The Babbitt City Council looked at initial projections for a 7.5% levy increase at a special council session on Wednesday, Sept. 9.
A resolution will come at next Tuesday’s regular council meeting to adopt the amount as the proposed 2027 levy.
The percentage could continue to decrease as discussions continue with department leadership, but the council cannot increase the levy once the resolution has passed.
The official 2027 levy will receive approval in December. A single-digit increase represents a more balanced budget than the one Babbitt faced for 2026. Last December, the council ultimately approved a 20% levy hike for taxes payable in 2026, following months of heated discussions with departments.
The 2025 levy represented a 3% increase above the $1,237,165 total revenue the city pulled in from 2024 property taxes.
The multi-hour meeting launched with a change request on the West Babbitt Development presented by project engineer Jason Chopp of Short Elliott Hendrickson (SEH).
Minnesota Power may be ready to begin electrical installation as early as Monday, Chopp said.
Electrical will cost $96,387.87 more than anticipated, a sum that will be tacked onto the project’s cost to the city. The amount is still within the agreed project contingency and will not influence the levy.
“We have to accept this, even though it’s not fair,” Zupancich said. “It’s like extortion.”
Chopp said the high invoice value came as a surprise to the contractor, Rachel Contracting, because Minnesota Power did not provide a price until last week.
Street department director Tony Chamberlin said the utility company would not visit the site until rough grading was complete.
“I’ll be honest. For something like this, working with Minnesota Power was very frustrating,” Chopp said.
Council member John Fitzpatrick made a motion to accept the change order, with a reluctant second from Jim Lassi.
Power installation, painting and erosion control are among the steps remaining until West Babbitt’s infrastructure is complete.
Chamberlin hopes to engage in increased cross-training among the recreation and street departments next year. This would eliminate some casual labor positions, which he said can be difficult to fill.
The proposal could reduce overtime, on top of limiting training expenses paid for casual laborers.
It would result in savings from the departments’ initial budget requests for 2027.
“I think the cross-training is something well-overdue,” Lossing said. “I totally agree with that.”
Chamberlin recommended a pay increase for employees who obtain additional certifications, such as CDL licenses.
Recreation department director Caitlin Stern indicated concerns about strain on employees’ time from limited staffing numbers.
Police department budget discussions followed, with an initial allowance of $756,000 — down slightly from last year’s $773,000.
Three department structures and their associated expense projections were presented at the meeting. A five-man format with one chief and four officers would result in the steepest costs.
The city counted interim police chief Todd Heikkila and officer Jon Shenett among the four officers, along with the department’s two new hires, Cory Merten and Reed Fletcher. A chief would be hired externally.
If Heikkila accepts a permanent position as chief of police, the department could bump its budget down to account for just four salaried employees, shaving off approximately $80,000 from current projections.
The city will budget for a five-per sonnel department until union negotiations are complete.
