Minnetonka council adopts EIP and CIP, certifies preliminary levy increase of 7.935%

Minnetonka City Council on Sept. 8 approved a package of planning and budget documents that staff say together explain the city’s spending priorities and a preliminary tax levy that will be submitted to Hennepin County.

The council adopted the 2026–2030 Economic Improvement Program and the 2026–2030 Capital Improvement Program and set a preliminary 2025 tax levy (collectible in 2026) that staff presented as a 7.935% increase in total city levies. The motions passed on unanimous roll-call votes.

Why it matters: staff and council framed the package as a multi-year investment in public safety, infrastructure and housing programs. City Manager Funk told the council: “The property tax increase for 2026 in the amount of 7.935%,” and staff said the increase is largely driven by public-safety investments and one-time shifts in capital funding.

What the package contains: the Economic Improvement Program (EIP) describes programmatic investments (housing, redevelopment and business assistance) and funding sources including a development fund balance, the HRA levy and an Affordable Housing Trust Fund. Community development director Julie Wishnak summarized program shares and told the council, “Housing is 37%,” noting the EIP focuses on program administration, affordable housing initiatives such as Pathways and Homes Within Reach, and grants that support business and housing work.

Capital plan and major projects: Finance Director Darren Nelson presented a five-year Capital Improvement Program of roughly $165 million that prioritizes public-health-and-safety and maintenance of existing systems. Major projects include trail expansions, water-meter replacement, the Excelsior Boulevard reconstruction (a joint project with Hennepin County) and other street and utility work. Nelson said staff is relying on a mix of grants, transfers from surplus fund balances and levy support to fund the CIP.

Public-safety costs and recurring services: council members and staff repeatedly flagged the public-safety master plan as a principal cost driver. Nelson told the council the budget includes funding for nine firefighters hired in 2025 (whose full-year personnel costs increase the 2026 budget), a multi-year Axon service agreement for body cameras and records management (about $615,000 annually), and operational funding for drone-first-responder capacity moving from CIP into operations in later years. Councilmembers described those as necessary investments to improve response and safety.

Special revenue and program subsidies: the proposal separates special-revenue levies for the ice arena and for the Marsh. Nelson said the Marsh is operating with projected annual net losses and that staff expects a subsidy in 2026; the preliminary budget earmarked $200,000 to the Marsh and $200,000 to the ice arena to stabilize operations next year.

Process and next steps: councilmembers emphasized that tonight’s action set a preliminary levy that will be submitted to the county; by law the council may lower but not raise the levy before the final adoption. Staff said additional study sessions and a statutory public hearing are scheduled, and the final levy and budget adoption is set for Dec. 8.

Votes at a glance: the council voted unanimously to adopt the EIP (motion by Councilmember Calvert, second by Councilmember Coakley), to adopt the CIP (motion by Councilmember Calvert, second by Councilmember Schack) and to set the preliminary levy, the Bassett Creek Watershed Management District levy matters, and the debt-service cancellation (motion by Councilmember Romaley, second by Councilmember Wilburn).