Item 5.1 Budget Levy CIP
Request for
City Council Action
DEPARTMENT INFORMATION
ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE:
Administration City Administrator/Finance Director Flaherty December 8, 2025
PRESENTER(s) REVIEWED BY: ITEM #:
Administration 5.1 – 2026 Budgets & 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 adopting operating budgets, a final property tax levy,
and the capital improvement plan.
ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED?
No Yes, was held on December 2, 2025.
BACKGROUND/JUSTIFICATION:
The City Council and staff began the budgeting process back in May, and have met in six special city council meetings,
which are work session settings in preparation and review of the operating budgets, property tax levy, and capital
improvement plan.
The proposed General fund revenue budget totals $10,850,321, an increase of $910,219 (9.16%) compared to the
current year, and the proposed expenditure budget totals $11,019,558, an increase of $1,079,456 (10.86%) compared
to the current year. The proposed budget is an un-balanced budget in the amount of $169,237, being funded with
fund balance more than City policy guidelines which will offset the budget and tax levy within the General Fund rather
than be transferred to a capital reserve fund.
The Public Utility budgets include the Water, Sanitary Sewer, and Storm Water funds. The primary sources of
revenues for these funds are from charges for services to customers of the public utilities. The expenses are
comprehensive, and include operating expenses, depreciation, capital outlay, debt service and interfund transfers.
The utility funds have cash flow projections which are monitored and updated multiple times per year. The rates for
the charges for services to customers have been analyzed, and current recommendations for increases have been
included in the budgets.
The Debt Service Funds budget includes revenues and expenditures for each of the City’s two outstanding general
obligation bond issues, not including public utility fund bond issues. The primary sources of revenue include property
taxes and special assessments. These revenues along with fund balance will repay the principal and interest on the
respective bond issues.
The Special Revenue Funds budget includes activity for the City’s three Tax Increment Districts Funds. The
expenditures within these funds are for TIF pay-as-you-go note agreements. These expenditures are funded through
tax increment collections.
The Economic Development Authority budget includes meeting stipends for the Board of Commissioners which is
accounted for within the General fund budget and debt service expenditures for the outstanding lease revenue bond
issue for construction of the fire station. The debt service expenditures are funded through lease payments from the
City.
The proposed property tax levy accounts for General fund revenues, Capital fund reserves, Debt Service repayments
and Tax Abatements. The total proposed levy is $11,105,525. The most recent information available from Wright
County shows the City’s net tax capacity total of $41,701,870 (+8.12% from 2025). This calculates an estimated City
tax rate of 26.631, compared to the prior year rate of 24.352.
The proposed Capital Improvement Plan (CIP) covers the years 2026-2035. A summary of the CIP is included and is
organized by funding source. Inclusion of an item within the CIP does not commit final approval by the City Council,
rather it directs staff to plan towards and gather necessary information for an educated final approval on each
respective item. Each individual item is planned, researched, and brought back to City Council for final approval when
the respective item is ready to move forward.
SUPPORTING DOCUMENTS ATTACHED:
• Resolution 2025-65: Adopting the 2026 Annual Operating Budgets
o Budget Summaries: General, Public Utility, Debt Service, Special Revenue, & EDA Funds
• Resolution 2025-66: Setting a Final Property Tax Levy for Taxes Payable 2026
o Tax Levy Calculations
• Resolution 2025-67: Adopting the 2026-2035 Capital Improvement Plan
o Projects by Funding Source Summary
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion to adopt Resolution 2025-65 Adopting the 2026 Annual Operating Budgets.
Motion to adopt Resolution 2025-66 Setting a Final Property Tax Levy for Taxes Payable 2026.
Motion to adopt Resolution 2025-67 Adopting the 2026-2035 Capital Improvement Plan.
