NORTH MANKATO — North Mankato’s 2025 financial statements show favorable budget results and continued growth in major development and infrastructure projects, according to an audit conducted by city staff and Mankato accounting firm, Abdo.
State law requires local governments to publish annual financial statements within six months following the close of the fiscal year and Abdo senior associate, Chad Guse, presented the results of the city’s annual audit Monday evening.
According to the audit, the city’s General Fund balance increased from approximately $6.1 million to $6.4 million during 2025. The ending balance represented 58.6% of the following year’s budgeted expenditures, exceeding the city’s reserve target.
General Fund revenues exceeded budget projections by about $151,000, while expenditures came in roughly $315,000 under budget. The resulting increase in fund balance totaled more than $270,000. The audit attributed higher-than-expected revenues in part to conservative budgeting, while lower expenditures were aided by reduced vehicle maintenance costs associated with a vehicle leasing program and lower-than-anticipated transit-related expenses, Guse said.
His team also conducted required testing of Minnesota legal compliance involving contracting, bidding, public indebtedness, claims and disbursements and reported no instances of noncompliance.
“Nothing came to our attention that indicated the financial statements were materially misstated in accordance with generally accepted accounting principles,” he said.
The city reported “lots of activity” in capital projects and special revenue funds during the year. The Port Authority Fund increased primarily because of land sales and adjustments related to joint economic development activity. The city’s debt load increased during 2025 because of bond issuances and loans associated with capital projects, like the controversial upcoming public works facility. Guse told the council that debt levels remained manageable compared with peer communities but noted that higher interest rates could make future borrowing more costly.
Continued work on projects identified in the five-year capital improvement plan included the 2025 Page Avenue reconstruction and Ringhofer Drive expansion. Planned projects include the new public works facility and Industry Court roadway construction in 2026, along with replacement of the Marie Lane force main, city documents show.
Major developments completed or underway during the year included the Amazon distribution center, Med Spa Skin Clinic, Peterbilt, mixed-use projects at 340 Webster Avenue and 242 Belgrade Avenue and a new residential building at Birchwood Cottages.
The audit noted increases in intergovernmental grant revenue, including funding received through the state’s Business Development Public Infrastructure grant program, which reimburses up to half the cost of public infrastructure projects that support economic development, job creation and tax base growth. The city received grant funding through the program for the first time since 2018.
Property tax and tax increment revenues also increased during 2025. The city approved a 9.49% tax levy increase to support General Fund operations, personnel, public safety and capital requests.
A noted revenue source came from the sale of land in the Northport Industrial Park to Amazon. The transaction led to construction of a 60,000-square-foot building addition and is expected to increase the city’s taxable market value beginning in 2026.
Enterprise funds remained financially stable. Water, sewer, stormwater, solid waste and recycling operations all reported positive operating cash flows and maintained reserves for future capital needs, Guse said.
During public comment resident Benton Bakke thanked Finance Director Jessica Ryan saying, “public trust is crucial, and her efforts in providing an accurate counting of the city’s financial activities provide the only bedrock upon which public debate of the city’s decisions can be made.”