City council to set preliminary 2026 budget
Multiple scenarios for a complex budget year are under consideration
On Monday, Sept. 22, the Roseville city council will vote to adopt a preliminary budget. Prior to this, city staff, city council, and the finance commission have been weighing the pros and cons of multiple budget scenarios.
2026 is a unique budget year, because the city needs to weigh the need for an increase of 22 personnel for the police and fire departments as well as take into account rising costs for the city’s operations overall. In order to keep the property tax increase lower, the city is considering implementing franchise fees on gas and electric utilities. The police and fire departments have also applied for federal grants, and won’t know if they’ve been awarded the grants until after the preliminary budget is adopted.
The council will adopt a preliminary budget in compliance with state law, which will set the maximum city and economic development authority (EDA) tax levies. When the final budget is approved in December, the budget and tax levy could be less than the preliminary amount, but it can’t exceed it.
According to City Manager Pat Trudgeon’s budget memo for the Sept. 22 meeting, the city is recommending that the council adopt the highest possible tax levy as the preliminary budget. That will give maximum flexibility to account for the pending federal grants for the police and fire departments as well as further discussions on whether to impose franchise fees on gas and electric utilities.
The city is considering instituting a flat-rate franchise fee of $3 to $4 per month for gas and electric utilities (each). This means residential property owners, regardless of the property value, would pay a maximum of $96 per year.
Trudgeon has put together six different budget scenarios, taking various factors and combinations of options into account. He decided to present these multiple options because he wanted to show the community the factors they were considering and a transparent look at how these budgetary decisions are made.
The city’s 2026 budget proposal totals approximately $81.2 million. The approved 2025 budget was approximately $74.1 million. That’s a 9.6% increase. Trudgeon said this increase is due to higher personnel costs, higher utility costs (water and sewer), new debt service for the electric fire engine, and $4.4 million more in capital spending in 2026 compared to 2025. This will result in a levy increase of 7.87% or $2.4 million.
Below is a table for all of the budget scenarios being considered, from the Sept. 22 meeting materials:
The monthly impact of the budget and levy scenarios for a media-valued ($378,600) Roseville single-family home ranges from $12.55 to $19.75, depending on the configuration of revenue options.
The Base Budget maintains the city's current status quo of programs and services and does not include any new public safety personnel, which are being urgently requested by the police and fire departments
In Scenarios 1 & 2, the police and fire departments get all the new personnel they need—with and without the federal grants they’ve applied for.
In Scenario 3, the police and fire departments would get their new personnel with the help of federal grants and the city would impose utility franchise fees, which would bring the increase of the property tax levy to 7.96%. Scenario 4 is the same as 3, but without the federal grants, bringing the property tax increase to 9.91%.
Scenario 5 would be the same as Scenario 3, but would utilize the $2.1 million of franchise fees as funding source for four right-of-way capital funds, which frees up more of the tax levy. Scenario 6 is the same, but it assumes not receiving grant funding.
If you’re the type of person who likes all the nitty gritty details, the files for the Sept. 22 budget meeting, including all of these scenarios, are available to the public here.
To better understand franchise fees:
Naomi Krueger
Finance Commission Recommendations
At the September 15, 2025, City Council meeting, members of the Roseville Finance Commission presented their recommendations on the 2026 Budget and Tax Levy.
Finance commission chair Bruce Bester summarized the commission’s recommendations, saying that although there were pros to instituting a utility franchise fee—and that many other cities do so—some residents may perceive the city as being “sneaky” because it looks like a tax in disguise. The finance commission unanimously opposed the implementation of gas and electric franchise fees.
“Franchise fees are a tax, a regressive tax, and a non-deductible tax. That also is a biggie. . . . At the federal level, we have a new state and local tax deduction that has increased from $10,000 to $40,000, which would mean more people will be able to itemize their deductions,” Bester said to the city council.
Bester is referring to the SALT (state and local tax) deduction, which is temporarily increased through 2029. SALT allows certain taxpayers to deduct state and local taxes from the federal income, which reduces your federal income tax liability.
Bester then went on to explain how the commission investigated the needs of the police and fire departments. They read city council documents as well as the Axtell Report and fire chief’s report from Jan. 27.
