Kandiyohi County adopts 6.23% 2026 levy and hears financing options for $67M Justice Center/HHS project

Kandiyohi County commissioners voted on Dec. 16, 2025, to adopt a 6.23% levy increase for 2026 after comparing three options presented by county staff. Administrator Kelsey Baker had recommended a lower option (5.38%), but the board split and adopted the middle option 6.23% by voice vote (3–2), citing the need to protect reserves while maintaining services.

Baker presented three levy scenarios (7.16%, 6.23%, 5.38%) and outlined reserve usage; staff recommended 5.38% but noted the differences hinge on reserve drawdown. Several commissioners said they were uncomfortable using additional reserves given anticipated state and federal cost shifts, while others urged careful stewardship of services.

Separately, Todd Hagen of Ehlers reviewed financing scenarios for a proposed Justice Center ($53M) and HHS expansion ($14M), a combined estimated project of roughly $67M. Hagen modeled a 25‑year bond issue (county’s AA rating with possible state guarantee) and estimated the additional annual levy needed to support debt service would be about $4.14 million initially; he presented a tax‑impact schedule showing effects on residential and commercial property values and noted a roughly 4.86% tax‑rate increase in one modeled scenario.

Ehlers also outlined options to reduce property tax pressure, including a local‑option county sales tax (adding 0.25%–0.5% in the county) that could generate an estimated $4.2 million per year at a 0.5% rate and significantly offset the levy impact. The firm described the legislative and referendum steps required to pursue a local sales tax: county resolution by Jan. 31 to seek authority, legislative approval, board resolution to place the measure on the ballot and a local referendum (possibly Nov. 2026), with collections starting as early as April 2027 if all phases succeed.

Commissioners raised multiple questions about timing, public outreach and the scale of the project; several said they want more public input and time to reconcile the capital plan with operating pressures. Some commissioners favored applying for legislative authority now to preserve the sales‑tax option, while others urged caution and more internal planning before pursuing a referendum.

Next steps: staff and advisors will provide more detailed financial schedules and outreach plans; the board agreed to continue the discussion in January and consider whether to pursue the legislative authorization and, if so, a public engagement timeline.