With many economic development projects in store for Columbia Heights in 2018, the council approved a resolution to increase the EDA tax levy and re-applied for an economic grant administered by Anoka County.
There are two different ways that the city is able to receive funding for economic development activities. The first is the city’s own EDA levy and the second is through a levy administered by the Anoka County Housing and Redevelopment Authority.
The council approved a resolution to an EDA tax levy increase at the June 12 meeting. This increase is about double the amount of the current levy, which is about .007 percent of the estimated market land value. The new approved tax levy now at its maximum limit of .018 percent.
The increase will provide an estimated amount of $220,000 for economic development activities in 2018, compared to its previous amount of about $136,000 in 2017.
A public hearing for the tax increase will be held at the July 10 council meeting to gather residents comments and concerns regarding the levy increase. Following the hearing, state statue requires a 30-day reverse referendum period to allow time for the public to file a petition.
“If the city doesn’t receive a valid petition with signatures of voters equaling 5 percent of the votes cast in the last city’s general election, then the EDA levy will increase for 2018,” Economic Development Manager Keith Dahl said.
Anoka County Housing and Redevelopment grant
The council voted to move forward with participation in ACHRA. This levy is administered in a five-year cycle, where cities in the county can decide if they want to participate every five years.
Columbia Heights has been participating in the ACHRA program since its inception in 2007. ACHRA collects additional property taxes from participating cities and makes those funds available for economic development projects directly from the cities that the funds are collected from.
“These funds can be saved up over a certain period of time and be used in a lump sum with various projects with economic development related activities,” Dahl said. “Its essentially a grant program, but the funds go directly back to the city.”
A notable project that Columbia Heights used ACHRA for is the $750,000 purchase of the property for the new library.
Although all collected funds go directly back to the city, a 15 percent administrative fee is taken from the collected funds to support the program.
At the meeting, Mayor Donna Schmitt expressed concern with the 15 percent fee and referred to the fact that the council had just approved doubling the city’s own EDA tax levy at the last meeting.
“There’s no one else holding that money other than the city,” Schmitt said. “I am not in favor of doubling that fee and now charging residents an additional cost for this additional Anoka County levy.”
Council member Connie Buesgens said she was in favor with continuing participation with ACHRA because the administrative fee is taken to specifically to support the program itself to pay for staff time. She added that the levy would also be a continuation of current participation so taxes would not be raised from current standing.
“This program, with the monies that we are able to obtain from them, helps with financial assistance with land acquisition, for site investigation, for remediation, and building demolition that has contributed to local job creation,” Buesgens added. “And there are many areas in this city that can use this funding.”
According to Dahl, the 15 percent administrative fee goes toward the Anoka County community development department budget each year, which essentially pays for staff time to review grants specific to ACHRA, as well as grants associated with home funding and community development block grant funding.
“That’s really how the county is able to support a community development department because they’re not funded through the general county fund,” Dahl said.
He added that the EDA and the city of Columbia Heights essentially have zero dollars going into the economics development projects fund and this will be able to jumpstart that fund.
He said the fund hasn’t been added to for several years, and with developments like Hy-Vee, Planet Fitness, apartments and other commercial projects, the City needs to be equip and better prepared to accommodate for commercial redevelopment.
“So we’re really looking for commercial revitalization with this and looking at purchasing properties that are nonconforming throughout the city,” Dahl said. The properties could then be sold by the City to encourage development.
If the EDA tax levy does not receive a valid petition, combined with the continuation of the ACHRA program, Dahl said residents could expect to see an estimated $20 annual increase in property taxes for a median value $200,000 home.