A 3.8% levy increase that city officials say will add about $4 per month to the tax bill on a $400,000 home was approved Dec. 8 as the East Bethel City Council adopted its 2026 budget.

The council unanimously approved the budget and levy on a 4-0 vote. Council Member Suzanne Erkel was absent. By the same vote, the council also approved the Economic Development Authority and Housing and Redevelopment Authority budgets and levies for 2026.

Finance Director Mike Jeziorski said the city follows a yearlong budget process using a financial model that incorporates the previous two years of activity, the current year’s budget and the proposed budget for the upcoming year. The model includes updated salary, benefit and debt service figures, followed by a series of meetings and a public hearing before final adoption.

Before presenting the 2026 budget, Jeziorski highlighted several financial indicators. In 2024, general fund revenues came in at 102% of budgeted amounts, while expenditures were 95% of budget. As of Dec. 31, 2024, the city’s general fund balance stood at $5.2 million, equal to 75% of the 2025 budget.

Jeziorski said the city maintains capital funds for equipment, streets, parks and buildings, completes annual audits and holds an AA2 credit rating. The city also has an approved union contract through 2028. East Bethel has the fifth-lowest tax rate among 21 Anoka County cities at 31.914%, he said.

The 2026 budget includes the general fund, special revenue funds such as recycling, the Economic Development Authority and Housing and Redevelopment Authority, debt service funds and capital funds for equipment, streets, parks and buildings. Enterprise funds include water, sewer and the city’s ice arena.

General fund revenues are projected to increase 7%, from $6,976,300 in 2025 to $7,455,700 in 2026. General fund expenditures are projected to increase by the same amount, Jeziorski said. Property taxes account for 77% of city revenue.

For 2026, the city employs 22 full-time employees, with an 8% cost-of-living adjustment, a $1,500 monthly cafeteria contribution and nine employees eligible for step increases. In addition to elected officials, the city employs 35 paid on-call firefighters, two seasonal summer public works employees and five seasonal winter public works employees.

Among city staff, all six administration employees are nonunion; one of five community development employees is union; eight of nine public works employees are union; and both fire employees are nonunion.

Contracted services for 2026 include a $110,000 increase in the city’s law enforcement contract, a $10,000 increase to the city attorney contract, a $1,000 increase to the audit contract and a $13,000 increase to information technology services.

Department-level changes from 2025 to 2026 include an increase in general government expenditures from $1,373,800 to $1,526,200; a decrease in community development expenditures from $678,900 to $674,200; an increase in public safety expenditures from $2,452,100 to $2,635,100; no change to $20,000 for engineering; an increase in public works expenditures from $1,685,000 to $1,773,700; and an increase in transfers to other funds from $760,000 to $820,000.

The city’s 2026 debt service fund includes two outstanding bond issues with a combined principal balance of $14,365,000. Debt service expenditures are projected to increase from $943,500 to $993,000.

East Bethel’s total levy for 2026 is set at $6,638,600, up 3.8% from $6,392,500 in 2025. The increase reflects a 6% increase in the general fund levy offset by an 8% decrease in the city’s debt service levy, Jeziorski said.

Using a $400,000 home as an example, Jeziorski said the city levy equates to an annual payment of $1,276.56, or $106.38 per month.

During public comment, resident Kory Jorgensen said his home’s assessed value increased by $41,000 after an assessor visited while he was not home. He said the assessor later told him a visit was unnecessary because the home was slab-on-grade.

“I can’t understand how on God’s green earth my house went up $41,000 in one year,” Jorgensen said, adding there had been no changes to the home since it was built eight years ago.

Another resident, Mitchell Webb, said relying on property taxes for 77% of city revenue was excessive. Webb, who owns several commercial properties, said tax rates in East Bethel were significantly higher than comparable properties in Blaine.

“What my tax rate on a building is in the city of Blaine, compared to commercial stuff in the city of East Bethel, is not even comparable,” Webb said. “I’d recommend looking at local tax, because you’re about to hear about cannabis and hemp and all this stuff — why don’t you guys tax that stuff?”