Hutchinson’s loss creates more loss

The March 8 news that Hutchinson Technology Inc. would be significantly cutting back its operations in Hutchinson compounds a problem the city was already facing.

To accommodate new business and industry growth, the city completed construction of a water plant in 2007, and upgraded its water treatment facility in 2008. They had expected to pay for the facilities with fees generated from increased water and wastewater usage.

But then the recession took hold. Instead of jobs coming to the community, employers began to leave. Now the city is struggling to figure out how to pay for the facilities.

“The significant job losses have severely reduced water and wastewater usage — business use is down 50 percent and residential use is down 30 percent,” Mayor Steve Cook told a March 9 joint meeting of the House Property and Local Tax Division and Senate Taxes Committee. With Hutchinson Technology’s announcement, he expects usage to decline another 10 percent.

While the city has taken measures to reduce expenses and restructure debt, Cook was at the Legislature seeking approval, through HF377, to impose a half of

1 percent sales and use tax and a $20 vehicle tax on motor vehicles sold by dealers located in the city limits to pay for the wastewater treatment facility. Rep. Ron Shimanski (R-Silver Lake) sponsors the bill. The companion, SF276, is sponsored by Sen. Scott Newman (R-Hutchinson).

No action was taken on the bills, but they could be formally acted upon in the respective division or committee.

Hutchinson is one of several cities seeking permission to levy a local sales and use tax. These taxes, while needing legislative approval, must also be approved by local voters in a referendum. In the case of Hutchinson, voters approved the new tax in the 2010 general election.

Other communities seeking to implement local taxes include:

• Clearwater, to pay the costs for new regional parks, bicycle trails, park land, open space and pedestrian walkways;

• Cloquet, for park improvements and water and stormwater infrastructure;

• Fergus Falls, for a new regional community ice arena;

• Lanesboro, to pay for street and utility improvements and enhancements to some city facilities, which include paying debt service on bonds and other obligations issued to fund the projects;

• Marshall, for new and existing facilities of the Minnesota Emergency Response and Industry Training Center and a new Southwest Minnesota Regional Amateur Sports Center; and

• Rochester, for improvements to the civic center complex, municipal water, sewer and storm sewer; a new regional recreation and sports center and regional highway and airport improvements.