City collects funds from sales tax

Talk about it

The city of Jamestown has already begun collecting its half of the 1 percent sales tax and will use it this year to eliminate the city’s share of special assessments property owners pay.

City Administrator Jeff Fuchs said the city began collecting the half cent last spring. So far the collection totals about $334,458. By Jan. 1, Fuchs estimated the total will be around $506,000.

The City Council voted last winter to take half of the 1 percent sales tax, which until then was exclusively used for economic development. An informal petition, with more than 1,000 signatures, urged the council to take half to offset the cost of repairing and improving areas of the sanitary sewer system following the 2009 flood events.

But in the end, the council decided to use the funds to reduce property taxes, by paying for the city’s share of special assessments. In past years, every property owner paid a portion of the city’s share, which historically has been 10 percent. This year that amounts to 10.5 mills.

“We typically levy for the city’s share,” Fuchs said.

Councilman Pat Nygaard, who championed taking half of the sales tax money, said the funds needed to be used to lower taxes for all property owners. What the petition pushed for would have only benefited a certain group — those served by the most dilapidated sanitary sewer lines.

“We wanted to find a way to use the funds in the most fair and equitable way,” Nygaard said.

So the council voted to use the sales tax money to cover the city’s share of infrastructure projects now and in the future. Along with sanitary and storm sewer projects, that includes seal-coating streets. The city also took over from the Jamestown/Stutsman Development Corp. paying about $280,000 a year on the wastewater treatment plant loan.

“Out of the collection we pay $23,333 a month on the bonded indebtedness of the wastewater treatment plant,” Fuchs said.

According to Darrel Wollan, city tax assessor, the city’s share of specials, now at 10.5 mills, is included in the general property tax amount. With the mills eliminated, he said, property owners will see a lower dollar amount owed on their 2010 tax statements.

“The gross taxes will go down,” Wollan said.

There will be no change in the special assessment line item on the statement. That line item includes city-wide and individual property special assessments only — not the city’s share. For example, the downtown parking lot mill and overlay, plus the cost of establishing the quiet zone will be specially assessed city-wide and on individual property. In other words, those assessment amounts will be on a future tax statement.

Half of the 1 percent sales tax is expected to provide around $1 million a year to the city. As collection goes into 2011, the city’s share of specials will increase from the present 10 to 25 percent on infrastructure projects. Fuchs said the biggest project in 2011 will be reconstruction of Business Loop East. The city’s share of that projected is estimated at about $230,000 a year, he said. There’s also the city share of annual seal-coating projects.

“And depending on what the sanitary sewer and storm sewer studies show we’ll be including projects in those areas,” he said.

Fuchs is figuring about $2 million a year for each of the sewer systems once the improvement projects start.

“And 25 percent of that is $550,000 a year on each one as the city’s share,” Fuchs said. This is the amount property owners in Jamestown won’t have to pay now.

Fuchs has determined the projected sales tax amount along with estimated expenditures in the years to come. He said revenue and expenditures should equal each other by 2013.

“If everything goes as projected we should be in good shape for the next 10 years or so,” he said. “We’ll monitor it to make sure it goes as projected and make revisions as needed.”

For Nygaard, the infusion of funds into the city budget makes the future a little brighter.

“It makes the improvements we need to make more affordable,” he said.

Sun reporter Toni Pirkl can be reached at (701) 952-8453

or by e-mail at tonip@jamestownsun.com

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