Commission approves tax exemption increase
Mimicking the city of Fargo's action, West Fargo City Commissioners voted 4-1 Monday night to set by resolution and adopt the new residential construction exemption plan, which the state legislative session enacted last year pertaining to new single family units. Similar plans are also currently being approved in other cities around the state as an incentive for construction of residential property.
The old plan, adopted yearly in West Fargo for the past several years and currently in place, allows for up to a $75,000 exemption for two years which was shared by both the builder and the buyer.
The new plan approved gives the buyer an exemption up to $150,000 of the building value for the two taxable years after completion of construction and the home is owner occupied starting with the 2009 taxable year. It also grants the builder an exemption up to $150,000 of the building value on 5 properties for the year of construction and one additional year starting with the 2009 taxable year.
Special assessments and taxes on the property must also be current for the exemptions to apply.
The effective beginning date will be construction starting after the 2008 taxable year. The exemption does not apply to land, only the first $150,000 of the true and full value of the residential building.
In order to be granted, homebuyers must file an application for exemption with the city assessor's office and a complete interior and exterior inspection, along with an appraisal which must be completed by the city assessor.
The builder must file an application for the property tax exemption annually on Feb. 1 with the city assessor. If any of the five properties listed sells mid-year, that exemption will be prorated to the date of sale and will still be considered as one of the five.
Commissioner Mike Thorstad said he approved the exemption but didn't think it was right to shift gears with the effective date so late in the year, making it retro to January 1, 2009. "This is supposed to be an incentive program for building. We are going back a long time on homes already built. I have no problem with this, but I think it should start Jan. 1, 2010."
Don Dabbert with Contemporary Builders stated that he felt making it effective Jan. 2009 might help the sale of some of the existing homes on the market.
Mayor Rich Mattern stated he had no objections, with the exception of the $200,000 amount for the builders as originally recommended by the West Fargo Economic Development Advisory Committee. "To me I think they should be equal," Mattern said.
Commissioner Mark Simmons made the motion to pattern the action after Fargo's, calling for the $150,000 exemptions for each. They also agreed that the exemption would not be reviewed every year as it has been in the past, instead when the need arises to do so.
City Assessor Wanda Wilcox said approving the exemption will mean an approximate $2,400 per year tax savings per household.
Commissioner Thorstad voted against the motion, with Mattern, and Commissioners Simmons, Bryan Schulz and Lou Bennett voting in favor.
The commission also discussed future plans for the Main Avenue Bridge, originally part of phase 1 work of this year's Main Avenue reconstruction.
City Administrator Jim Brownlee told the board it was the staff's recommendation to hold off on doing any additional work on the bridge and let it be a part of the phase three Main Avenue reconstruction scheduled for 2015.
Problems had occurred earlier this summer, with soil conditions surrounding the bridge located near 6th Street West, when a box culvert was to be installed. Talk had centered on leaving the bridge work until next spring and completing it then, but Brownlee said after further discussion with North Dakota Department of Transportation officials, it was the consensus to wait until phase three to avoid Main Avenue being torn up again next summer.
He said the bridge is safe and in the same condition as it has always been. "There's no advantage to tearing up Main again to just put in the bridge," Brownlee said. "These people have suffered enough this year," a reference to business owners and motorists having to travel the route. He added, the bridge will be inspected by NDDOT officials each year to ensure its safety.
The board voted 5-0 to support the recommendation.
In other action, the commission:
-approved two Renaissance Zone application requests for the construction of a 5,000 square foot shop and office building by Leier Investment at 349 11th St. W. The building will house Superior Steam Clean, a carpet cleaning and restoration business. Perry Leier is the owner;
-approved a bench franchise ordinance amendment that will require bid solicitations once the current contract expires next summer. The board also voted to allow an additional franchise at the present, if there is someone out there wishing to secure it for their business to implement more bench signs around the community. In June of 2010 bids will be accepted and there will be only one franchise agreement;
-approved 25 year assessments versus a 15-year plan for municipal improvement assessments in a section of Shadow Wood Development. Fargo is presently allowing the same time frame. Developers feel the move will be an incentive for homebuyers to purchase "more of a house" by spreading the assessments over a longer time frame;
-okayed a vacation of easement for Sheyenne Crossing easements;
-awarded the contract for Sewer Improvement District No. 1214 for North Central forcemain replacement to LaTour Construction, Inc., Maple Lake, Minn., with a low bid of $1,672,048.90;
The next regularly scheduled meeting of the West Fargo City Commission will take place at 5:30 p.m., Monday, Oct. 19, in the commission chambers at West Fargo City Hall. All meetings are open to the public.