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Close, but not quite – Delano City Council expects to take action on assessment policy in November
Oct. 25, 2010
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By Ryan Gueningsman
Managing Editor

It came close, but Delano still does not have an approved assessment policy for dealing with public infrastructure and maintenance costs.

Tuesday night’s city council meeting saw another presentation on the issue, with a revised policy being presented to the council by city staff. Following the discussion, the council elected to table voting on the issue until its Thursday, Nov. 4 meeting.

Major changes highlighted by City Administrator Phil Kern include the cost-share allocation between properties and property tax – revising the proposed policy to reflect a 30 percent assessment/70 percent property tax for residential properties, and a 50 percent assessment/50 percent property tax share for commercial properties.

The previous draft showed a 50/50 percent property tax share for residential properties, and a 70 percent assessment/30 percent property tax share for commercial properties.

The repayment period for assessments was also changed from a 10-year period to a 15-year period. The interest rate applied for those paying over time or deferred was also changed to reflect no greater than 0.5 percent.

The new proposal also changed the guarantee period to not be assessed again for improvements from 20 years to 30 years.

Another amendment reduced the assessment calculation for residential buildings with three or more units on the same property at 0.5 units per dwelling.

Flexibility was also added to the policy for “flag lot” situations, which are lots with narrow street footage but a wider, larger lot size where the principal structure is built.

The revised policy that was presented reduces the impacts of the assessments by about 40 percent, Kern said. However, it maintains a level of assessments that will meet state requirements.

Discussion took place regarding the legality of the policy with City Attorney Mark Johnson, why businesses are treated differently than residences, the property tax impact of options, and administration of the policy.

Delano resident Dan Vick asked about a committee that there had been discussion about forming to further study the issue. He asked what the hurry was, and said he’d like to see that process happen before the council votes on the issue.

Delano Mayor Joe McDonald said he felt public input has been received and cited the public hearings that have previously taken place on the issue, along with individualized committee meetings between city staff and smaller groups of citizens.

“I feel, at this point, a lot of work has been done,” McDonald said, adding that it is an equitable and fair policy for “today, tomorrow, and the next 25 years.”

Vick said he appreciates the work that has been done, but said he doesn’t understand the hurry on the issue.

“Just because everyone else is doing it doesn’t make it right,” Vick said.

McDonald said he doesn’t feel the process has been hurried, and said anyone who has wanted to get involved with the process has had the opportunity to do so. He agreed with Vick that the issue did not need to be voted on at the meeting.

Council Member Brad Hotchkiss also added that the council is voting on a mechanism for paying for improvements, and not on individual projects themselves. It was noted that public hearings will take place preceding any specific projects proposed to take place.

Delano resident Dale Graunke asked the council when the policy would go into effect, if passed. He questioned the timing of the issue, citing concerns of enough growth.

Council Member Betsy Stolfa said it would go into effect when the first project happens. Groundwork could be laid for the first projects in 2011, and happen in 2012.

“No project is in the draft budget for 2011,” Kern said, adding that the draft budget can be changed before its final approval in December.

Council Member Larry Bartels admitted growth is needed to help pay for this, specifically industrial growth.

Bartels said he would like the public to have the next two weeks to review the revised policy, and that he would be set to take action on the issue Thursday, Nov. 4. He said he intends to vote in favor of the project, but wants to give the public the chance to absorb and study the changes that have been made to it.

“It’s not because of the election,” Bartels stressed regarding putting the vote off until Nov. 4. “I’m going to vote for it. I’ve looked at the numbers and, going forward, it’s the only way that makes mathematical sense.”

The issue was tabled, with the council directing city staff to ensure the policy is able to be viewed on the city’s website.

Mayor, council salaries frozen by council

State statute states the city council may amend its salaries only once every two years, and only at the meeting prior to the next general election, according to Kern.

The last change in mayor and city council salaries came in October 2004. Since that time, the council has chosen twice to leave the salaries unchanged. The next opportunity to review salaries will be October 2012.

The council took action to freeze the wages of the council and mayor.

Odds and ends

In other business, the council:

• approved the purchase of a new computer work station for the Delano Senior Center health office in the amount of $1,375 from Intrcomm Technology. Funding comes from the senior capital fund, which was established with funds that have been received from donations and memorials from the seniors and their families.

• set a public hearing for Tuesday, Nov. 16 for the issuance of industrial development revenue bonds for Landscape Structures for improvements the company wishes to make.

It was noted none of this debt would be an obligation to the city, and the purpose of the city approving the debt is for Landscape Structures to obtain tax-free status on the notes and a lower interest rate.

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