DELANO, MN – How much will property taxes increase in Delano in 2018?
The Delano City Council answered that question by approving the levy, budget, and capital improvement plan for the upcoming year Tuesday evening.
“The total levy is $3,282,640, an increase of 6.65 percent,” Finance Director Brian Bloch said. “More than half of that is coming from debt levies. They’re there because of our street projects.”
What does the levy increase mean for the average homeowner when combined with the county’s and school district’s tax levies?
“If you have a $250,000 home in 2017, you’re paying $3,228 in total tax,” Bloch said. “In 2018, if the home didn’t go up in value, you’ll pay $3,241. If the property value increases 6 percent, the home would be worth $265,000, and you’d be paying $3,466, or a 7 percent increase . . . We saw a significant increase in taxable market value, especially for homeowners compared to industrial, commercial, and retail.”
Bloch broke down the general fund expenditures of $3,560,800, noting that 28 percent will go to community services, 22 percent will go to general government, 20 percent will go to public safety, 13 percent will go to capital outlay, 12 percent will go to public works, and 5 percent will go to other.
“I’m curious what that’s allocated for,” resident Richard Kotten said, referencing the “other” category. “It’s quite a bit of money to have labeled as ‘other.’”
“Most of that is debt on this building . . . $160,000,” Bloch said. “Another $20,000 we put into the Economic Development Authority to pay for expenditures.”
City Administrator said the debt on the city hall building will be paid off in 2023.
“We have quite a few things that will fall off,” Mayor Dale Graunke said. “That’s why we’re projecting out four or five years.”
Graunke thanked Kotten for the question, and welcomed him to town, as he had said he was a new resident.
Bloch further broke down the general fund, explaining that it increased $148,345, or 4.3 percent.
Items impacting expenditures include a 16 percent increase in medical insurance; a 2 percent cost of living adjustment; capital needs; the new splash pad, which revenues are expected to offset; website redesign; and election expenses.
General fund revenues include 69 percent from property taxes, 10 percent from franchise fees, 10 percent from intergovernmental aids, 6 percent from transfers in, 3 percent for licenses and permits, 2 percent for charges for services, and less than 1 percent for other.
Bloch said the property tax percentage decreased by one point because intergovernmental aids increased by one point.
Regarding licenses and permits, Councilman Jon Sutherland said, “As far as estimates on construction activity, I’ve got a gut feeling you’re low. As far as lot inventory, we have more lots than that available in the city.”
Bloch agreed that he expects his estimate of 25 new homes to be low, as there have been more than 50 new homes built in 2017, but he stressed the importance of being conservative.
“If the economy continues the way it has been, we’ll have more permit revenue,” Bloch said. “It’s better to be conservative. One year, we budgeted $300,000, and had trouble getting to $90,000.”
Delano’s tax rate is 54.056 percent, the school district’s tax rate is 43.779 percent, and the county’s tax rate is 39.921 percent, for a total of 137.756 percent. Delano’s city tax rate is sixth lowest in the county, while the total tax rate is sixth highest.
Regarding the portion of taxes that go to the city, Bloch broke down how much services cost each month. For a $260,000 home, $20.82 will go toward parks and trails, $16.89 will go toward street reconstruction debt, $16.05 will go toward snow removal and street maintenance, $15.46 will go toward police, $12.36 will go toward capital outlay, $8.95 will go toward building and infrastructure debt, and $7.68 will go toward fire protection.
“If you compare that to some of your other bills, it puts it into perspective,” Bloch said.
Odds and ends
In other business, the council:
• approved an amendment to the Wright County Area Transportation joint powers agreement to include Wright County. The agreement, which must be approved by all 14 cities included in WCAT, would allow the county to have representation on the Trailblazer Transit board and would require the county to fund 50 percent of transportation costs in the county, and the entire cost in five years.
• approved an ordinance amending city code related to right-of-way management regarding small cell towers within the right of way. Requests for small cell towers within the right of way will be subject to inter-department review. If a tower is abandoned, the company that abandoned it will not be allowed to build another tower within the city’s right of way.
• tabled the County State Aid Highway Corridor study. The study looked at current traffic and pedestrian movements and projected movements for 2027, and beyond 2027. Council members opted to table the study, as they requested more information about pedestrian wait times, and would like the county to consider changes to limit speeds within city limits. These structures must also be at least 10 feet from flood improvement structures.
• accepted a CSAH 17 study regarding river bank erosion near Second Street South. City Engineer Vince Vander Top expressed concerns that the study only addressed erosion and not flood concerns in that area. By accepting the study, the council did not endorse a remedy. City staff will continue to work with county staff to address the situation.
• recognized Dan Smith of the Friends of the Delano Library for various volunteer efforts, including working with the city to retrofit the library with LED fixtures and bulbs and leading a charge to have a mural painted on one of the library’s walls in the future. Smith accepted the award on behalf of the entire Friends of the Delano Library. “I appreciate what the city council has done in helping to fund some of the projects we’ve asked your help on,” Smith said.
• approved the vacation of a portion of a trail easement within Westridge Hills Third and Fourth Additions because the easement went through several homeowners’ properties.