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Cloquet City Councilors approve final tax levy

The Cloquet City Council passed a zero percent 2012 tax levy Tuesday, with only the people watching CAT-7 in the comfort of their homes as citizen witnesses.

Cloquet Finance Director Nancy Klassen - whose work recently garnered Cloquet another Certificate of Achievement for Excellence in Financial Reporting - was surprised by the lack of audience members for the meeting, noting that the city will usually see at least a couple people who have questions or comments about the city's portion of their property taxes.

Actually one person, resident Jan Puline, did attend the Council work session prior to Tuesday's formal meeting and addressed the council on a number of items, including a question about how to get her home reassessed because she thought the assessed value was overly high.

City Administrator Brian Fritsinger and councilors advised Puline that the assessments are done by Carlton County Assessor Marci Moreland and that the time to appeal assessments is past, although they encouraged her to call Moreland with any questions.

In his formal budget presentation, Fritsinger noted that city officials have worked hard over the past few years and reached the goal of a zero percent levy sooner than originally planned. He explained that the previous five-year budget plans projected a levy increase of 2.5 to 3 percent this year but, thanks to a lesser cut to Local Government Aid (LGA) than anticipated as well as lower health insurance premiums, the city didn't need to ask property owners for an increase in the levy. Another big money saver, according to Klassen, was a decision to refund two bond issues, which will save the city $250,000 over the life of the bonds, which also helps keep the levy amount down.

"The budget process has been challenging over the past eight or nine years," Fritsinger said, referring to the continual budget struggles by the state and resulting cuts to local government units. "To be frank, this year was probably a little less stressful in the context of trying to figure out how to deal with cuts, because this was one of the first times we weren't seeing significant cuts proposed in 2012 for our LGA."

Fritsinger noted that over the past eight years, Cloquet has gone from getting approximately $3.6 million in LGA per year from the state to $1,968,020 promised for 2012.

Including both unallotments and annual reductions made to LGA by the state since 2002, Cloquet has lost around $10 million in state dollars over those past eight years that the city would have received had state funding remained stable.

"We, as a council and a staff, have had to work pretty diligently to figure out what we do and how we do it in response to the service demands that our community has," he said. "We've made a lot of changes in staffing, operations, reorganization with our neighbors.

"Unfortunately, because of the shift the state made [eliminating the market value homestead credit program (MVHC), which resulted in a shift of approximately $170,000 from the state to residents], that zero percent does get lost on many of our taxpayers."

Fritsinger said it's been difficult to predict how much people's taxes will increase because of the MVHC change, but the city expected an average of just over 7 percent for most property owners. That varied quite a bit in reality, however, with many commercial properties seeing much higher increases, according to council members.

"It's been different for everyone, some [property owners] have seen decreases ... others have seen increases of 20 percent or more [compared to 2011 property taxes]," Fritsinger said.

The city's capital plan for 2012 includes some significant projects amounting to almost $4 million, including the second phase of the 18th Avenue street reconstruction and sewer project ($900,000) as well as a White Pine Trail waterline loop ($750,000). Other significant scheduled projects include $400,000 for improvements at the intersection of Doddridge Avenue and Highway 33, $275,000 for Pinehurst Park improvements and $575,000 for city building and energy renovation projects.

Council members voted unanimously to adopt the 2012 budget, the proposed levy amount of $2,650,000 [the same as last year's] and a 2012-2016 capital improvement plan.

At the same meeting, councilors also unanimously authorized a process for hiring a new city planner - a position that's been vacant for three years - and approved Jesse Berglund to fill a vacancy on the Cloquet Planning Commission. Council members also voted to hire LHB Inc. design firm to head the city's upcoming master plan for parks. Councilor David Bjerkness abstained from the vote, because he is a partner in the company's Duluth office.

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