Item 5.1 2026 Preliminary Property Tax Levy
Request for
City Council Action
DEPARTMENT INFORMATION
ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE:
Administration City Administrator/Finance Director Flaherty September 22, 2025
PRESENTER(s) REVIEWED BY: ITEM #:
Administration 5.1 – Preliminary Tax Levy
STRATEGIC VISION
MEETS: THE CITY OF OTSEGO:
X Is a strong organization that is committed to leading the community through innovative communication.
X Has proactively expanded infrastructure to responsibly provide core services.
X Is committed to delivery of quality emergency service responsive to community needs and expectations in a
cost-effective manner.
X Is a social community with diverse housing, service options, and employment opportunities.
X Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff is recommending the City Council adopt resolutions related to the preliminary property tax levy and to
schedule the truth in taxation meeting.
ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED?
No No
BACKGROUND/JUSTIFICATION:
The City Council and staff have met in three work session settings in preparation and review of the preliminary
property tax levy. Each item is discussed below:
1) When the City issues debt, a property tax levy certification resolution is sent to Wright County. The levy
amounts in that resolution are projections at the time of issuance. Each year, City staff analyzes the debt
service funds to determine if a property tax levy is needed and what the levy amount should be. Given the
most recent analysis performed, the property tax levies for payable 2026 are different than those originally
projected. To change the 2026 debt levies from the amounts in the original certification resolution, Wright
County requires the City Council to pass a resolution.
2) Minnesota State statutes require the City to certify a preliminary property tax levy on or before September
30th to the County auditor. The preliminary property tax levy amount will be used to formulate the truth in
taxation notices that will be sent out by Wright County later this fall. It is important to note that the City’s
final levy can be less, but not more than this preliminary levy amount.
3) The Minnesota Department of Revenue requires that cities with a population over 500 hold a meeting at
which the budget and property tax levy will be discussed, and the public allowed to speak. This meeting may
be held between November 25 and December 29 and no earlier than 6PM. With the final City Council meeting
of the year typically held the second Tuesday of December (December 8, 2025), staff would recommend the
City Council consider a date of either December 1st or 2nd for this meeting.
SUPPORTING DOCUMENTS ATTACHED:
• PowerPoint Slides
• Tax Levy Calculation Summary
• Resolution 2025-46: Adjusting the 2026 Debt Service Property Tax Levy
• Resolution 2025-47: Adopting a Preliminary Property Tax Levy for Taxes Payable in 2026
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion to adopt Resolution 2025-46, adjusting the 2026 debt service property tax levy certified in the original bond
resolution.
Motion to adopt Resolution 2025-47, adopting a preliminary property tax levy for taxes payable in 2026.
Motion to set the Truth in Taxation public hearing for 6:00 p.m., on December 1st OR 2nd, 2025. The meeting will be
held in the Council Chambers at 8899 Nashua Avenue NE, Otsego, MN 55330.
BUDGET INFORMATION
FUNDING: BUDGETED:
N/A
N/A
9/19/2025
1
2026 Preliminary Property Tax Levy
SEPTEMBER 22, 2025
Preliminary Levy
Estimated amount of money
the city plans to collect to
fund budgeted expenditures
not funded by other revenue
sources
Levy amount used for truth-
in-taxation notices to
property owners to provide
an estimate of taxes payable
in 2026
County and School District Taxes also
included on this notice.
Final levy can be less, but not
more
1
2
9/19/2025
2
Budget & Levy Meetings
June
Staff prepare line-item
budgets
July
City Administrator
review of draft budgets
August
8/4: City Council
Meeting – General
Fund
8/11: City Council
Meeting – Special
Revenue & Debt
Service Funds
September
9/8: City Council
Meeting – Capital
Project Funds & Tax
Levy
9/22: City Council
Meeting – Consider
Preliminary Tax Levy
Preliminary Levy
7,581,848
108,624
1,631,379
1,884,287
2026 Preliminary Levy
General Fund Tax Abatement Debt Service Capital Projects
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
General Fund Tax Abatement Debt Service Capital Projects
2025 vs. 2026
2025 2026
3
4
9/19/2025
3
Preliminary levy = $7,581,848
Increase = $581,848
Major Factors
•Election Year ($76,808)
•Contracts
• Law Enforcement ($85,750)
• Fire Protection ($238,765)
•Employees
• New Positions for IT & HR ($144,677)
• New Positions for Fire ($173,325)
General Fund
Preliminary levy = $108,624
Increase = $21,188
Purpose
• City Investment in Public Infrastructure = $949,187
• County Partnership of $400,000
• Repayment of Infrastructure in 2028
Tax Abatement
5
6
9/19/2025
4
Preliminary levy = $1,631,379
Increase = $1,341,071
Projects Financed
•Fire & Emergency Services Facility
•2018 Road Improvements
• Neighborhood Street Reconstruction
• Kadler Avenue Construction
•2007 Road Improvements
• Queens Avenue Construction
• CSAH 42 Reconstruction
Debt Service
Preliminary levy = $1,884,287
Decrease = $130,839
Infrastructure Investments
•Parks & Trails
•City Streets
•Vehicles & Equipment
•City Buildings & Properties
Capital Improvement Plan
7
8
9/19/2025
5
Market
Value
Class
Rate
Tax
Capacity
Tax Capacity
Tax Levy
• $11,206,138
Tax
Capacity
• $40,337,056
Tax Rate
• 27.781
Tax Rate
9
10
9/19/2025
6
Otsego
St.
