Potential HVAC project spurs 5% jump in county tax levy

A troublesome HVAC system is taking a spot at the top of the priority list for Dodge County’s 2024 budget, leading to a 5% tax levy increase for the coming year.
The county board is expected to approve a $39.4 million budget for 2024 at its next regular meeting, which represents a 5% tax levy increase over 2023, or a total tax levy of $17.3 million. Dodge County commissioners were given the option to increase the budget by 2.8% at the Nov. 28 meeting but gave the go-ahead to the full 5% increase — in part, to pay for a new HVAC system.
The 2024 tax levy and budget will be presented during the Truth in Taxation meeting scheduled for 6 p.m., Tuesday, Dec. 12. The regular meeting of the Dodge County Board of Commissioners previously scheduled for 9:30 a.m. has been rescheduled to the evening to accommodate the mandatory Truth in Taxation meeting.
Truth in Taxation
Truth in Taxation (TnT) meetings typically draw few — if any — members of the public, though Minnesota state statute specifically requires municipalities to hold such meetings so taxpayers can learn how their tax dollars will be spent. Municipalities must provide overview of the proposed property tax levy and proposed budget for the coming year; in this case, the taxes payable year 2024.
“TnT meetings offer the opportunity to ask questions about the budget,” County Administrator Jim Elmquist explained. “The budget is a large part of county government, and this gives [the public] the opportunity to talk about any questions or comments they have.”
Truth in Taxation meetings signal the nearing end to the annual budget process. Dodge County officials begin the budget process in June. A first draft for the budget and tax levy is reviewed by commissioners in August. The county board certified its preliminary tax levy at a 5% increase in October with the intention of decreasing the tax levy before the final budget was approved in December.
HVAC system
The fact is that the HVAC system in the Government Services Building has been faulty for almost as long as the GSB has been open, requiring multiple repairs over the past eight years. The HVAC system has been on the county’s Capital Improvement Plan (CIP) for several years, with one quote of $2.5 million as a possible price tag for its replacement.
Most residential parcels will see a decrease in taxes payable in 2024, even with the 5% tax levy increase, according to Elmquist. Dodge County experienced significant growth in the past year, which is helping to drive the tax capacity tax rate down from 42.26% in 2023 to 36.78% in 2024.
At the Nov. 28 regular meeting, Dodge County commissioners weighed both the 5% and 2.8% tax levy increases against one another. More notably, to increase the tax levy by 2.8% would not give the county the funding necessary to address the HVAC system needs.
Certifying the 2.8% tax levy increase is not a consideration, District 1 Commissioner John Allen said, because it would not generate the funds needed to address the HVAC system.
“The heating system for $2.5 million, how are we going to pay for that? We’re going to go into this budget now, and where are we going to come up with the $2.5 million?” he asked. “Are we going to fix it or are we just going to limp it along?”
The HVAC replacement would be a one-time expenditure. The county did seek one estimate to help plan funding, which resulted in the $2.5 million quote. The final cost may be more or less than the quote, but county officials will not know that dollar amount until the project is put to bid, and a contractor selected through the bidding process. There is no current timeline for the project, though plans will likely begin in 2024, Elmquist said.