FAIRMONT– The Fairmont City Council’s second budget workshop on Monday turned into a conversation about building needs and purposes and ended with the council approving a Request for Proposal (RFP) for a facility needs assessment for existing city facilities.

As for the budget, after some tweaking by staff, the city is now facing an 8.2 percent levy increase. At its last discussion on Aug. 25, the city was facing a 6.8 percent levy increase.

Looking at the general fund expenditures, Finance Director, Paul Hoye, said that there is an increase in expenses of $454,000, or 4.2 percent, from 2025, the majority of which come from wages and benefits.

Hoye also touched on an increase of $70,000 to the legal budget in 2026 and explained that the last couple of years the city has blown through its legal budget so he thought it best to increase the amount to $200,000.

“It fluctuates based on use and we’ve been using Flaherty and Hood a lot more than we anticipated,” Hoye said. “In 2025 we had $90,000 budgeted for Flaherty and Hood.”

He said it is one of the larger increases in expenses in 2026.

Council Member Randy Lubenow asked for more details since the charges were twice as high as the council budgeted for.

“We pay by the hour so depending on how much we use them… it’s really going to fluctuate on how much we use them,” Hoye said.

In speaking about the property tax levy, Hoye said, “I know the council probably hears a lot that our taxes are too high in Fairmont and I understand why people are saying that but there’s inflationary costs, tariffs and things are squeezing everyone’s pocketbooks.”

However he did say the city has a competitive tax rate but also has additional costs that the city’s trying to cover, such as street improvements.

“In 2026 we’re looking to add another $100,000 to the levy for our street improvement program,” Hoye said.

“Over the last two years we’ve increased our levy by $500,000 in total. The plan to get to $2.5 million in funding for streets every year, we need to raise an additional $100,000 over the next five years.”

Hoye also pointed out there are aging facilities, which the council had learned about from the Wold study a few years ago so the city has been renovating existing facilities or considering the possibility of new public buildings.

“In order to plan for that, we’ve included $100,000 to increase our levy to put into a building sinking fund,” Hoye explained.

As for the tax impact to residents with an 8.2 percent levy increase, there would be a 7.1 percent increase in property taxes so those with a $150,000 home would pay an extra $65.86 and those with a $250,000 home would pay an extra $109.77.

Hoye said when compared to 15 cities, Fairmont’s is the fifth lowest of the 15.

“Other cities are in the same boat as we are, aging infrastructure, rising costs from tariffs and inflation, the days of 2, 3 percent levy increases, it’s tough to put a budget together and maintain services with the costs we’re seeing,” Hoye said.

Speaking about the levy increase, Luebnow noted it’s not extremely high, but he said the most comments he hears from citizens has to do with the parks and street department.

“Why do we have 20, 30 year old pieces of equipment that we consider essential but we haven’t replaced them when they’re past their useful life. People are concerned about that,” Lubenow said.

Council Member Britney Kawecki asked about the building sinking fund and Hoye said that cash has been set aside for the past five years to build up the fund and the goal is to continue to do that for the next five years, along with the levy increase. At the end of five years, there will be a $500,000 levy that could fund the debt service on a $21 million building.

Kawecki said it was hard to justify $100,000 for the fund when the city has not identified its needs via a needs or space analysis, which she said is different than the Wold study.

“I have a hard time transferring money into funds for capital improvement buildings when we haven’t identified even that we need a new city hall,” Kawecki said.

Council Member Jay Maynard said he thought the city would definitely need to spend money on buildings and specifically mentioned the fire station and law enforcement center.

“It just makes sense, if we know we’re going to spend that money, we might as well start saving now so we don’t drop a bigger hit on people when we start to do the building,” Maynard said.

Kawecki said she didn’t think buildings weren’t needed, but hadn’t been identified. She asked what the plan was for a needs analysis and Hoye said that council hadn’t asked staff to put such an analysis together.