Michael
(*)
Otsego
(Prelim)Dayton Hanover
(*)
Monticel
lo (*)Rockford Albertvill
e
Annanda
le Waverly Delano
Buffalo
(*)
Clearwat
er
Montros
e
Maple
Lake Cokato Howard
Lake
South
Haven
Tax Rate 24.352 26.821 27.781 35.394 37.681 37.701 40.742 42.861 43.340 44.412 44.509 51.965 55.526 56.824 58.896 64.148 65.772 76.154
City Tax 955 1,052 1,090 1,388 1,478 1,479 1,598 1,681 1,700 1,742 1,746 2,038 2,178 2,228 2,310 2,516 2,579 2,987
-
500
1,000
1,500
2,000
2,500
3,000
3,500
-
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
Wright County Cities - Tax Rates
Tax Rate City Tax
Notes:
(*) Indicates a City has either an EDA or HRA Tax Levy in addition to the tax rate included above.
Tax Rate is Final Tax Rate for Taxes Payable 2025.
City Tax Calculation Assumes Residential Value of $402,500 (Otsego median appraised value for taxes payable 2026).
12
2026 Estimated Taxes - Calculation
Preliminary
Payable Payable (%)
2025 2026 Change Comments
Residential
Median Appraised Value 386,400$ 402,500$ 4.17% Source - Wright County
Less: Market Value Exclusion (11,774) (10,325) Max Benefit = $30,400 / Phase Out = $517,200
Taxable Market Value 374,626 392,175 Subtract MV Exclusion from Estimated MV
Class Rate 1.00% 1.00% Set by Legislature (Over $500k is 1.25%)
Tax Capacity 3,746 3,922 Taxable MV Multiplied by Class Rate
City of Otsego - Tax Rate 24.352 27.781 14.08% Tax Levy Divided by Tax Capacity * 100
City of Otsego - Estimated Taxes 912$ 1,090$ 19.42% Tax Capacity Multiplied by Tax Rate
11
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9/19/2025
7
Looking Forward
CAPITAL
IMPROVEMENT
PLAN
UTILITY FUND
BUDGETS
FEE SCHEDULE TRUTH IN
TAXATION
MEETING
FINAL BUDGET &
LEVY ADOPTION
Questions:
CITY ADMINISTRATOR/FINANCE DIRECTOR – ADAM FLAHERTY
AFLAHERTY@OTSEGOMN.GOV
(763) 441-4414
13
14
City of Otsego
Property Tax Levy Calculations
Payable 2026
Revised: September 19, 2025
$%
2024 2025 2026 Change Change
General Fund 6,336,000 7,000,000 7,802,000 802,000 11.46%
Tax Abatements 88,224 87,436 108,624 21,188 24.23%
Debt Service
Series 2018A 102,144 104,308 106,314 2,006
Series 2020A 197,000 186,000 186,000 -
Series 2024A - - 1,339,065 1,339,065
Sub-total 299,144 290,308 1,631,379 1,341,071 461.95%
Capital Reserves
Pavement Management 1,000,000 800,000 600,000 (200,000)
Trails Management 70,000 76,000 82,000 6,000
Parks Equipment 400,000 425,000 450,000 25,000
Capital Equipment Revolving 550,393 587,937 613,954 26,017
Fire Reserve 210,000 - - -
Fire Capital Revolving - 6,189 8,333 2,144
City Buildings & Property 35,000 120,000 130,000 10,000
Sub-total 2,265,393 2,015,126 1,884,287 (130,839) -6.49%
Use of Fund Balances (220,152) (220,152)
Grand Total 8,988,761 9,392,870 11,206,138 1,813,268 19.30%
Growth (%) -3.66% 4.50%
Tax Capacity 39,516,976 39,284,126 40,707,494
Growth (%) 23.20% -0.59% 3.62%
Net Tax Capacity 38,897,895 38,570,629 40,337,056
Growth (%) 23.29% -0.84% 4.58%
Tax Rate 23.109 24.352 27.781
Population 22,705 23,132 23,790
Tax Levy Per Capita 396 406 471
Description 2024 2025 2026 Change ($) Change (%)
Median Appraised Value 402,700 386,400 402,500 16,100 4.17%
Less: MV Exclusion (997) (11,774) (10,325)
Taxable Market Value 401,703 374,626 392,175
Tax Capacity 4,017 3,746 3,922 175 4.68%
Taxing Estimated Estimated Estimated
Authority Tax Tax Tax Change ($) Change (%)
City of Otsego 928 912 1,090 178 19.52%
Levy Description
Preliminary Levy - (9/22/2025)
Y:\Budget\2026\Property Taxes\Tax Levy Calculations (2026) 2026-V2
