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Attention property tax payers: when you attend the North Branch city taxation hearing later in November be advised that council members understand residents are dealing with inflated costs for everyday items, but so too is the city.  Plus, North Branch has in the past either been “kicking the can down the road” or has been “conservative” in its budgeting making and 2024 is being eyed as the year for financial catch-up.

In voting last week to support an approximately 9 percent increase in the levy, Council member Travis Miles said some of his homework included viewing meeting videos and he heard past councils refer to budgets as “keep the lights on” and “kick the can down the road.”  Although good for re-election success;  holding the line on tax collections  has meant North Branch has not been growing its budget to keep up with population increases.

Council member Kelly Neider disputed the kicking the can down the road description, and told her fellow council member that she and council a few years ago were “conservative.”

City Administrator Renae Fry explained that now is a good point at which to bring the budget more in line with needs.

The tax capacity of parcels in North Branch has grown with real estate appreciation and more parcels are paying into the revenue base.

Specially financed properties will come onto the tax rolls soon because of expiring special financing and development agreements and longtime debt service is nearing  maturity dates as well.  North Branch levies $284,000 for the Economic Development Authority and $290,000 for Interstate Business Park lease purchase borrowing from the county.  This balance of $603,256 is slated to be paid off in 2026. The balance on the second set of development debt is $2.3 million, due to end in 2031.  

Fry said staff have long lacked the “luxury” of having a basic Public Works vehicle replacement program, for example.  The city financed equipment purchases in 2022.  

With housing development comes added road miles and the need for snowplows and operators, for example.   Fry explained that staff constantly monitor new housing starts. Revenue estimates for 2024  are made on tighter average growth numbers of 30 permits, than the trend of 60 to 70 permits annually.

Sharon Wright, North Branch’s finance director, added staff are hearing from citizens about services and amenities North Branch is lacking, or are being put-off.  In going through budget scenarios for adding employees, which impacts the levy, council members wrestled with costs of overtime versus new personnel.  

Wright said police and public works combined  had $100,000 in OT paid last year.  She has done some analysis of new employee costs and told council adding staff can “off set” overtime.  Public Works is slated for adding staff.  The mayor and Neider both agreed with the need.  Public Works is “extremely busy” Neider declared.

Wright said the intention behind the budget and levy proposed now— is to get the city “taking a step in the right direction.”

The hearing November 27 at 6:30 p.m. will be covering the preliminary maximum levy adopted by council at $6,380,881 which is an 8.8 percent hike from 2023.

This equates to a city tax rate increase for 2024 from 37.6 percent to 41 percent.

Tax Rate is simply total market value of a city like North Branch divided by the budget, so if a city has a budget of $10,000 and market value of $1 million its tax RATE applied to each property’s value is one percent.

On a $175,000 North Branch home the preliminary hike translates to $5.57 per month for a city property tax total of $726,  compared to $659 now.

A $250,000 home parcel would contribute $7.96 more monthly or an annual increase of $95.

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