Annex tool gets council eye
September 24. 2013 2:48PM
The City of Dell Rapids is considering establishing a special tax district to make annexing land easier and more enticing to rural landowners.
City Administrator Justin Weiland said creating an Urban Rural Service District would exempt landowners from paying city property taxes on land that is used for agriculture purposes, even after the property is annexed within city limits. Such a district is expected to make expanding city limits more palatable to rural landowners, he said.
“If the city was to move in any direction, that might be a method where you could convince an area that is farm ground to be annexed into the city,” Weiland told the City Council at its regular meeting last week.
When cities expand, he said, the tax impact on effected landowners typically creates a major roadblock.
“This helps to calm that hurdle,” Weiland said. “It’s a tax classification. If the land is considered ag land, then it would stay at the exact same tax assessment value it’s at currently. It would not jump into the city tax.”
Land used for agriculture purposes would not be subject to City tax rates until the property is urbanized – residential, commercial or industrial, he said.
Ag land in an Urban Rural Service District would, however, be subject to bonds and opt-outs.
Without taking formal action, the council expressed a desire to explore the idea.