Grand Forks city leaders crowded into a lower-level room at City Hall on Monday to hash out next year's budget, a process that promises to be fraught with tough decisions. Should the city entice more employees into retirement? How should it manage a new sales tax proposal-likely headed to voters this year-while it juggles staff salaries and services?

Perhaps half an hour in, City Council President Dana Sande piped up to say that it might be time to look at "duplicated services" throughout the city. He wondered aloud what might happen if the city absorbed the Grand Forks Park District-a potentially seismic shift in local government.

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"I'm not saying I disagree with what our Park District does," he said. "I think if it came down to being more efficient ... I think everyone would think that's a great idea."

The comment was the most remarkable in an evening full of discussion, and it comes as the flow of state funding diminishes to a trickle. With the North Dakota economy grappling with low agriculture and oil prices and a weaker Canadian dollar, communities like Grand Forks are left with fewer resources coming in from Bismarck.

Because of rollbacks in state property tax aid, Grand Forks city residents could see their full property tax bills increasing 7 percent next year before any other changes are calculated. The city is also dealing with lower statewide sales tax sharing, recently adjusting its budget for the year downward by $350,000.

"I think it's true to say that this is a pinching year for us," City Administrator Todd Feland said in an interview. "(But) it's certainly not the end of the year. We're still a growing community."

Mayor Mike Brown's budget, first previewed on Monday and set for debate and redrafting in coming months, is a reflection of those pressures. Though wages for municipal workers through the region will likely increase by 2.74 percent next year, Grand Forks budget drafts only have them at 1.91 percent. Feland pointed out that the draft of next year's general fund budget is just under $39 million, only slightly higher than the budget adopted last year, which was passed at $38.6 million. Some of the largest changes come from salary increases and an $576,000 sum squirreled away for large, as-of-yet unbudgeted purchases-like a fire truck, for example.

"We're definitely seeing headwinds, which is impacting our budget," Feland said. "We've really tried to refine all of our expenses."

Revenues shift as well. With new construction and rising property values-not tax rate changes-the general fund budget forecasts a 5 percent bump in property tax revenue. Utility rates shift under the draft budget, too. Garbage collection rates go down by 4 percent for commercial consumers, but up by 4 percent for residential sites. Water rates go up 6 percent and 4 percent for residential and nonresidential customers, respectively.

And beyond those changes, city leaders still eye the longer term with concern. They're still wondering how to pay for millions in street projects, with a city fund dedicated to such work expected to dip to negative $16 million in the early 2020s.

That's where a local sales tax hike comes in. Mayor Brown has called for a citywide referendum on a new increase. Though a vote to increase the sales tax by 0.75 percent failed in November, setting the city back on its hopes for infrastructure and water spending, Brown still hopes to see another vote. The city could see more formal proposal language from the city attorney in July.

"We're burning daylight, as Gil Favor used to say on 'Rawhide,' because we're burning money," Brown said at Monday's meeting.

City Council President Dana Sande said he's conscious of the difficulty of proposing a sales tax hike, coming as it does in the midst of a "difficult position" the city is in with low state aid and property tax help.

"It's really hard to try to find the balance with our services, our salaries, and then ask people to support a sales tax," he said. "The fact of the matter is, we have no revenue stream for our roads."

'Layers of bureaucracy'

Sande, asked about merging the Park District and the city, said that he's been concerned about too many "layers of bureaucracy" in local government for some time. He's been at odds with the Park District recently, urging them to decline stewardship of downtown's Arbor Park before an election decided its fate, but argued that there's nothing political about finding efficiency-work crews could be merged, administrators could be phased out and taxpayers could save money. At the very least, he said, he'd like more communication and more "cross-utilizing" workers.

"I'm not looking at it and saying, 'Someone needs to go,' " he said. "Over time, even through attrition, you become more efficient having combined teams."

Bill Palmiscno, executive director of the Park District, said the organization's independence helps it fundraise and respond to the public, but he's open to talking about working better together.

"We just finished working very well hand-in-hand after the storm a week ago ... but to sit down and visit about (efficiency), I don't have any problems with that," he said.