Chatfield citizens express their concerns

At the December 9 meeting of the Chatfield City Council, during the Truth in Taxation public hearing, numerous citizens took the opportunity to express their concerns and pose questions related to rising property taxes. 

City Clerk Joel Young gave an in-depth budget presentation, both looking back at 2019 and looking forward to 2020 and beyond. Construction of the new swimming pool and its opening, the Highway 52 lighting and improvements, a new roof on the city shop/fire hall, street maintenance, and water main and catch basin repairs were the most visible projects over the last year. 

Unusually heavy snow in February and heavy rains in June added to the expenses for public works. Some damages due to heavy rains still need to be repaired.

Chatfield has been growing its businesses and its housing. Seven new home permits were issued. There was $1.7 million in residential construction and $9.8 million in commercial construction in 2019.

The city has maintained its AA, strong bond rating and financial position.

The preliminary levy was approved in September with an 8.47% increase. This day the final 2020 levy was unanimously approved, showing a 6.38% increase, or an increase of $129,652. Three cost increases for 2020 contributed to this increase: a $35,000 increase to the swimming pool debt service ($284,000 in 2019 and $314,000 in 2020), $36,000 for Highway 52 lighting/sidewalk improvements, and an additional $40,000 transferred to the  ambulance fund to keep it in the black.

The net taxable capacity for the city increased 12.5%, or $227,573 over 2019. Increases in the net taxable capacity cause the tax rate to go down. Properties that did not see a property valuation increase should see reduced property taxes for 2020. It was noted that Fillmore County valuations increased by a greater percent than did Olmsted County valuations.

Young commented on the differences between tax rates among neighboring communities. Tax rates are affected by a city’s policy on assessments, whether or not they assess individual property owners for things like sidewalk improvements. Chatfield shares costs of sidewalk improvements so they are paid for with the levy, instead of through individual assessments. Amenities that Chatfield has, like the swimming pool, CCTV, Arts Center, and wastewater treatment plant should also be taken into account when comparing the tax rates of neighboring cities.

One of the city’s long term goals is to gradually reduce the tax rate, which was 112% in 2019 to 90 (tax rate is down to 106% for 2020). Other financial planning goals include reducing the GO debt per capita from $4,400 to $3,500; keeping the long term cost increases to 3%; reimbursing the General Fund for past tax contributions made to the Sanitary Sewer Fund; and maintaining positive reserves in Enterprise Funds.

Goals for 2020 include, but are not limited to, plans for Safe Routes to School, two residential subdivisions, library remodeling (paid with endowment funds), a possible purchase of a used Durapatch machine for streets with Stewartville and Spring Valley, the 2020 census, three elections, and an effort to secure Chatfield Center for the Arts (CCA) Phase II funding.

The impact of the 2020 levy increase will vary between property owners due to property value decreases or increases. Mayor Russ Smith made it clear that the city doesn’t set valuations on properties.  If a property owner feels his/her valuation is too high, one should take that up with the county assessor.

Citizen comments

Over a dozen citizens attended the meeting due to their concerns over property taxes. Six of them addressed the city council.

Mike Mandt who had authored opinion pieces on the proposed budget/levy and the affect it has been having on property taxes spoke first. His property tax proposal for 2020 on his home was close to $6,000. He maintained other nearby cities would have about half of the tax on a similar property. The valuation on his home was up $54,000 for this next year. He questioned whether the city could do less. Maybe the CCA needs to be self sufficient. Is it a “need” or a “want”? He noted the concerns he has have been voiced by many others.

According to Mandt, the swimming pool referendum was not adequately advertised. He admitted he didn’t read the newspaper, but suggested signs around town noticing the referendum could have made people more aware and resulted in a different outcome.

Maybe the city doesn’t need as much of a police force; the library could be open on fewer days.

Councilor Paul Novotny explained the 52 project cost was more than what they had saved for it. Without the three cost drivers (debt service increase, 52 lighting, and additional ambulance funding) the levy increase would have been less than 3%. What is needed/essential varies among the citizenry. The amenities Chatfield has are what makes Chatfield, Chatfield. He agreed that valuations seem to be out of control.

Councilor Josh Broadwater agreed individuals value different amenities. We have to do what is best for everyone. The CCA is great for the community. It would not have been cost effective to fix the old pool and the majority voted to construct a new pool. Broadwater told Mandt that the articles he authored resulted in more discussion; they put everyone’s brain to work.  Medicare only pays a portion of ambulance bills, so those losses need to be made up.

Councilor Mike Urban stated there are unexpected expenses. Due to the heavy snows last year the city paid an extra $40,000 to truck snow. Councilor John McBroom said until you get on this side of the table, you can’t see it all; I’m not happy when taxes go up either. We have a fabulous fire and ambulance crew. Urban explained that we have less people than larger cities to spread out the expenses. 

Mayor Smith reported that the 52 improvements cost a total of $2.5 million. The city’s portion was a fraction of that, $214,000.

Rich Bakken admitted he has been a little stunned. He is concerned about future years; saying that we better find a way to control the increase. His taxes have increased by $1,700 over the last two years and his valuation has also been going up. He is afraid the word is out about high taxes in Chatfield. I love Chatfield and have lived here about 30 years. Some people will not be able to swing the tax increases; he is especially worried about young couples. He is concerned that property taxes will stop people from moving to Chatfield.

Novotny said the increase in valuations on the Fillmore County side have shifted the tax burden some. Broadwater added that we are very aware of the short term and long term issues.

Kyle Davis explained he has a business, rental house, and a home in Chatfield. He is a relative newcomer, having lived in Chatfield about three years. He said his taxes are now more than $7,000. He insisted his taxes would be less if he moved back to Rochester. He warned if taxes keep going up there will be a “for sale” sign in his front yard. 

Vicki Cramer asked how tax increment financing works. Young explained how it works and that it can fill the gap in order to make a project feasible. The developer takes a risk doing a development.

Louise Mandt asked how the plan for the pool came about. It was explained that the repair cost of the old pool was not feasible. A committee was formed from volunteers, which lead to plans and eventually the referendum.

Roy Lange questioned the use of spot lights at the swimming pool. A certain degree of lighting is necessary to fulfill safety requirements.

Other business in brief

•A resolution certifying the final budget and property tax levy for taxes payable in 2020 was approved. A resolution was also approved to set the pay grid for 2020 (a 3% increase effective January 1, 2020).

•Chris Barber, WSB, explained the Storm Water capital improvement plan was adopted in 2015. An amendment to the plan will include Old Territorial Rd. Phase I includes repair/restoration and Phase II includes improvements necessary to protect from further storm water issues. The amended capital improvement plan was approved as presented.

•The second consideration and publication, of Ordinance 446; Fee Schedule 2020, were approved.

•A motion was approved to table the renewal of the Pathfinder CRM Contract. Broadwater asked what the city is getting for the $12,000 to be spent for the contract. He said he wants to discuss it more to see if there is a way it can be restructured.