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FAIRMONT-- The Fairmont City Council held its third budget workshop on Tuesday morning and the focus of this one was on the general fund and proposed 2027 tax levy. Right now, the city is looking at a proposed levy increase of 11.9 percent with the estimated property tax rate impact being a 5.8 percent increase.
In the prior two budget workshops, the council talked about the five year Capital Improvement Plan (CIP) projects and budgets for each department, including parks and streets, fire and police and also proposals for a potential parks master plan and facilities condition and staffing needs assessments.
Finance Director Paul Hoye said that on the next regular meeting on Sept. 14, staff intends to bring the preliminary budget and proposed tax levy before the council. It needs to be approved by Sept. 30 and after that, it can be lowered, but not raised before the final budget and levy is adopted in December.
He walked through the packet provided to council that details the general fund. It also included the budgets and actual numbers from both 2024 and 2025.
For the 2027 revenues and expenses, there's a balanced budget of $12.15 million. Hoye explained there are two main revenue sources in the general fund: property taxes and state aid. For 2027, there is just a .7 percent increase in state aid.
"When we have lower local government aid coming in, the way that we make up for the additional costs that we have to cover is mainly with property taxes," Hoye said.
In the general fund then, there is an increase of $761,000 in property taxes, which is roughly a 16.8 percent increase in the general fund tax levy (Not the overall tax levy).
As for expenses, Hoye said that there is a 3.5 percent COLA (cost of living adjustment) included in the contracts, which is built into the 2027 budget. He said the majority of the city's costs will be related to that and that it's the largest share of the budget.
"A lot of what we're going to see for cost increases is going to be tied to our personnel costs," Hoye said.
The mayor and council budget is up $38,000 from 2026 and the city administrator budget is mostly flat, up $1,500 from 2026 due to some training and supplies. The city clerk budget is down because there is no election in 2027.
There's an increase of $124,000 in the finance department with the vast majority going to IT expenses, including a new server. However, Hoye said they're looking at making some changes or pushing some of it back to help lower the levy for 2027. There are not many changes in the HR and planning and zoning departments.
Council Member Randy Lubenow questioned some of the planned technology purchases. He said there has been other software purchased in the past that staff wasn't trained on or didn't like.
"I just want to make sure we're buying stuff that staff is going to use," Lubenow said.
City Administrator Jason Baker said he's been involved in the process and that staff is buying in and on board with using it effectively.
Moving onto public safety, Hoye said there is a $258,000 increase to the police department budget, but he explained that's mostly due to the planned addition of code enforcement staff as well as changes to a work comp program. For the fire department, it's up $56,000, which is almost entirely related to pension expenses.
Under public works, Hoye said there was not much that could be identified in the operating budget that was changing from 2026 but that any additional costs are related to personnel increases.
"If we look at our total expense increase for 2027, it's $851,000 or 7.5 percent. A little higher than it has been the last few years," Hoye said.
Of the $570,000 in personnel costs, $102,000 is for health insurance, he said.
As for the tax levy and how the additional costs are going to be addressed, Hoye said again with state aid not going up, the majority of the costs will need to be covered by property taxes.
With that said, the city is currently looking at a levy increase of $942,930, or 11.9 percent.
Hoye said staff's goal is to try to get it under 10 percent and he noted that last year a 6.9 percent levy increase was adopted for 2026.
He also said that he'll have a better idea of the property tax rate impact for residents before the meeting on the 14th.
When the presentation was done, council members asked some questions and shared thoughts.
Lubenow asked whether employees not covered by a union contract are getting a COLA increase.
Hoye said that there's the same adopted pay plan in the contracts and that for 2027 it's 3.5 percent for un-represented employees as well.
"As long as they're meeting standards, they're still be getting the 3.5 percent increase," he said of staff.
Council Member James Kotewa asked how many employees are still getting step increase. Hoye said he didn't know the number off the top of his head but that he could get that number to council.
Council Member Britney Kawecki then said the biggest concern she hears from residents is about property taxes. She referenced a recent housing study that was completed and shared with council and pointed out that the city is not growing.
"When it comes to personnel, that's not something we can change," Kawecki said. "To me, the things that we can change... is equipment. What do we need to do as a council to lower this rate?" she asked.
Kawecki has been vocal in past budget workshops about doubting the need to replace certain equipment and has asked for a more detailed needs analysis on the city's fleet to be done.
"After the first budget meeting, I requested that night or the next day, a simple five column fund and reserve balance spreadsheet so that we could understand as an entire council exactly all of the reserve funds and all of the balance sheets," Kawecki said.
She said the council members gets many pages emailed to them, but that it's hard for her to understand.
"We as council, per the charter, are here to approve the budget. To make the best educated decision we can for the citizens of Fairmont," Kawecki said.
She further said that her request went unanswered and that she was recently told by Baker that the spreadsheet would not be provided to her.
"I can't understand what I'm looking at, but he said, 'I'm not going to give it to you,'" Kawecki said.
Hoye said he's open to finding whatever information the council wants to see but that if it's specific or detailed information, it can take time to get together.
"We want to make sure that anything we're doing, it can be done by our software so it's not creating additional staff time to provide this information," Hoye said. "I think it should be a council decision on what they want to see. The finance department doesn't want to be providing five different reports to five different council members."
Baker added that the information can be provided, but at the direction of the council.
"Having just one council member come to us and ask for additional work that's going to take staff time... we don't do that. If council wants to come together and make the decision, perfect, let's do it," Baker said.
Lubenow said he did think a balance sheet would be helpful, as Kawecki had requested, and that it would help all council members in explaining the budget to citizens.
However, Maynard said he believes the council is getting the information that it needs and that is requested. He acknowledged that they may not be getting it in a form that's easily digestible to someone without an accounting degree.
"To me, the answer doesn't seem to be to have staff put in more time and effort to curate the information that we see, but instead in educating us on how to read the information we're already getting. They're already doing the job that the charter requires of them and that's enough. If we don't know how to deal with it, then it's on us to learn," Maynard said.
Kotewa asked what was needed to get the "cliffnotes" version of the budget. Hoye said that he could talk to their software vendor to determine the capabilities of it putting together another report that meets the requirements.
After some more discussion, Baker asked whether council wanted a summary page of the fund balance that Hoye sends out monthly.
Hoye explained that some of the reports need to be manually done as the software can't project all of it. Kawecki asked whether the council can get a summary before the meeting on the14th and Hoye said it could be provided, but it may need to be done manually this time as he works on something that can be done more efficiently going forward.