“The council will have to give staff direction on whether or not they want to build a new facility or renovate existing facilities,” Hoye said.

Lubenow agreed with Kawecki and said, “we know we need something but don’t know what we need.”

The council inevitably began talking about the Southern Minnesota Educational Campus (SMEC) building.

Maynard said the SMEC building is a great school building and could be turned into apartments but would be a terrible city hall because of the design.

“I’m not going to consider the SMEC building as a replacement of any city facility,” Maynard said.

Kawecki said she was open to different opportunities to save taxpayers money. She said she would like to see a needs analysis done.

The council passed a motion to direct staff to develop an RFP for a needs and space analysis of existing city facilities consisting of city hall, police department and fire hall.

In continuing its budget workshop, the council heard from Public Works Director, Matthew York, regarding a vehicle replacement schedule, which the council asked for during its first budget meeting.

York said he’s had experience using a schedule like this in different communities and told the council, “it’s basically a way to begin the discussion on a yearly basis on what vehicles need to be replaced.”

At the last budget talk, several city vehicles that are 30 years or older were discussed as they’re proposed to be replaced.

“We understand that we have a lot of vehicles that have either passed or are bumping up against the normal standards for replacement,” York said.

He added that he’s reached out to the communities of Marshall, New Ulm and St. Peter to see what their vehicle replacement plans are.

Some newly established guidelines were shared with the council that include timelines for replacement for mowers at eight years, pickups and small vehicles at 10 years, dump trucks at 15 years, large equipment at 20 years, small equipment at 12 years and trailers at 30 years.

York also shared a spreadsheet, which he called a tool, about how costs will be handled but pointed out that they will fluctuate.

Kawecki shared concerns about the number of vehicles the city has. She said she had done some research in talking to past employees as well as other communities comparable to Fairmont.

“In 1997 the city of Fairmont had six dump trucks. Now we have 17,” Kawecki said. “In the parks department, we have seven workers, one foreman and a Forrester. We have 15 pickups and three Jeeps. That’s two vehicles per worker. There’s dump trucks in that department as well.”

By comparison, she said she contacted the city of New Ulm and said they have a total of 10 dumptrucks.

She said she believed the problem is that the city has been expanding its fleet, rather than replacing it.

York said that a lot of it boils down to staffing the fleet based on snow and parks in the spring and summer.

“We do have a large amount of vehicles, but we also have a large service area that we’re working with in order to maintain for snow emergencies,” York said.

He pointed out there are seven dump trucks slated for replacement on the spreadsheet with the youngest of them being from 2006.

Maynard said that aside from talking about the vehicles and staffing the city has had in the past, he didn’t hear anyone talking about the level of service the city is currently able to provide.

“Without that, the rest of the discussion seems a bit misleading,” Maynard said.

Lubenow said he appreciates that the council and staff are looking up ways to come up with some plans.

“Citizens are telling me that clearing the streets are the most important thing and I’ve brought it up with Nick Lardy (parks and streets superintendent) before…,” Lubenow said.

“We’re trying to do the best we can… I have to be responsible to you guys because you’re the ones that are making the plans from the people. We’re trying to come up with this plan and can we set up something so we can begin to move forward and make the positive change we want to make,” York said.

Kawecki said she believe the city has gotten to this problem because the city council has unanimously approved every budget.

“You say it’s my job to bring forward these requests, but I look at you and say it’s your job to rule out what shouldn’t be brought. It’s hard for me to look at the city of Fairmont, which hasn’t grown since 1970 and see that our fleet is so much bigger than communities that are 4,000 and 5,000 bigger than ours,” Kawecki said to York.

She said the city should be trading, rather than buying new and that past city councils have been allowing it.

“We shouldn’t be just rubber stamping budgets and I believe that’s department heads who need to be cutting the costs on all of this wasteful sending. And that’s not micromanaging. It’s the job of the council,” Kawecki said.

The preliminary budget and levy has to be approved and certified and sent to the county auditor by Sept. 30.