By Lois E. Johnson
Moose Lake Star-Gazette 

No annexation without due remonstration

Council passes resolution to prevent hostile annexation in the future


April 19, 2018

Lois E. Johnson

Moose Lake Township property owners and other concerned citizens packed the city council chambers, with some seated on the floor, on Wednesday, April 11, to protest the proposed annexation of Moose Lake Township by the City of Moose Lake.

A letter to the township residents from the Moose Lake Township Board resulted in people packing the Moose Lake City Council chambers for a public hearing during the Moose Lake City Council meeting on Wednesday, April 11.

The letter stated:

"The City of Moose Lake has recently commissioned a financial study to determine the effect upon both city and township residents if the city annexed all of Moose Lake Township. That study has determined that many township residents will see significant tax increases as a result of annexation. Estimates of the increase in local taxes are as follows: $150,000 home value, township taxes, $240, city taxes after annexation, $694, an annual tax increase of $454."

The tax increase on a $200,000 home was $755, and the increase on a $300,000 home was $907.

The letter went on to state:

"If the city attempts to annex the township, township residents will not get to vote on this issue – it will be decided by an Administrative Law Judge."

Residents and property owners living elsewhere strongly objected to the increase of taxes, the increase in taxes without increased benefits and the hostile annexation without a vote by the township property owners. Testimony was taken for two hours during the hearing.

At the beginning of the hearing, City Administrator Tim Peterson explained the only action taken so far was a study done to see if there was some way to move forward together.

"There will be no hostile annexation and no court," he said. "There are a million different ways to move forward. That is not the only way to do it. Not doing it at all is still an option."

Tammy Omdahl of Northland Public Finance presented the information found in the study.

The total taxable value for both buildings and land in the township was $76,533,067.

The property in the township was divided into an Urban Service District and a Rural Service District. Taxable value of buildings and land in the Urban Service District was $14,605,000.

The total taxable value of the buildings and land in the city was $68,249,281.

"The tax levy for the Rural Service District is estimated to be higher than the township's current tax rate," it was stated in the report. "The increase in rate will result from certain property within the annexation area being taxed at the city urban rate versus a city rural tax rate.

"Property located within the Urban Service District will be subject to a higher urban city tax rate," it was stated in the report. "This reflects the level of municipal services that property within the Urban Service District have been and will continue to receive after the annexation."

The report stated that the township does not have any debt obligations as of fiscal year 2015 but it does have an obligation to make payments to the city for Capital Improvement Bonds issued by the city. Those are for its part in paying for the city/township-owned building, where the public hearing was held, according to Peterson in a telephone interview.

The report stated, if there was a township debt outstanding, debt would likely need to remain with the township.

The city does have general obligation bonds, with the total principal payable of $11,043,118, as of Dec. 31, 2017.

The township represents approximately 33.5 square miles of land area, and approximately 1,384 people live in the township. The city's population is 2,751.

Some properties in the township receive sewer service from the Moose Lake-Windemere Sanitary Sewer District.

The city's policy is no city or water sewer services can be provided outside of the city limits.

There would be no increase in Local Government Aid to the city, it was stated in the report. That is because the township has a higher adjusted net tax capacity per capita than the city, and LGA is based in the amount paid the previous year.

The township receives township aid of $16,595 but the city is not eligible to receive township aid.

Rather than annex one area bordering the city limits to provide water and sewer services to the properties, Peterson proposed annexing the whole township. To study the implications of the proposed annexation, the study was initiated on Nov. 27, 2017, it was listed on the report.

The 27-page report is available on the City of Moose Lake's website.

After the conclusion of the public hearing, Mayor Ted Shaw called the council meeting back to order.

Councilor Doug Juntunen made the motion, based on the information provided in the study and from the people that testified at the hearing, that today and in the future the city not initiate a hostile annexation. His motion was seconded by Councilor Kris Huso. The motion was passed unanimously.


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