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Board delays vote on tax abatement request

By John Weiss

weiss@postbulletin.com

PRESTON — The Fillmore County Board had many technical questions but no final answer Tuesday when asked to approve Chatfield’s tax abatement request to fund a road and more water to the Hilltop area of Chatfield.

The Chatfield City Council approved it two weeks ago, and the school board approved it last week, though in a different form, saying it will pay only for the road, not the water pumping system, which it believes in paying for in other ways.

The county board was scheduled to vote Tuesday, but a glitch in how the meeting was advertised forced the board to postpone the vote until 4 p.m. April 15. Two of five were not present.

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The city says it needs the abatements to pay for a major road from U.S. 52 up to Hilltop Estates and also a system to pump water up the tall bluff where the district’s new school will be built and where Hilltop is being developed. The developer and school would normally pay for those, but the road going up the hill doesn’t have any homes or businesses along it so the city has no one to assess to pay for it, and also has no way to pay for the water system.

The district wants the road as another way to get buses to the new school and in case the other road is blocked when emergency vehicles need to get to the school.

Process

Abatements are a way to collect extra property taxes that come when raw land is developed. In this case, 75 percent of those taxes would be used to pay for the improvements with the other 25 percent going to the three taxing bodies; taxes already being collected on raw land would still go to the regular places. When improvements are paid for, all the taxes go to the three governmental units.

In this system, it’s up to each unit to decide what it will offer in abatements.

The city wants to go ahead with the road and water project now, even before the development has begun. If nothing happens up there, the city would end up paying about $3.3 million in principle and interest on bonds over about 15 years. But the city has already begun setting aside regular taxes to help pay for some of the early costs and is confident there will be development.

The county board had many technical questions, such as whether the part of the development in Olmsted County would benefit from a third improvement — a new sewer line — that could be built, or a planned water tower that the city says it has another way of paying for without abatements.

Commissioner Duane Bakke said he’s more willing to pay for a water tower and not the road.

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Concerns

However, some people fear that the development won’t happen fast enough and citizens would be stuck paying what abatements couldn’t cover.

The housing market is bad, said Luke Schieffelbein, a new Chatfield resident. "If it doesn’t get built, the city of Chatfield is going to get hammered," he said. People can’t afford more taxes, he said.

Barbara Upton of rural Fountain had many of the same fears, including why Olmsted County isn’t included. "Fillmore is not a rich county; Olmsted is," she said.

She also fears Hilltop needs further environmental review because she fears erosion and pollution from it. "I think it’s time to go back" and do more studies, she said.

Chatfield Mayor Curt Sorenson said that if the county passes an abatement agreement that is substantially different from the city’s and school district’s, the city will have to decide what it will do. It can’t tell the other two governmental units what to do, he said.

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