City budget taking a beatingThe City Council approved the 2010 budget for Jamestown Monday including a nearly 9-mill increase in the levy to cover rising costs in employee benefits as well as the price tag for snow and flood. With the knockout blow the weather dished out plus the economy’s effect on other costs City Administrator Jeff Fuchs said he anticipates ending 2010 with a deficit of $220,000 in the general fund.
By: Toni Pirkl, The Jamestown Sun
The City Council approved the 2010 budget for Jamestown Monday including a nearly 9-mill increase in the levy to cover rising costs in employee benefits as well as the price tag for snow and flood.
With the knockout blow the weather dished out plus the economy’s effect on other costs City Administrator Jeff Fuchs said he anticipates ending 2010 with a deficit of $220,000 in the general fund.
“The reserves will cover that so we’ll still be in the black,” Fuchs said. “But our reserves are the lowest they’ve been since 2003. The city’s investment revenue has dropped.”
Not so surprisingly, the biggest blow to the city 2010 budget also comes from a drop in investment earnings for others. Workers compensation, for example, has “seen a substantial drop in investment earnings,” Fuchs said. That drop has forced a discontinuance of Workers Safety Insurance’s 50 percent discount. So, instead of the $72,000 the city paid in premiums in 2009, the cost for workers comp in 2010 will be $139,000.
“And we’re looking at a 90 percent increase in workers comp premiums in 2011,” he said.
The loss of investment earnings is affecting health insurance premiums as well with an increase of 18 percent or $86,000. Another $100,000 in pension costs reflects the loss of earnings in that fund.
“Those three are the biggest impacts as far as our everyday operations go,” he said.
To better understand the effects of the drop, Fuchs said, the city had investment earnings of $833,000 in 2006. In 2008, the city, along with many other entities in the state, saw investments earn about half that amount.
“In 2009, we’ll be lucky to hit $180,000 to $200,000,” he said. “That has quite an impact on our revenue. So just to balance the budget, we’re looking at an increase of between 8 and 9 mills in the levy.”
With the mill increase and despite investment losses, Councilman Ken Schulz said the “city is in good financial shape.” He said it is due to Fuchs’ stewardship.
“But the flood this spring upset a few of our plans and changed some of our priorities,” Schulz said.
The flood fight cost the city close to $2 million, Fuchs said.
“Much of that should be reimbursed by FEMA, but we haven’t seen any of it yet,” he said. “It puts a damper on our cash flow for the next 30 to 60 days. But there’s no danger of not being able to pay our bills.”
The city had hoped to repair most of the damages caused by the flood fight before freeze up. However, because of the backlog with FEMA and the North Dakota Department of Transportation, the approvals weren’t received in time.
“The numerous projects will wait until next summer’s construction season,” Fuchs said.
“And we don’t know all the infrastructure costs we’re going to have,” Schulz noted.
The increase in property taxes puts the city at 99 mills for the general fund, the highest since 2005, when it was 99.6 mills. As property valuation in Jamestown has gone up, for several years the number of mills levied has gone down. The state sets the parameters for valuation, which is based on what neighboring properties sell for. The city has no choice but to make the necessary adjustments to be within those parameters.
“The state will make the adjustments if we don’t,” Fuchs said.
Added to the general fund mill levy, tax statements include 11 mills for the city’s share of special assessments, 15 mills for the library, 5 mills for maintenance of city buildings and 5 mills for the airport.
Despite city and county levy increases totaling about 13 mills for 2009, however, city residents should still see reduced property taxes on their tax statements. The Jamestown Public School District has reduced its levy by 75 mills, because the state is picking up that amount in funding.
“So overall, city residents should see a $290 reduction on a $100,000 house on their tax statements,” Fuchs said. “That doesn’t take into consideration changes in valuation.”
The breakdown on this year’s tax statement will be 30 percent to the city, which includes the library and airport. The county will get about 24 percent of the tax payment. The park district gets 10 percent. The school district will still get the largest share at 36 percent.
“We do everything we can to keep property taxes and fees down,” Schulz said. “As far as value for the dollar, the city’s share of property taxes covers the fire and police budgets.”
Other revenue comes to the city from state aid distribution as well as a portion of state sales and excise taxes. The city also charges utility fees, such as sewer and water.
“When you compare Jamestown with other cities, the property taxes are higher, but the other fees are lower,” Schulz said. “And that’s a benefit to homeowners, because if you itemize on your income tax, you can deduct property taxes as an expense. You can’t do that with fees.”
Sun reporter Toni Pirkl can be reached at (701) 952-8453
or by e-mail at email@example.com