Willmar, Minn., council approves 2012 budget
WILLMAR -- No one from the public appeared to talk about their city taxes during the Willmar City Council's state-required Truth-in-Taxation hearing Monday night.
During the hearing, the council received an overview from Finance Director Steve Okins of Mayor Frank Yanish's proposed 2012 budget. The council later adopted a recommendation from the Finance Committee to approve the budget of $31,706,422, up from the 2011 budget of $25,694,742.
Okins said the 2012 budget is considerably more than the five-year average of $24,405,625 for budgets from 2008 through 2012. Next year's increase is due mainly to $6 million in spending slated for improvements to the old airport site for development as an industrial park.
The project has been delayed, however, because the city is still working on the land release with the Federal Aviation Administration. The city hopes to have the land released in the beginning of 2012, he said.
The project will be totally funded by the half-cent local option sales tax. Okins said about three-fourths of sales tax proceeds have been received and are in the bank. The remaining tax will be collected in 2012, he said. The voter-approved tax is scheduled to expire after a seven-year run at the end of 2012.
Council member Ron Christianson asked if there is a date by which the city must file notice with the state to sunset the tax.
City Administrator Charlene Stevens said the notice is to be filed three months before the expiration date of Sept. 30.
The 2012 budget was amended from the mayor's initial $31,683,222 proposal to reflect payment of the $23,200 contract with Maximum Cruise Aviation, the airport's fixed-base operator. Officials have said the contract was inadvertently omitted during the 2012 budget preparations.
Stevens said the contract will be paid with excess revenue from contracts that Willmar and Dovre townships have with Willmar Fire Department for fire protection services in 2012.
Also Monday, the council approved the 2012 city property tax levy of $3,992,734, up 4 percent from 2011. The increase could have been greater, however, because the Legislature removed levy limits for 2012.
Okins said local government aid from the state is scheduled to decrease by $429,485 in 2012. The council did not increase the levy by that amount, but accepted the mayor's proposed $196,000 increase. The difference in those two revenues is being made up by the elimination or non-filling of five city staff positions, Okins said.
He said there has been much discussion about the market value homestead credit that is being eliminated and the homestead exclusion that is replacing it.
Okins said the city has received all of its market value credit from the state through 2009. In 2010, the city received 9 percent of what the city was supposed to have received from the state, and the amount has been reduced entirely in 2011, he said.
Those reductions in local government aid and market value homestead credit in 2011 were made up by reductions in staffing and deferred spending on some capital improvements, he said.
Okins presented a graph that indicated that the amount of local government aid received has been generally flat since 2008, with the exception of a slight increase in 2009, while the local property tax has been increasing during the period. In 2012, local government aid and the levy are somewhat equal, he said.
Okins said citizens all would have received their property tax notification, which would include the three taxing jurisdictions of the city, Kandiyohi County and Willmar School District, plus some special taxing jurisdictions. The council's hearing dealt only with the city portion. The city's levy amount now goes to the county auditor.
Okins said the county has held its Truth-In-Taxation hearing and the school district will hold its hearings later in the month.
In other business Monday, the council approved the Willmar Housing and Redevelopment Authority's 2012 levy of $170,000, which is unchanged from 2011.
After the nearly one-hour council meeting adjourned, the Tribune asked Yanish why he thought no one from the public attended the hearing.
He noted that taxes are divided among the three major taxing jurisdictions and the city did not greatly increase taxes when considering that the increase is divided by the number of households in the city.
"I suspect that's probably the reason people were satisfied in today's economic climate to know that that wasn't a huge increase,'' he said.