Bester went on ride-alongs and had individual meetings and operational briefings with Assistant Fire Chief Neil Sjostrom and Battalion Chief Cody Thornburg, as well as Police Chief Erika Scheider and Assistant Police Chief Joe Adams. As a result of these conversations, Bester and the commission agreed that increasing personnel for both fire and police departments was essential. The commission supported a tax levy increase to meet this need, but recommended capping the tax levy under 10%.
"I think one of the things where our advice might have the most expertise has to do with the franchise fees, and we discussed that a lot as to whether that made sense or not. That's more in our bailiwick than how many more police or fire staff is needed,” Raye Kanzenbach, finance commissioner, said to the council. “That's the trade-off you guys have. How much more of that service do you want, and how much more levy goes with it? That's the political decision.”
Councilmember Julie Strahan urged the Finance Commission to trust the analysis and recommendations of the experts in the Axtell Report and the Fire Department as to what they need and why they need it. She emphasized the new Paid Family Leave Medical Act that would have impacts on time off for the police and fire departments and the cost savings of having additional full time exempt staff instead of paying part time staff overtime.
“The bottom line is one thing, but I also want to make sure we take the human component in this—these are people's lives, and we want to have some longevity to what they do. We want to be a good employer to them, and we have to. We're mandated by law to allow them to have some of this time,” Strahan said to the commissioners.
Council Member Robin Schroeder questioned whether the franchise fees would have any impact at all on residents’ potential property tax credits or on their monthly cash flow.
Strahan agreed, saying, “How many people in our city are going to say they can itemize this? If we're talking a franchise fee that's like $3 a month, it's $36 a year. That will not be enough to put them into an itemized deduction category.”
Commissioner Raye Kanzenbach agreed that the dollar amount was not that big, but that their concern was more the principle of the thing—that a franchise fee was basically a “regressive tax” and that with property taxes, those with larger, more expensive properties would pay higher taxes.
“Council Member Schroeder has gone to multiple League of Minnesota Cities meetings, and this is not some harebrained idea. This is something that people in other cities say works,” Strahan said. “This has been something that she's really pushed for us to investigate because it's something that pretty much every other city in this area is utilizing. I've often said, if Council Member Schroeder has reviewed it financially, I will probably be okay with it because that's not my forte.”
Mayor Roe suggested that city staff should come back with more information about the different budget option scenario impacts on the average residential taxpayer for the Sept. 22 meeting.
The discussion moved on to the possibility of making budget cuts, and while there are some reductions in the proposed budget, it’s not enough to bring down the overall tax levy.
The commission declined to make recommendations on where to cut the budget, suggesting that was the responsibility of the council and city departments, not the commission.
“As a service entity, staffing is our big cost. And if we're going to be cutting costs, it's going to be cutting staffing. And then the question is, what kind of service levels will we get,” Roe said at the meeting.
Ultimately at the end of the meeting, Mayor Roe instructed Trudgeon to bring forward budget options that consider both the potential franchise fees and a budget without them—and to prepare data on the impact to the average taxpayer in Roseville.
2026 City Budget Timeline
Under state law, the city must adopt a preliminary tax levy for the city budget and Economic Development Authority (EDA) by September 30 each year. The Roseville City Council will pass a preliminary budget at their Sept. 22 meeting, which will set ceilings on the 2026 budget and the property tax levy. A vote on the final budget is scheduled for December 8. The final budget may be lower than the preliminary budget, but under state law it cannot exceed.
This article was co-authored by Naomi Krueger and Greg Simbeck
Greg Simbeck is a freelance writer who lives in Roseville, Minnesota. He has had 200 articles published on national sites including Yardbarker, WhoWhatWhy, and New Leaf News. He and his wife Mary Jo have lived in Roseville for over 17 years. He was previously a commissioner on the Roseville Parks and Recreation Commission and a board member of the Rice-Larpenteur Alliance.
Naomi Krueger is the founding journalist and editor of the Roseville Reader. She and her husband have lived in Roseville for over a decade and have two sons in Roseville Area Schools. When not covering local news, Krueger works as a children's book editor, enjoys gardening, and takes frequent walks around her neighborhood with her cocker spaniel Yeti.
Contributing Writer
Naomi Krueger
