BIWABIK — The Biwabik City Council on Monday finalized the city-wide infrastructure project assessment. Finalized amounts will be received in the mail and are online now.
Over email this week, Biwabik Mayor Jim Weikum said, “The council approved an assessment of $29.59 per linear foot. That is roughly half of the original estimate before we started the hearing process.”
The original assessment was $58.85 per linear foot.
The motion to change the assessments was passed in a 4-1 roll call vote. The nay vote was Councilor Peter Senarighi.
“The two largest factors in lowering the assessment to $29.59 are the transfer of a 1.15 million dollar gap in funds received from royalties on mining activity from the assessed properties to the general levy, and including the footage of city-owned property in the assessment calculation,” explained City Administrator Jeff Jacobson over email. “Those changes resulted in a smaller amount being spread over a larger footage amount.”
The city-owned footage calculation is 12,954 feet by $29.56, totaling $382,948.14.
“We intend to cover that amount from utility bills but the exact amounts for each utility is yet to be determined,” Jacobson said. The utility funds the City has are: water, sewer, stormsewer, refuse/trash and streetlights/electrical.
“No rate increases have been officially approved quite yet, but for example a $1 per month increase in each of the utilities would cover the $382,948 I previously mentioned (over 20 years),” Jacobson added. “Any rate changes would be approved and implemented in the next few months.”
Over the past few years, there has been a city-wide infrastructure project in Biwabik. Total actual construction costs were $3,057,941.38. Part of that was deducted for tax forfeit mineral lease not collected leaving $1,907,941.38 to be assessed to those properties that had work done.
As stated by Jacobson, the levied portion to be paid on property taxes by all residents is $1,323,032.65 with an estimated annual levey amount of $93,390.54, if the levy is to be paid in equal installments over 20 years.
“The city council will need to make a decision on the actual levy each year as part of our budget process,” reminded Jacobson. “That $93,000 is not set in stone.”
Biwabik residents and landowners experienced sticker shock earlier this fall when they received the original assessments in the mail. Several well attended meetings and public hearings have been held and residents have had the option to submit objection letters.
“Property owners still have legal recourse to object to the finalized amount,” said Weikum explaining that process is outlined in state statute.
One item of debate over the multiple meetings was a change to assessment billing in recent years. The previous Biwabik Special Assessment Policy was taken into consideration and “People with multiple assessments on the same parcel (corner lots or front/back) were given a break on the additional side,” said Jacobson.
The assessment amounts have now been submitted to Saint Louis County. Calculated final assessment will be mailed to property owners but they are also currently posted on the City’s website. Those with questions or without internet access are invited to stop by City Hall.
“Last night's decision by the council means that citizens have the option of paying their assessment in full without any interest as long as they pay within 30 days of the decision,” Weikum said. “Otherwise, a portion of the total amount (also available on the website) will be assessed over the next twenty (20) years.”
Some landowners will choose to pay the assessment, in full, before the Dec. 26 deadline. They will not be charged any interest. Others, will be charged via their property tax bill equal installments over 20 at an interest rate of 3.75%.
For example, taking the property at 120 3rd Ave. S.: This property is two parcels. According to the finalized assessment, the total assessment of the 25-foot front footage at $29.59 per foot, is $739.75 per parcel. If this is not paid in full by Dec. 26, the property owners (a trust) will be charged an annual payment of $53.23 for each parcel.
Jacobson explained part of this property's assessment: “That one is an Interior Lot Less Than 200 feet in Depth Which Abuts Two Parallel Streets so according to the provisions in the policy that we referenced (attached), only one side of the frontage was used for the assessment calculation.”
There are seven definitions applied to this special assessment which uses property footage: rectangular interior lots, rectangular corner lots, irregularly shaped interior lots, interior lots less than 200 fee in depth which abut two parallel streets, end lots less than 200 foot in depth which abut three streets and interior lots greater than 200 feet in depth which abut two parallel streets.
In total, the property at 120 3rd Ave. S. is being assessed $1,479.50 or $106.46 annually for 20 years. With the 3.75% interest, the property owner would pay about a total of $2,129.20 over those 20 years. The assessment can be paid off early.
“While the process took over a month, I was pleased at the level of citizen engagement and the vast majority understood why the infrastructure work needed to be done and they supported it,” said Weikum. “It has been roughly twenty years since the City levied any substantial assessments, so we wanted to go through the process carefully. I am proud of our city for making necessary improvements and repairs. This is an investment not only for our children and grandchildren, but for decades to come.”