Item 4.1 Preliminary Property Tax Levy
Request for
City Council Action
DEPARTMENT INFORMATION
ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE:
Administration City Administrator/Finance Director Flaherty September 28, 2026
PRESENTER(s) REVIEWED BY: ITEM #:
Administration 4.1 – 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 2027 are different than those originally
projected. To change the 2027 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 comment and ask
questions. This meeting may be held between November 25 and December 28 and no earlier than 6PM. With
the final City Council meeting of the year typically held the second Tuesday of December (December 14,
2026), staff would recommend the City Council consider a date of November 30 for this meeting.
SUPPORTING DOCUMENTS ATTACHED:
• PowerPoint Slides
• Tax Levy Calculation Summary
• Resolution 2026-86: Adjusting the 2027 Debt Service Property Tax Levy
• Resolution 2026-87: Adopting a Preliminary Property Tax Levy for Taxes Payable in 2027
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion to adopt Resolution 2026-86, adjusting the 2027 debt service property tax levy certified in the original bond
resolution.
Motion to adopt Resolution 2026-87, adopting a preliminary property tax levy for taxes payable in 2027.
Motion to set the Truth in Taxation public hearing for 6:00 p.m., on Monday, November 30, 2026. 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
9/25/2026
1
2027 Preliminary Property Tax Levy
SEPTEMBER 28, 2026
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 2027
County and School District Taxes also
included on this notice.
Final levy can be less, but not
more
1
2
9/25/2026
2
Budget & Levy Meetings
June
Staff prepare line-item budgets
July
City Administrator review of draft budgets
August
8/10: City Council Meeting – Special
Revenue & Debt Service Funds
8/11: City Council Meeting – General Fund
8/24: City Council Meeting – Capital
Project Funds & Tax Levy
September
9/14: City Council Meeting – General
Fund, Fund Balance Transfer & Tax Levy
9/28: City Council Meeting – Consider
Preliminary Tax Levy
Preliminary Levy
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
General Fund Tax Abatements Debt Service Capital
Improvement
Plan
2026 vs. 2027
2026 2027
3
4
9/25/2026
3
Preliminary levy = $8,150,000
Increase = $605,000
Major Factors
•Law Enforcement ($121,272)
•Full Year Budget for Fire Station Building ($95,399)
•New Positions
• Full Year Budget of New Positions Hired in 2026 ($83,635)
• Engineering Position in 2027 ($109,429)
• Finance Position in 2027 ($140,187)
• Facilities Maintenance Position ($76,561)
General Fund
Preliminary levy = $75,004
Decrease = $33,620
Purpose
• City Investment in Public Infrastructure = $949,187
• County Partnership of $400,000
• Repayment of Infrastructure done in 2028
Tax Abatement
5
6
9/25/2026
4
Preliminary levy = $1,527,836
Decrease = $39,778
Projects Financed
•Fire Station
•2018 Road Improvements
• Neighborhood Street Reconstruction
• Kadler Avenue Construction
•2007 Road Improvements
• Queens Avenue Construction
• CSAH 42 Reconstruction
Debt Service
Preliminary levy = $2,811,113
Increase = $926,826
Infrastructure Investments
•Parks & Trails
•City Streets
•Vehicles & Equipment
•City Buildings & Properties
•Future Facilities Reserve & Planning
Capital Improvement Plan
7
8
9/25/2026
5
Assessed Valuation Changes
Market
Value
Class
Rate
Tax
Capacity
Tax Capacity
9
10
9/25/2026
6
Tax Levy
• $12,563,953
Net Tax
Capacity
• $43,454,936
Tax Rate
• 28.913
Tax Rate
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 2026.
City Tax Calculation Assumes Residential Value of $410,650 (Otsego median appraised value for taxes payable 2027).
11
12
9/25/2026
7
Notes:
(*) Indicates a City has either an EDA or HRA Tax Levy in addition to the tax levy included above.
Tax Levy is the Final 2026 Tax Levy for each City.
Per Capita Tax Levy is Based on 2025 Population from the Minnesota State Demographer.
