Pandemic impact on Minot city finances less than expected

Pandemic impact on city finances less than expected

Submitted Photo A rendering shows a car wash building to be constructed at 619 N. Broadway. The Minot City Council approved a Renaissance Zone tax exemption for the proposed construction Monday.

The coronavirus pandemic is having less of a negative impact on the City of Minot’s budget than originally feared.

David Lakefield, city finance director and acting city manager, told the Minot City Council Monday that federal relief funds and sales tax collections that held steadier than anticipated have put the city in a better-than-expected position going into 2021.

The council also gave its approval to a tax break for a car wash and the merger of Minot Area Development Corp. and the Minot Area Chamber of Commerce during the meeting that brought some favorable news regarding city finances.

A projected $6.3 million budget shortfall due to the pandemic is now estimated to be a $1.2 million shortfall.

The city originally projected collecting $10 million from each penny of sales tax in 2020, down from $11 million in 2019. Lakefield said the projection was changed to $8.5 million with the economic retraction at the start of the pandemic. However, actual collections through October were trending above the original $10 million forecast, he said.

Collections are down 8% from 2019 but are running 3% ahead of the original forecast for 2020, he said. He noted holiday spending in the final two months of the year will be critical to final sales tax numbers, though.

Lakefield said the city has fared worse than expected with interest revenue because of the low rates currently.

The council had made $7.6 million in budget cuts in response to the pandemic. Lakefield said those cuts now mean more money carried over into 2021 than forecasted and an opportunity to look at projects that have been held back.

Earlier this year, the council removed a new fire station and City Hall retaining wall from the budget, restoring partial funding for both in the 2021 budget.

The city also invested this past year in upgrading technology for remote services and to accommodate a more mobile workforce.

“This pandemic has pointed out to us we were not ready with our technology,” Lakefield said.

In other action Monday, the council revisited a Renaissance Zone project that previously had been denied a five-year property-tax exemption. The vote had been 3-3. Some council members questioned whether the type of project, a car wash, should qualify for Renaissance Zone assistance.

TITA, LLC, represented by Gabriel Holt, wants to construct a new building on property at 619 N. Broadway that has been vacant for several years.

Brian Billingsley, community and economic development director for the city, told the council that the project meets the Renaissance Zone rules so should be approved. The project came before the council last month because a public hearing was required. With no members of the public arguing the project failed to meet the rules, the council is obligated to approve it, he said.

The conclusion that the council’s hands were tied took members aback.

“If we get to vote on it, we should be able to vote on it and not be told how to vote on it just because they meet criteria,” council member Tom Ross said.

“I always thought this was a special incentive we gave,” council member Stephan Podrygula said of the tax break. “Not just kind of a matter of right.”

After seeing the plans for the project, council member Carrie Evans said she believes she erred in previously voting against the tax break. She suggested amending rules in the 2016 Renaissance Zone plan to take into account the different types of properties now in the zone. Originally focused on the downtown, the more recent inclusion of North Broadway properties and eventual inclusion of Trinity buildings require a different vision, she said.

“Everybody agrees the time has come to tweak the 2016 plan to take into consideration the different flavors we have of the zones,” Evans said. “What we want to see as a council on North Broadway is different than what we want to see on Central Ave in an old, historic building.”

The council voted 6-0, with Paul Pitner abstaining, to approve the tax break. The council also will be looking to the Renaissance Zone Committee for a revision of the zone guidelines.

In other business:

– The council voted 7-0 to cast its two ballots to support the merger of Minot Area Development Corp. and the Minot Area Chamber of Commerce. The city belongs to both organizations. Members are voting on the merger this month.

– Master Officer Aaron Moss with the Minot Police Department reported the Fraternal Order of Police’s fourth annual toy collection drive matched last year’s collections and cash donations were up. A police shopping event with disadvantaged youth has been revised to allow the youth to create wishlists that police officers and air base security officers will fulfill.

– The council voted 7-0 to advertise for a staff attorney to handle municipal prosecution services. The city had been contracting with a Minot firm for prosecutorial services. That contract ended in October, and the city re-advertised, receiving one proposal, which it rejected. The legal department currently has a city attorney and an assistant attorney.


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