Council closes tax increment districtThe Hudson City Council approved a resolution Monday night officially closing Tax Increment District No. 4. The unanimous decision followed a special meeting of the council on March 11.
By: Randy Hanson, Hudson Star-Observer
The Hudson City Council approved a resolution Monday night officially closing Tax Increment District No. 4.
The unanimous decision followed a special meeting of the council on March 11 in which the city’s financial advisor outlined ways the city might use the roughly $350,000 in added property tax revenue that it will receive as a result of closing the district.
Sean Lentz of Ehlers & Associates presented three options to the council.
He said the city could use the added tax revenue to reduce the mill rate, or it could maintain the 2008 equalized mill rate of $4.18 per $1,000 of assessed property value and use the added revenue to finance new capital projects.
A third option is some combination of the first two. Lentz said the city could use some of the new revenue to lower the mill rate and the rest to finance new projects.
The city’s police department, fire department and ambulance service have been calling for new or expanded facilities for some time.
More recently, the Hudson Library Foundation has proposed buying the Nuclear Management Co. building at 700 First St. and converting it into a new home for the Hudson Area Joint Library.
The city formed TID No. 4 in 1995 as a way to finance the construction of streets and utilities for St. Croix Business Park, as well as some commercial and residential property in the neighborhood of Carmichael and Hanley roads.
The taxes collected on buildings constructed in the district after it was formed went to pay for the infrastructure. Lentz said the TID will have generated enough tax revenue to pay off the remaining debt this year.
He said that if the city maintained its current mill rate, it would be able to increase the future debt levy by $720,000 a year. But it could have trouble paying to operate any new facilities, he added, given the state-imposed operating levy limits.
Under one scenario presented by Lentz, the city would issue $1.6 million worth of bonds for capital projects in 2008, and $5 million in bonds for major capital improvements in 2009.
The city could bond for capital projects and also reduce its mill rate, he said, by extending the repayment period. The downside to that, he noted, was that the city would pay more in interest over the life the bonds.
Also in attendance at the March 11 meeting were Dean Knudson, candidate for mayor in the April 1 election, as well as City Council candidates Pam Brokaw, Dave Selissen and Lori Bernard.
Mayor Breault invited the candidates to the meeting because he wanted their input on how the council should proceed. The council needed to act on closing TID No. 4 before May 15 in order to capture the new tax revenue for the 2009 budget.
Breault isn’t seeking another term after 12 years as Hudson’s mayor.
Knudson is the only candidate still in the race to replace Breault. Todd Erskine filed as a candidate, and his name will appear on the ballot, but he has since withdrawn from the race and endorsed Knudson.
Brokaw is on the ballot to replace Dennis O’Connell as the alderperson representing District 2. O’Connell has accepted a postmaster position in Caledonia, Minn., and isn’t seeking another term after more than five years on the council.
Selissen and Bernard are running for the District 3 council seat being vacated by Alderman Paul Radermacher. Radermacher is stepping down after serving for four years.
None of the candidates at the meeting opposed disbanding the tax increment district.
Knudson said he thought it was a “pretty straightforward” decision to make. He also indicated that taxpayers should see some benefit from closing the district in the form of a lower mill rate.
City Finance Officer Betty Caruso and St. Croix Emergency Medical Services Chief Eric Christensen addressed the council concerning the ambulance service’s needs.
Caruso reported that the city will need to cover a $58,000 operating loss for the service through the end of 2006. She said the service is $35,000 to $50,000 in the red since then.
Breault suggested changing the agreement with the other municipalities served by St. Croix EMS (the village of North Hudson and towns of Hudson and Troy) so they help cover any future shortfalls.
Christensen said he is working on a plan to increase St. Croix EMS staffing. The service’s call volume has increased 92 percent since it went to paramedic-level care at the beginning of 2005.
“We’re at a point now where we need two trucks (ambulances) available 24-7, with a third one in reserve,” he said after the meeting.