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CITY OF GEM LAKE Heritage Hall 4200 Otter Lake Road | Gem Lake, MN 55110 651-747-2790/92 | 651-747-2795 (fax) E-mail city@gemlakemn.org Look for us on the World Wide Web at gemlakemn.org December 15, 2025 RE: 2026 Proposed Budget and Property Tax Levy. State Statues require Cities to certify their final property tax levies by December 31st this year. The levy will fund the 2026 operating (General Fund) budget and some debt payments. If a final tax levy is not approved by December 31st the final levy would become the preliminary levy certified in September. The 2026 proposed final property tax levy is proposed at $715,830, which is a 0.4% decrease from the 2025 final property tax levy. The 2026 preliminary property tax levy consists of a debt levy of $85,778.00 (an increase from 2025 debt levy of $2,042.00) and the general operating levy of $630,052 (a decrease of 0.78% from the 2025 tax levy). The following changes were made from the 2025 adopted budget as a basis for the 2026 proposed budget and property tax levy: 1. Based on the 2015 Refunding Bond schedule the debt levy for 2026 is set for $77,763.00. In addition, in 2018, the City issued bonds for the improvements on Scheuneman Road and the 2026 debt levy for this issue is $8,015.00. The two of these debt levies makes up the City’s 2026 debt levy of $85,778. 2. City Council wages remain at $9,000 for the year, which is the same as 2025. 3. City Council contingency left at $9,000. 4. Clerk/General Government budget includes $55,000.00 for wages and $9,900 for health insurance coverage. Base on current rates and COLA increases this should be sufficient. 5. Financial Administration and Legal Services reduced based on past expenditures 6. Planning & Zoning budget increased $12,000.00 based on past expenditures. 7. Police budget was increased 4.16% to $153,537 based on the City of White Bear Lake budget provided us and includes $139,470 for police services and $14,067 for the public facilities building. 8. The cost of fire services could increase 1.22% to $53,474.00. It includes $35,,196 for fire services, $9,087 for fire marshal services, and $9,191 for the public facilities building. 9. Road Maintenance budget includes $18,000 for road maintenance/repair and $8,000 for trimming boulevard trees. 10. Ice & Snow Removal budget increase 2.13% to $24,000 based on past expenditures. 11. Heritage Hall budget includes $10,000 for building improvements and $10,000 for other improvements. 12. Park maintenance budget of $14,500 for maintaining park area of the Villas of Gem Lake and replacing trees. 13. The 2025 budget includes $20,000.00 for future improvements. 14. Revenue and other expenditure line items adjusted based on past history. These changes result in the City’s operating budget to increase 3.98% and the City to have a proposed preliminary tax levy of $715,830.00 for 2026. This compares to 2026 preliminary levy of $768,005.00 and 2025 final levy of $718,736.00. Using a 2026 property tax levy of