By Derrick Knutson
The city of North Branch plans to be frugal about spending in upcoming years, but that doesn’t mean there won’t be debt to deal with.
During its work session July 5, the council listened to a presentation from Finance Director Richard Hill about limited capital improvements over the next 4-5 years and the debt the city will be working to pare down before next year’s final budget is approved. Hill noted the capital improvement plan city staff developed is simply that – a plan – and it serves as “a benchmark to keep things in front of the council so the council can see over the next 10 years what’s in front of the city.”
“Once the plan is adopted, we’ll have to fund it somehow,” he said. “Given the difficult situation of the economy, our desire was to delay (capital improvements) as much as possible.”
In terms of next year’s levy debt, Hill estimated it would be about $1,821,000.
However, city staff is taking steps to reduce that amount before the council approves its final property-tax levy in the fall.
He said cash transfers, money from the city’s cable fund, tax increment financing pooling and incoming tax money from a proposed 40-unit housing project south of 400th Street could help reduce that debt $150,000-$170,000.
The housing project, proposed by MWF Properties, could prove to be a tax boon to the city, but Hill said city staff is budgeting that potential money as extra, not funds to be relied upon.
Any other developments that could come into the city would also lower the tax burden.
Hill mentioned that the council came to a consensus in 2009 to start reducing city debt as much as possible, but levy debt is actually projected to be slightly higher in 2014 than 2013.
That’s due to a number of factors, including the city owing money to the county for the purchase of industrial commercial land, the construction of the fire hall and the Highway 95 bridge.
Once the bonds for those projects are paid off, the debt will begin to decline, Hill said.
“The goal here is to get as much out of the levy as possible, but reduce the tax burden,” he said.
The council has three upcoming budget meetings. Those dates are July 25, 26 and 30.