NEW ULM – The New Ulm City Council is looking at a possible final levy increase of 7.36% for 2026.

This is down slightly from the preliminary levy increase of 8.16% set in September. New Ulm Finance Director Nicole Jorgensen said the reduction in levy came from two sources: an adjustment to health insurance payments and a correction to a city fund.

The city will use funds from a health insurance trust to bring down the increased costs to health insurance over the next five years. A portion of this trust will be used each year through 2030.

Jorgensen said the city also found an interest error in the city’s 290 fund. The interest was listed at $1,870 but was actually $187,000. This gave the city an additional $168,000 in funds. Jorgensen said she placed $68,000 into the budget to bring the levy down. The remaining $100,000 was placed in the city’s facility reserve fund.

“We have some large projects coming up with the Park and Rec over the next several years,” Jorgensen said. “If we increase that account, it could help.”

The council agreed to keep the $100,000 in the facility reserved fund instead of using it to further lower the levy.

Councilor David Christian said he would rather leave it in the facility reserve fund because in three years, the city will likely face the same issue.

Jorgensen provides a general overview of the entire city budget. New Ulm’s highest revenue is from property tax. In 2026, the levy is at $11.2 million and represents 43% of the budget. Around 20% of the city’s revenue comes from Local Government Aid (LGA). In 2026, New Ulm will receive $5.1 million in LGA. This is a $7,000 increase from 2025.

The largest expense to the city is public works at $5.66 million or 21.2% followed by public safety at $5.45 million or 20.4%.

Jorgensen gave a side by side comparison of the 2025 levy compared to the revised levy for 2026. With a 7.36% levy increase, a New Ulm resident with a home valued at $200,000 will see their taxes increase by $47.01 from last year.

Council President Andrea Boettger said it was important to realize a 7.36% increase to the levy is not a 7.36% increase to an individual’s taxes.

“Compared to other communities, I think we do a very good job of maintaining that 6-9% range every year, so we don’t have these big swings,” she said.

Jorgensen said, according to statewide data, Minnesota cities are averaging an 8.7% levy increase.

Councilor Christian made the motion to approve the revenue and expenditure adjustments to the preliminary budget, with a second from Warmka. It was unanimously approved. Final approval of the budget will be made during the final meeting of the year.