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Isanti City Council adopts 0% levy, using one‑time funds to balance 2026 budget
Summary
The Isanti City Council voted 4‑0 to adopt a 2026 budget that holds the property tax levy flat by using one‑time revenue and fund balance, after finance staff outlined two budget options and long‑term impacts of reserve use.
The Isanti City Council voted unanimously to adopt a 2026 budget that keeps the city’s levy at 0% and covers the difference with one‑time funds and fund balance.
Nick George, the city’s finance director, presented two options: one that would raise the levy by about 5.05% and use roughly $212,000 of fund balance, and a second that would keep the levy flat but draw about $395,000 from reserves. George told the council the first option would leave unreserved fund balance near 50.87% of expenditures; the flat‑levy option would lower that ratio to about 47.20%.
Council members examined the tradeoffs between smoothing taxes now and preserving reserves for future years. George highlighted that the budget projections did not include wage or insurance increases and that a delayed capital project (well No. 4) moved roughly $2 million of expenditure into 2026 but would be paid from the water enterprise fund, not the general fund. He also noted a debt service payment due to fall off in 2029 that would reduce recurring costs by roughly $200,000 per year thereafter.
Several council members supported using an anticipated $165,000 EDA property sale as part of the funding plan while noting that sale proceeds were not yet finalized and would be handled later if received. "I guess I'll make a motion to roll that 165 into the general, keep the levy at zero," said Council Member Heman when moving the motion to adopt the flat levy. Council Member Peterson seconded; the motion passed 4‑0.
Council directed staff to continue monitoring enterprise fund timing, liquor‑store transfers used for one‑time projects, and longer‑term levy impacts for 2027–2029. The council recorded the vote and moved on to remaining business.
The adopted budget is expected to hold the tax rate flat for 2026 while using reserves and potential one‑time receipts to avoid immediate increases; staff cautioned that reliance on one‑time funds may require larger levy adjustments in future years if recurring expenses are not reduced.
