Brainerd City Council: Approves 6 percent levy increase, agrees to keep city hall

Brainerd's tax levy will increase 6 percent in 2019.

And city hall will stay right where it is.

After nearly three months of back and forth conversation, the Brainerd City Council approved the levy increase 6-1 Monday, Dec. 17, and agreed not to tear down city hall.

The 2019 tax levy is set at $5,895,572, which is roughly $333,000 higher than 2018.

The city council approved a 6 percent increase for the preliminary levy on a split vote back in September, with council members Sue Hilgart and Gabe Johnson wanting an increase of 2.8 percent, which would leave property tax statements relatively unchanged.

During recent budget workshops, Hilgart essentially gave the council an ultimatum, agreeing to support a 6 percent levy increase if the money will go toward refurbishing city hall instead of building a new facility, an idea she and Johnson vehemently opposed when the council began exploring it in October. Hilgart reminded the council of two residents who spoke during a previous budget meeting asking for the city's history to be preserved and city hall to stay where it is.

Council member Jan Lambert, noting her support for a new city hall, said she wanted to go beyond just fixing city hall's issues.

"I think we should look at how we can make the buildings, the facilities work better for staff, so I would be inclined to have more than just the deficiencies taken care of," Lambert said. "I would ask that we have a little bit more forward-thinking on making it usable."

But with Brainerd Community Action recently notifying the city of its intent to move out of city hall's annex building at the end of the year, Hilgart noted the additional space soon available at city hall, space that could be used to consolidate departments, which was the goal of a new city hall.

Council member Kelly Bevans advocated for a 6 percent levy increase regardless of city hall's fate, noting whatever project the city chooses to do will be expensive.

"I'm not interested in which way each of us go at this point for the facilities, I'm more interested in saving the citizens the interest expense," Bevans said, noting the less money levied, the more will have to be borrowed and paid back with interest. "Nothing kills a business ... like having to spend extra money on interest."

Council member Dave Badeaux on Monday fell in line with Hilgart, saying he too would vote for a 6 percent levy if it means staying in the current city hall building.

Johnson wanted a concrete decision on city hall before voting at all.

"I would support the 6 percent if we were staying in city hall," Johnson said Monday. "I'm going to vote against any levy until we know what we're going to do with city hall."

After a failed motion to set the levy at a 6 percent increase, Johnson led the council in a vote to leave city hall alone.

"I direct staff to abandon all plans for a new city hall and have them work to implement the renovation plan from the facilities study while also looking at options to better improve the efficiencies of existing facilities," Johnson said.

The motion passed unanimously, followed by a vote for the 6 percent tax levy increase, agreed upon by all but Johnson.

City hall repairs

During a facilities workshop in October, City Administrator Cassandra Torstenson told council members they would have to dish out about $9.1 million to fix the various deficiencies at city hall, which include a lack of usable space, poor temperature control, water damage and an outdated heating, venting and air-conditioning system.

Torstenson also presented the council with options to build a new one-, two- or three-story city hall, ranging in price from $11 million to $20.8 million.

2019 budget

The nearly $5.9 million levy makes up about 43.7 percent of the city's $13.5 million in total budgeted revenues for operations for 2019. The next largest chunk of revenue comes from local government aid (36.2 percent), followed by services and fines at 7.8 percent.

The city budgeted $13,412,409 for operating expenditures, excluding funds for transit, sanitary and storm sewer, recycling and parking. The biggest piece of that funding goes toward public safety (40.2 percent), followed by general operations (20.6 percent), debt services (9.4 percent), parks (8.5 percent), equipment (7.7 percent), street and sewer (7.6 percent), other expenditures (3.4 percent) and road maintenance (2.6 percent).

Notable changes in the 2019 budget include adding 1.67 full-time police officers, bringing the force up to 26 sworn officers by the end of the year; adding a building inspector; budgeting to issue debt for a new fire ladder truck; and contracting with Crow Wing County for facility maintenance for Laurel Street buildings.

With the 6 percent levy increase, residents with a home valued at $120,000 will see their property taxes rise by $25.05 annually if the property experienced no change in market value.

To break that number down, half of every residential property tax dollar paid goes to the city, while 29 cents goes to the school district, 20 cents to Crow Wing County and 1 cent in the "other" category.

In the case of commercial/industrial entities, a property valued at $363,500 would see a property tax increase of about $177 if it experienced no change in market value.

Of each commercial property tax dollar spent, 43 cents goes to the city, 21 cents to the school district, 18 cents to Crow Wing County, 17 cents to the state general fund and 1 cent in the "other" category.

School district property acquisition

After approving the budget and levy, the city council gave its stamp of approval to the Brainerd School District's property acquisition proposal for improvements to various school facilities.

The council showed support for an updated design plan at Harrison Elementary School.

School district officials previously said they would designate Southeast 15th Street on the west side of the building as a parent drop-off area and may seek to make the road a one-way. Council members were leery of the original proposal, citing concerns from residents of losing their on-street parking. The new design, presented at Monday's council meeting, will leave 15th Street as a two-way and maintain on-street parking on the west side for residents. The east side of the street will be a parent drop-off area with no parking allowed. The special education bus drop-off-previously planned for 15th Street north of the intersection with Oak Street-will now move to the north side of the building.

The school board will have a special meeting at noon Monday, Dec. 19, with a property acquisition hearing at 11:45 a.m. for properties that were mislabeled on the original acquisition list released in September.