In a meeting held Tuesday, Sept. 3, the Shakopee City Council took on a number of topics. Here are three takeaways:
Most Shakopee residents would see a slight increase in their annual property taxes, while their tax rates — or the percentage of taxes paid based on property value — will decrease under the city’s proposed preliminary 2020 tax levy, which was discussed at Tuesday’s city council meeting. The preliminary levy, which establishes the ceiling for what the city can collect, was increased by $1.15 million over last year. The $20.38 million budget would focus on maintaining street infrastructure and investing in regional park development, according to city finance director Darin Nelson, who presented on the levy at the meeting.
The preliminary tax levy for 2019 was $19.5 million, a decrease of $30,000 from 2018.
Most Shakopee residents would pay slightly more in tax dollars due to an increase in property value, under the proposed preliminary levy.
On average, Shakopee homes will see a 6.7% increase in property value. This means the average home in Shakopee — a $255,400 home — would see its property value increase to $272,600 in 2020, adding $3.25 in additional property taxes per month. A home valued at $188,800 in 2020 would see a $3.16 monthly property tax increase, and a $369,600 home would see a $2 monthly property tax increase.
Shakopee’s tax capacity is estimated to increase by 10.8% due to the construction of new homes and the taxes paid off increasing property value. New growth alone adds $346,000 to the levy.
Counselor Matt Lehman was hesitant to support a levy that was higher than the amount earned off new growth, adding he feels the people who can least afford property taxes are the ones who get hit the hardest.
“So just raise the levy by ($346,000)... I’m sold,” Lehman said.
Throughout the discussion, City Administrator Bill Reynolds stressed the fact that Shakopee’s tax rate was able to decrease because of the city’s growth.
“What a joy it is to be in a community with that kind of growth,” Reynolds said, adding that “if the pie is growing,” tax rates can remain low.
Although counselor Jay Whiting mentioned the growth has to stop at some point, Mayor Bill Mars said, “I’d rather have the challenges of growth than the challenges of contraction.”
The City Council must certify a proposed levy by Sept. 30.
2. Storm water
At its Sept. 3 meeting, the Shakopee City Council approved a deal with WSB and Associates Inc. for the design, bidding and construction management services of rerouting storm water drainage along County Highway 101 Sept. 3. This project will correct historic water flow that has caused degradation of Indian burial mounds north of County Road 101 in Shakopee, according to Public Works Director Steve Lillehaug.
Lillehaug said when the Minnesota Department of Transportation originally built the highway, it constructed a storm water drain under the road that released water into the burial grounds.
“Historically, storm water has flowed through that area,” Lillehaug said in an interview prior to the Sept. 3 council meeting.
Lillehaug said a feasibility study was performed in 2016 to execute the project, and over the past several years, the city has fleshed out alternatives to the drainage issue. The drainage rerouting is outlined in Shakopee’s capital improvement plan.
The project includes an archaeological investigation of the historic site, as well as the cost of the design and construction of the drainage rerouting. The total price of the project will cost $1.55 million. The Minnesota Historical Society will cover $336,406, the Shakopee Mdewakanton Sioux Community has donated $75,000 and the Lower Minnesota Watershed District has offered $50,000 to cover part of the project’s price. The city will cover the rest of the cost with $839,000 from the storm drainage fund.
3. Transfer of $80,000
for innovation center
The Shakopee City Council approved the motion to transfer $80,000 from the city’s Facade Improvement Fund to pay for a feasibility study for a long-discussed regional innovation center in Shakopee. The money transfer comes after the city failed to receive funding from the Federal Economic Development Authority to pay for half of the $100,000 study. The improvement fund, which has a balance of $400,000, allows Shakopee businesses to apply for a forgivable loan from the city for exterior building improvements.
The federal EDA told the city that, although it would not help fund a feasibility study, it would consider funding 80% of the construction costs of the innovation center, should the city carry through with the project following the study.
This offer did not impress Lehman, who said he didn’t want the city to be in a position where it doesn’t have any outside funding sources to pay for the innovation center if the Federal EDA falls through. “When I read the word ‘consider,’ that’s not a guarantee. It’s a maybe,” he said.
The innovation center would likely be able to offer pre-college courses for high school students, credits for those wanting to complete a degree, and even credits for students in advanced degree programs. The facility might also include landing space for companies researching a move to Shakopee or the surrounding area.
“This has become popular in other locations since it allows a company to establish itself and move critical staff to an area to test a market or to acquire a site and coordinate new business development,” Kerski said.
The facility could also offer space for companies to train employees on new equipment or technology, and it could also offer co-working spaces and separate meeting rooms for group work.
Reynolds said at the meeting city staff has been actively working with business owners in the downtown area to take advantage of the facade improvement program, but given the number of applications received, transferring $80,000 from the fund for the feasibility study would still leave for adequate funds available for facade improvement projects.