Items relating to setting the 2026 preliminary tax levies and the 2027 preliminary budget

Darin Nelson, Finance Director

Erik Nilsson, City Attorney

Moranda Dammann, Assistant City Manager

Mike Funk, City Manager

City staff is pleased to propose to the city council a 2026 property tax levy, collectible in 2027, and a preliminary 2027 budget consistent with our strategic goals and community values. Within that framework, the budget recommendations presented are both forward-looking and responsive to the community and the city council’s concerns, specifically to ensure that city services are maintained. The proposal aligns with the reaffirmation by a considerable majority of Minnetonka community survey respondents that they would support an increase in taxes to maintain current city service levels. The recommendations are built using long-term forecasts, including a conservative eye on the national economy.

Staff recommends increasing the 2027 preliminary base city levy by 3.5 percent, with an additional 0.8 percent dedicated to the Capital Improvements Program, 1.60 percent dedicated to continuing public safety master plan implementation, and 0.7 percent dedicated to future debt service related to community facilities and/or Fire Station #2 improvements, for a total city levy increase of 6.6 percent. This is a slight decrease from the 6.8 percent increase that was discussed at the August study session. 

As always, the City of Minnetonka will continue to provide the excellent services that our residents and businesses have come to expect, and at a reasonable value, both in 2027 and well into the future.

Motion to adopt the following resolutions:

• A resolution setting a preliminary 2026 tax levy, collectible in 2027, and a preliminary 2027 budget, and consenting to a special benefit tax levy of the Minnetonka Economic Development Authority, and
• A resolution setting a preliminary 2026 tax levy, collectible in 2027, for the Bassett Creek Watershed Management Tax District.

The city’s six strategic priorities drive the development and direction of the annual budget.

This action sets the 2026 preliminary tax levies collectible in 2027 and establishes a preliminary 2027 budget. 

See supplemental background report.