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Ely taxpayers facing double-digit tax levy hike

Cleanup costs from July 21 severe wind storm top $150,000

Keith Vandervort
Posted 9/8/16

ELY – Ely property owners could see a double-digit increase in the city portion of their tax bill next year.

The 2017 budget as proposed by the Budget Committee, represents an 11.19-percent …

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Ely taxpayers facing double-digit tax levy hike

Cleanup costs from July 21 severe wind storm top $150,000

Posted

ELY – Ely property owners could see a double-digit increase in the city portion of their tax bill next year.

The 2017 budget as proposed by the Budget Committee, represents an 11.19-percent increase in the property tax levy over the 2016 budget.

According to Clerk-Treasurer Harold Langowski, “This is the result of an increase in the general fund, library, cemetery and capital projects budgets for property tax revenue.”

The proposed budget was presented to City Council members Tuesday night without discussion. The 2017 proposed budget calls for revenues to stay flat, increasing from $3,219,300 to $3,224,600. Proposed expenditures increase from $1,620,800 to $1,802,200.

City officials were counting on state lawmakers to come to an agreement on tax and bonding bills last spring. Because Gov. Dayton and the legislature couldn’t come to an agreement, despite efforts to call a special session, Minnesota “TED” (transportation, economic development) grant funds are not available and Ely property owners will be on the hook to pick up a large share of the 17th Avenue East project.

The project will cost about $1.4 million to extend curb and gutter, pavement and utility work to the new Vermilion Community College student housing project. City officials were counting on a variety of funding sources from the state and went ahead with the project to coincide with the construction work at VCC.

The proposed budget calls for a 14.57-percent increase in the general fund from $402,300 to $460,900. Capital projects could increase from $375,000 to $641,500, or 71 percent. Library funding is set to increase 12.56 percent, from $252,400 to $284,100. The cemetery budget is looking at a 57.46-percent increase, from $13,400 to $21,100.

Through timely refinancing moves this year, debt service shows a drop of 35.6 percent, from $359,600 to $231,600.

A preliminary, not-to-exceed, levy must be adopted by the council at the Sept. 20 business meeting. The final levy may decrease before early December when final certification is approved.

Storm cleanup

The severe wind storm that blew through Ely and the area in the early morning of July 21 resulted in damage and cleanup costs of $153,681 to city taxpayers, Ely Little League and electric utility customers, Langowski said.

“This does not include the future replacement cost for all of the trees that were lost that will need to be replaced, or the cost of removing the stumps to allow for planting,” he said in a memo to the council.

He said the initial clean up of downed trees on city property and rights of way, including utilities equipment and manpower, public works equipment and manpower, and line materials and fixtures to repair the electrical system, totaled $87,941.

“We also continue to have requests to remove damaged trees on rights of way and city property,” Langowski said. He anticipated $33,600 in costs to remove the remaining trees.

The recycle center and the old dump site on Lookout Ridge Road are currently full of storm debris that was hauled in. “The majority of that debris was hauled in from entities outside of Ely and I don’t think it’s fair for the taxpayers to have to pay to get rid of that debris,” Langowsk said. “The dump site was closed immediately following the establishment of sites for township and county residents to dump wood debris.”

He anticipated a cost of $32,800 in public works labor and equipment to haul and burn the debris this winter.

“We don’t know if we will be eligible for any disaster relief assistance,” he said. He attended a Homeland Security Emergency Management meeting last week and provided information on the city’s cleanup costs for possible reimbursement. “A lot of the communities that were there utilized contractors for much of their work. We used all city, and in-kind labor and equipment and in the end I think that’s going to save us a tremendous amount of money.”

Broadband hope on horizon?

Langowski reported on hopeful progress in the ongoing effort to extend fiber optic broadband Internet service within the city.

Blandin Foundation, through their Community Broadband Program, is offering up to $1.5 million in grants and technical support to rural Minnesota communities.

“They are currently putting together an application process and will select four communities in the Taconite Relief area to help with planning for Broadband projects,” he said.

“We are looking at this as a regional project to include the city, school district, Chamber of Commerce, Incredible Ely, VCC, city of Winton, town of Morse, and the hospital,” he said.

He noted there is potential through partnering with the North East Service Cooperative (NESC). “We are looking to work with them and utilizing the fiber they have in the ground already, and working with a potential third-party contractor to provide service to certain areas of town that we could prioritize as a project area.”

He described an idea of running broadband along both the alley on the north and south sides of Sheridan Street. “We have the potential of hooking into their fiber network and utilizing our public utility to be the provider,” Langowski said.

“These are projects that will start out smaller, rather than rolling it out to the entire community,” he said. “I think there is some potential here. We have some interested partners. A big part of this is figuring out how this can work. To wait for someone else to do it for us is not going to happen.”

Langowski said he is impressed with the amount of fiber buried within Ely. “I never realized how much they have here buried in the alleys and along our streets. They cannot provide service to residences,” he said. “That’s why we will have to bring in a third party to make this work. This is all very preliminary, but at least we can apply for this money to get started.”

The council approved Langowski’s request to attend the Border to Border Broadband meeting in Duluth next week.

Other business

In other business, the Ely City Council took the following action:

• Accepted the city’s audit report from Greg Knutson, of Walker Giroux and Hahne;

•Approved the request from the Memorial High School student council to conduct a homecoming parade on city streets on Friday, Sept. 23;

•Authorized the Fire Chief to solicit offers to sell the 1957 American LaFrance fire truck;

•Denied payment of invoices totaling $3,360 from Mesabi Humane Society for the boarding of two cats and a dog, citing the costs were part of a settlement agreement;

• OK’d the appointment of Rob Wilmunen to serve on the Projects Committee;

• Set a public hearing for 5 p.m. on Sept. 27 for three houses deemed as blight properties;

•Rescheduled the Ely Economic Development Authority meeting to Tuesday, Sept. 20 at 4:30 p.m.;

•Went into closed session to discuss union negotiations, and potential property sale and property purchase.