Bypassing the traditional citywide vote, the Minot City Council voted Monday to re-enact a city sales tax when the tax expires next year. Half of the proceeds would go toward flood protection.
The action requires a second reading for final passage, and council members expect to hear from constituents before they vote again.
The 11-2 council vote reflected some concern by council members Dean Frantsvog and Scott Knudsvig about skipping an election.
Frantsvog said residents need to have a say about a tax that could be in place for 30 years.
"Because of the magnitude of it, I just don't want the council to make a decision without the input of the people," he said. "The citizens deserve a voice, and I would like to give it to them."
"We are in a position where we need this tax," council member Larry Frey said. "I think they will understand."
Fact Box
Council moves toward change in employee retirement funding
The Minot City Council decided Monday to investigate a defined contribution plan for city employees, indicating its desire to move away from an existing pension plan.
The council voted to call for proposals for a plan that would provide for set city and employee contributions, along with Social Security participation. The existing pension plan would eventually be closed to new employees.
"We have to whether we like it or not close the plan," council member Blake Krabseth said.
"We can't afford to have it anymore. We don't have a choice," added council member Amy Moen.
Hit by a downtown in the stock market that devastated pension plans nationwide, the city plan currently is under-funded by $53 million.
The council voted to adjust the expected rate of return for the pension fund from 7.75 percent to 7.5 percent. The fund has achieved the 7.75 percent rate at times in the past, but the city's investment adviser suggested lowering the amount to 7 percent. The council went with a lesser decline to avoid a significant increase in the amount that the city and employees would have to pay in to support the plan.
Council agrees to hire another accountant
The Minot City Council voted Monday to add an accountant to its finance department after vetoing the idea a month earlier. The department brought back the request after finding budget savings to pay for it.
The savings would come from lower than budgeted expenses for a new blade for street maintenance, for aerial photos and for monitoring at the landfill. Total savings came to $57,483.
The department has sought an accountant because it is falling behind in providing reports to grant agencies and in managing the finances of an increasing number of special assessment districts.
On Feb. 4, the council voted 6-6, with Mayor Curt Zimbelman breaking the tie, to deny the new position. Council members who opposed funding the position had voiced concern about reopening discussions that they thought they had settled at budget time. Last fall, the council weighed more than 60 staffing requests to select 31.5 positions to fund.
The accountant position had been requested last fall but was lower on the priority list. Cindy Hemphill, finance director, told the council's Finance and Improvements Committee last week that the situation changed considerably since last fall, making the position now urgent. The committee had concerns about sustaining long-term a permanent position created with one-time budget savings but voted 4-1 to recommend council approval.
The tax approved by the council gives 50 percent for flood control, 25 percent for capital improvements, 15 percent for economic development and 10 percent for property-tax relief starting July 1, 2014. It doesn't include a sunset.
It would replace the existing tax that now is split with 50 percent going to capital improvements, 40 percent to economic development and 10 percent to property-tax relief. The current tax sunsets June 30, 2014.
The council had received information indicating that a half percent sales tax would raise $230 million over 30 years. The required local share is unknown. The project from Burlington to Velva is estimated to cost $820 million, with the city portion at $530 million.
"It might not be enough, but at least we have a start with financing our end of the project," Mayor Curt Zimbelman said.
He said the city needs to have a source of local funding before approaching the state and federal government for help. Other options to pay for flood control are property tax and special assessment, he said.
"I just don't think the two other alternatives are viable," he said.
Council member Bob Miller said council has heard from the people. By their actions in rebuilding after the flood, they are saying that they want the city to fund flood protection, he said.
Council member Blake Krabseth added that the council was elected to lead, and its action on the sales tax shows that it is doing so on the issue of flood control.
The mayor and council indicated that they will be listening for public feedback in the next month, though. People can find contact information for council members at (www.minotnd.org) under the "city government" heading.