City of Willmar proposing a nearly $2 million levy increase for 2023
Willmar City Council approved the preliminary levy and budget for 2023, which was presented by Mayor Marv Calvin, at its Sept. 19 meeting. This amount may decrease before the final levy is approved
WILLMAR — The city of Willmar and Mayor Marv Calvin are proposing a 2023 property tax levy of $9,188,990 for 2023, which is an increase of $1,875,318, or 25.6%, over the final approved 2022 levy of $7,313,672.
"The 2023 budget I am proposing addresses the city's mission statement of providing responsible municipal services in an open, effective and efficient manner to all citizens while achieving Willmar's community values," Calvin said when presenting the budget at the Sept. 19 meeting of the Willmar City Council.
The proposed budget is a 12.89% increase in the tax rate for the city’s portion of property taxes, according to Calvin.
He noted the budget includes funding all the requests the city formally received by individual council members, including putting money back in for maintenance on the City Auditorium.
“The budget that you see in front of you tonight gives you the opportunity to manipulate that budget to how you, as council, would like to see that budget hammered out,” Calvin said. “We know that levy number is probably higher than you are comfortable with, but there are also areas where you, as council, could make some adjustments to that if you chose to, or, if you left it the way it is, then you would start correcting this downfall that we have.”
The City Council approved the preliminary levy and budget Monday. This amount may decrease before the final levy is approved after the Truth-in-Taxation public hearing Dec. 5, 2022, but it cannot increase.
“We put this budget together, and I know it appears to be higher than normal, but the past has not really kept up with everything,” said City Administrator Leslie Valiant about the increase, noting the city has still not received information regarding any increases in health insurance for staff and salary negotiations for staff are still taking place.
The city’s 2023 tax capacity is estimated to increase by 10.5%, or $1.7 million, according to Finance Director Steve Okins, who noted that 37 cents of every dollar of property taxes paid by city residents goes to the city, and the remainder goes to Kandiyohi County, Willmar Public Schools, Kandiyohi County Housing and Redevelopment Authority and Mid-Minnesota Development Commission.
Approximately $7.9 million of the levy will fund the city’s operating costs, $700,000 will fund debt service for street improvement projects, and $524,000 will be reserved to fund a future debt for construction of a new city hall and community center — which is expected to be a 30-year debt on a $10 million project, according to Okins.
During his presentation, Calvin noted that he proposed two major financial policy changes in 2021, which he would like to continue — financing street debt for 15 years instead of 10 and financing debt service for a city hall over the next 30 years.
The city is expected to bond $9 million in 2023 for street improvements. The council will be reviewing a robotics analysis of the city’s streets and coming up with a plan for future street improvement projects later in October, Calvin said.
Of the $2.171 million the city is receiving in American Rescue Plan Act funds, $1.1 million has been dedicated to employee mental health, day care, software replacement and water infrastructure upgrades, Calvin stated.
Council and staff continue to work on committing the American Rescue Plan Act funds to long-term projects, he added, noting funding has to be committed by 2024 with projects completed no later than 2026.
The city debt service fund was reduced in 2022 with the retirement of the $34.8 million debt for Rice Memorial Hospital, according to Calvin. The city’s debt position at the end of 2021 was slightly over $95 million, with 60% for the wastewater plant that is paid by sewer charges, 19% for street improvements, 19% for local option sales tax projects, and 2% in tax increment financing notes.
Approximately $1.88 million dollars is included in the 2023 budget for capital improvement projects and vehicle replacement, according to Calvin.
Capital improvements for the wastewater department include the design, construction and updates to two lift stations at Eagle Lake, along with roof replacement at the old wastewater treatment plant for an estimated cost of $2.7 million.
Calvin is also proposing capital improvements to the airport to correct drainage and pond retention issues, to update the septic system and for flooring and furniture.