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BE Council discusses new revenue ideas

By Staff | Dec 10, 2017

While the 2018 budget and levy dominated discussion at last Monday’s Blue Earth City Council meeting, the council members also discussed a couple of possible new revenue sources.

One was a possible utility service fee, while the other was a city sales and use tax.

The service fee that would be added to all the utility bills in the city would possibly be around $2 per month, city administrator Tim Ibisch said.

“It is just an idea of something we could do,” Ibisch told the council. “It is a way to raise revenue without raising the levy more.”

Ibisch said the fee would raise approximately $18,000 per year, and he suggested that money be used for the city’s charge for paying for the electricity used for street lights.

Each year the city is charged by Blue Earth Light and Water for the electricity for all the street lights in the city. In 2016 that cost was $71,000, while the city had budgeted just $55,000.

This year, the cost was already at $77,900 with another month to go. The budgeted amount for 2017 had been increased to $60,000, which still will not cover it.

Ibisch said charging a fee to all utility users in the city would be more fair than raising the levy to cover the street light cost.

“Everyone benefits from the street lights,” Ibisch said. “Not just the taxpayers.”

He estimated that someone with a $100,000 home would have the $2 per month service fee on their bill, but their real estate taxes could be decreased by $10 per month.

The council did not take any action on the idea last Monday, but is expected to continue discussion in future meetings.

The other idea of a city sales and use tax was proposed earlier this year.

Basically the city would impose a small percentage sales tax on goods sold in the city.

Many other cities across the state have such a city sales tax.

If the council decides to implement the tax, there is a long process for it to actually go into effect, said city attorney David Frundt.

The first step after a council vote would be to place the question on the next election, in November of 2018. If it passes, the Minnesota State Legislature then has to also authorize it.

The council would then have to enact an ordinance, according the City Charter. It is then possible the citizens could vote on the idea once again.

“The whole process will take time,” Frundt said. “It would probably not go into effect until late 2019 or early 2020.”

In other business at the meeting last Monday, the City Council:

Voted to give administrator Ibisch the go ahead to negotiate the purchase of an abandoned house at 525 E. Eighth Street, with the intent to have the structure demolished.

Passed a land sale ordinance to sell a piece of property in the new housing development back to Blue Earth Light and Water, at the same price it was purchased for.

Authorized contracts with the city engineer and the city attorney for 2018.

There was no change in the contract with the city attorney, but there was a $5 per hour increase in the city’s reduced rate for engineering work.

Heard from Heather Klassen, a Jackson real estate agent who is running for the House of Representatives in District 23A, a position currently held by Rep. Bob Gunther (Fairmont-Rep.).

Klassen told the council she wanted to introduce herself to them and said she was trying to get out to as many city and school meetings as possible in the District, which covers parts of Jackson, Faribault and Watonwan counties, and all of Martin County.