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Chatfield takes no position on distribution of Rochester sales tax

Fri, Mar 15th, 2013
Posted in Chatfield Government

The Chatfield City Council at their March 11 meeting decided not to take a position for or against House File 476 which seeks to add cities to receive a share of the Rochester area local sales tax. Councilor Ken Jacobson was absent.

Legislation passed in 2012 provides for $5 million, collected from the local Rochester sales tax, to be made available and shared by seventeen cities surrounding Rochester including Chatfield. As the law stands, Chatfield is expected to receive $297,543.84 for economic development purposes.

There is legislation introduced by Rep. Steve Drazkowski that would extend the sales tax to more cities within a 25 miles radius of the Government Center in Rochester that were left off the list.

City Clerk Joel Young noted there are about 46,000 people in the seventeen cities and if the four additional cities of Wanamingo, Mazeppa, Grand Meadow, and Altura were added, there would be an additional 3,132 people. The distribution of the sales tax is to be on a per capita basis. Therefore, the city of Chatfield’s allocation would decrease by about $21,000 with the additional cities.

City Attorney Fred Suhler acknowledged that he represents a number of cities. The legislation requires the money to be used for economic development purposes and one of Suhler’s cities does not have an EDA. He added a city shouldn’t need to have an EDA because some don’t because they haven’t had the resources to do economic development. Suhler added there are other cities within the radius that need the money.

Young said they were not involved in the original legislation and distribution of the money, suggesting “this isn’t our fight.” Mayor Don Hainlen maintained they are asking us to make a hard decision because nobody else wants to make it. The safer position is to choose not to do anything. Councilor Paul Novotny said everyone within the radius is attached to Rochester, adding it shouldn’t be up to us to object.

The council unanimously approved a letter to the House Property and Local Tax Division “not taking a position in favor, or in opposition, of H.F. 476.”

Mayor Hainlen to Resign

Mayor Hainlen announced that it looks as though his house is sold. Assuming the sale goes through as expected, he expects to submit his resignation as of March 25. Young said the order of succession is clear. The Mayor’s office will automatically be filled by the vice-mayor, Russ Smith. The council will then pass a resolution to appoint someone to fill the remaining two years of his council term, ending December 31, 2014.

Other Business In Brief

•The annual audit for the city was reviewed by Jason Boynton, Smith Schafer and Associates. He noted the city’s tax capacity had decreased by just less than $200,000 from 2011 to 2012, which was attributed to the change to the state’s market value exclusion.

Local Government Aid (LGA) represented 23 percent of the city’s governmental revenues. State Aid has been relatively steady for the last three years at about $667,000. With less dollars from the state on top of not getting the market value credit, more of needed revenue has to come from local property taxes.

The city’s Unreserved General Fund balance equals 62 percent of next years general fund property tax levy and LGA. This is at the top end of the 40 to 60 percent target range.

A new bond issued in 2012 to refund the 2008A utility bonds saved the city about $265,000. Sewer fund rates are increasing on an established schedule.

The annual audit report was accepted as presented.

•The council authorized advertisement for bids on the 2013 public street improvements project. The project includes mill and overlay and sidewalk repairs on Fourth Street from Twiford to Fillmore, Fifth Street from Twiford to Fillmore, Sixth Street from Twiford to Fillmore, and part of Block 5 alley.

•The Minnesota Wrestling Coaches Association awarded Craig Manahan, Chatfield Community Television with the 2013 Publicity Award for tireless promotion of high school wrestling.

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