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Economy threatens financial stability of city's budget

The current economy could play a cruel trick on New Richmond taxpayers if things don't start picking up soon.

In a report at the July 13 City Council meeting on the current status of the city's finances, consultant Sean Lentz of Ehlers & Associates noted that two of New Richmond tax increment financing districts will require attention in the next few years.

Tax Increment Financing District #6, which is part of the Business and Technical Park, needs to realize about $12 million in additional development in the next few years or debt payments will not be covered by the available revenue.

If the development does not occur, the taxpayers of the city would end up picking up the tab, Lentz said.

The same holds true for TIF District #8, which is along the new Highway 64 corridor coming into New Richmond.

Lentz said the county owns a big portion of the property in the district, but a big proposed project on that land eventually fell through.

If $10 million to $15 million in development doesn't occur by 2013 in that district, Lentz said debt payments could fall to the general tax levy as well.

"This is a substantial potential problem for the city," said City Clerk Joe Bjelland. "We really need to work with the county. This is the one that's a worrisome issue."

Lentz noted that the community's other tax increment financing districts are faring well, including the portion covering the older part of the Business and Tech Park, the Econofoods redevelopment project and the North Knowles redevelopment area.

The two that are having difficulty right now are the result of the declining economy, he said. When the districts were first established, officials expected there to be no problem paying for the public improvements associated with the projects, as the community was growing at a fast rate, Lentz said.

In other financial business, the council approved financing for a new street shop building and other capital projects.

Despite an effort to keep new borrowing at $1 million, New Richmond has been spending about $1.4 million a year on capital projects that add to the community's debt, said Alderman Fred Horne.

Bjelland said even with the extra borrowing this year, the city's debt levy will remain about the same as the past year, which is a positive note.

Bjelland said if borrowing can be limited to $1 million new debt a year from now on, the debt levy will remain essentially unchanged.

But Horne asked Lentz to provide additional projections if the city spends $1.5 million or $2 million a year instead.

"I think we lull ourselves into thinking we can do $1 million a year," he said. "This draws a better picture."

Horne said the city could have some "big ticket" items to pay for in the near future -- such as a new library and the Richmond Way extension -- that would not be covered by the $1 million annual cap.

In other business:

• Horne, who is a St. Croix County Board supervisor as well, will apparently lead the charge in encouraging the county to begin collecting 100 percent of the library levy to help increase funding for operations.

Currently public libraries only receive 71 percent of the funding they're due to cover costs associated with serving patrons in surrounding townships and villages.

The remaining 29 percent gap in funding is essentially subsidized by city taxpayers.

Council member Jim Zajkowski said a bump in the county levy would only amount to $15 a year for the owner of a $200,000 home in a township.

Zajkowski said most elected officials in the area seem to agree that coming up with a fair way of paying for library services is a good idea.

• The council voted to establish a new "Public Properties District" within its zoning ordinances. The city hopes to use the zoning designation for schools.

Building Inspector John Frisco said Wisconsin Indianhead Technical College's property in New Richmond is inappropriately zoned right now.

As WITC seeks to expand, Frisco said, its zoning must change to allow for construction.

"They're dead in the water on their 29-acre campus right now," he said.

• The council set a community and neighborhood meeting to talk about options for extending the bicycle and pedestrian pathway from the Rail Bridge Trail to the Millpond. There are proposals to run the path along Minnesota and possibly Dakota at the present time. The meeting will be Wednesday, Aug. 5, at 7 p.m. at the Civic Center.

• New Richmond Golf Club pro Ross Johnson reported that the public course is doing well, despite the poor economy.

"We're a little bit ahead of last year's pace," he said. "It's better than we thought it would be."

• Darian Blattner, director of the New Richmond Area Centre, reported that the recreational facility's financial health continues to be strong. Membership units have grown from 770 in January, when the YMCA left town, to 1,228 today.

The Centre's swim program, Silver Sneakers group and after-school programs have been very successful as well, he said.

"Things have gone better than anyone could have anticipated," he said.

To meet the needs of a growing membership, Blattner asked the council for permission to renovate the facility's gym. The plan is to cut the 10,000-square-foot space by 4,000 square feet, then add to the group fitness and weight room spaces. The locker rooms would also be renovated.

Blattner said the cost of the project would likely be around $125,000, which the non-profit organization hopes to raise through donations.