Burnsville debates taxes, economic development

Maximum levy hike is 3.9 percent

The Burnsville City Council voted Tuesday to raise city taxes by up to 3.9 percent next year, adding a small, last-minute increase to accelerate economic development efforts.

The council voted unanimously to raise the general levy by up to 3.5 percent. In separate votes, the council also approved an increase of up to 0.4 percent in the Economic Development Authority levy.

Council members Bill Coughlin and Cara Schulz voted against adding 0.3 percent to the EDA levy, originally slated to rise by 0.1 percent. The 0.4 percent hike would add $100,000 to the levy.

The 3.9 percent maximum increase will appear on tax statements Dakota County will mail to property owners in November. The council can reduce but not exceed the amount when it approves a final 2018 budget and levy on Dec. 5.

The proposed levy totals $33.96 million, a $1.27 million increase. A 3.6 percent increase is needed to maintain current services and accommodate planned funding for streets, parks and other needs, budget planners say.

A 3.6 percent increase would raise city taxes on a median-value Burnsville home ($238,200) by about $32. City taxes would fall by about $243 on $1 million in commercial property, which is growing in value much slower than residential property.

EDA President and Council Member Dan Kealey, reprising an idea the council discussed last month, proposed adding the 0.3 percent — $75,000 — to the EDA levy.

With a notable exception — the Heart of the City — Burnsville is behind, and behind other cities, in pursuing development and redevelopment, Kealey said.

Possible uses for the added revenue include hiring a consultant to pool various initiatives such as a pending city study of the Burnsville Center/County Road 42 retail area and building funds for development incentives such as building teardowns and land assembly, according to Kealey.

The mall, the Minnesota River Quadrant and aging commercial-industrial buildings all need attention, Kealey said.

“Quite honestly, I’m thrilled you want to raise the levy for the EDA,” said Council Member Dan Gustafson, who joined Kealey and Mayor Elizabeth Kautz in backing the increase.

The Burnsville Chamber of Commerce voiced its support for a stronger economic development push. During the open-comment period of Tuesday’s council meeting, President Jennifer Harmening called on the council to craft a plan next year that includes “economic development tools.”

A “greater plan and vision is needed,” Harmening said. The chamber’s Public Policy Committee concludes that cities with “tangible outcomes from their economic development investments” have a “broader community vision,” Harmening said.

“We need economic development in the city of Burnsville. We need to expand our tax base,” said Gustafson, adding that annual city tax increases like next year’s are inevitable without new development.

Schulz opposed the added 0.3 percent EDA levy increase.

“And I would be very vocal in not supporting that anywhere I could,” she said. “My stance is extremely firm on this.”

“Again,” Coughlin said, “I just don’t believe at this time we can afford it.”

Kealey stressed that he wants the EDA increase offset by savings in other city spending. He said he hopes city staff can bring the 3.5 percent general levy increase down to “3 or less” before the council votes in December.

Coughlin countered that the staff has already done a good job of cutting costs, and that City Manager Heather Johnston has told the council there is “no low-hanging fruit” in the budget.

Gustafson renewed his call to add a fire inspector position, even though he said it lacks sufficient council support to include in next year’s levy.

The $150,000 first-year cost would add about 0.4 percent to the levy, Coughlin said: “I don’t believe we can afford it.”

Backers of the proposal say the inspector position, which was cut during the Great Recession, is needed to resume annual fire inspections of Burnsville hotels. The city handed the duties to the state, which inspects every three years and visits only a small share of the rooms.

Some run-down Burnsville hotels with low price points have hurt the city’s lodging industry and deterred would-be hotel developers from coming here, Gustafson and others have said.

He asked city staff to seek less expensive ways to resume the city inspections.