1
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2025-46
ADJUSTING THE 2026 DEBT SERVICE PROPERTY TAX LEVY
CERTIFIED IN THE ORIGINAL BOND RESOLUTION
WHEREAS, the Wright County Auditor’s records show the original debt levies pledged by the City Council at the time of sale
as follows:
GO Improvement Bond, 2018A $106,314
GO Improvement Refunding Bond, 2020A 307,252
TOTAL RECORDED LEVY $413,566 ; and
WHEREAS, the City of Otsego has, in its most recent audited financial statement, recorded cash balances meeting
requirements in the Debt Sinking Funds maintained for the 2020A bond issue; and
WHEREAS, the cash balances in the Debt Sinking Funds, together with future collections of special assessments and property
tax levies will be sufficient to meet the debt service requirements for the Series 2020A bond issue; and
WHEREAS, the restructured property tax levy schedule will result in a lower amount levied to repay the Series 2020A bond
issue when compared to the original debt levies pledged at the time of the bond sale; and
WHEREAS, the debt levies have been adjusted based on revenue collections, cash balances reported and projections.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA:
1. That the following amounts are approved adjusted property tax levies to be levied as property taxes payable in 2026
for debt service purposes:
GO Improvement Bond, 2018A $106,314
GO Improvement Refunding Bond, 2020A 186,000
TOTAL LEVY FOR DEBT SERVICE $292,314
2. That these debt service property tax levy adjustments are applicable to taxes payable for 2026 only and that any
future changes in levy will be adopted at such time as is proper and prudent.
2
ADOPTED by the Otsego City Council this 22nd day of September, 2025.
MOTION BY:
SECONDED BY:
IN FAVOR:
OPPOSED:
CITY OF OTSEGO
__________________________________
Jessica L. Stockamp, Mayor
ATTEST:
__________________________________
Audra Etzel, City Clerk
1
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2025-47
ADOPTING A PRELIMINARY PROPERTY TAX LEVY
FOR TAXES PAYABLE IN 2026
WHEREAS, the Otsego City Council is required by State Statute to establish a preliminary tax levy for taxes payable in 2026 by
September 30, 2025, and certify the preliminary tax levy to the Wright County Auditor; and
WHEREAS, the Otsego City Council has reviewed the City’s anticipated expenditures for funds using property tax proceeds in
2026; and
WHEREAS, the Otsego City Council has considered projected revenues for funds using property tax proceeds in 2026; and
WHEREAS, revenues from sources other than property taxes are not sufficient to meet the anticipated expenditures of said
funds; and
WHEREAS, the debt levies have been adjusted based on revenue collections and projections.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA:
1. That the following amounts are the maximum to be levied as property taxes payable in 2026 for the following
purposes:
General Revenue $7,802,000
Tax Abatement 108,624
GO Improvement Bond, 2018A 106,314
GO Improvement Refunding Bond, 2020A 186,000
Lease Revenue Bond, 2024A 1,339,065
Capital Improvement Plan 1,884,287
Use of Fund Balances (220,152)
Total Tax Levy $11,206,138
2
ADOPTED by the Otsego City Council this 22nd day of September, 2025.
MOTION BY:
SECONDED BY:
IN FAVOR:
OPPOSED:
CITY OF OTSEGO
__________________________________
Jessica L. Stockamp, Mayor
ATTEST:
__________________________________
Audra Etzel, City Clerk