The City of International Falls presented a preliminary 2026 levy of $4,978,484 and a budget framed around maintaining public safety, replenishing reserves and long-term planning, city finance officer Emma Rudd said at a Truth in Taxation public hearing on Dec. 1, 2025.

Rudd said the preliminary levy — the number certified by the council in September and required to be presented under state rules — represents a worst-case scenario that can be lowered but not increased after certification. "After the adoption of a 2026 preliminary levy, the levy can be lowered, but it cannot be, increased," Rudd said.

The preliminary levy as presented is allocated across six municipal funds, she said, with the general government fund accounting for about 51% of the total. Rudd listed the proposed allocations as permanent improvements (16.9%), parks and recreation (10.6%), ambulance (8.3%), library (7.3%) and capital reserves (5.9%). She said the city budgeted to put $1,000,000 back into general fund reserves in the preliminary plan and had included a dedicated ambulance levy ($414,873) that represented roughly 10% of the initial 20% levy increase.

Rudd attributed the levy increase to several drivers: replenishing reserves, the ambulance levy, inflationary pressures on utilities and fuel, higher employee wages and insurance costs, and new state-mandated paid-leave premiums. She told residents Couchiching County saw roughly $900,000 in net tax capacity growth for fiscal 2026, with about $400,000 of that growth in the City of International Falls; Rudd did not specify the underlying causes of that growth.

Rudd also explained how individual property tax notices can show changes that differ from the percentage change in a local levy because taxable market values, class rates and other jurisdictions’ levies affect the final bill. As an example, she walked through a sample parcel whose market value rose from $153,800 to $167,600 and whose county- and city-level levies produced different percentage effects for that parcel.

Several adjustments have been made to the draft working budget since the preliminary levy was set in September, Rudd said: she reported cutting the ambulance levy in half to $207,437, reducing the planned reserve replenishment from $1,000,000 to $800,000, removing the $115,500 airport appropriation and removing one police officer position through attrition (saving roughly $120,000). "All in all, I would say there's a strong likelihood that our city levy will come down significantly from that 20% given discussions we're having at a committee level," Rudd said.

No formal vote was taken at the hearing. Mayor (role stated) said the council will continue budget meetings and intends to set and adopt a final levy at its Dec. 15 regular council meeting.

Public commenters pressed elected officials on personnel costs and why raises were included in the budget. Eric Nielsen asked which employees were receiving increases and whether administrative costs for departments were charged to each department or to the central administration; council and staff replied that contracted union raises follow the contract, and proposed salaried raises had been discussed at 3% (an amount Rudd estimated at about $34,000). "If you have a contract that says every year certain employees are going to get a certain raise...that's what happens," Rudd said.

Several residents questioned whether salaried staff could forgo raises to reduce the levy. Nancy Imhoff said she opposed the proposed 3% raises in the current financial situation: "I don't know how you guys can warrant that, honestly." Bobby Bernath and others asked when the last salaried increase occurred; the council said salaried staff received a 3% raise earlier in 2025.

A resident, Scott Carock, said his individual tax bill rose 41% and asked why the statewide city average reported by the Minnesota Department of Revenue was 8.7%. Rudd and the mayor reiterated that individual bill changes depend on property valuations and distribution of levy burdens across jurisdictions, and noted the city receives substantial local government aid (LGA) distributed by state formula.

Rudd listed resources for taxpayers, including the state property tax refund and the senior citizen property tax deferral program, and reiterated that valuation disputes must be raised with the county assessor and the board of equalization in the spring.

The hearing closed with no formal action; the council remains scheduled to meet again and expects to certify a final levy at its Dec. 15 meeting.