Another contentious budget meeting stretched for over three hours in the Municipal Center on Monday afternoon. Dozens of local residents filled the council chambers to provide comments as council members worked to round out final numbers for the 2026 city budget prior to the Sept. 30 deadline.
Ultimately, the council settled upon increases in the police and library budgets by about $60,000 and $20,000 respectively. Budget adjustments also included an increase in the proposed levy from 15.5% to 20% — a figure which Mayor Andrea Zupancich hopes will drop before the end of the year.
“We’ll set the levy high, anticipating it will go low,” said Zupancich. After submitting preliminary estimates to the state, municipalities may subsequently lower the rate prior to the December deadline, said Zupancich, but they may not raise it.
A bond obligation for the city-owned campground quickly emerged as one of the most controversial items on the agenda as taxpayers expressed concerns about shouldering the cost burden.
“We were promised by the panel that was elected at the time that none of the campground expenses would ever fall on the taxpayers,” said one attendee, “And now the debt falls on us.”
Previously, the council had collected rents from other departments to cover the cost, which is budgeted at $156,090.38 for the upcoming year on top of $97,600 in operating expenses.
During the 2026 budget development process, auditors informed the city they could no longer continue this practice.
“This year we’re not collecting any rents,” said deputy clerk Sara Powell, “But the city still has to come up with the payment.”
The ordeal traces back to a bond on the Municipal Center sourced over a decade ago. Rent payments worked to cover bond costs, and were intended to roll over and help cover the campground bond after its establishment three years ago.
“Thirteen years ago, they refinanced the (Municipal Center) loan and the terms changed and said you have to levy for this bond payment,” said Powell, “You cannot collect rents for this bond payment. However, the city office still continued to collect rents.”
Council member Joe White joined the audience in expressing frustration with the opacity of the former rent payments.
“I’ve been on the council for three years and didn’t even know we were paying,” said council member Joe White, “I was told when I ran that no money comes out of the city tax dollars for the campground.”
White believes the problems can be ameliorated with a rate hike for summer sites.
“I think we can get pretty close to neutralizing the debt,” said White, “The rates for the campsites are not anywhere near (the rates) at other facilities that are as great as ours.”
“There’s a little bit to frontload, but especially 17 years from now, (the campground) will be a huge asset to the community,” said Tony Chamberlin.
Former mayor Bernice Norregaard pointed out that property taxes and the budget could have went down when the bond for the municipal building was paid off. Instead the city council voted to bond for the campground and even made interest only payments to start.
The city council additionally aimed to address deep concerns regarding departmental budget cuts.
Library director Lisa Pennala again voiced dissatisfaction with the council’s proposed library funding.
“For 2026, the library requested a total budget of ($176,800). This was designed to save the city money while still allowing us to schedule staff effectively and maintain our current level of service,” Pennala said, “The budget proposed by the city council for 2026 is $138,300.75, which will severely limit our ability to serve the community.”
Later in the meeting, the council made an approximately $20,000 addition to the library budget.
Next year’s police funds also emerged from the meeting looking much more optimistic, following the discovery of additional revenue hidden in what clerk-treasurer Nancy Sanford — just 11 days into her role — called “confusing” bookkeeping from the previous year.
“There was a $62,000 revenue in 2024. That was our State Police Aid fund,” said Sanford, “On our 2025 budget, we did not include what our police aid will be for 2025, and we did not include it in 2026 either.”
Sanford reached out to the state prior to the meeting and believes the revenue will amount to sums of $60,000 added both to this year’s and next year’s budget.
“Those are additional revenues into the police budget that we did not anticipate, which basically cover the deficit we were looking at,” said Sanford, “It’s probably not going to be exactly what Chief Bissonette proposed, but it will be very close to that.”
Council member Joe White said while he supports the police department there are people who contacted him about cutting the police department. He pointed out the city spend $750,000 for the police department.
Council member Duane Lossing said similar size communities pay less than Babbitt and cited Coleraine at $463,000, Hoyt Lakes at $650,000, Aurora at $566,000 and Nashwauk at $493,000.
• At the beginning of the meeting, Sanford thanked the council for hiring her for the position. She also thanked Kirsten Traut and Powell for running the office before she was hired. Sanford said she had a blank canvas in coming to Babbitt without any family or friends here. She said she has been a property owner in St. Louis County for many years.
“This is my 11th day in this job,” said Sanford. However she said she was disappointed in the “rhetoric, misinformation and gossip to a preliminary budget.” She said not a single resident or employee showing up in her office until this morning to ask questions about the numbers.
Former city employee and council member Terry Switajewski addressed Sanford and said, “You have no right to reprimand the citizens of this town for what is on social media.”
