Written by Don Ratzlaff Tuesday, 12 February 2013 11:39
Despite a weak national economy and the ongoing fiscal challenges facing small rural communities, Hillsboro is holding its own—and maybe gaining.
That was the assessment of Clint Seibel, the city’s economic development director, when he updated the city council on five key indicators of the town’s economic health during the council’s Feb. 4 meeting.
“I think this town can be real pleased as to where it’s going right now,” Seibel said.
Using a PowerPoint presentation, Seibel showed the council how 2012 compared to previous years starting with 2006, when Tabor College students Josh Elliott and Rob Moore helped Seibel developed a “baseline” for the city’s economic well-being.
The presentation covered five indicators: capital investments, real estate appraisal values, local sales tax revenue, population and student enrollment.
The capital-investment indicator was broken down into five areas: municipal, commercial, industrial, residential, educational, health care and religious.
In 2012, municipal investment hit a record high for the seven-year period of nearly $1.38 million, continuing a trend of significant growth over the past three years.
“Basically, it’s the street projects that keep us going right now,” Seibel said. “The last couple of years we’ve had some good street projects, and that will continue because of next year’s as well.”
He said significant municipal investment “shows that the town is investing in itself and we’re moving ahead.”
Meanwhile, commercial investment has been up and down over the same period, with 2012 on the low end at $314,296.
The high points in the past few years came when sizeable projects were in play, such as $1.45 million in 2010 for the construction of the Midway Motors dealership.
In the industrial realm, expansions at business such as Container Services Inc. and United Suppliers prompted a near-record spike of nearly $1.01 million in 2012.
The record level of $1.1 million occurred in 2010, and included construction of the large grain silo at Cooperative Grain & Supply.
Residential investment increased slightly to $798,626, but has been essentially steady the past three years.
Seibel the peak year for residential investment was 2008, when more than $5.5 million was invested, thanks to a significant hail storm.
“We didn’t build a lot of buildings, we just repaired lots and lots of roofs,” Seibel said.
Educational investment increased slighty in 2012 to $199,500, and was roughly at that level the previous two years.
The big year for education was $5.52 million in 2009, which included the construction of the new stadium for USD 410 and Tabor College.
Health-care investment in 2012 jumped from $29,000 in 2011 to $270,000 in 2012, but Seibel said it came mostly from maintenance projects.
Lastly, religious investment was negligible for the sixth straight year following a spike of $6.2 million in 2006.
“We haven’t build any churches lately,” Seibel said.
Overall, the significance of the numbers should be viewed over time, not just year to year, Seibel said. Since 2006, the community has averaged $5 million of capital investments a year.
“We’re reinvesting in this town pretty well,” Seibel said. “What it says is lenders have confidence in the Hillsboro economy. We don’t have $5 million to ante up—most of that money is borrowed, and lenders are saying, ‘Yeah, we think we’ll lend it, and we think we’ll get it back.’
“Also, business owners and residents have confidence that if they borrow that money, they’ll be able to pay it back,” he added.
“What this shows us is we have confidence in our economic climate.”
One indicator that is not affected as much by major events or projects is a city’s appraisal value, Seibel said. In that area, Hillsboro experienced a decline in 2012 for the first time since 2006.
Residential valuation slipped from a high of nearly $82.8 million in 2011 to $82.2 million in 2012.
“What’s interesting about this is, even though the recession is ‘over,’ we find we’re going down,” Seibel said. “In appraisal value there’s a lag time. We’re kind of following that recession,?and I think it’s going to come back this year.”
Once again, Seibel pointed to the trend of property valuation over the seven-year period, which shows a 16 percent increase.
“We got a nice increase over a period of time,” he said. “We haven’t been stagnant, which is good.
“Maybe this is one reason we can keep our mill levy where’s it at, because our appraisal value is higher and we’re not overspending,” he added.
Seibel characterized sale tax revenue as a more reliable barometer of economic health in the present. In that arena, Hillsboro retail businesses generated a record $657,447 in 2012—a 7.7 percent increase from 2011—after showing a slow but steady annual rise since 2005.
“That’s showing that the retail market in this community is strong and it’s staying strong,” said Larry Paine, city administrator.
It also was noted that the data indicate the county’s half-cent sales tax to build a new jail apparently hasn’t hurt the local economy, as some opponents had feared.
Referring to the presentation Don Macke, director of the RUPRI Center for Rural Entrepreneurship, made at the joint Marion-Hillsboro Chamber of Commerce dinner last month, Seibel said there’s still plenty of opportunity for retail growth.
Macke said Marion County has a retail demand of $93 million, but is supplying only $44 million of it—a gap of $49 million.
In the area of school enrollment, the news was positive in 2012 for Tabor College as well as USD 410.
Tabor experienced another record enrollment for the 2012 fall semester—the fifth year in a row.
“I’ll tell you what, a strong Tabor makes a strong Hillsboro,” Seibel said. “I think a strong Hillsboro makes a strong Tabor as well. We share in that together.”
Meanwhile, the local public schools registered a second consecutive year of enrollment growth this fall, from 568 to 587—but still well below the 669 students enrolled in 2006.
Seibel said the recent growth is coming in the lower grades, including preschool, which bodes well for the future because those students “will be with us for awhile.”
He reminded the council that enrollment growth is not the norm for rural districts.
“I talk to a lot of people, and they’re struggling,” Seibel said.
In conclusion, Seibel said one of the positive things the data show is that one third of the capital investment in the city was business-related rather than municipal.
“You can spend a lot of money and not get any tax benefit from it,” he said. “But a third of that was business related, which I think is important.”
At the same time, the council leadership has been instrumental, too.
“I think the decisions that have been made though the history of this council are paying off because we have infrastructure (for future growth).
“I think the trend lines are good.”
Mayor Delores Dalke thanked Seibel for taking the initiative to develop and track the economic record of the city.
“As we make decisions, it’s important that we’re able to prove where we’re at so we can decide what makes sense and what doesn’t.”