Lakeville plans major infrastructure investments amid 7% tax increase
The Lakeville City Council discussed a proposed 2026 budget featuring a 7% property tax increase and major capital projects on Tuesday, though no formal votes were taken. The increase would add about $61 annually to the median homeowner's bill to fund new staff positions, water treatment expansion, and transportation improvements.
The council heard details on the proposed 2026 budget, which would raise the property tax levy by 7% — a combination of a 3% general fund increase and a 2% allocation to the building fund. The median home value in Lakeville has increased 3.8% to $468,000, according to city staff. Key spending drivers include cost-of-living adjustments and new staff positions, including an IT specialist, facility technician, and park maintenance worker. The city also plans to fund full-time firefighters through a federal SAFER grant.
Council members acknowledged the increase but noted it was lower than the previous year. Staff outlined a strategy to build a $1.8 million designated fund balance by 2027 to cushion the city when federal grant funding expires, preventing a sharp tax spike down the road. The budget will return to the council next week for formal action.
The council also discussed major infrastructure challenges. A significant Interstate 25 and County Road 50 interchange project is planned for 2028, which will cause major traffic disruptions. To prepare, the city is frontloading transportation projects in 2026-2027, including new traffic signals and turn lane improvements at key intersections. Staff and Scott County Commissioner Hullberg detailed plans to mitigate commuter impacts during the freeway closure.
Separately, the council reviewed options for expanding the city's water treatment capacity, which is expected to reach capacity around 2030. Three alternatives were presented: expanding the existing plant ($26 million), building a satellite plant at the recently acquired Fisher property ($44 million), or a raw water bypass option ($17 million). Council members expressed skepticism about the bypass option due to water quality concerns and questioned whether the higher-cost satellite plant was justified. The Fisher property is also being considered for a new fire station, public works storage, and potentially housing or commercial development.
The city's finances remain stable. Second quarter revenues were at 45% of budget, with expenditures at 48%, according to staff. The liquor fund performed well, with cannabis sales exceeding projections.
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Other Topics from This Document
Water Treatment Expansion Alternatives
Proposed 2026 Budget and Property Tax Levy
Capital Improvement Plan (CIP) Discussion
Second Quarter Financial Report
Fire Relief Board Discussion
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