WARSAW — The city’s assessed value — the basis for determining property tax rates — is expected to rise by a whopping $151 million dollars next year.
The overall 16 percent increase is due to several annexations, including the airport industrial park, and a large amount of pent up construction that is coming to fruition, officials said.
About $60 million of that is from annexation, namely the airport industrial park, Mayor Joe Thallemer told city council Monday night, Aug. 19.
In recent years, the assessed value has been rising steadily. In 2016, it stood at $830 million. That jumped to $869 million a year later. That rose to $880 million in 2018 and hit $917 million in 2019.
With the upcoming increase in assessed value, the city now believes the total for 2020 will eclipse $1 billion and be around $1,068,711,317.
The airport industrial park includes Zimmer Biomet’s north campus, the former headquarters of Biomet before the two companies merged.
The city is already in the midst of spending about $6 million to extend utilities into the park, a move that is expected to quickly generate more growth in the park.
City Plan Director Jeremy Skinner credits years of laying the groundwork with infrastructure in various tax increment finance districts.
“A lot of the growth we’ve seen has come from our ability to use the TIF districts to put the infrastructure in the ground that generates the growth,” Skinner said.
Thallemer and Skinner both credited years of planning in establishing and developing industrial parks. The city’s tech park along US 30 continues to grow.
The city’s been eyeing the annexation of the land near the airport for more than a dozen years.
“This is really what we’ve been trying to accomplish for all the years … It’s pretty obvious how this is paying off,” Thallemer said.
Increases in assessed value broaden the tax base and can potentially lead to a drop in the tax rate.
While the bigger tax base could potentially result in a reduced rate, it’s too early to tell, Thallemer said.
“I would like to think so,” Thallemer said. “It sure puts us in a better position.”
One factor that works against that happening is that the state allows cities to increase their tax levy after an annexation to help pay for anticipated increases in service — such as snow plowing, police and fire services — for those new areas.
Thallemer said they will seek the additional levy because of the need to provide increased services.
In a related matter, the council heard departmental budget proposals for parks, fire, police and several other smaller budgets.
The police department is seeking a 6.4 percent hike with its proposed $5.6 million budget for 2020.
One unexpected development that’s come to light is the loss of a K9 dog to retirement and concerns over the health of another.
A K9 handler recently resigned and the city approved plans to retire his K9, Mako, who is close to retirement age.
On top of that, Police Chief Scott Whitaker informed the council that another K9 is struggling with health issues, meaning the city might need to replace two dogs.
The cost of training a K9 with a specific handler can be upward of $20,000.
Thallemer said there is still time to look at how to cover those costs.
The Warsaw-Wayne Fire Territory is seeking a proposed 7.8 percent increase in its operating fund, which would be $5.3 million if approved.
The parks department is seeking a 7 percent increase in its proposed $2.7 million budget. Some of that stems from preliminary plans to renovate Center Lake Pavilion and demolish a vacant gas station at the corner of Canal and North Detroit streets.
The city is proposing 3 percent pay hikes for employees. The budget is also calculated with a 15 percent hike in health care costs, but that is expected to be closer to 3 percent, Thallemer said.