14
2027 Estimated Taxes - Calculation
Preliminary
Payable Payable (%)
2026 2027 Change Comments
Residential
Median Appraised Value 402,500$ 410,650$ 2.02% Source - Wright County
Less: Market Value Exclusion (10,325) (9,592) Max Benefit = $30,400 / Phase Out = $517,200
Taxable Market Value 392,175 401,059 Subtract MV Exclusion from Estimated MV
Class Rate 1.00% 1.00% Set by Legislature (Over $500k is 1.25%)
Tax Capacity 3,922 4,011 Taxable MV Multiplied by Class Rate
City of Otsego - Tax Rate 26.664 28.913 8.43% Tax Levy Divided by Tax Capacity * 100
City of Otsego - Estimated Taxes 1,046$ 1,160$ 10.89% Tax Capacity Multiplied by Tax Rate
114$
13
14
9/25/2026
8
15
Sample Property Percentages
Looking Forward
CAPITAL
IMPROVEMENT
PLAN
UTILITY FUND
BUDGETS
FEE SCHEDULE TRUTH IN
TAXATION
MEETING
FINAL BUDGET &
LEVY ADOPTION
15
16
9/25/2026
9
Questions:
CITY ADMINISTRATOR/FINANCE DIRECTOR – ADAM FLAHERTY
AFLAHERTY@OTSEGOMN.GOV
(763) 441-4414
17
City of Otsego
Property Tax Levy Calculations
Payable 2026
Revised: September 25, 2026
$%
2026 2027 Change Change Comment
General Fund 7,545,000 8,150,000 605,000 8.02%
Tax Abatements 108,624 75,004 (33,620) -30.95%
Debt Service
Series 2018A 106,314 113,412 7,098
Series 2020A 186,000 186,000 -
Series 2024A 1,275,300 1,228,424 (46,876)
Sub-total 1,567,614 1,527,836 (39,778) -2.54%
Capital Reserves
Pavement Management 600,000 500,000 (100,000)
Trails Management 82,000 88,000 6,000
Parks Equipment 450,000 475,000 25,000
Capital Equipment Revolving 613,954 661,816 47,862
Fire Capital Revolving 8,333 560,297 551,964
Facilities Reserve - 386,000 386,000
City Buildings & Property 130,000 140,000 10,000
Sub-total 1,884,287 2,811,113 926,826 49.19%
Grand Total 11,105,525 12,563,953 1,458,428 13.13%
Growth (%) 18.23%
Tax Capacity 42,394,192
Growth (%) 7.92%
Net Tax Capacity 41,649,271 43,454,936 Per Wright County (9-18-2026)
Growth (%) 7.98% 4.34%
Tax Rate 26.664 28.913
Population 23,790 24,451 Source = MN State Demographer
Tax Levy Per Capita 467 514
Residential City Tax City Tax
Valuation Tax Capacity 2026 2027 Change ($) Change (%)
200,000 1,715 457 496 39 8.53%
300,000 2,805 748 811 63 8.42%
410,650 4,011 1,069 1,160 91 8.51%
500,000 4,985 1,329 1,441 112 8.43%
600,000 6,250 1,667 1,807 140 8.40%
Description 2026 2027 Change ($) Change (%)
Median Appraised Value 402,500 410,650 8,150 2.02%
Less: MV Exclusion (10,325) (9,592)
Taxable Market Value 392,175 401,059
Tax Capacity 3,922 4,011 89 2.27%
Taxing Estimated Estimated
Authority Tax Tax Change ($) Change (%)
City of Otsego 1,046 1,160 114 10.90%
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.
City Taxes Only. Based on the Median Value for
each respective year provided by the Wright
County Assessor.
Preliminary Levy (9-28-2026)
Y:\Finance\Budget\2027\Property Taxes\Tax Levy Calculations (2027) 2027-V3
1
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2026-86
ADJUSTING THE 2027 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 $113,412
GO Improvement Refunding Bond, 2020A 349,440
TOTAL RECORDED LEVY $462,852 ; 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 2027
for debt service purposes:
GO Improvement Bond, 2018A $113,412
GO Improvement Refunding Bond, 2020A 186,000
TOTAL LEVY FOR DEBT SERVICE $299,412
2. That these debt service property tax levy adjustments are applicable to taxes payable for 2027 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 28th day of September, 2026.
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: 2026-87
ADOPTING A PRELIMINARY PROPERTY TAX LEVY
FOR TAXES PAYABLE IN 2027
WHEREAS, the Otsego City Council is required by State Statute to establish a preliminary tax levy for taxes payable in 2027 by
September 30, 2026, 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
2027; and
WHEREAS, the Otsego City Council has considered projected revenues for funds using property tax proceeds in 2027; 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 2027 for the following
purposes:
General Revenue $8,150,000
Tax Abatement 75,004
GO Improvement Bond, 2018A 113,412
GO Improvement Refunding Bond, 2020A 186,000
Lease Revenue Bond, 2024A 1,228,424
Capital Improvement Plan 2,811,113
Total Preliminary Property Tax Levy $12,563,953
2
ADOPTED by the Otsego City Council this 28th day of September, 2026.
MOTION BY:
SECONDED BY:
IN FAVOR:
OPPOSED:
CITY OF OTSEGO
__________________________________
Jessica L. Stockamp, Mayor
ATTEST:
__________________________________
Audra Etzel, City Clerk