East Grand Forks leaders want to figure out what to do with the money they didn’t spend in 2018.
The city ended up with a $588,000 surplus that year, and that pushes its total reserves to about $6 million -- a few percentage points higher than the range set in the city's 2011 fund balance policy, which calls for it to keep 35-50 percent of its budget in reserve.
That, in administrators and officials’ estimation, means the city has a few options as it starts to work on a 2020 budget: spend that money on a series of hoped-for projects like a Bygland Road roundabout, a southside bridge over the Red River, or a new refrigeration system at the Civic Center; use it to offset a potential property tax hike; keep it in reserve; or, as City Council Member Clarence Vetter suggested, pay off some of the city’s debt early, if possible.
As it stood at a Tuesday city council meeting, the city expects to spend $517,000 more from its general fund, a 4.9 percent increase that includes department heads’ requested budget hikes. But city staff expect they’ll only take in another $276,000 -- 2.5 percent more -- from property tax revenue, license and permit fees, state aid and so on. That leaves a projected deficit of $241,000, but City Administrator David Murphy said he plans to meet with city department heads to whittle that figure closer to zero. Whatever’s left of that deficit would presumably eat up some portion of the $588,000.
At council members’ direction, department heads are set to recap their budget requests, not including salary bumps, to council members at meetings next week and the week after.
For the moment, city staff are projecting a 5 percent increase in property tax revenue in 2020, but that doesn’t necessarily mean East Grand Forks residents will pay 5 percent more to the city that year. Polk County staff expect the city will add another $12 million worth of new construction to its tax base this year. The estimated market value of all taxable property in East Grand Forks was $668.3 million in 2018, according to unaudited data supplied to council members Monday. Tacking on another $12 million would be an increase of about 1.79 percent.
City staff said they will have a sharper idea of how much larger the city’s tax base has grown later this fall.