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Caledonia Village Board Considers Development Study

The residents of Caledonia have been locked in an ongoing battle over land use for years. Some Village Board members had questions about how the Village could grow. Here's why they did they commissioned the study and what they learned.

The listened to a presentation made on Wednesday by a consultant they hired from Ehlers, which laid out a variety of land use scenarios on how the Village could grow and the financial implications of those decisions.

The Village Board wanted the : "what type of development should be encouraged, is there a value that should be targeted to maintain the current level of services, should the Village encourage development at all?"

Feeling the pressure to develop because of financial constraints, the Village Board wanted ideas on how they could develop Caledonia. State law prohibits local municipalities from increasing their tax levy. But the same law also allows them to raise the tax levy by the same percentage of growth. The problem was and still is that the Village hasn't been growing and there has been political pressure not to bring in commercial development into the Village. Board members have also grappled with over how best to develop the Village.

This wasn't a problem until the housing bubble burst and the Village lost the revenue stream they had coming in from construction permits. They've also lost state funding and costs continue to rise. Village officials argue that without development, their budget is unsustainable unless they can raise taxes.

Still, plans for a $55 million senior housing campus at the Siena Center could be presented as early as next month, but the property would be tax exempt.

So the question facing the Village is, if property taxpayers don't want their taxes to increase or see Village services diminish, how could they potentially develop with the idea of sustaining their budget?

According to the study there are four scenarios:

1. No Growth Position: resulting in a $0.06 increase in the mill rate annually for every 1 percent increase in expenditures.

2. Residential Growth Only: Average home value will need to be $287,000 to fund current operational standards.

3. Proportional development - current: Average home value will need to be approximately $245,000 to fund current operation standards.

4. Proportional Development - comparable: Average home value will need to be approximately $198,000 to fund current operational standards.

The average home value in Caledonia is $191,000. The report points out that high density development would have the highest impact to Village services, but the least impact would be industrial development.

 "(T)o reduce the impact of service cost to the average residential taxpayer, the more non-residential development occures, the less of an impact there will be to the residential taxpayer," the report indicated. "This must be tempered with location specific analysis to determine the impact of development pressure outside of current service areas."

While no decisions were made, Ron Coutts said the study would be considered by the Plan Commission and the Community Development Authority.

*This version of the story adds information from Ehlers report.

Thomas Spieker November 18, 2011 at 01:59 PM
well what did the study conclude?
Denise Lockwood November 18, 2011 at 04:27 PM
I'll post the photos of the document.
Denise Lockwood November 18, 2011 at 04:48 PM
I also added information from the executive summary. Hope that helps. Let me know if you have any other questions.
Denise Lockwood November 18, 2011 at 05:11 PM
@Tom, I think it more concretely laid out the basis for a healthier and more realistic discussion to take place. Because the Village relies extensively on residential housing for its tax base and the housing market has tanked, the discussions -- at least what I've witnessed -- have been extremely unproductive in the sense that they all go round and round about how they are going to sustain services in the Village given the current economic crisis. Actually, my opinion is (taking off my reporter hat here), that it gives the board a sense of what elements to consider in making development decisions. When Walmart stuck it's toe in the proverbial water here, many people argued (and rightly so) that they not only didn't like the location of the potential project, and that a big box retail development really wasn't the brand of Caledonia they wanted. The Village Board argued (and rightly so) that if not Walmart, then what? The housing market is stagnant so it laid out cost/impact of what type of development would have the greatest impact. So it really wasn't meant to be "the" answer, it was meant to be a tool for them to use to come up with the answer.
San November 18, 2011 at 06:03 PM
i am wondering about the $55 million development being "tax exempt". IRS code holds that non profit organisations can be tax exempt for specifically "non profit' activities, but if they run business enterprises, those businesses need to report and pay tax. My understanding is that the Siena Center project is a combination of an expansion of facilities for the religious order (clearly "exempt") as well as a major senior housing facility, which appears to be an "unrelated" business enterprise, and thus, should be taxable. If this is the case, why would the whole project be "tax exempt"? As a business enterprise, they also clearly draw on services in the village and should pay their share. Non profit enterprises, providing a clear public benefit are part of the services the rest of the taxpayers pay for in our system, but we should not provide "welfare" to "for profit" businesses.
San November 18, 2011 at 06:07 PM
The real underlying problem is that the rules of the relevant share of the income and sales tax revenues of Village citizens that were collected through the state but remitted to the Villages were unilaterally changed from their long-term share in the current budget to help "balance" the State Budget but without looking at the consequences for school districts and municipalities who were entitled to a share of the revenues collected from their citizens, as has been recognized by both Republican and Democratic administrations for many years in this State. The "solution" to the state budget was "artificial" because it simply took these customary splits of the revenue collections and appropriated them for the State and put the budget crisis on the backs of local governments without any realistic way to solve it effectively at that level.
San November 18, 2011 at 06:10 PM
i posted the entire report as a pdf in the photos section so everyone can have access to it.
Denise Lockwood November 18, 2011 at 06:37 PM
@San... thanks! I'm stuck in coal ash land...
Thomas Spieker November 18, 2011 at 08:05 PM
How much did they pay for this study?
Denise Lockwood November 19, 2011 at 05:16 AM
Thomas -- I don't recall. Let me check on Monday.
Denise Lockwood November 21, 2011 at 06:57 PM
@Thomas -- I asked Tom Lebak, the Village Administrator, how much the study cost and he said they don't have a final bill. However, the scope of services said it would cost between $15,000 and $20,000.
Jay Warner December 06, 2011 at 02:40 AM
Is this the only Patch posting of this meeting? (I left town the next day, so had other things on my mind.) In the discussion there was a clear split between those who wanted development - almost any development will do - and those who were less than eager for 'any' development. I thought we almost had a discussion on where we want Caledonia to go from here. The video was caught some good points, but there is a lot more in this subject.
Denise Lockwood December 06, 2011 at 03:10 AM
@Jay, yes. However, San was kind enough to upload the PDF of the study for me.

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