Cloquet property taxes to drop
For the first time since 2003, Cloquet property taxpayers will see a small tax decrease in 2019.
According to the projected budget the City Council discussed during its meeting Tuesday, Nov. 20, Cloquet's levy will drop by more than $45,000 to a total of $2.99 million, a decrease of approximately 1.5 percent from 2018 levels.
A Cloquet homeowner with a house valued at $150,000 will pay $405.71 in 2019, about a $6 decrease from what they paid in 2018.
The 2019 budget still contains a number of projects from the city's capital improvement plan, including a $1.3 million water loop project and the $4 million purchase and renovation of the Members Cooperative Credit Union building in Cloquet, which will become the new City Hall and Cloquet Police Department headquarters.
City Administrator Aaron Reeves said the city has put a "significant number" into the permanent improvement fund — the primary reason for the decrease. However, the city wasn't able to put enough in each year to actually fund any significant infrastructure projects, so the $350,000 was spread among the city's other funds.
"It is kind of a different way that we are going to be handling infrastructure projects," Reeves said. "The bottom line was we couldn't get that project fund up high enough to do even one project without significantly increasing our levy every year. It is why you do bond for these sorts of projects is so you can spread that cost out over the 20-year period."
The City Hall project won't cost taxpayers any money, however. The city plans to spend some of its reserves pay for the project.
The city has more than 70 percent of its general fund in reserves. It will use those reserves to pay for the $1.8 million purchase and estimated $2 million renovation of the MCCU building.
City administration and the CPD hope to move into the building in April.
Reeves said the 70 percent is more than the city needs in its reserves and far more than the 35-50 percent recommended by the state of Minnesota. He said the city's financial adviser, Ehlers Inc., told the city it could take a slight hit on its credit rating, but it would be less expensive than obtaining a short-term bond for the project.
"Ehlers looked at and said it's just one part of it. It may affect you; it may not," Reeves said.
At its Nov. 8 meeting, the council agreed to also fund scoreboards at the Braun Park baseball fields at a cost of $50,000, but chose not pay for a Council of Greater Minnesota Cities membership at $20,070 or electrical upgrades at Veterans Park in Cloquet at $39,000.
The council will revisit the CGMC membership in 2020. It is waiting to learn if legislation passes allowing the use of sales tax money on the Veterans Park electrical work.
The council also agreed Nov. 8 not to fund a $35,000 request from the Cloquet/Carlton Housing and Redevelopment Authority following a discussion with Executive Director Debra Shaff and Bob Nelson, housing choice voucher coordinator.
The Cloquet City Council will have its truth-in-taxation meeting during its next regular meeting at 7 p.m. Dec. 4 at Cloquet City Hall.