Council approves 3.5% levy increase for 2022

Published 7:11 am Thursday, December 23, 2021

The increase is down from an almost 10% preliminary levy passed this fall

The Albert Lea City Council last week approved an overall 3.5% increase in the tax levy for 2022.

The $6.94 million total levy includes a general fund levy increase of $239,000 compared to 2021 and a slight decrease in the debt service levy of about $4,300. 

The overall increase is down from the preliminary 9.98% tax levy increase approved earlier this fall.

It includes a general fund levy of $5.065 million and a debt levy of $1.876 million.

Third Ward Albert Lea City Councilor Jason Howland thanked city staff, and councilors Larry Baker and Rich Murray, who spent significant time on the budget and worked with department leaders to try to get the levy down. 

He said it was a testament to the current council and the councilors before him that the city was able to operate at a zero percent increase in the levy for 10 years. He noted the increase was inevitable because of the rise in expenses for personnel and health insurance. 

He said the department heads, city leaders and councilors looked at everything in the budget down to whether a certain amount needed to be spent on tires for vehicles and even money for office supplies. He said a 3.5% increase is the best possible scenario with all the work that was done. 

City Finance Director Kristi Brutlag said if a person owned a $100,000 home in 2021 and the value stayed the same in 2022, that individual’s city taxes would go down $4.54. If that property’s value increased by the overall tax capacity increase seen in the city of 4.3%, that person would have an increase in city taxes of $21.07. 

The council approved the 2022 budget at about $17.2 million, an increase of about $329,000 compared to 2021. 

Brutlag said the the city cut about $618,000 from the general fund budget since when the preliminary levy and budget were approved.

Changes included a decrease in personnel costs of $355,000, reductions in health insurance of $255,000 when compared to original projections, reductions in workers compensation costs of $60,000, an increase in the wage adjustment from a 2% increase to a 2.5% increase for a total of $45,000, and other reductions totaling $85,000, including delaying a new parks and arena position until April 1. 

Other reductions in expenses included reducing the city’s donation to the Main Street program by $35,000, reducing home demolition costs by $150,000 and an increase in tax abatement for Freeborn-Mower Electric Cooperative of $15,000, among other changes. 

Brutlag said the city receives 34% of its revenue from local government aid, 30% from its tax levy and 10% from franchise fees, among other smaller categories.

In other action, the council:

  • Increased the city’s water and sewer utility rates by 5% each. 

Brutlag said a person who uses 6,000 gallons of water a month will see a $3.30 increase monthly under the changes. 

City Manager Ian Rigg said the city’s water fund is a lot lower than it should be at less than $1 million, and he noted that while the sewer fund has a better balance, the city has to plan for the $60 million improvement to the wastewater treatment plant in the near future. 

Howland said he understands that the wastewater treatment plant is a big project, but noted there have been increases in the city water rates every year since he has been on the council and asked when it would end. He said he would vote in favor of the increase but not without some hesitation. 

The rate increase passed 6-1 with Sixth Ward Councilor Al Brooks voting against. 

Brutlag recommended a new full rate study for 2023. 

  • Approved the Albert Lea Housing and Redevelopment Authority’s levy at $109,000, which is the same as 2021. 
  • Approved the 2022-26 capital improvement plan, which includes $133 million in expenditures. 

For 2022, there is a total of $27.7 million in projects, including the East Main Street project from Newton Avenue to Interstate 35 for $11.23 million, the Main Street reconstruction from I-35 to County Road 38 for $2.4 million, the wastewater treatment plant upgrade design for $1.65 million and the neighborhood improvement for $1.5 million. 

There is also the 2022 state aid overlay project on Hammer Road for $850,000, facade repair at 211 S. Broadway for $600,000, the demolition or repair of 324 and 332 S. Broadway for $550,000 and a stormwater pond off of Fourth and Front streets for $300,000, among other projects. 

  • Approved the 2022 water, sewer, solid waste, Senior Center and airport budgets.
  • Amended the fee schedule for 2022. Some of the changes included increasing the wine on-sale license from $200 to $400 a year, increasing the 3.2% off-sale license from $25 a year to $200 a year and adding a grazing fee for $100.