Lake Elmo council adopts 2026 budget, 14% levy increase and 10-year CIP after truth-in-taxation hearing
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Summary
The council approved the 2026 budget (total general fund expenditures about $8.86 million), a total levy of $11,497,785 (about a 14% increase) with an estimated $179 annual impact on a median-value home, and a 10-year capital improvement program; the resolution passed 3–2 following public comment raising transparency and franchise-fee concerns.
After a public hearing and more than an hour of debate, the Lake Elmo City Council on Dec. 16 adopted the 2026 budgets, a property tax levy increase and a 10-year capital improvement program.
Clarissa, the city finance presenter, gave a high-level overview of the proposed 2026 general fund and utility budgets. She stated the general fund budget was about $8,859,000 in expenditures, an increase of roughly $907,000 from the prior year, and said the proposal included using $300,000 of fund balance. Clarissa also presented a proposed total levy of $11,497,785 and estimated a $179-per-year tax impact on a median-value home valued at $585,800.
The council opened a truth-in-taxation public hearing. Mary Deutsch asked the council to provide documentation explaining how the proposed $1.4 million levy increase would be allocated and criticized a monthly franchise fee appearing on residents’ Xcel Energy bills, calling it, in her words, “a sneaky way to generate extra revenue.” Cliff Bujold raised similar transparency concerns, said his personal tax increase was larger than the median estimate, and asked whether 3M will be held accountable to pay for PFAS-related costs tied to the municipal water treatment work.
During debate, council members and staff discussed the long-term financial planning that led to the levy request, including a 10-year capital improvement program intended to smooth large costs and reduce reliance on debt. Council members described planned hires and equipment purchases, including adding a public works position and phasing in three fire captains. A major CIP line item discussed was a water treatment plant (described as a sizable portion of the CIP by staff).
A motion to approve Resolution 2025-084 adopting the levy and budgets was made, seconded and approved by a 3–2 vote. Council members who voted in favor cited long-term planning, debt reduction goals and public safety needs as reasons for supporting the measure; those opposed said the increase was larger than they were comfortable approving and urged additional reductions or phasing of levies.
The council also adopted the 2026–2035 capital improvement program and later approved the 2026 fee schedule (Ordinance 2025-18), which incorporated the park use policy revisions approved earlier in the meeting.
