Cottage Grove EDA approves modest HRA levy hike for 2026

The Cottage Grove Economic Development Authority voted Dec. 2 to set a 2026 housing and redevelopment authority (HRA) levy at $142,500, a $5,000 increase from the 2025 levy.

Finance Director Brenda Malinowski told the board the city first established a separate HRA levy in 2025 to make housing-related expenditures more transparent. She said the city split the prior EDA levy and moved approximately half of the salaries that supported housing activities into the new HRA fund. "We simply took the EDA levy from 2024 and we took 50% of it and we called it the HRA levy," Malinowski said during the presentation.

Malinowski said the proposed levy increase amounts to about a 3.6% rise from 2025 and that, because of new construction in the community, the median Cottage Grove homeowner will see an estimated one-dollar decrease in their HRA portion of the property tax bill in 2026. She explained the HRA levy revenue is intended for housing and redevelopment projects that benefit low- and moderate-income households.

EDA members asked for clarification on fund structure and transfers. Malinowski described three funds: the city’s General Fund for core services; the EDA special revenue fund, which funds EDA operations; and the HRA special revenue fund now supported by the HRA levy. She also explained the ED Trust Fund is a separate capital fund funded by donations, not taxpayer levy revenues. "Our general fund is our chief operating budget for the city," she said. "The HRA fund, also a special revenue fund, is funded now with this HRA levy."

After the presentation and a public hearing with no public speakers, the board approved Resolution 2025-002 to set the HRA levy for fiscal year 2026.

The EDA chair closed the hearing and noted the vote carried. No further implementation steps or budgets for specific HRA projects were adopted at the meeting; staff will bring the 2026 budget materials forward as required.