By MaryHelen Swanson

A proposed levy of 32 percent brought North Branch residents to the Nov. 30 Truth in Taxation public hearing.

There were close to 30 individuals, many with tax statement in hand, seated in the room. City finance director David Stutelberg said it was by far the largest group attending a tax hearing since he got here in 1997.

Many in the group had a word or two to say about the tax situation.

Before they spoke, however, Stutelberg had some better news than those preliminary tax statements in hand declared.

With the city council passing the rezoning for the city's ESSBY project Nov. 27, things changed.

Stutelberg said the council did not have to eliminate the $659,000 line item in the levy set aside for bond payment for the ESSBY project, but if they did, that 32 percent figure could come tumbling down.

In fact, Stutelberg explained that if the ESSBY item is eliminated, even if the council reinstates certain budget reductions to various departments, the city could request Chisago County to collect $3,306,104 from North Branch taxpayers.

That would produce a 13.55 percent levy increase.

Stutelberg explained that the amount of property taxes paid by individuals varies, depending on the tax classification, the estimated market value assigned by the county assessor, and the tax valuation formula prescribed by the state.

It is the county that sets the valuation on NB homes, he said.

Stutelberg reminded everyone that the county assessor is updating market values for North Branch. A change, he noted, in market value, by itself, has the effect of increasing property taxes.

Stutelberg went through the complicated tax formula and how the market rate is calculated.

He also compared taxes on a $200,000 home in the city with and without the ESSBY payment included.

For 2007, that $200,000 home would pay a city tax of $905.16 with the ESSBY levy.

Without the ESSBY levy, that same home would pay $776.60.

But, again, if the valuation of one's home increases, then the tax increases also.

Stutelberg told the residents a detailed copy of the proposed 2007 budget was available for viewing at City Hall, and if residents wanted copies of any potion, they could get them for a nominal cost.

First public speaker was John Von Lange who denounced Stutelberg's claim that the city had nothing to do with the value of one's property. He believed the city's recent actions with the ESSBY project caused property values to increase, even if the county is the one to place that value on a property.

In Von Lange's eagerness to share his opinion, he got a bit hot under the collar which prompted Mayor Gloria Karsky to remind the others about respect and a time limit on speaking.

Bill Anderson, who lives on 420th Street, wanted to know why his taxes are so high as he doesn't have city services or a paved road. He said lots of homes are going up for sale, but are not selling. He had a significant increase in his home's valuation.

Gene Overmire, living on 391st Street, a senior on a fixed income, said seniors are being pushed out of North Branch. And he may have to go in a few years, too, if increases continue, he said. He asked the council what they are doing to keep those on fixed incomes in NB.

June Martinson, asked about the library/community center line item. She thought the library was a county thing.

She also said a hockey arena should not be paid for by the city, but by the parents. She said there is, however, a need for a community center.

Martinson also hoped the council members could work together better instead of fighting.

Mayor Karsky said she did too.

Max Malmquist asked about the number of homes - the growth in housing - the city was basing the 2007 budget on.

In the city's comprehensive plan, the city is anticipating 150 new housing starts a year to pay for city operations and services. This year's housing starts were around 50.

Malmquist asked what would happen if next year the number was even lower.

Stutelberg reminded them that the city does maintain fund balances. It is about $3.6 million in the General Fund budget, he said.

He also said if needed, the city could ask departments to look for ways to cut costs, and he reminded the people that the council sets fees (which bring in revenue) in January.

If there is a major expenditure need, he said, the 2008 budget could be increased to make up for it.

Mayor Karsky said the council is aware of shortfall in housing starts bringing in less fee revenue, but that the council has compensated for this in putting together the 2007 budget.

Rick Anderson, a commercial property owner, asked why the tax rate was so high in NB for commercial property.

He said people couldn't buy his industrial park building simply because of the high property taxes.

He asked the council to keep this in mind as they finalize the budget and levy. Even at 13 percent, he said, the taxes are a going to be a significant amount.

One gentleman, living on 411th Street, brought a bit of gloom and doom when he said the federal, state and city governments are heading for a real crisis. "We're going to see changes like you never have seen before," said this man who has been 41 years in the finance world. He cautioned the council about city spending.

Former motel owner, Bob Streater stressed the importance of a freeway access from the ESSBY area, but not at 400th as the city is considering.

Karsky said a city transportation committee would be looking at this issue in 2007.

Klaus Mitterhauser from Pine Lane, asked if the city budget addressed citizens' health care costs. It only affects those of city employees, he was told.

Finally, Stu Schmidt owner of North Country Coffee, and a NB school bus driver, criticized the design of the railroad crossing at 400th Street, because he said the bus hangs out on the road at the intersection. It was the safety of kids that concerned him.

Overmire presented one of the final questions: with so many 3-2 votes, how were the councilmembers going to vote to reduce the levy?

The four present (Amy Oehlers was absent) all said they'd vote yes for a reduced levy. Theresa Furman said she never voted for 32 percent in the first place.

The final levy will be adopted Monday night, Dec. 11.