The budget process starts in April. City staff review all departments to determine the actual costs of services. This year, departments were told to plan for the same amount as in 2025. They could only ask for more money if:

• It was unavoidable to keep current services running
• The City Council specifically requested it
• It's part of the city's strategic plan 

Any requests to add new services or expand existing ones had to be truly necessary to be included.

Did you know over 70% of the city’s general fund budget is allocated to personnel costs?

Key Drivers of the Preliminary 2026 General Fund Budget:

• Wage increases: Salaries and benefits make up more than two thirds of the city’s spending. Wage increases, which include a 3% cost-of-living adjustment, will add about $1,045,000 to the budget.
• Minnesota Paid Leave Act: Starting in 2026, a new state law requires employers and employees to pay into a paid leave program. The tax is 0.88%, and the city must pay half of that. This will cost the city an estimated $70,000.
• Elections: 2026 is an election year, so we need extra staff at polling places. This will cost about $49,000. State Fire Aid: Good news here. The Savage Fire Relief
  Association’s benefit plan ended in May 2025. Now the city can use State Fire Aid money to help pay firefighter salaries and benefits. This will save the city about $250,000.
• Health Insurance Costs: Last year, the city shopped around for health insurance and saved 16.8%. But for 2026, rates are going up by 12% (which was capped in our contract). This will cost $225,000.
• Priority Level 1 Increases: These are essential costs we can’t avoid, like software licenses, gas, and electricity. The total is $447,747 ($158,400 is one-time costs, $289,347 will be recurring expenses).
• Dedicated Equipment Levy (Year 2 of 5): The city is adding $100,000 to reduce how often we borrow money to buy equipment like trucks and machinery. Our financial advisor, Baker Tilly, recommended this approach to build a more stable replacement plan.
• Fire Station Remodel Loan Payment: We’re paying back a loan for the Fire Station #1 remodel using state Public Safety Aid money and an internal loan from the Water/Sewer Fund. This annual payment is $75,000.
• Police video system (Year 2 of 4): We replaced the police department’s video system in 2024. We’re gradually shifting the cost from the state Public Safety Aid to the General Fund. This year’s increase is $55,000.
• Staff Requests: The city is proposing to add three new positions. Salaries and benefits for these positions will cost about $224,500.

Did you know approximately 50% of the City's budget supports local public safety services?

The impact on homeowners depends on how much your property’s value has changed since 2025. Scott County estimates an average increase of 2.3%.

2025 Median House value:

• $408,200
• City Tax = $ 1,657

2026 Median House value:

• $417,700
• Proposed City Tax = $ 1,734

Change of:

• $77 per year
• $6 per month

Did you know only 1/3 of your property tax bill goes to the City of Savage?

Here are answers to some common questions:

Q: How does the budget process actually work?

We start early. Back in April, we asked all city departments to stick to their 2025 budgets. If they needed more money, they had to show us exactly why, and it had to be either for unavoidable costs to keep things running as they are, or for specific things the City Council asked us to do.

In September, the city council set a preliminary tax levy of 8.7%. Think of this as the maximum amount we could collect in property taxes to keep the city running and make sure everyone gets the quality services they expect. Here's the thing: we can lower that number before we finalize the budget in December, but we can't raise it.

So, between September and December, staff went through everything again to tighten up the numbers and cut costs wherever we could without affecting service or what needs to get done. We identified $678,000 in savings (about 2.5%).

Where we started: $27.35M
Where we ended up: $26.6M (we saved $677,865)

Q: What is the impact on my property taxes?
It depends on what happened to your home's value this year. According to Scott County, the median home in Savage went from $408,200 to $417,700 (a 2.3% increase). If your home is right around that median value, we estimate you'll pay about $77 more in city property taxes for the year. That breaks down to about $6 a month.

Here's what that looks like:

• 2025: Median home valued at $408,200, city tax of $1,657/year
• 2026: Median home valued at $417,700, city tax of $1,734/year
• Change: $77 more per year (or roughly $6/month)

Of course, if your home's value went up more or less than the median, your increase will be different. But this gives you a ballpark idea of what most homeowners in Savage can expect.

Q. So why is the budget going up?
We're dealing with the same thing you're probably dealing with at home: stuff just costs more than it used to. Health insurance premiums went up. Equipment costs more. Technology isn't getting cheaper. Here's what's really driving our budget:

1. People costs. This is the big one. Three-quarters of our budget goes to paying the people who work for the city and their benefits. For 2026, that includes giving everyone a 3% cost-of-living raise (because groceries and gas cost more for them too), adding three new positions we really need, covering higher insurance premiums, and paying into Minnesota's new Paid Leave program.

2. The stuff we can't avoid. Things like software licenses, gas for city vehicles, and electricity bills. These aren't optional, and they keep going up every year.

3. Setting aside money for equipment. We're adding $100,000 to a fund so we don't have to borrow as much money when we need to replace trucks, machinery, and other big equipment. It's like building up savings instead of always putting everything on a credit card.

Q: The 2026 budget includes three new positions. Why are they needed?
Good question. Here's what's happening:

Code Enforcement/Rental Licensing Manager and Fire Inspector. The City Council asked us to implement a more robust rental licensing program and to be more proactive in code enforcement. Savage has a lot of older homes, and we want to make sure they're all being kept up properly. That also applies to all our rental properties. Right now, we're mostly reactive—waiting for complaints to come in. These two positions let us get out ahead of problems, do regular inspections, and make sure every property in Savage meets our standards. It's about protecting the quality of our neighborhoods.

Facilities Maintenance Supervisor. We recently conducted a comprehensive assessment of all our city buildings—the Depot, our offices, the Savage Sports Center, all of it. Turns out, we've got aging facilities that need someone dedicated to managing them strategically, rather than just fixing things when they break. This person would oversee maintenance for everything we own and make sure we're taking care of these buildings properly before small problems become big, expensive ones.

Q. What do I get for my property taxes?  
For about $145 a month, here's what you're getting:

Police and fire protection around the clock. When you call 911, someone shows up fast. Officers patrol your neighborhood. Firefighters are ready when you need them.

Roads that work. We fix potholes, repave streets, plow snow, keep traffic lights running, and manage stormwater so your street doesn't flood.

Clean drinking water from the tap.

Places to enjoy. Parks, playgrounds, walking trails, ball fields, and yes, pickleball courts.

The behind-the-scenes stuff that keeps a city running. Elections, planning and zoning, building permits, inspections —all the things that make sure Savage works the way it should.