in 2026—a mechanic and a GIS supervisor—one of which would have a midyear impact.

Staff rationale and council response

Feldman described the proposal as part of a two-year budgeting strategy that uses available one-time funds in the first year to smooth levy impacts and phases recurring levy support into the second year. “I believe this is probably the first time we’ve really optimized the two-year budget strategy,” Feldman said.

City Administrator (Ms.) Miller and Feldman highlighted drivers including health insurance increases, paid family and medical leave, the phasing in of prior public-safety funding for 10 full-time-equivalent positions, and debt service tied to the community center renovation. Miller described the process as difficult and thanked department directors for work on departmental requests.

Council members asked about reserve levels and how much fund balance should be used now versus held for credit rating and future needs. Feldman said the city consults financial advisors and that there is no exact science; council members discussed trade-offs between drawing from reserves and pushing costs onto future levies.

There was verbal support from council members for the staff proposal; multiple council members indicated they were comfortable moving forward with the recommended approach while noting the need to monitor staffing and departmental service levels. Formal approval of the preliminary levy will occur at the Sept. 2 meeting; staff said the Truth in Taxation process will follow state statute and that the levy can be reduced but not increased after the December public hearing.

Ending

Staff will return Sept. 2 with the preliminary levy and detailed budget documents; Feldman and other staff encouraged council and public review of the full departmental budget books included in the meeting packet. No final levy or ordinance was adopted at the workshop.