Willmar sales tax-funded stormwater projects might not happen due to lack of revenue
The Invest in Willmar local option sales tax has collected nearly $2.7 million since October 2019, an average of $180,000 a month. That is vastly under the estimated $250,000 per month the city had hoped would be collected. The diminished revenue could mean there will not be enough money to complete all the approved projects, especially any additional stormwater projects.
WILLMAR — The Invest in Willmar local option sales tax went into effect on Oct. 1, 2019, and since then nearly $2.7 million has been collected, which is to be used to fund six community projects.
The problem — that amount is only about two-thirds of what the city had hoped to collect in that time. In 2019, the estimate was the city would collect approximately $250,000 per month . In actuality, the average is closer to $180,000.
For related stories, see:
Invest in Willmar
Local Option Sales Tax
The highest collection month was July 2020, when the city brought in $240,899. However, nearly $42,000 of that was sales tax collected in previous months. Due to the pandemic, the state allowed businesses to delay sending in the sales tax it owed to the state, said Willmar Finance Director Steve Okins at the Feb. 10 meeting of the Invest in Willmar Board. July is when the tax became due.
Otherwise, the monthly sales tax collections have bounced between lows in the $150,000s to highs in the low $190,000s.
While revenue collections have remained below the $250,000 projections, the actual collections do not seem to have been impacted negatively by the pandemic. Based on the numbers presented at the meeting, since May the monthly collection has been higher than what it was in February, the final month before the pandemic hit causing business slowdowns and shutdowns.
What has been impacted is whether the city can afford to borrow for all the projects based on those monthly collections.
"Our debt is tied to how much is coming in to support it," Okins said.
The Willmar City Council has already approved $5 million in bonding for the improvements at Robbins Island and Swansson Field. Next on the priority list is $6 million for the new recreational fields and $10 million for the recreation and event center, all to be built near the Willmar Civic Center.
What gets tricky is funding the remaining projects — the $2 million for the Willmar Community Center and $7 million for stormwater improvements.
"We could pay for the rec fields. We could also bond for the event center," said Willmar City Administrator Brian Gramentz. "It gets tight, but it is very possible we can do the community center. What doesn't get funded is the stormwater."
Tax revenue could always go up as Willmar grows and new businesses move in, allowing the city to go back later and do projects it wasn't able to do at first. But, right now, money is very tight for the local option sales tax projects.
"We are right at the breaking point," Gramentz said.