North Mankato council reviews proposed 6.27% 2026 tax levy; seeks $285,000 in cuts to lower rate

Finance Director Ryan presented the City of North Mankato’s proposed 2026 budget and a total tax levy of $10,184,000, a 6.27% increase from 2025 that represents a $601,111 rise in property-tax revenue. The levy proposal would allocate $6,325,000 to the General Fund, $2,350,000 to the Debt Service Fund, $75,000 to the Port Authority and $1,434,000 to the Capital Levy.

Ryan told the council the General Fund revenue budget is proposed at $10,919,547, an increase of $236,679, and that Debt Service Fund revenue is proposed at $3,883,923 with total 2026 debt payments of $3,897,657 (an increase of $1,077,360). The 2026 plan includes a proposed $34 million debt issuance to fund a new public works facility, Belgrade improvements and pool liner and repair work. Ryan also said the Port Authority General Fund would receive $75,000 in property-tax support and that the Port Authority's total revenue budget for 2026 is proposed at $592,050, an increase of $340,148.

Department-level changes reviewed by Ryan include a small decrease in the legislative budget (-$595), a $67,640 increase in general government largely tied to personnel for the election year, no net increase expected for the police department after planned reductions in overtime and services, a $21,352 increase for the volunteer fire department for turnout gear and State Aid payments, a $24,944 decrease in the street department largely from reduced sealcoating and salting, and a $100,173 increase for parks to fund a new Parks Superintendent, court resurfacing and contractor costs. The library budget is proposed to rise by roughly $43,112, and the Bookmobile line shows a modest $7,814 increase. Community development is projected up $31,396 mostly for wages and insurance.

Ryan said current interfund transfers are expected to fall by $45,700 as the Storm Water Fund becomes more self-supporting. Area agency disbursements noted for increases include approximately $8,597 for mass transit and $88,036 for upgrades to the All-Season Arena.

Council members expressed concern about the proposed levy. Ryan said the draft levy reflects a 1.385% rate increase in the staff-calculated tax-rate metric and that, to lower the levy closer to 0%, the council would need about $285,000 in additional reductions. The council directed staff to pursue options and return with follow-up information.

Staff presented a range of potential reductions and revenue options. Proposals to cut personnel-related costs included reducing overtime through changes to weekend park rounds, flexible event-staff scheduling, greater use of part-time seasonal staff, reclassifying the Parks and Recreation Coordinator’s FLSA status to exempt, and hiring an intern to support Caswell Sports and youth programming. Council rejected the suggestion to leave vacant positions unfilled when employees resign or retire because doing so could shift costs into overtime.

Revenue and program cuts discussed included modest reductions to agency disbursements (staff identified possible $12,000 reductions each for Vine Faith in Action and the Twin Rivers Center for the Arts), pausing or restructuring Symphony on the Prairie unless additional sponsorships are found and shifting some Belgrade events to Business on Belgrade, and pausing Bookmobile services until a replacement vehicle is purchased while the city explores alternate options. The council also considered reducing or eliminating the Caswell Park transfer of $77,000 and adjusting concession and fee schedules to reduce Mill/Overlay and Sealcoating expenses.

On capital delivery the council discussed re-evaluating project assignments so smaller projects currently contracted to Bolton & Menk could be handled in-house to reduce consultant costs. The fleet-replacement plan was also targeted for reductions; Police Chief Gullickson said he could forgo two planned squad replacements but would prefer to keep one if possible.

Council Member Peterson expressed opposition to adding a street-light fee on utility bills as merely reallocating how the city collects revenue, while Mayor Carlson asked staff to provide additional detail on a potential street-light utility fee and on utility-rate comparisons with peer cities. Staff noted North Mankato currently has among the lowest utility rates compared with comparable cities.

The council gave staff direction to refine options and return with detailed proposals and fiscal impacts. Council Member Steiner moved, seconded by Council Member Whitlock, to adjourn the work session; the motion carried and the session adjourned at 6:25 p.m.