City council sets 4.97 percent preliminary levy
The Grand Marais City Council met on Sept. 10 to set the preliminary levy and continue discussions about improvements to 3rd St.
During the meeting, the city council reviewed the budget and the proposed 4.97% preliminary levy for 2026.
City Administrator Mike Roth told the city council that it remains early in the budgeting process, and work will continue in the coming months to reduce the 4.97% preliminary levy amount.
“All in all, I feel pretty good about this,” Roth. “I think 4.97% is a responsible number to put in front of people. Also, one that’s achievable and one that we know we’re not satisfied with, and we know we’re going to try and improve on. And we think we’ve got a strategy to do so.”
Roth said the city must either cut another $110,000 in expenses or generate the same amount in revenue to bring the levy down to the targeted 3%.
The city has not yet received the final revenue figures from the past month for the recreation park and liquor store, both of which will help reduce the levy. Roth said he projects about $85,000 in revenue for the rest of the year.
A couple of the factors contributing to the preliminary 2026 levy are a 3% increase in labor expenses, some of which is attributed to rising health insurance costs. Another uncertainty is the cost of operating the new city hall. Staff moved into the building in March 2025, just six months ago, and the full annual expenses for utilities and other related costs are still unknown.
Taking that into account, Roth said he recommended the city council leave the preliminary levy with a little bit of room, given that there are some unknowns and variables at play.
The city council voted unanimously to approve the preliminary levy at 4.97%. With the preliminary levy set, the city council cannot exceed the 4.97% when setting the final budget in December.
In other city council agenda items, the city council voted to approve holding a public hearing to gather input and comments regarding proposed improvements to 3rd St. between 6th Avenue W. and 8th Avenue W. The improvements would include reconstruction and installation of pavement, curb, gutter, and the potential extension of utilities.
The public hearing follows the city council’s approval of a developer’s agreement with Jon Petters, the developer of the Bjorkberg project. The latest version of the Bjorkberg project consists of residential homes rather than a planned-unit development. Because 3rd St. is a substandard city road, the city has said it would need to be widened to accommodate additional growth. The city and Petters have also been working with engineering firms to explore the possibility and cost of extending utilities along 3rd St.
Following the public hearing on Oct. 7 in the city hall chambers, the city council will consider how to proceed.
WTIP’s Kalli Hawkins spoke with Grand Marais Mayor Tracy Benson about the preliminary levy, the public hearing for 3rd St. improvements, and other city council matters. The audio from the interview is below.
Kalli Hawkins September 14, 2025
