Olmsted County is set to levy a new property tax to meet affordable housing needs, but property owners in the city of Stewartville will be exempt from the county's new tax.
The Stewartville City Council voted Tuesday night in a 4-1 decision to deny Olmsted County permission to include Stewartville in the boundary for the proposed taxing district.
Stewartville will be the only municipality in the county exempt from the housing tax, should the Olmsted County Board of Commissioners and Olmsted County Housing and Redevelopment Authority carry out plans to levy the tax .
The county board took action earlier this year to amend state legislation regarding housing and redevelopment authorities. The move allowed the county board to replace the county-appointed members of the former housing and redevelopment authority board.
With elected officials in position, the county board expressed its intent to levy a tax to support the creation of affordable housing in the county.
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There is one other active housing and redevelopment authority in Olmsted County, and it operates in the city of Stewartville. The Stewartville housing authority is not currently levying a housing tax and has not levied a tax for two decades or more, said Barb Neubauer, city finance director.
Stewartville has used the housing authority to leverage funding for senior housing at the Root River Estates, Neubauer said.
Per state statute, the Olmsted County board required written permission from the Stewartville council to levy a tax where another housing authority exists.
Stewartville council members were concerned the tax dollars taken in the city might not return to the city.
"I'm a little bit concerned that this money doesn't come back to our community," Council Member Wendy Timms said.
Council Member Dick Uptagraft cited concern with the growth projected in Destination Medical Center plans and how it would affect housing projects and their placement in the county.
"My feeling is that I kind of think I know where this money is going to go, and it's not going to go to Stewartville, it's going to go to Rochester. I like DMC as much as the next guy, but I don't like having to build affordable housing for Mayo Clinic," Uptagraft said.
Olmsted County Board Member Matt Flynn and County Administrator Richard Devlin attended and spoke at the meeting to address questions. Flynn said the dollars raised for housing would not be targeted to Rochester, but would benefit the county in different areas.
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"I think the county has a good history of dispersing different things throughout the county, for the good of the county," Flynn said.
Council Member Gary Sensrud and Mayor Jimmie-John King both expressed frustrations with the state of Minnesota and its role in creating housing. The state has affordable housing funds, but to access them, more local dollars are needed, King said.
Sensrud made a motion to deny Olmsted County's request to levy a tax in Stewartville, and Timms seconded. Uptagraft and King joined Sensrud and Timms in approving the vote to deny the county request.
Council Member Craig Anderson voted against the motion to deny. Stewartville had less chance of creating affordable housing on its own than with the county as a whole, Anderson said after the meeting.
The county board's maximum levy for housing funds would be about $2.5 million a year, an added tax of $32.25 for a residential home valued at $200,000.
The tax potential lost in Stewartville will not be eliminated from the county's levy collection. The levy amount will be divided among property owners in all other areas of the county, according to Mark Krupski, Olmsted County Director of Property Records and Licensing.
Stewartville contains 2,594 taxable residential and commercial properties, representing about $351 million in market value . In comparison to the county and its 64,943 taxable properties, the properties in Stewartville represent about 2.4 percent of the county's overall $14.74 billion property value.
The county board has not yet set the amount it plans to levy under its housing and redevelopment authority. Flynn said that decision could come in September.
