The Lake Elmo City Council convened on September 16, 2025, to discuss key financial matters, including the proposed 2026 street improvements and the preliminary budget and levy for the upcoming year. The meeting began with a review of the funding structure for the street improvements project, which is set to be financed through a combination of special assessments, general funds, and bonds. Council members sought clarification on the allocation of costs, particularly regarding the use of general funds, which has been a topic of concern in previous discussions.

City officials confirmed that while 30% of the project costs would be covered by special assessments, the remaining 70% would be funded through city resources, including potential bonds. The council emphasized the importance of establishing a dedicated infrastructure fund to support future projects without relying heavily on general funds. The discussion highlighted the ongoing strategic planning efforts aimed at optimizing funding sources for capital projects.

Following this, the council moved on to the preliminary budget and levy for 2026. The proposed budget outlines total tax revenues of approximately $6.3 million, with non-tax revenues exceeding $2.2 million. Total expenses are projected at $8.8 million, reflecting an 11% increase from the previous year. Key factors contributing to this increase include the addition of public works staff and ongoing projects such as the comprehensive planning process and fire department staffing.

The proposed levy stands at $11,497,785, marking a 14% increase over 2025. This increase is expected to impact the median value home by approximately $179 annually, translating to less than $15 per month. The council noted that the proposed tax rate remains competitive compared to other cities in Washington County.

Council members engaged in discussions regarding the implications of adjusting funding levels for infrastructure reserves, with some advocating for a careful approach to managing debt projections. The meeting concluded with a motion to approve the resolution for the street utility improvements, which passed unanimously.

Overall, the council's discussions underscored the importance of strategic financial planning as Lake Elmo prepares for its upcoming projects and budgetary commitments. The next steps will involve further refinement of the budget and continued evaluation of funding strategies to ensure sustainable growth and infrastructure development.