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Minot City Manager Tom Barry presented the preliminary 2018 City budget during the Minot City Council’s regular meeting on Aug. 7, and his message was clear:
“It was no easy task putting this budget together. That should not be a surprise to anyone,” said Barry.
On the surface, the proposed $104.8 million budget includes approximately a 4 percent increase in spending, but the proposed budget actually reduced operations costs by about $4 million. “We’re very lean as far as operating a City, without drastically impacting service,” said Barry. “At this point it isn’t our expenses that are the problem, it’s the revenue.”The City of Minot has traditionally relied heavily on variable revenue sources, notably sales tax, permits, and fees, and all of those revenue streams have been significantly reduced in recent years.
With less income generated through sales tax and other variable sources, and economic trends showing steep reductions in oil and agricultural commodity prices and a drop in the value of the Canadian dollar, the City now finds itself in a position where it’s necessary to increase revenue.
The City’s budget for 2017 included a levy of 79.25 mills; the proposed levy for 2018 is 108.8 mills. The City’s mill levy was roughly 113 mills 10 years ago.
“The budget is for the most part flat. But again, it is the revenue side that needs to be modified because we no longer have the luxury of relying on those sales taxes,” Barry said.
Barry said the City is presenting a lean budget for 2018, and spending has been reduced through a number of ways. The City has eliminated 19.5 full-time staff positions through reassignments and attrition. Approximately $2 million in capital improvement projects have been delayed. Some budget requests from departments have been eliminated, cutting another $5 million in requested spending.
But there are aspects of the City’s budget that are unavoidable and must be funded. For instance, the pension liability for 2018 is $578,322. Costs for liability insurance and electricity are going up. The City’s emergency fund must be replenished with more than $1 million after being depleted during last year’s major snow removal efforts.
Barry pointed out that the budgeting process is a long one, with work on the 2018 budget beginning in April. Budget workshops began in April, with department heads meeting in May and June to prepare for 2018. Vetting of department budget requests took place in June and July, and the preliminary budget was developed between July 14 and Aug. 1 before being delivered to City Council on Aug. 7.
In the weeks that follow, the Committee of the Whole will meet Aug. 29 for a budget question-and-answer session. Mark Jantzer, Council President, will deliver his budget message on Sept. 5. A special City Council meeting will be held Sept. 14 to allow for a public hearing on the budget, followed by a second reading and final adoption of the 2018 budget on Sept. 21.
The City of Minot is one of four entities that levy property taxes in Minot. In an average homeowner’s property tax bill, 38.2 percent goes to the Minot Public School, 27.5 percent to the City of Minot, 22.8 percent to Ward County, and 11.1 percent to the Minot Park District.
Barry reiterated to the Council that everyone involved in the budget’s creation approached the task with detailed principals:
Barry also said there were clearly defined goals that guided the process of crafting the 2018 budget.