North St. Paul staff propose 6% levy increase to fund 10-year, $100M CIP

North St. Paul City Council convened July 1 for a workshop to begin the 2026 budget process, where Finance Director Dan Winnick presented a comprehensive budget packet and recommended a baseline 6% levy increase to support the city’s capital improvement plan (CIP).

Winnick said the city manager set a goal “to shoot for a 6% levy increase and to hold our utility rates the same,” and that the 10-year CIP—totaling roughly $100 million in staff estimates—was the primary driver behind the proposed levy. He told council the package in the packet covers every fund the council approves, including the general fund, HRA and EDA levies, enterprise funds, internal service funds and special revenue funds.

Why it matters: the levy proposal is intended to preserve funding for streets, parks and city facilities amid rising debt service and personnel costs. Winnick said personnel is the largest expenditure in the general fund (about 69%) and public safety (police, fire and code enforcement) consumes roughly 63% of general-fund spending, constraining other options.

How staff propose to reach a 6% baseline - Maintain a $131,000 transfer of penalty revenues from the electric fund into the general fund (included in the packet but subject to council approval); - Reinstatement of some previous transfers from the water, wastewater and surface water funds that had been reduced; and - Using the asset preservation fund to absorb some short-term program costs (for example, a multi-year Emerald Ashbore removal effort that had been funded from the levy).

Winnick emphasized that debt and capital are the key pressure points: a recent bond issuance raised debt-service obligations (he identified a 2025 bond among others) and the CIP includes multi-year street-reconstruction and facility projects that require steady levy support. He summarized the net city-portion levy increase at about $466,000 (roughly 6% year-over-year when combined with park and HRA/EDA components).

Revenue mix and fiscal risks Winnick said property taxes make up just under 57% of general-fund revenue and local government aid (LGA) is about $1.6 million. He warned that state-level reductions in LGA could force additional levies: “If we were to lose 10% of our local government aid, that’s $160,000—there’s over a 2% levy increase just to make up that component,” he said. Staff noted fiscal-disparity calculations typically arrive in late summer and will affect final tax impacts.

Enterprise funds and system pressures Winnick walked through enterprise fund forecasts: the water fund shows a modest budget increase largely tied to capital; wastewater is similar, with capital driving most of the change; the electric fund’s revenue projection is lower than 2025’s budgeted number and contractual costs to providers such as MMUA affect both revenue and expenditures. He said the fiber fund faces a structural problem: Ramsey County libraries plan to move off city fiber, reducing fiber revenue by an estimated $29,000 and complicating plans to eliminate a roughly $2 million negative fund balance.

Technology and internal services Internal service funds are modeled to cover charges across departments, but Winnick called out sharply higher technology costs: Metro Inet service is budgeted near $390,000 for 2026 (versus about $221,000 when he began), and a new HR/payroll contract will increase internal-service obligations. Winnick said the IT fund can cover two years of increased costs from fund balance but these items merit council attention.

Community center and asset preservation The community center currently projects no revenue and Winnick said it will need about an $85,000 transfer; its 2026 operating budget is roughly $97,000. Separately, he recommended transferring $1.3 million in ARPA funds that had been parked in street maintenance into the asset preservation fund to meet facility needs identified by a recent assessment. He said that transfer will be a separate council action.

Council discussion and options Council members asked about fiscal disparity timing and about alternative approaches to minimize net resident cost, including a discussed concept to levy penalty revenues and then rebate them via electric-bill credits to reduce the net impact on residents. Winnick offered a sample impact: a 6% levy on a median-valued home (median value cited in the packet as about $311,000) would amount to roughly $100 per year.

Outcome and next steps No formal budget decisions were adopted at the workshop; staff asked council for direction on the levy target and for feedback on proposed transfers, the ARPA/asset-preservation move and the community center funding. The council unanimously adopted the workshop agenda at the start of the meeting and later adjourned by voice vote. Staff will return with updated fiscal-disparity numbers, tax-impact materials and more detailed CIP funding scenarios for future council consideration.

Representative quotes “...we were shooting for a 6% levy increase and to hold our utility rates the same,” Finance Director Dan Winnick told council. “We’ve got a good 10‑year outlook for the CIP now, which is critical,” Winnick said. “Their decisions today will define your tomorrow,” Winnick closed his presentation.

Ending note Council did not take a formal vote on the levy target at the workshop; next steps are updated fiscal-disparity calculations, tax-impact analyses and follow-up council work sessions and hearings before any levy ordinance or budget adoption occurs.