5E. Approval of the 2026 General Fund Operating Budget

Superintendent's Recommendation:

MOTION TO APPROVE THE 2026 GENERAL FUND OPERATING BUDGET IN THE AMOUNT OF $55,413,013; AND FURTHER, AUTHORIZE THE SUPERINTENDENT AND CHIEF FINANCIAL OFFICER TO FORWARD THIS DOCUMENT TO THE HENNEPIN COUNTY BOARD OF COMMISSIONERS FOR REVIEW PURSUANT TO STATE LAW.

Prepared By: Howard D. Koolick, Chief Financial Officer

Background:

Development of the Park District’s 2026 General Fund Operating Budget began in early summer. The Superintendent led senior staff through multiple budget discussions where options and issues were discussed and evaluated. This process led to several budget discussions with the Board during the fall and resulted in a budget that supports the following goals for 2026:

• Continue to provide high quality facilities, programs, and recreational opportunities.
• Continue to manage natural resources, be a leader in natural resource management issues and educate the public on natural resource management issues.
• Continue implementation of the System Plan by providing a wide range of services to Park District users both within existing park locations and in resident’s local communities.
• Use non-property tax revenue to fund needed budget increases.
• Prepare the Park District for change and unforeseen challenges.

The attached 2026 General Fund Operating Budget document shows the Park District's operating budget goals, challenges, and how funds are going to be received and expended.

The public was invited to comment on the budget at a public hearing held prior to the Commissioners considering adoption of the budget.

The major revenue changes for the 2026 budget totaling $2,156,364 include:

• A 4.8% increase in the total property tax levy which results in an increase for the General Fund of $1,630,000.
• Park use revenue estimate increases for a variety of locations and revenue streams combined with fee increases for some passes resulting in an increase of $154,200. (fee increases are proposed for swim ponds, tubing, cross country skiing, summer camps, and shelter rentals)
• Met Council Lottery-in-lieu-of and equity grant increases totaling $275,000. Interest and other miscellaneous revenues are being increased by $97,164 based on amounts collected in past years.

The major expenditure changes for 2026 budget, which total $2,156,364 are:

• Inflationary increases for union employees in addition to continuation of the existing step program as outlined in their contracts.
• A 2% inflationary increase for non-union employees combined with the existing merit pay program with an increased growth factor for pay ranges.
• Increased costs for health, life, and dental insurance due to increasing premiums. State mandated participation in the paid Family and Medical Leave program. Increased contribution to the District’s Equipment ISF Fund to manage the costs of operating and maintaining the District’s fleet of vehicles and equipment.
• Increased utility and contractual costs whose increases are based on rising prices and are beyond the Park District's control.
• Increases in a variety of operating costs to continue to provide existing services to the public.
• Reallocation of three vacant full-time positions to fund two positions that will provide increased service when compared to the three vacant positions.
• A minor increase in the contingency amount to allow the District to react to unforeseen issues during the year.

Upon approval of the budget, the Park District, in accordance with state law, must submit the operating budget to Hennepin County for their review. The County Board has 15 days to review and recommend changes to the Park District’s Board. Staff will be delivering the budget to the County on Friday, November 14, 2025, The County will discuss the budget at its meeting on November 18. Part of this discussion will be a presentation by the Superintendent.

The final phase of the budget process is the approval of the 2026 property tax levy. This item, including a resolution, will be presented to the Board for adoption on December 18, 2025. In addition, any comments from County Commissioners will be reviewed with the Board at that time.

Relationship to the System Plan:

The Request for Action supports the following goal(s) of the System Plan:

The Request for Action supports the goals of the System Plan by providing and properly managing the financial resources of the Park District.

Attachments:

2026 General Fund Budget Book.pdf