Willmar hits pause on City Hall, sales tax projects
While the pavement improvements at Robbins Island Regional Park were allowed to move forward, all other architect work on the Invest in Willmar local option sales tax projects and the new Willmar City Hall was halted by the Willmar City Council on Monday. Sales tax revenue has not been as high as the city had hoped and the COVID-19 pandemic has slowed things down even more.
WILLMAR — Due to financial uncertainty caused by lagging local option sales tax revenue and the COVID-19 pandemic, the Willmar City Council unanimously decided Monday to stop all architectural design work on most of the Invest in Willmar sales tax projects, as well as on the city hall project.
"Put everything on hold because we need to reassess what we are doing," said City Administrator Brian Gramentz, who urged the council to take the action as the city continues to be billed for work the architects are doing. The event center alone is costing the city $15,000 a week in architectural fees. "We need to tell them to stop."
Gramentz requested the same action be taken for the project to construct a new city hall. The council approved suspending architect work on the city hall until funding guidelines have been established.
What was allowed to move forward were the pavement improvements, which include a new road and parking lots, at Robbins Island Regional Park. Those plans and specifications were already completed and approved by the council. The next step is to bid the project out and hire a contractor to do the work. The council unanimously approved the motion to move on with Robbins Island.
The sales tax revenue is planned for six Willmar projects in total — stormwater improvements, upgrades at Robbins Island and Swansson Field, a new recreation and event center, additional athletic fields and a major upgrade of the Willmar Community Center. The new city hall project is not a sales tax project, but is planned in conjunction with the upgraded community center at the same site.
The Invest in Willmar board will be meeting Wednesday and it will need to start the process of prioritizing the sales tax projects because the city does not believe it will collect enough revenue from the sales tax over the next 13 years to pay for $30 million in projects. Due to financial stress, there is the possibility the board and its project subcommittees will need to slash their project budget by a third, according to discussion held at the council meeting.
The city had hoped to collect close to $250,000 a month in revenue from the 0.5 percent sales tax. The actual collections from October, November and December were significantly less than estimates. Financial projections are now showing the total revenue collected over the 13 years of the sales tax will be closer to $20 million if current trends continue.
"It does not take into account inflation and a lot of unknowns at this point too," Gramentz said. "It is our best conservative estimate."
While the final votes taken Monday night were unanimous among the City Council members, the discussion to get to that point was not. Some council members were more willing to act than others.
Councilor Kathy Schwantes made an initial motion to move forward with both the Robbins Island and Swansson Field projects at 90 percent of the voter-approved budget while giving the Invest in Willmar board the rest of the year to prioritize and plan for the future projects.
The motion, which ultimately failed, took some councilors by surprise, as the meeting agenda did not include any action items related to the projects, despite the entire council having met in a special finance meeting last week to discuss the issue.
"I thought the intent of the entire conversation we had last week was so we can move forward with those projects," Schwantes said.
Some on the council wanted to get feedback from the Invest in Willmar group before taking any action on the projects. They also wanted to wait until decisions are made on just how to pay for these projects — either by bonding or waiting until enough sales tax revenue comes in. There was also some discussion on asking the state Legislature for an extension on the sales tax.
"I think we need to be careful with the decisions we make," said Councilor Audrey Nelsen. "I just question whether we are ready for that at this time."
Once the first motion failed, Councilor Julie Asmus made a motion to go ahead with the Robbins Island project, which did pass.
"The rest of the projects still have to do some due diligence, on how they are going to be cut back and what their alternates are going to be," Asmus said.