Sales tax funds: Council approves taking 50 percent, extending tax

Talk about it

The City Council voted 3-1 Monday to enact the amended ordinance taking half of the 1 percent sales tax for the city’s share of special assessments and extending the tax to Dec. 31, 2018.

The ordinance specifies special assessments on public works projects. It includes but is “not limited to the city’s sanitary and storm sewer systems and infrastructure within the city pertaining to economic development and the annual $280,000 on the current wastewater treatment plant…” Councilwoman Kelani Parisien was absent and Councilman Ken Schulz voted against the ordinance, which switches about $1 million of economic development funds to the city’s coffers annually.

Until this vote, the city sales tax funds have been dedicated to economic development in the city and county, administered by the Jamestown/ Stutsman Development Corp. JSDC Board President Jim Boyd told the council the JSDC has tried to work with the city on resolving the economic development needs with the city’s sewer issues.

“We said we wanted to find a way to help with the sanitary and storm sewers,” he said. “It was a futile effort. But do the right thing; this should go back to the voters.”

City resident Harold Newman told the council the sales tax was voted in to diversify what was primarily a farming economy.

“It has been successful,” Newman said. “The residents voted for that tax for that purpose and it has worked.”

Three of the community’s largest companies, he said, pay about $550,000 a year in property taxes.

“We have to realize the benefits of the (sales) tax,” he said.

City resident Katie Anderson said she commended the JSDC for its attempt to compromise with the council. She said taking the economic development funding to reduce property taxes is not a good use for it.

“Economic development increases the tax base,” Anderson said. “So lowering property taxes starts with economic development.”

Schulz added that as he only owns a home, he won’t see much benefit from a reduction of the city’s share of special assessments. That reduction amounts to 11 mills on a 7,000 square-foot property at this point.

“But I could save money if I had more property,” he said. “It’s a real benefit to people with a lot of property in town.”

Resident Joe Schmidt blamed the JSDC for bad decisions and planning on infrastructure such as the Cavendish Farms sewer line and the roads to Great River Energy. He said he supported the city’s effort to use the funding. Schmidt flung a number of accusations and assumptions on the JSDC’s use of the sales tax money such as the amount of money the JSDC has in reserves and what JSDC Board members earn in salaries.

JSDC CEO Connie Ova heatedly responded to Schmidt’s comments, saying her office has also been getting calls with similar assumptions about the use of those funds and JSDC’s role.

“We have no power and no money. The money is in the city and county economic development coffers,” she said. “We’re a recommending board and the City Council and County Commission make the final decisions.”

The JSDC Board of Directors is made up of volunteers who are not paid anything, she said. All the financial information on the economic development fund is a matter of public record. Anyone can see it online or in the office.

“We have nothing to hide,” Ova said. “All we’ve done is our job.”

In the history of the sales tax fund, she said, only 8 percent of the dollars invested in projects has been lost. She added she doubted even a bank could claim that good a record.

She said the economic development fund has $6 million in reserves because a proposed corn ethanol plant in Spiritwood never materialized. The bottom fell out of the market and most plants went bankrupt.

“We’ve protected the taxpayers and we did our job,” she said.

Sun reporter Toni Pirkl can be reached at (701) 952-8453 or by e-mail at tonip@jamestownsun.com

Tags: local news, news, city, jamestown, sales, tax, council