The Albert Lea City Council on Monday approved a 6.7 percent increase in the levy to pay debt. It covers projects for which the city had to issue bonds in 2013.

How the increase will affect residents varies, said Albert Lea City Manager Chad Adams.

He said the effect will depend on market values of properties. The city also has an increased tax base, which is taking on some of the brunt of the increase.

While some people may see a small increase in their taxes, some may see a decrease, depending on the value of their homes, Adams said.

He said city taxes for a $100,000 home will cost $410 a year.

The levy increase covers the Broadway reconstruction project, the retrofit of City Hall’s heating and cooling system and street projects in 2013.

The general-fund operating levy will be $4.76 million with no increase, and the debt-service levy will be $1.07 million with the 6.7 percent increase.

The council approved a $14.5 million general fund budget for 2014.

As part of the budget, the council approved a 2 percent cost-of-living wage increase for 2014 for the public works and parks department employees who are part of the American Federation of State, County and Municipal Employees union. The three-year contract calls for a 2.25 percent cost of living increase in 2015 and a 2.5 percent in 2016.

All nonunion city employees will see a 2 percent wage increase in 2014.

In other action, the City Council:

• Approved a 2 percent increase in sewer rates. For water rates, the council approved a 10 percent increase in water base charges and a 9 percent increase in the usage charges.

The increase is needed to replace aging infrastructure and build a cash reserve in case of an emergency, Adams said.

A similar increase will likely be needed next year.

An average residence that uses 1,000 cubic feet of water per month would see a difference in $2.93 per month in their utility bill, he said.

• Approved a $109,000 levy for the Albert Lea Housing and Redevelopment Authority.

This one will go toward demolition of unsafe structures, completing a housing study in 2014 and making up for cuts in federal aid.

• Approved the fee schedule for 2014, with an exception for a fire call fee. The council will readdress this issue at a later meeting.

• Approved the 2014-18 capital improvement plan for the city.

The plan includes projects being considered for completion each year.

• Allocated the interest earnings from the police and fire pension fund for 2013 and 2014.

Interest earnings in 2013, estimated at about $64,000, will go toward replacement of the computers in the squad cars and for the difference in costs for replacing the cars.

In 2014, the earnings, estimated at about $75,000, will go to a portion of the facility master plan, which will review the city’s need for a new fire station, and to replacement of some equipment in both the fire and police departments.

• Received rebate checks from Alliant Energy totaling almost $10,000. There is a $5,000 rebate for improvement to the City Hall roof, and the remainder came from the lighting upgrades completed in 2012 at City Hall.

• Witnessed the swearing in of Sy Vanthavong as the newest Albert Lea Police Department officer.