Taxpayers could see big city tax increase

Cloquet city councilors set the 2025 preliminary tax levy at just over $3.9 million Tuesday, an 11.23 percent increase over the 2024 levy. Once a preliminary levy is approved, the figure can go down before it gets final approval in December, but it cannot be increased.

City administrator Tim Peterson said the reason behind the jump is easy to pinpoint: wages.

Salaries and benefits make up just over $6 million of the entire general fund budget of $9.5 million, he said. The total wage increases for next year are $460,000 and the proposed levy increase is $397,000. On a $200,000 home, an 11.23 percent property tax increase would be $75 a year or $6.25 a month, Peterson said..

Ward 4 councilor Kerry Kolodge asked what it would take to cut the levy increase to 5 or 6 percent.

“What would it require of us, would it mean jobs would be lost? … You can’t cut vehicles or maintenance, it comes down to jobs?” Kolodge asked.

Peterson said cutting vehicles or maintenance would just defer items that are needed. “All that really does is push a larger levy increase, whether it’s next year or the year after, for equipment,” he said. The public works department plans to set aside money every year to avoid the large ups and downs of major equipment purchases, he explained.

Cutting the levy increase in half would likely require eliminating two or three jobs, Peterson said. And cuts would affect larger organizational structures: police department or snowplow shifts, for example, are designed to work with a certain number of people. The parks — with all the improvements in recent years — take more people to maintain today than 10 years ago.

“If we like the level of service that we have right now, if we feel that’s necessary for the community that we have, this is what it costs to have that,” Peterson said.

The dramatically higher budget wasn’t exactly a surprise after council members approved increased pay for the police department in June of roughly 11 percent for this year.

The police budget will grow by $352,700 to a total of $4.2 million in 2025. The library will see a budget increase of $66,000, to $634,000. The streets and highways budget is $1.9 million, up $55,000.

There are other areas where costs are rising. The outdoor swimming pool is budgeted for an increase of $27,400 to $137,800. The hockey arenas have an increase of $36,000 to $349,000. Parks will get $25,250 more, for a $593,400 budget.

Ward 2 councilor Sheila Lamb asked about the hockey arenas, “the elephant in the room,” she called it.

“I know it’s not going to be popular, but I’m looking at what affects the entire community, which is always taxes,” she said.

Is it good use of taxpayer money to continue maintaining two hockey arenas, she asked, “when we’re facing some multi-million dollar expenses to keep these arenas going?”

Peterson admitted the hockey arenas have a huge impact on the city budget. Northwoods Credit Union Arena is the newer arena and is utilized year around, he said. Pine Valley “The Barn” arena is used only in the winter.

“The impact of the arenas on our parks department [budget], …was so dramatic that over the last couple of years we’ve had to separate out the hockey arenas into their own department so we can track it separately,” he said.

“When something breaks in the arena, it breaks really hard in an expensive way,” he said.

There is money coming for hockey from outside of property taxes. Cloquet voters approved two sales tax questions in 2022: one of those targets almost $6 million for improvements to the ice arenas. With cost increases, Peterson expects to be able to replace a shared ice plant and not much else, he said.

Kolodge saud he served on a past committee looking to reduce costs and the idea they had was to turn off the ice making in both arenas the state high school hockey tournament and turn it back on a couple weeks before hockey season starts. The proposal “never got any legs,” he said.

Peterson acknowledged the points made.

“People have become accustomed to hockey in this community running for 11 months in Northwoods Arena, and that can be fairly expensive to operate,” he said, pointing out the Minnesota Wilderness, high school and youth hockey hold camps in the summer.

There were no easy answers Tuesday. Eventually councilors voted unanimously on the preliminary levy, and set a Truth in Taxation hearing for Dec. 3 and a final vote.

Code changes

In other matters Tuesday, councilors voted unanimously after discussion to amend the city code and adopt the International Property Maintenance Code, which would provide up-to-date widespread property maintenance standards for existing buildings.

“This is a better version of what we already have,” Peterson said.

It is also updated every four years, community development director Holly Hansen said.

Councilors questioned the necessity, and also whether the code would allow for cultural practices. They also worried that lower income residents would face expenses they can’t afford.

“Most of what’s being discussed tonight is going to come down to: If your neighbor calls and complains, is there a section of code that addresses some property upkeep thing that we can (as a city) agree to?” Peterson said.

It won’t be someone missing a shingle, he said. “But there are some standards that the vast majority of people would like our neighbors to adhere to.”

Cultural practices, like saunas in the backyard, for example, would likely only be addressed for safety, he said.