BAXTER - In better economic times, the city of Baxter saw new construction market value as high as $40 million.
But new construction within the city dropped significantly, from $23 million in 2008 to $14.4 million in 2009.
Baxter City Council members, along with several city staff, met in a budget work session Monday night to discuss the proposed 2010 budget and proposed increases in water and sewer charges.
Finance director Jeremy Vacinek said commercial properties should experience a slight reduction in city taxes next year because of reductions in values while residential values remain flat. The city's tax capacity rate is proposed to increase slightly, from 42.175 percent in 2009 to 43.977 percent, or about 1.8 percent. The city's proposed 2010 levy is $5.65 million, about $80,500 less than proposed earlier this fall.
In terms of new construction, residential homestead market value dropped from $3.49 million in 2008 to $1.146 million in 2009. Residential non-homestead properties dropped from $5.4 million to $2.8 million. The biggest growth came in residential non-homesteaded four-plus properties, which includes the Grand Oaks project, which increased from $380,000 in 2009 to $4 million in 2009. Commercial new construction dropped from $13.9 million in 2008 to $6.39 million in 2009 and new industrial construction increased from $10,000 in 2008 to $90,800.
The estimated impact of the 2010 proposed levy for a $150,000 residential property would be a $27.03 increase. A $500,000 commercial property would experience a $166.67 increase.
City staffers are proposing that the city council approve a 5 percent residential and commercial water rate increase for 2010 to offset declining water accessibility charges, flat growth in usage and declining interest income revenues. The city has experienced a 2 percent decrease in water usage, Vacinek said. The increased fees would mean an additional $1.39 per month in water charges for a 7,000 gallon household, or a $21.95 fixed rate plus $2.82 per 1,000 gallons for commercial properties.
City staffers also have proposed a water treatment plant fee increase for debt service to offset a decline in water availability charge, or WAC, revenues. Residential and commercial WAC rates would remain at $2,800 and $3,100 per unit, respectively, for hookups to city water, but the proposed water treatment plant fees would increase from $2 to $3 per month or from $6 to $9 per month for homes above 15,000 gallons per month. Commercial monthly increases would go from $3 to $4.50, $6 to $9, $12 to $18, $18 to $27, $40 to $60 and $80 to $120, based on consumption.
City staffers also have proposed a 2.7 percent rate increase in city sewer services to offset declines in sewer accessibility charge revenue, flat growth in usage and declining interest income revenues. Proposed is a $12.76 fixed rate plus $3.57 per 1,000 gallons for residential hookups to city sewer and a $25.51 fixed rate plus $3.57 per 1,000 gallons for commercial properties. A 7,000 gallon household would result in an additional 97-cent-per-month increase in sewer charges.
Sewer accessibility charges, or SAC, will remain at $3,000 for residential and $3,400 for commercial in 2010.
Council member Jim Klein said it was a double-edged sword - the higher the city's water and sewer rates are increased, the less likely people and businesses would move to Baxter. Vacinek said that if the city hadn't invested in its sewer and water projects, developments wouldn't come either.
"People have lowered lots to half-price - nice lots - because they're not selling," Mayor Darrel Olson said. "We're in a situation we're not familiar with. I don't think it's happening anywhere right now."
"Hopefully it'll all turn around," Klein said. "It's like going to a grocery store. If you keep jacking up the prices, I'm going to leave it on the shelves. We're basically in the market of selling water."
Olson said he doesn't believe the sewer and water accessibility charges are keeping developers away. Rather, it's the economy.
"I believe it's no buyers," Olson said.
The council will meet at 6:15 p.m. Nov. 30 for an informational meeting, an opportunity for residents to listen to and provide input on the 2010 levy and budget before council members officially adopt them in December.
JODIE TWEED may be reached at email@example.com or 855-5858.
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