The City of Chaska City Council adopted Resolution 2025-68 to set the proposed 2026 maximum property tax levy during its regular meeting. Council Member Graff made the motion to adopt the resolution and Council Member Hatfield seconded; the motion passed on a voice vote.

Matt, a city staff member presenting the budget, said the resolution is the council's first formal action on the 2026 budget and summarized key policy drivers: capture new growth in town, cover expenditure inflation, finish the fourth and final year of the building improvement program, sustain general fund reserves and fully fund capital maintenance (the city's CAMP program).

The levy proposal represents a 14.606% increase in the city's general fund and EDA levy, but staff emphasized that new construction and rising market values reduce the per-household impact. Staff estimated the net impact on a median-valued home would be about $172 annually (roughly $14.33 per month): about $85 of that for baseline operations and approximately $87 for the city's building program. The presentation noted the median home value figures used in the calculation and explained that much of the city's recent valuation increases are attributable to new construction rather than market changes on existing properties.

Why it matters: The levy funds the final year of a four-year building program that includes a new public safety facility, the municipal service building (MSB), a planned library project and a later City Hall remodel. Council and staff said the program also helps maintain service levels while the city absorbs a rapid population and development surge.

Key budget points and program details

- Building improvement program: Staff said 2026 is intended to be the last funding year of a four-year program that has prioritized public safety facilities first, then the municipal service building, then the library and finally City Hall remodels. The MSB concept plan is approved and staff expects to go out for bids in late January or early February with a potential May 2026 construction start and an estimated 14–18 month build time.

- Public safety and service changes: The budget includes a shift to a 24-hour duty crew model for the fire service starting Jan. 1 (staff said the change will improve response times overnight). The budget also funds one police officer beginning July 1 and a new police social worker position to respond to mental-health related calls.

- CAMP and capital projects: The city continues its capital asset maintenance program at an annual baseline of $1,000,000, with an indexing approach to add inflationary increases going forward. Planned projects noted for 2026 include repaving Bavaria Road (a project cost cited at about $1,400,000) and three miles of trail resurfacing.

- General fund reserves and transfers: The city has budgeted $300,000 annually to build reserves since 2021. Staff reported a general fund reserve balance increase from about $1.9 million in 2020 to roughly $6.9 million in 2024 (about 33% of the target 40% reserve level). Staff estimated that, if building permit revenue continues to outpace budgeted amounts, the city could reach the 40% target within approximately two years.

- Utility and franchise revenues: The city charges a 5% franchise fee and an additional 5% contribution from its electric fund to the general fund (totaling about 10% of electric sales). Staff cited an anticipated electric-fund transfer approaching $5.5 million next year tied to higher electric sales; a projected franchise-fee contribution to the general fund was estimated at about $150,000 but described as preliminary until collection begins.

- Local sales tax and housing: The city reported receipt of a 1% local sales tax allocation (three-quarters to transportation, one-quarter to housing), with an estimated housing portion of about $339,000 this year and projection near $345,000 next year. Staff described using those housing funds as potential seed money to leverage projects with the CDA for affordable housing.

Process, schedule and next steps

Staff reviewed procedural deadlines tied to truth-in-taxation notices: councils must adopt a maximum levy by Sept. 30 (staff framed the September action as setting a ceiling that may be lowered later but not increased), the truth-in-taxation public hearing is scheduled for Dec. 1, and the council is scheduled to adopt the final levy and budgets on Dec. 15. Staff also noted the EDA will separately set its levy at a short EDA meeting; staff said the EDA amount was included in the impact calculations presented to the council.

Council discussion and context

Council members and staff explained the levy in the context of strong recent growth: population estimates presented in the packet showed the city's population rising to roughly 30,000 from about 18,000 several years earlier, with market value increases driven largely by new construction. Council members emphasized that the levy funds both essential services (public safety, streets and utilities) and capital maintenance that preserves infrastructure and city assets. Several council members urged residents to review the presentation materials and contact council members with questions before the final levy adoption.

Action recorded

The council adopted Resolution 2025-68, setting the proposed 2026 maximum property tax levy. The motion was made by Council Member Graff, seconded by Council Member Hatfield, and passed on a voice vote; staff recorded "motion passes." The EDA levy will be set separately at a short EDA meeting, and the council is scheduled to hold a truth-in-taxation hearing on Dec. 1 and adopt the final levy and budgets on Dec. 15.

Ending

Staff said more detailed discussions of other funds (recreation/community center, curling center, golf courses and inter-utility funds) will follow in October and November work sessions. Council members invited residents to review the meeting materials and ask questions ahead of the truth-in-taxation hearing.