COTTAGE GROVE, Minn. — The 2020 budget that passed at the Dec. 4 Cottage Grove City Council meeting includes a hefty tax hike.

The $16,914,400 levy represents a 7.7% increase compared to last year, director of finance Robin Roland said. Levy increases for 2019 and 2018 were 3.02% and 3.13%, respectively.

The increase means the owner of a home valued at $253,00 will pay $927.88, or about $48 more than last year.

But taxpayers were spared a bigger hit thanks mostly to the construction of new homes.

"Our tax base, thankfully, continues to grow at a robust pace," Roland. The city's total tax capacity is $36.8 million, a 9% increase over 2019, she said.

The increase is driven primarily by bond debt on the new Health and Emergency Response Occupations (HERO) Center training facility and the cooling system replacement at the Cottage Grove Ice Arena.

The construction of the new Ravine Parkway also helped push the projected 2020 total debt levy to $2,397,500, compared to $1,590,000 last year.

"Those are the three things that bumped us up," Mayor Myron Bailey said. "This was an anomaly year."

Cottage Grove and Woodbury have both added $5.26 million to their capital improvement plans over the next five years for the HERO Center, which they will own and operate jointly.

Water rates will not increase, but there will be a 1% increase in sewer rates. The storm water fees will increase from $5.25 per month to $5.50. The streetlight fee will increase from $4.20 to $4.40 per month.

"The average increase in all the cities in the county is 7.7. Comparatively, we are right in the thick of things," Roland said.

Council also approved an ordinance that allows the city to establish a local lodging tax of up to 3% on gross receipts from hotel rooms. Council also adopted a resolution establishing the Cottage Grove Area Convention and Visitors Bureau. It will be a nonprofit entity under the control of the Cottage Grove Area Chamber of Commerce.