by Eric Oslund
The Otsego City Council approved the city’s preliminary property tax levy, for taxes payable in 2018, during the meeting on Monday, Sept. 11, for the amount of $6,106,302.
It’s an 8.46 percent increase from 2017, but Otsego’s tax rate is projected to go down from 37.85 percent to 37.7 percent. That means that the city tax will go down unless there is a significant enough increase in the property value of a home. County wide, there has been an average property value increase of 7 percent, but it will vary from home to home.
“Each value increase is dependent upon the individual property,” said Otsego City Administrator Adam Flaherty. “That should be the only increase the residents see in their city taxes.”
Otsego has been adding a number of new businesses and has been averaging about 200 new homes a year over the last four years and is now going on its fifth year of the same. Each one of those new developments adds new tax capacity to the city, which is one of the forces that usually increases a levy. As the city continues to expand, the demand for city services also rises.
One of the biggest changes in the 2018 budget from previous years is the addition of eight more hours a day of service from the Wright County Sheriff’s Department starting July 1.
“Every time we put a new neighborhood in, a lot of the times there’s a new park that goes in. Every new neighborhood is more miles of street, so when we get to a certain point we have to add a new plow truck, we have to add another street employee,” Flaherty explained. “Not in any given year, but over time new business and new homes have built a demand for increased city services.”
For instance, all those new neighborhoods and roads have added an increase of $124,040 to the 2018 levy.
There is also an increase for capital improvements of $122,300. But all the growth that the city has is what allows officials to budget for that while also decreasing the tax rate for residents.