Council starts with budget plan of $200 million
Property taxes, fees would go up
Property taxes are up $2.84 for every $100,000 in home valuation – or about $9 a year on a $300,000 home – in a nearly $200 million preliminary budget approved by the Minot City Council Monday.
The preliminary budget could see changes before it is finalized in October. A public hearing is set for Sept. 18 at 5:30 p.m.
The overall budget is up about $17 million, City Manager Harold Stewart told the council. That money largely represents construction on the Northwest Area Water Supply project, flood control and the Puppy Dog Coulee stormwater project.
Property taxes of $28.7 million are up about $1.5 million, with most of that increase coming from new construction and increased market values rather than the mill rate. Increasing the mills by .63 to 120.71 mills accounts for only about $150,000 of that $1.5 million.
The city’s assessed value is up more $543 million, although a share of that is Trinity property that will be coming off the tax rolls now that the hospital is in operation.
“Between property tax and sales tax, we have probably close to 25 percent of our revenues accounted for from these two streams,” Stewart said. “One of the things that we’re seeing from year to year is we’re becoming less dependent on property tax and more dependent on sales tax. More of our equipment purchases and projects and those kinds of things are being paid for with a sales tax, whereas property tax is primarily going toward staff, with a significant portion of that going toward public safety.”
Garbage collection fees go up by 50 cents on a 65-gallon cart and $1 on a 95-gallon cart in the preliminary budget.
The proposed budget also creates a $2 a month residential utility fee and $4 a month commercial utility fee for flood control maintenance. The fee is expected to generate $354,288. An additional $256,315 from sales tax would go toward flood control maintenance. That maintenance includes new positions for four equipment operators.
In total, the budget proposes 10 new full-time positions, which the city determined are mission essential. Three impact property taxes. One is a school resource officer for Minot North, with 75% of that cost paid by the school district. An administrative clerk in the police department would go from part-time to full-time, and a transportation fleet manager would be hired.
Other positions include an airport security specialist, funded with airport money, and two utility operators, paid from water and sewer funds.
The budget also makes wage adjustments that spend an additional $2.5 million. The city would begin to make a transition from a sick leave and vacation policy to a paid-time-off policy for employees at a cost of $230,000 for a disability leave safety net.
“Like many businesses and citizens throughout the community, we’ve experienced inflationary pressures. Costs of materials, parts and services and all those kinds of things have increased significantly over the last 12 to 24 months,” Stewart said. “We’ve been spending a lot of the money that the council has given to us and as that’s gotten tighter, there’s been less savings to roll over from budget year to budget year. We’ve also made it a priority to preserve the progress that we’ve made on allocating funding toward our street maintenance program.”
The 2024 budget includes the same $8 million as budgeted in 2023 for street maintenance, although the estimate to get to where the streets need to be is about $12 million a year in spending, Stewart said.
“We’re just trying to not lose more ground and keep our funding steady,” he said.
He noted the council approved using $3 million in reserves to balance the 2024 budget. It primarily is going to street maintenance, maintaining five police officers and setting aside about $1.5 million for former city hall renovation for police department use.
The budget imposes a new fire inspection fee and changes some fees at the airport and landfill.
The budget doesn’t include $1 million in construction on a Canadian Pacific Railway quiet zone downtown, although design work will continue. It doesn’t include $560,000 for a library remodel or $480,000 in capital equipment requests.
“We also made some cuts in personnel costs, cuts in operational costs and cuts in other capital expenditures throughout, all representing about $8.8 million in cuts that city staff had made to help balance the budget for 2024,” Stewart said.
In looking ahead, Stewart noted federal COVID funds in the 2024 budget won’t be there in 2025. Inflationary pressures and rising interest rates that make borrowing more expensive will be factors in future budgets, too, he said.
Stewart raised the possibility of another 1% sales tax for public safety, increasing the city’s rate to 3%. Each penny raises about $11.5 million.
“This is a conversation we need to have in the future because if we’re going to have any success at balancing the 2025 budget and beyond without reducing services and cutting staff positions, that public safety tax is going to need to be in place to help cover some of our public safety personnel costs and equipment replacement costs and facility costs in the future to provide some relief on the property tax,” he said.
The sales tax going to NAWS is expected to be needed until 2027 or 2028 to cover the local cost, he said.