Cloquet City Councilors on Tuesday unanimously approved bonding authorization and property tax abatement to pay for the $1.5 million swimming pond renovation in Pinehurst Park.
They did so after a public hearing which about a dozen people attended and after a presentation by Todd Hagen of Ehlers - the city's financial advisor. Hagen explained that tax abatement will not mean higher taxes for residents.
Property tax abatements - full or partial relief from tax liability for certain parcels - are widely used by state and local economic development programs. Hagen added that many around the state are using this tool for swimming facility improvements.
To comply with state abatement rules, Hagen and staff listed specific Cloquet properties using an equation of their tax capacity multiplied by the city's tax rate to equal the $1.5 million cost. Generally, properties closest to the pond were chosen.
"[Those] property owners still pay their normal taxes - you're not getting picked on," Hagen told residents and the council. "Nothing unusual will show up on your tax statements."
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The city has chosen to issue Build America Bonds to be paid back over the next 20 years. The city has already levied for the interest so City Administrator Brian Fritsinger does not expect taxes to rise much more, if at all, for area residents.
"We have built into our levy in the past two years a specific dollar amount to pay for debt services so it's already being taken care of," he said. "[That levy] is city wide so if I see an impact on my own taxes, we all will."
City councilors will consider bond sale proposals at their regular July 21 meeting.
In other business, non-union city employees will be given raises in 2009 that will date back to January 1 after the council approved the measure Tuesday. The plan to give raises was put on hold until the final cuts in Local Government Aid were determined.
"With the unallotment information given, it does not appear that a wage freeze will need to be pursued in 2009," Fritsinger said. "Staff will recommend that such a freeze be instead implemented in 2010."
Additionally, land north of Big Lake Road along Spruce Street and Prospect Avenue West was unanimously approved for the building of two single-family homes by the Eastern Lake Superior Habitat for Humanity organization. No adverse input was received by the city and building is set to begin later this month.
Councilors also approved waiving the remaining $4,500 of a Small Cities Development program loan for a business they intend to purchase on Cloquet Avenue for the County Government Services building project.