BUDGET INFORMATION
FUNDING: BUDGETED:
N/A
N/A
1
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2025-65
ADOPTING THE 2026
ANNUAL OPERATING BUDGETS
WHEREAS, the Otsego City Council has on December 2, 2025, held a public meeting to allow for public comment before
adopting a final budget and certifying a final property tax levy; and
WHEREAS, the Otsego City Council has reviewed the proposed General, Public Utility, Debt Service, Special Revenue, and EDA
fund budgets and has determined the budget is adequate to fund the respective fund operations for the year 2026.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA:
1. That the following revenues and expenditures (summarized) be authorized as the final budget for the operation of
the General fund for 2026 as follows:
Revenues
Property Taxes $7,553,534
Cable Franchise Fees 106,000
Licenses and Permits 1,904,463
Intergovernmental 186,333
Charges for Services 268,365
Miscellaneous 228,626
Transfers from Other Funds 603,000
Total Revenues $10,850,321
Fund Balance
Use of Fund Balance in Excess of Policy $169,237
Total Revenues and Fund Balance Use $11,019,558
Expenditures
General Government $2,549,850
Public Safety 4,827,286
Public Works 2,234,775
Parks and Recreation 1,306,497
Economic Development 101,150
Total Expenditures $11,019,558
2
2. That the following revenues and expenses (summarized) be authorized as the final budget for the operation of the
Public Utility funds for 2026 as follows:
Revenues
Operating $8,372,395
Non-Operating 1,084,179
Availability & Connection Charges 5,143,579
Special Assessments 40,248
Bond Proceeds 26,441,878
Total Revenues $41,082,279
Expenses
Operating $4,486,687
Capital Outlay 17,851,584
Depreciation 5,144,320
Debt Service 5,411,154
Transfers to Other Funds 603,000
Total Expenses $33,496,745
3. That the following revenues and expenditures (summarized) be authorized as the final budget for the operation of
the Debt Service funds for 2026 as follows:
Revenues
Property Taxes $292,313
Special Assessments 160,924
Total Revenues $453,237
Expenditures
Principal $495,000
Interest and Fiscal Agent Fee’s 65,481
Total Expenditures $560,481
4. That the following revenues and expenditures (summarized) be authorized as the final budget for the operation of
the Special Revenue funds for 2026 as follows:
Revenues
Tax Increments $645,302
Total Revenues $645,302
Expenditures
Economic Development $585,035
Total Expenditures $585,035
3
5. That the following revenues and expenditures (summarized) be authorized as the final budget for the operation of
the Economic Development Authority for 2026 as follows:
Revenues
Lease Revenues from City $1,275,300
Total Revenues $1,275,300
Expenditures
Interest and Fiscal Agent Fee’s $752,800
Total Expenditures $752,800
ADOPTED by the Otsego City Council this 8th day of December, 2025.
MOTION BY:
SECONDED BY:
IN FAVOR:
OPPOSED:
CITY OF OTSEGO
__________________________________
Jessica L. Stockamp, Mayor
ATTEST:
__________________________________
Audra Etzel, City Clerk
City of Otsego
General Fund Budget - 2026
Requested Budget
Revenue & Expenditure Summary
Final
Budget Budget
2025 2026 $ Change % Change
Revenues
Taxes 6,992,002$ 7,553,534$ 561,532$ 8.03%
Cable Franchise Fees 117,000 106,000 (11,000) -9.40%
Licenses & Permits 1,703,459 1,904,463 201,005 11.80%
Intergovernmental 209,554 186,333 (23,221) -11.08%
Charges for Services 244,830 268,365 23,535 9.61%
Special Assessments 3,500 3,400 (100) -2.86%
Fines & Forfeitures 33,600 37,100 3,500 10.42%
Investment Interest 142,657 175,126 32,469 22.76%
Miscellaneous 15,500 13,000 (2,500) -16.13%
Interfund Transfers 478,000 603,000 125,000 26.15%
Subtotal 9,940,102 10,850,321 910,219 9.16%
Expenditures
General Government 2,196,516 2,549,850 353,334 16.09%
Public Safety 4,263,499 4,827,286 563,787 13.22%
Public Works 2,118,872 2,234,775 115,903 5.47%
Culture & Recreation 1,250,315 1,306,497 56,182 4.49%
Economic Development 110,900 101,150 (9,750) -8.79%
Interfund Transfers - - - #DIV/0!
