At the Crookston City Council’s last meeting in September, the council approved a preliminary levy increase of 18.15% from the 2022 levy, which, if left alone, will raise city taxes by about 3.817%. We met with City Administrator Charles “Corky” Reynolds to learn more about some of the reasons the levy is as high as it is this year and what the city plans to do to potentially lower it in time for the final levy at the end of the year.
Despite receiving American Rescue Plan Act (ARPA) funds from the state and county to help recover from the COVID-19 pandemic, there are still many things that the city is looking to purchase or repair that has caused the levy to rise 18.15% higher than it was in 2022. One of the main reasons for the increased levy is the repair and upgrading of some of the city’s infrastructure, notably the water and wastewater departments. Many of the lift and pumping stations have been under repaired and are not up to date for various reasons over the years, which was brought to the city’s attention after Red Lake River flooded last spring that caused many things in the stations to break. Another thing that caused the rise in the levy was inflation for utilities (fuel, natural gas, electricity, etc.) to such a high extent that caught the city by surprise. The city currently assumes a 40% increase from 2022 utility costs. However, Reynolds, other city employees, and the Crookston Housing & Economic Development Authority (CHEDA) estimate that utility costs for 2023 may be even higher than what they initially believed after finding CHEDA’s increase in utilities alone was greater than a 40% increase. The final main component of the increase is that the city is making a concerted effort to raise the personnel wages for its employees, which they are changing after making some comparisons with other similarly populated cities. “We have found in comparison to a number of like-populated, like-situated cities that a number of our employee groups are underpaid compared to the average of these other cities,” Administrator Reynolds explained. “We took an average of those eight comparable cities being East Grand Forks, Thief River Falls, Grand Rapids, and Montevideo, not the City County metro area for our comparison. So, in our preliminary budget, we budgeted to bring our employees up to the average.”
The city has made some moves already to lower the original preliminary budget from 25.5% to its current amount of 18.15%. Some of these actions include using the city’s undesignated reserves to purchase or fund items for the Parks and Recreations Department and the Crookston Fire and Police Department’s Capital Improvement Plans (CIP), such as a vehicle for the police department with all of the equipment that would be in it for about $55,000. However, the city is looking at more ways to lower the levy to a more moderate increase, one way being to reduce expenditures on some of their less essential items. “We can always look at reserves, and we did to bring it down to 18.15%, in addition to reduced expenditures, taking items out of the proposed budget. Those same options are available at this point,” Reynolds explained. “The Department Heads and myself are working on potentialities and hypotheticals, so as we get closer to the December taxation hearing and the City Council deciding what the final levy will be, there will be options available to reduce that 18.15% to another number.” Reynolds and the Department Heads have met multiple times to discuss each department’s needs, and Reynolds believes that the budget holds all the city’s needs to deliver its services to the people but is preparing to use the options available to them to lower the levy further if they are requested by the City Council.
City Administrator Reynolds did wish to clarify one thing about the preliminary levy and its impact on the citizens of Crookston, saying that the preliminary levy increase amount is not the same as the increase in city taxes the citizens will have to pay. “Many people assume that when we say the preliminary levy will increase by 18.15%, their city portion of their tax bill is going up 18.15%. That is not accurate,” Reynolds explained. “What that correlates to in terms of your taxes is if we held 18.15% through the final levy, your taxes would go up by 3.817%. An example is you are paying $1000 in your past year’s tax bill for city taxes, excluding school district, county, watershed, etc. Instead of paying $1000, it would go up by 3.817%, so you pay $1,038.17 as opposed to the $1000 you paid last year.” Reynolds clarified that the levy increase correlates to the actual percentage tax increase for a citizen in Crookston for the city.
We will continue to give updates on the preliminary tax levy for the city, and other actions the city takes as the date of the final tax levy is determined.
