Rates to rise: Jamestown utility rates will go up 5 percent in 2015
Jamestown residents can anticipate a 5 percent increase in the costs of city-furnished utilities in 2015.
The Jamestown City Council discussed the increases at a budget hearing Wednesday. Final action on the budget and rate increases can occur no later than the October City Council meeting. The increases will go into effect at the first of the year if given final approval.
The preliminary budget includes a property tax reduction of 2.87 mills along with the 5 percent utility rate increase. A reduction of 2.87 mills would reduce the annual property taxes on a $100,000 home by about $11.
“The 5 percent increase is in line and keeps our water (costs) reasonable,” said Mayor Katie Andersen during the discussion of the water utilities.
With the 5 percent increase, the water utility will generate about $3.9 million in revenue and incur $2.4 million in expenses. The department also pays about $900,000 in bond payments and sets aside 10 percent of its revenue for replacing equipment. City officials transfer $250,000 each year from the water fund to the Jamestown general fund.
The 2015 Water Department budget includes $490,000 in renovations to the water tower located near Cavendish, which was included in the 2014 budget but not started due to changes in priority, Andersen said.
City Administrator Jeff Fuchs said the sewer utility faced a net operating loss of about $600,000, even with the planned 5 percent increase. The sewer utility is anticipated to generate $3.6 million in revenue with $1.9 million in expenses but has about $2 million in bond payments scheduled for 2015.
“Even with a $640,000 transfer from the city share of sales tax to cover debt service, I have a concern about the ability to add any sewer projects without substantial increases to sewer rates,” Fuchs said.
Andersen said the entire bond payment associated with the most recent sewer project should be paid from the sales tax funds. The $10 million project updated lift stations and replaced some of the sewer main lines. It was completed this summer. The bond payments amount to about $800,000 per year. The city transfers $100,000 from the sewer fund to the general fund each year.
Fuchs said paying all of the bond issue from the sales tax could cause a problem if the sales tax is not extended when it expires in 2018.
“If it expires, you could see a substantial sewer rate increase,” he said.
Andersen said transferring $800,000 from the sales tax fund to the sewer fund could allow for some additional projects for the sewer department.
A proposal from the city engineer’s office included a $2.3 million request to replace one of its buildings located near the main lift station. Equipment in this building removes foreign materials and grit from the sewage flow before it enters the pumping station and treatment plant, reducing damage to that equipment.
Fuchs said the sanitation and solid waste departments would continue to roughly break even with the planned 5 percent increase. The city transfers $80,000 from the sanitation fund to the general fund each year.
“This is an area where we’re going to have to do some pencil scratching,” he said. “That is without any recycling costs.”
Other budget requests
The City Council also reviewed and approved other departmental budgets with the exception of a request to increase the Jamestown Police Department staff by five officers.
According to the budget request submitted by Jamestown Police Chief Scott Edinger, the increase would cost the city about $290,000 during the first year to hire, equip and train five officers.
“We’re not sure we could recruit, hire and train five in a year,” Edinger said. “It is more and more difficult to get good candidates.”
Decisions concerning adding police officers, salary and benefit increases for staff and the budgets for the Jamestown/Stutsman Development Corp. and Jamestown Tourism were delayed until a future budget hearing later in August.
The City Council also delayed action on the engineering department budget until City Engineer Reed Schwartzkkopf returns from medical leave.
The final budget must be certified to the Stutsman County Auditor’s Office in October for the calculation of tax rates and the distribution of tax statements.
Sun reporter Keith Norman can be reached at 701-952-8452 or by email at firstname.lastname@example.org