Subtotal 9,940,102 11,019,558 1,079,456 10.86%
Net Change in Fund Balance -$ (169,237)$
Description
City of Otsego
Public Utility Fund Budget - 2026
Revenue & Expenditure Summary
Budget Budget
2025 2026
Utility Revenues
Operating 8,118,701$ 8,372,395$
Non-Operating 2,966,469 1,084,179
Availability + Connection Charges 4,696,540 5,143,579
Special Assessments 35,274 40,248
Bond Proceeds 10,098,000 26,441,878
Subtotal 25,914,984 41,082,279
Expenditures
Personal Services 1,488,288 1,735,152
Supplies 1,019,630 1,024,788
Services & Other Charges 1,582,905 1,726,747
Capital Outlay 20,506,400 17,851,584
Depreciation 4,638,841 5,144,320
Debt Service 5,208,236 5,411,154
Interfund Transfers 478,000 603,000
Subtotal 34,922,300 33,496,745
Excess (Deficiency) of Revenues
Over (Under) Expenditures (9,007,316)$ 7,585,534$
Description
City of Otsego
Debt Service Fund Budget - 2026
Revenue & Expenditure Summary
Budget Budget
2025 2026
Revenues
Taxes 290,308$ 292,313$
Special Assessments 168,333 160,924
Subtotal 458,641 453,237
Expenditures
Principal 480,000 495,000
Interest 81,556 64,081
Fiscal Agent Fee's 1,000 1,400
Subtotal 562,556 560,481
Excess (Deficiency) of Revenues
Over (Under) Expenditures (103,915)$ (107,244)$
Description
City of Otsego
Special Revenue Fund Budget - 2026
Revenue & Expenditure Summary
Budget Budget
2025 2026
Revenues
Tax Increments 609,601$ 645,302$
Subtotal 609,601 645,302
Expenditures
Personal Services 3,200 3,500
Services & Other Charges 4,500 5,100
Development Incentives 510,542 576,435
Subtotal 518,242 585,035
Excess (Deficiency) of Revenues
Over (Under) Expenditures 91,359$ 60,267$
Description
City of Otsego
EDA Debt Service Fund Budget - 2026
Revenue & Expenditure Summary
Budget Budget
2025 2026
Revenues
Lease Revenues from City -$ 1,275,300$
Subtotal - 1,275,300
Expenditures
Principal - -
Interest 439,759 750,300
Fiscal Agent Fee's 2,500 2,500
Subtotal 442,259 752,800
Excess (Deficiency) of Revenues
Over (Under) Expenditures (442,259)$ 522,500$
Description
1
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2025-66
SETTING A FINAL PROPERTY
TAX LEVY FOR TAXES PAYABLE IN 2026
WHEREAS, the Otsego City Council has on December 2, 2025, held a public meeting to allow for public comment before
adopting a final budget and certifying a final property tax levy; and
WHEREAS, the Otsego City Council is required by State Statute to establish a final property tax levy for taxes payable in 2026
and certify the final property tax levy to the Wright County Auditor.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA:
1. That a tax is hereby levied for collection in 2026 upon all taxable properties in the City of Otsego for the purpose and
sums as follows:
General Revenue $7,545,000
Tax Abatement 108,624
GO Improvement Bond, 2018A 106,314
GO Improvement Refunding Bond, 2020A 186,000
Lease Revenue Bond, 2024A 1,275,300
Capital Improvement Plan 1,884,287
Total Tax Levy $11,105,525
ADOPTED by the Otsego City Council this 8th day of December, 2025.
