Cannon Falls council adopts 2026 tax levy, approves year-end transfers to correct 2021 fund errors

Cannon Falls adopted its 2026 tax levy and budget and approved year-end budget transfers on Dec. 16, the City Council announced after brief discussion and unanimous voice votes.

City staff gave a short summary before a public hearing, saying the preliminary levy this year had been 10.8% but the final levy presented to the council represents about a 3.17% increase from the current levy. John, a city staff member, said most local home values are expected to remain flat and that the estimated effect on a median residential property is roughly a $38–$45 increase next year.

The council opened a public hearing on Resolution 2848 (the 2026 tax levy and budget); no members of the public spoke and the council then moved to adopt the resolution. Councilmember Diane Johnson moved for adoption and Lisa seconded; the motion carried on a voice vote.

Separately, the council approved Resolution 2852 authorizing year-end budget transfers intended to correct several prior transfers that had been posted to the wrong funds in 2021. John said staff identified two main errors: $166,500 that had been transferred in 2021 and intended for the Fire Capital Improvement Project was instead posted to the Park Capital Fund, and a $365,000 transfer meant for a water tower restoration project had remained in the Park Fund. The resolution moves those dollars back toward the intended uses, dedicates $100,000 toward repairs for the museum roof, and consolidates bond principal and interest budget lines to avoid duplicate transfers in future years.

John told the council auditors had advised consolidating the budget treatment for bond principal and interest so future adjustments would be made through auditors' processes rather than duplicative transfers; that change is expected to lower future contribution requirements for utility funds because prior debt service accounts built up positive balances.

Votes at a glance - Adopt Resolution 2848, 2026 tax levy and budget: moved by Diane Johnson; seconded by Lisa; outcome: approved on voice vote. - Adopt Resolution 2852, year-end budget transfers/corrections: moved by Lisa; seconded by Chris; outcome: approved on voice vote. - Consent agenda (items a–p) approved, with Item I (sewer inspection camera) pulled for separate consideration: outcome: approved on voice vote. Consent items included Resolution 2849 (accept a $1,000 donation from Invenergy to the ambulance department), Ordinance 413 (fees/charges; second reading and adoption), Resolution 2850 (accept a $1,500 donation from Invenergy to the police department), memorandum of agreement with the law enforcement union to extend probation, promotion of Officer Altoff, Resolution 2851 (fire department officer stipends), and final pay request for the 2023–24 street improvement project.

Why it matters The levy and budget set the city's tax and spending plan for 2026 and the approved transfers correct past accounting errors, freeing funds for intended capital projects (including dedicating $100,000 to the museum roof) and adjusting how bond payments are budgeted. Staff said these changes helped lower the levy increase from the preliminary rate and will affect the utility funds' contribution lines going forward.

What's next City staff indicated the auditors will finalize year-end audit work in the spring; the transfers will be processed through that audit and the city will implement the consolidated bond accounting approach in future budgets.

Sources: city staff presentation and council discussion at the Dec. 16 city council meeting.