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Finance director outlines preliminary 2026 budget: $1.66M levy increase proposed, council discussion begins
Summary
Finance Director Reinhart presented a preliminary 2026 levy increase of $1,660,000 (6.22%) including $1.4M for general operations, $300,000 for capital improvements, an EDA levy increase of $50,000, and a target to keep the city among lower-tax communities; council discussion focused on assumptions and next steps.
Shakopee’s Finance Director presented the city’s preliminary 2026 budget and levy numbers on Aug. 19, flagging several moving pieces and asking for council input before staff finalizes recommendations.
Key figures presented: a proposed $1,660,000 increase in the levy (approximately 6.22%), driven by an estimated $1,400,000 increase in general fund operations and a $300,000 increase for capital improvements; a proposed $50,000 increase in the EDA levy; and a projected $3.9 million in building permit revenue for 2026 (staff noted the city has been conservative in forecasts and recently saw permit revenue above $5 million in prior years). The presentation included staffing and compensation assumptions: a market/compensation study recommendations for nonunion staff, proposed cost‑of‑living adjustments for unions and nonunion staff (3% and 3.5% in some groups), step increases, and an assumed health‑insurance cost increase used for planning (staff later said the renewal indicated a lower figure and the estimate would be refined).
Staff also proposed a new dedicated health inspector position (offset by additional inspection revenues), a part‑time marketing specialist shared between recreation and communications, and use of some fund balances as one‑time offsets. The city reiterated its goal to remain among the lower‑tax communities in the metro area while funding critical services. Councilors asked clarifying questions about assumptions, the EDA transfer, and how proposed fee and revenue changes (for example from the community center) affect the levy; staff said figures remain preliminary and will come back with more detail ahead of the Sept. 30 preliminary levy adoption deadline.
What happens next: staff will refine revenue and expenditure estimates, update health insurance renewal information after upcoming meetings, and return with a revised levy calculation before the statutory preliminary levy adoption deadline.
