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City staff outline 2026 preliminary budget showing $798,008 projected general-fund gap; council discusses levy and enterprise pressures
Summary
Staff presented a preliminary 2026 general-fund summary with a $798,007.89 projected deficit and a placeholder 3% levy; enterprise funds (stormwater, sewer, refuse) showed strain—sewer costs driven by industrial biosolids and refuse requiring rate adjustments—prompting council discussion about multi-year levy planning and targeted fees.
City finance and staff presented an updated preliminary budget for 2026 and detailed pressures across several enterprise funds.
Staff showed a preliminary general-fund summary using a 3% placeholder levy ($214,139) and reported a remaining projected deficit of $798,007.89 for 2026. Finance staff said that number had improved slightly from a prior estimate but still requires council direction on revenue and spending choices.
Carla Anderson reviewed enterprise funds: stormwater had a reported cash balance of about $1.4 million (roughly 50% of annual expenses), sewer-treatment costs rose substantially because of industrial biosolids the city ships to Grand Forks (pushing treatment expenses higher), and refuse operations still showed losses even after recent residential rate increases. Staff said options include targeted rates for high-cost industrial users, phased commercial rate increases, and continued monitoring of cash balances and capital projects.
Council members expressed concern about variability in annual levy changes and urged a multi-year projection to smooth increases for residents. One councilor suggested a steady 5–6% year-over-year plan rather than unpredictable spikes. Staff estimated a 6–8% increase as a reasonable target to maintain current service levels, given personnel and health-insurance cost pressures.
Next steps: staff will continue budget work, provide more detailed rate options for enterprise funds, and return with analysis and recommended levy guidance for council consideration.
