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What will BE’s levy increase be?

By Staff | Dec 8, 2019

The Blue Earth City Council had a rather long meeting last Monday night, and part of the reason was because they held their annual Truth in Taxation Public Hearing during the meeting at 6 p.m.

As part of the hearing, the council heard an explanation of two different possible budgets from city administrator Tim Ibisch, with two different property tax levies attached to each one.

However, in the end the council did not accept either budget or tax levy amount.

One of those budget plans would have resulted in an increase of the property tax levy of 3.5 percent, which some of the council members had previously suggested as a target amount for an increase.

However, Ibisch pointed out the taxable value of all property in the city of Blue Earth has increased 5.1 percent, which means the council could raise the levy to 5.1 percent with no change in taxes from last year to residential property owners, unless the valuation of their homes increased or decreased from the previous year.

So, the second budget reflected an increase of 5.1 percent.

Mayor Rick Scholtes suggested the levy could even be raised to 8.8 percent, and residents would effectively only see an increase of 3.5 percent on their property taxes, because of the overall increase in taxable property..

“The 8.8 percent number is still lower than our original proposed levy increase of 9.8 percent,” Scholtes said. “That number was the one used on the proposed property tax notice the county sent out recently and I did not hear much about it (from residents).”

Ibisch presented two samples of the recent 2020 proposed tax statements with one showing a very minimal amount of an increase, and the other actually showing a decrease in the tax on that property.

“I think we can capture this growth and not have it affect the taxpayers,” Scholtes said. “The extra revenue could be added to the street fund for our upcoming projects.”

Councilman John Huisman agreed that the time to capture the tax from this growth is now, with the increase not affecting the taxpayer.

In the end, the council did not adopt a final 2020 budget nor did they set the exact amount of the levy increase last Monday night. That will be done at their Dec. 16 meeting, they decided.

At last Monday’s meeting, the council also:

Had a first reading of an ordinance which would sell six lots in the new housing development area to APX Construction of Mankato for $109,000.

The new construction would be on the cul-du-sac street, named Butterfly Court, near the entrance to the housing development, which has been named the Prairieview Sub-division. There would be three two-family duplexes built, using two lots for each building.

In addition, three drafts of agreements between the Housing Redevelopment Authority (HRA) and APX were handed out at the meeting. Those were for three multi-family residences which APX would build for the HRA, one on a lot in the housing development, plus two on lots the HRA already owns; one on Fourth Street and one on Eighth Street.

Ibisch was quick to point out that the cost of the construction of those three buildings be done without using taxpayer levy funds.

The draft agreements with APX will go to the HRA for review at their meeting on Nov. 9. then will come back to the council at their Nov. 16 meeting.

Voted to proceed with a process which would have the city eventually leasing all of their vehicles, instead of owning them.

The city would begin by leasing three vehicles next year from Enterprise Fleet Management, and three more in 2021, until all the city’s vehicles go under a lease.

The city expects to save $74,000 over the next five years with this arrangement.

Council members John Huisman and Dan Warner both volunteered to serve on a subcommittee which will continue to work on this proposal. The program is being done in partnership with Blue Earth Light and Water.

Voted to proceed with an energy audit through a company called Energy Insight, at all of the city’s 31 electrical and natural gas using sites.

Potential savings to the city could be $38,000 per year, if proposed energy saving updates are done.

Approved the agreement for the city attorney’s annual contract with Frundt, Lundquist & Gustafson for 2020 with no changes from the current year. They also approved the city engineer’s 2020 contract with Bolton & Menk with a 5-percent increase in the base amount.