Minnetonka Budget

While reviewing Minnetonka’s budget I have learned average compensation for city staff has increased, on average, 3.19% in 2022, 4.65% in 2023, 5.1% in 2024, 4.65% in 2025 and the proposed 2026 budget is based on 4.94% (5.0% for non-union).

Previously, I was working on the assumption that 78% of the city budget was payroll related. As such my assumption was the COLA increases were roughly as follows: 2.31% in 2023 (1.8% of levy presented in budget divided by .78), 2.18 in 2024 (levy impact of 1.7%), 3.72% in 2025 (2.9% levy impact) and 2026 would be 3.33% with a 2.6% levy impact.

A quick look online shows employers are budgeting for 3.5% raises in 2026. Employers Eyeing Flat Salary Increases in 2026

My only ask regarding the final 2026 budget would be that council directs salary adjustments closer to 3.5% rather than the proposed 5% for non-union staff.

The taxpayers, who aren’t on fixed income, are only getting 3.5% raises.

Outside of the budgeting process, I’d ask council members participating in the Minnesota League of Cities to share compensation pressures throughout the metro exceeding taxpayer resources. I know Minnetonka is competing with these peer cities. This is a metro problem.

Minnetonka’s population peaked in 2019 at around 54,100 and has steadily declined to 53,300 in 2025 and is projected to drop to 50,800 in 2029. This trend is occurring in the majority of the peers presented in the budget process. People are voting with their feet rather than contacting you. Minnetonka, Minnesota Population 2025

Please consider these facts while finalizing the 2026 budget. I’ll have much more robust feedback during the 2027 budget cycle.

I would also like to thank Mr. Funk and Mr. Nelson for the time they've spent helping me better understand the budget.

Thanks

An 8% increase in taxes is absolutely not sustainable for the people of Minnetonka. My wages don’t increase 8% annually and yet I have an increase in grocery prices, medical coverage, and medication.
Keep the budget flat.
Your citizens must tighten their belts, you should too.
A few ideas: eliminate unnecessary oversight and redundant positions, factor in a vacancy rate and fill open jobs at a slower rate. Charge more for additional services so those who use them, pay for them.
I am happy to meet and discuss further.

How do you justify and how do you expect people to afford increases that are multiple of times greater than inflation/people's income? This levy + any increase in property valuation will once again result in a double digit property tax increase.

The presentation is clearly, clearly designed to justify this continued budget increase of three times inflation and 3 times the rate of income increases. Where are the more relevant data addressing these:

1. The historical rate of City budget increase compared to all of the CPI, the PPI he CCI and most importantly the MCI (Municipal Cost Index)? I cannot find them in the summary presentation, the Aug 18 packet or on Minnetonka Matters. Do they even show up in the main budget presentation?

2. Where Is the discussion of the historical increase in City budget compared Hennepin County tax increases? Where is the discussion of what responsibilities of other government entities the City has taken over?

3. In the carefully worded polls the City sends out about tax increases, why are no hard numbers included, or even a simple limit to an acceptable increase included - to put a more relevant context to the questions? As presented in your online material, the wording appears as simple "push poll" manipulation to favor an outcome.

4. The City is proud of its communication on the budget, as stated it communicates via the Minnetonka Memo and hears citizens the September pre-approval and Dec final approval meetings. Please name the budget years in the last 20, or even 10, in which the City reduced the budget as a result of these listening sessions.

5. The City council frequently cites its "Values" as justification for increased spending above the rate of the cost of delivering current services. It created a Sustainability Commission just for that apparent purpose.. Where is the discussion of sustainability of the City taxes on the residential ability to pay for it? I cannot find that.

Thank You for your fulsome answers. See you tonight.