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Sturgis City Council approves tax district; road closures, open container for Mustang Rally

Sturgis City Council approves tax district; road closures, open container for Mustang Rally

Sturgis City Council

The Sturgis City Council held a special meeting Monday to discuss a Tax Increment Finance District and the budget for Fiscal Year 2021. The council approved both, along with a street closure and open container for the 14th Annual Sturgis Mustang Rally.

Sturgis City Council unanimously approved Tax Increment Finance District No. 17 during its special meeting Monday.

According to a city council report, the district is being established to fund a portion of the street reconstruction and utility infrastructure costs of Katie Lane. Additional lots would also be created for low density housing.

City Manager Daniel Ainslie said the area was just annexed into the city as of the last council meeting and the vote Monday would allow the city to proceed with developments.

Ainslie said the additional road improvements wouldn’t include sidewalk, curb or gutter.

“It would expand the city’s tax bases and the city’s limits would go to the U.S. Forest Service, which has been another long-time goal of the city,” he said.

He also said the city anticipates paying off the TIF in seven years, and that it would be self-funded.

Ainslie said it would be repaid at a 5% interest rate from taxes off the property, so it wouldn’t count as a debt for the city.

He also said the city only currently has four active TIFDs, and TIFDs can only be 10% of a city’s assessed value. He said at the moment, Sturgis’ are at 3.2%.

After a question from a council member, Ainslie said the city’s oldest TIFD is the one with Scott Peterson Motors, which has lasted so long because the tax rate keeps falling.

“Which is a good thing, as a tax payer, but when we put that TIFD together, I think the city’s mill levy was .8% and now it’s .61,” he said. “That’s a significant reduction, so that’s causing that to be drawn out longer.”

Ainslie said there are three homes included in TIFD No. 17, but they won’t necessarily be changing. They also won’t see an increase in taxes, unless there was a major change to their home.

“They’re just included because there are going to be improvements on Katie Lane,” he said.

The district boundary would be the following:

Lot 1 of Bowman Addition; Lot 10A of Lot 10 of Bowman Addition; Lot 10B of Lot 10 of Bowman Addition, located in the N ½ NE ¼ of Section 21, T5N, R5E, BHM; Lot S in the N ½ N ½ NE ¼ of Section 21, T5N, R5E, BHM; and Lot B of Wheeler Heights estates.

During the meeting, the council also approved the preliminary 2021 budget. Ainslie said the city should maintain a reserve balance of $1.6 million, and that the city is doing fairly well.

Council also approved a road closure and open container Sept. 5 for the 14th Annual Sturgis Mustang Rally during the Show and Shine. 

Main Street will be closed from Mill Street to Fourth Street with Junction Avenue left open; First and Harley-Davidson Way closed between Sherman and Lazelle streets; and Third Street closed from Sherman to the alley behind Loud American.

The Mustang Rally will be Sept. 3-6. 

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