St. Michael projects ‘lowest tax rate’

The city of St. Michael conducted the annual Truth in Taxation meeting Tuesday, Dec. 11, at 7 p.m. to discuss the 2013 budget, at St. Michael city Hall, 11800 Town Center Drive NE.

The 2013 city budget includes a proposed 2.99% budget/property tax levy increase for 2013. This reflects an increase of $151,025 to the total budget levy that is proposed at $5,196,344. Even with this increase, St. Michael is projected to remain the city with the lowest overall city tax rate (not including school district and county, but including special levies) in Wright County and one of the lowest in the state for its population.

“This is a fact the city takes great pride in, while still providing a high level of customer service to our residents and businesses,” said city administrator Steve Bot.

Depending on changes in a property’s market value and the recent changes in homestead exclusions at a state level, residential properties are seeing either an increase or a decrease in their city property taxes that could be more or less than the 2.99% levy increase. The recent state property tax law changes with homestead exclusions have shifted more of the tax burden to agricultural and commercial/industrial properties.

The increase of the levy is necessary primarily to cover increases to infrastructure, public safety, and equipment replacement needs. Paying off debt service payments for Highway 241, the One-way Pair, and the Town Center Civic building projects is a primary part of the infrastructure payment needs. The city had originally planned to fund these projects with revenues from new development. However, with the recession, there has been minimal new development, so the city has had to make up the difference with general levy.

In 2012 the city expects to have around 30 new homes built. This is higher than the 23 built last year but still considerably less than 2001–04 when approximately 350 homes per year were constructed.

“Based on new and current home sales, we are starting to see an uptick in home sales and property values for the first time in many years,” Bot said. “This is not the case in most comparable communities.”

Bot said commercial development in St. Michael continues to be slow but it is encouraging to note that many existing businesses are growing and many vacant commercial spaces have been filled over the past year.

“Despite the extended depressed economy, the city is in good overall financial shape and has avoided a ‘kick the can down the road’ strategy by making bond payments on time and not restructuring them far into the future as so many other cities have done,” Bot said. “This conservative financial approach has served St. Michael well in the past and should continue to do so in the future.”

Staffing cuts and consolidation of city government continues to be the primary source of reductions to the city budget. These reductions have helped offset larger increases in the needs mentioned above and help keep city taxes low.

In 2012, due to the development slowdown, the city laid off its planner and did not hire replacements for two valuable top level staff members (city administrator and finance clerk) who retired in the past year.

“As of 2013, city office staffing has been cut by almost 50% from our peak development years,” Bot said. “While no additional maintenance staff has been added during this same timeframe, maintenance costs have increased for the city as our infrastructure and equipment starts to deteriorate. Over the past year St. Michael has partnered with our neighboring cities to share staff that has helped uniquely provide both better customer service and cost savings for each city.”

Even though budgets have been challenging the last few years, the city has made it a priority to not cut back on services, or maintenance and replacement of the city’s infrastructure. When comparing the value of the services the city provides (police, fire, streets, snowplowing, parks, senior center, library, trails/sidewalks, etc.) to other communities based on both services and taxes, many believe the city of St. Michael provides a good value to taxpayers, Bot said.

The city’s budget and other financial information is available online at the city’s website, or in hard copy at city Hall. Call the city Bot at 7416-7931, for more information.

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