MOTION BY:
SECONDED BY:
IN FAVOR:
OPPOSED:
CITY OF OTSEGO
__________________________________
Jessica L. Stockamp, Mayor
ATTEST:
__________________________________
Audra Etzel, City Clerk
City of Otsego
Property Tax Levy Calculations
Payable 2026
Revised: December 4, 2025
$% $%
2025 2026 Change Change 2026 Change Change Comment
General Fund 7,000,000 7,802,000 802,000 11.46% 7,545,000 545,000 7.79%
Tax Abatements 87,436 108,624 21,188 24.23% 108,624 21,188 24.23%
Debt Service
Series 2018A 104,308 106,314 2,006 106,314 2,006
Series 2020A 186,000 186,000 - 186,000 -
Series 2024A - 1,339,065 1,339,065 1,275,300 1,275,300
Sub-total 290,308 1,631,379 1,341,071 461.95% 1,567,614 1,277,306 439.98%
Capital Reserves
Pavement Management 800,000 600,000 (200,000) 600,000 (200,000)
Trails Management 76,000 82,000 6,000 82,000 6,000
Parks Equipment 425,000 450,000 25,000 450,000 25,000
Capital Equipment Revolving 587,937 613,954 26,017 613,954 26,017
Fire Capital Revolving 6,189 8,333 2,144 8,333 2,144
City Buildings & Property 120,000 130,000 10,000 130,000 10,000
Sub-total 2,015,126 1,884,287 (130,839) -6.49% 1,884,287 (130,839) -6.49%
Use of Fund Balances (220,152) (220,152)
Grand Total 9,392,870 11,206,138 1,813,268 19.30% 11,105,525 1,712,655 18.23%
Growth (%) 4.50%
Tax Capacity 39,284,126 42,446,791 42,446,791 Source = Wright County
Growth (%) -0.59% 8.05% 8.05%
Net Tax Capacity 38,570,629 41,701,870 41,701,870 Source = Wright County
Growth (%) -0.84% 8.12% 8.12%
Tax Rate 24.352 26.872 26.631
Population 23,132 23,790 23,790 Source = MN State Demographer
Tax Levy Per Capita 406 471 467
Residential City Tax City Tax City Tax
Valuation Tax Capacity 2025 2026 Change ($) Change (%) 2026 Change ($) Change (%)
200,000 1,715 418 461 43 10.29% 457 39 9.33%
300,000 2,805 683 754 71 10.40% 747 64 9.37%
402,500 3,922 955 1,054 99 10.37% 1,044 89 9.32%
500,000 4,985 1,214 1,339 125 10.30% 1,327 113 9.31%
600,000 6,250 1,522 1,680 158 10.38% 1,664 142 9.33%
Description 2025 2026 Change ($) Change (%) 2026 Change ($) Change (%)
Median Appraised Value 386,400 402,500 16,100 4.17% 402,500 16,100 4.17%
Less: MV Exclusion (11,774) (10,325) (10,325)
Taxable Market Value 374,626 392,175 392,175
Tax Capacity 3,746 3,922 175 4.68% 3,922 175 4.68%
Taxing Estimated Estimated Estimated
Authority Tax Tax Change ($) Change (%) Tax Change ($) Change (%)
City of Otsego 912 1,054 142 15.57% 1,044 132 14.47%
Levy Description
City Taxes Only. Bold valuation is the Median
Value of all residential properties within the
City and is provided by the Wright County
Assessor. This range of values represents 92.8%
of all residential homesteads within the City.
City Taxes Only. Based on the Median Value for
each respective year. Note: The formula for tax
capacity changed in 2025 to due legislative
changes for the Homestead Market Value
Exclusion Program.
Preliminary Levy - (9/22/2025) Proposed Final Levy (12/8/2025)
Y:\Budget\2026\Property Taxes\Tax Levy Calculations (2026)2026-V4
1
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2025-67
ADOPTING THE 2026-2035
CAPITAL IMPROVEMENT PLAN
WHEREAS, the Otsego City Council has determined it is fiscally responsible and necessary to develop a capital improvement
plan that identifies items that may require significant capital investment; and
WHEREAS, the Otsego City Council has reviewed the details and estimated cost of each item included within the capital
improvement plan; and
WHEREAS, the Otsego City Council has identified probable funding sources for each item included within the capital
improvement plan; and
WHEREAS, the inclusion of an item within the capital improvement plan does not commit final approval for each respective
item, rather each item will be presented to the Otsego City Council with final expenditure amounts and a detailed funding plan
to gain final approval.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA:
1. That the 2026-2035 Capital Improvement Plan, as set forth in summary, attached as Exhibit A to this Resolution is
adopted.
ADOPTED by the Otsego City Council this 8th day of December, 2025.
MOTION BY:
SECONDED BY:
IN FAVOR:
OPPOSED:
CITY OF OTSEGO
__________________________________
Jessica L. Stockamp, Mayor
ATTEST:
__________________________________
Audra Etzel, City Clerk