The council opened a public hearing to discuss the final 2026 budget and levy. The budget presentation was detailed, explaining the tax structure for residents based on property values. In Minnesota, homes valued under $500,000 have a tax capacity set at 1% of their value, while properties exceeding this value face a slightly altered tax capacity. Residents were reminded that their tax bills include contributions to the city, county, and school districts, which operate independently. Recent property tax notices were addressed, noting the absence of increase in property values from 2024 to 2025—a contrast to the significant rises in previous years.

Adjustments to the proposed tax levy were discussed, with the initial 14.35% increase reduced to 8.4% due to budget modifications, including the hiring of a new police officer and rising healthcare costs. The police budget saw a 17% increase, attributed to the additional officer and higher equipment subscription costs. Meanwhile, administrative costs saw a modest increase, owing to departmental restructuring and hiring a new employee with cross-departmental responsibilities. Street budgets experienced only a slight increase of 2.5% due to personnel allocation adjustments.

For residents, the impact of the proposed budget was outlined, with a $300,000 home facing a final city tax of $1,581.19—an approximate monthly increase of $8.38. A breakdown of tax allocations was presented, covering administration, police, streets, and planning and zoning, reflecting only the general fund and not other restricted funds. This comprehensive overview highlighted the complexities of city financial planning and emphasized the need for transparency in tax revenue utilization.

The meeting also delved into the administration fund’s nuances, underscoring that expenses are not solely person-related but also include publishing, legal fees, and engineering services. A council member elaborated on the implications for higher-value homes, where losing the homestead credit could lead to increased taxes despite a less severe overall tax increase.

After closing the public hearing, the council addressed unfinished business, particularly the fee schedule. Current fees were noted to be below those suggested by the international building code, with discussions on manual reading fees for water meters due to resident resistance to new technology. Additionally, wastewater fees were proposed to increase by 4%, and the possibility of introducing a charge for paper billing was considered, given the city’s significant postage costs.

In new business, the council unanimously rejected all bids for a pool project due to their high costs. This formal rejection, required by law, is part of a plan to rebid the project in early January, with construction anticipated to begin in April. A positive community response was noted, with hopes for the pool’s future.

The council also acknowledged the awarding of $85,000 in grant funds from the Greater Minnesota Small Cities Housing and Aid Grant Program. This funding will support a Habitat for Humanity project in Zumbrota, the first in approximately 25 years, facilitating the purchase of a lot for housing construction.

Further discussions included the Zumbrota Police Department’s contract for 2026 to 2028. Negotiations were described as collaborative, with a mutual understanding of financial responsibilities leading to an agreement that introduced sabbatical leave for officers to enhance wellness. The sabbatical allows officers to take 84 hours of leave without affecting their paid time off, available after five years of employment. Changes to overtime and compensatory time rules were also implemented to prevent officers from receiving both in the same pay period. The council approved the police contract unanimously.