FAIRMONT– Toward the end an exceptionally long four hour meeting on Monday evening, the Fairmont City Council held its Truth in Taxation hearing and discussed its 2025 budget and levy. The council was able to adopt the levy at a smaller increase than was expected.

City Finance Director, Paul Hoye, said typically the council adopts a levy that is pretty inline with what it sets as the preliminary levy in September, which this year was a 9.1 percent increase. However, he said due to several factors, namely a reduction in premiums for property liability insurance and worker’s comp insurance, the levy dropped to a 7.9 percent increase.

Speaking to some of the main drivers of the levy increase, Hoye reminded the council and the public that it’s council’s goal to address some inefficiencies in the city’s roads so the levy was increased $400,000 to go toward the annual street improvement program.

“The other part of the levy increase was really just for general fund operations. The city has experienced inflationary costs like everyone else from salt and sand mix that we use on our streets to repairing equipment. Things are just costing the city more,” Hoye said.

He added that the city also has three different labor agreements and each one has a 3 percent cost of living increase for 2025.

“Those are the main factors of what went into setting the levy and driving the need to increase the levy,” Hoye explained.

In giving an overview of the 2025 budget, he said there’s a slight increase in the general government fund due to the new Human Resources department in 2025. The Public Safety and Public Works departments also have slight increases due to inflationary costs.

There is also a change in the special revenue funds, which covers economic development, the Southern Minnesota Educational Campus (SMEC) building, airport, lake restoration fund and Local Option Sales Tax (LOST) fund.

Hoye said there will be an increase in the lake restoration monthly charge, sent to utility customers, from $1 to $4 and it would raise an additional $200,000 per year, which would go toward combating Curly Leaf Pondweed– at least in the first year– and subsequent lake improvement projects.

As for special revenue expenditures, there’s $125,000 designated out of lake restoration funds for repairs to the George Lake Dam.

Moving to capital projects, Hoye touched on a couple of the larger projects and the amount for them in the budget. The council spent some time talking about the downtown beautification project, which is under streets and parks and has $1.2 million budgeted for it.

Public Works Director, Matthew York, said the city recently received bids for the cost of conceptual design that were between $30,000 and $35,000. York said the $1.2 million could be reduced because the odds of the city spending $1.2 million on the project in the first year is slim.

Council Member Britney Kawecki said she wanted to make sure that downtown businesses give input during the design process. However, York said that as per the Request for Proposal (RFP) the city is seeking professional opinion on what would be the best design for the space.

“Concept and actual design are two totally different things. You hope that concept turns into what your design is going to be, but if it doesn’t meet standards…” York said.

He said the precipice of the project was that streetlights and bollards need to be replaced and the sidewalks need to be replaced. Work also needs to be done to make the sidewalks ADA compliant.

“That’s where the $1.2 million comes from,” York said.

He said that a plan was needed to approach the project in phases that made sense. However, Kawecki said she still felt like the amount of money for the project could be reduced and the rest could be put toward an ongoing project at Veterans Park.

“We could pull some of the $1.2 million, and take $700,000 or $500,000 and put it toward Veterans Park… we’ve already budgeted the $1.2 million… we can’t finish this whole project downtown in one year but we can rebudget money in 2026 to finish it,” Kawecki said.

Council Member Michele Miller said the city had already decided to work on the downtown project.

“Why are we talking about this and beating it to death. Let’s just move forward,” she said.

Council Member Jay Maynard agreed and asked what the point of pulling money from the project was. He said that the Veterans Park project was worth pursuing but that it needed to be considered separately at a different time.

“I would just leave the $1.2 million in the budget… if he (York) doesn’t use it, he doesn’t use it. It doesn’t affect the levy,” Miller said.

Speaking to some other capital improvement projects, Hoye said that there is $191,000 budgeted for court resurfacing at Veterans Park and $75,000 budgeted to finish the Sylvania Park Bandshell rehab project.

The largest amount however, is $440,000 included in the budget to combat Emerald Ash Borer which includes taking out trees infected in city limits. This has been an ongoing project since the disease was detected in the city of Fairmont several years ago.

Finally, Hoye spoke about the liquor store funds and said that they’re anticipating a net income of $617,924 from the liquor store before transfers.

“We continue to see good, strong profits there at the liquor store. We’re anticipating that our reserves will be around $2 million at the end of this year. We’ll be dried down a little bit with some of the projects we’ve identified to fund,” he said.

As for the tax impact on residents with a 7.9 percent levy increase, Hoye said it will really be a 4.2 percent increase to the tax rate. The owner of a $95,000 home would pay $23 more per year in property taxes and the owner of a $250,000 home would pay $61.45 more in property taxes.

Following Hoye’s presentation, assistant finance director, Julie Zarling, spoke about the public utility budget and rate increases, which represented a 5 percent average rate increase for residential, commercial and industrial water customers, a 7 percent average rate increase for residential, commercial and industrial wastewater customers and a 3 percent average rate increase for residential, commercial and industrial electrical customers.

The council approved 4-1 a motion to adopt the 2025 levy at a 7.9 percent increase. Kawecki was opposed.

The council approved the 2025 budget 4-1 with Kawecki opposed.