The City of Isanti will be forced to make some unpopular changes as it struggles to recover
from the recession over the next two years, including the forcible
annexation of nearly two dozen properties and a steep hike in sewer
fees, according to Mayor George Wimmer.
The City of Isanti will be forced to make some unpopular changes as it struggles to recover from the recession over the next two years, including the forcible annexation of nearly two dozen properties and a steep hike in sewer fees, according to Mayor George Wimmer.
Wimmer’s predictions came as part of a State of the City address he made to members of the Isanti Area Chamber of Commerce on Wednesday, Feb. 16, in which he detailed some of the most pressing problems in Isanti’s near future, and what he described as painful but unavoidable adjustments that would have to be made.
According to Wimmer, city-funded expansions to infrastructure east of Hwy. 65 begun by the previous mayor and council have left the city under a back-breaking debt. The project, which is paid for through the sewer and water fund, relied on a rate of growth of nearly 140 homes in Isanti each year for 10 years—a rate that Isanti has fallen well short of during the recession.
“Obviously, that’s not happened,” Wimmer said. “That’s not going to happen.”
Now Wimmer said the City Council must vote in April to raise sewer fees by roughly 30 percent for all Isanti residents in order to avoid bankrupting the fund.
“There are times that I want to just yell and scream that this never should have happened,” Wimmer said. “And I voted against it, but these are the consequences of those actions and we have to do the responsible thing and make it work. You can’t walk away from it.”
Wimmer also said the Council will take the unprecedented step of forcibly annexing 23 properties that fall within city boundaries but are not yet part of the city. The properties currently receive city services but pay taxes to Isanti Township instead. Wimmer said the move is something the Council has debated for a number of years, but ultimately decided in favor of because they found it unfair that city residents are required to pay for someone else’s “free ride.”
“None of us really like the idea of having to do it, but we’re at a point where we can’t continue to foot that bill,” Wimmer said.
Wimmer explained Isanti has experienced a $500,000 drop in tax capacity, meaning that even if the Council significantly raised property taxes––which Wimmer stressed it would not do—the city would still fall short of previous tax revenues because of the drop in home values. Property taxes, which account for 66 percent of the city’s revenue, have been set at 54 percent for residences in 2011, but that number may change when the final home valuations are released in March.
Wimmer said revenues had been choked further by an additional $500,000 in taxes and fees that has not yet been paid to the city, and he also anticipates a $300,000 cut in funding from the state government. Wimmer said while he understands some cuts are necessary, he faulted the state for its indecision on the issue. He also expressed frustration that in the midst of reducing its funding for cities, the state is finding ways to demand more money from them, such as a charge for water the city used for emergency purposes. The state already charges the city for the water it pumps for business and domestic uses, but the city is able to pay those fees by charging the property owners in turn.
Wimmer entreated the Chamber members to do their part by recruiting new businesses to the area. Wimmer said while city staff works hard to attract businesses, potential investors will pay more attention to the opinion of people already operating a business in Isanti. Only 13 percent of tax revenue in Isanti comes from commercial and industrial sources, compared to 74 percent from residential sources.
Despite these challenges, Wimmer said there are still reasons to see a bright future for Isanti. He highlighted some of the accomplishments the city had made in the past year, including the addition or expansion of four businesses using Tax Increment Funding, the successful negotiations with the law enforcement union to lower health care payments and the pavement of the last gravel road within city limits.
Wimmer also pointed to 2014 as a “Golden Year,” in which much of Isanti’s debt will be paid off, freeing up city funds for other uses.
“It’s one of the reasons I’m still very optimistic about our future,” Wimmer said. “It’s really a good picture once we get to that point.”