Crookston City Council reviews preliminary 2026 budget, faces $999,039 capital shortfall

Jeff, a city staff member, told the Crookston City Council that the city’s preliminary 2026 budget shows about $1.9 million in departmental capital requests, of which roughly $360,000 are firm and the rest subject to prioritization, leaving a funding gap of about $999,039 for capital projects.

The staff presentation outlined assumptions driving the draft budget: an estimated 8.0–8.2% increase in health-care costs and a roughly 5.5% wage increase tied to contracts. Jeff said the draft includes a planned $250,000 transfer from the water fund to the general fund as one piece of the financing picture.

Why it matters: the council was shown how capital choices interact with long-term debt and the tax levy. Staff identified two major near-term projects: a Sherman/Sheridan road rehabilitation estimated at $2.6 million with an estimated first-year levy obligation of about $22,000 and an industrial-park infrastructure project that could require a local match of roughly $3.3–$3.5 million, contingent on an expected U.S. EDA grant. Jeff said bond payments associated with these projects would raise levy-obligated debt service to an estimated $312,000 in 2027 and to $511,000 by 2030 under the plan presented.

The council heard the city’s consultant CIP lists about $108 million in capital needs, with roughly $45 million classified as critical. Jeff described the city’s special-assessment policy example — water and sewer each covering 30% of a project, 30% through special assessments, leaving about 10% of project cost for levy obligation — and noted projects along Highway 2 north would not be eligible for special assessments, raising the levy share for those work items.

Council members pressed for clarity on several line items, including an estimated $75,000–$80,000 parking-lot repair behind city hall, and asked whether some previously budgeted grant dollars and ongoing support to transit providers such as Tri Valley and Golden Link remain justified. Jeff said department heads had already pared many line items and that larger adjustments will likely need to be program-level cuts or revenue strategies rather than marginal line-item reductions.

Staff framed two complementary paths to close the gap: (1) constrain capital spending to preserve operating reserves, and (2) expand tax capacity through new development. Jeff described a pending RFP for a 20-acre housing project that could yield about 47 new homes and an estimated 150 new residents, and he noted another 18-unit income-limited housing project proposed near Casey’s. He also said the city is exploring private opportunities such as solar-battery leases near wastewater ponds and outreach to potential data-center operators as longer-term revenue strategies.

The council will take the staff analysis into scheduled budget-workshop sessions in September intended to produce a preliminary levy by the statutory deadline (Sept. 30). The staff presentation and the council’s follow-up questions make clear the municipality faces a near-term capital shortfall and must balance immediate infrastructure needs against long-term reserve and debt-management goals.