Hillman outlined key operating expenditures, noting that personnel services would account for the largest expense at approximately $9.58 million, an increase driven by contract settlements and staffing adjustments. The city plans to integrate technology and utility departments, budgeting for six additional full-time employees.

Capital expenses for 2026 include a $5.5 million allocation for remodeling Fire Station 1, necessitating debt issuance. Despite requests for increased appropriations from departments like the airport commission and the library, the council opted to maintain some levies at previous levels. Hillman highlighted efforts to balance fiscal responsibility with department needs, noting a 5.05% increase in total budgeted expenditures, set at $17,272,433.

The council explored the implications of the proposed tax rate, which would lead to an estimated increase of 1.835% from the 2025 tax levy. Hillman explained that the increase would affect residential and commercial property owners differently, with varying impacts based on property value changes. Discussions underscored the intricate distribution of tax revenues, with residential property owners contributing to various entities, including the county and school district.

Significant concerns emerged regarding financial equity between Brainerd and Crow Wing County, particularly in terms of tax capacity and the perceived disparity in financial responsibilities. A council member expressed frustration that Brainerd residents bear a higher tax burden compared to those outside the city. The ongoing lack of communication from the county was also criticized, with council members lamenting unaddressed letters and unresolved financial arrangements.

Additionally, the council scrutinized billing practices for services provided to the county and the airport. While plans to bill for IT and human services are set to begin in 2026, council members expressed dissatisfaction with delays and the financial imbalance created by the county’s lack of contribution. The conversation extended to budget allocations for the airport and library, with members questioning the rationale behind differing funding increases for these entities.

The future of Gustaffson Park was another key topic, with the council evaluating options for its development. Proposals included transferring the property to the Housing Authority for affordable housing, which would yield no revenue, or selling the land for market-rate development. The latter option could generate between $120,000 and $155,000, depending on market conditions. The council acknowledged public sentiment favoring the park’s preservation, emphasizing the need to balance financial viability with community preferences.

In a related discussion, the council considered the fate of the City Hall annex building. Options included selling, leasing, or retaining the building as an asset with necessary repairs. A motion to proceed with repairs, including updates to windows, roofing, and HVAC systems, was made to preserve the building’s value and historical significance. While some members expressed reservations about investing without a clear future plan, the motion passed.